Dana Corporation Announces Third-Quarter Results
17 October 2000
Dana Corporation Announces Third-Quarter Results
Earnings in Line with Previously Announced Expectations
TOLEDO, Ohio, Oct. 17 Dana Corporation today
announced that its sales for the quarter ended Sept. 30 were $2.9 billion,
down from $3.1 billion for the same period last year.
Operating income for the quarter totaled $61 million, or 41 cents per
share -- in line with expectations announced by the company on Sept. 18.
Reported net income for the period was $29 million, or 19 cents per share.
This included net non-recurring expenses of $32 million after tax, primarily
attributable to the closure of the company's Reading, Pa., Structural Products
facility. For the third quarter of 1999, the company reported net income of
$162 million or 97 cents per share. Last year's results included
approximately $11 million of non-recurring after-tax charges.
Dana's nine-month consolidated sales were $9.6 billion, compared to $9.9
billion during the same period last year. Net income for the first three
quarters was $418 million, or $2.71 per share. This total included net non-
recurring income of $43 million after tax. Comparable results from 1999 were
net income of $513 million, or $3.07 per share, including non-recurring
charges of approximately $21 million after tax.
Among the factors impacting Dana's quarterly results were a number of
broad issues that affected the industry as a whole. These included unexpected
reductions in production schedules for light truck and sport utility vehicles
manufactured by several of Dana's largest customers, a declining U.S. heavy
truck market, softness in the U.S. and European aftermarkets, and the
continued weakness of the Euro.
"The past several months have been difficult for our entire sector, but
because of Dana's business mix, we have been particularly hard hit by the
convergence of all four of these factors," said Dana Chairman and CEO Joe
Magliochetti. "These challenges have come at a time when we are actively
repositioning Dana to focus on long-term, profitable growth in our foundation
businesses.
"We remain focused on our strategic direction. Year to date, we have
divested businesses with annual sales in excess of $660 million, for which we
have received proceeds of $562 million," he said. "Moving forward, we will
continue to evaluate the future of operations outside of our foundation
businesses and aggressively pursue the divestiture of those that are
considered to be non-strategic.
"We will continue to use our free cash flow, supported by these
divestiture proceeds, to invest in those technologies and businesses that will
drive our global growth, as well as for share repurchases and debt reduction,"
he added.
Dana Chief Financial Officer Bob Richter said, "We have undertaken a
number of aggressive actions to respond to current market conditions. These
include significant expense reduction initiatives, limitations on capital
spending, and workforce reductions totaling more than 3,500 people. This
includes the reductions associated with the closure of the Reading plant.
"We also continue to work toward the resolution of the software
implementation and integration issues associated with the consolidation of the
Automotive Aftermarket Group's Engine Controls warehouses, which are impacting
our performance.
"Until we see positive developments with respect to the factors that
affected our third quarter, we will remain guarded in our outlook for the
fourth quarter," he said.
Yesterday, Dana's Board approved a quarterly dividend of 31 cents per
share payable Dec. 15, 2000, to shareholders of record on Dec. 1. This will
mark Dana's 252nd consecutive dividend -- dating back to 1936 -- without a
reduced or missed payment.
Dana will hold a conference call at 9:30 a.m. (EDT) today to discuss its
third-quarter results. The dial-in number is (800) 275-3210. Please dial
into the conference 15 minutes prior to the start. A recording of this
conference call will be available after 5 p.m. (EDT) Wednesday, Oct. 18. To
access this recording, please dial (800) 537-8823.
Dana Corporation
(in millions, except
per share amounts)
Unaudited
Three Months Ended September 30
1999 2000
Sales $3,127 $2,855
Net Income 162 29
Net Income Per Common Share -
Basic $0.98 $0.19
Diluted $0.97 $0.19
Average Shares Outstanding -
For Basic EPS 166 149
For Diluted EPS 167 150
Unaudited
Nine Months Ended September 30
1999 2000
Sales $9,915 $9,601
Net Income 513 418
Net Income Per Common Share -
Basic $3.10 $2.73
Diluted $3.07 $2.71
Average Shares Outstanding -
For Basic EPS 166 153
For Diluted EPS 167 154