Dana Corporation Announces Record 1996 Sales, Profits; Global Growth And Diversification Strategy Is Working
Jan 23, 1997
TOLEDO, Ohio, Jan. 23 /PRNewswire/ -- Dana Corporation (NYSE: DCN) today
announced record 1996 sales of $7.7 billion. Profits reached an all-time high
of $306 million, an increase of 6 percent over the previous year. Earnings
per share totaled $3.01, up 6 percent from 1995.
Sales for the fourth quarter of 1996 were $1.9 billion compared to
$2 billion during the fourth quarter of 1995. Net income was $70.6 million,
versus $78.9 million in the fourth quarter of 1995. Earnings per share were
69 cents, compared to 77 cents during the fourth quarter of 1995. The 1995
results included a non-recurring after-tax gain of $12 million or 11 cents per
share and a one-time positive sales adjustment of $105 million.
"The fourth quarter of 1996 was a strong one by most standards, in spite
of lower production of medium and heavy trucks," said Dana Chairman Southwood
J. Morcott. "It topped off a record year for Dana."
Added Morcott, "One of the things I'm most excited about is the fact that
Dana experienced a record year in 1996 despite a considerable decrease in
North American medium and heavy truck production. This speaks volumes about
our success in diversifying across product lines and markets. It also lends
further credence to our strategic plan for global growth and Dana's emphasis
on its eight core businesses."
The past year was a strong one for several Dana markets. Global sales of
light truck components (for sport utility vehicles, pick-up trucks and vans)
to original equipment manufacturers finished 9 percent above Dana's record
1995 performance. Additionally, 1996 sales to global manufacturers of
off-highway vehicles were up 6 percent and worldwide sales to passenger car
makers were up 5 percent. Dana's global distribution business (32 percent of
Dana sales) also grew slightly during 1996.
Quality and growth were key Dana themes in 1996. The company earned
national and international recognition for the quality of its operations and
processes. Dana's leasing operation, Dana Commercial Credit, earned the
Malcolm Baldrige National Quality Award, the highest quality-oriented
achievement in the United States.
In addition, Spicer Driveshaft Division's Bristol, Virginia, facility was
honored as one of North America's Top 10 manufacturing facilities by Industry
Week magazine. In total, 12 Dana operations earned state-level quality awards
in 1996. Internationally, Venezuela recognized Dana's Quality Leadership
Awards (DQLA) as an officially-sanctioned quality validation system for that
country.
This growing reputation for quality continued to lead to new business.
Among the company's most exciting 1996 announcements was its "rolling chassis"
project in Brazil. In a first for the global vehicle manufacturing industry,
Dana will provide a complete rolling chassis -- including the frame,
driveshaft, axles, brakes, suspension components, wheels and tires -- for a
light truck. Dana will supply the rolling chassis for the 1998 Dodge Dakota
manufactured in Brazil.
A few of Dana's other key 1996 new business awards were:
* Dana will supply frames to the new Toyota truck plant in Princeton,
Indiana. Production will begin in the fall of 1998.
* In Canada, Dana will use hydroforming to produce engine cradles for the
1999 Ford Windstar, with production starting in 1998. The program
represents the first high-pressure hydroformed application specifically
for a minivan.
* Dana will supply driveshafts and frames for Ford Ranger light trucks to
be assembled in Argentina, beginning later this year.
* Dana will supply axles and driveshafts for light trucks built by the
Ford/Mazda joint venture in Thailand.
* Dana became the sole supplier of automotive filters to UAP Inc.,
Canada's leading distributor to the automotive aftermarket.
The past year continued Dana's recent growth in acquisitions, joint
ventures and new business. In December, Dana signed agreements to acquire the
assets of two major component manufacturers:
* In the largest acquisition in its 93-year history, Dana agreed to
acquire the global assets of Clark-Hurth Components, a unit of
Ingersoll-Rand Company and a worldwide manufacturer of off-highway
vehicle components.
* Dana also agreed to acquire the assets of the worldwide piston ring and
cylinder liner operations of SPX Corporation and its well-known Sealed
Power brand name.
These transactions are currently undergoing customary regulatory review.
Operations joining Dana in 1996 included:
* Thompson Ramco Argentina S.A., an Argentine manufacturer and distributor
of chassis parts and piston rings.
* J.B. Morgan & Co. Pty. Ltd., a manufacturer of oil, air and fuel
filters, based in Melbourne, Australia.
* James N. Kirby, Pty. Ltd., a Sydney, Australia-based manufacturer of
radial and panel air filters for automobiles and medium-duty trucks.
* Industrias Orlando Stevaux Ltda., a Brazilian manufacturer of gaskets
and oil seals.
* Thermoplast+Apparatebau GmbH, a German injection molding company.
* Flexon, Inc., a Ferndale, Michigan-based fuel filter manufacturer.
Dana also formed joint ventures or increased its equity in several
operations:
* Dana purchased a 70-percent share of Centrust S.A., an Argentine holding
company. Centrust owns Armetal Industrias Argentina de Metales S.A., a
producer of automotive parts for original equipment manufacturers and
the aftermarket. In addition, Armetal's subsidiaries produce brake and
rubber products, stamped frames, siderails and crossmembers.
* Dana formed a 50/50 joint venture with Brazilian brake manufacturer
Freios Varga S.A. to supply front suspension modules and rear axles for
the Volkswagen Golf automobile in Brazil.
* Dana's Wix Filtration Products Group and Helsa-Werke (Helmut Sandler
GmbH & Co.) formed a joint venture to produce particulate and odor
removal air filtration products for the automotive, commercial and
industrial markets in North America. Dana owns 60 percent of Wix-Helsa
Filtration Technologies, Inc., the new joint venture company.
Dana continued to grow through the establishment of two "greenfield"
plants in 1996:
* Dana's Spicer Axle Division began production of steering knuckles,
shafts and other components for light truck front and rear axles at its
new Whitsett, N.C., facility.
* Dana's Spicer India operation established a new axle facility in Chakan,
India.
Dana also continued to realign its operations for cost efficiency. Three
non-competitive or redundant facilities were closed during 1996.
"Dana will continue to grow in 1997," said President Joseph M.
Magliochetti. "But this growth will be supplemented by complete dedication to
improving facility efficiency and enhancing asset management. It is the
execution of these fundamentals -- the basic blocking and tackling -- that
will best serve Dana and its shareholders."
Magliochetti added, "Dana units that are not performing to corporate
standards have been given a firm directive to 'move up or move out.'"
From a strategic standpoint, Dana introduced "Beyond 2000," a refinement of
its Dana 2000 vision, introduced in 1990.
A key amendment to Dana 2000 was the modification of Dana's sales
diversification goal. Dana will now seek to obtain 50 percent of sales from
highway vehicle OEM customers and 50 percent from distribution, off-highway
and industrial markets. Typically, these businesses move through market
cycles at different times, helping to offset any downturns that might occur.
In addition, Dana set specific financial goals in the areas of sales
growth, profitability and return on shareholders' equity. Other "Beyond 2000"
goals relate to obtaining 50 percent of sales from outside the U.S., becoming
the leading global systems and components supplier, and implementing the Dana
Style throughout the corporation.
"This was a natural time to revisit Dana 2000 -- midway through the decade
-- and adjust our plan," Morcott said. "The agreement to acquire the assets
of Clark-Hurth -- which supports global diversity, new market and customer
growth, and new technology -- is a perfect example of how we are making
prudent acquisitions to support this strategic plan."
In concert with "Beyond 2000," Dana continued to grow its core businesses,
adding industrial products and engine products to its existing list. Other
Dana core businesses include axles, driveshafts, structural components,
sealing products and filtration products, as well as leasing services.
In February, the Dana family was saddened by the passing of former
Chairman Rene C. McPherson. Widely recognized as the architect of the Dana
Style of management, McPherson revolutionized Dana's corporate culture to
better reflect the company's belief that people are its most important asset.
Dana elected two new members to its Board of Directors in 1996: Dana
President Joseph M. Magliochetti, and Richard B. Priory, president and chief
operating officer of Duke Power Co., Charlotte, N.C.
In December, John S. Simpson was elected Dana's chief financial officer,
effective January 1, 1997. Simpson succeeds James E. Ayers, who retires after
33 years of service to Dana Corporation.
Dana Corporation is a global leader in the engineering, manufacture and
distribution of products and systems for the vehicular, industrial and mobile
off-highway markets. Its core products are axles, driveshafts, structural
components (frames), sealing products, filtration products, engine products
and industrial products. Founded in 1904 and based in Toledo, Ohio, Dana
operates facilities in 29 countries with more than 46,000 people. It has
40 product research and development centers worldwide. Dana also owns Dana
Credit Corporation, a leading provider of lease financing services. The
internet address for Dana's home page is: http://www.dana.com.
(in millions, except
per share amounts)
Three Months Ended December 31
1995 1996
Sales $ 1,977.4 $ 1,877.3
Net Income 78.9 70.6
Net Income Per Common Share $0.77 $0.69
Average Shares Outstanding 101.3 101.8
Twelve Months Ended December 31
1995 1996
Sales $ 7,597.7 $ 7,686.3
Net Income 288.1 306.0
Net Income Per Common Share $2.84 $3.01
Average Shares Outstanding 101.3 101.8
Dana Corporation
Statement of Income
December 31, 1996
(in millions, except per share amounts)
Three Months Ended December 31
1995 1996
Net Sales $ 1,977.4 $ 1,877.3
Revenue from Lease Financing
and Other Income 60.2 43.2
Total 2,037.6 1,920.5
Costs and Expenses
Cost of Sales 1,702.8 1,611.9
Selling, General and
Administrative Expenses 179.3 163.3
Interest Expense 38.9 42.6
Total 1,921.0 1,817.8
Income Before Income Taxes 116.6 102.7
Estimated Taxes on Income (26.7) (26.5)
Minority Interest (12.8) (7.7)
Equity in Earnings
of Affiliates 1.8 2.1
Net Income $ 78.9 $ 70.6
Net Income Per Common Share $0.77 $0.69
Average Number of Shares
Outstanding 101.3 101.8
Dana Corporation
Statement of Income
December 31, 1996
(in millions, except per share amounts)
Twelve Months Ended December 31
1995 1996
Net Sales $ 7,597.7 $ 7,686.3
Revenue from Lease Financing
and Other Income 196.8 204.4
Total 7,794.5 7,890.7
Costs and Expenses
Cost of Sales 6,449.7 6,525.2
Selling, General and
Administrative Expenses 685.2 714.8
Interest Expense 146.4 159.0
Total 7,281.3 7,399.0
Income Before Income Taxes 513.2 491.7
Estimated Taxes on Income (181.2) (166.3)
Minority Interest (40.4) (32.8)
Equity in Earnings (Losses)
of Affiliates (3.5) 13.4
Net Income $ 288.1 $ 306.0
Net Income Per Common Share $2.84 $3.01
Average Number of Shares
Outstanding 101.3 101.8
Dana Corporation
Condensed Balance Sheet
December 31, 1996
(in millions)
December 31 December 31
Assets 1995 1996
Cash and Marketable Securities $ 66.6 $ 227.8
Accounts Receivable 1,081.6 1,069.1
Inventories 874.8 912.9
Lease Financing 1,004.9 1,167.3
Investments and Other Assets 1,036.1 958.1
Property, Plant & Equipment, Net 1,649.5 1,824.8
Total Assets $ 5,713.5 $ 6,160.0
Liabilities and Shareholders' Equity
Accounts Payable and Other
Liabilities $ 1,192.4 $ 1,196.8
Short-Term Debt 791.4 640.3
Long-Term Debt 1,315.1 1,697.7
Deferred Employee Benefits 1,096.2 1,025.6
Minority Interest 153.8 170.9
Shareholders' Equity 1,164.6 1,428.7
Total Liabilities and
Shareholders' Equity $ 5,713.5 $ 6,160.0
Dana Corporation
(Including Dana Credit Corporation on an Equity Basis)
Statement of Income
December 31, 1996
(in millions)
Three Months Ended December 31
1995 1996
Net Sales $ 1,977.2 $ 1,877.3
Other Income 25.7 6.1
Total 2,002.9 1,883.4
Costs and Expenses
Cost of Sales 1,709.5 1,621.2
Selling, General and
Administrative Expenses 160.7 143.8
Interest Expense 21.1 23.4
Total 1,891.3 1,788.4
Income Before Income Taxes 111.6 95.0
Estimated Taxes on Income (30.5) (25.8)
Minority Interest (12.8) (7.7)
Equity in Earnings
of Affiliates 10.6 9.1
Net Income $ 78.9 $ 70.6
Dana Corporation
(Including Dana Credit Corporation on an Equity Basis)
Statement of Income
December 31, 1996
(in millions)
Twelve Months Ended December 31
1995 1996
Net Sales $ 7,596.3 $ 7,686.3
Other Income 41.5 28.0
Total 7,637.8 7,714.3
Costs and Expenses
Cost of Sales 6,469.0 6,549.8
Selling, General and
Administrative Expenses 602.9 627.7
Interest Expense 75.5 84.6
Total 7,147.4 7,262.1
Income Before Income Taxes 490.4 452.2
Estimated Taxes on Income (181.0) (154.5)
Minority Interest (40.4) (32.8)
Equity in Earnings
of Affiliates 19.1 41.1
Net Income $ 288.1 $ 306.0
Dana Corporation
(Including Dana Credit Corporation on an Equity Basis)
Condensed Balance Sheet
December 31, 1996
(in millions)
December 31 December 31
Assets 1995 1996
Current Assets
Cash and Marketable Securities $ 54.9 $ 224.3
Accounts Receivable 1,098.4 1,087.0
Inventories 874.8 912.9
Other Current Assets 132.5 141.4
Total Current Assets 2,160.6 2,365.6
Property, Plant & Equipment, Net 1,486.4 1,637.2
Investments and Other Assets 960.4 934.2
Total Assets $ 4,607.4 $ 4,937.0
Liabilities and Shareholders' Equity
Accounts Payable and Other
Current Liabilities $ 1,112.4 $ 1,114.2
Notes Payable 515.4 362.9
Long-Term Debt 533.7 810.4
Deferred Employee Benefits
and Other Noncurrent Liabilities 1,127.5 1,049.9
Minority Interest 153.8 170.9
Shareholders' Equity 1,164.6 1,428.7
Total Liabilities and
Shareholders' Equity $ 4,607.4 $ 4,937.0
Dana Credit Corporation
(A Wholly-Owned Subsidiary of Dana Corporation)
Statement of Income
December 31, 1996
(in millions)
Three Months Ended December 31
1995 1996
Lease Financing $ 40.0 $ 43.9
Other Income (1.2) 11.4
Total 38.8 55.3
Interest Expense 16.7 19.0
General and Administrative
Expenses 23.6 28.5
Total 40.3 47.5
Income Before Income Taxes (1.5) 7.8
Estimated Taxes on Income 11.4 (0.7)
Equity in Earnings of Affiliates 1.2 0.8
Net Income $ 11.1 $ 7.9
Dana Credit Corporation
(A Wholly-Owned Subsidiary of Dana Corporation)
Statement of Income
December 31, 1996
(in millions)
Twelve Months Ended December 31
1995 1996
Lease Financing $ 152.2 $ 170.5
Other Income 28.2 59.1
Total 180.4 229.6
Interest Expense 62.8 74.4
General and Administrative
Expenses 103.1 115.6
Total 165.9 190.0
Income Before Income Taxes 14.5 39.6
Estimated Taxes on Income 8.0 (11.8)
Equity in Earnings of Affiliates 4.9 2.7
Net Income $ 27.4 $ 30.5
Dana Credit Corporation
(A Wholly-Owned Subsidiary of Dana Corporation)
Balance Sheet
December 31, 1996
(in millions)
December 31 December 31
Assets 1995 1996
Cash $ 11.5 $ 3.5
Lease Financing 1,153.5 1,327.9
Loans Receivable and Other Assets 221.7 337.8
Total Assets $ 1,386.7 $ 1,669.2
Liabilities and Shareholder's Equity
Short-Term Debt $ 371.7 $ 456.4
Long-Term Debt 600.7 708.3
Other Liabilities and
Accrued Expenses 74.3 86.6
Deferred Income Taxes 235.4 294.0
Shareholder's Equity 104.6 123.9
Total Liabilities and
Shareholder's Equity $ 1,386.7 $ 1,669.2
SOURCE Dana Corporation
CONTACT: Gary Corrigan of Dana Corporation, 419-535-4813