Dana Corporation Announces Third-Quarter Results

Oct 17, 2000

           Earnings in Line with Previously Announced Expectations

    TOLEDO, Ohio, Oct. 17 /PRNewswire/ -- Dana Corporation (NYSE: DCN) today
announced that its sales for the quarter ended Sept. 30 were $2.9 billion,
down from $3.1 billion for the same period last year.
    (Photo:  http://www.newscom.com/cgi-bin/prnh/19990903/DANA )
    Operating income for the quarter totaled $61 million, or 41 cents per
share -- in line with expectations announced by the company on Sept. 18.
Reported net income for the period was $29 million, or 19 cents per share.
This included net non-recurring expenses of $32 million after tax, primarily
attributable to the closure of the company's Reading, Pa., Structural Products
facility.  For the third quarter of 1999, the company reported net income of
$162 million or 97 cents per share.  Last year's results included
approximately $11 million of non-recurring after-tax charges.
    Dana's nine-month consolidated sales were $9.6 billion, compared to $9.9
billion during the same period last year.  Net income for the first three
quarters was $418 million, or $2.71 per share.  This total included net non-
recurring income of $43 million after tax.  Comparable results from 1999 were
net income of $513 million, or $3.07 per share, including non-recurring
charges of approximately $21 million after tax.
    Among the factors impacting Dana's quarterly results were a number of
broad issues that affected the industry as a whole.  These included unexpected
reductions in production schedules for light truck and sport utility vehicles
manufactured by several of Dana's largest customers, a declining U.S. heavy
truck market, softness in the U.S. and European aftermarkets, and the
continued weakness of the Euro.
    "The past several months have been difficult for our entire sector, but
because of Dana's business mix, we have been particularly hard hit by the
convergence of all four of these factors," said Dana Chairman and CEO Joe
Magliochetti.  "These challenges have come at a time when we are actively
repositioning Dana to focus on long-term, profitable growth in our foundation
businesses.
    "We remain focused on our strategic direction. Year to date, we have
divested businesses with annual sales in excess of $660 million, for which we
have received proceeds of $562 million," he said.  "Moving forward, we will
continue to evaluate the future of operations outside of our foundation
businesses and aggressively pursue the divestiture of those that are
considered to be non-strategic.
    "We will continue to use our free cash flow, supported by these
divestiture proceeds, to invest in those technologies and businesses that will
drive our global growth, as well as for share repurchases and debt reduction,"
he added.
    Dana Chief Financial Officer Bob Richter said, "We have undertaken a
number of aggressive actions to respond to current market conditions.  These
include significant expense reduction initiatives, limitations on capital
spending, and workforce reductions totaling more than 3,500 people.  This
includes the reductions associated with the closure of the Reading plant.
    "We also continue to work toward the resolution of the software
implementation and integration issues associated with the consolidation of the
Automotive Aftermarket Group's Engine Controls warehouses, which are impacting
our performance.
    "Until we see positive developments with respect to the factors that
affected our third quarter, we will remain guarded in our outlook for the
fourth quarter," he said.
    Yesterday, Dana's Board approved a quarterly dividend of 31 cents per
share payable Dec. 15, 2000, to shareholders of record on Dec. 1.  This will
mark Dana's 252nd consecutive dividend -- dating back to 1936 -- without a
reduced or missed payment.
    Dana will hold a conference call at 9:30 a.m. (EDT) today to discuss its
third-quarter results.  The dial-in number is (800) 275-3210.  Please dial
into the conference 15 minutes prior to the start.  A recording of this
conference call will be available after 5 p.m. (EDT) Wednesday, Oct. 18.  To
access this recording, please dial (800) 537-8823.
    Dana Corporation is one of the world's largest suppliers to vehicle
manufacturers and their related aftermarkets.  Founded in 1904 and based in
Toledo, Ohio, the company operates approximately 320 major facilities in 32
countries and employs more than 80,000 people.  The company reported sales of
$13.2 billion in 1999.  Dana's Internet address is http://www.dana.com .
    Certain statements contained herein 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 future 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 ability of various
vehicular customers and suppliers to achieve projected sales and production
levels, the cyclical nature of the vehicular industry, international economic
conditions, and further delays in consolidation of the company's Engine
Controls warehouse network.  Additional factors are detailed in Dana's public
filings with the Securities and Exchange Commission.  Dana does not undertake
to update any forward-looking statements contained herein.

    Dana Corporation
    (in millions, except
    per share amounts)
                                                          Unaudited
                                               Three Months Ended September 30

                                                       1999           2000

    Sales                                             $3,127         $2,855
    Net Income                                           162             29
    Net Income Per Common Share -
      Basic                                            $0.98          $0.19
      Diluted                                          $0.97          $0.19

    Average Shares Outstanding -
      For Basic EPS                                      166            149
      For Diluted EPS                                    167            150


                                                           Unaudited
                                                Nine Months Ended September 30

                                                       1999           2000

    Sales                                             $9,915         $9,601
    Net Income                                           513            418
    Net Income Per Common Share -
      Basic                                            $3.10          $2.73
      Diluted                                          $3.07          $2.71
    Average Shares Outstanding -
      For Basic EPS                                      166            153
      For Diluted EPS                                    167            154


    Dana Corporation
    Statement of Income (Unaudited)
    September 30, 2000
    (in millions, except per share amounts)

                                               Three Months Ended September 30

                                                        1999          2000
    Net sales                                         $3,127         $2,855
    Revenue from lease financing and other income         47             50
          Total                                        3,174          2,905
    Costs and expenses
      Cost of sales                                    2,564          2,466
      Selling, general and administrative expenses       289            281
      Restructuring and integration charges               17             69
      Interest expense                                    69             82
        Total                                          2,939          2,898
    Income before income taxes                           235              7
    Estimated taxes on income                            (81)            10
    Minority interest                                     (3)            (4)
    Equity in earnings of affiliates                      11             16
    Net income                                          $162            $29
    Net income per common share -
      Basic                                            $0.98          $0.19
      Diluted                                          $0.97          $0.19
    Average shares outstanding -
      For Basic EPS                                      166            149
      For Diluted EPS                                    167            150


    Dana Corporation
    Statement of Income (Unaudited)
    September 30, 2000
    (in millions, except per share amounts)

                                                Nine Months Ended September 30
                                                       1999           2000

    Net sales                                         $9,915         $9,601
    Revenue from lease financing and other income        119            308
      Total                                           10,034          9,909
    Costs and expenses
      Cost of sales                                    8,176          8,117
      Selling, general and administrative expenses       875            863
      Restructuring and integration charges               30            103
      Interest expense                                   206            238
        Total                                          9,287          9,321
    Income before income taxes                           747            588
    Estimated taxes on income                           (267)          (207)
    Minority interest                                    (10)           (12)
    Equity in earnings of affiliates                      43             49
    Net income                                          $513           $418
    Net income per common share -
      Basic                                            $3.10          $2.73
      Diluted                                          $3.07          $2.71
    Average shares outstanding -
      For Basic EPS                                      166            153
      For Diluted EPS                                    167            154


    Dana Corporation
    Condensed Balance Sheet (Unaudited)
    September 30, 2000
    (in millions)

                                                   December 31    September 30
    Assets                                              1999           2000

    Current assets
      Cash and marketable securities                      $111           $144
      Accounts receivable
        Trade                                            1,935          1,916
        Other                                              411            424
      Inventories                                        1,784          1,696
      Other current assets                                 560            779
        Total current assets                             4,801          4,959

    Property, plant and equipment, net                   3,450          3,372
    Investment in leases                                 1,014          1,062
    Investments and other assets                         1,858          2,009

      Total assets                                     $11,123        $11,402

    Liabilities and Shareholders' Equity

    Accounts payable and other
      current liabilities                               $2,470         $2,473
    Notes payable                                        1,418          1,965
      Total current liabilities                          3,888          4,438

    Long-term debt                                       2,732          2,715
    Deferred employee benefits
      and other noncurrent liabilities                   1,398          1,400
    Minority interest                                      148            120
    Shareholders' equity                                 2,957          2,729

      Total liabilities and
        shareholders' equity                           $11,123        $11,402


    Dana Corporation
    Condensed Statement of Cash Flows (Unaudited)
    September 30, 2000
    (in millions)
                                               Three Months Ended September 30

                                                        1999           2000

    Net income                                          $162            $29
    Depreciation and amortization                        129            130
    Gain on divestitures                                   -            (13)
    Working capital change                              (138)           (97)
    Other                                                 26             45
        Net cash from operating activities               179             94

    Purchases of property, plant and equipment          (161)          (130)
    Purchases of assets to be leased                    (196)          (171)
    Payments received on leases and loans                107             61
    Net loans to customers                               (62)           (41)
    Acquisitions                                          (6)           (74)
    Divestitures                                           -             38
    Other                                                 42            (17)
        Net cash flows - investing activities           (276)          (334)

    Net change in short-term debt                        150             58
    Proceeds from long-term debt                         107            300
    Payments on long-term debt                           (68)           (55)
    Dividends paid                                       (51)           (46)
    Shares reacquired                                    (32)           (61)
    Other                                                (17)             1
        Net cash flows - financing activities             89            197
    Net change in cash and cash equivalents              (8)           (43)
    Cash and cash equivalents - beginning of period      193            187
    Cash and cash equivalents - end of period           $185           $144


    Dana Corporation
    Condensed Statement of Cash Flows (Unaudited)
    September 30, 2000
    (in millions)
                                                Nine Months Ended September 30

                                                        1999           2000

    Net income                                          $513           $418
    Depreciation and amortization                        392            390
    Gain on divestitures                                (110)             -
    Working capital change                              (522)          (223)
    Other                                                (81)           (50)
        Net cash from operating activities               302            425

    Purchases of property, plant and equipment          (562)          (464)
    Purchases of assets to be leased                    (318)          (242)
    Payments received on leases and loans                152            126
    Net loans to customers                               (87)          (147)
    Acquisitions                                         (12)          (279)
    Divestitures                                           -            562
    Other                                                 24             27
        Net cash flows - investing activities           (803)          (417)

    Net change in short-term debt                       (195)           621
    Proceeds from long-term debt                       1,151            311
    Payments on long-term debt                          (302)          (388)
    Dividends paid                                      (154)          (142)
    Shares reacquired                                    (43)          (381)
    Other                                                 (1)             4
        Net cash flows - financing activities            456             25
    Net change in cash and cash equivalents              (45)            33
    Cash and cash equivalents - beginning of period      230            111
    Cash and cash equivalents - end of period           $185           $144


    Dana Corporation
    (Including Dana Credit Corporation on an Equity Basis)
    Statement of Income (Unaudited)
    September 30, 2000
    (in millions)

                                               Three Months Ended September 30

                                                       1999           2000

    Net sales                                         $3,127         $2,855
    Other income                                          11              3
      Total                                            3,138          2,858

    Costs and expenses
      Cost of sales                                    2,577          2,482
      Selling, general and
        administrative expenses                          263            252
      Restructuring and
        integration charges                               17             69
      Interest expense                                    51             55
      Total                                            2,908          2,858

    Income before income taxes                           230              -
    Estimated taxes on income                            (83)            13
    Minority interest                                     (3)            (4)
    Equity in earnings
      of affiliates                                       18             20

    Net income                                          $162            $29


    Dana Corporation
    (Including Dana Credit Corporation on an Equity Basis)
    Statement of Income (Unaudited)
    September 30, 2000
    (in millions)
                                                Nine Months Ended September 30

                                                       1999           2000

    Net sales                                         $9,915         $9,601
    Other income                                          19            183
      Total                                            9,934          9,784

    Costs and expenses
      Cost of sales                                    8,214          8,163
      Selling, general and
        administrative expenses                          799            787
      Restructuring and
        integration charges                               30            103
      Interest expense                                   157            163
      Total                                            9,200          9,216

    Income before income taxes                           734            568
    Estimated taxes on income                           (274)          (204)
    Minority interest                                    (10)           (12)
    Equity in earnings
      of affiliates                                       63             66

    Net income                                          $513           $418


    Dana Corporation
    (Including Dana Credit Corporation on an Equity Basis)
    Condensed Balance Sheet (Unaudited)
    September 30, 2000
    (in millions)

                                                     December 31  September 30
    Assets                                                1999           2000

    Current assets
      Cash and marketable securities                      $101           $136
      Accounts receivable
        Trade                                            1,935          1,893
        Other                                              399            424
      Inventories                                        1,784          1,696
      Other current assets                                 418            512
        Total current assets                             4,637          4,661

    Property, plant and equipment, net                   3,064          2,937
    Investments and other assets                         1,801          1,843
        Total assets                                    $9,502         $9,441

    Liabilities and Shareholders' Equity

    Accounts payable and other
      current liabilities                               $2,423         $2,419
    Notes payable                                          897          1,317
        Total current liabilities                        3,320          3,736

    Long-term debt                                       1,862          1,696
    Deferred employee benefits
      and other noncurrent liabilities                   1,216          1,162
    Minority interest                                      147            118
    Shareholders' equity                                 2,957          2,729

        Total liabilities and
          shareholders' equity                          $9,502         $9,441


     Dana Corporation
    (Including Dana Credit Corporation on an Equity Basis)
    Condensed Statement of Cash Flows (Unaudited)
    September 30, 2000
    (in millions)

                                               Three Months Ended September 30

                                                        1999           2000

    Net income                                          $162            $29
    Depreciation and amortization                        106            105
    Gain on divestitures                                   -            (13)
    Working capital change                              (127)          (104)
    Other                                                (15)            (6)
      Net cash from operating activities                 126             11

    Purchases of property, plant and equipment          (105)           (81)
    Acquisitions                                          (5)           (74)
    Divestitures                                           -             38
    Other                                                 10            (24)
      Net cash flows - investing activities             (100)          (141)

    Net change in short-term debt                        102            215
    Proceeds from long-term debt
    Payments on long-term debt                           (32)           (13)
    Dividends paid                                       (51)           (46)
    Shares reacquired                                    (32)           (61)
    Other                                                (17)             2
      Net cash flows - financing activities              (30)            97
    Net change in cash and cash equivalents               (4)           (33)
    Cash and cash equivalents - beginning of period      187            169
    Cash and cash equivalents - end of period           $183           $136


    Dana Corporation
    (Including Dana Credit Corporation on an Equity Basis)
    Condensed Statement of Cash Flows (Unaudited)
    September 30, 2000
    (in millions)

                                                Nine Months Ended September 30
                                                        1999           2000

    Net income                                          $513           $418
    Depreciation and amortization                        323            319
    Gain on divestitures                                   -           (110)
    Working capital change                              (503)          (202)
    Other                                               (102)          (101)
      Net cash from operating activities                 231            324

    Purchases of property, plant and equipment          (384)          (318)
    Acquisitions                                         (11)          (279)
    Divestitures                                           -            562
    Other                                                (22)             9
      Net cash flows - investing activities             (417)           (26)

    Net change in short-term debt                       (473)           510
    Proceeds from long-term debt                       1,002              -
    Payments on long-term debt                          (189)          (255)
    Dividends paid                                      (154)          (142)
    Shares reacquired                                    (43)          (381)
    Other                                                 (1)             5
      Net cash flows - financing activities              142           (263)
    Net change in cash and cash equivalents              (44)            35
    Cash and cash equivalents - beginning of period      227            101
    Cash and cash equivalents - end of period           $183           $136


                               Dana Corporation
                       Quarterly Financial Information
                            Q3 - 2000 (Unaudited)
                                (in millions)

                              Sales             EBIT           Operating PAT
                          99         00      99       00        99       00
    Automotive Systems
      Group           $1,031     $1,089    $116      $83       $75      $58
    Automotive Aftermarket
      Group              756        693      85       30        52       18
    Heavy Truck Group    461        345      52       27        32       17
    Engine Systems Group 314        302      20       13        13       14
    Fluid Systems Group  283        266      26       18        16       11
    Off-Highway Systems
      Group              189        150      14        9         9        6
    Dana Commercial
      Credit               -          -       -        -        10        7
    Other                 93         10     (21)     (60)      (34)     (70)
    Total Operations   3,127      2,855     292      120       173       61

    Restructuring and
      nonrecurring
      items                -          -     (17)     (68)      (11)     (32)
    Consolidated      $3,127     $2,855    $275      $52      $162      $29

    North America     $2,458     $2,156    $295     $149      $183      $97
    Europe               465        440      19       11        10        6
    South America        141        158       6       10         5        8
    Asia Pacific          63        101      (2)       3        (1)       2
    Dana Commercial
      Credit               -          -       -        -        10        7
    Other                  -          -     (26)     (53)      (34)     (59)
    Total Operations   3,127      2,855     292      120       173       61

    Restructuring and
     nonrecurring items    -          -     (17)     (68)      (11)     (32)
    Consolidated      $3,127     $2,855    $275      $52      $162      $29


                               Dana Corporation
                       Quarterly Financial Information
                            Q3 - 2000 (Unaudited)
                                (in millions)

                                   Net Profit               Net Assets
                                99            00           99            00
    Automotive Systems Group   $64           $34       $1,834        $2,041
    Automotive Aftermarket
      Group                     40            (2)       1,970         2,032
    Heavy Truck Group           26             8          688           594
    Engine Systems Group        10             8        1,181         1,111
    Fluid Systems Group         13             6          763           700
    Off-Highway Systems Group    7             3          559           434
    Dana Commercial Credit      10             7          140           168
    Other                        3            (3)         189            76
    Total Operations           173            61        7,324         7,156

    Restructuring and
      nonrecurring items       (11)          (32)           -             -
    Consolidated              $162           $29       $7,324        $7,156

    North America             $155           $53       $5,242        $5,015
    Europe                       4            (3)       1,359         1,338
    South America                3             4          599           508
    Asia Pacific                (4)           (1)         140           175
    Dana Commercial Credit      10             7          140           168
    Other                        5             1         (156)          (48)
    Total Operations           173            61        7,324         7,156

    Restructuring and
    nonrecurring items         (11)          (32)           -             -
    Consolidated              $162           $29       $7,324        $7,156


                               Dana Corporation
                       Quarterly Financial Information
            For Nine Months Ending September 30, 2000 (Unaudited)
                                (in millions)

                                Sales             EBIT       Operating PAT
                            99        00       99      00      99      00
    Automotive Systems
      Group               $3,329    $3,589    $408    $363    $262    $240
    Automotive
      Aftermarket Group    2,326     2,174     245     133     149      81
    Heavy Truck Group      1,424     1,310     156     131      95      80
    Engine Systems Group     997     1,007      85      78      57      57
    Fluid Systems Group      925       893     103      89      63      55
    Off-Highway Systems
      Group                  619       536      47      44      29      27
    Dana Commercial Credit     -         -       -       -      28      28
    Other                    295        92    (141)   (181)   (149)   (193)
    Total Operations       9,915     9,601     903     657     534     375
    Restructuring and
      nonrecurring items       -         -     (31)     63     (21)     43
    Consolidated          $9,915    $9,601    $872    $720    $513    $418

    North America         $7,760    $7,410    $955    $731    $602    $462
    Europe                 1,553     1,501      82      69      47      41
    South America            418       427      11      20      14      16
    Asia Pacific             184       263      (3)      6      (2)      4
    Dana Commercial Credit     -         -       -       -      28      28
    Other                      -         -    (142)   (169)   (155)   (176)
    Total Operations       9,915     9,601     903     657     534     375

    Restructuring and
      nonrecurring items       -         -     (31)     63     (21)     43
    Consolidated          $9,915    $9,601    $872    $720    $513    $418


                               Dana Corporation
                       Quarterly Financial Information
            For Nine Months Ending September 30, 2000 (Unaudited)
                                (in millions)

                                      Net Profit               Net Assets
                                   99           00           99          00

    Automotive Systems Group     $209          $171       $1,834       $2,041
    Automotive Aftermarket Group  105            24        1,970        2,032
    Heavy Truck Group              69            51          688          594
    Engine Systems Group           42            40        1,181        1,111
    Fluid Systems Group            49            39          763          700
    Off-Highway Systems Group      20            17          559          434
    Dana Commercial Credit         28            28          140          168
    Other                          12             5          189           76
    Total Operations              534           375        7,324        7,156

    Restructuring and
      nonrecurring items          (21)            43            -           -
    Consolidated                 $513           $418       $7,324      $7,156

    North America                $484           $330       $5,242      $5,015
    Europe                         20             12        1,359       1,338
    South America                   6              8          599         508
    Asia Pacific                   (9)            (5)         140         175
    Dana Commercial Credit         28             28          140         168
    Other                           5              2         (156)        (48)
    Total Operations              534            375        7,324       7,156
    Restructuring and
      nonrecurring items          (21)            43            -           -
    Consolidated                 $513           $418       $7,324      $7,156

    See Note 13 to Dana's 1999 Annual Report for further information
    ( http://WWW.Dana.Com )


SOURCE Dana Corporation

Web Site: http://www.dana.com

Photo Notes: http://www.newscom.com/cgi-bin/prnh/19990903/DANA
Company News On Call: Company News On-Call:
http://www.prnewswire.com/comp/226839.html or fax, 800-758-5804,
ext. 226839


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