AUBURN HILLS, Mich.,
Oct. 29, 2015 /PRNewswire/
-- BorgWarner Inc. (NYSE: BWA) today reported third quarter
results.
Third Quarter Highlights:
- U.S. GAAP net sales of $1,884
million, down 7% compared with third quarter 2014.
- Excluding the impact of foreign currencies, net sales were up
3% compared with third quarter 2014.
- U.S. GAAP net earnings of $0.70
per diluted share.
- Excluding the $(0.04) per diluted
share impact of restructuring, the $(0.02) per diluted share impact of M&A
expense and the $0.02 per diluted
share impact of tax adjustments, net earnings were $0.73 per diluted share.
- U.S. GAAP operating income of $237
million.
- Excluding the $9 million pretax
impact of restructuring expense and the $4
million pretax impact of M&A expense, operating income
was $250 million, or 13.3% of net
sales, up from 12.5% in third quarter 2014.
2015 Guidance: The company has adjusted its 2015 full
year guidance. Net sales growth is now expected to be within a
range of -6.0% to -5.0% compared with 2014. Excluding the impact of
foreign currencies, net sales growth is expected to be
approximately 4.5%. Net earnings per share, excluding
non-comparable items, is expected to be within a range of
$2.95 to $3.00 per diluted share.
Operating income, as a percentage of net sales, excluding
non-comparable items, is expected to be approximately 13%.
Financial Results: Net sales were $1,884 million in third quarter 2015, down 7%
from $2,032 million in third quarter
2014. Net earnings in the quarter were $157
million, or $0.70 per diluted
share, compared with $167 million, or
$0.73 per diluted share, in third
quarter 2014. Third quarter 2015 net earnings included net
non-comparable items of $(0.03) per
diluted share. Third quarter 2014 net earnings included
non-comparable items of $(0.06) 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 $214 million and decreased net earnings by
approximately $0.08 per diluted share
in third quarter 2015 compared with third quarter 2014.
Net sales were $5,900 million for
the first nine months of 2015, down 7% from $6,313 million in the first nine months of 2014.
Net earnings in the first nine months of 2015 were $484 million, or $2.14 per diluted share, compared with
$516 million, or $2.25 per diluted share, in the first nine months
of 2014. Net earnings in the first nine months of 2015 included net
non-comparable items of $(0.12) per
diluted share. Net earnings in the first nine months of 2014
included non-comparable items of $(0.25) 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
$684 million and decreased net
earnings by approximately $0.26 per
diluted share in the first nine months of 2015 compared with the
first nine months of 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
|
Third
Quarter
|
|
First Nine
Months
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
Non – U.S.
GAAP
|
$
|
0.73
|
|
|
$
|
0.79
|
|
|
$
|
2.26
|
|
|
$
|
2.50
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliations:
|
|
|
|
|
|
|
|
|
Restructuring
expense
|
(0.04)
|
|
|
(0.05)
|
|
|
(0.16)
|
|
|
(0.24)
|
|
|
Merger and
acquisition expense
|
(0.02)
|
|
|
—
|
|
|
(0.02)
|
|
|
—
|
|
|
Gain on previously
held equity interest
|
—
|
|
|
—
|
|
|
0.05
|
|
|
—
|
|
|
Pension
settlement
|
—
|
|
|
(0.01)
|
|
|
—
|
|
|
(0.01)
|
|
|
Tax
adjustments
|
0.02
|
|
|
—
|
|
|
0.01
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
U.S.
GAAP
|
$
|
0.70
|
|
*
|
$
|
0.73
|
|
|
$
|
2.14
|
|
|
$
|
2.25
|
|
|
|
|
|
|
|
|
|
|
|
*Column does not
add due to rounding
|
|
Net cash provided by operating activities was $470 million in the first nine months of 2015
compared with $546 million in first
nine months of 2014. Investments in capital expenditures, including
tooling outlays, totaled $419 million
in the first nine months of 2015, compared with $398 million in the first nine months of 2014.
Balance sheet debt increased by $469
million and cash increased by $236
million at the end of third quarter 2015 compared with the
end of 2014. The company's net debt to net capital ratio was 17.0%
at the end of third quarter 2015 compared with 12.8% at the end of
2014.
Engine Segment Results: Engine segment net sales were
$1,309 million in third quarter 2015
compared with $1,412 million in third
quarter 2014. Excluding the impact of foreign currencies, primarily
the Euro, net sales were up 4% from the prior year's quarter.
Adjusted earnings before interest, income taxes and non-controlling
interest ("Adjusted EBIT") were $212
million in third quarter 2015, down 5% from $223 million in third quarter 2014. Excluding the
impact of foreign currencies, Adjusted EBIT was $233 million, up 4% from third quarter 2014.
Drivetrain Segment Results: Drivetrain segment net sales
were $584 million in third quarter
2015 compared with $627 million in
third quarter 2014. Excluding the impact of foreign currencies,
primarily the Euro, net sales were up 2% from the prior year's
quarter. Adjusted EBIT was $70
million in third quarter 2015, up 3% from $68 million in third quarter 2014. Excluding the
impact of foreign currencies, Adjusted EBIT was $76 million, up 12% from third quarter 2014.
Recent Highlights:
- BorgWarner produces S-Series turbochargers for Mercedes-Benz
Actros heavy-duty trucks powered by its new engine, now produced in
Brazil. BorgWarner received a 2014
Mercedes-Benz Brazil Supplier Award in the Innovation Technology
category for its successful turbocharger launch for the new
Mercedes-Benz Euro V engine families in South America.
- BorgWarner celebrated its plant opening in Oroszlány,
Hungary, on July 28, 2015. The wholly-owned campus provides
production capacity for advanced all-wheel drive (AWD) solutions
such as transfer cases, feeder pumps, valves and AWD couplings for
global automakers.
- BorgWarner produces 2-speed Torque-On-Demand®
transfer cases for the recently launched Foton Motor's Sauvana SUV.
BorgWarner's Torque-On-Demand technology automatically
redistributes torque from the rear wheels to the front wheels
without driver intervention for improved traction, increased
stability and enhanced dynamics.
- BorgWarner received a 2015 General Motors Supplier IMPACT Award
for demonstrating top performance in the Diversity Spend Percentage
to Goal category and excelling in the Significantly Improved
category. General Motors' annual Supplier IMPACT meeting
highlighted strategic Tier 1 suppliers that have made a strong
impact on their company's supply chain with certified, diverse
suppliers. BorgWarner ranked as one of General Motors' Top 20 Tier
1 suppliers for 2014.
- BorgWarner received a 2014 World Excellence Award in the
Aligned Business Framework category for exemplifying the Ford Motor
Company's principles of quality, value and innovation. During the
17th annual awards ceremony, Ford also presented
BorgWarner's facility in Rzeszów, Poland, with a Gold Award for consistently
demonstrating superior quality, delivery and cost performance,
ranking it in the top 5 percent of qualifying suppliers.
- BorgWarner supplies silent engine timing chains for a wide
variety of Yamaha vehicles, including motorcycles, snowmobiles,
all-terrain vehicles, recreational off-highway vehicles and
personal watercrafts. BorgWarner's silent engine timing chains
deliver low noise and proven durability.
Recent Highlights (continued):
- BorgWarner supplies Eco-Launch™ stop/start accumulator
technology and multi-segment wet friction plates for the new
8-speed rear-wheel drive automatic transmission (8L45) from General
Motors. To enable the transmission's stop/start functionality,
BorgWarner's Eco-Launch hydraulic accumulator and solenoid valve
provide rapid, quiet and smooth engagements during engine restarts.
BorgWarner's advanced friction plate technology reduces drag and
enhances shift feel. Improving fuel economy up to 5 percent
compared with similar 6-speed automatic transmissions, the 8L45
transmission will debut on the 2016 Cadillac CT6 and will also
drive the 2016 Cadillac CTS and ATS.
- BorgWarner produces its mini direct-acting variable force
solenoid (VFS) for the 2016 Chevrolet Volt, Chevrolet Malibu hybrid
and Cadillac ELR as well as future General Motors (GM) vehicle
applications powered by the same transmission. Designed to deliver
increased accuracy with significantly lower leakage, the advanced
solenoid reduces parasitic losses from the transmission oil pump,
saving battery power to propel the vehicle.
At 9:30 a.m. ET today, a brief
conference call concerning 2015 third 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 57 locations in
18 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 outlook, expectations, estimates and projections. Words
such as "anticipates," "believes," "continues," "could,"
"designed," "effect," "estimates," "evaluates," "expects,"
"forecasts," "goal," "initiative," "intends," "outlook," "plans,"
"potential," "project," "pursue," "seek," "should," "target,"
"when," "would," and 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: the failure to complete or receive the anticipated
benefits from BorgWarner's acquisition of Remy International Inc.
("Remy"), the possibility that the parties may be unable to
successfully integrate Remy's operations with those of BorgWarner,
that such integration may be more difficult, time-consuming or
costly than expected, revenues following the transaction may be
lower than expected, customer loss and business disruption
(including, without limitation, difficulties in maintaining
relationships with employees, customers, or suppliers) may be
greater than expected following the transaction; the retention of
key employees at Remy may not be achieved, the conditions to the
completion of the transaction may not be satisfied, or the
regulatory approvals required for the transaction may not be
obtained on the terms expected or on the anticipated schedule, the
failure to obtain Remy stockholder approval in a timely manner or
otherwise, fluctuations in domestic or foreign vehicle production,
the continued use by original equipment manufacturers of outside
suppliers, fluctuations in demand for vehicles containing our
products, changes in general economic conditions, as well as other
risks noted in reports that we file 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 or announce publicly any updates to or
revision to any of the forward-looking statements.
BorgWarner
Inc.
|
|
|
|
|
|
|
|
Condensed
Consolidated Statements of Operations (Unaudited)
|
|
|
|
|
(millions, except per
share amounts)
|
|
|
|
|
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Net sales
|
$
|
1,884.0
|
|
|
$
|
2,032.1
|
|
|
$
|
5,900.1
|
|
|
$
|
6,313.2
|
|
Cost of
sales
|
1,485.8
|
|
|
1,607.6
|
|
|
4,643.9
|
|
|
4,970.1
|
|
Gross
profit
|
398.2
|
|
|
424.5
|
|
|
1,256.2
|
|
|
1,343.1
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
148.0
|
|
|
174.5
|
|
|
483.6
|
|
|
529.5
|
|
Other expense,
net
|
13.1
|
|
|
12.3
|
|
|
33.4
|
|
|
62.1
|
|
Operating
income
|
237.1
|
|
|
237.7
|
|
|
739.2
|
|
|
751.5
|
|
|
|
|
|
|
|
|
|
Equity in affiliates'
earnings, net of tax
|
(8.7)
|
|
|
(14.8)
|
|
|
(28.3)
|
|
|
(35.8)
|
|
Interest
income
|
(2.0)
|
|
|
(1.4)
|
|
|
(5.3)
|
|
|
(4.3)
|
|
Interest expense and
finance charges
|
15.0
|
|
|
9.0
|
|
|
42.6
|
|
|
26.2
|
|
Earnings before
income taxes and noncontrolling interest
|
232.8
|
|
|
244.9
|
|
|
730.2
|
|
|
765.4
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
66.9
|
|
|
71.9
|
|
|
219.2
|
|
|
225.3
|
|
Net
earnings
|
165.9
|
|
|
173.0
|
|
|
511.0
|
|
|
540.1
|
|
|
|
|
|
|
|
|
|
Net earnings
attributable to the noncontrolling interest, net of tax
|
8.5
|
|
|
6.4
|
|
|
26.6
|
|
|
24.2
|
|
Net earnings
attributable to BorgWarner Inc.
|
$
|
157.4
|
|
|
$
|
166.6
|
|
|
$
|
484.4
|
|
|
$
|
515.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share —
diluted
|
$
|
0.70
|
|
|
$
|
0.73
|
|
|
$
|
2.14
|
|
|
$
|
2.25
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding — diluted
|
225.991
|
|
|
228.668
|
|
|
226.565
|
|
|
229.222
|
|
|
|
|
|
|
|
|
|
Supplemental
Information (Unaudited)
|
|
|
|
|
|
|
|
(millions of
dollars)
|
|
|
|
|
|
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Capital expenditures,
including tooling outlays
|
$
|
133.8
|
|
|
$
|
140.6
|
|
|
$
|
418.8
|
|
|
$
|
397.9
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization:
|
|
|
|
|
|
|
|
Fixed assets and
tooling
|
$
|
74.0
|
|
|
$
|
74.9
|
|
|
$
|
223.3
|
|
|
$
|
226.3
|
|
Intangible assets and
other
|
4.3
|
|
|
6.9
|
|
|
13.0
|
|
|
20.7
|
|
|
$
|
78.3
|
|
|
$
|
81.8
|
|
|
$
|
236.3
|
|
|
$
|
247.0
|
|
BorgWarner
Inc.
|
|
|
|
|
|
|
|
Net Sales by
Reporting Segment (Unaudited)
|
|
|
|
|
|
|
(millions of
dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Engine
|
$
|
1,308.9
|
|
|
$
|
1,412.4
|
|
|
$
|
4,102.8
|
|
|
$
|
4,322.0
|
|
Drivetrain
|
583.7
|
|
|
627.0
|
|
|
1,821.8
|
|
|
2,016.4
|
|
Inter-segment
eliminations
|
(8.6)
|
|
|
(7.3)
|
|
|
(24.5)
|
|
|
(25.2)
|
|
Net sales
|
$
|
1,884.0
|
|
|
$
|
2,032.1
|
|
|
$
|
5,900.1
|
|
|
$
|
6,313.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Earnings
Before Interest, Income Taxes and Noncontrolling Interest
("Adjusted EBIT") (Unaudited)
|
(millions of
dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Engine
|
$
|
211.9
|
|
|
$
|
222.6
|
|
|
$
|
670.3
|
|
|
$
|
696.0
|
|
Drivetrain
|
70.3
|
|
|
68.0
|
|
|
213.4
|
|
|
237.6
|
|
Adjusted
EBIT
|
282.2
|
|
|
290.6
|
|
|
883.7
|
|
|
933.6
|
|
Restructuring
expense
|
9.3
|
|
|
13.1
|
|
|
41.3
|
|
|
67.6
|
|
Merger and
acquisition expense
|
3.9
|
|
|
—
|
|
|
3.9
|
|
|
—
|
|
Gain on previously
held equity interest
|
—
|
|
|
—
|
|
|
(10.8)
|
|
|
—
|
|
Pension
settlement
|
—
|
|
|
2.7
|
|
|
—
|
|
|
2.7
|
|
Corporate, including
equity in affiliates' earnings and stock-based
compensation
|
23.2
|
|
|
22.3
|
|
|
81.8
|
|
|
76.0
|
|
Interest
income
|
(2.0)
|
|
|
(1.4)
|
|
|
(5.3)
|
|
|
(4.3)
|
|
Interest expense and
finance charges
|
15.0
|
|
|
9.0
|
|
|
42.6
|
|
|
26.2
|
|
Earnings before
income taxes and noncontrolling interest
|
232.8
|
|
|
244.9
|
|
|
730.2
|
|
|
765.4
|
|
Provision for income
taxes
|
66.9
|
|
|
71.9
|
|
|
219.2
|
|
|
225.3
|
|
Net
earnings
|
165.9
|
|
|
173.0
|
|
|
511.0
|
|
|
540.1
|
|
Net earnings
attributable to the noncontrolling interest, net of tax
|
8.5
|
|
|
6.4
|
|
|
26.6
|
|
|
24.2
|
|
Net earnings
attributable to BorgWarner Inc.
|
$
|
157.4
|
|
|
$
|
166.6
|
|
|
$
|
484.4
|
|
|
$
|
515.9
|
|
BorgWarner
Inc.
|
|
|
|
Condensed
Consolidated Balance Sheets (Unaudited)
|
(millions of
dollars)
|
|
|
|
|
|
|
|
|
September 30,
2015
|
|
December 31,
2014
|
Assets
|
|
|
|
|
|
|
|
Cash
|
$
|
1,033.3
|
|
|
$
|
797.8
|
|
Receivables,
net
|
1,551.5
|
|
|
1,443.5
|
|
Inventories,
net
|
523.1
|
|
|
505.7
|
|
Other current
assets
|
193.1
|
|
|
223.8
|
|
Total current
assets
|
3,301.0
|
|
|
2,970.8
|
|
|
|
|
|
Property, plant and
equipment, net
|
2,185.2
|
|
|
2,093.9
|
|
Other non-current
assets
|
2,200.9
|
|
|
2,163.3
|
|
Total
assets
|
$
|
7,687.1
|
|
|
$
|
7,228.0
|
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
|
|
|
|
Notes payable and
other short-term debt
|
$
|
74.6
|
|
|
$
|
623.7
|
|
Accounts payable and
accrued expenses
|
1,436.6
|
|
|
1,530.3
|
|
Income taxes
payable
|
28.6
|
|
|
14.2
|
|
Total current
liabilities
|
1,539.8
|
|
|
2,168.2
|
|
|
|
|
|
Long-term
debt
|
1,734.5
|
|
|
716.3
|
|
Other non-current
liabilities
|
624.9
|
|
|
652.6
|
|
|
|
|
|
Total BorgWarner Inc.
stockholders' equity
|
3,717.0
|
|
|
3,616.2
|
|
Noncontrolling
interest
|
70.9
|
|
|
74.7
|
|
Total
equity
|
3,787.9
|
|
|
3,690.9
|
|
Total liabilities and
equity
|
$
|
7,687.1
|
|
|
$
|
7,228.0
|
|
BorgWarner
Inc.
|
|
|
|
Condensed
Consolidated Statements of Cash Flows (Unaudited)
|
(millions of
dollars)
|
|
|
|
|
|
|
|
|
Nine Months Ended
September 30,
|
|
2015
|
|
2014
|
Operating
|
|
|
|
Net
earnings
|
$
|
511.0
|
|
|
$
|
540.1
|
|
Non-cash charges
(credits) to operations:
|
|
|
|
Depreciation and
amortization
|
236.3
|
|
|
247.0
|
|
Restructuring
expense, net of cash paid
|
19.9
|
|
|
44.2
|
|
Gain on previously
held equity interest
|
(10.8)
|
|
|
—
|
|
Deferred income tax
provision
|
26.8
|
|
|
44.8
|
|
Other non-cash
items
|
21.7
|
|
|
13.8
|
|
Net earnings adjusted
for non-cash charges to operations
|
804.9
|
|
|
889.9
|
|
Changes in assets and
liabilities
|
(334.7)
|
|
|
(343.7)
|
|
Net cash provided by
operating activities
|
470.2
|
|
|
546.2
|
|
|
|
|
|
Investing
|
|
|
|
Capital expenditures,
including tooling outlays
|
(418.8)
|
|
|
(397.9)
|
|
Payments for
businesses acquired, net of cash acquired
|
(12.6)
|
|
|
(106.4)
|
|
Proceeds from asset
disposals and other
|
3.4
|
|
|
3.2
|
|
Net cash used in
investing activities
|
(428.0)
|
|
|
(501.1)
|
|
|
|
|
|
Financing
|
|
|
|
Net (decrease)
increase in notes payable
|
(531.0)
|
|
|
369.9
|
|
Additions to
long-term debt, net of debt issuance costs
|
1,027.5
|
|
|
107.8
|
|
Repayments of
long-term debt, including current portion
|
(22.4)
|
|
|
(422.7)
|
|
Payments for purchase
of treasury stock
|
(130.3)
|
|
|
(90.0)
|
|
Proceeds from stock
options exercised, including the tax benefit
|
15.1
|
|
|
16.2
|
|
Taxes paid on
employees' restricted stock award vestings
|
(13.1)
|
|
|
(23.5)
|
|
Dividends paid to
BorgWarner stockholders
|
(87.9)
|
|
|
(86.8)
|
|
Dividends paid to
noncontrolling stockholders
|
(18.4)
|
|
|
(20.4)
|
|
Net cash provided by
(used in) financing activities
|
239.5
|
|
|
(149.5)
|
|
|
|
|
|
Effect of exchange
rate changes on cash
|
(46.2)
|
|
|
(52.3)
|
|
|
|
|
|
Net increase
(decrease) in cash
|
235.5
|
|
|
(156.7)
|
|
|
|
|
|
Cash at beginning of
year
|
797.8
|
|
|
939.5
|
|
Cash at end of
period
|
$
|
1,033.3
|
|
|
$
|
782.8
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/borgwarner-reports-third-quarter-2015-us-gaap-net-earnings-of-070-per-diluted-share-or-073-per-diluted-share-excluding-non-comparable-items-300168676.html
SOURCE BorgWarner Inc.