AUBURN HILLS, Mich.,
April 26, 2012 /PRNewswire/ --
BorgWarner Inc. (NYSE: BWA) today reported first quarter 2012
earnings of $1.28 per diluted share,
a new first quarter record for the company. Net sales were up 11%
from first quarter 2011, while global vehicle production was up
approximately 4%.
First Quarter Highlights:
- Net sales of $1,913 million, up
11% from first quarter 2011.
- Record earnings of $1.28 per
diluted share, up 28% from first quarter 2011.
- Operating income of $226 million,
or 11.8% of net sales.
- Reiterates guidance for 2012 of 10% to 12% annual sales growth
and earnings of $5.35 to $5.65 per
diluted share.
First Quarter Performance: "The first quarter was a
strong start to the year," said Timothy
Manganello, Chairman and CEO of BorgWarner. "The focus on
fuel economy and improved emissions around the globe continued to
drive demand for BorgWarner technology, and above-market growth for
our company. Excluding the impact of currency and 2011 acquisitions
and divestitures, our net sales were up approximately 13% in the
first quarter compared with first quarter 2011, while global
vehicle production grew only 4%. While growing our net sales in the
quarter, we also successfully managed costs, which resulted in a
strong quarterly operating income margin of 11.8%."
2012 Outlook: After considering its financial performance
in the first quarter, the company reiterated its guidance for 2012
of 10% to 12% annual sales growth and earnings of $5.35 to $5.65 per diluted share. "The outlook
for our business for the remainder of 2012 is generally stable
although we are watching Europe
closely," Manganello said.
Financial Results: Net sales were $1,913 million in first quarter 2012, up 11% from
$1,730 million in first quarter 2011.
Net earnings in the quarter were $158
million, or $1.28 per diluted
share, compared with $125 million, or
$1.00 per diluted share, in first
quarter 2011. The impact of foreign currencies, primarily the Euro,
decreased net sales by approximately $45
million, and decreased net earnings approximately
$0.03 per diluted share, in first
quarter 2012 compared with first quarter 2011.
Net cash provided by operating activities was $31 million in first quarter 2012 compared with
net cash used in operating activities of $(41) million in first quarter 2011. Capital
expenditures, including tooling outlays, totaled $95 million in first quarter 2012, compared with
$70 million in first quarter 2011.
Balance sheet debt increased by $81
million and cash on hand increased by $37 million compared with the end of 2011. The
$44 million increase in balance sheet
debt (net of cash) was primarily due to seasonal working capital
funding requirements. The ratio of balance sheet debt (net of cash)
to capital was 27.1% at the end of first quarter 2012 compared with
28.3% at the end of 2011.
Engine Group Results: Engine segment net sales were
$1,308 million in first quarter 2012,
up 5% from $1,249 million in the
prior year's quarter as a result of increased sales of engine
timing systems, including variable cam timing products, greater
sales of emissions products and the growth in turbocharger
technology adoption around the world. Excluding the impact of
currency and 2011 divestitures, net sales were up approximately 8%.
Adjusted earnings before interest, income taxes and non-controlling
interest ("Adjusted EBIT") were $210
million in first quarter 2012, up 13% from $186 million in first quarter 2011.
Drivetrain Group Results: Drivetrain segment net sales
were $611 million in first quarter
2012, up 26% from $486 million in the
prior year's quarter as a result of strong all-wheel drive system
sales in North America and
Europe, growth in traditional
transmission component sales in North
America and Korea and higher dual clutch transmission module
sales in Europe. Excluding the
impact of currency and the acquisition of the Traction Systems
division of Haldex, net sales were up approximately 24%. Adjusted
EBIT was $61 million in first quarter
2012, up 91% from $32 million in
first quarter 2011.
Recent Highlights:
- BorgWarner successfully settled all conversions of its 3.50%
Convertible Senior Notes due 2012 (the "Notes"). The company
delivered approximately 11.4 million shares of its common stock,
previously held in Treasury, to converting Noteholders. As a result
of this settlement activity, the company's balance sheet debt was
reduced by approximately $374
million, and its stockholders' equity increased by
approximately $374 million, the
impact of which will be seen in the company's second quarter
financial statements.
- On March 27, 2012, BorgWarner
announced the appointment of Ronald
Hundzinski, 53, to Chief Financial Officer and James Verrier, 49, to the newly-created position
of President and Chief Operating Officer. The company also
announced that Robin Adams, 59, was
promoted to Vice Chairman of the Board of Directors and will remain
Executive Vice President and Chief Administrative Officer reporting
to Tim Manganello, Chairman of the
Board of Directors and Chief Executive Officer. Mr. Hundzinski
reports to Mr. Adams and Mr. Verrier reports to Mr.
Manganello.
- BorgWarner received a 2012 Automotive News PACE Award for its
turbocharger with low-pressure exhaust gas recirculation
technology. With a variety of awarded and pending patents, the
technology has launched with a major global OEM. It was one of
three BorgWarner innovations named as finalists for this year's
PACE Awards.
- BorgWarner will supply Torque-on-Demand® two-speed transfer
cases for the 2012 Ford F-150 Lariat, King
Ranch and Platinum models. The first two-speed active
all-wheel drive system for F-150 trucks will feature 4-high, 4-low,
full-time and automatic all-wheel drive modes.
- Hyundai Motor Company's 5.9-liter six-cylinder diesel engine is
the first commercial vehicle engine in Asia equipped with BorgWarner's regulated
two-stage (R2S) turbocharging technology. BorgWarner's
award-winning R2S system provides outstanding performance,
significantly boosts fuel economy and helps the engine comply with
Euro 5 emissions standards.
- BorgWarner supplies Torque-On-Demand® (TOD®) single speed
transfer cases for Ford Australia's Territory. The active all-wheel
drive system harnesses BorgWarner's expertise in electronics,
controls and vehicle-level integration to deliver a stable,
comfortable ride with improved traction.
- BorgWarner United Transmission Systems, a majority-held joint
venture between BorgWarner and twelve leading Chinese automakers in
Dalian, China, will supply wet
dual-clutch technology for three FAW transmission programs in
China. At full launch of all three
transmission programs, total volumes are expected to reach over
500,000 units per year.
At 9:30 a.m. ET today, a brief
conference call concerning first quarter results will be webcast
at:
http://www.borgwarner.com/en/Investors/Webcasts/default.aspx.
Auburn Hills, Michigan-based
BorgWarner Inc. (NYSE: BWA) is a technology leader in highly
engineered components and systems for powertrain applications
worldwide. Operating manufacturing and technical facilities in 59
locations in 19 countries, the company develops products to improve
fuel economy, reduce emissions and enhance performance. Customers
include VW/Audi, Ford, Toyota, Renault/Nissan, General Motors,
Hyundai/Kia, Daimler, Chrysler, Fiat, BMW, Honda, John Deere, PSA,
and MAN. For more information, please visit www.borgwarner.com.
Statements contained in this news release may contain
forward-looking statements as contemplated by the 1995 Private
Securities Litigation Reform Act that are based on management's
current expectations, estimates and projections. Words such as
"outlook," "expects," "anticipates," "intends," "plans,"
"believes," "estimates," variations of such words and similar
expressions are intended to identify such forward-looking
statements. Forward-looking statements are subject to risks and
uncertainties, many of which are difficult to predict and generally
beyond our control, that could cause actual results to differ
materially from those expressed, projected or implied in or by the
forward-looking statements. Such risks and uncertainties include:
fluctuations in domestic or foreign vehicle production, the
continued use of outside suppliers, fluctuations in demand for
vehicles containing our products, changes in general economic
conditions, and other risks detailed in our filings with the
Securities and Exchange Commission, including the Risk Factors,
identified in our most recently filed Annual Report on Form 10-K.
We do not undertake any obligation to update any forward-looking
statements.
BorgWarner
Inc.
|
|
|
|
Condensed
Consolidated Statements of Operations (Unaudited)
|
(millions,
except per share amounts)
|
|
|
|
Three
Months Ended
March 31,
|
|
2012
|
|
2011
|
Net
sales
|
$
|
1,912.5
|
|
|
$
|
1,730.4
|
|
Cost of
sales
|
1,516.7
|
|
|
1,387.6
|
|
Gross profit
|
395.8
|
|
|
342.8
|
|
|
|
|
|
Selling,
general and administrative expenses
|
169.0
|
|
|
165.1
|
|
Other
(income) expense
|
1.1
|
|
|
(1.6)
|
|
Operating income
|
225.7
|
|
|
179.3
|
|
|
|
|
|
Equity in
affiliates' earnings, net of tax
|
(9.2)
|
|
|
(8.4)
|
|
Interest
income
|
(1.4)
|
|
|
(1.0)
|
|
Interest
expense and finance charges
|
15.1
|
|
|
18.4
|
|
Earnings before income taxes and noncontrolling
interest
|
221.2
|
|
|
170.3
|
|
|
|
|
|
Provision
for income taxes
|
57.5
|
|
|
40.9
|
|
Net earnings
|
163.7
|
|
|
129.4
|
|
|
|
|
|
Net
earnings attributable to the noncontrolling interest, net of
tax
|
5.7
|
|
|
4.9
|
|
Net earnings attributable to BorgWarner
Inc.
|
$
|
158.0
|
|
|
$
|
124.5
|
|
|
|
|
|
|
|
|
|
Reconciliation to diluted earnings per
share:
|
|
|
|
Net earnings attributable to BorgWarner
Inc.
|
$
|
158.0
|
|
|
$
|
124.5
|
|
Adjustment for net interest expense on convertible
notes
|
5.0
|
|
|
5.2
|
|
Diluted net earnings attributable to BorgWarner
Inc.
|
$
|
163.0
|
|
|
$
|
129.7
|
|
|
|
|
|
Earnings
per share — diluted
|
$
|
1.28
|
|
|
$
|
1.00
|
|
|
|
|
|
Weighted
average shares outstanding — diluted
|
127.7
|
|
|
130.2
|
|
|
|
|
|
Supplemental Information (Unaudited)
|
|
|
|
(millions
of dollars)
|
|
|
|
|
Three
Months Ended
March 31,
|
|
2012
|
|
2011
|
Capital
expenditures, including tooling outlays
|
$
|
95.0
|
|
|
$
|
70.2
|
|
|
|
|
|
Depreciation and amortization:
|
|
|
|
Fixed assets and tooling
|
$
|
63.8
|
|
|
$
|
60.9
|
|
Intangible assets and other
|
7.4
|
|
|
6.9
|
|
|
$
|
71.2
|
|
|
$
|
67.8
|
|
BorgWarner
Inc.
|
|
|
|
Net Sales
by Reporting Segment (Unaudited)
|
|
|
(millions
of dollars)
|
|
|
|
|
|
|
|
|
Three
Months Ended
March
31,
|
|
2012
|
|
2011
|
Engine
|
$
|
1,308.2
|
|
|
$
|
1,249.4
|
|
Drivetrain
|
611.4
|
|
|
486.4
|
|
Inter-segment eliminations
|
(7.1)
|
|
|
(5.4)
|
|
Net sales
|
$
|
1,912.5
|
|
|
$
|
1,730.4
|
|
|
|
|
|
|
|
|
|
Adjusted
Earnings Before Interest, Income Taxes and Noncontrolling Interest
("Adjusted EBIT") (Unaudited)
|
(millions
of dollars)
|
|
|
|
|
|
|
|
|
Three
Months Ended
March
31,
|
|
2012
|
|
2011
|
Engine
|
$
|
209.8
|
|
|
$
|
186.1
|
|
Drivetrain
|
61.2
|
|
|
32.0
|
|
Adjusted EBIT
|
271.0
|
|
|
218.1
|
|
Corporate,
including equity in affiliates' earnings and stock-based
compensation
|
36.1
|
|
|
30.4
|
|
Interest
income
|
(1.4)
|
|
|
(1.0)
|
|
Interest
expense and finance charges
|
15.1
|
|
|
18.4
|
|
Earnings before income taxes and noncontrolling
interest
|
221.2
|
|
|
170.3
|
|
Provision
for income taxes
|
57.5
|
|
|
40.9
|
|
Net earnings
|
163.7
|
|
|
129.4
|
|
Net
earnings attributable to the noncontrolling interest, net of
tax
|
5.7
|
|
|
4.9
|
|
Net earnings attributable to BorgWarner
Inc.
|
$
|
158.0
|
|
|
$
|
124.5
|
|
BorgWarner
Inc.
|
|
|
|
Condensed
Consolidated Balance Sheets (Unaudited)
|
(millions
of dollars)
|
|
|
|
|
|
|
|
|
March
31,
2012
|
|
December
31,
2011
|
Assets
|
|
|
|
|
|
|
|
Cash
|
$
|
396.9
|
|
|
$
|
359.6
|
|
Receivables, net
|
1,369.4
|
|
|
1,183.0
|
|
Inventories, net
|
480.8
|
|
|
454.3
|
|
Other
current assets
|
162.9
|
|
|
140.9
|
|
Total current assets
|
2,410.0
|
|
|
2,137.8
|
|
|
|
|
|
Property,
plant and equipment, net
|
1,696.4
|
|
|
1,664.3
|
|
Other
non-current assets
|
2,174.9
|
|
|
2,156.5
|
|
Total assets
|
$
|
6,281.3
|
|
|
$
|
5,958.6
|
|
|
|
|
|
Liabilities and Equity
|
|
|
|
|
|
|
|
Notes
payable and other short-term debt
|
$
|
184.2
|
|
|
$
|
196.3
|
|
Current
portion of long-term debt
|
377.1
|
|
|
381.5
|
|
Accounts
payable and accrued expenses
|
1,291.3
|
|
|
1,297.8
|
|
Income
taxes payable
|
28.6
|
|
|
29.8
|
|
Total current liabilities
|
1,881.2
|
|
|
1,905.4
|
|
|
|
|
|
Long-term
debt
|
848.7
|
|
|
751.3
|
|
Other
non-current liabilities
|
830.6
|
|
|
848.9
|
|
|
|
|
|
Total
BorgWarner Inc. stockholders' equity
|
2,658.0
|
|
|
2,387.9
|
|
Noncontrolling interest
|
62.8
|
|
|
65.1
|
|
Total equity
|
2,720.8
|
|
|
2,453.0
|
|
|
|
|
|
Total liabilities and equity
|
$
|
6,281.3
|
|
|
$
|
5,958.6
|
|
BorgWarner
Inc.
|
|
|
|
Condensed
Consolidated Statements of Cash Flows (Unaudited)
|
(millions
of dollars)
|
|
|
|
|
|
|
|
|
Three
Months Ended
March
31,
|
|
2012
|
|
2011
|
Operating
|
|
|
|
Net
earnings
|
$
|
163.7
|
|
|
$
|
129.4
|
|
Non-cash
charges (credits) to operations:
|
|
|
|
Depreciation and amortization
|
71.2
|
|
|
67.8
|
|
Bond amortization
|
4.4
|
|
|
4.8
|
|
Deferred income tax benefit
|
(22.1)
|
|
|
(18.2)
|
|
Other non-cash items
|
13.6
|
|
|
(7.5)
|
|
Net earnings adjusted for non-cash charges to
operations
|
230.8
|
|
|
176.3
|
|
Changes in
assets and liabilities
|
(200.0)
|
|
|
(217.7)
|
|
Net cash provided by (used in) operating
activities
|
30.8
|
|
|
(41.4)
|
|
|
|
|
|
Investing
|
|
|
|
Capital
expenditures, including tooling outlays
|
(95.0)
|
|
|
(70.2)
|
|
Net
proceeds from asset disposals
|
1.0
|
|
|
6.1
|
|
Payments
for business acquired, net of cash acquired
|
—
|
|
|
(203.7)
|
|
Net
proceeds from sale of business
|
1.6
|
|
|
—
|
|
Net cash used in investing activities
|
(92.4)
|
|
|
(267.8)
|
|
|
|
|
|
Financing
|
|
|
|
Net
(decrease) increase in notes payable
|
(11.7)
|
|
|
42.3
|
|
Additions
to long-term debt, net of debt issuance costs
|
191.4
|
|
|
206.7
|
|
Repayments
of long-term debt, including current portion
|
(99.9)
|
|
|
(3.9)
|
|
Payments
for purchase of treasury stock
|
—
|
|
|
(181.9)
|
|
Proceeds
from stock options exercised, including the tax benefit
|
47.0
|
|
|
27.9
|
|
Taxes paid
on employees' restricted stock award vestings
|
(17.5)
|
|
|
(12.5)
|
|
Dividends
paid to noncontrolling stockholders
|
(12.0)
|
|
|
—
|
|
Net cash provided by financing activities
|
97.3
|
|
|
78.6
|
|
|
|
|
|
Effect of
exchange rate changes on cash
|
1.6
|
|
|
3.6
|
|
|
|
|
|
Net
increase (decrease) in cash
|
37.3
|
|
|
(227.0)
|
|
|
|
|
|
Cash at
beginning of year
|
359.6
|
|
|
449.9
|
|
Cash at
end of period
|
$
|
396.9
|
|
|
$
|
222.9
|
|
SOURCE BorgWarner Inc.