AUBURN HILLS, Mich.,
April 30, 2015 /PRNewswire/
-- BorgWarner Inc. (NYSE: BWA) today reported first quarter
2015 U.S. GAAP net earnings of $0.79
per diluted share. Excluding non-comparable items, net earnings
were $0.78 per diluted share. Net
sales were $1,984 million in the
quarter.
First Quarter Highlights:
- U.S. GAAP net sales of $1,984
million, down 5% compared with first quarter 2014.
- The impact of foreign currencies decreased first quarter 2015
net sales growth by approximately 11% compared with first quarter
2014.
- Excluding the impact of foreign currencies, the Wahler
acquisition, and the first quarter 2015 acquisition of the
remaining 51% of BERU Diesel Start Systems Pvt. Ltd. ("BERU
Diesel"), net sales were up 3% compared with first quarter
2014.
- U.S. GAAP net earnings of $0.79
per diluted share.
- The impact of foreign currencies decreased net earnings by
approximately $0.09 per diluted share
in first quarter 2015 compared with first quarter 2014.
- Excluding the $0.01 per diluted
share net impact of restructuring, gain on a previously held equity
interest and tax adjustments, net earnings were $0.78 per diluted share.
- U.S. GAAP operating income of $260
million.
- Excluding the $12 million pretax
impact of restructuring and the $11
million pretax gain on a previously held equity interest in
BERU Diesel, operating income was $261
million, or 13.1% of net sales, in line with first quarter
2014.
First Quarter Results: "Outstanding operating performance
drove our first quarter results," said James R. Verrier, President and Chief Executive
Officer, BorgWarner. "The strong performance enabled us to achieve
an impressive operating income margin of 13.1%, excluding
non-comparable items, in line with our operating margin a year ago.
The demand for our advanced powertrain technology, designed to
improve fuel economy, emissions and vehicle performance, continued
around the globe, but our growth was temporarily impacted by an
unfavorable mix of light vehicle production in North America and launch delays in
Asia. We believe these issues are
short term and should not impact our full year growth
expectations."
2015 Guidance: The company has updated its 2015 full year
guidance. Due to weakening foreign currencies, net sales growth is
now expected to be within a range of -4% to 0% compared with 2014,
down from 2% to 6% previously. Excluding the impact of weakening
foreign currencies, net sales growth is expected to be within a
range of 9.5% to 12%, unchanged from the previous guidance. The
company is lowering its net earnings per share guidance to a range
of $3.10 to $3.30 per diluted share
from a previous range of $3.35 to
$3.55 per diluted share, primarily due to the impact of
weakening foreign currencies on expected net sales growth. Both net
earnings guidance ranges exclude non-comparable items. Operating
income, as a percentage of net sales, is still expected to be above
13%, excluding non-comparable items.
Financial Results: Net sales were $1,984 million in first quarter 2015, down 5%
from $2,084 million in first quarter
2014. Net earnings in the quarter were $179
million, or $0.79 per diluted
share, compared with $159 million, or
$0.69 per diluted share, in first
quarter 2014. First quarter 2015 net earnings included net
non-comparable items of $0.01 per
diluted share. First quarter 2014 net earnings included a
non-comparable item of $(0.13) per
diluted share. These items are listed in a table below as
reconciliations of non-U.S. GAAP measures, which are provided by
the company for comparison with other results, and the most
directly comparable U.S. GAAP measures. The impact of foreign
currencies decreased net sales by approximately $222 million and decreased net earnings by
approximately $0.09 per diluted share
in first quarter 2015 compared with first quarter 2014.
The following table reconciles the company's non-U.S. GAAP
measures included in the press release, which are provided for
comparison with other results, and the most directly comparable
U.S. GAAP measures:
Net earnings per
diluted share
|
First
Quarter
|
|
|
2015
|
|
2014
|
|
|
|
|
|
|
Non – U.S.
GAAP
|
$
|
0.78
|
|
|
$
|
0.83
|
|
|
|
|
|
|
|
Reconciliations:
|
|
|
|
|
Restructuring
expense
|
(0.05)
|
|
|
(0.13)
|
|
|
Gain on previously
held equity interest
|
0.05
|
|
|
|
|
Tax
adjustments
|
0.01
|
|
|
|
|
|
|
|
|
|
U.S.
GAAP
|
$
|
0.79
|
|
|
$
|
0.69
|
|
*
|
|
|
|
|
|
*Column does not
add due to rounding
|
|
|
Net cash provided by operating activities was $33 million in first quarter 2015 compared with
$46 million in first quarter 2014.
Investments in capital expenditures, including tooling outlays,
totaled $140 million in first quarter
2015, compared with $126 million in
first quarter 2014. Balance sheet debt increased by $498 million and cash increased by $238 million at the end of first quarter 2015
compared with the end of 2014. The $261
million increase in net debt was primarily due to capital
expenditures, weakening foreign currencies, a dividend payment to
shareholders and share repurchases. The company's net debt to net
capital ratio was 18.4% at the end of first quarter 2015 compared
with 12.8% at the end of 2014.
Engine Segment Results: Engine segment net sales were
$1,381 million in first quarter 2015
compared with $1,412 million in first
quarter 2014. Excluding the impact of foreign currencies, primarily
the Euro, the Wahler acquisition and the BERU Diesel acquisition,
net sales were up 6% from the prior year's quarter, primarily due
to higher sales of turbochargers. Adjusted earnings before
interest, income taxes and non-controlling interest ("Adjusted
EBIT") were $230 million in first
quarter 2015, down 1% from $232
million in first quarter 2014. Excluding the impact of
foreign currencies, the Wahler acquisition and the BERU Diesel
acquisition, Adjusted EBIT was $256
million, up 10% from first quarter 2014.
Drivetrain Segment Results: Drivetrain segment net sales
were $611 million in first quarter
2015 compared with $681 million in
first quarter 2014. Excluding the impact of foreign currencies,
primarily the Euro, net sales were down 2% from the prior year's
quarter, primarily due to lower sales of all-wheel drive systems.
Adjusted EBIT was $71 million in
first quarter 2015, down 12% from $81
million in first quarter 2014. Excluding the impact of
foreign currencies, Adjusted EBIT was $75
million, down 6% from first quarter 2014.
Recent Highlights:
- BorgWarner received a 2015 Automotive News PACE Award for its
first-to-market front cross differential (FXD) technology. The
electronic limited slip differential provides automakers with a
cost-effective and fuel-efficient alternative to all-wheel drive
(AWD) systems. BorgWarner's FXD technology debuted on the
Volkswagen Golf GTI with Performance Pack and SEAT Leon CUPRA.
Programs are also under development with several other global
automakers.
- BorgWarner Morse TEC recently received a Best Powertrain EMEA
(Europe, Middle East and Africa) Supplier Award 2014 from Fiat Chrysler
Automobiles (FCA). BorgWarner was honored for its strong
engineering contributions throughout the development of FCA's
Global Small Engine (GSE) platform and its excellent service level,
especially in part quality.
- The company received a 2014 Regional Contribution Award from
Toyota Motor Corporation during the Toyota Global Suppliers
Convention held recently in Nagoya,
Japan. The award recognizes BorgWarner's outstanding
contribution to Toyota's localization success as its sole North
American supplier of part-time four-wheel drive transfer cases for
the 2014 Tundra pick-up truck.
- BorgWarner's manufacturing plants in Nabari and Aoyama,
Japan, were presented with a
Supplier Excellence Award from Honda Japan, recognizing
best-in-class quality in 2014. This is the second consecutive year
BorgWarner has received the award.
- The company supplies its advanced variable turbine geometry
(VTG) turbochargers for two newly developed 1.4-liter
three-cylinder diesel engines from the Volkswagen Group. Both
engines comply with Euro 6 emissions
standards and set new benchmarks by improving fuel economy up to 21
percent compared with the predecessor vehicles.
Recent Highlights (continued):
- BorgWarner supplies its GenV all-wheel drive (AWD) coupling for
the BMW Group's all-new 2 Series Active Tourer. The
electro-hydraulically actuated AWD coupling automatically
distributes power between the front and rear wheels of BMW brand's
first-ever front-wheel drive vehicle.
- The company has expanded manufacturing capacity for emissions
technologies in China,
Mexico and South Korea. Products produced at the newly
expanded facilities include ignition products, exhaust gas
recirculation (EGR) modules, valves and coolers, variable force
solenoids, diesel cold-start technologies and coolant control
valves.
- On March 16, 2015, BorgWarner
issued $1.0 billion aggregate
principal amount of fixed rate senior notes, consisting of
$500 million of 3.375% senior notes
due March 2025 and $500 million of 4.375% senior notes due
March 2045.
- In January 2015, the Company
completed the purchase of the remaining 51% of BERU Diesel by
acquiring the shares of its former joint venture partner. The
former joint venture was formed in 1996 to develop and manufacture
glow plugs in India.
At 9:30 a.m. ET today, a brief
conference call concerning 2015 first quarter results will be
webcast at:
http://www.borgwarner.com/en/Investors/default.aspx.
BorgWarner Inc. (NYSE: BWA) is a product leader in highly
engineered components and systems for powertrains around the world.
Operating manufacturing and technical facilities in 58 locations in
19 countries, the company delivers innovative powertrain solutions
to improve fuel economy, reduce emissions and enhance performance.
For more information, please visit 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,
|
|
2015
|
|
2014
|
Net sales
|
$
|
1,984.2
|
|
|
$
|
2,084.1
|
|
Cost of
sales
|
1,555.2
|
|
|
1,638.3
|
|
Gross
profit
|
429.0
|
|
|
445.8
|
|
|
|
|
|
Selling, general and
administrative expenses
|
168.2
|
|
|
173.8
|
|
Other expense,
net
|
1.2
|
|
|
38.8
|
|
Operating
income
|
259.6
|
|
|
233.2
|
|
|
|
|
|
Equity in affiliates'
earnings, net of tax
|
(8.5)
|
|
|
(8.8)
|
|
Interest
income
|
(1.7)
|
|
|
(1.5)
|
|
Interest expense and
finance charges
|
10.0
|
|
|
8.2
|
|
Earnings before
income taxes and noncontrolling interest
|
259.8
|
|
|
235.3
|
|
|
|
|
|
Provision for income
taxes
|
72.1
|
|
|
68.1
|
|
Net
earnings
|
187.7
|
|
|
167.2
|
|
|
|
|
|
Net earnings
attributable to the noncontrolling interest, net of tax
|
8.8
|
|
|
8.1
|
|
Net earnings
attributable to BorgWarner Inc.
|
$
|
178.9
|
|
|
$
|
159.1
|
|
|
|
|
|
|
|
|
|
Earnings per share —
diluted
|
$
|
0.79
|
|
|
$
|
0.69
|
|
|
|
|
|
Weighted average
shares outstanding — diluted
|
227.1
|
|
|
229.3
|
|
|
|
|
|
Supplemental
Information (Unaudited)
|
|
|
|
(millions of
dollars)
|
|
|
|
|
Three Months
Ended
March 31,
|
|
2015
|
|
2014
|
Capital expenditures,
including tooling outlays
|
$
|
140.0
|
|
|
$
|
126.2
|
|
|
|
|
|
Depreciation and
amortization:
|
|
|
|
Fixed assets and
tooling
|
$
|
72.7
|
|
|
$
|
74.1
|
|
Intangible assets and
other
|
4.4
|
|
|
6.0
|
|
|
$
|
77.1
|
|
|
$
|
80.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BorgWarner
Inc.
|
|
|
|
Net Sales by
Reporting Segment (Unaudited)
|
|
|
|
(millions of
dollars)
|
|
|
|
|
|
|
|
|
Three Months
Ended
March 31,
|
|
2015
|
|
2014
|
Engine
|
$
|
1,380.9
|
|
|
$
|
1,412.1
|
|
Drivetrain
|
611.2
|
|
|
680.7
|
|
Inter-segment
eliminations
|
(7.9)
|
|
|
(8.7)
|
|
Net sales
|
$
|
1,984.2
|
|
|
$
|
2,084.1
|
|
|
|
|
|
|
|
|
|
Adjusted Earnings
Before Interest, Income Taxes and Noncontrolling Interest
("Adjusted EBIT") (Unaudited)
|
(millions of
dollars)
|
|
|
|
|
|
|
|
|
Three Months
Ended
March 31,
|
|
2015
|
|
2014
|
Engine
|
$
|
230.4
|
|
|
$
|
231.7
|
|
Drivetrain
|
71.0
|
|
|
80.5
|
|
Adjusted
EBIT
|
301.4
|
|
|
312.2
|
|
Restructuring
expense
|
12.1
|
|
|
|
39.5
|
|
Gain on previously
held equity interest
|
(10.8)
|
|
|
—
|
|
Corporate, including
equity in affiliates' earnings and stock-based
compensation
|
32.0
|
|
|
30.7
|
|
Interest
income
|
(1.7)
|
|
|
(1.5)
|
|
Interest expense and
finance charges
|
10.0
|
|
|
8.2
|
|
Earnings before
income taxes and noncontrolling interest
|
259.8
|
|
|
235.3
|
|
Provision for income
taxes
|
72.1
|
|
|
68.1
|
|
Net
earnings
|
187.7
|
|
|
167.2
|
|
Net earnings
attributable to the noncontrolling interest, net of tax
|
8.8
|
|
|
8.1
|
|
Net earnings
attributable to BorgWarner Inc.
|
$
|
178.9
|
|
|
$
|
159.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BorgWarner
Inc.
|
|
|
|
Condensed
Consolidated Balance Sheets (Unaudited)
|
(millions of
dollars)
|
|
|
|
|
|
|
|
|
March 31,
2015
|
|
December 31,
2014
|
Assets
|
|
|
|
|
|
|
|
Cash
|
$
|
1,035.5
|
|
|
$
|
797.8
|
|
Receivables,
net
|
1,564.7
|
|
|
1,443.5
|
|
Inventories,
net
|
506.3
|
|
|
505.7
|
|
Other current
assets
|
218.9
|
|
|
223.8
|
|
Total current
assets
|
3,325.4
|
|
|
2,970.8
|
|
|
|
|
|
Property, plant and
equipment, net
|
2,049.9
|
|
|
2,093.9
|
|
Other non-current
assets
|
2,147.3
|
|
|
2,163.3
|
|
Total
assets
|
$
|
7,522.6
|
|
|
$
|
7,228.0
|
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
|
|
|
|
Notes payable and
other short-term debt
|
$
|
107.8
|
|
|
$
|
623.7
|
|
Accounts payable and
accrued expenses
|
1,484.4
|
|
|
1,530.3
|
|
Income taxes
payable
|
9.3
|
|
|
14.2
|
|
Total current
liabilities
|
1,601.5
|
|
|
2,168.2
|
|
|
|
|
|
Long-term
debt
|
1,730.6
|
|
|
716.3
|
|
Other non-current
liabilities
|
628.0
|
|
|
652.6
|
|
|
|
|
|
Total BorgWarner Inc.
stockholders' equity
|
3,504.0
|
|
|
3,616.2
|
|
Noncontrolling
interest
|
58.5
|
|
|
74.7
|
|
Total
equity
|
3,562.5
|
|
|
3,690.9
|
|
Total liabilities and
equity
|
$
|
7,522.6
|
|
|
$
|
7,228.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BorgWarner
Inc.
|
|
|
|
Condensed
Consolidated Statements of Cash Flows (Unaudited)
|
(millions of
dollars)
|
|
|
|
|
|
|
|
|
Three Months
Ended
March 31,
|
|
2015
|
|
2014
|
Operating
|
|
|
|
Net
earnings
|
$
|
187.7
|
|
|
$
|
167.2
|
|
Non-cash charges
(credits) to operations:
|
|
|
|
Depreciation and
amortization
|
77.1
|
|
|
80.1
|
|
Restructuring
expense, net of cash paid
|
8.1
|
|
|
34.3
|
|
Gain on previously
held equity interest
|
(10.8)
|
|
|
—
|
|
Deferred income tax
provision
|
10.4
|
|
|
15.6
|
|
Other non-cash
items
|
1.1
|
|
|
(1.2)
|
|
Net earnings adjusted
for non-cash charges to operations
|
273.6
|
|
|
296.0
|
|
Changes in assets and
liabilities
|
(240.9)
|
|
|
(249.6)
|
|
Net cash provided by
operating activities
|
32.7
|
|
|
46.4
|
|
|
|
|
|
Investing
|
|
|
|
Capital expenditures,
including tooling outlays
|
(140.0)
|
|
|
(126.2)
|
|
Payments for
businesses acquired, net of cash acquired
|
(12.6)
|
|
|
(106.4)
|
|
Proceeds from asset
disposals and other
|
0.8
|
|
|
1.5
|
|
Net cash used in
investing activities
|
(151.8)
|
|
|
(231.1)
|
|
|
|
|
|
Financing
|
|
|
|
Net (decrease)
increase in notes payable
|
(512.3)
|
|
|
111.3
|
|
Additions to
long-term debt, net of debt issuance costs
|
1,012.8
|
|
|
100.0
|
|
Repayments of
long-term debt, including current portion
|
(3.1)
|
|
|
(100.1)
|
|
Payments for purchase
of treasury stock
|
(33.7)
|
|
|
—
|
|
Proceeds from stock
options exercised, including the tax benefit
|
11.5
|
|
|
9.4
|
|
Taxes paid on
employees' restricted stock award vestings
|
(13.1)
|
|
|
(22.2)
|
|
Dividends paid to
BorgWarner stockholders
|
(29.4)
|
|
|
(28.4)
|
|
Dividends paid to
noncontrolling stockholders
|
(15.9)
|
|
|
(14.0)
|
|
Net cash provided by
financing activities
|
416.8
|
|
|
56.0
|
|
|
|
|
|
Effect of exchange
rate changes on cash
|
(60.0)
|
|
|
(2.7)
|
|
|
|
|
|
Net increase
(decrease) in cash
|
237.7
|
|
|
(131.4)
|
|
|
|
|
|
Cash at beginning of
year
|
797.8
|
|
|
939.5
|
|
Cash at end of
period
|
$
|
1,035.5
|
|
|
$
|
808.1
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/borgwarner-reports-first-quarter-2015-us-gaap-net-earnings-of-079-per-diluted-share-or-078-per-diluted-share-excluding-non-comparable-items-300075046.html
SOURCE BorgWarner Inc.