-Strong momentum continues with adjusted EBITDA of $181 million and revenues of $1.8 billion

- Income of $23 million, excluding $53 million of charges related to restructuring debt

- Expanding operations in emerging markets and new product introductions support growth targets

- Roger Wood joins Dana as CEO

- New agreements reached with UAW and USW

MAUMEE, Ohio, April 27, 2011 /PRNewswire/ -- Dana Holding Corporation (NYSE: DAN) today reported its first-quarter 2011 financial results, including adjusted EDITDA of $181 million. The company had a net loss of $30 million in the quarter, which included $53 million of one-time charges associated with the refinancing and restructuring of debt in January. Excluding these charges, Dana posted first-quarter net income of $23 million.

Strong sales of $1.8 billion – up nearly 20 percent over the first quarter of 2010 – and continued operating improvements enabled the company to achieve an adjusted EBITDA margin of 10.1 percent. Diluted adjusted earnings per share in the quarter were $0.34, compared to $0.06 in the prior-year period.

"Dana had another strong quarter as we took decisive steps to expand our global footprint and product offerings," said Dana Executive Chairman John Devine. "We have significantly improved the building blocks for continued growth by reaching an early agreement with our labor unions, restructuring our balance sheet, and strategically investing in key markets."

Free cash flow use of $35 million in the quarter was driven by increased working capital requirements associated with the higher level of sales. Global liquidity continues to exceed $1.1 billion. The company's strong balance sheet, cash position, and financial flexibility are supporting its aggressive, long-term growth plans in emerging markets and the development of new drivetrain, sealing, and thermal technologies.

Recovering Markets

The light and commercial vehicle markets continue to improve. Light vehicle production was up 5 percent globally and 14 percent in North America compared to the same period last year. Commercial vehicle production in the quarter was up 41 percent in North America.

The off-highway market also reflects growth year-over-year. Strength in mining and construction equipment continues, and agriculture equipment production has benefited from strong commodity prices and increasing farm income.

Growing Presence in Emerging Markets

Dana recently announced it has signed a definitive agreement with Axles India, Ltd. (AIL), to acquire select assets of AIL's commercial truck axle business. This $13 million transaction is consistent with the company's growth objectives for Asia, and is expected to generate approximately $50 million in annual revenue in India's commercial vehicle market, which is growing at a compound annual rate of 8 percent. Key customers of this business are Ashok Leyland and Mahindra & Mahindra.

In January, Dana agreed to increase ownership of its joint venture, Dongfeng Dana Axle Co., Ltd. (DDAC), to 50 percent, pending government approval, in the rapidly growing Chinese market. In February, Dana completed a strategic agreement with SIFCO S.A., adding front steer axles to its product portfolio in South America, bringing its total annual sales in the region to more than $1 billion.

New Labor Agreements Reached Early

As previously announced, Dana reached new three-year international labor agreements with the United Auto Workers (UAW) and United Steel Workers (USW), effective June 1, 2011. The agreements were ratified in late March by members of both unions at 20 facilities in the United States and support the company's continued drive for leaner, more competitive operations.

Reaching new agreements nearly 10 weeks before the current contracts expire has also enabled the company and its employees to remain focused on the needs of customers.

Product Technology and Quality

Other product-related highlights from the first quarter that support Dana's growth objectives include:

The company's global production facilities achieved world-class performance in the area of product quality delivered to customers, with an aggregate single-digit PPM (defective parts per million) score – a company best;

Dana introduced two new products to the commercial vehicle market: the Spicer® Pro-40™ family of tandem drive axles for heavy-duty trucks, which offers fuel efficiency improvements through significant weight reduction and improved power density, and the Spicer LMSi™ hub system, which improves driveline reliability and maintenance intervals;

Dana and Bosch Rexroth AG introduced a new hydro-mechanical variable powersplit transmission (HVT) system to the off-highway industry, which has demonstrated fuel savings of more than 20 percent on front-end loaders when compared with the same vehicle outfitted with a conventional torque converter transmission; and

Dana's operation in South Africa was honored by Toyota Motor Corporation with a supplier achievement award for improving the manufacture of Spicer axles for the Toyota Hilux pickup truck.

New CEO Named

Roger J. Wood joined Dana earlier this month as president and chief executive officer; he has also been elected to the company's board of directors. He had been an executive vice president and group president at BorgWarner Inc., where he worked for 26 years in a wide range of responsibilities and leadership roles in manufacturing, strategy, and operations.

"Dana's global footprint, quality momentum, and growing cadence of product innovations all provide a great foundation on which to keep winning new business – and delivering more value to our customers and shareholders," Wood said.

Increased Sales and Earnings Guidance for 2011

Dana updated its assumptions and earnings guidance for 2011:

2011 revenues are now forecast to increase more than 20 percent over 2010 versus the previous forecast of more than 17 percent growth;

Adjusted EBITDA is now projected to be $755 million to $775 million versus the previous guidance of $740 million to $760 million; adjusted EBITDA as a percent of sales is still forecast to be more than 10 percent;

Diluted adjusted earnings per share are expected to total $1.55 to $1.65 per share compared to earlier guidance of $1.50 to $1.60 per diluted adjusted share; and

Free cash flow for the year is projected at more than $175 million versus the previous guidance of greater than $150 million.

Dana to Host First-Quarter Conference Call at 11 a.m. Today

Dana will discuss its first-quarter results in a conference call at 11 a.m. EDT today. Participants may listen to the audio portion of the conference call either through audio streaming online or by telephone. Slide viewing is available online via a link provided on the Dana Investor Web site. To participate in the Dana Holding Corporation Financial Webcast and Conference Call from the U.S., dial 1-888-311-4590 (Conference I.D. # 59289629); outside the U.S. dial 1-706-758-0054 (Conference I.D. # 59289629). Phone registration will be available beginning at 10 a.m. EDT. An audio recording of the call will be available after 5 p.m. To access this recording, dial 1-800-642-1687 (U.S. or Canada) or 1-706-645-9291 (international) and enter Conference I.D. # 59289629. A webcast replay will also be available after 5 p.m. today, and may be accessed via the Dana Investor Web site.

Non-GAAP Measures

Adjusted EBITDA is a non-GAAP financial measure that we have defined as earnings before interest, taxes, depreciation, amortization, non-cash equity grant expense, restructuring expense, and other nonrecurring items (e.g. gain/loss on debt extinguishment or divestitures, impairment, etc.). The most significant impact on Dana's ongoing results of operations as a result of applying fresh start accounting following our emergence from bankruptcy was higher depreciation and amortization. By using adjusted EBITDA, a performance measure that excludes depreciation and amortization, the comparability of results is enhanced. Management also believes that adjusted EBITDA is an important measure since the financial covenants in our debt agreements are based, in part, on adjusted EBITDA. Adjusted EBITDA should not be considered a substitute for income (loss) before income taxes, net income (loss), or other results reported in accordance with GAAP. Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies.

Free cash flow is a non-GAAP financial measure that we have defined as cash provided by (used in) operating activities, excluding any bankruptcy claim-related payments, less purchases of property, plant, and equipment. We believe this measure is useful to investors in evaluating the operational cash flow of the company inclusive of the spending required to maintain the operations. Free cash flow is neither intended to represent nor be an alternative to the measure of net cash provided by (used in) operating activities reported under GAAP. Free cash flow 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 (loss) attributable to the parent company, excluding restructuring expense, amortization expense and nonrecurring items (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 under GAAP.

The financial information accompanying this release provides reconciliations of adjusted EBITDA, free cash flow, and diluted adjusted EPS to the most directly comparable financial measures calculated and presented in accordance with GAAP.

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