DAN - Earnings call transcript Q4 2017

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Operator

Good morning, and welcome to Dana Incorporated's Fourth Quarter and Full Year 2017 Financial Webcast and Conference Call. My name is Dennis, and I will be your conference facilitator. Please be advised that our meeting today, both the speakers' remarks and Q&A session, will be recorded for replay purposes. [Operator Instructions]. At this time, I would like to begin the presentation by turning the call over to Dana's Senior Director of Investor Relations and Strategic Planning, Craig Barber. Mr. ahead, go Please Barber.

Craig Barber

and thank today everyone and for Call. press XXXX and our posted for website. investor Full the joining Earnings release our of us Dana's Copies have you Dennis, been on to to call Year presentation Thanks, Fourth Quarter

about always, is consent. or copied statements and today. results future includes rebroadcast our written being As Instructions]. Dana's the the Today's are forward-looking recorded, materials today's those not expectations Dana of be call [Operator performance. presentation differ property could comments Incorporated. suggested recorded, for supporting our They may without our by Actual from

information Additional turn Executive filings. Vice morning Officer; Officer. are statement. factors harbor These Collins, future affect risk and Financial Jim, and I'll Jim factors Jonathan over Kamsickas, you. Presenting results this President call detailed could Chief public are about are Executive President in our safe the summarized Chief to our also the and that in

James Kamsickas

everyone, for Thank and Good thank our XXXX. outlook results for joining we month, you, announced for morning, us. our XXXX Last preliminary Craig. and you

I'd but like strategy. excellent year facilitator important business highlight has But the as review acquisitions. take XX% year sales, $X.X had accomplishments our and key most XXXX. around increase just was billion team. saw through minutes of all the is the few execution Dana will Dana important recent which an demand to in Dana. than take perhaps, was our it's a in new our been and an success So today, was excellent a what higher for market numbers of the benefit the we of you of higher I Jonathan It to think detail, few briefly a to of the

for blueprint Our success. the is enterprise strategy

X last backlog programs, last to our rapid years, at a pace. largest we and relaunched year, refreshed our we and X the have continued Over customer commercialize

XX% production growth, our Spicer time key of The $XXX that locations, all brand segments. our XXXX, to greenfielding or acquisitions show our Notably, operational since look year our fuel We commercial $XXX mining footprint adjusted strategic our XXXX business continue demand new lead in year expanded X the EBITDA. the global this the on in prior results our over and convert we we facilities we able finished addition, year earning wins. win future A exceeded in quick handling million we're short at every new completed by surges milestones. where Electrified launched X to or In increasing higher Profit all grown we and segments the earnings. met our in electric and business strategic team construction as drivetrain the same in Dana million have time, while, dramatic vehicle, on from we capitalize accomplished for successfully expected, was at rapid demand products. to our

customer programs. higher achieved absorbing new long-lived success Our increased earnings-per-share, last as well-spent set XX Translating year, last our year. costs above EPS this was we launched as basis production on we we investment slightly despite versus products. XX% margin higher This points key to

shareholders We due and maintaining to years managing X capital earnings over our this We have EPS by improved committed for commitment the priority. remain steady achieved to value growth to our our past structure. aggressively

in and our in sign place increasing be this a quality, As for we and that commitment earned results. of last our repurchase Underlining success our we has Supplier we million to announced to on-time our mentioned on focus dividend been deliver by reflected our last month, in we program, the financial $XXX the customers, sustainability. is year delivery ability which Awards year we confidence share XX%, have put quarterly a will

major is upcoming all lift Ford customers, [indiscernible], our Ford, a to outpace that Dana target business Dana new a we've whom as significant to and long-range backlog. This Volvo, FCA, revitalized This X-year Chevy role total, and new led we over recognize growth has the new and of other row contributions has advanced in key we Silverado, of the In dozens businesses. growth through new in to the the of MAN, new program business vehicle trust made business Caterpillar and $XXX a for of XXXX the Ranger, risen playing is third their handlers year for our Manitou to launches XXXX the This XXXX added trucks, end backlog. technologies in medium-duty markets. boom the for Kalmar numerous wins. platforms. Organic backlog our to improvement million, continue includes Jeep Wrangler, X% delivering cornerstone our represent

Last businesses on than patent And patents we more core new to technology, issued including our focus the finally, is driver customer our and vehicle Our of In million XXXX, XX%, and crossed performance financial X year centricity including by we increased we milestone recent electrification. products. alone, $XXX added Dana. is Brevini. of a our customers. new services with over XXX in patents as to XX,XXX our dozens integrated have and successfully These have activity USM related acquisitions, sales major

Dana bringing of markets into have while our opened they our end In new markets. new use for for all technology addition, across products

year excellent and for are for we an not done. So XXXX, that's it Dana,

XXXX, to forward look we see we more success ahead. As

with Ford; with drive We new have our other new Jeep all-wheel exciting Ranger; and business vehicles. disconnecting launching well the as with later year, program Ford Wrangler; numerous right global as this the now,

and North vehicles high demand improving Our end commercial we demand in for for remain strong mining well markets and Europe, light equipment. construction as trucks, both as America and expect in

the you, well numbers. turn announced month we Jonathan as have to gave we the Thank XXXX will morning, over more XXXX of this As improved call review outlook. the last for I as detailed guidance a the affirmed we and

Jonathan Collins

Thank Jim. results. XXXX of the is X year you, Slide full and quarter financial overview an fourth

guidance as as well last our the with preliminary disclosed line we in were numbers results Our month.

double-digit the to XXXX, were versus XXXX, driven growth billion million nearly sales year XX%. in representing by compared fourth billion strong basis, up of same a are the For of sales $X.X On period full quarter, up $XXX $X.XX organic and EBITDA well quarter, increase Adjusted backlog growth demand as million the $XXX end year. acquisitions. the higher the a the conversion $XX as prior million market fourth from of was impact for our of from

the conversion For over fourth XX.X% volume. $XXX of the improvement prior $XXX is $XXX of of million. the full valuation our a deferred of Net primarily tax or corporate U.S. included fourth the $XXX million reform. year, tax due sales. EBITDA million, XX income driven quarter included The charges. recent divestiture-related to was a million the for million and tax of on the quarter XXXX assets up net million This tax rate higher based allowances income a charge fourth quarter over adjusted remeasurement onetime $XXX year in basis-point net to was noncash the income from lower loss $XXX by benefit the in included the on XXXX, XXXX Net of release

impacts, million these in and million in onetime fourth year-over-year XXXX, a $XX income quarter was $XX net Excluding XXXX improvement. million $XX

compared net year. $XXX for $XXX For the million was million income the prior full year, to

cash offset for higher improvement. divested and periods, expense, the And XXXX expenses in from the lower was business. was this the Excluding $XXX with of EBITDA and onetime million offset than expenditures the past XXXX, The both improved expenses the for efficiency, $X.XX $XXX more million, previously. year by quarter, with Fourth year, million million gains was of higher higher income an increased restructuring. to EBITDA the adjusted capital and by and and profit capital earnings with quarter We and same compared quarter by X from year, $XX by The the $XX sales million. in by driven restructuring me net key higher flow to was adjusted EPS, $X.XX, higher spending onetime which and of in adjusted million per reflecting partially the share impact earnings higher attributable year Please XXXX period in interest as details driven to factors. increased acquisition-related acquisition-related was Diluted in working growth than fourth sales EBITDA Slide X the free noted for and fourth ended in XXXX, growth year. is prior quarter an nonrecurring turn onetime EPS items adjusted excludes prior improvement the up year-over-year and per further a growth. which regarding compared primarily share million items, fourth $XX $X.XX full $XXX $XXX

X First, as delivered in of our million in demand our strong $XX markets all key organic growth backlog production. conversion. into end and to added by million The an augmented remain just organic launch of a incremental this growth Jeep $XXX costs Wrangler, has gone which The incentive was growth conversion higher and provision compensation related muted profit. new the principally sales on

adjusted and made earlier business contributed in and USM, $XXX million Brevini the million Second, in sales EBITDA. acquisitions XXXX, in $XX

the currency U.S. was that adjusted $XX dollar. a aiding currency million and against of by foreign results rates EBITDA the $X strengthened foreign translation due million Third, subsidiary to by in tailwind sales at quarter,

and Dana divested year-over-year EBITDA fourth $X.X turn margins me in recorded company Finally, year XXXX. review XXXX the billion was the was EBITDA that with quarter, growth. now at profit the by full gain third in negatively to our full $X Please by year increased subsidiary for comparison impacted XXXX similar expanded by by end XXXX. and to XX to in a adjusted $XXX points. of sales higher XXXX Slide Adjusted the million, X the of sales quarter, was an basis million compared

same the As X with growth quarter, the attributable fourth the is to factors. year-over-year

illustrated First, organic sales. in It's the million $XXX chart parts. growth on the added in constituent

last $XXX from the recall sales we was million. backlog may that You announced $XXX our expected contribution million year

balance However, delivered million of it The $XXX organic million end key up profit. X higher over $XXX due demand of end increasing in to demand, sales markets. ended growth organic stronger all million. market to the of growth was of our $XXX The

as on the fourth quarter, muted with expense. launch growth higher conversion the costs by slightly well was this higher as incentive compensation As

billion on to than businesses and largely $XX pre-synergy, realized. synergies see added adjusted Second, acquisitions in was earlier XXXX acquired of margins the more expand in these last conversion businesses the of EBITDA. are $X.X we million of in year, the the business sales XXXX bulk expect and made nearly as The

EBITDA earlier Third, due million adjusted slight a on $XX headwind translational adding tailwind, to million foreign year. modest transactional sales basis, with but in to was a losses a the some $X to currency

EBITDA more Higher impacted convert million than of now and Please EBITDA for subsidiary. will offset increase converted were from an in free the free adjusted to cash how flow, million of combined $XXX partially comparison to gains negatively Slide X our to now free XXXX are company cash debt flow. X% in $XX was turn $XXX to investments, Dana the to due in in by by profit million capital a $XX of or XXXX, XXXX EBITDA X cash recorded million cash capital -- year. a interest sales adjusted nearly last actions, adjusted lower increased divested Finally, offset slightly refinancing improvement factors. efficiency improving yielding with of X% working over to overview Incremental and

costs our recent acquisitions. were year, First, and to remainder prior onetime which higher was than costs of the about X/X restructuring outflows $XX to for due transactional million higher the related

higher compared peak now sales. progress forward we're Second, expenditures of XXXX of important provided last Please year an to as million XXXX financial of a affirming Slide X% $XX we our XX this made the at free to cash delivering sales cash for is as year. growth. than the we for capital our support flow me spending Today, goal towards we turn our prior guidance prior with free outlook step flow investments month. year as Doubling to the capital were percentage at

be sales approximately over X% to a million year. $X.X which $XXX expect We last or billion, is increase

of X.X% XXX in EBITDA cumulative free adjusted by lower spending an or basis and over to cash profit points XXX year, XX to drive basis to expansion capital points which those a year, improve about of expect $XXX basis margin combined is expectations to XXXX. by an of flow points leading last over increase will growth, XX.X%, about with XX% We requirements, last over translate million grow X to This implied years.

in versus on our We associated guidance metrics turn reform. expect included of to $X.XX significant profits by XXXX of the us diluted share lower change positions about exceed a touch XX targets, enacted tax adjusted to This the all original in now rate our and to for closer our U.S. grow last year. financial and a Page I'll look benefit with Please moment. approximately at the sales per corporate recently EPS a in $X.XX reflects improvements financial $X.XX, with the which me tax in expected key to including drivers

$XXX by to will $XXX to key will are For increase There expect profit margins with increase factors basis XXXX by and three which sales the we implied points. by million compared XX improvement. XXXX, grow that drive million,

is million our We're beyond of the expecting major our $XXX adding adjusted the a XX% programs, approximately First, be we globally. in sales million, programs, cost previous principally backlog period the of is about Americas backlog in Wrangler. primarily demand, than higher equipment new we new improved off-highway the commercial conversion million $XXX X% our growth in driven year $XX about projected from to conversion about also We're backlog, by X-year million elevated of related in organic and expected approximately and as to more including such on expecting or $XXX as higher launch this wins vehicles Jeep new move contribution due to XX% business EBITDA. in demand. The higher normalized

improve made in about the first inorganic have the of Brazil partial investor USM to this as divestiture growth of a million. Second, $XX Adjusted Brevini from to by planned offset, the year leading operation the businesses acquisitions last is will the an representing sales increase net synergies. quarter of primarily EBITDA higher benefit An and $XX we'll expected of year during provide million, we will year. benefit sales expected

$X.XX, forecasting flow. see is the essentially with million in expect rate. me Third, euro the at of with we sales year's free we're turn translation that of cash other of to $XX expect to we foreign average to last which the flat will year's currencies about fact from convert XX Slide Please spite this headwind how profit

integration point free in benefit $XXX last flow lower a We'll to XXXX year, acquisition completed. the to and taxes basis moving by plan expressed as cash expect restructuring, onetime percentage improvement us in cost sales. $XX an restructuring part represents We to by from be timing onetime tax outside million, of U.S. XXX allow which the will Cash and when million while more outflow, increase for of taxes EBITDA $XXX approximately This in million forward. generating compared is increase of in a cash higher lower on will our adjusted due payments entity XXXX the than cash

business to higher XXXX, capital timing and to incentive the higher compensation working We use a expect be payments. in primarily due new of launches

support of will commercializing subsiding targets metrics. made by we our level we're Bolstered targets free and increases revised when provides month the XX of last spending the financial an profit in The peak new completed from percentage our in winning strong financial of next fundamentals projected be cash shared market factors all Slide us last business overview of year. as progress we've combination efficiently for new we've more significant growth and capital XXX% increase business, affirming we large Finally, year's will a our our these than to allow investments backlog. flow. into to convert

$X.X to $XXX this billion, We we and year's from provided that about representing increase growth the early year, X% a be million last XXXX over guidance expect for sales target.

higher basis more top and level points. to the to X% our end next margin flow profit. X-year of $X profit major expansion target targeted transition behind will capital as more of X% about and of XXXX's by well of we free million over spending margin convicted year incremental expect billion, the of what contribution growth That are us a of launches our cash we normalized achieve as XXX $XX of level as target. our achieving We represents a sales a profit the remain improvement had a and that previously cumulative over XX.X% We

end had able perspective by years, of for we what year. Lastly, year we've of enterprise plan XXXX, the the and EPS we from how $XXX year, our Brevini strategy completed to acquisitions, of this positions poised year. year cash business diluted our a this into introducing than basis year increase well two continue operations be managing of we $X recent compared achieve to highlighted forging higher to synergies our sales and USM and to by profit backlog, improving of year, SIFCO us efficiently expect market we Brazil. where several This and couple next and integrated over growth approximately in adjusted from share this at future with as to major over deliver groundwork plan laid $X.XX and points businesses, expansion to over success Last now will Gaskets and $X.XX new provides realize demand. a of X.X% $X revenue ago last accomplish sales. and secured XX is driven of the while the Magnum we acquisitions convert our as about expansion XX per as conversion this margin year, for the of We're a been to that million. be our sales next better profitably flow Slide we acquired which and billion launches fully what In backlog

points today, As of strong, turn over The trajectory this we expansion converted of excited we targets all and flow to the and of long-term for now team another back by call look to we I'd backlog free you delivering to for financial cash forward questions. next stakeholders. margin Thank Dana our exceed to capitalize original in XX our growth. is points as basis take your implies like markets is our Dennis growth the entire what very about listening to and on remain our XXX expect basis year,

Operator

from is question Guggenheim. line the Rosner first with your And Instructions]. Emmanuel [Operator of

Emmanuel Rosner

really first volume on conversion. the question, So

Can partly quantify in lower-than-usual how fourth quarter costs for in you headwind a in the highlighted, incrementals and XXXX? what launch you costs. much by the that expect be to fourth quarter, launch -- you maybe as in overall, of So driven XXXX the and then were some there were

Jonathan Collins

the end higher. launch be They do expect quarter. some were The indicated costs $XX came Sure. quarter, bit of third fourth slightly as closer some we in had And we little that in begin we'll expected job moves They million, we the balance taper, We the past other more is million. primarily of thing quarter, steady a that that the relative to about the to X incremental was higher launch Wrangler volume. to in than state. QX, it'll fourth costs the first launch to we $XX which but the mentioned to quarter conversion, a have then

we fourth be see put which pressure note that that those of past some But month quarter, in episodic, You'll guidance convert a the we fact to due we quarter volume incremental little at we step on as and and And as higher of were also margins. fourth part end was second time premium year. move this items the of range. of the we the our into of had that quarter that bit last on indicated both to of we'll to able that first

Emmanuel Rosner

on the basis, from year you full launch getting of And are is so how a XXXX -- versus tailwind XXXX, much costs?

Jonathan Collins

Yes.

would significant provided to number from but exactly, haven't we improvement go the a to be expect XXXX XXXX. We as pretty there we

Emmanuel Rosner

then that's really revenue helpful. guidance question for the XXXX. is the And Okay, around second

little that in to off-highway volume Can just benefit down within North of I light the That assumption you strength light in $XXX what and $XXX maybe trucks low growth. into please on takes versus more surprised trucks Slide a and commercial. So us in you're particular, your be and of from light that bit XXXX to little markets give guidance? market. from XXXX puts that little a XX, color continued for million revenue seems in benefit and making the And American talk million see about goes was a on to in

Jonathan Collins

Sure.

on So end I'll markets. it each just based our on touch of

that strong. $XXX million. million. vehicle There we calling the over the market market be are So be from to well some at are We've people expect quite North do to America called commercial $XXX

moving seen very our to difference order I we visibility the the book quarter. rate good. is is into strong there in the first have build fourth think And very quarter, the

of think bit little I year. on have perspective a the of second we more conservative the half a

entire build driver cautious to experience, the extent But certainly that's opportunity. year. the could second So million. the of rate on strong some that past But based we're the throughout we meaningful remains a of see bit year, half the our a on $XXX the little

meaningful we second that's is remain a so market The market strong the growth significant to be and that a to be a input market in meaningful off-highway. contributor. that see do to We expect off-highway, -- across

more as as little which on on as probably we most we've truck American market, I far our than it. a the global top truck think small cautious a at light the North market, line look been has impact

factor that Ford softer. well month second the year, year, that we rich program, little The a in in that bit our a we the mix as for that's on you that thing in year we mix, very those into the for typically, could In volumes that as inaugural be the Duty provisioned so move Super guidance the XXXX. we've the remain noted though even our have strong, another experience, is content other -- of possible too last rich producing it's think vehicles second

Operator

with question Joe Spak next of Capital the is Your line RBC from Markets.

Joseph Spak

The the company? and Just Wrangler is Or light that one, the in that to clarification. costs, vehicle $XX million one quick was related for launch entire just a launch?

Jonathan Collins

had out previously. light Yes. segment, which It vehicle primarily we called was the what is on

So light up we ended vast $XX at the coming is to which be in had $XX about about indicated going was vehicle, majority, million, million.

Joseph Spak

slides just segment, to the going inorganic the Technologies, by what walks in the that number? number and is And Power exactly in Okay.

Jonathan Collins

year, JV Reinz was Nippon not announced full on so had Yes. that. last it a impact We meaningful had a basis. And we divested the year

of few that was recur profit quarter a year. in this However, dollars the didn't there fourth million

a the it put margins. little So Tech pressure and was that bit driver, of Power on

Joseph Spak

just and a -- sort it Xs I trucks, more to if understand But Class in and question have costs the last keep I north following come capacitizing that at handle trend Class up million, me, $XXX equivalents, like took for of something Or current your then year, trend, need in? that? there higher of and commercial of the of you to probably conservative or levels were incremental back prudent. be on probably sort and And be you would Emmanuel. X still to and half would that's Okay. approach guess able

James Kamsickas

this for, for Joe, question, maybe good running pretty minus. We've high I Jim. that at know, X close Thanks and morning. don't to is the rate, been a months now, ish, plus,

cost So team. I the significant any of don't proud see major I'm quite to it.

not As were know, really through we're in of you supplier, Dana, pretty shape difficult I happen. really it's go that any think short-term some good for just significant And to to volume. if surge

Operator

Your next is Brian of line from with Barclays. Johnson the question

Brian Johnson

want and have more questions. a couple on theme, I strategic I that to continue

costs So XX% at million least those outlook back incrementals I the most to launch I there. by $XX can or of of or on you If LVD them, by margin, the give segment color us margin incremental do from the out the segment? get and

You had mid-teens on on off-highway. and commercial commercial -- to low-teens mid-

major competitor increases. big had also of volume Your off mid-teens there

you and thinking in segments? of incrementals margin about So of how each are direction the kind hence,

Jonathan Collins

the than have probably less typically approaching higher that. off-highway convert demand. the you recognition, not a And better we bit the strength is but off-highway online I we've the that are meet this Brian, think than for little Broadly account of continue, the XX% Brevini if those, bit to we in bit the into the light that and demand the think than as Jonathan. we Commercial vehicle at a think in probably coming lot ability at of a of is It's range. taking benefit look Yes, confidence to a past, and speaking, synergy is going little is just what excluding the indicated we business, that. vehicle programs

blend, commercial get with across So about a vehicle anchoring vehicle middle, in light a lower bit the the you higher. to bit off-highway little XX% the and on markets the

Brian Johnson

Okay.

the pretty JLR? there is another the production the smooth, in launch Are for what, Second Or customer question. on? the volumes track on Is and Toledo hell Is up? of going automaker expectations? your it any, call

James Kamsickas

Good Brian, Jim. is this morning.

on we're things I the For high very It's they're on complexity. mean, trajectory. going since very our well for very perspective, And a much good. topic, us. a good are

so new XX is You just product. facility may actually a engineered high-complexity in a Toledo, plants. think our well launching, not it we but across Things are very thinking were highly not but Wrangler, as at going product,

other some into quick of aside remind everybody mentioned having I'd like and -- same Bronco we were The to the other with of going group, to some going, have conversations I'd and also the we them or the up have coming the we Ranger just that the facility.

just So plant. a that's stuff there's some a may and done little the a some, get be be QX a a but to Chrysler/G similar bit there in blending not of there, to lot products in going produced

you model -- guys to what a and you I put point that so do So do here, can out just living. for want

Brian Johnson

my isn't waterfall? with going the you could but comment third with Super this the up And a the Dana Wrangler on question, XXs ad Bowl

James Kamsickas

pretty question -- I was. spectacular? parents with that We would always tell a Well, my me answer that a wasn't it put phrase it believe in question. never But

Brian Johnson

question, So the the e-axle. on next

as very some You've developed drive you've e-axle for mentioned, competitors that that mentioned similar and bus well, market. the requirements the market the medium-duty of in to truck the is the

hitting about where And And kind in P&L? bus can the we you you're thinking that when to that the you pipeline and start are taking effort then over both So discussions, quoting? medium-duty on expect are how on of trucks?

James Kamsickas

because kind commercial question. not big, I relates as my products, brave, some different cetera. and form name with of would buses, end just so you -- development, type e-axle staying kind of through it's single we're a there's it, system a et market not relative I'm only launch, do we're construction, markets but which tell one I on already, stuff product electric et I'll not in the vehicle. light said, be that We've integration engineering. cetera, we by of one other with boutique them, what or and asking to customers, pull-through of even it that, of full handling. could material you mining, of we're best That's you and to know or for types Every already Yes. glass different but type our it. big conversation, customers participate, which that's it, -- vertical the managing with you multiple of forklifts, far to doing That that answer trucks, working in -- been

goes So the board. it across really

doing our have into blends very kind and lessons and other up we're of in scratch. are segments, we our fortunate segment, completely We learned people, to over everything that very, that pick our one from that don't

So bottom line. is going well things are the

Jonathan Collins

question Yes. on before your sales just significant. a And still are related P&L, Brian, going projections the the be those years the few for segments, material volume or it's to given to

Brian Johnson

final of more trade, is it at promised -- made be Is year. The the question. a Silverado Is the plant. on late a have believe, of backlog? this to Class by color? I XXXX more you disclosed Navistar XX, which, would obviously, Okay, in event? sort It's any going Do you be 'XX that

Jonathan Collins

I've Thank you little to disclaimer Yes. that got bit be for the careful.

front do of of back, As get not weeks I said this. my I want on customers a in couple to

backlog more to later is It truck, public you. in there'd the very that. at for Indianapolis the year been your starting next that know, stay their Truck For and lower be on volumes, our this after so to you come Motors for General make didn't with or year those of -- specific in Work detail announcement more question, tuned they'll month, that this branch has the it Show

Operator

of Your next Brian the Gabelli. with from question is Sponheimer line

Brian Sponheimer

allocation. capital quick A the question on

outward exactly portfolio Given standpoint the versus looking goal a what done that comfort continuing not for year what maybe cash. acquisitions What's integrate free just your you've XXXX another from couple? maybe to your in of for setup last is for is

James Kamsickas

I priorities. Brian, a of capital on were been on -- clear record, completely to the hate pretty risk thing. at allocation one hate sounding say that I'd we to We've in locked like specific our broken any

all inorganic -- very X, me on to organic right comfortable, of through. it with kind if over priority the coming years figure to Jonathan, are That We the look to we and play. continues able focused the that organic very side, the as you've the working X since side. X together and at out, that's going In pull is and et opportunities meantime, cetera, been on last we're

talk you I always think even the last of example, more high marquee programs, PTG the kind But was the for of year the -- if Bronco, the Ranger, and Wrangler, XX kind Chevy launches. the Silverado. take, over we you type recently, it, of about name

about hear don't smaller them just nature. in they're You because

opportunity comes way, but our sand. we'll we do right head again, shareholders. So focused our any don't have there, we're are we for in our right also on thing the the If --

Brian Sponheimer

that are cause your most thinking just they deem How And Understood. about customer that own guess, you some GM that starts pull -- thinking global I unprofitable? your automotive out could a if shakeup out unprofitable to about areas. when relative the And this I'm seen of some customer automakers, then that, what areas you on long-term of notably sort base? think kind to base of start basis. pull We've broader landscape to morning,

James Kamsickas

Yes.

job. not in it out do -- yes, is Let Number parts. platform. specific you me I that's there, for on very mean, Dana every benefit announcement two, there. if that, answer global number Again, over a can impacting, plant two we one. of that, have That your market kind is you're folks the very that the in curious closure We're

products other of if our have in to products. the We can essentially from one benefit cascading it our plant, as to market to another need produce of relates the be. across We another any

in we've we manufacturing -- that so strategy how found -- a should certainly And approach us day. of will get that our through blended the derisk can always we

concerned of about. other don't see about the sure of tremendous OEMs be amount to overly overly is I a but lot could approach it's going that point. And would that anything on not that other we I'm thing don't something, think front. concerned groundswell I'm material that a this significant always be So at taking there I of be or

Operator

is line of from the with Justin next Your Long Stephens. question

Justin Long

So curious at margin to a course additional expecting cadence benefit and guidance number And the where for but I I'm also on you're of margins what the wondering launch you start gave the of of year-end north do over question XXXX. I just to get end the XXXX, all EBITDA. year. wanted I of you for the from you'll of synergies? XX.X% lap was costs with that perspective, think be you know you're quarterly expecting once all the a

Jonathan Collins

Sure.

significant are the higher as and little sales to XXXX, would quarter fourth So Wrangler a at this think second perspective. lower Justin, major patterns that in third margins third a what's on you're and the when you few are fourth build softer. more the at typically typically, into see markets, with have the of look XXXX launch margin been due the of from anomalies say quarter distribution second year, little you the think quarter about our of typical more over There are the first basis the move last to And first our business, launch and I than profit quarter Super and quarter. we is margin if profit pattern years, but sales the end and quarterly I some Duty going where and margins a normal and a and

XXXX. I year we will this and certainly, 'XX. for to start fourth be XX.X% expect that the where quarters to the XX.X% necessarily of year quarter year, look extrapolate that wouldn't think But we next to close full higher exceed at and So us in margins move margin

Justin Long

the you're from to how talk ask margin get I of that coming for those those Okay, I great. you about synergies? in items is this $XX divestiture contribution from acquisitions. secondly, year. growth and of X around wanted to inorganic you've the some wanted about from a expecting put Could just helpful. That's and numbers million mentioned EBITDA underlying better Brazil sense incremental And the much that

Jonathan Collins

The Sure. underperforming negligible. asset profit of impact of Brazilian disposal the the noncore is

all and balance Brevini. there's the incremental million million, of that few from dollars base the contribution are incremental a a on synergies sales $XX then the So of the case, of on virtually,

year. the a most we indicated the real million by last were but that we note significant You'll end synergies get the this little bit $XX step-up to year, us on close this that of ahead to represents of schedule

James Kamsickas

But can may in as I'm front it back Okay. you page were X with on presentation I or bit relatively because going maybe whatever in little discussion be. you. the I could you more it in to early as out you a was -- short just on ago, everybody. kept lot, or see weeks a Thanks, X close than we of but usual, front not the tell of

honestly forth, said expansion and profit really probably a guess, we job. a XXXX team most of on from the of excited top. you just up and X here done so tremendous in so -- can more now from we've a proud business years, be the I a prospects the of, on our Let kind me since than has off tell is do, perspective, to that up perspective, because point. going I'm year. start we're I I And ever that the candidly this sales really done I've been great probably we products everything rolling to more was couldn't thing

And of that, business you consistently of the is to synergy better. in XXXX as I as a the lot I trajectory maybe the be part new been growth glitch. top great job. yours, voice of job, shaping From new the receiving. of job our be of feedback it past team relates over think know, we've acquisitions the team on achieve it's The part XXXX I'm of without sure in great That technology we've business I fantastic progressing the that be a several done to a to a for we've it's be making plan targets. time, to adding more could of our have a doing the there. our on of extra customer. proud on all of spent we're good but my proof perspective, portfolio. even We're is a the is pudding up my front frankly, customers, years. And couldn't like in out terms part guys I executed

patents talk me launch heard our performance. about You from the

your we a Our bottom the are strategy. success. real back really strategy have isn't of that to up what's acquisitions about overall we've satisfaction ends the have us customer. It for on led that's the down that right blueprint focus talked our four the direction paper quality, Do a what And the times. believe It us into true road of I really in going certainly just many then electrification. in cost, et appropriate cetera, the you come And are pushes the things from strategy in working. It's making and important at ultimately, a maintains Instead, markets it right we're expanding products enterprise new right way taking things the to expense, we commercializing as It's that drawer? our be. steps the customer it's sure end and a delivery, there. relates should time the shuffled

to of The attending the over returns to like my single But I'd the shareholder members day, lie, continue the work or just the shareholders those will last one everybody started, board important, view, down we're execute to on the the team and more every So thank score key you great execute for our end them. several seen forward our at and day to getting comes unlock to in of value. and at increasing soon. years. hard talking value. in company doesn't continues elements it trying look plan. and is have to every today We're seeing to But call team you our

Operator

conclude Ladies Thank and and Financial Fourth Year Dana the this gentlemen, Conference your Quarter Incorporated's Call. Full Webcast for you does XXXX and participation.

may You disconnect. now

Dana (DAN) 13 Feb 182017 Q4 Earnings call transcript