Dana Corporation Announces Second-Quarter Results
Jul 18, 2000
Earnings in Line with Previously Announced Expectations
TOLEDO, Ohio, July 18 /PRNewswire/ -- Dana Corporation (NYSE: DCN) today
announced its results for the quarter ended June 30. Sales were approximately
$3.3 billion, down slightly from record sales of $3.4 billion last year.
Recent divestitures more than accounted for this difference.
(Photo: http://www.newscom.com/cgi-bin/prnh/19990903/DANA )
Operating income for the quarter totaled $154 million, or $1.01 per share.
Including non-recurring expenses of $9.6 million after tax, reported net
income for the period was $145 million, or 95 cents per share. For the second
quarter of 1999, the company reported net income of $190 million or $1.14 per
share. Last year's results included approximately $5 million of non-recurring
after-tax expenses.
Dana's six-month consolidated sales were $6.8 billion, down slightly from
the same period last year, again as the result of divestitures. Net income
for the first two quarters was $390 million, or $2.50 per share. This total
included net non-recurring income of $75 million after tax. Comparable
results from 1999 were net income of $352 million, or $2.10 per share,
including non-recurring charges of approximately $10 million after tax.
Dana Chairman and CEO Joe Magliochetti said, "Our second-quarter results
were significantly impacted by the disappointing performance of our Automotive
Aftermarket Group. As we announced previously, this is attributable to two
factors. Market softness in North America, and to a lesser extent Europe, has
clearly impacted the entire sector. Also, unanticipated systems complications
which we've encountered while consolidating our Engine Controls warehouse
network have resulted in additional costs in order to maintain service levels,
which are crucial to our customers.
"While these factors will continue to impact our results during the second
half, we have remediation plans in place and are beginning to see positive
results. Additionally, we expect that the solid performance of our other six
business units and the benefit of our stock repurchase program will help to
offset a portion of any aftermarket-related shortfall," he added.
During the quarter, Dana initiated the second phase of its $600 million
stock buy-back program. A total of $420 million has been expended to date,
with $70 million purchased during the second quarter. As a result, the
average number of shares on a fully diluted basis was 153 million for the
second quarter, down from 167 million for the same period last year.
Mr. Magliochetti said, "We will continue to work this and other aspects of
our Five-Point Plan. In keeping with this Plan, over the last 12 months we
have divested non-strategic or non-performing businesses with annual revenue
of more than $850 million. At the same time, we have announced additional
investments in our core activities. These include the acquisition of the
cardan driveshaft business of GKN, the formation of the Drive Tek joint
venture with GKN, the acquisition of the automotive axle and stamping
operations of Invensys, and an agreement to purchase an interest in Getrag, a
manufacturer of light-duty transmissions, transaxles, and axles. Moving
forward, we will further increase our focus on those businesses that are core
to our global growth strategy."
Dana's growth prospects have also been enhanced by a number of new
business awards. These include programs with several major original equipment
manufacturers, such as the Ford Escape/Mazda Tribute mini sport-utility wagon.
Dana will serve as the four-wheel-drive systems integrator, providing
driveshafts and rear independent axles for the vehicle. Dana will also
provide independent front axle assemblies and driveshafts for the new Ford
Explorer Sport Trac vehicle. Net incremental annualized sales from these and
other new business awards exceed $700 million.
Yesterday, Dana's Board approved a quarterly dividend of 31 cents per
share payable Sept. 15, 2000, to shareholders of record on Sept. 1, 2000.
This will mark Dana's 251st consecutive dividend -- dating back to 1936 --
without a reduced or missed payment.
Dana Corporation is one of the world's largest independent 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 82,000 people. Dana's Internet address
is http://www.dana.com .
This news release contains "forward-looking" statements within the meaning
of the Private Securities Litigation Reform Act of 1995. Such statements
involve assumptions, uncertainties and risks and Dana's actual results,
performance and achievements may differ materially from those expressed or
implied herein. Factors that could affect Dana's actual results include the
performance of the global automotive aftermarket segment, international
economic conditions and further delays in consolidation of the company's
Engine Controls warehouse network. Other 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 June 30
1999 2000
Sales $3,408 $3,286
Net Income 190 145
Net Income Per Common Share -
Basic 1.15 0.95
Diluted 1.14 0.95
Average Shares Outstanding -
For Basic EPS 166 152
For Diluted EPS 167 153
Unaudited
Six Months Ended June 30
1999 2000
Sales $6,788 $6,745
Net Income 352 390
Net Income Per Common Share
Basic 2.12 2.51
Diluted 2.10 2.50
Average Shares Outstanding
For Basic EPS 166 155
For Diluted EPS 167 156
Dana Corporation
Statement of Income (Unaudited)
June 30, 2000
(in millions, except per share amounts)
Three Months Ended June 30
1999 2000
Net Sales $3,408 $3,286
Revenue from Lease Financing
and Other Income 33 42
Total 3,441 3,328
Costs and Expenses
Cost of Sales 2,797 2,763
Selling, General and
Administrative Expenses 290 277
Restructuring and
Integration Charges 7 15
Interest Expense 67 78
Total 3,161 3,133
Income Before Income Taxes 280 195
Estimated Taxes on Income (102) (68)
Minority Interest (4) (4)
Equity in Earnings
of Affiliates 16 22
Net Income $190 $145
Net Income Per Common Share -
Basic $1.15 $0.95
Diluted $1.14 $0.95
Average Shares Outstanding -
For Basic EPS 166 152
For Diluted EPS 167 153
Dana Corporation
Statement of Income (Unaudited)
June 30, 2000
(in millions, except per share amounts)
Six Months Ended June 30
1999 2000
Net Sales $6,788 $6,745
Revenue from Lease Financing
and Other Income 73 259
Total 6,861 7,004
Costs and Expenses
Cost of Sales 5,612 5,650
Selling, General and
Administrative Expenses 586 581
Restructuring and
Integration Charges 14 34
Interest Expense 137 157
Total 6,349 6,422
Income Before Income Taxes 512 582
Estimated Taxes on Income (185) (216)
Minority Interest (7) (9)
Equity in Earnings
of Affiliates 32 33
Net Income $352 $390
Net Income Per Common Share -
Basic $2.12 $2.51
Diluted $2.10 $2.50
Average Shares Outstanding -
For Basic EPS 166 155
For Diluted EPS 167 156
Dana Corporation
Condensed Balance Sheet (Unaudited)
June 30, 2000
(in millions)
December 31 June 31
Assets 1999 2000
Current Assets
Cash and Marketable Securities $111 $187
Accounts Receivable
Trade 1,935 2,067
Other 411 434
Inventories 1,784 1,708
Other Current Assets 560 665
Total Current Assets 4,801 5,061
Property, Plant & Equipment, Net 3,450 3,333
Investment in Leases 1,014 995
Investments and Other Assets 1,858 2,007
Total Assets $11,123 $11,396
Liabilities and Shareholders' Equity
Accounts Payable and Other
Current Liabilities $2,470 $2,660
Notes Payable 1,418 1,755
Total Current Liabilities 3,888 4,415
Long-Term Debt 2,732 2,633
Deferred Employee Benefits
and Other Noncurrent Liabilities 1,398 1,354
Minority Interest 148 118
Shareholders' Equity 2,957 2,876
Total Liabilities and
Shareholders' Equity $11,123 $11,396
Dana Corporation
Condensed Statement of Cash Flows (Unaudited)
June 30, 2000
(in millions)
Three Months Ended June 30
1999 2000
Net income $190 $145
Depreciation and amortization 132 128
Gain on divestitures - -
Working capital change 77 12
Other (130) (59)
Net cash from operating activities 269 226
Purchases of property, plant and equipment (207) (168)
Purchases of assets to be leased (96) (59)
Payments received on leases and loans 35 133
Acquisitions (6) -
Divestitures - -
Other - (169)
Net cash flows - investing activities (274) (263)
Net change in short-term debt 158 326
Proceeds from long-term debt 1 11
Payments on long-term debt (118) (100)
Dividends paid (52) (48)
Shares reacquired (11) (70)
Other 12 1
Net cash flows - financing activities (10) 120
Net change in cash and cash equivalents (15) 83
Cash and Cash Equivalents - beginning of period 208 104
Cash and Cash Equivalents - end of period $193 $187
Dana Corporation
Condensed Statement of Cash Flows (Unaudited)
June 30, 2000
(in millions)
Six Months Ended June 30
1999 2000
Net income $352 $390
Depreciation and amortization 263 260
Gain on divestitures - (97)
Working capital change (384) (126)
Other (108) (96)
Net cash from operating activities 123 331
Purchases of property, plant and equipment (401) (334)
Purchases of assets to be leased (122) (71)
Payments received on leases and loans 86 170
Acquisitions (6) (205)
Divestitures - 524
Other (84) (167)
Net cash flows - investing activities (527) (83)
Net change in short-term debt (345) 563
Proceeds from long-term debt 1,044 11
Payments on long-term debt (234) (333)
Dividends paid (103) (96)
Shares reacquired (11) (320)
Other 16 3
Net cash flows - financing activities 367 (172)
Net change in cash and cash equivalents (37) 76
Cash and Cash Equivalents - beginning of period 230 111
Cash and Cash Equivalents - end of period $193 $187
Dana Corporation
(Including Dana Credit Corporation on an Equity Basis)
Statement of Income (Unaudited)
June 30, 2000
(in millions)
Three Months Ended June 30
1999 2000
Net Sales $3,408 $3,286
Other Income (2) 6
Total 3,406 3,292
Costs and Expenses
Cost of Sales 2,812 2,778
Selling, General and
Administrative Expenses 260 255
Restructuring and
Integration Charges 7 15
Interest Expense 51 52
Total 3,130 3,100
Income Before Income Taxes 276 192
Estimated Taxes on Income (105) (70)
Minority Interest (4) (4)
Equity in Earnings
of Affiliates 23 27
Net Income $ 190 $ 145
Dana Corporation
(Including Dana Credit Corporation on an Equity Basis)
Statement of Income (Unaudited)
June 30, 2000
(in millions)
Six Months Ended
June 30
1999 2000
Net Sales $6,788 $6,745
Other Income 8 181
Total 6,796 6,926
Costs and Expenses
Cost of Sales 5,637 5,681
Selling, General and
Administrative Expenses 535 534
Restructuring and
Integration Charges 14 34
Interest Expense 106 108
Total 6,292 6,357
Income Before Income Taxes 504 569
Estimated Taxes on Income (191) (217)
Minority Interest (7) (8)
Equity in Earnings
of Affiliates 46 46
Net Income $352 $390
Dana Corporation
(Including Dana Credit Corporation on an Equity Basis)
Condensed Balance Sheet (Unaudited)
June 30, 2000
(in millions)
December 31 June 30
Assets 1999 2000
Current Assets
Cash and Marketable Securities $101 $169
Accounts Receivable
Trade 1,935 2,067
Other 399 386
Inventories 1,784 1,708
Other Current Assets 418 431
Total Current Assets 4,637 4,761
Property, Plant & Equipment, Net 3,064 2,936
Investments and Other Assets 1,801 1,877
Total Assets $9,502 $9,574
Liabilities and Shareholders' Equity
Accounts Payable and Other
Current Liabilities $2,423 $2,603
Notes Payable 897 1,119
Total Current Liabilities 3,320 3,722
Long-Term Debt 1,862 1,699
Deferred Employee Benefits
and Other Noncurrent Liabilities 1,216 1,161
Minority Interest 147 116
Shareholders' Equity 2,957 2,876
Total Liabilities and
Shareholders' Equity $9,502 $9,574
Dana Corporation
(Including Dana Credit Corporation on an Equity Basis)
Condensed Statement of Cash Flows (Unaudited)
June 30, 2000
(in millions)
Three Months Ended June 30
1999 2000
Net income $190 $145
Depreciation and amortization 109 104
Gain on divestitures - -
Working capital change 88 21
Other (104) (38)
Net cash from operating activities 283 232
Purchases of property, plant and equipment (159) (121)
Acquisitions (6) -
Divestitures - -
Other (4) 3
Net cash flows - investing activities (169) (118)
Net change in short-term debt (22) 133
Proceeds from long-term debt (10) -
Payments on long-term debt (59) (61)
Dividends paid (52) (48)
Shares reacquired (11) (70)
Other 12 1
Net cash flows - financing activities (142) (45)
Net change in cash and cash equivalents (28) 69
Cash and Cash Equivalents - beginning of period 215 100
Cash and Cash Equivalents - end of period $187 $169
Dana Corporation
(Including Dana Credit Corporation on an Equity Basis)
Condensed Statement of Cash Flows (Unaudited)
June 30, 2000
(in millions)
Six Months Ended June 30
1999 2000
Net income $352 $390
Depreciation and amortization 217 214
Gain on divestitures - (97)
Working capital change (376) (98)
Other (88) (96)
Net cash from operating activities 105 313
Purchases of property, plant and equipment (279) (237)
Acquisitions (6) (205)
Divestitures - 524
Other (32) 33
Net cash flows - investing activities (317) 115
Net change in short-term debt (575) 295
Proceeds from long-term debt 1,002 -
Payments on long-term debt (157) (242)
Dividends paid (103) (96)
Shares reacquired (11) (320)
Other 16 3
Net cash flows - financing activities 172 (360)
Net change in cash and cash equivalents (40) 68
Cash and Cash Equivalents - beginning of period 227 101
Cash and Cash Equivalents - end of period $187 $169
SOURCE Dana Corporation
Web Site: http://www.dana.com
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