Dana Corporation Reports First-Quarter Results for 2005 TOLEDO,
Ohio, April 20 /PRNewswire-FirstCall/ -- Dana Corporation
(NYSE:DCN) today announced that its 2005 first-quarter sales were
$2.5 billion, compared to $2.3 billion during the same period last
year. Net income for the quarter totaled $18 million, or 12 cents
per share, versus $65 million, or 43 cents per share, for the
period in 2004. (Logo:
http://www.newscom.com/cgi-bin/prnh/19990903/DANA ) First-quarter
2004 net income included $13 million from the discontinued
automotive aftermarket businesses that were sold in November, 2004.
Additionally, first-quarter 2004 net income included $2 million of
unusual net gains from the sale of Dana Credit Corporation assets,
while unusual transactions in the first quarter of 2005 did not
have a significant impact on net income. Dana Chairman and CEO Mike
Burns said 2005 first-quarter earnings were impacted by several
external factors. "The single greatest factor impacting our
earnings was roughly $32 million in additional steel costs that we
incurred compared to the first quarter of 2004," he said. "This is
an after- tax number and is net of what we've recovered from our
customers. "In addition, this year's results were affected by a
component shortage from a principal supplier, which resulted in
reduced shipments of heavy-duty axles in March," Mr. Burns said.
"The component shortage also affected the operating efficiency in
our Heavy Vehicle group and led to significantly higher levels of
inventory on other related components. "Finally, the performance of
our Automotive Systems Group was impacted by lower production on
many of our key light vehicle platforms in North America. "Against
this challenging backdrop, we are stepping up our focus on those
items within our control," Mr. Burns said. "This means accelerating
our cost- reduction actions to deliver savings to the bottom line,
despite external challenges. We are also working hard to grow our
top line. During the quarter, we were awarded net new business that
will add approximately $60 million to full-year 2005 sales." Recent
Actions Position Dana for Long-Term Success Mr. Burns said Dana has
also taken several recent actions that position the company to
further leverage its capabilities and achieve success over the
longer term: * In February, Dana's principal Brazilian subsidiary,
Dana-Albarus, initiated a tender offer in Brazil for the 15.8
percent of its outstanding shares not held by Dana. Completion of
this offer will enable Dana to consolidate all profits from this
business, while at the same time saving the administrative costs
associated with operating a separate public company. * In March,
Dana announced an agreement to form a 50/50 joint venture in China
- Dongfeng Dana Axle Co. Ltd. The joint venture is expected to be
established in the third quarter of this year, following government
approvals. Dana will initially have a $60 million net investment in
the joint venture, which will provide axles - and potentially other
driveline products - for the growing Chinese commercial vehicle
market. * Earlier this month, Dana and IBM announced an agreement
for IBM Business Consulting Services to provide Dana with
administrative services in the human resources area, such as
payroll and benefits, compensation, and recruitment and training.
This move is designed to improve Dana's flexibility in managing its
human resource processes, as well as to deliver cost savings over
the 10-year life of the contract. Outlook Commenting on the
company's near-term outlook, Mr. Burns said, "Our full- year
guidance remains $1.30 to $1.45 per share." He continued, "As we
put the recent component shortage behind us, and address other
operational issues that have held back margin expansion in the
Heavy Vehicle group over the past two quarters, we expect to more
fully benefit over the remainder of the year from the strong demand
anticipated in the North American commercial vehicle market. "In
the case of the Automotive Systems Group, the dominant issue has
been the effect of higher steel prices," Mr. Burns added. "The good
news is that the market price for raw steel has decreased in recent
months and demand appears to be moderating. Although the price we
pay for forgings and other parts with high steel content has been
slow to follow the decrease for a variety of reasons, we remain
hopeful that we'll see less pressure on steel and other material
price increases during the balance of the year. Therefore, if
light-duty production schedules for the balance of the year do not
change significantly, we expect that our accelerated cost reduction
efforts will lead to improved performance in this group as well."
Quarterly Conference Call Scheduled Today at 10 a.m. Dana will
discuss its first-quarter results in a conference call at 10 a.m.
(EDT) today. The call may be accessed via Dana's web site (
http://www.dana.com/ ), where it will be accompanied by a brief
slide presentation, or by dialing (800) 275-3210. Please dial into
the conference five minutes prior to the call. An audio recording
of this conference call will be available after 2 p.m. today. To
access this recording, please dial (800) 537-8823. A webcast replay
of the call will be available after 4 p.m. today and will be
accessible via the Dana web site. Dana people design and
manufacture products for every major vehicle producer in the world.
Dana is focused on being an essential partner to automotive,
commercial, and off-highway vehicle customers, which collectively
produce more than 60 million vehicles annually. A leading supplier
of axle, driveshaft, engine, frame, chassis, and transmission
technologies, Dana employs 46,000 people in 28 countries. Based in
Toledo, Ohio, the company reported sales of $9.1 billion in 2004.
Dana's Internet address is: http://www.dana.com/. Forward-Looking
Statements Certain statements contained in this release constitute
"forward-looking" statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These statements
represent Dana's expectations based on our current information and
assumptions. Forward-looking statements are inherently subject to
risks and uncertainties. Dana's actual results could differ
materially from those that are anticipated or projected due to a
number of factors. These factors include: national and
international economic conditions; adverse effects from terrorism
or hostilities; the strength of other currencies relative to the
U.S. dollar; increases in commodity costs, including steel, that
cannot be recouped in product pricing; our ability and that of our
customers to achieve projected sales and production levels; the
continued availability of necessary goods and services from our
suppliers; competitive pressures on our sales and pricing; the
success of our cost reduction and cash management programs,
long-term transformation, and U.S. tax loss carryforward
utilization strategies; our ability to finalize the Brazilian
tender offer and Dongfeng joint venture as contemplated; our
ability to realize expected cost savings under the IBM agreement;
and other factors set out in our public filings with the Securities
and Exchange Commission. Dana does not undertake to update any
forward-looking statements in this release. Dana Corporation
Financial Summary (Unaudited) (in millions, except per share
amounts) Three Months Ended March 31 2005 2004 Sales $2,488 $2,311
Income from continuing operations $18 $52 Income from discontinued
operations - 13 Net income $18 $65 Income from continuing
operations $18 $52 Less - Net gains from sales of DCC assets (2)
Income from continuing operations, excluding unusual items $18 $50
Income from discontinued operations $- $13 Diluted earnings per
share: Income from continuing operations $0.12 $0.34 Income from
discontinued operations 0.09 Net income $0.12 $0.43 Income from
continuing operations, excluding unusual items $0.12 $0.33 Income
from discontinued operations, excluding unusual items 0.09 Net
income, excluding unusual items 0.12 0.42 Unusual items 0.01 Net
income $0.12 $0.43 Dana Corporation Condensed Statement of Income
(Unaudited) (in millions, except per share amounts) Three Months
Ended March 31 2005 2004 Net sales $2,488 $2,311 Revenue from lease
financing and other income (expense) 32 14 2,520 2,325 Costs and
expenses Cost of sales 2,327 2,105 Selling, general and
administrative expenses 136 134 Interest expense 43 51 2,506 2,290
Income before income taxes 14 35 Income tax benefit 3 Minority
interest (3) (3) Equity in earnings of affiliates 7 17 Income from
continuing operations 18 52 Income from discontinued operations 13
Net income $18 $65 Basic earnings per share Income from continuing
operations $0.12 $0.35 Income from discontinued operations 0.09 Net
income $0.12 $0.44 Diluted earnings per share Income from
continuing operations $0.12 $0.34 Income from discontinued
operations 0.09 Net income $0.12 $0.43 Average shares outstanding -
For Basic EPS 149 148 For Diluted EPS 151 150 Dana Corporation
Condensed Balance Sheet (Unaudited) (in millions) March 31 December
31 Assets 2005 2004 Current assets Cash and cash equivalents $590
$634 Accounts receivable Trade 1,479 1,266 Other 379 444
Inventories 977 907 Other current assets 256 217 Total current
assets 3,681 3,468 Investment in leases 277 281 Investments and
other assets 3,025 3,145 Property, plant and equipment, net 2,106
2,153 Total assets $9,089 $9,047 Liabilities and Shareholders'
Equity Current liabilities Notes payable $305 $155 Accounts payable
1,407 1,317 Other current liabilities 1,138 1,217 Total current
liabilities 2,850 2,689 Long-term debt 2,045 2,054 Deferred
employee benefits and other noncurrent liabilities 1,689 1,746
Minority interest 126 123 Shareholders' equity 2,379 2,435 Total
liabilities and shareholders' equity $9,089 $9,047 Dana Corporation
Condensed Statement of Cash Flows (Unaudited) (in millions) Three
Months Ended March 31 2005 2004 Net income $18 $65 Depreciation and
amortization 83 93 Gain on divestitures and asset sales (1) (4)
Working capital increase (266) (222) Other (37) 6 Net cash flows -
operating activities (203) (62) Purchases of property, plant and
equipment (70) (79) Payments received on leases and loans 4 4 Asset
sales 35 103 Proceeds from partnership distributions 64 6 Other 1
(5) Net cash flows - investing activities 34 29 Net change in
short-term debt 164 115 Proceeds from long-term debt 5 Payments on
long-term debt (20) (259) Dividends paid (18) (18) Other (1) 5 Net
cash flows - financing activities 125 (152) Net change in cash and
cash equivalents (44) (185) Cash and cash equivalents - beginning
of period 634 731 Cash and cash equivalents - end of period $590
$546 Dana Corporation (Including Dana Credit Corporation on an
Equity Basis) Condensed Statement of Income (Unaudited) (in
millions) Three Months Ended March 31 2005 2004 Net sales $2,488
$2,311 Other income (expense) 18 7 2,506 2,318 Costs and expenses
Cost of sales 2,331 2,114 Selling, general and administrative
expenses 129 120 Interest expense 35 38 2,495 2,272 Income before
income taxes 11 46 Income tax expense (11) Minority interest (3)
(3) Equity in earnings of affiliates 10 20 Income from continuing
operations 18 52 Income from discontinued operations 13 Net income
$18 $65 Dana Corporation (Including Dana Credit Corporation on an
Equity Basis) Condensed Balance Sheet (Unaudited) (in millions)
March 31 December 31 Assets 2005 2004 Current assets Cash and cash
equivalents $564 $619 Accounts receivable Trade 1,479 1,266 Other
380 445 Inventories 977 907 Other current assets 234 192 Total
current assets 3,634 3,429 Investments and other assets 3,310 3,337
Property, plant and equipment, net 1,969 2,015 Total assets $8,913
$8,781 Liabilities and Shareholders' Equity Current liabilities
Notes payable $504 $289 Accounts payable 1,407 1,317 Other current
liabilities 1,212 1,269 Total current liabilities 3,123 2,875
Long-term debt 1,604 1,611 Deferred employee benefits and other
noncurrent liabilities 1,683 1,739 Minority interest 124 121
Shareholders' equity 2,379 2,435 Total liabilities and
shareholders' equity $8,913 $8,781 Dana Corporation (Including Dana
Credit Corporation on an Equity Basis) Cash Flow Impact on Net Debt
(Unaudited) (in millions) Three Months Ended March 31 2005 2004
Sources Net income $18 $65 Depreciation 78 83 Asset sales 19 14
Working capital increase (250) (180) (135) (18) Uses Capital spend
(70) (76) Dividends (18) (18) Restructuring cash payments (8) (23)
Net changes in other accounts (36) 14 (132) (103) Cash change in
net debt $(267) $(121) Dana Corporation Condensed Consolidating
Statement of Income (Unaudited) (in millions) Three Months Ended
March 31, 2005 Dana with DCC on Equity Elimination Dana Basis DCC
Entries Consolidated Net sales $2,488 $ $ $2,488 Other income
(expense) 18 23 (9) 32 2,506 23 (9) 2,520 Costs and expenses Cost
of sales 2,331 (4) 2,327 Selling, general and administrative
expenses 129 10 (3) 136 Interest expense 35 10 (2) 43 2,495 20 (9)
2,506 Income before income taxes 11 3 - 14 Income tax expense -
Minority interest (3) (3) Equity in earnings of affiliates 10 5 (8)
7 Net income $18 $8 $(8) $18 This consolidating statement provides
a reconciliation of the amounts presented for Dana with Dana Credit
Corporation (DCC) on an equity basis to amounts reported for Dana
Corporation on a fully consolidated basis. Dana Corporation
Condensed Consolidating Statement of Income (Unaudited) (in
millions) Three Months Ended March 31, 2004 Dana with DCC on Equity
Elimination Dana Basis DCC Entries Consolidated Net sales $2,311 $
$ $2,311 Other income (expense) 7 22 (15) 14 2,318 22 (15) 2,325
Costs and expenses Cost of sales 2,114 (9) 2,105 Selling, general
and administrative expenses 120 20 (6) 134 Interest expense 38 13
51 2,272 33 (15) 2,290 Income (loss) before income taxes 46 (11) -
35 Income tax benefit (expense) (11) 14 3 Minority interest (3) (3)
Equity in earnings of affiliates 20 6 (9) 17 Income from continuing
operations 52 9 (9) 52 Income from discontinued operations 13 13
Net income $65 $9 $(9) $65 This consolidating statement provides a
reconciliation of the amounts presented for Dana with Dana Credit
Corporation (DCC) on an equity basis to amounts reported for Dana
Corporation on a fully consolidated basis. Dana Corporation
Condensed Consolidating Balance Sheet (Unaudited) (in millions)
March 31, 2005 Dana with DCC on Equity Elimination Dana Assets
Basis DCC Entries Consolidated Current assets Cash and cash
equivalents $564 $26 $ $590 Accounts receivable Trade 1,479 1,479
Other 380 262 (263) 379 Inventories 977 977 Other current assets
234 151 (129) 256 Total current assets 3,634 439 (392) 3,681
Investment in leases 406 (129) 277 Investments and other assets
3,310 402 (687) 3,025 Property, plant and equipment, net 1,969 8
129 2,106 Total assets $8,913 $1,255 $(1,079) $9,089 Liabilities
and Shareholders' Equity Current liabilities Notes payable $504 $57
$(256) $305 Accounts payable 1,407 1,407 Other current liabilities
1,212 63 (137) 1,138 Total current liabilities 3,123 120 (393)
2,850 Long-term debt 1,604 441 2,045 Deferred employee benefits and
other noncurrent liabilities 1,683 334 (328) 1,689 Minority
interest 124 2 126 Shareholders' equity 2,379 358 (358) 2,379 Total
liabilities and shareholders' equity $8,913 $1,255 $(1,079) $9,089
This consolidating statement provides a reconciliation of the
amounts presented for Dana with Dana Credit Corporation (DCC) on an
equity basis to amounts reported for Dana Corporation on a fully
consolidated basis. Dana Corporation Condensed Consolidating
Balance Sheet (Unaudited) (in millions) December 31, 2004 Dana with
DCC on Equity Elimination Dana Assets Basis DCC Entries
Consolidated Current assets Cash and cash equivalents $619 $15 $
$634 Accounts receivable Trade 1,266 1,266 Other 445 208 (209) 444
Inventories 907 907 Other current assets 192 137 (112) 217 Total
current assets 3,429 360 (321) 3,468 Investment in leases 411 (130)
281 Investments and other assets 3,337 467 (659) 3,145 Property,
plant and equipment, net 2,015 8 130 2,153 Total assets $8,781
$1,246 $(980) $9,047 Liabilities and Shareholders' Equity Current
liabilities Notes payable $289 $68 $(202) $155 Accounts payable
1,317 1,317 Other current liabilities 1,269 67 (119) 1,217 Total
current liabilities 2,875 135 (321) 2,689 Long-term debt 1,611 443
2,054 Deferred employee benefits and other noncurrent liabilities
1,739 316 (309) 1,746 Minority interest 121 2 123 Shareholders'
equity 2,435 350 (350) 2,435 Total liabilities and shareholders'
equity $8,781 $1,246 $(980) $9,047 This consolidating statement
provides a reconciliation of the amounts presented for Dana with
Dana Credit Corporation (DCC) on an equity basis to amounts
reported for Dana Corporation on a fully consolidated basis. Dana
Corporation Consolidating Cash Flow Impact on Net Debt (Unaudited)
(in millions) Three Months Ended March 31, 2005 Dana with DCC on
Equity Elimination Dana Basis DCC Entries Consolidated Sources Net
income $18 $8 $(8) $18 Depreciation 78 5 83 Asset sales 19 16 35
Working capital increase (250) (7) (1) (258) (135) 22 (9) (122)
Uses Capital spend (70) (70) Dividends (18) (18) Restructuring cash
payments (8) (8) Net changes in other accounts (36) 3 63 30 (132) 3
63 (66) Cash change in net debt $(267) $25 $54 $(188) Analysis of
components of increase (decrease) in net debt: Net change in
short-term debt $218 $ $(54) $164 Net payments on long-term debt
(6) (14) (20) Change in cash 55 (11) 44 Cash change in net debt 267
(25) (54) 188 Non-cash changes in net debt (4) 1 (3) Total change
in net debt $263 $(24) $(54) $185 This consolidating statement
provides a reconciliation of the amounts presented for Dana with
Dana Credit Corporation (DCC) on an equity basis to amounts
presented for Dana Corporation on a fully consolidated basis. Dana
Corporation Consolidating Cash Flow Impact on Net Debt (Unaudited)
(in millions) Three Months Ended March 31, 2004 Dana with DCC on
Equity Elimination Dana Basis DCC Entries Consolidated Sources Net
income $65 $9 $(9) $65 Depreciation 83 10 93 Asset sales 14 89 103
Working capital increase (180) (8) (11) (199) (18) 100 (20) 62 Uses
Capital spend (76) (3) (79) Dividends (18) (18) Restructuring cash
payments (23) (23) Net changes in other accounts 14 (22) 20 12
(103) (25) 20 (108) Cash change in net debt $(121) $75 $- $(46)
Analysis of components of increase (decrease) in net debt: Net
change in short-term debt $145 $(30) $ $115 Net payments on
long-term debt (237) (17) (254) Change in cash - continuing
operations 213 (28) 185 Cash change in net debt 121 (75) - 46
Non-cash changes in net debt 16 (27) (11) Total change in net debt
$137 $(102) $- $35 This consolidating statement provides a
reconciliation of the amounts presented for Dana with Dana Credit
Corporation (DCC) on an equity basis to amounts presented for Dana
Corporation on a fully consolidated basis. Investor Relations Dana
Corporation Quarterly Financial Information (Unaudited) For the
Quarter Ended March 31, 2005 (in millions) Inter- Segment External
Sales Sales EBIT 05 04 05 04 05 04 Automotive Systems Group $1,810
$1,712 $37 $45 $59 $103 Heavy Vehicle Technologies and Systems
Group 674 578 8 9 40 39 Dana Commercial Credit Other 4 21 1 2 (59)
(59) Continuing Operations 2,488 2,311 46 56 40 83 Discontinued
Operations 25 Unusual Items Excluded from Performance Measurement
(2) (1) Consolidated $2,488 $2,311 $46 $56 $38 $107 North America
$1,586 $1,594 $27 $27 $24 $83 Europe 532 438 42 30 38 30 South
America 209 130 59 44 22 18 Asia Pacific 161 149 5 1 10 8 Dana
Commercial Credit Other (54) (56) Continuing Operations 2,488 2,311
133 102 40 83 Discontinued Operations 25 Unusual Items Excluded
from Performance Measurement (2) (1) Consolidated $2,488 $2,311
$133 $102 $38 $107 Information for Discontinued Operations 510 4
Investor Relations Dana Corporation Quarterly Financial Information
(Unaudited) For the Quarter Ended March 31, 2005 (in millions)
Operating PAT Net Profit Net Assets 05 04 05 04 05 04 Automotive
Systems Group $40 $71 $5 $40 $3,169 $3,031 Heavy Vehicle
Technologies and Systems Group 25 24 8 10 746 637 Dana Commercial
Credit 6 7 6 7 358 301 Other (53) (52) (1) (7) 9 (29) Continuing
Operations 18 50 18 50 4,282 3,940 Discontinued Operations 13 13
Unusual Items Excluded from Performance Measurement 2 2
Consolidated $18 $65 $18 $65 $4,282 $3,940 North America $12 $54
$(16) $25 $2,308 $2,165 Europe 26 22 16 14 1,223 1,136 South
America 14 11 10 9 411 312 Asia Pacific 7 5 3 2 206 183 Dana
Commercial Credit 6 7 6 7 358 301 Other (47) (49) (1) (7) (224)
(157) Continuing Operations 18 50 18 50 4,282 3,940 Discontinued
Operations 13 13 Unusual Items Excluded from Performance
Measurement 2 2 Consolidated $18 $- $65 $18 $65 $4,282 $3,940
Information for Discontinued Operations 945 FOR MORE INFORMATION
(http://www.dana.com/) - Dial-For-Dana U.S. or Canada 800-537-8823;
OH 800-472-8810 E-Mail or Dana Investor Relations 419-535-4635
http://www.newscom.com/cgi-bin/prnh/19990903/DANA DATASOURCE: Dana
Corporation CONTACT: Michelle L. Hards of Dana Corporation,
+1-419-535-4636, or Web site: http://www.dana.com/ Company News
On-Call: http://www.prnewswire.com/comp/226839.html
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