Delphi Reports First Quarter 2016 Financial Results

GILLINGHAM, England, May 4, 2016 /PRNewswire/ -- Delphi Automotive PLC (NYSE: DLPH), a leading global vehicle components manufacturer, today reported first quarter 2016 U.S. GAAP earnings from continuing operations of $1.15 per diluted share. Excluding special items, first quarter earnings from continuing operations totaled $1.36 per diluted share.

First Quarter Highlights Include:

• Revenue of $4.1 billion, up 7%
• U.S. GAAP net income from continuing operations of $320 million, diluted earnings per share from continuing operations of $1.15
  • Excluding special items, earnings from continuing operations of $1.36 per diluted share, up 12%
• Adjusted Operating Income of $509 million, up 8%
  • Adjusted Operating Income margin of 12.6%, up 20 basis points. U.S. GAAP Operating Income margin of 10.9%
• Generated $268 million of cash from continuing operations
• Share repurchases and dividends of $450 million
• Reaffirms full year financial guidance

"Delphi's strong quarterly results reflect the execution of our strategy, which delivered solid revenue growth and margin expansion," said Kevin Clark, president and chief executive officer. "We remain confident in our ability to deliver on our customer and shareholder commitments in 2016 and beyond."

First Quarter 2016 Results

The Company reported first quarter 2016 revenue of $4.1 billion, an increase of 7% from the prior year period, reflecting continued volume growth in North America, Europe and Asia Pacific. Adjusted for currency exchange, commodity movements, the acquisition of HellermannTyton Group PLC ("HellermannTyton") and the divestiture of the Company's Reception Systems business, revenue increased by 6% in the first quarter. This reflects growth of 5% in North America, 9% in Europe and 8% in Asia, partially offset by a decline of 24% in South America.

The Company reported first quarter 2016 U.S. GAAP net income from continuing operations of $320 million and earnings from continuing operations of $1.15 per diluted share, compared to $288 million and $0.99 per diluted share in the prior year period. First quarter Adjusted Net Income, a non-GAAP financial measure defined below, totaled $377 million, or $1.36 per diluted share, which includes the favorable impact of a reduced share count, offset by a higher tax rate compared to the prior year period. Adjusted Net Income in the prior year period was $353 million, or $1.21 per diluted share.

First quarter Adjusted Operating Income, a non-GAAP financial measure defined below, was $509 million, compared to $472 million in the prior year period. Adjusted Operating Income margin increased 20 basis points in the first quarter of 2016 to 12.6%, compared with 12.4% in the prior year period, resulting from the continued growth of our businesses in North America, Europe and Asia Pacific, and the impact of successful cost reduction initiatives, including our continuing rotation to low cost manufacturing locations in Europe. Depreciation and amortization expense totaled $162 million in the first quarter, an increase from $128 million in the prior year period, primarily attributable to the acquisition of HellermannTyton in December of 2015.

Interest expense for the first quarter totaled $41 million, an increase from $32 million in the prior year period, which reflects the issuance of $1.3 billion in senior unsecured notes in the fourth quarter of 2015 to finance the acquisition of HellermannTyton.

Tax expense in the first quarter of 2016 was $75 million, resulting in an effective tax rate of approximately 19%, compared to $61 million, or an effective rate of 17%, in the prior year period. The increase is primarily attributable to the geographic mix of pretax earnings.

Also during the first quarter of 2016, the Company completed the final step of the divestiture of its former Thermal Systems business by closing the sale of its interest in the Shanghai Delphi Automotive Air Conditioning ("SDAAC") joint venture for $99 million, and recognized an after-tax gain on the divestiture of $104 million within income from discontinued operations.

The Company generated net cash flow from continuing operating activities of $268 million in the first quarter of 2016, compared to $121 million in the prior year period. As of March 31, 2016, the Company had cash and cash equivalents of $463 million and total debt of $4.4 billion.

Reconciliations of Adjusted Net Income, Adjusted Net Income per Share, Adjusted Operating Income and Cash Flow Before Financing, which are non-GAAP measures, to the most directly comparable financial measures, respectively, calculated and presented in accordance with accounting principles generally accepted in the United States ("GAAP") are provided in the attached supplemental schedules.

Acquisition of PureDepth

Delphi has further expanded its portfolio of technology solutions by acquiring PureDepth, Inc. ("PureDepth"), a leading provider of multi-layer display technology that enables glasses-less 3D for cluster and other applications. The acquisition of PureDepth will complement and enhance Delphi's fully-reconfigurable digital display product offerings.

Share Repurchase Program

During the first quarter of 2016, Delphi repurchased 5.60 million shares for approximately $370 million under its existing authorized share repurchase program, leaving approximately $137 million available for future share repurchases. As previously disclosed, the Company's Board of Directors also authorized a new $1.5 billion share repurchase program, commencing upon the completion of the existing program. 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.

Q2 and Full Year 2016 Outlook

The Company's second quarter and full year 2016 financial guidance is as follows:

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 95570059. 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"). Specifically, Adjusted Operating Income, Adjusted Net Income, Adjusted Net Income per Share and Cash Flow Before Financing are non-GAAP financial measures. Adjusted Operating Income represents net income before interest expense, other income (expense), net, income tax expense, equity income (loss), net of tax, income (loss) from discontinued operations, net of tax, restructuring, other acquisition and portfolio project costs, asset impairments and gains (losses) on business divestitures. Other acquisition and portfolio project costs include costs incurred to integrate acquired businesses and to plan and execute product portfolio transformation actions, including business and product acquisitions and divestitures. Adjusted Operating Income margin is defined as Adjusted Operating Income as a percentage of Net sales.

Adjusted Net Income represents net income attributable to Delphi before discontinued operations, restructuring and other special items, including the tax impact thereon. Adjusted Net Income Per Share represents Adjusted Net Income divided by the weighted average number of diluted shares outstanding for the period. Cash Flow Before Financing represents cash provided by (used in) operating activities from continuing operations plus cash provided by (used in) investing activities from continuing operations, adjusted for the purchase price of business acquisitions (including the settlement of foreign currency derivatives related to the 2015 acquisition of HellermannTyton) and net proceeds from the divestiture of discontinued operations.

Management believes the non-GAAP financial measures used in this press release are useful to both management and investors in their analysis of the Company's financial position and results of operations. In particular, management believes Adjusted Operating Income, Adjusted Net Income, Adjusted Net Income Per Share and Cash Flow Before Financing are useful measures in assessing the Company's ongoing financial performance that, when reconciled to the corresponding GAAP measure, provide improved comparability between periods through the exclusion of certain items that management believes are not indicative of the Company's operating performance and that may obscure underlying business results and trends. Management also uses these non-GAAP financial measures for internal planning and forecasting purposes.

Such non-GAAP financial measures are reconciled to the most directly comparable GAAP financial measures in the attached supplemental schedules 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.

About Delphi

Delphi Automotive PLC (NYSE: DLPH) is a high-technology company that integrates safer, greener and more connected solutions for the automotive sector. Headquartered in Gillingham, U.K., Delphi operates technical centers, manufacturing sites and customer support services in 44 countries. Visit delphi.com.

Forward-Looking Statements

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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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SOURCE Delphi Automotive PLC