Dana Corporation Announces First-Quarter Results
Apr 17, 2002
TOLEDO, Ohio, April 17 /PRNewswire-FirstCall/ -- Dana Corporation
(NYSE: DCN) today announced its first-quarter results, which included the
impact of the company's previously announced restructuring program and the
required adoption of new accounting standard FAS 142.
(Photo: http://www.newscom.com/cgi-bin/prnh/19990903/DANA )
Operating Performance
The company reported first-quarter sales of $2.5 billion and net income,
excluding non-recurring charges, of $28 million or 18 cents per share. During
the same period last year, the company's sales were $2.7 billion and net
income, excluding non-recurring items, was $1 million.
Dana Chairman and CEO Joe Magliochetti said the improved operating
performance is largely attributable to progress made on the company's
restructuring initiatives announced in October 2001. "We are very encouraged
by the progress our people have made over the past six months," he said.
"Clearly, we are beginning to see the benefits from our restructuring efforts,
as well as progress in our broader efforts to transform Dana."
Restructuring Update
In October 2001, Dana announced a series of restructuring actions,
including plans to further decrease its workforce by more than 15 percent and
the planned closure or consolidation of more than 30 facilities. The cost of
the restructuring actions is expected to total $445 million. During the
quarter, the company recorded charges of $37 million related to its
restructuring, bringing to $316 million the total charges recorded to date for
the October 2001 restructuring plan.
Through March 31, Dana had reduced its workforce by 7 percent. Dana has
also closed seven facilities and announced plans to close 21 others. The
company expects to record substantially all of the charges and complete most
of the actions related to this restructuring plan by the end of 2002.
Company Adopts FAS 142
During the quarter, the company adopted Statement of Financial Accounting
Standards No. 142, a new accounting requirement that changes the way in which
companies account for goodwill and other intangible assets. Due to the change
in accounting, the company reduced goodwill by $289 million, resulting in an
after-tax charge of $220 million during the first quarter. In accordance with
the new requirement, the remaining goodwill will no longer be amortized, but
will be reviewed annually for potential impairment.
Financial Results
After the non-recurring charges of $37 million for restructuring and the
$220 million effect of the change in accounting, the company's reported loss
for the first quarter of 2002 was $229 million, or $1.54 per share. In the
first quarter of 2001, the reported net loss was $27 million, or 18 cents per
share, including non-recurring charges of $28 million.
Improved Liquidity
During the first quarter of 2002, Dana continued to strengthen its
liquidity through tight control of its working capital and fixed asset
investment. The company also completed the private placement of $250 million
of eight-year, unsecured senior notes. On March 31, 2002, excluding the
accounts of Dana Commercial Credit, the company had cash and marketable
securities of $255 million and borrowings of only $15 million against its
$750 million lines of available credit.
"As we execute our restructuring actions, we continue to focus on managing
for cash and strengthening our balance sheet," said Dana Chief Financial
Officer Bob Richter. "As a result, we remain confident in our ability to both
fund our restructuring initiatives and significantly reduce debt in 2002."
Outlook
Commenting on the company's outlook for the balance of the year,
Mr. Magliochetti said, "While we have seen modest improvement in production
volumes from the prior quarter, we continue to remain cautious in our market
outlook. Specifically, we are concerned that recent improvements in
production volumes may have been driven by light vehicle incentives and pre-
buying of Class 8 trucks in advance of an October change in emission
requirements for heavy-duty diesel engines.
"We will be in a much better position to judge the effect of these factors
when we have greater visibility of production schedules for the third and
fourth quarters," he added. "Despite our cautious outlook on the markets, we
expect to see continued improvement in our performance due to those factors
within our control."
Dana will discuss its first-quarter results in a conference call at
10 a.m. (EDT) today. The call may be accessed via Dana's website
( http://www.dana.com ), where it will be accompanied by a slide presentation, or by
dialing (800) 275-3210. Please dial into the conference 15 minutes prior to
the call. A recording of this conference call will be available after 1 p.m.
(EDT) today. To access this recording, please dial (800) 537-8823.
Dana Corporation is one of the world's largest suppliers of components,
modules and complete systems to global vehicle manufacturers and their related
aftermarkets. Founded in 1904 and based in Toledo, Ohio, the company operates
some 300 major facilities in 34 countries and employs approximately 70,000
people. The company reported sales of $10.3 billion in 2001. Dana's Internet
address is http://www.dana.com .
Certain statements contained herein (including our forecasts, beliefs, and
expectations) constitute "forward-looking" statements within the meaning of
the Private Securities Litigation Reform Act of 1995. These statements involve
assumptions, uncertainties, and risks, and Dana's actual results, performance,
or achievements may differ materially from those expressed or implied in these
statements. Among the factors that could affect Dana's actual results are the
impact of national and international economic conditions (including additional
adverse effects from terrorism or hostilities) on production and sales by the
company and its vehicular customers; the company's ability to complete the
sale of the Dana Commercial Credit businesses and other divestitures as
contemplated; and the success and timing of the company's restructuring, cost
reduction and cash management programs. Additional factors are contained in
Dana's public filings with the Securities and Exchange Commission. Dana does
not undertake to update any forward-looking statements contained herein.
(in millions, except
per share amounts)
Unaudited
Three Months Ended March 31
2001 2002
Sales $2,731 $2,521
Net income, excluding non-recurring
items and effect of change in accounting $1 $28
Non-recurring items
Severance costs (7) (13)
Exit and other costs (5) (9)
Asset impairment charges (4) (15)
Loss on divestiture (12)
(28) (37)
Effect of change in accounting (220)
Net loss, including non-recurring items
and effect of change in accounting (27) (229)
Basic earnings per share
Income before non-recurring items and
effect of change in accounting $0.01 $0.19
Non-recurring items (0.19) (0.24)
Effect of change in accounting (1.48)
Net loss (0.18) (1.54)
Diluted earnings per share
Income before non-recurring items
and effect of change in accounting $0.01 $0.18
Non-recurring items (0.19) (0.24)
Effect of change in accounting (1.48)
Net loss (0.18) (1.54)
Average shares outstanding -
For Basic EPS 148 149
For Diluted EPS 149 149
Dana Corporation
Statement of Income (Unaudited)
March 31, 2002
(in millions, except per share amounts)
Three Months Ended March 31
2001 2002
Net sales $2,731 $2,521
Revenue from lease financing
and other income 22 53
2,753 2,574
Costs and expenses
Cost of sales 2,443 2,236
Selling, general and
administrative expenses 261 248
Restructuring charges 22 39
Interest expense 85 68
2,811 2,591
Loss before income taxes (58) (17)
Estimated taxes on income 24 (4)
Minority interest (2) (6)
Equity in earnings of affiliates 9 18
Net loss before effect of change
in accounting (27) (9)
Effect of change in accounting - (220)
Net Loss $(27) $(229)
Basic earnings per share
Loss before effect of change
in accounting $(0.18) $(0.06)
Effect of change in accounting - (1.48)
Net loss $(0.18) $(1.54)
Diluted earnings per share
Loss before effect of change
in accounting $(0.18) $(0.06)
Effect of change in accounting - (1.48)
Net loss $(0.18) $(1.54)
Average shares outstanding -
For Basic EPS 148 149
For Diluted EPS 149 149
Dana Corporation
Condensed Balance Sheet
March 31, 2002
(in millions)
December 31 March 31
Assets 2001 2002
Current assets
Cash and marketable securities $199 $275
Accounts receivable
Trade 1,371 1,611
Other 371 236
Inventories 1,299 1,255
Other current assets 557 581
Total current assets 3,797 3,958
Property, plant and equipment, net 3,133 3,058
Investment in leases 1,068 1,045
Investments and other assets 2,209 1,980
Total assets $10,207 $10,041
Liabilities and Shareholders' Equity
Accounts payable and other
current liabilities $2,369 $2,439
Notes payable 1,120 947
Total current liabilities 3,489 3,386
Long-term debt 3,008 3,193
Deferred employee benefits
and other noncurrent liabilities 1,640 1,736
Minority interest 112 101
Shareholders' equity 1,958 1,625
Total liabilities and
shareholders' equity $10,207 $10,041
Dana Corporation
Condensed Statement of Cash Flows (Unaudited)
March 31, 2002
(in millions)
Three Months Ended March 31
2001 2002
Net loss $(27) $(229)
Depreciation and amortization 136 121
Change in accounting for goodwill 220
Asset impairment 21
Working capital change (98) (29)
Other 101 (33)
Net cash from operating activities 112 71
Purchases of property, plant and equipment (124) (75)
Purchases of assets to be leased (30) (26)
Payments received on leases 10 9
Net loans to (payments from) customers 60 (3)
Divestitures 15 10
Other 20 43
Net cash flows - investing activities (49) (42)
Net change in short-term debt 96 (147)
Proceeds from long-term debt 43 250
Payments on long-term debt (186) (56)
Dividends paid (46) (1)
Other 1 1
Net cash flows - financing activities (92) 47
Net change in cash and cash equivalents (29) 76
Cash and cash equivalents - beginning of period 179 199
Cash and cash equivalents - end of period $150 $275
Dana Corporation
(Including Dana Credit Corporation on the Equity Basis)
Statement of Income (Unaudited)
March 31, 2002
(in millions)
Three Months Ended March 31
2001 2002
Net sales $2,731 $2,521
Other income (13) 14
2,718 2,535
Costs and expenses
Cost of sales 2,461 2,251
Selling, general and administrative expenses 237 222
Restructuring charges 22 39
Interest expense 55 46
2,775 2,558
Loss before income taxes (57) (23)
Estimated taxes on income 23
Minority interest (2) (6)
Equity in earnings of affiliates 9 20
Loss before effect of change in accounting (27) (9)
Effect of change in accounting (220)
Net loss $(27) $(229)
Dana Corporation
(Including Dana Credit Corporation on the Equity Basis)
Condensed Balance Sheet (Unaudited)
March 31, 2002
(in millions)
December 31 March 31
Assets 2001 2002
Current assets
Cash and marketable securities $182 $255
Accounts receivable
Trade 1,371 1,611
Other 253 194
Inventories 1,299 1,255
Other current assets 518 536
Total current assets 3,623 3,851
Property, plant and equipment, net 2,778 2,713
Investments and other assets 2,164 1,883
Total assets $8,565 $8,447
Liabilities and Shareholders' Equity
Accounts payable and other
current liabilities $2,325 $2,489
Notes payable 617 454
Total current liabilities 2,942 2,943
Long-term debt 2,155 2,364
Deferred employee benefits
and other noncurrent liabilities 1,400 1,416
Minority interest 110 99
Shareholders' equity 1,958 1,625
Total liabilities and
shareholders' equity $8,565 $8,447
Dana Corporation
(Including Dana Credit Corporation on an Equity Basis)
Condensed Statement of Cash Flows (Unaudited)
March 31, 2002
(in millions)
Three Months Ended March 31
2001 2002
Net loss $(27) $(229)
Depreciation and amortization 111 98
Change in accounting for goodwill 220
Asset impairment 21
Working capital change (74) (33)
Other 42 (24)
Net cash from operating activities 52 53
Purchases of property, plant and
equipment (74) (64)
Divestitures 15 10
Other 7 (7)
Net cash flows - investing activities (52) (61)
Net change in short-term debt 183 (169)
Proceeds from long-term debt 10 250
Payments on long-term debt (162)
Dividends paid (46) (1)
Other 2 1
Net cash flows - financing activities (13) 81
Net change in cash and cash equivalents (13) 73
Cash and cash equivalents - beginning of period 149 182
Cash and cash equivalents - end of period $136 $255
Investor Relations
Dana Corporation
Quarterly Financial Information (Unaudited)
Q1 - 2002
(in millions)
Inter-Segment
External Sales Sales
01 02 01 02
Automotive Systems Group $971 $936 $34 $21
Automotive Aftermarket Group 637 626 3 4
Engine and Fluid Management Group 586 528 37 34
Commercial Vehicle Systems 321 250 23 26
Off-Highway Systems Group 178 158 7 7
Dana Commercial Credit
Other 38 23 7 5
Goodwill Amortization
Total Operations 2,731 2,521 111 97
Restructuring and nonrecurring items
Effect of Change in Accounting
Consolidated $2,731 $2,521 $111 $97
North America $2,034 $1,900 $27 $26
Europe 489 423 23 21
South America 127 121 19 42
Asia Pacific 81 77
Dana Commercial Credit
Other
Goodwill Amortization
Total Operations 2,731 2,521 69 89
Restructuring and
nonrecurring items
Effect of Change in Accounting
Consolidated $2,731 $2,521 $69 $89
See Note 13 to Dana's 2001 Annual Report for further information
(http://WWW.Dana.Com)
FOR MORE INFORMATION
(http://WWW.Dana.Com) - Dial-For-Dana U.S. or Canada 800-537-8823;
OH 800-472-8810
E-Mail Greg.Smietanski@Dana.com or Karen.Crawford@Dana.Com
Dana Investor Relations 419-535-4635
Investor Relations
Dana Corporation
Quarterly Financial Information (Unaudited)
Q1 - 2002
(in millions)
EBIT Operating PAT
01 02 01 02
Automotive Systems Group $57 $51 $40 $41
Automotive Aftermarket Group (12) 23 (7) 14
Engine and Fluid Management Group 38 29 25 19
Commercial Vehicle Systems 9 7 5 5
Off-Highway Systems Group 13 10 8 6
Dana Commercial Credit 7 10
Other (52) (54) (70) (67)
Goodwill Amortization (9) (7)
Total Operations 44 66 1 28
Restructuring and
nonrecurring items (46) (46) (28) (37)
Effect of Change in Accounting (289) (220)
Consolidated $(2) $(269) $(27) $(229)
North America $81 $92 $46 $56
Europe 23 22 20 20
South America 2 9 (4) 5
Asia Pacific 1 2 1 1
Dana Commercial Credit 7 10
Other (54) (59) (62) (64)
Goodwill Amortization (9) (7)
Total Operations 44 66 1 28
Restructuring and
nonrecurring items (46) (46) (28) (37)
Effect of Change in Accounting (289) (220)
Consolidated $(2) $(269) $(27) $(229)
See Note 13 to Dana's 2001 Annual Report for further information
(http://WWW.Dana.Com)
FOR MORE INFORMATION
(http://WWW.Dana.Com) - Dial-For-Dana U.S. or Canada 800-537-8823;
OH 800-472-8810
E-Mail Greg.Smietanski@Dana.com or Karen.Crawford@Dana.Com
Dana Investor Relations 419-535-4635
Investor Relations
Dana Corporation
Quarterly Financial Information (Unaudited)
Q1 - 2002
(in millions)
Net Profit Net Assets
01 02 01 02
Automotive Systems Group $17 $20 $1,963 $1,932
Automotive Aftermarket Group (25) (3) 1,615 1,271
Engine and Fluid Management Group 12 8 1,521 1,040
Commercial Vehicle Systems (3) (3) 407 293
Off-Highway Systems Group 4 2 400 365
Dana Commercial Credit 7 10 173 209
Other (4) (6) 43 27
Goodwill Amortization (7)
Total Operations 1 28 6,122 5,137
Restructuring and
nonrecurring items (28) (37)
Effect of Change in Accounting (220)
Consolidated $(27) $(229) $6,122 $5,137
North America $1 $12 $4,187 $3,455
Europe 8 9 1,317 1,086
South America (7) 3 442 412
Asia Pacific (2) (1) 142 141
Dana Commercial Credit 7 10 173 209
Other 1 (5) (139) (166)
Goodwill Amortization (7)
Total Operations 1 28 6,122 5,137
Restructuring and
nonrecurring items (28) (37)
Effect of Change in Accounting (220)
Consolidated $(27) $(229) $6,122 $5,137
See Note 13 to Dana's 2001 Annual Report for further information
(http://WWW.Dana.Com)
FOR MORE INFORMATION
(http://WWW.Dana.Com) - Dial-For-Dana U.S. or Canada 800-537-8823;
OH 800-472-8810
E-Mail Greg.Smietanski@Dana.com or Karen.Crawford@Dana.Com
Dana Investor Relations 419-535-4635
SOURCE Dana Corporation
Web Site: http://www.dana.com
Photo Notes: http://www.newscom.com/cgi-bin/prnh/19990903/DANA AP
Archive: http://photoarchive.ap.org PRN Photo Desk, 888-776-6555
or 212-782-2840
Company News On Call: Company News On-Call:
http://www.prnewswire.com/gh/cnoc/comp/226839.html