Delphi Technologies reports fourth quarter and full year 2017 financial results admin

21 feb. 2018 / Delphi Technologies PLC, reported fourth quarter 2017 U.S. GAAP earnings of $0.63 per diluted share. Excluding special items, fourth quarter earnings totaled $1.24 per diluted share. The Company also reported revenue of $1.3 billion for the quarter and $4.8 billion for the full year, an increase of 9 percent compared to the respective equivalent prior periods, on an adjusted basis.

Prior to December 4, 2017, Delphi Technologies operated as the Powertrain Systems segment of Delphi Automotive PLC (the “former parent”) and the historical financial information presented in this press release for periods prior to December 4, 2017 were derived from the former parent’s accounting records and are presented on a carve-out basis as if Delphi Technologies had operated as a stand-alone company for all periods presented.

Fourth quarter highlights

• Revenue of $1.3 billion, up 9%(*) year-on-year
• U.S. GAAP net income of $56 million, diluted earnings per share of $0.63
  • Excluding special items, earnings of $1.24 per diluted share
• U.S GAAP operating income of $106 million, or 8.2% margin
  • Adjusted operating income of $164 million, or 12.7% margin
• Generated $95 million of cash from operating activities
• Completed the separation in early December

Full year 2017 highlights

• Revenue of $4.8 billion, up 9%(*) year-on-year
• U.S. GAAP net income of $285 million, diluted earnings per share of $3.21
  • Excluding special items, earnings of $5.15 per diluted share
• U.S. GAAP operating income of $446 million, or 9.2% margin
  • Adjusted operating income of $637 million, or 13.1% margin
• Generated $389 million of cash from operating activities
• Closed 2017 with a cash and cash equivalents balance of $338 million

(*) Adjusted for currency exchange and certain aftermarket revenue retained by the former parent

“2017 was a tremendous year for Delphi Technologies. We delivered strong revenue growth, margin expansion and ended the year with record bookings. As a leader in advanced vehicle propulsion systems, we are well positioned to support our customers across the globe on their path to electrification, at the same time as providing efficient, clean and cost effective technologies for internal combustion engines,” said Liam Butterworth, President and Chief Executive Officer for Delphi Technologies. “For 2018, we will continue to focus on delivering value to shareholders and customers through our pioneering innovation and technology investments, leveraging our strong operational execution capabilities to drive long-term growth.”

Fourth quarter 2017 results

The Company reported fourth quarter 2017 revenue of $1.3 billion, an increase of 12% from the prior year period, reflecting continued volume growth. Adjusted for currency exchange and certain aftermarket original equipment service revenue retained by the former parent, revenue increased by 9% in the fourth quarter. This reflects growth of 10% in Powertrain Systems and 4% in Delphi Technologies Aftermarket. It also reflects growth of 19% in Asia Pacific, 5% in Europe, 3% in North America and 16% in South America.

The Company reported fourth quarter 2017 U.S. GAAP net income of $56 million and net income of $0.63 per diluted share, compared to $78 million and $0.88 per diluted share in the prior year period. Fourth quarter Adjusted Net Income, a non-GAAP financial measure defined below, totaled $110 million, or $1.24 per diluted share, which compares to Adjusted Net Income in the prior year period of $97 million, or $1.09 per diluted share.

Fourth quarter U.S. GAAP operating income was $106 million, compared to $112 million in the prior year period. Adjusted Operating Income, a non-GAAP financial measure defined below, was $164 million, compared to $133 million in the prior year period.

Adjusted Operating Income margin increased 110 basis points in the fourth quarter of 2017 to 12.7%, compared with 11.6% in the prior year period, resulting from the continued above-market growth of our businesses and the impact of cost reduction initiatives, including our continuing rotation to best cost manufacturing locations, partially offset by continued investments for growth.

Depreciation and amortization expense (including asset impairment charges) totaled $57 million in the fourth quarter as compared to $52 million in the prior year period.

Interest expense for the fourth quarter totaled $13 million, as compared to less than $1 million in the prior year period, which reflects the interest related to the issuance of $1,550 million of debt in connection with the separation from the former parent.

U.S. GAAP tax expense in the fourth quarter of 2017 was $27 million, resulting in an effective tax rate of approximately 30%. This compares to U.S. GAAP tax expense of $23 million, or an effective tax rate of approximately 21%, in the prior year period. The increase in the effective tax rate reflects the impacts of discrete items and separation related activities.

The Company generated net cash flow from operating activities of $95 million in the fourth quarter, compared to $68 million in the prior year period.

Full year 2017 results

For full year 2017, Delphi Technologies reported revenue of $4.8 billion, an increase of 8% from the prior year, reflecting continued volume growth. Adjusted for currency exchange, and certain aftermarket original equipment service revenue retained by the former parent, revenue increased by 9% during the year.

This reflects growth of 10% in Powertrain Systems and 6% in Delphi Technologies Aftermarket. It also reflects growth of 24% in Asia Pacific, 5% in North America, 2% in Europe and 13% in South America.

For full year 2017, the Company reported U.S. GAAP net income of $285 million and $3.21 per diluted share, compared to $236 million and $2.66 per diluted share in the prior year. Full year 2017 Adjusted Net Income totaled $457 million, or $5.15 per diluted share compared to Adjusted Net Income in the prior year of $421 million, or $4.75 per diluted share.

The Company reported U.S. GAAP operating income of $446 million, compared to $320 million in the prior year. For the full year 2017, Adjusted Operating Income was $637 million, compared to $512 million in the prior year.

Adjusted Operating Income margin was 13.1% for full year 2017, an improvement of 170 basis points, compared with 11.4% in the prior year, resulting from the continued above-market growth of our businesses and the impact of cost reduction initiatives, including our continuing rotation to best cost manufacturing locations, partially offset by continued investments for growth. Depreciation and amortization expense totaled $201 million as compared to $210 million in the prior year.

Interest expense for full year 2017 totaled $15 million, an increase from $1 million in the prior year, which reflects the interest related to the issuance of $1,550 million of debt in connection with the separation from the former parent.

U.S. GAAP tax expense for full year 2017 was $106 million, resulting in an effective tax rate of approximately 25%. This compares to $50 million, or an effective tax rate of approximately 16%, in the prior year. The increase in the effective tax rate reflects the impacts of discrete items and separation related activities.

The Company generated net cash flow from operating activities of $389 million in 2017. As of December 31, 2017, the Company had cash and cash equivalents of $338 million and total debt of $1.5 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 calculated and presented in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) are provided in the attached supplemental schedules.

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