Dana Corporation Posts Record Third-Quarter Sales, Profits
20 October 1997
Dana Corporation Posts Record Third-Quarter Sales, Profits
TOLEDO, Ohio, Oct. 20 -- Dana Corporation today
posted record third-quarter sales and profits.
Sales for the quarter of $2 billion were up 8 percent compared with the
third quarter of 1996, while net income and earnings per share also rose
significantly.
Net income for the quarter rose to $98 million, and earnings per share
increased to 93 cents, including non-recurring charges of $51 million
(50 cents per share) associated with restructuring and rationalization at a
number of operating units and a one-time gain of $70 million (67 cents per
share) on the sale of Dana's clutch business to Eaton Corporation.
Excluding these one-time items, net income for the quarter jumped
23 percent to $80 million, and earnings per share rose 19 percent to 76 cents.
Dana's nine-month consolidated sales totaled $6.2 billion, up 7 percent
compared with the same period last year. Net income for the first three
quarters of 1997 was $285 million, and earnings per share were $2.73.
Excluding the effect of non-recurring gains and charges for the first
three quarters, net income for the first nine months of 1997 was $263 million,
an increase of 12 percent over the first three quarters of 1996, and earnings
per share for the first three quarters of 1997 rose 9 percent over the same
period last year to $2.52.
During the first three quarters of 1997, the company achieved record sales
of light truck components to original equipment manufacturers -- up 6 percent
over last year's record performance in the same period -- and achieved a
44 percent increase in sales of off-highway components, including the effects
of acquisitions. International sales were up 6 percent, compared with the
first three quarters of 1996, paced by a 16 percent increase in sales in the
South American region. Domestic sales were also strong, up 7 percent over the
same period last year.
The third quarter saw sales of components to medium and heavy truck
manufacturers jump 28 and 19 percent, respectively, over the same period last
year.
During the quarter the company also announced that it will supply rear
axles for the 1998 Isuzu Trooper/Big Horn and Acura SLX, both of which will be
built in Japan. The axles will be assembled at Dana's Columbia, Mo., regional
assembly facility and exported to Dana's Japanese affiliate, Najico Spicer
Company, Ltd., which supplies Isuzu on a just-in-time basis. The selection of
Dana as supplier for the Trooper strengthens the global relationship between
the companies. Dana's Spicer Axle Group currently supplies all front and rear
axles for the U.S.-built Isuzu Rodeo and Honda Passport.
Dana Chairman Southwood J. Morcott credited the third-quarter earnings
growth to an aggressive implementation of the company's strategic plan. "We
said that 1997 would be a year of sharpened focus on core businesses. As we
have implemented our plan, we have begun to see consistent improvement in our
financial results. We expect this focus to positively affect earnings in the
next several years," he said.
The quarter saw the completion of a series of strategic moves previously
announced by the company, as well as internal activity designed to further
focus on global customers and markets.
Along with completing the sale of its clutch operations, Dana during the
quarter closed the sale of its transmission business to a unit of its Mexican
affiliate Spicer, S.A. de C.V. Also, on Oct. 6, the company completed the
sale of its flat rubber products operations at Paragould, Ark., to a unit of
Coltec Industries, Inc. This sale will result in a gain of $9 million
(8 cents per share) to be realized during the fourth quarter of 1997.
The third quarter charges included $22 million resulting from
restructuring at Dana's Parish facilities in Reading, Pa.; $20 million in
deferred tax benefits not expected to be utilized in connection with the
ongoing rationalization of Dana's Perfect Circle Europe operations in France;
$5 million related to the restructuring of the Light Axle Europe Group in
Birmingham, England; and $4 million related to closing the Spicer Transmission
Division office in Toledo, Ohio, consolidating the Perfect Circle Sealed Power
Division's facilities in the United States, and rationalizing the Wix
Filtration Products Division facility in Pickering, Ontario. Morcott said he
expects this restructuring to improve earnings in 1998 and 1999.
In concert with these moves, Dana evolved its organization for increased
focus on its global markets and customers. In September, the company
established six Strategic Business Units encompassing Dana's key market areas:
automotive components, engine components, heavy truck components, off-highway
components, industrial components, and leasing services.
Dana's Board of Directors today approved a quarterly dividend of $0.27 per
share payable Dec. 15, 1997, to shareholders of record as of Dec. 1, 1997.
This will mark Dana's 240th consecutive dividend (dating back to 1936) without
a missed or reduced payment.
Dana Corporation is a global leader in the engineering, manufacture, and
distribution of products and systems for the automotive, engine, heavy truck,
off-highway, and industrial markets. It also operates a leasing services
business, Dana Credit Corporation. Founded in 1904 and based in Toledo, Ohio,
Dana operates facilities in 30 countries and employs more than
48,000 people. The Internet address for Dana's home page is http://www.dana.com.
(in millions, except
per share amounts)
Unaudited
Three Months Ended September 30
1996 1997
Sales $ 1,815.8 $ 1,960.7
Net Income 65.2 98.3
Net Income Per Common Share $0.64 $0.93
Average Shares Outstanding 101.7 104.1
Nine Months Ended September 30
1996 1997
Sales $ 5,809.0 $ 6,216.8
Net Income 235.4 284.7
Net Income Per Common Share $2.32 $2.73
Average Shares Outstanding 101.7 104.1
Dana Corporation
Statement of Income (Unaudited)
September 30, 1997
(in millions, except per share amounts)
Three Months Ended September 30
1996 1997
Net Sales $ 1,815.8 $ 1,960.7
Revenue from Lease Financing
and Other Income 48.7 175.3
Total 1,864.5 2,136.0
Costs and Expenses
Cost of Sales 1,536.0 1,715.4
Selling, General and
Administrative Expenses 179.5 184.6
Interest Expense 40.9 46.3
Total 1,756.4 1,946.3
Income Before Income Taxes 108.1 189.7
Estimated Taxes on Income (36.4) (94.6)
Minority Interest (10.1) (8.2)
Equity in Earnings
of Affiliates 3.6 11.4
Net Income $ 65.2 $ 98.3
Net Income Per Common Share $0.64 $0.93
Average Number of Shares
Outstanding 101.7 104.1
Dana Corporation
Statement of Income (Unaudited)
September 30, 1997
(in millions, except per share amounts)
Nine Months Ended September 30
1996 1997
Net Sales $ 5,809.0 $ 6,216.8
Revenue from Lease Financing
and Other Income 161.2 386.7
Total 5,970.2 6,603.5
Costs and Expenses
Cost of Sales 4,913.3 5,361.8
Selling, General and
Administrative Expenses 551.5 565.2
Interest Expense 116.4 144.2
Total 5,581.2 6,071.2
Income Before Income Taxes 389.0 532.3
Estimated Taxes on Income (139.8) (251.9)
Minority Interest (25.1) (20.0)
Equity in Earnings
of Affiliates 11.3 24.3
Net Income $ 235.4 $ 284.7
Net Income Per Common Share $2.32 $2.73
Average Number of Shares
Outstanding 101.7 104.1
Dana Corporation
Condensed Balance Sheet (Unaudited)
September 30, 1997
(in millions)
December 31 September 30
Assets 1996 1997
Cash and Marketable Securities $ 227.8 $ 355.5
Accounts Receivable
Trade 1,026.7 1,196.0
Other 42.4 141.1
Inventories 912.9 922.8
Lease Financing 1,167.3 1,246.0
Investments and Other Assets 958.1 1,226.9
Property, Plant & Equipment, Net 1,824.8 1,974.1
Total Assets $ 6,160.0 $ 7,062.4
Liabilities and Shareholders' Equity
Accounts Payable and Other
Liabilities $ 1,196.8 $ 1,574.2
Short-Term Debt 640.3 457.9
Long-Term Debt 1,697.7 2,130.2
Deferred Employee Benefits 1,025.6 1,071.1
Minority Interest 170.9 174.0
Shareholders' Equity 1,428.7 1,655.0
Total Liabilities and
Shareholders' Equity $ 6,160.0 $ 7,062.4
Dana Corporation
(Including Dana Credit Corporation on an Equity Basis)
Statement of Income (Unaudited)
September 30, 1997
(in millions)
Three Months Ended September 30
1996 1997
Net Sales $ 1,815.8 $ 1,960.7
Other Income 2.2 132.4
Total 1,818.0 2,093.1
Costs and Expenses
Cost of Sales 1,540.2 1,722.3
Selling, General and
Administrative Expenses 156.1 160.8
Interest Expense 21.5 27.7
Total 1,717.8 1,910.8
Income Before Income Taxes 100.2 182.3
Estimated Taxes on Income (34.7) (93.0)
Minority Interest (10.1) (8.2)
Equity in Earnings
of Affiliates 9.8 17.2
Net Income $ 65.2 $ 98.3
Dana Corporation
(Including Dana Credit Corporation on an Equity Basis)
Statement of Income (Unaudited)
September 30, 1997
(in millions)
Nine Months Ended September 30
1996 1997
Net Sales $ 5,809.0 $ 6,216.8
Other Income 21.9 231.9
Total 5,830.9 6,448.7
Costs and Expenses
Cost of Sales 4,928.6 5,382.2
Selling, General and
Administrative Expenses 483.9 486.4
Interest Expense 61.2 85.5
Total 5,473.7 5,954.1
Income Before Income Taxes 357.2 494.6
Estimated Taxes on Income (128.7) (237.2)
Minority Interest (25.1) (20.0)
Equity in Earnings
of Affiliates 32.0 47.3
Net Income $ 235.4 $ 284.7
Dana Corporation
(Including Dana Credit Corporation on an Equity Basis)
Condensed Balance Sheet (Unaudited)
September 30, 1997
(in millions)
December 31 September 30
Assets 1996 1997
Current Assets
Cash and Marketable Securities $ 224.3 $ 352.4
Accounts Receivable
Trade 1,026.7 1,196.0
Other 60.3 160.7
Inventories 912.9 922.8
Other Current Assets 141.4 201.6
Total Current Assets 2,365.6 2,833.5
Property, Plant & Equipment, Net 1,637.2 1,781.0
Investments and Other Assets 934.2 1,205.2
Total Assets $ 4,937.0 $ 5,819.7
Liabilities and Shareholders' Equity
Accounts Payable and Other
Current Liabilities $ 1,114.2 $ 1,452.9
Notes Payable 362.9 421.7
Long-Term Debt 810.4 998.1
Deferred Employee Benefits
and Other Noncurrent Liabilities 1,049.9 1,118.0
Minority Interest 170.9 174.0
Shareholders' Equity 1,428.7 1,655.0
Total Liabilities and
Shareholders' Equity $ 4,937.0 $ 5,819.7
Dana Credit Corporation
(A Wholly-Owned Subsidiary of Dana Corporation)
Statement of Income (Unaudited)
September 30, 1997
(in millions)
Three Months Ended September 30
1996 1997
Lease Financing $ 42.7 $ 47.5
Other Income 13.4 10.6
Total 56.1 58.1
Interest Expense 19.5 19.1
General and Administrative
Expenses 28.6 31.6
Total 48.1 50.7
Income Before Income Taxes 8.0 7.4
Estimated Taxes on Income (1.7) (1.5)
Equity in Earnings of Affiliates 0.4 0.7
Net Income $ 6.7 $ 6.6
Dana Credit Corporation
(A Wholly-Owned Subsidiary of Dana Corporation)
Statement of Income (Unaudited)
September 30, 1997
(in millions)
Nine Months Ended September 30
1996 1997
Lease Financing $ 126.6 $ 139.7
Other Income 47.7 60.7
Total 174.3 200.4
Interest Expense 55.4 60.3
General and Administrative
Expenses 87.1 102.4
Total 142.5 162.7
Income Before Income Taxes 31.8 37.7
Estimated Taxes on Income (11.1) (14.6)
Equity in Earnings of Affiliates 1.9 1.5
Net Income $ 22.6 $ 24.6
Dana Credit Corporation
(A Wholly-Owned Subsidiary of Dana Corporation)
Balance Sheet (Unaudited)
September 30, 1997
(in millions)
December 31 September 30
Assets 1996 1997
Cash $ 3.5 $ 3.1
Lease Financing 1,327.9 1,411.8
Loans Receivable and Other Assets 337.8 304.9
Total Assets $ 1,669.2 $ 1,719.8
Liabilities and Shareholder's Equity
Short-Term Debt $ 456.4 $ 301.2
Long-Term Debt 708.3 867.0
Other Liabilities and
Accrued Expenses 86.6 83.3
Deferred Income Taxes 294.0 332.9
Shareholder's Equity 123.9 135.4
Total Liabilities and
Shareholder's Equity $ 1,669.2 $ 1,719.8
SOURCE Dana Corporation