Dana Corporation Announces First-Quarter Results
18 April 2000
Dana Corporation Announces First-Quarter Results DANA CORPORATION LOGO Dana Corporation logo. (PRNewsFoto)[DM] TOLEDO, OH USA 09/03/1999
Operating Earnings Meet Consensus;
Significant Gains from Divestitures also Reported
TOLEDO, Ohio, April 18 Dana Corporation (NYSE: DCN) today
announced that first-quarter sales continued to be strong, at nearly
$3.5 billion. Despite recent divestitures, this represents an increase of
more than 2 percent over the same period last year. Operating income for the
quarter amounted to $160 million, or $1.01 per share, in line with analysts'
expectations. In the first quarter of 1999, Dana recorded operating income of
$167 million, or $1.00 per share.
Reported net income for the quarter was $245 million, or $1.54 per share,
and included net non-recurring income of approximately $85 million after-tax.
This net non-recurring income included approximately $97 million of gains from
divestitures and $12 million of integration expenses. The company reported
net income of $162 million, or 97 cents per share, for the first quarter of
1999.
Dana Chairman and CEO Joe Magliochetti said, "Dana experienced another
quarter of strong demand for our vehicular products in North America. Our
people deserve a lot of credit for enabling us to meet the needs of our
customers during a period when light vehicular production reached an
annualized rate of nearly 18 million units. While we continue to be
successful in meeting these demands without adding permanent capacity, this
level of production has resulted in increased costs associated with overtime
and premium freight that continue to put pressure on margins, especially in
our Automotive Systems and Engine Systems groups.
"Margins for the Aftermarket Group also were lower, owing to softer
volumes. We are pleased, however, with the improved profitability in our Heavy
Truck, Off-Highway, Fluid Systems, and leasing groups."
During the quarter, the company repurchased $250 million worth of stock
under its share-repurchase program. This, in combination with $100 million of
stock repurchased in 1999, completed the $350 million authorized a year ago.
Bob Richter, vice president and chief financial officer, said, "We are
pleased to have completed the initial authorization, while maintaining our
debt-to-capital ratio. These share repurchases were largely facilitated by our
planned divestitures, which closed in the first quarter and generated proceeds
of more than a half billion dollars in cash.
"Now we begin utilizing the additional $250 million for share repurchases
that the Board authorized in February. This program will be funded, in part,
through additional divestitures and also through a global working-capital
reduction initiative, which is a key corporate objective for 2000."
This initiative includes a team of representatives from each strategic
business unit and operating region. The team is led by Todd Peters, who has
held operational positions with Dana's Long Manufacturing division and has
served as controller for Dana's Preferred Technical Group and the Fluid
Systems Products Group.
Dana's goal for working-capital reduction in 2000 is $300 million. In
combination with proceeds from divestitures, these savings will be used to
fund elements of the company's Five-Point Plan, including share repurchases,
strategic acquisitions, and debt reduction.
Magliochetti commented, "Overall, we have to be pleased with the results
of the first quarter, which were achieved in part due to the diligent pursuit
of our Five-Point Plan, which remains a central part of our agenda. In
addition to the Five-Point Plan and working-capital reduction, Dana's other
key corporate objectives for 2000 include advancing product and process
technology, deploying our internal quality processes throughout the
organization, and fully leveraging our e-business capabilities to improve
supply-chain management and better serve our customers."
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 .
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 its
customers and suppliers to achieve projected sales levels, the cyclical nature
of the automotive industry, and international economic conditions. 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.
(in millions, except
per share amounts)
Unaudited
Three Months Ended March 31
1999 2000
Sales $3,381 $3,459
Net income 162 245
Net income per common share -
Basic 0.97 1.55
Diluted 0.97 1.54
Average shares outstanding -
For Basic EPS 166 158
For Diluted EPS 167 159
Dana Corporation
Statement of Income (Unaudited)
March 31, 2000
(in millions, except per share amounts)
Three Months Ended March 31
1999 2000
Net sales $3,381 $3,459
Revenue from lease financing
and other income 39 217
Total 3,420 3,676
Costs and expenses
Cost of sales 2,815 2,888
Selling, general and
administrative expenses 296 304
Restructuring and
integration charges 7 19
Interest expense 70 79
Total 3,188 3,290
Income before income taxes 232 386
Estimated taxes on income (83) (148)
Minority interest (2) (4)
Equity in earnings
of affiliates 15 11
Net income $162 $245
Net income per common share -
Basic $0.97 $1.55
Diluted $0.97 $1.54
Average shares outstanding -
For Basic EPS 166 158
For Diluted EPS 167 159
Dana Corporation
Condensed Balance Sheet (Unaudited)
March 31, 2000
(in millions)
December 31 March 31
Assets 1999 2000
Current assets
Cash and marketable securities $111 $104
Accounts receivable
Trade 1,935 2,068
Other 411 438
Inventories 1,784 1,730
Other current assets 560 638
Total current assets 4,801 4,978
Property, plant and equipment, net 3,450 3,330
Investment in leases 1,014 1,015
Investments and other assets 1,858 1,963
Total assets $11,123 $11,286
Liabilities and Shareholders' Equity
Accounts payable and other
current liabilities $2,470 $2,739
Notes payable 1,418 1,605
Total current liabilities 3,888 4,344
Long-term debt 2,732 2,546
Deferred employee benefits
and other noncurrent liabilities 1,398 1,376
Minority interest 148 125
Shareholders' equity 2,957 2,895
Total liabilities and
shareholders' equity $11,123 $11,286
Dana Corporation
Condensed Statement of Cash Flows (Unaudited)
March 31, 2000
(in millions)
Three Months Ended March 31
1999 2000
Net income $ 162 $ 245
Depreciation and amortization 131 132
Gain on divestitures and other 22 (134)
Working capital change (461) (138)
Net cash from operating activities (146) 105
Purchases of property, plant and equipment (194) (166)
Purchases of assets to be leased (26) (12)
Payments received on leases and loans 51 37
Acquisitions -- (205)
Divestitures -- 524
Other (84) 2
Net cash flows - investing activities (253) 180
Net change in short-term debt (503) 237
Proceeds from long-term debt 1,043 --
Payments on long-term debt (116) (233)
Dividends paid (51) (48)
Shares reacquired -- (250)
Other 4 2
Net cash flows - financing activities 377 (292)
Net change in cash and cash equivalents (22) (7)
Cash and cash equivalents - beginning of period 230 111
Cash and cash equivalents - end of period $ 208 $ 104
Dana Corporation
(Including Dana Credit Corporation on an Equity Basis)
Statement of Income (Unaudited)
March 31, 2000
(in millions)
Three Months Ended March 31
1999 2000
Net sales $ 3,381 $ 3,459
Other income 9 174
Total 3,390 3,633
Costs and expenses
Cost of sales 2,825 2,903
Selling, general and
administrative expenses 275 280
Restructuring and
integration charges 7 19
Interest expense 55 55
Total 3,162 3,257
Income before income taxes 228 376
Estimated taxes on income (86) (146)
Minority interest (2) (4)
Equity in earnings
of affiliates 22 19
Net income $ 162 $ 245
Dana Corporation
(Including Dana Credit Corporation on an Equity Basis)
Condensed Balance Sheet (Unaudited)
March 31, 2000
(in millions)
December 31 March 31
Assets 1999 2000
Current assets
Cash and marketable securities $ 101 $ 100
Accounts receivable
Trade 1,935 2,068
Other 399 421
Inventories 1,784 1,730
Other current assets 418 495
Total current assets 4,637 4,814
Property, plant and equipment, net 3,064 2,927
Investments and other assets 1,801 1,896
Total assets $ 9,502 $ 9,637
Liabilities and Shareholders' Equity
Accounts payable and other
current liabilities $ 2,423 $ 2,703
Notes payable 897 1,041
Total current liabilities 3,320 3,744
Long-term debt 1,862 1,701
Deferred employee benefits
and other noncurrent liabilities 1,216 1,173
Minority interest 147 124
Shareholders' equity 2,957 2,895
Total liabilities and
shareholders' equity $ 9,502 $ 9,637
Dana Corporation
(Including Dana Credit Corporation on an Equity Basis)
Condensed Statement of Cash Flows (Unaudited)
March 31, 2000
(in millions)
Three Months Ended March 31
1999 2000
Net income $ 162 $ 245
Depreciation and amortization 108 110
Gain on divestitures and other 16 (156)
Working capital change (464) (118)
Net cash from operating activities (178) 81
Purchases of property, plant and equipment (120) (116)
Acquisitions -- (205)
Divestitures -- 524
Other (28) 30
Net cash flows - investing activities (148) 233
Net change in short-term debt (553) 162
Proceeds from long-term debt 1,012 --
Payments on long-term debt (98) (181)
Dividends paid (51) (48)
Shares reacquired -- (250)
Other 4 2
Net cash flows - financing activities 314 (315)
Net change in cash and cash equivalents (12) (1)
Cash and cash equivalents - beginning
of period 227 101
Cash and cash equivalents - end of period $ 215 $ 100