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Delphi Technologies reports second quarter results

Delphi Technologies PLC today announced financial results for its second quarter 2020

Delphi Technologies PLC (“Delphi Technologies” or the “Company”) today announced financial results for its second quarter 2020.

Q2 2020 results

Revenue

Operating Income

Net Income per Share – Diluted

Cash From Operations

GAAP

$628 M

$(60) M

$(1.23)

$10 M

vs. Q2 2019

(44)%

(207)%

(497)%

$(60) M

Adj. Revenue Growth

Adj. Operating Income

Adj. Net Income per Share – Diluted

Non-GAAP

N/A

$(43) M

$(0.58)

vs. Q2 2019

(41)%

(153)%

(200)%

Q2 2020

  • Revenue of $628 million decreased 44% from Q2 2019. Adjusting for currency exchange, revenue decreased 41%. The decline was primarily due to lower global production, the closure of customer production sites related to COVID-19 and the downward trend in passenger car diesel fuel injection systems in Europe. This was partially offset by strong growth in Power Electronics.
  • On a regional basis, adjusted revenue reflects decreases of 57% in Europe, 61% in North America, and 34% in South America, partially offset by an increase of 13% in Asia Pacific, including an increase of 41% in China.
  • Operating loss was $60 million, compared to operating income of $56 million in the prior year period. Adjusted operating loss was $43 million, compared to $81 million of adjusted operating income in the prior year period. The decrease was primarily due to lower volumes, partially offset by structural cost reductions.
  • Earnings per diluted share of $(1.23), compared to $0.31 in the prior year period. Excluding special items, earnings per diluted share was $(0.58), compared to $0.58 in the prior year period.
  • Cash flow from operating activities was $10 million, compared to $70 million in the prior year period. The year-on-year decrease is primarily due to the decrease in net income, offset by changes in operating assets and liabilities.
  • Cash balance of $550 million as of June 30, 2020, including $500 million of funds drawn on the Company’s Revolving Credit Facility.
  • The Company executed the sale of a technical center and received cash proceeds of approximately $40 million during the third quarter 2020.

CEO comments

“In the face of the severe economic downturn and complexity caused by the global COVID-19 pandemic, the Delphi Technologies team performed admirably in the second quarter and I could not be more proud of them.” said Richard F. Dauch, Chief Executive Officer of Delphi Technologies.

“Our financial position remained robust, reflecting our ability to execute on our key strategic priorities in the most difficult of environments. We acted decisively to protect the health and safety of our employees and families, as well as taking the necessary steps to preserve and generate cash.

Financial highlights included:

  • Strong revenue outgrowth in the quarter, led by more than 40% year-on-year growth in China and 30% year-on-year growth in Power Electronics.
  • 25% decremental adjusted operating margin, driven by stringent cost control measures and positive momentum of our cost transformation plan.
  • Positive operating cash flow of $10 million.
  • A cash balance of $550 million at the end of Q2, including the full $500 million of revolving credit facility.

Significantly, since the end of Q2 we have received approximately $40 million in cash from asset sales, which further strengthens our balance sheet.

Delphi Technologies also made major strides in Q2 from an operational perspective.

Operational highlights included:

  • Working closely with customers and suppliers across the globe to ensure continuity of supply under rapidly changing business conditions.
  • Completing the full qualification and launch of new plants in Mexico, China and Poland as we continue to support OEMs on the path to electrified vehicles.
  • Maintaining the timing on all major new business programs launching over the next two years.
  • Securing a number of significant new Power Electronics wins, as well as earning a major new GDi program in North America.
  • Ensuring GDi remains on track to be break-even by the end of the year, despite significantly lower industry production, and is on a path to deliver long term profitable growth.
  • Driving our cost transformation plan, including footprint consolidation and LEAN systems implementation which remains ahead of schedule, and is delivering a payback of less than one year.  Year to date, we have closed 17 distribution warehouses, 3 technical centers and one manufacturing site.

Excellent progress continues to be made on the BorgWarner transaction. We have now received regulatory approval from six out of seven jurisdictions, and an overwhelming majority of our shareholders approved the transaction.

In addition, integration and synergy planning for the transaction, which is expected to close this year, is on schedule. I am excited about the future combination of Delphi Technologies with BorgWarner and am even more confident about the value creation opportunity for all of our shareholders.”

SOURCE: Delphi Technologies

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