Dana Incorporated announced financial results for the fourth quarter and full-year 2022.
Sales for 2022 were $10.2 billion, compared with $8.9 billion in 2021. The increase of $1.2 billion resulted from improved overall market demand and conversion of the sales backlog combined with pricing actions, including material commodity price and inflationary cost recoveries, according to Dana.
“Dana continues to successfully execute as front runners in the transformation to a zero-emission world, while taking extraordinary operational actions to serve our customers, including scaling operations to support near-term market share gains,” said James Kamsickas, Dana chairman and CEO. “Our focus on offering complete in-house electrification capability, coupled with our ability to leverage significant company-wide synergies, enables us to provide exceptional customer satisfaction – placing us in a strong position to deliver profitable above-market sales growth in 2023.”
Adjusted EBITDA for 2022 was $700 million, compared with $795 million in 2021. Lower profit was driven primarily by non-material inflation, as well as production inefficiencies driven by volatile customer demand schedules, continued supply-chain challenges, higher launch costs, and accelerated spending on development for electric-vehicle products.
The net loss attributable to Dana for 2022 was $242 million or $1.69 per share, compared with net income of $197 millionor $1.35 per share in 2021. The loss resulted from a one-time non-cash goodwill impairment charge of $191 million due to increasing interest rates and lower market capitalization, and from $157 million of additional non-cash tax valuation allowances.
Adjusted net income attributable to Dana was $54 million and diluted adjusted earnings per share were $0.37 in 2022, compared with an adjusted net income of $243 million and $1.66 per share in 2021.
The company reported operating cash flow of $649 million in 2022. Free cash flow was $209 million, compared with free cash flow use of $211 million in 2021. Cash flow this year was driven by improved working capital efficiency partially offset by lower operating earnings and higher capital spending.
Fourth-quarter 2022 Financial Results
Sales for the fourth quarter of 2022 totaled $2.56 billion, compared with $2.27 billion in the same period of 2021, representing a $282 million increase driven by improved global markets, cost-recovery actions, and conversion of the sales backlog, according to Dana.
Adjusted EBITDA for the fourth quarter of 2022 was $176 million, compared with $118 million for the same period in 2021. Dana says the improved profit margin in the fourth quarter of 2022 was primarily driven by higher sales volumes and cost recoveries, which were partially offset by non-material inflation, as well as production inefficiencies driven by volatile customer demand schedules and accelerated spending on development for electric-vehicle products.
The net loss attributable to Dana was $179 million, or $1.25 per share, compared with net income of $25 million, or $0.18per share, in the fourth quarter of 2021. The loss resulted primarily from the recording of $155 million of additional non-cash valuation allowances on U.S. federal tax credits, general business credits, and interest limitation attributes.
The adjusted net loss attributable to Dana was $15 million, or $0.10 per share, for the fourth quarter of 2022, compared with negligible adjusted net income and earnings per share in 2021.
Operating cash flow in the fourth quarter of 2022 was $342 million, compared to $139 million in the same period of 2021. Free cash flow was $202 million, compared with a use of $2 million in the fourth quarter of 2021. The increase was driven by a continued focus on working capital efficiency.
“As we closed out 2022, Dana achieved many of its goals, including sales growth and cash flow in a challenging environment. We experienced unexpected headwinds in the fourth quarter, including higher raw material costs and lower commercial recoveries, additional costs for EV program wins, increased customer schedule volatility, and incremental costs to scale operations,” said Timothy Kraus, Dana senior vice president and chief financial officer. “Looking forward to 2023, we expect sales growth to accelerate with improved profit conversion as customer operations stabilize throughout the year, ongoing cost recoveries largely offset inflation, and commodity costs continue to moderate.”