Dana Corporation Posts Record Third-Quarter Sales, Profits

Oct 20, 1997


    TOLEDO, Ohio, Oct. 20 /PRNewswire/ -- Dana Corporation (NYSE: DCN) today
posted record third-quarter sales and profits.
    Sales for the quarter of $2 billion were up 8 percent compared with the
third quarter of 1996, while net income and earnings per share also rose
significantly.
    Net income for the quarter rose to $98 million, and earnings per share
increased to 93 cents, including non-recurring charges of $51 million
(50 cents per share) associated with restructuring and rationalization at a
number of operating units and a one-time gain of $70 million (67 cents per
share) on the sale of Dana's clutch business to Eaton Corporation.
    Excluding these one-time items, net income for the quarter jumped
23 percent to $80 million, and earnings per share rose 19 percent to 76 cents.
    Dana's nine-month consolidated sales totaled $6.2 billion, up 7 percent
compared with the same period last year.  Net income for the first three
quarters of 1997 was $285 million, and earnings per share were $2.73.
    Excluding the effect of non-recurring gains and charges for the first
three quarters, net income for the first nine months of 1997 was $263 million,
an increase of 12 percent over the first three quarters of 1996, and earnings
per share for the first three quarters of 1997 rose 9 percent over the same
period last year to $2.52.
    During the first three quarters of 1997, the company achieved record sales
of light truck components to original equipment manufacturers -- up 6 percent
over last year's record performance in the same period -- and achieved a
44 percent increase in sales of off-highway components, including the effects
of acquisitions.  International sales were up 6 percent, compared with the
first three quarters of 1996, paced by a 16 percent increase in sales in the
South American region.  Domestic sales were also strong, up 7 percent over the
same period last year.
    The third quarter saw sales of components to medium and heavy truck
manufacturers jump 28 and 19 percent, respectively, over the same period last
year.
    During the quarter the company also announced that it will supply rear
axles for the 1998 Isuzu Trooper/Big Horn and Acura SLX, both of which will be
built in Japan.  The axles will be assembled at Dana's Columbia, Mo., regional
assembly facility and exported to Dana's Japanese affiliate, Najico Spicer
Company, Ltd., which supplies Isuzu on a just-in-time basis.  The selection of
Dana as supplier for the Trooper strengthens the global relationship between
the companies.  Dana's Spicer Axle Group currently supplies all front and rear
axles for the U.S.-built Isuzu Rodeo and Honda Passport.
    Dana Chairman Southwood J. Morcott credited the third-quarter earnings
growth to an aggressive implementation of the company's strategic plan.  "We
said that 1997 would be a year of sharpened focus on core businesses.  As we
have implemented our plan, we have begun to see consistent improvement in our
financial results.  We expect this focus to positively affect earnings in the
next several years," he said.
    The quarter saw the completion of a series of strategic moves previously
announced by the company, as well as internal activity designed to further
focus on global customers and markets.
    Along with completing the sale of its clutch operations, Dana during the
quarter closed the sale of its transmission business to a unit of its Mexican
affiliate Spicer, S.A. de C.V.  Also, on Oct. 6, the company completed the
sale of its flat rubber products operations at Paragould, Ark., to a unit of
Coltec Industries, Inc.  This sale will result in a gain of $9 million
(8 cents per share) to be realized during the fourth quarter of 1997.
    The third quarter charges included $22 million resulting from
restructuring at Dana's Parish facilities in Reading, Pa.; $20 million in
deferred tax benefits not expected to be utilized in connection with the
ongoing rationalization of Dana's Perfect Circle Europe operations in France;
$5 million related to the restructuring of the Light Axle Europe Group in
Birmingham, England; and $4 million related to closing the Spicer Transmission
Division office in Toledo, Ohio, consolidating the Perfect Circle Sealed Power
Division's facilities in the United States, and rationalizing the Wix
Filtration Products Division facility in Pickering, Ontario.  Morcott said he
expects this restructuring to improve earnings in 1998 and 1999.
    In concert with these moves, Dana evolved its organization for increased
focus on its global markets and customers.  In September, the company
established six Strategic Business Units encompassing Dana's key market areas:
automotive components, engine components, heavy truck components, off-highway
components, industrial components, and leasing services.
    Dana's Board of Directors today approved a quarterly dividend of $0.27 per
share payable Dec. 15, 1997, to shareholders of record as of Dec. 1, 1997.
This will mark Dana's 240th consecutive dividend (dating back to 1936) without
a missed or reduced payment.
    Dana Corporation is a global leader in the engineering, manufacture, and
distribution of products and systems for the automotive, engine, heavy truck,
off-highway, and industrial markets.  It also operates a leasing services
business, Dana Credit Corporation.  Founded in 1904 and based in Toledo, Ohio,
Dana operates facilities in 30 countries and employs more than
48,000 people.  The Internet address for Dana's home page is www.dana.com.


    (in millions, except
     per share amounts)
     Unaudited

                                               Three Months Ended September 30
                                                     1996                1997

    Sales                                   $      1,815.8      $      1,960.7
    Net Income                                        65.2                98.3
    Net Income Per Common Share                      $0.64               $0.93
    Average Shares Outstanding                       101.7               104.1

                                                Nine Months Ended September 30
                                                    1996                1997

    Sales                                   $      5,809.0      $      6,216.8
    Net Income                                       235.4               284.7
    Net Income Per Common Share                      $2.32               $2.73
    Average Shares Outstanding                       101.7               104.1


    Dana Corporation
    Statement of Income (Unaudited)
    September 30, 1997
    (in millions, except per share amounts)

                                             Three Months Ended September 30
                                                   1996                1997

    Net Sales                              $      1,815.8      $      1,960.7
    Revenue from Lease Financing
      and Other Income                               48.7               175.3
        Total                                     1,864.5             2,136.0

    Costs and Expenses
      Cost of Sales                               1,536.0             1,715.4
      Selling, General and
       Administrative Expenses                      179.5               184.6
      Interest Expense                               40.9                46.3
        Total                                     1,756.4             1,946.3

    Income Before Income Taxes                      108.1               189.7
    Estimated Taxes on Income                       (36.4)              (94.6)
    Minority Interest                               (10.1)               (8.2)
    Equity in Earnings
      of Affiliates                                   3.6                11.4

    Net Income                             $         65.2      $         98.3

    Net Income Per Common Share                     $0.64               $0.93

    Average Number of Shares
      Outstanding                                   101.7               104.1


    Dana Corporation
    Statement of Income (Unaudited)
    September 30, 1997
    (in millions, except per share amounts)

                                               Nine Months Ended September 30
                                                   1996                1997

    Net Sales                              $      5,809.0      $      6,216.8
    Revenue from Lease Financing
      and Other Income                              161.2               386.7
        Total                                     5,970.2             6,603.5

    Costs and Expenses
      Cost of Sales                               4,913.3             5,361.8
      Selling, General and
       Administrative Expenses                      551.5               565.2
      Interest Expense                              116.4               144.2
        Total                                     5,581.2             6,071.2

    Income Before Income Taxes                      389.0               532.3
    Estimated Taxes on Income                      (139.8)             (251.9)
    Minority Interest                               (25.1)              (20.0)
    Equity in Earnings
      of Affiliates                                  11.3                24.3

    Net Income                             $        235.4      $        284.7

    Net Income Per Common Share                     $2.32               $2.73

    Average Number of Shares
      Outstanding                                   101.7               104.1


    Dana Corporation
    Condensed Balance Sheet (Unaudited)
    September 30, 1997
    (in millions)

                                              December 31         September 30
    Assets                                        1996                1997
    Cash and Marketable Securities          $        227.8      $        355.5
    Accounts Receivable
      Trade                                        1,026.7             1,196.0
      Other                                           42.4               141.1
    Inventories                                      912.9               922.8
    Lease Financing                                1,167.3             1,246.0
    Investments and Other Assets                     958.1             1,226.9
    Property, Plant & Equipment, Net               1,824.8             1,974.1
      Total Assets                          $      6,160.0      $      7,062.4

    Liabilities and Shareholders' Equity

    Accounts Payable and Other
      Liabilities                           $      1,196.8      $      1,574.2
    Short-Term Debt                                  640.3               457.9
    Long-Term Debt                                 1,697.7             2,130.2
    Deferred Employee Benefits                     1,025.6             1,071.1
    Minority Interest                                170.9               174.0
    Shareholders' Equity                           1,428.7             1,655.0
      Total Liabilities and
       Shareholders' Equity                 $      6,160.0      $      7,062.4


    Dana Corporation
    (Including Dana Credit Corporation on an Equity Basis)
    Statement of Income (Unaudited)
    September 30, 1997
    (in millions)

                                              Three Months Ended September 30
                                                   1996                1997

    Net Sales                              $      1,815.8      $      1,960.7
    Other Income                                      2.2               132.4
      Total                                       1,818.0             2,093.1

    Costs and Expenses
      Cost of Sales                               1,540.2             1,722.3
      Selling, General and
       Administrative Expenses                      156.1               160.8
      Interest Expense                               21.5                27.7
        Total                                     1,717.8             1,910.8

    Income Before Income Taxes                      100.2               182.3
    Estimated Taxes on Income                       (34.7)              (93.0)
    Minority Interest                               (10.1)               (8.2)
    Equity in Earnings
      of Affiliates                                   9.8                17.2

    Net Income                             $         65.2      $         98.3


    Dana Corporation
    (Including Dana Credit Corporation on an Equity Basis)
    Statement of Income (Unaudited)
    September 30, 1997
    (in millions)

                                               Nine Months Ended September 30
                                                   1996                1997

    Net Sales                              $      5,809.0      $      6,216.8
    Other Income                                     21.9               231.9
      Total                                       5,830.9             6,448.7
    Costs and Expenses
      Cost of Sales                               4,928.6             5,382.2
      Selling, General and
       Administrative Expenses                      483.9               486.4
      Interest Expense                               61.2                85.5
        Total                                     5,473.7             5,954.1

    Income Before Income Taxes                      357.2               494.6
    Estimated Taxes on Income                      (128.7)             (237.2)
    Minority Interest                               (25.1)              (20.0)
    Equity in Earnings
      of Affiliates                                  32.0                47.3

    Net Income                             $        235.4      $        284.7


    Dana Corporation
    (Including Dana Credit Corporation on an Equity Basis)
    Condensed Balance Sheet (Unaudited)
    September 30, 1997
    (in millions)

                                                December 31       September 30
    Assets                                         1996                1997

    Current Assets
      Cash and Marketable Securities        $        224.3      $        352.4
      Accounts Receivable
       Trade                                       1,026.7             1,196.0
       Other                                          60.3               160.7
      Inventories                                    912.9               922.8
      Other Current Assets                           141.4               201.6
       Total Current Assets                        2,365.6             2,833.5

    Property, Plant & Equipment, Net               1,637.2             1,781.0
    Investments and Other Assets                     934.2             1,205.2
      Total Assets                          $      4,937.0      $      5,819.7

    Liabilities and Shareholders' Equity

    Accounts Payable and Other
      Current Liabilities                   $      1,114.2      $      1,452.9
    Notes Payable                                    362.9               421.7
    Long-Term Debt                                   810.4               998.1
    Deferred Employee Benefits
      and Other Noncurrent Liabilities             1,049.9             1,118.0
    Minority Interest                                170.9               174.0
    Shareholders' Equity                           1,428.7             1,655.0
      Total Liabilities and
       Shareholders' Equity                 $      4,937.0      $      5,819.7


    Dana Credit Corporation
    (A Wholly-Owned Subsidiary of Dana Corporation)
    Statement of Income (Unaudited)
    September 30, 1997
    (in millions)

                                               Three Months Ended September 30
                                                    1996                1997

    Lease Financing                        $         42.7      $         47.5
    Other Income                                     13.4                10.6
      Total                                          56.1                58.1
    Interest Expense                                 19.5                19.1
    General and Administrative
      Expenses                                       28.6                31.6
        Total                                        48.1                50.7

    Income Before Income Taxes                        8.0                 7.4
    Estimated Taxes on Income                        (1.7)               (1.5)
    Equity in Earnings of Affiliates                  0.4                 0.7

    Net Income                             $          6.7      $          6.6


    Dana Credit Corporation
    (A Wholly-Owned Subsidiary of Dana Corporation)
    Statement of Income (Unaudited)
    September 30, 1997
    (in millions)

                                               Nine Months Ended September 30
                                                   1996                1997

    Lease Financing                        $        126.6      $        139.7
    Other Income                                     47.7                60.7
      Total                                         174.3               200.4

    Interest Expense                                 55.4                60.3
    General and Administrative
      Expenses                                       87.1               102.4
        Total                                       142.5               162.7

    Income Before Income Taxes                       31.8                37.7
    Estimated Taxes on Income                       (11.1)              (14.6)
    Equity in Earnings of Affiliates                  1.9                 1.5

    Net Income                             $         22.6      $         24.6


    Dana Credit Corporation
    (A Wholly-Owned Subsidiary of Dana Corporation)
    Balance Sheet (Unaudited)
    September 30, 1997
    (in millions)

                                                December 31       September 30
    Assets                                          1996              1997

    Cash                                    $          3.5      $          3.1
    Lease Financing                                1,327.9             1,411.8
    Loans Receivable and Other Assets                337.8               304.9
      Total Assets                          $      1,669.2      $      1,719.8

    Liabilities and Shareholder's Equity

    Short-Term Debt                         $        456.4      $        301.2
    Long-Term Debt                                   708.3               867.0
    Other Liabilities and
      Accrued Expenses                                86.6                83.3
    Deferred Income Taxes                            294.0               332.9
    Shareholder's Equity                             123.9               135.4
      Total Liabilities and
       Shareholder's Equity                 $      1,669.2      $      1,719.8

SOURCE  Dana Corporation

CONTACT: Gary Corrigan of Dana, 419-535-4813

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