Dauch (DCH) Q1 2026 earnings summary

Executive summary

• Sales surged to $2.4 billion in Q1 2026, up 68.6% year-over-year, driven by the Dowlais acquisition, with integration synergies already being realized and positive customer feedback on the combined portfolio.

• Adjusted EBITDA reached $309 million (13% margin), supported by favorable mix, Dowlais contribution, and operational efficiency.

• Adjusted EPS improved to $0.34 from $0.22 year-over-year, despite a reported net loss of $100.3 million (loss of $0.52/share) due to acquisition-related items.

• Portfolio optimization continued with the sale of a Dowlais cylinder liner business, generating ~$21 million in proceeds, and divestiture of the India commercial vehicle axle business.

• New business awards and contract extensions secured globally, including major wins in China, Brazil, Asia, Europe, and South America, and ongoing success in metal forming and sideshafts.

Financial highlights

• Q1 2026 sales: $2.38 billion, up from $1.41 billion in Q1 2025, driven by Dowlais acquisition and FX benefits.

• Adjusted EBITDA: $308.5 million (13% margin), up from $177.7 million (12.6%) in Q1 2025; Dowlais contributed $122 million.

• GAAP net loss: $100.3 million (loss of $0.52/share) vs. net income of $7.1 million ($0.06/share) in Q1 2025, due to acquisition-related costs.

• Adjusted EPS: $0.34 vs. $0.22 in Q1 2025.

• Net cash used in operations: $64.4 million; adjusted free cash flow: -$40.8 million, reflecting working capital and acquisition costs.

• Net debt: $4.1 billion; net leverage ratio: 2.7x; liquidity: $2.6 billion.

Outlook and guidance

• Full-year 2026 sales guidance raised to $10.3–$10.8 billion; adjusted EBITDA to $1.3–$1.425 billion; adjusted free cash flow to $235–$325 million.

• Production assumptions: North America ~15.0M, Europe ~16.7M, China ~32.3M, global ~91.4M units.

• Guidance reflects strong Q1, synergy realization, and stable customer schedules, but accounts for macro risks, energy costs, and geopolitical uncertainty.

• JV income from China (HASCO SDS) expected at $65–$75 million, unchanged from prior guidance.

• Capital spending expected at 4.5–5% of sales; restructuring and synergy implementation cash payments expected to decrease in 2027.