Dana Corporation Announces Second-Quarter Results
18 July 2000
Earnings in Line with Previously Announced Expectations
TOLEDO, Ohio - Dana Corporation 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.
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 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