Auburn Hills, Michigan, April 26, 2012 – BorgWarner Inc. (NYSE: BWA) today reported first quarter 2012 earnings of $1.28 per diluted share, a new first quarter record for the company. Net sales were up 11% from first quarter 2011, while global vehicle production was up approximately 4%.
First Quarter Highlights:
First Quarter Performance: “The first quarter was a strong start to the year,” said Timothy Manganello, Chairman and CEO of BorgWarner. “The focus on fuel economy and improved emissions around the globe continued to drive demand for BorgWarner technology, and above-market growth for our company. Excluding the impact of currency and 2011 acquisitions and divestitures, our net sales were up approximately 13% in the first quarter compared with first quarter 2011, while global vehicle production grew only 4%. While growing our net sales in the quarter, we also successfully managed costs, which resulted in a strong quarterly operating income margin of 11.8%.”
2012 Outlook: After considering its financial performance in the first quarter, the company reiterated its guidance for 2012 of 10% to 12% annual sales growth and earnings of $5.35 to $5.65 per diluted share. “The outlook for our business for the remainder of 2012 is generally stable although we are watching Europe closely," Manganello said.
Financial Results: Net sales were $1,913 million in first quarter 2012, up 11% from $1,730 million in first quarter 2011. Net earnings in the quarter were $158 million, or $1.28 per diluted share, compared with $125 million, or $1.00 per diluted share, in first quarter 2011. The impact of foreign currencies, primarily the Euro, decreased net sales by approximately $45 million, and decreased net earnings approximately $0.03 per diluted share, in first quarter 2012 compared with first quarter 2011. Net cash provided by operating activities was $31 million in first quarter 2012 compared with net cash used in operating activities of $(41) million in first quarter 2011. Capital expenditures, including tooling outlays, totaled $95 million in first quarter 2012, compared with $70 million in first quarter 2011. Balance sheet debt increased by $81 million and cash on hand increased by $37 million compared with the end of 2011. The $44 million increase in balance sheet debt (net of cash) was primarily due to seasonal working capital funding requirements. The ratio of balance sheet debt (net of cash) to capital was 27.1% at the end of first quarter 2012 compared with 28.3% at the end of 2011.
Engine Group Results: Engine segment net sales were $1,308 million in first quarter 2012, up 5% from $1,249 million in the prior year’s quarter as a result of increased sales of engine timing systems, including variable cam timing products, greater sales of emissions products and the growth in turbocharger technology adoption around the world. Excluding the impact of currency and 2011 divestitures, net sales were up approximately 8%. Adjusted earnings before interest, income taxes and non-controlling interest ("Adjusted EBIT") were $210 million in first quarter 2012, up 13% from $186 million in first quarter 2011.
Drivetrain Group Results: Drivetrain segment net sales were $611 million in first quarter 2012, up 26% from $486 million in the prior year’s quarter as a result of strong all-wheel drive system sales in North America and Europe, growth in traditional transmission component sales in North America and Korea and higher dual clutch transmission module sales in Europe. Excluding the impact of currency and the acquisition of the Traction Systems division of Haldex, net sales were up approximately 24%. Adjusted EBIT was $61 million in first quarter 2012, up 91% from $32 million in first quarter 2011.
Recent Highlights:
At 9:30 a.m. ET today, a brief conference call concerning first quarter results will be webcast at:http://www.borgwarner.com/en/Investors/Webcasts/default.aspx.