“Dana delivered another strong performance this quarter, keeping us on track to achieve a third consecutive year of double-digit sales and profit growth,” says James Kamsickas, Dana president and CEO.
“Due to stable end markets, our strong sales backlog and accretive acquisitions, we increased sales by 12 percent over last year and achieved improved margin performance,” Kamsickas says. “Our intense focus on customer satisfaction and cost discipline, combined with steady organic and inorganic growth is positioning us to finish the year strong.”
Sales for the second quarter of 2019 totaled $2.3 billion, compared with $2.1 billion in the same period of 2018, representing a $252 million improvement. The increase was attributable to conversion of sales backlog, additional sales from recent acquisitions, higher end-market demand and commodity recoveries, which were partially offset by unfavorable currency translation, the company says.
Dana reported a net loss of $68 million for the second quarter of 2019, compared with net income of $124 million in the same period of 2018. The difference was primarily due to $258 million in one-time pension settlement charges related to the transfer of future pension liabilities from a U.S. pension plan to third-party insurers in the second quarter of 2019. Partially offsetting this one-time charge was a net tax benefit of $87 million in this year’s second quarter driven by the pension termination and foreign tax credits.
The second quarter of 2018 also included a $39 million tax benefit related to tax credits and valuation allowance releases. Excluding these one-time income tax and pension charges, second-quarter net income was $103 million in 2019, compared with $85 million in 2018, reflecting the increased operating earnings this year associated with higher sales, Dana says.
Reported diluted earnings per share were a loss of $0.47, compared with earnings per share of $0.85 in the second quarter of 2018.
Adjusted EBITDA for the second quarter of 2019 was $286 million, compared with $246 million for the same period last year. Profit in the second quarter of 2019 benefited from both organic and inorganic growth, partially offset by higher commodity costs and the impact of unfavorable currency translation related to the strengthening of the U.S. dollar.
Diluted adjusted earnings per share were $0.87 in the second quarter of 2019, compared with $0.74 in the same period last year.
Operating cash flow in the second quarter of 2019 was $73 million, compared with $141 million in the same period of 2018. The second quarter of 2019 included a voluntary pension contribution of $62 million related to the transfer of the pension plan liabilities.
Adjusted free cash flow was $43 million, compared with $61 million in the second quarter of 2018. Higher earnings and lower year-over-year working capital requirements were more than offset by increased one-time costs due to acquisitions, elevated cash taxes related to foreign entity restructuring, and the timing of investment to support new program launches.
For more information on Dana’s Q2 financial report, CLICK HERE.
