Dana Reports Improvement And Declares Dividend
Restructuring Actions Continue to Produce Benefits
TOLEDO, Ohio, Oct. 25, 2002; Dana Corporation
today announced improved third-quarter sales and operating
earnings strengthened by sustained progress in its restructuring actions.
Sales for the period were $2.6 billion, up 7 percent from 2001.
During the third quarter, Dana recorded after-tax charges of $40 million
as part of its $445 million restructuring plan announced one year ago. This
brings total charges recorded to date to $398 million, or approximately
90 percent of the total program. Net income, after restructuring charges and
other non-recurring items, totaled $4 million, or 2 cents per share. This
compares with net income of $13 million, or 8 cents per share, during the same
period last year that included goodwill amortization of $9 million after tax.
Exclusive of non-recurring items, Dana's operating earnings for the
quarter totaled $44 million, or 30 cents per share, as compared to the
consensus estimate of 26 cents per share. On the same basis, the company
incurred a net loss of $8 million, or 5 cents per share, during the third
quarter of 2001.
"The improvement from last year in our operating profit was clearly driven
more by progress with our restructuring plan than by sales volume," said Dana
Chairman and CEO Joe Magliochetti. "In this respect, our operations have been
successful in managing those items within their control. Third-quarter profit
showed solid improvement across all four of our strategic business units,
compared to the same period last year. We are also generating strong cash
flow and continuing to improve our balance sheet."
Nine-Month Results Improved
Dana's nine-month consolidated sales were $7.9 billion, comparable to
sales for the same period last year. Excluding non-recurring items, net
income was $139 million, or 94 cents per share, compared with $19 million, or
13 cents per share, in 2001.
The company adopted new accounting standard FAS 142, which resulted in an
after-tax charge of $220 million during the first quarter of 2002. Dana also
recorded $119 million in restructuring charges during the first nine months of
the year and benefited from a net gain of $27 million on the sale of several
non-core operations. As a result, the reported net loss for the first nine
months of 2002 was $173 million, or $1.16 per share. This compares to break-
even performance for the first nine months of 2001, which included net non-
recurring charges of $19 million and goodwill amortization of $23 million
after tax.
Restructuring on Target
Dana has reduced its permanent workforce by approximately 9 percent,
closed 18 facilities, and announced plans to close 16 others from the
inception of the restructuring plan announced one year ago through Sept. 30,
2002. The company expects to complete most of the actions and record all of
the charges related to this restructuring plan by the end of this year.
Divestiture of Non-Core Operations Continues
During the quarter, the Dana Credit Corporation (DCC) Real Estate Services
Group was sold for approximately $153 million. Also, Dana entered into a
definitive agreement for the sale of its light-duty cylinder liner business,
which had 2001 sales of approximately $53 million.
Earlier this month, the company announced an agreement to sell its Boston
Weatherhead operations, which had 2001 sales of $207 million. Dana Chief
Financial Officer Bob Richter said, "This and other anticipated transactions,
if closed by year end, would allow us to surpass the $300 million in
divestiture-related proceeds we had projected for this year. This is
exclusive of any transactions related to DCC. We will continue to take the
time necessary to sell the remaining DCC businesses in a way that will
maximize the value received for our shareholders."
Fourth-Quarter Outlook
Mr. Magliochetti said Dana still remains somewhat cautious in its outlook
for its markets during the fourth quarter due largely to the following
considerations:
* A decrease in the build rate of Class 8 trucks following advanced
purchases by many fleets in anticipation of changes in heavy-duty engine
emission requirements;
* Traditionally soft demand for aftermarket products in the final quarter
of the year;
* And the growing uncertainty about the broader global economic outlook,
which some believe could negatively impact light-vehicle production
rates.
"However, despite this uncertain environment, we remain very confident
that we will deliver on our restructuring plans and achieve the 50 to 55 cents
in earnings per share that we had previously forecasted for the second half of
this year," Mr. Magliochetti said.
(in millions, except
per share amounts)
Unaudited
Three Months Ended September 30
2001 2002
Sales $2,399 $2,566
Net income, excluding non-
recurring non-recurring items $(8) $44
Non-recurring items
Severance costs (3) (17)
Exit and other costs (4) (13)
Asset impairment charges (10)
Gain (loss) on divestitures 28
21 (40)
Net income, including
non-recurring items $13 $4
Basic earnings per share
Income before non-
recurring items $(0.05) $0.30
Non-recurring items 0.14 (0.28)
Net income 0.08 0.02
Diluted earnings per share
Income before non-
recurring items $(0.05) $0.30
Non-recurring items 0.14 (0.28)
Net income 0.08 0.02
Average shares outstanding -
For Basic EPS 148 148
For Diluted EPS 149 149
Nine Months Ended September 30
2001 2002
Sales $7,898 $7,876
Net income, excluding non-
recurring items and effect of
change in accounting $19 $139
Non-recurring items
Severance costs (12) (58)
Exit and other costs (10) (30)
Asset impairment charges (5) (31)
Gain (loss) on
divestitures 8 27
(19) (92)
Effect of change in
accounting (220)
Net loss, including non-
recurring items and effect
of change in accounting $* $(173)
Basic earnings per share
Income before non-
recurring items and
effect of change in
accounting $0.13 $0.94
Non-recurring items (0.13) (0.62)
Effect of change in
accounting (1.49)
Net loss * (1.17)
Diluted earnings per share
Income before non-
recurring items and
effect of change in
accounting $0.13 $0.93
Non-recurring items (0.13) (0.62)
Effect of change in
accounting (1.48)
Net loss * (1.16)
Average shares outstanding-
For Basic EPS 148 148
For Diluted EPS 149 149
* Amount is less than $.5 and per share amounts are less than
one-half cent.
Dana Corporation
Statement of Income (Unaudited)
September 30, 2002
(in millions, except per share amounts)
Three Months Ended September 30
2001 2002
Net sales $2,399 $2,566
Revenue from lease financing
and other income 98 44
2,497 2,610
Costs and expenses
Cost of sales 2,149 2,277
Selling, general and
administrative expenses 242 227
Restructuring charges 12 35
Interest expense 76 65
2,479 2,604
Income before income taxes 18 6
Estimated taxes on income (13) (5)
Minority interest (1) (4)
Equity in earnings
of affiliates 9 7
Net income $13 $4
Net income per common share -
Basic $0.08 $0.02
Diluted $0.08 $0.02
Average shares outstanding -
For Basic EPS 148 148
For Diluted EPS 149 149
Dana Corporation
Statement of Income (Unaudited)
September 30, 2002
(in millions, except per share amounts)
Nine Months Ended September 30
2001 2002
Net sales $7,898 $7,876
Revenue from lease financing
and other income 149 174
8,047 8,050
Costs and expenses
Cost of sales 7,006 6,960
Selling, general and
administrative expenses 775 720
Restructuring charges 38 130
Interest expense 239 199
8,058 8,009
Income (loss) before income taxes (11) 41
Estimated taxes on income (6) (21)
Minority interest (6) (13)
Equity in earnings
of affiliates 23 40
Net income before effect of
change in accounting * 47
Effect of change in accounting (220)
Net income (loss) $ * $(173)
Basic earnings (loss) per share
Income before effect of change
in accounting * $0.32
Effect of change in accounting (1.49)
Net income (loss) $ * $(1.17)
Diluted earnings (loss) per share
Income before effect of change
in accounting $ * $0.32
Effect of change in accounting (1.48)
Net income (loss) $ * $(1.16)
Average shares outstanding -
For Basic EPS 148 148
For Diluted EPS 149 149
* Amount is less than $.5 and per share amounts are less than
one-half cent.
Dana Corporation
Condensed Balance Sheet
September 30, 2002
(in millions)
December 31 September 30
Assets 2001 2002
Current assets
Cash and marketable
securities $199 $447
Accounts receivable
Trade 1,371 1,614
Other 371 269
Inventories 1,299 1,267
Other current assets 557 551
Total current assets 3,797 4,148
Property, plant and
equipment, net 3,133 2,953
Investment in leases 1,068 937
Investments and other assets 2,209 1,964
Total assets $10,207 $10,002
Liabilities and Shareholders'
Equity
Accounts payable and other
current liabilities $2,369 $2,491
Notes payable 1,120 674
Total current
liabilities 3,489 3,165
Long-term debt 3,008 3,303
Deferred employee benefits
and other noncurrent
liabilities 1,640 1,755
Minority interest 112 106
Shareholders' equity 1,958 1,673
Total liabilities and
shareholders' equity $10,207 $10,002
Dana Corporation
Condensed Statement of Cash Flows (Unaudited)
September 30, 2002
(in millions)
Three Months Ended
September 30
2001 2002
Net income $13 $4
Depreciation and amortization 137 118
Asset impairment 2 15
Loss (gain) on divestitures (30) 3
Working capital change (90) (35)
Other (28) (20)
Net cash from operating activities 4 85
Purchases of property,
plant and equipment (68) (85)
Purchases of assets to be
leased (17) (25)
Payments received on leases 9 21
Net loans to customers 18 4
Acquisitions - (31)
Divestitures 206 166
Other 27 23
Net cash flows - investing activities 175 73
Net change in short-term debt (680) (71)
Proceeds from long-term
debt 752 -
Payments on long-term debt (116) (28)
Dividends paid (47) (2)
Other (13) 72
Net cash flows - financing activities (104) (29)
Net change in cash and cash
equivalents 75 129
Cash and cash equivalents -
beginning of period 153 318
Cash and cash equivalents -
end of period $228 $447
Dana Corporation
Condensed Statement of Cash Flows (Unaudited)
September 30, 2002
(in millions)
Nine Months Ended
September 30
2001 2002
Net loss $- $(173)
Depreciation and
amortization 408 360
Change in accounting for
goodwill - 220
Asset impairment 10 45
Loss (gain) on divestitures (10) (31)
Working capital change (81) (11)
Other 30 (50)
Net cash from operating activities 357 360
Purchases of property,
plant and equipment (306) (250)
Purchases of assets to be leased (49) (51)
Payments received on leases 28 46
Net loans to customers 103 18
Acquisitions (21) (31)
Divestitures 232 258
Other 85 77
Net cash flows - investing activities 72 67
Net change in short-term debt (642) (282)
Proceeds from long-term debt 796 285
Payments on long-term debt (383) (252)
Dividends paid (139) (5)
Other (12) 75
Net cash flows - financing activities (380) (179)
Net change in cash and cash
equivalents 49 248
Cash and cash equivalents -
beginning of period 179 199
Cash and cash equivalents -
end of period $228 $447
Dana Corporation
(Including Dana Credit Corporation on the Equity Basis)
Statement of Income (Unaudited)
September 30, 2002
(in millions)
Three Months Ended September 30
2001 2002
Net sales $2,399 $2,566
Other income 61 22
2,460 2,588
Costs and expenses
Cost of sales 2,164 2,292
Selling, general and
administrative expenses 216 203
Restructuring charges 12 35
Interest expense 52 44
2,444 2,574
Income before income taxes 16 14
Estimated taxes on income (13) (13)
Minority interest (1) (4)
Equity in earnings
of affiliates 11 7
Net income $13 $4
Dana Corporation
(Including Dana Credit Corporation on the Equity Basis)
Statement of Income (Unaudited)
September 30, 2002
(in millions)
Nine Months Ended September 30
2001 2002
Net sales $7,898 $7,876
Other income 36 50
7,934 7,926
Costs and expenses
Cost of sales 7,054 7,004
Selling, general and
administrative expenses 698 640
Restructuring charges 38 130
Interest expense 156 135
7,946 7,909
Income (loss) before income
taxes (12) 17
Estimated taxes on income (7) (28)
Minority interest (6) (13)
Equity in earnings
of affiliates 25 71
Income before effect of change
in accounting * 47
Effect of change in accounting (220)
Net income (loss) $ * $(173)
* Amount is less than $.5 and per share amounts are less than
one-half cent.
Dana Corporation
(Including Dana Credit Corporation on the Equity Basis)
Condensed Balance Sheet (Unaudited)
September 30, 2002
(in millions)
December 31 September 30
Assets 2001 2002
Current assets
Cash and marketable
securities $182 $373
Accounts receivable
Trade 1,371 1,614
Other 253 257
Inventories 1,299 1,267
Other current assets 518 504
Total current assets 3,623 4,015
Property, plant and
equipment, net 2,778 2,550
Investments and other
assets 2,164 2,042
Total assets $8,565 $8,607
Liabilities and
Shareholders' Equity
Accounts payable and other
current liabilities $2,325 $2,545
Notes payable 617 276
Total current
liabilities 2,942 2,821
Long-term debt 2,155 2,484
Deferred employee benefits
and other noncurrent
liabilities 1,400 1,525
Minority interest 110 104
Shareholders' equity 1,958 1,673
Total liabilities and
shareholders' equity $8,565 $8,607
Dana Corporation
(Including Dana Credit Corporation on an Equity Basis)
Condensed Statement of Cash Flows (Unaudited)
September 30, 2002
(in millions)
Three Months Ended
September 30
2001 2002
Net income $13 $4
Depreciation and amortization 112 96
Asset impairment 2 15
Loss (gain) on divestitures (30) (2)
Working capital change (83) (29)
Other (15) 13
Net cash from operating
activities (1) 97
Purchases of property,
plant and equipment (55) (52)
Acquisitions - (31)
Divestitures 206 35
Other (29) 53
Net cash flows - investing
activities 122 5
Net change in short-term
debt (688) (94)
Proceeds from long-term
debt 751 -
Payments on long-term debt (84) (6)
Dividends paid (47) (1)
Other (13) 71
Net cash flows - financing
activities (81) (30)
Net change in cash and cash
equivalents 40 72
Cash and cash equivalents -
beginning of period 146 301
Cash and cash equivalents -
end of period $186 $373
Dana Corporation
(Including Dana Credit Corporation on an Equity Basis)
Condensed Statement of Cash Flows (Unaudited)
September 30, 2002
(in millions)
Nine Months Ended
September 30
2001 2002
Net loss $- $(173)
Depreciation and
amortization 331 291
Change in accounting for
goodwill 220
Asset impairment 10 45
Loss (gain) on divestitures (10) (5)
Working capital change (126) (4)
Other 16 (26)
Net cash from operating
activities 221 348
Purchases of property,
plant and equipment (219) (186)
Acquisitions (21) (31)
Divestitures 232 64
Other (8) 47
Net cash flows - investing
activities (16) (106)
Net change in short-term
debt (512) (219)
Proceeds from long-term
debt 761 250
Payments on long-term debt (266) (152)
Dividends paid (139) (4)
Other (12) 74
Net cash flows - financing
activities (168) (51)
Net change in cash and cash
equivalents 37 191
Cash and cash equivalents -
beginning of period 149 182
Cash and cash equivalents -
end of period $186 $373
Investor Relations
Dana Corporation
Quarterly Financial Information (Unaudited)
Q3 - 2002
(in millions)
Inter-Segment
External Sales Sales EBIT
01 02 01 02 01 02
Automotive Systems Group $832 $903 $33 $24 $28 $48
Automotive Aftermarket Group 639 655 5 4 15 43
Engine and Fluid Management Group 492 511 32 35 11 33
Commercial Vehicle Systems 263 319 21 25 6 24
Off-Highway Systems Group 141 154 6 1 4 8
Dana Commercial Credit
Other 32 24 12 2 (32) (52)
Goodwill Amortization (10)
Total Operations 2,399 2,566 109 91 22 104
Restructuring and
nonrecurring items 38 (50)
Effect of Change in Accounting
Consolidated $2,399 $2,566 $109 $91 $60 $54
North America $1,787 $1,922 $23 $26 $54 $113
Europe 380 422 20 20 6 17
South America 154 116 43 48 6 23
Asia Pacific 78 106 1 2 6
Dana Commercial Credit
Other (36) (55)
Goodwill Amortization (10)
Total Operations 2,399 2,566 86 95 22 104
Restructuring and
nonrecurring items 38 (54)
Effect of Change in Accounting
Consolidated $2,399 $2,566 $86 $95 $60 $50
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)
Q3 - 2002
(in millions)
Operating PAT Net Profit Net Assets
01 02 01 02 01 02
Automotive Systems Group $24 $31 $9 $13 $1,969 $1,913
Automotive Aftermarket Group 9 26 (4) 11 1,528 1,180
Engine and Fluid Management
Group 7 21 (2) 11 1,388 1,033
Commercial Vehicle Systems 4 15 (3) 7 359 295
Off-Highway Systems Group 2 5 2 431 379
Dana Commercial Credit 5 7 5 7 186 258
Other (50) (61) (4) (7) 134 43
Goodwill Amortization (9) (9)
Total Operations (8) 44 (8) 44 5,995 5,101
Restructuring and
nonrecurring items 21 (40) 21 (40)
Effect of Change in Accounting
Consolidated $13 $4 $13 $4 $5,995 $5,101
North America $32 $64 $(1) $26 $3,953 $3,293
Europe 7 11 2 1,247 1,197
South America 4 14 1 11 559 298
Asia Pacific 1 4 (2) 1 151 178
Dana Commercial Credit 5 7 5 7 186 258
Other (48) (56) (2) (3) (101) (123)
Goodwill Amortization (9) (9)
Total Operations (8) 44 (8) 44 5,995 5,101
Restructuring and
nonrecurring items 21 (40) 21 (40)
Effect of Change in Accounting
Consolidated $13 $4 $13 $4 $5,995 $5,101
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)
For Nine Months Ended September 30, 2002
(in millions)
Inter-Segment
External Sales Sales EBIT
01 02 01 02 01 02
Automotive Systems Group $2,825 $2,853 $99 $72 $167 $170
Automotive Aftermarket Group 1,950 1,964 12 13 21 107
Engine and Fluid Management Group 1,647 1,610 104 104 85 107
Commercial Vehicle Systems 886 889 69 82 28 54
Off-Highway Systems Group 484 489 21 10 27 32
Dana Commercial Credit
Other 106 71 25 10 (140) (169)
Goodwill Amortization (29)
Total Operations 7,898 7,876 330 291 159 301
Restructuring and
nonrecurring items (25) (158)
Effect of Change in Accounting (289)
Consolidated $7,898 $7,876 $330 $291 $134 $(146)
North America $5,935 $5,941 $71 $76 $268 $345
Europe 1,308 1,292 65 63 47 64
South America 414 368 84 136 15 54
Asia Pacific 241 275 1 1 2 12
Dana Commercial Credit
Other (144) (174)
Goodwill Amortization (29)
Total Operations 7,898 7,876 221 276 159 301
Restructuring and
nonrecurring items (25) (158)
Effect of Change in Accounting (289)
Consolidated $7,898 $7,876 $221 $276 $134 $(146)
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)
For Nine Months Ended September 30, 2002
(in millions)
Operating PAT Net Profit Net Assets
01 02 01 02 01 02
Automotive Systems Group $116 $126 $56 $64 $1,969 $1,913
Automotive Aftermarket Group 13 65 (35) 16 1,528 1,180
Engine and Fluid Management
Group 54 69 21 36 1,388 1,033
Commercial Vehicle Systems 16 33 (7) 9 359 295
Off-Highway Systems Group 16 20 7 10 431 379
Dana Commercial Credit 17 24 17 24 186 258
Other (190) (198) (17) (20) 134 43
Goodwill Amortization (23) (23)
Total Operations 19 $- 139 19 139 5,995 5,101
Restructuring and
nonrecurring items (19) (92) (19) (92)
Effect of Change in
Accounting (220) (220)
Consolidated $- $(173) $- $(173) $5,995 $5,101
North America $159 $205 $38 $79 $3,953 $3,293
Europe 37 52 9 23 1,247 1,197
South America 33 (10) 25 559 298
Asia Pacific 1 8 (6) 151 178
Dana Commercial Credit 17 24 17 24 186 258
Other (172) (183) (6) (12) (101) (123)
Goodwill Amortization (23) (23)
Total Operations 19 139 19 139 5,995 5,101
Restructuring and
nonrecurring items (19) (92) (19) (92)
Effect of Change in
Accounting (220) (220)
Consolidated $- $(173) $- $(173) $5,995 $5,101
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
