AUBURN HILLS, Mich.,
April 28, 2016 /PRNewswire/ --
BorgWarner Inc. (NYSE: BWA) today reported first quarter
results.
First Quarter Highlights:
- U.S. GAAP net sales of $2,269
million, up 14.3% compared with first quarter 2015.
- Excluding the impact of foreign currencies and the Remy
acquisition, net sales were up 4.5% compared with first quarter
2015.
- U.S. GAAP net earnings of $0.75
per diluted share.
- Excluding the $(0.05) per diluted
share related to net non-comparable items (detailed in the table
below), net earnings were $0.80 per
diluted share, of which $0.03 per
diluted share were contributed by the Remy acquisition.
- U.S. GAAP operating income of $264
million.
- Excluding the $12 million of
pretax expenses related to non-comparable items, operating income
was $276 million, of which
$11 million was contributed by the
Remy acquisition. Excluding the impact of non-comparable items,
operating income was 12.2% of net sales. Excluding the impact of
non-comparable items and the Remy acquisition, operating income was
13.2% of net sales.
Full Year 2016 Guidance: The company has updated its 2016
full year guidance. Net sales growth is now expected to be within a
range of 12.7% to 17.5% compared with 2015. Excluding the impact of
foreign currencies and the Remy acquisition, net sales growth is
still expected to be within a range of 2.5% to 5.5%. Net earnings
are still expected to be within a range of $3.11 to $3.32 per diluted share, of which
approximately $0.12 per diluted share
are expected to be contributed by the Remy acquisition. Excluding
the impact of non-comparable items, operating income, as a
percentage of net sales, is still expected to be above 12%.
Excluding the impact of non-comparable items and the Remy
acquisition, operating income, as a percentage of net sales, is
still expected to be above 13%.
Second Quarter 2016 Guidance: Second quarter 2016 net
sales growth is expected to be within a range of 10.6% to 16.0%
compared with second quarter 2015. Excluding the impact of foreign
currencies and the Remy acquisition, net sales growth is expected
to be within a range of 1.5% to 4.8%. Net earnings are expected to
be within a range of $0.78 to $0.83
per diluted share, of which approximately $0.03 per diluted share are expected to be
contributed by the Remy acquisition. Excluding the impact of
non-comparable items, operating income, as a percentage of net
sales, is expected to be approximately 12%. Excluding the impact of
non-comparable items and the Remy acquisition, operating income, as
a percentage of net sales, is expected to be approximately 13%.
Financial Results: Net sales were $2,269 million in first quarter 2016, up 14.3%
from $1,984 million in first quarter
2015. Net earnings in first quarter 2016 were $164 million, or $0.75 per diluted share, compared with
$179 million, or $0.79 per diluted share, in first quarter 2015.
Net earnings in first quarter 2016 included non-comparable items of
$(0.05) per diluted share. Net
earnings in the first quarter 2015 included net non-comparable
items of $0.01 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 $58 million
and decreased net earnings by approximately $0.03 per diluted share in first quarter 2016
compared with the first quarter 2015.
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 Three
Months
|
|
2016
|
|
2015
|
|
|
|
|
|
Non – U.S.
GAAP
|
$
|
0.80
|
|
|
$
|
0.78
|
|
|
|
|
|
|
Reconciliations:
|
|
|
|
|
Restructuring
expense
|
(0.02)
|
|
|
(0.05)
|
|
|
Merger and
acquisition expense
|
(0.03)
|
|
|
—
|
|
|
Gain on previously
held equity interest
|
—
|
|
|
0.05
|
|
|
Tax
adjustments
|
—
|
|
|
0.01
|
|
|
|
|
|
|
U.S.
GAAP
|
$
|
0.75
|
|
|
$
|
0.79
|
|
Net cash provided by operating activities was $34 million in first quarter 2016 compared with
$33 million in first quarter 2015.
Investments in capital expenditures, including tooling outlays,
totaled $104 million in first quarter
2016, compared with $140 million in
first quarter 2015. Balance sheet debt increased by $48 million and cash decreased by $185 million at the end of first quarter 2016
compared with the end of 2015. The company's net debt to net
capital ratio was 37.0% at the end of first quarter 2016 compared
with 35.2% at the end of 2015.
Engine Segment Results: Engine segment net sales were
$1,399 million in first quarter 2016
compared with $1,381 million in first
quarter 2015. Excluding the impact of foreign currencies, primarily
the Euro, net sales were up 4.5% from the prior year's quarter.
Adjusted earnings before interest, income taxes and non-controlling
interest ("Adjusted EBIT") were $233
million in first quarter 2016. Excluding the impact of
foreign currencies, Adjusted EBIT was $240
million, up 4.2% from first quarter 2015.
Drivetrain Segment Results: Drivetrain segment net sales
were $879 million in first quarter
2016 compared with $611 million in
first quarter 2015. Excluding the impact of foreign currencies,
primarily the Euro, and the Remy acquisition, net sales were up
4.8% from the prior year's quarter. Adjusted EBIT was $84 million in first quarter 2016. Excluding the
impact of foreign currencies, and the Remy acquisition, Adjusted
EBIT was $76 million, up 6.4% from
first quarter 2015.
Recent Highlights:
- BorgWarner's eGearDrive® transmission will propel the Geely
EC7-EV sedan, the Chinese automaker's first mass-produced electric
vehicle. Specifically designed for the emerging high-volume
electric vehicle market, BorgWarner's eGearDrive transmission
features a highly-efficient gear train for extended range and quiet
performance, and is available in a wide range of ratios for a
variety of motor sizes.
At 9:30 a.m. ET today, a brief
conference call concerning first quarter 2016 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 74 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 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; 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
March 31,
|
|
2016
|
|
2015
|
|
Net sales
|
$
|
2,268.6
|
|
|
$
|
1,984.2
|
|
|
Cost of
sales
|
1,804.3
|
|
|
1,555.2
|
|
|
Gross
profit
|
464.3
|
|
|
429.0
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
188.4
|
|
|
168.2
|
|
|
Other expense,
net
|
11.7
|
|
|
1.2
|
|
|
Operating
income
|
264.2
|
|
|
259.6
|
|
|
|
|
|
|
Equity in affiliates'
earnings, net of tax
|
(9.1)
|
|
|
(8.5)
|
|
|
Interest
income
|
(1.6)
|
|
|
(1.7)
|
|
|
Interest expense and
finance charges
|
21.3
|
|
|
10.0
|
|
|
Earnings before
income taxes and noncontrolling interest
|
253.6
|
|
|
259.8
|
|
|
|
|
|
|
Provision for income
taxes
|
80.4
|
|
|
72.1
|
|
|
Net
earnings
|
173.2
|
|
|
187.7
|
|
|
|
|
|
|
Net earnings
attributable to the noncontrolling interest, net of tax
|
9.1
|
|
|
8.8
|
|
|
Net earnings
attributable to BorgWarner Inc.
|
$
|
164.1
|
|
|
$
|
178.9
|
|
|
|
|
|
|
|
|
|
|
Earnings per share —
diluted
|
$
|
0.75
|
|
|
$
|
0.79
|
|
|
|
|
|
|
Weighted average
shares outstanding — diluted
|
218.1
|
|
|
227.1
|
|
|
|
|
|
|
Supplemental
Information (Unaudited)
|
|
|
|
|
(millions of
dollars)
|
|
|
|
|
Three Months
Ended
March 31,
|
|
2016
|
|
2015
|
|
Capital expenditures,
including tooling outlays
|
$
|
104.3
|
|
|
$
|
140.0
|
|
|
|
|
|
|
Depreciation and
amortization:
|
$
|
94.4
|
|
|
$
|
77.1
|
|
|
BorgWarner
Inc.
|
|
Net Sales by
Reporting Segment (Unaudited)
|
|
(millions of
dollars)
|
|
|
|
|
|
Three Months
Ended
March 31,
|
|
2016
|
|
2015
|
|
Engine
|
$
|
1,399.2
|
|
|
$
|
1,380.9
|
|
|
Drivetrain
|
879.2
|
|
|
611.2
|
|
|
Inter-segment
eliminations
|
(9.8)
|
|
|
(7.9)
|
|
|
Net sales
|
$
|
2,268.6
|
|
|
$
|
1,984.2
|
|
|
|
|
|
|
|
|
|
|
Adjusted Earnings
Before Interest, Income Taxes and Noncontrolling Interest
("Adjusted EBIT") (Unaudited)
|
|
(millions of
dollars)
|
|
|
|
|
|
|
|
|
Three Months
Ended
March 31,
|
|
2016
|
|
2015
|
|
Engine
|
$
|
233.4
|
|
|
$
|
230.4
|
|
|
Drivetrain
|
83.8
|
|
|
71.0
|
|
|
Adjusted
EBIT
|
317.2
|
|
|
301.4
|
|
|
Restructuring
expense
|
6.4
|
|
|
12.1
|
|
|
Merger and
acquisition expense
|
5.8
|
|
|
—
|
|
|
Gain on previously
held equity interest
|
—
|
|
|
(10.8)
|
|
|
Corporate, including
equity in affiliates' earnings and stock-based
compensation
|
31.7
|
|
|
32.0
|
|
|
Interest
income
|
(1.6)
|
|
|
(1.7)
|
|
|
Interest expense and
finance charges
|
21.3
|
|
|
10.0
|
|
|
Earnings before
income taxes and noncontrolling interest
|
253.6
|
|
|
259.8
|
|
|
Provision for income
taxes
|
80.4
|
|
|
72.1
|
|
|
Net
earnings
|
173.2
|
|
|
187.7
|
|
|
Net earnings
attributable to the noncontrolling interest, net of tax
|
9.1
|
|
|
8.8
|
|
|
Net earnings
attributable to BorgWarner Inc.
|
$
|
164.1
|
|
|
$
|
178.9
|
|
|
BorgWarner
Inc.
|
|
|
|
|
Condensed
Consolidated Balance Sheets (Unaudited)
|
|
(millions of
dollars)
|
|
|
|
|
|
|
|
|
March 31,
2016
|
|
December 31,
2015
|
|
Assets
|
|
|
|
|
|
|
|
|
Cash
|
$
|
392.3
|
|
|
$
|
577.7
|
|
|
Receivables,
net
|
1,861.2
|
|
|
1,665.0
|
|
|
Inventories,
net
|
756.3
|
|
|
723.6
|
|
|
Other current
assets
|
172.6
|
|
|
168.9
|
|
|
Total current
assets
|
3,182.4
|
|
|
3,135.2
|
|
|
|
|
|
|
Property, plant and
equipment, net
|
2,498.9
|
|
|
2,448.1
|
|
|
Other non-current
assets
|
3,259.4
|
|
|
3,242.4
|
|
|
Total
assets
|
$
|
8,940.7
|
|
|
$
|
8,825.7
|
|
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
|
|
|
|
|
Notes payable and
other short-term debt
|
$
|
466.5
|
|
|
$
|
441.4
|
|
|
Accounts payable and
accrued expenses
|
1,819.4
|
|
|
1,866.4
|
|
|
Income taxes
payable
|
24.5
|
|
|
49.4
|
|
|
Total current
liabilities
|
2,310.4
|
|
|
2,357.2
|
|
|
|
|
|
|
Long-term
debt
|
2,131.9
|
|
|
2,108.9
|
|
|
Other non-current
liabilities
|
737.3
|
|
|
728.1
|
|
|
|
|
|
|
Total BorgWarner Inc.
stockholders' equity
|
3,693.2
|
|
|
3,553.7
|
|
|
Noncontrolling
interest
|
67.9
|
|
|
77.8
|
|
|
Total
equity
|
3,761.1
|
|
|
3,631.5
|
|
|
Total liabilities and
equity
|
$
|
8,940.7
|
|
|
$
|
8,825.7
|
|
|
BorgWarner
Inc.
|
|
Condensed
Consolidated Statements of Cash Flows (Unaudited)
|
|
(millions of
dollars)
|
|
|
|
|
|
|
|
|
Three Months
Ended
March 31,
|
|
2016
|
|
2015
|
|
Operating
|
|
|
|
|
Net
earnings
|
$
|
173.2
|
|
|
$
|
187.7
|
|
|
Depreciation and
amortization
|
94.4
|
|
|
77.1
|
|
|
Restructuring
expense, net of cash paid
|
0.1
|
|
|
8.1
|
|
|
Gain on previously
held equity interest
|
—
|
|
|
(10.8)
|
|
|
Deferred income tax
provision
|
23.9
|
|
|
10.4
|
|
|
Other non-cash
items
|
(6.1)
|
|
|
1.1
|
|
|
Net earnings adjusted
for non-cash charges to operations
|
285.5
|
|
|
273.6
|
|
|
Changes in assets and
liabilities
|
(251.1)
|
|
|
(240.9)
|
|
|
Net cash provided by
operating activities
|
34.4
|
|
|
32.7
|
|
|
|
|
|
|
Investing
|
|
|
|
|
Capital expenditures,
including tooling outlays
|
(104.3)
|
|
|
(140.0)
|
|
|
Payment for business
acquired, net of cash acquired
|
—
|
|
|
(12.6)
|
|
|
Proceeds from asset
disposals and other
|
1.1
|
|
|
0.8
|
|
|
Net cash used in
investing activities
|
(103.2)
|
|
|
(151.8)
|
|
|
|
|
|
|
Financing
|
|
|
|
|
Net increase
(decrease) in notes payable
|
19.7
|
|
|
(512.3)
|
|
|
Additions to
long-term debt, net of debt issuance costs
|
—
|
|
|
1,012.8
|
|
|
Repayments of
long-term debt, including current portion
|
(8.7)
|
|
|
(3.1)
|
|
|
Payments for purchase
of treasury stock
|
(79.5)
|
|
|
(33.7)
|
|
|
Payments for
stock-based compensation items
|
(7.6)
|
|
|
(1.6)
|
|
|
Dividends paid to
BorgWarner stockholders
|
(28.2)
|
|
|
(29.4)
|
|
|
Dividends paid to
noncontrolling stockholders
|
(20.5)
|
|
|
(15.9)
|
|
|
Net cash (used in)
provided by financing activities
|
(124.8)
|
|
|
416.8
|
|
|
|
|
|
|
Effect of exchange
rate changes on cash
|
8.2
|
|
|
(60.0)
|
|
|
|
|
|
|
Net (decrease)
increase in cash
|
(185.4)
|
|
|
237.7
|
|
|
|
|
|
|
Cash at beginning of
year
|
577.7
|
|
|
797.8
|
|
|
Cash at end of
period
|
$
|
392.3
|
|
|
$
|
1,035.5
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/borgwarner-reports-first-quarter-2016-us-gaap-net-earnings-of-075-per-diluted-share-or-080-per-diluted-share-excluding-non-comparable-items-300259271.html
SOURCE BorgWarner Inc.