Delphi Automotive PLC (NYSE: DLPH), a leading global vehicle components manufacturer, today reported fourth quarter U.S. GAAP earnings of $0.97 per diluted share. Excluding special items, earnings increased 24% to $1.12 per diluted share.
Fourth Quarter Highlights include:
- Revenue of $4.2 billion, up 11%
- U.S. GAAP diluted earnings per share of $0.97, up 126%
- Excluding special items, earnings of $1.12 per diluted share, up 24%
- Adjusted Operating Income of $472 million, up 33%
- Adjusted Operating Income margin of 11.3%, up 190 basis points
- Adjusted EBITDA of $611 million, up 26%
- Adjusted EBITDA margin of 14.6%, up 170 basis points
- Returned $147 million to shareholders through share repurchases and dividends
Full Year 2013 Highlights include:
- Revenue of $16.5 billion, up 6%
- U.S. GAAP diluted earnings per share of $3.89, up 17%
- Excluding special items, earnings of $4.40 per diluted share, up 15%
- Adjusted Operating Income of $1,844 million, up 10%
- Adjusted Operating Income margin of 11.2%, up 40 basis points
- Adjusted EBITDA of $2,384 million, up 11%
- Adjusted EBITDA margin of 14.5%, up 70 basis points
- Generated $1.8 billion of cash from operations, up 18%
- Returned $668 million to shareholders through share repurchases and dividends
“Delphi’s fourth quarter financial results demonstrate the consistently high level of execution by Delphi’s team,” said Rodney O’Neal, chief executive officer and president. “In 2013, we were able to deliver exceptional value to both our global customers and our shareholders. Our strong performance provides significant momentum as we enter 2014.”
Fourth Quarter 2013 Results
The Company reported fourth quarter 2013 revenue of $4.2 billion, an increase of 11% over the fourth quarter of 2012, reflecting continued strong growth in Asia and North America. Adjusted for the impacts of currency exchange, commodity movements, acquisitions and divestitures, revenue increased by 8% in the fourth quarter. This reflects growth of 14% in Asia, 9% in North America and 7% in Europe, partially offset by declines of 6% in South America.
The Company reported fourth quarter U.S. GAAP net income of $298 million and earnings of $0.97 per diluted share, compared to $136 million and $0.43 per diluted share in the prior year period. Fourth quarter net income excluding special items consisting of restructuring-related charges, asset impairments, acquisition-related integration and transaction costs, and losses on extinguishment of debt (“Adjusted Net Income”), totaled $345 million, or $1.12 per diluted share, which includes the unfavorable impact of an increased effective tax rate as well as the favorable impact of a reduced share count. Adjusted Net Income in the prior year period was $287 million, or $0.90 per diluted share.
Fourth quarter earnings before interest expense, other income (expense), income tax expense, equity income, restructuring and acquisition-related integration costs (“Adjusted Operating Income”) was $472 million, compared to $355 million in the prior year period. Adjusted Operating Income margin was 11.3% in the fourth quarter of 2013, an increase of 190 basis points compared with 9.4% in the prior year period.
Fourth quarter earnings before depreciation and amortization, interest expense, other income (expense), income tax expense, equity income, restructuring and acquisition-related integration costs (“Adjusted EBITDA”) was $611 million, compared to $486 million in the prior year period. Adjusted EBITDA margin increased 170 basis points in the fourth quarter of 2013 to 14.6%, compared with 12.9% in the prior year period. The increase in Adjusted EBITDA reflects the continued strong performance and growth of our businesses in Asia and North America, as well as the benefits of our on-going European restructuring programs initiated in late 2012.
Interest expense for the fourth quarter totaled $37 million, comparable to $36 million in the prior year period. Tax expense in the fourth quarter of 2013 was $74 million, resulting in an effective tax rate of approximately 19%, compared to a tax benefit of $15 million in the prior year period. The increase reflects higher pretax earnings, as well as the geographic mix of pretax earnings.
Full Year 2013 Results
For full year 2013, the Company reported revenue of $16.5 billion, an increase of 6% compared to 2012. Adjusted for the impacts of currency exchange, commodity movements, acquisitions and divestitures, revenue increased by 1%. This reflects growth of 11% in Asia, 5% in North America and 2% in South America, partially offset by a 6% decline in Europe.
The Company reported full year 2013 U.S. GAAP net income of $1.2 billion and earnings of $3.89 per diluted share, compared to $1.1 billion or $3.33 per diluted share in the prior year. Full year 2013 Adjusted Net Income totaled $1.4 billion, or $4.40 per diluted share, which includes the favorable impact of share repurchases in 2013, compared to Adjusted Net Income of $1.2 billion, or $3.84 per diluted share, in the prior year.
Adjusted Operating Income totaled $1,844 million for the full year 2013, compared to $1,671 million in the prior year period. Adjusted Operating Income margin was 11.2% for the full year 2013, an improvement of 40 basis points compared with 10.8% in the prior year period.
Full year 2013 Adjusted EBITDA totaled $2,384 million, compared to $2,142 million in the prior year period. Adjusted EBITDA margin for the full year 2013 improved 70 basis points to 14.5%, from 13.8% in the prior year period. The increase in Adjusted EBITDA reflects the strong performance of our businesses in Asia and North America and the increased earnings from the acquisition of MVL, partially offset by sales declines in Europe.
Interest expense for 2013 totaled $143 million, compared to $136 million in the prior year period. Additionally, the first quarter of 2013 included a net loss on retirement of debt totaling $39 million. Tax expense for 2013 was $256 million, resulting in an effective tax rate of approximately 17%, compared to $212 million, or an effective rate of 16%, in the prior year period. The increase in 2013 reflects higher pretax earnings, as well as the geographic mix of pretax earnings.
The Company generated net cash flow from operating activities of $1.8 billion in 2013, compared to $1.5 billion in the prior year period. Cash flow before financing totaled $1.1 billion compared to $0.8 billion in the prior year period. As of December 31, 2013, the Company had cash and cash equivalents of $1.4 billion and access to $1.5 billion in undrawn committed revolving bank facilities, and total debt of $2.4 billion.
Share Repurchase Program
During the fourth quarter of 2013, Delphi repurchased 1.69 million shares for approximately $95 million under its existing $750 million share repurchase program, leaving approximately $190 million available for future share repurchases under this program. As previously disclosed, the Company’s Board of Directors also authorized a new $1 billion share repurchase program, commencing upon the completion of the existing program. During the full year 2013, the Company repurchased 9.11 million shares for approximately $457 million. All repurchased shares were retired, and are reflected as a reduction of ordinary share capital for the par value of the shares, with the excess applied as reductions to additional paid-in capital and retained earnings.
Q1 2014 and Full Year 2014 Outlook
The Company’s first quarter and full year 2014 financial guidance is as follows:
|(in millions, except per share amounts)||Q1|
|Revenue||$4,200 – $4,300||$17,200 – $17,600|
|Adjusted Operating income||$435 – $460||$1,950 – $2,050|
|Adjusted Operating income Margin||10.4% – 10.7%||11.3% – 11.6%|
|Adjusted Earnings Per Share||$1.04 – $1.08||$4.70 – $4.95|
|Cash Flow Before Financing||$1,100|
|Depreciation and Amortization||$600|
|Adjusted Effective Tax Rate||18%|
|Share Count – Diluted||309|
Full year 2014 mid-point earnings per share guidance represents 10% growth year-over-year, and assumes global vehicle production increases of 3%.
Conference Call and Webcast
The Company will host a conference call to discuss these results at 9:00 a.m. (ET) today, which is accessible by dialing 888.486.0553 (US domestic) or 706.634.4982 (international) or through a webcast at http://investor.delphi.com/. The conference ID number is 34601527. A slide presentation will accompany the prepared remarks and has been posted on the investor relations section of the Company’s website. A replay will be available two hours following the conference call.
Use of Non-GAAP Financial Information
This press release contains information about Delphi’s financial results which are not presented in accordance with accounting principles generally accepted in the United States (“GAAP”). Such non-GAAP financial measures are reconciled to their closest GAAP financial measures at the end of this press release. Non-GAAP measures should not be considered in isolation or as a substitute for our reported results prepared in accordance with GAAP and, as calculated, may not be comparable to other similarly titled measures of other companies.
Delphi Automotive PLC (NYSE: DLPH) is a leading global supplier of technologies for the automotive and commercial vehicle markets. Headquartered in Gillingham, U.K., Delphi operates major technical centers, manufacturing sites and customer support services in 32 countries, with regional headquarters in Bascharage, Luxembourg; Sao Paulo; Shanghai and Troy, Mich. Delphi delivers innovation for the real world with technologies that make cars and trucks smarter and safer as well as more powerful and efficient. Visit www.delphi.com.
This press release, as well as other statements made by Delphi Automotive PLC (the “Company”), contain forward-looking statements that reflect, when made, the Company’s current views with respect to current events and financial performance. Such forward-looking statements are subject to many risks, uncertainties and factors relating to the Company’s operations and business environment, which may cause the actual results of the Company to be materially different from any future results. All statements that address future operating, financial or business performance or the Company’s strategies or expectations are forward-looking statements. Factors that could cause actual results to differ materially from these forward-looking statements are discussed under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s filings with the Securities and Exchange Commission. New risks and uncertainties arise from time to time, and it is impossible for us to predict these events or how they may affect the Company. It should be remembered that the price of the ordinary shares and any income from them can go down as well as up. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events and/or otherwise, except as may be required by law.