UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM
CURRENT REPORT
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| Item 7.01 | Regulation FD Disclosure |
Dana Incorporated’s (“Dana”) Chairman and Chief Executive Officer, James Kamsickas and Executive Vice President and Chief Financial Officer, Jonathan Collins, will be providing an overview of the company and an update of the company’s financial outlook at Gabelli Funds 44th Annual Automotive Symposium on Monday November 2, 2020. A copy of the presentation slides, which will be discussed at that conference, is attached hereto as Exhibit 99.1. From time to time, Dana may also use this presentation in conversations with investors and analysts.
| Item 8.01. | Other Events. |
Dana Incorporated announced today that it has entered into a definitive agreement to purchase a portion of the thermal-management business of Modine Manufacturing Company’s automotive segment. A copy of Dana’s press release related to the agreement is attached to hereto as Exhibit 99.2 and is incorporated herein by reference.
The information in Items 7.01, 8.01 and 9.01 of this report (including Exhibit 99.1 and 99.2 hereto) is being “furnished” and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, is not subject to the liabilities of that section and is not deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except as shall be expressly set forth by specific reference in such a filing.
| Item 9.01. | Financial Statements and Exhibits. |
(d) Exhibits. The following item is furnished with this report.
| Exhibit |
Description | |
| 99.1 | Gabelli Funds 44th Annual Automotive Symposium Presentation | |
| 99.2 | Dana Incorporated Press Release dated November 2, 2020 | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| DANA INCORPORATED | ||||||
| Date: November 2, 2020 | By: | /s/ Douglas H. Liedberg | ||||
| Name: | Douglas H. Liedberg | |||||
| Title: | Senior Vice President, General Counsel and Secretary | |||||
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Gabelli Funds Automotive Symposium November 2, 2020 James Kamsickas Chairman and Chief Executive Officer Jonathan Collins Executive Vice President and Chief Financial Officer Exhibit 99.1
Certain statements and projections contained in this presentation are, by their nature, forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on our current expectations, estimates and projections about our industry and business, management’s beliefs, and certain assumptions made by us, all of which are subject to change. Forward-looking statements can often be identified by words such as “anticipates,” “expects,” “intends,” “plans,” “predicts,” “believes,” “seeks,” “estimates,” “may,” “will,” “should,” “would,” “could,” “potential,” “continue,” “ongoing,” similar expressions, and variations or negatives of these words. These forward-looking statements are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause our actual results to differ materially and adversely from those expressed in any forward-looking statement. Dana’s Annual Report on Form 10-K, subsequent Quarterly Reports on Form 10-Q, recent Current Reports on Form 8-K, and other Securities and Exchange Commission filings discuss important risk factors that could affect our business, results of operations and financial condition. The forward-looking statements in this presentation speak only as of this date. Dana does not undertake any obligation to revise or update publicly any forward-looking statement for any reason. Safe Harbor Statement
Business Overview Technologies Drive Axles, e-Axles, e-Drives, propshafts / driveshafts, conventional and hybrid transmissions, wheel and track drives, high-precision gears Motion Winches, slew drives, gearboxes, hydraulics, valves, custom gear and drives, controls and software, hub drives Sealing Cam covers, oil pan modules, engine gaskets and seals, transmission gaskets and seals, transmission separator plates Thermal Transmission and engine oil cooling; battery, motor, and electronics cooling; charge air cooling; active warm-up; thermal-acoustical protective shielding Digital Active and passive system controls, descriptive and predictive analytics Electrodynamic Motors, inverters, controls and software, chargers, electrified power cradle, battery management system, fuel cell plates Products Segments 19% Light Vehicle Drive Systems 42% Power Technologies 12% 27% Off-Highway Drive and Motion Systems Regions North America South America Europe Asia Pacific Sales as of Dec. 31, 2019. Consolidated sales only. Commercial Vehicle Drive and Motion Systems Markets Heavy Vehicles Light Vehicles Off-Highway 52% 20% 28%
Dana Sustainability Goal: Energy Efficiency Renewable Energy Waste Elimination Water Conservation Dana to reduce total annual GHG emissions by >50% by 2035 Reduction of 300,000+ metric tons of GHG, annually
Light Vehicle Thermal Acquisition Light Vehicle Thermal Business* *Acquired liquid cooling portion of Modine's Automotive segment 8 Global Manufacturing Locations AMERICAS ~20% ICE Thermal HEV BEV EUROPE ~60% ASIA-PACIFIC ~20%
Transaction Summary Timing / Approvals Structure / Financials Signed definitive agreement to acquire a portion of Modine’s Automotive segment Purchase price of 1 dollar Assumption of certain financial liabilities ~$2 million financial debt ~$15 million unfunded pension liability Subject to customary regulatory approvals Anticipated closing in H1 2021 Will be consolidated within Power Technologies segment 2019A sales of ~$300 million Adjusted EBITDA of ~$30 million including cost synergies See appendix for comments regarding the presentation of non-GAAP measures Transaction Terms
Acquisition Benefits Increases PT scale by ~30% Balances portfolio by increasing thermal product content Complementary manufacturing processes and supply chain Enhances Power Technologies >70% of product offering has HEV and BEV applications Expands and enhances EV product offering Significant market growth opportunity Accelerates Electrification Enhanced relationships with new and existing light vehicle OEM customers Additional content with European and Asian customers Diversifies geographic footprint Complements Customers & Geography Contributes ~$30M of segment EBITDA on a post-synergy basis Negligible cash investment Expected to accrete ~$1/share Creates Shareholder Value
End-Market Outlook Light-truck demand expected to remain strong for our key platforms New product launches for Ford Bronco Sport and Bronco will drive growth Class 8 and medium-duty demand expected to strengthen New business from EV programs beginning middle of next year Expect continued improvement in agriculture equipment demand Construction equipment market poised for rebound due to low equipment inventory levels Anticipate strong profit and cash conversion on improving market conditions Light Vehicle Market ➨ Commercial Vehicle Market Off-Highway Equipment Market ➨ ➨
Adjusted EBITDA is a non-GAAP financial measure which we have defined as net income before interest, income taxes, depreciation, amortization, equity grant expense, restructuring expense, non-service cost components of pension and other postretirement benefit costs and other adjustments not related to our core operations (gain/loss on debt extinguishment, pension settlements, divestitures, impairment, etc.). Adjusted EBITDA is a measure of our ability to maintain and continue to invest in our operations and provide shareholder returns. We use adjusted EBITDA in assessing the effectiveness of our business strategies, evaluating and pricing potential acquisitions and as a factor in making incentive compensation decisions. In addition to its use by management, we also believe adjusted EBITDA is a measure widely used by securities analysts, investors and others to evaluate financial performance of our company relative to other Tier 1 automotive suppliers. Adjusted EBITDA should not be considered a substitute for earnings before income taxes, net income or other results reported in accordance with GAAP. Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies. Diluted adjusted EPS is a non-GAAP financial measure which we have defined as adjusted net income divided by adjusted diluted shares. We define adjusted net income as net income attributable to the parent company, excluding any nonrecurring income tax items, restructuring charges, amortization expense and other adjustments not related to our core operations (as used in adjusted EBITDA), net of any associated income tax effects. We define adjusted diluted shares as diluted shares as determined in accordance with GAAP based on adjusted net income. This measure is considered useful for purposes of providing investors, analysts and other interested parties with an indicator of ongoing financial performance that provides enhanced comparability to EPS reported by other companies. Diluted adjusted EPS is neither intended to represent nor be an alternative measure to diluted EPS reported in accordance with GAAP. Free cash flow is a non-GAAP financial measure which we have defined as net cash provided by (used in) operating activities less purchases of property, plant and equipment. Adjusted free cash flow is a non-GAAP financial measure which we have defined as net cash provided by (used in) operating activities excluding discretionary pension contributions less purchases of property, plant and equipment. We believe these measures are useful to investors in evaluating the operational cash flow of the company inclusive of the spending required to maintain the operations. Free cash flow and adjusted free cash flow are not intended to represent nor be an alternative to the measure of net cash provided by (used in) operating activities reported in accordance with GAAP. Free cash flow and adjusted free cash flow may not be comparable to similarly titled measures reported by other companies. The accompanying financial information provides reconciliations of adjusted EBITDA, diluted adjusted EPS, free cash flow and adjusted free cash flow to the most directly comparable financial measures calculated and presented in accordance with GAAP. We have not provided a reconciliation of our adjusted EBITDA and diluted adjusted EPS outlook to the most comparable GAAP measures of net income (loss) and diluted EPS. Providing net income (loss) and diluted EPS guidance is potentially misleading and not practical given the difficulty of projecting event driven transactional and other non-core operating items that are included in net income (loss) and diluted EPS, including restructuring actions, asset impairments and certain income tax adjustments. The accompanying reconciliations of these non-GAAP measures with the most comparable GAAP measures for the historical periods presented are indicative of the reconciliations that will be prepared upon completion of the periods covered by the non-GAAP guidance. Non-GAAP Financial Information
Exhibit 99.2
| IMMEDIATE |
Contact: |
Jeff Cole | ||||
| +1-419-887-3535 | ||||||
| jeff.cole@dana.com |
Dana to Acquire Portion of Light-Vehicle Thermal Business from
Modine Manufacturing Company
Transaction enhances Power Technologies business with complementary products
MAUMEE, Ohio, Nov. 2, 2020 – Dana Incorporated (NYSE: DAN) announced today that it has signed a definitive agreement to purchase a portion of the thermal-management business of Modine Manufacturing Company’s (NYSE: MOD) automotive segment. The transaction further strengthens Dana’s Power Technologies business unit. The agreed purchase price is $1 with the assumption of certain financial liabilities.
Subject to customary regulatory approvals and other closing conditions, the transaction is expected to be completed in the first half of 2021 and will be consolidated within Dana’s Power Technologies segment. The acquisition balances the company’s current product portfolio by extending its offerings in chillers and water-charged air coolers, adding exhaust-gas recirculation, and expanding its manufacturing process capabilities.
The transaction brings numerous benefits to Dana, including:
| • | adding approximately $300 million in revenue based on 2019 results, and is expected to contribute $30 million in adjusted EBITDA on a post-synergy basis; |
| • | increasing the scale of Dana’s Power Technologies business by approximately 30 percent, balancing the product portfolio with expanded thermal content, and leveraging complementary manufacturing processes and supply chains; |
| • | accelerating the company’s electrification strategy with electric-vehicle thermal technologies, a key source of market growth; |
| • | strengthening relationships with new and existing light-vehicle manufacturers; and |
| • | diversifying the global geographic footprint of Dana’s Power Technologies operations in the United States, Europe, and Asia. |
“Dana’s in-house engineering and manufacturing of thermal-management technologies is an important differentiator, and this acquisition is synergistic to our current portfolio, making it a natural fit for our Power Technologies business,” said James Kamsickas, Dana chairman and CEO. “In addition to strengthening relationships with core customers in Europe and Asia, it presents opportunities to leverage our scale to expand business with new mobility manufacturers and optimize the business to deliver significant value to our shareholders.”
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This acquisition includes eight manufacturing facilities with operations in China, Germany, Hungary, Italy, the Netherlands, and the United States. The business serves a global roster of original-equipment and new mobility vehicle manufacturers.
Citigroup Global Markets, Inc.; Hunton Andrews Kurth LLP; and Hogan Lovells served as advisers to Dana.
About Dana Incorporated
Dana is a world leader in providing power-conveyance and energy-management solutions that are engineered to improve the efficiency, performance, and sustainability of light vehicles, commercial vehicles, and off-highway equipment. Enabling the propulsion of conventional, hybrid, and electric-powered vehicles, Dana equips its customers with critical drive and motion systems; electrodynamic technologies; and thermal, sealing, and digital solutions.
In 2019, the company reported sales of $8.6 billion with 36,000 associates in 34 countries across six continents. Based in Maumee, Ohio, USA, and founded in 1904, Recognized by Forbes magazine as a World’s Best Employer, Dana has established a high-performance culture that focuses on its people, and the company has earned recognition around the world as a top employer. Learn more at dana.com.
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