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Dana Holding Corporation (DAN)
Q4 2008 Earnings Call
March 16, 2009 10:30 am ET
Stephen N. Superits – Vice President of Investment Management & Investor Relations
John M. Devine – Chairman of the Board, Chief Executive Officer & President
James A. Yost – Chief Financial Officer & Executive Vice President
Jacqueline A. Dedo – Vice President of Business Development
Brian Johnson – Barclays Capital
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There will be a question and answer period after the speakers’ remarks. We will take question from the telephone and the web. (Operator Instructions) At this time I would like to begin the presentation by turning the call over to Dana’s Vice President of Investment Management and Investor Relations, Steve Superits.
Stephen N. Superits
You should now be on Slide 3 in the presentation deck. As referenced on this Slide, I would like to remind everyone the topics discussed on this call will include forward-looking statements. Please take a moment to review our Safe Harbor statement. This call is being recorded and the conference call and supporting visuals are the property of Dana Holding Corporation. The may not be recorded, copied or rebroadcast without our written consent.
Our webcast system allows you to direct questions to us via the Internet. We will answer as many questions as time permits. Moving to Slide 4, today’s call will feature remarks by Dana’s Chairman and CEO John Devine and Chief Financial Officer Jim Yost. John will begin today’s presentation with an update on some key issues and initiatives and Jim will follow with a review of our December 31st financial results, liquidity and other financial issues.
Our call will conclude this morning with a question and answer session. Now, please move to Slide 5 and I’ll turn the call over to John Devine.
John M. Devine
I’ll just cover a couple of Slides here quickly before I turn it over to Jim to go through the numbers. You’ve been seeing this page 5 all year throughout ’08 on our priorities for ’08. I’d say it’s a mix score card. Obviously our financial performance and plans were below what we would like to see given the lower volumes that we saw and higher steel costs. That said and despite a very difficult year we made very important progress in 2008 around rebuilding our team, jump starting our operations including manufacturing business development, a number of operations throughout the organization.
Right sizing the operation began and so at the end of the day I felt very good about what we achieved in ’08 and obviously for ’09 we have to improve that performance based on a lot of the things we got done last year. If you turn to page 6 and really the key for us in 2009 is a plan that I’ve briefly described here and Jim will describe in more detail later. Our focus is very much on achieving this aggressive plan.
We’ve had to right size our operations to what we believe are now conservative volumes and we’re doing that right now. That will be largely done by the end of this month. We’re focused on improving profits on operations despite lower volume this year. That really requires more cost reduction at our plants, more cost reduction activities around the company, reducing fixed costs in all activities.
Margin improvements both through cost and pricing with a real focus and a continued focus from ’08 on our loss and low return business. We made good progress last year, we expect to make even better progress this year. Throughout the year we’re focused on maintaining adequate liquidity and profitability obviously, both very critical in this environment, Jim will talk more about that in a moment and on our strategic initiatives, as you might recall, last year we said we were exploring our options for three of our businesses: ceiling; thermal; and our structures business.
We’re announcing today that we determined that it’s not an attractive environment, no surprise, to divest our ceiling and thermal operations. We remain committed to maintaining their competitiveness, they’re strong brand reputation and the performance of these businesses and to the customers they serve. While we did have strong interest from buyers in these businesses but the current environment created a number of impediments to executing attractive transactions so we’re keeping them. We’re going to run them hard and work with our customers going forward.
On the structures business we’re still exploring strategic options and we’ll update you there as quickly as we can. With that, let me turn it over to Jim.
James A. Yost
If you’d all turn to Slide 8 for a review of our 2008 results. On Slide 8 we’ve summarized both our fourth quarter and full year results. On the sales front we ended up the year at about $8.1 billion that’s down $600 million from ’07 and the fourth quarter came in at $1.5 billion, also down $600 million so you can see through nine months our sales were pretty comparable to ’07 but the short fall for the full year was equal to our short fall in the fourth quarter.