TOLEDO, Ohio, March 22 /PRNewswire-FirstCall/ -- Dana Corporation
(OTC:DCNAQ) (BULLETIN BOARD: DCNAQ) today reported preliminary,
unaudited consolidated financial results for the quarter and full
year ended Dec. 31, 2005. (Logo:
http://www.newscom.com/cgi-bin/prnh/19990903/DANA ) Fourth-Quarter
2005 Results Sales for the fourth quarter of 2005 were $2,046
million, compared to $1,988 million during the same period in 2004.
The company expects to report a net loss of $376 million for the
quarter, including a loss from continuing operations of $231
million. This compares to a net loss of $136 million in the fourth
quarter of 2004, which included a loss from continuing operations
of $72 million. The fourth-quarter 2005 net loss will include
unusual charges expected to total $230 million, after tax. These
include: -- Charges of $123 million related to the previously
announced planned divestitures of the company's non-core engine
hard parts, fluid products, and pump products businesses that are
currently held for sale and will be classified as discontinued
operations; -- Goodwill impairment of $53 million; -- Realignment
charges and related asset impairments of $45 million; -- A change
in accounting related to the recognition of asset retirement
obligations of $2 million; and -- A loss of $7 million on asset
sales. The balance of the fourth-quarter 2005 loss - expected to
total $146 million, after tax - will be from operations. Continuing
operations, before unusual items, are expected to generate a loss
of $126 million in the fourth quarter of 2005 as compared to income
of $54 million for the same period in 2004. Discontinued operations
are expected to produce a loss of $20 million, before unusual
items, in the fourth quarter of 2005, which compares to a loss of
$19 million in the previous year's fourth quarter. Full-Year 2005
Results Sales of continuing operations for the full year 2005 were
$8,611 million, compared to $7,775 million in 2004. The company
expects to report a 2005 net loss of $1,602 million versus net
income of $62 million in 2004. Included in the net loss for 2005 is
an expected loss from continuing operations of $1,172 million
compared to income from continuing operations of $72 million in
2004. In addition to the unusual fourth-quarter 2005 charges
totaling $230 million, the year-on-year change in earnings is
expected to be driven primarily by unusual items recorded in the
third quarter of 2005. These items totaled $1,209 million and
included: -- The provision of a $918 million valuation allowance to
reduce Dana's net U.S. and U.K. deferred tax assets, comprised of
$835 million of deferred tax assets as of Dec. 31, 2004, and
additional benefits recognized between the beginning of the year
and June 30, 2005; -- An impairment charge of $275 million, after
tax, to reduce the book value of certain assets of the non-core
businesses that are now held for sale; and -- Aggregate charges of
approximately $16 million related to the sale of Dana's domestic
fuel rail business and the dissolution of an engine bearings joint
venture. Adjusted for unusual items, continuing operations are
expected to generate an after-tax loss of $215 million in 2005,
compared to income of $165 million in 2004. Discontinued
operations, on the same basis, are expected to report an after-tax
loss of $36 million in 2005, compared to income of $48 million in
the prior year. Results from 2004 included income from the
automotive aftermarket businesses that were sold in November 2004.
Unusual items of $151 million, after tax, in 2004 included $171
million of charges recorded in the fourth quarter, as well as $20
million of net gains reported earlier in the year. The
fourth-quarter 2004 charges included costs associated with
completing the divestiture of the company's automotive aftermarket
businesses, two facility closures and other manufacturing
realignments, and the repurchase of approximately $900 million of
long-term debt. Business Segment Results for Continuing Operations
Sales in the Automotive Systems Group totaled $1,414 million in the
fourth quarter of 2005 and $5,941 million for the full year 2005,
compared to $1,387 million and $5,384 million respectively during
the fourth quarter and full year 2004. On an EBIT basis, the group
expects to record income of $6 million during the fourth quarter of
2005 and $187 million for the full year 2005, compared to $49
million and $300 million during the respective periods in 2004.
Sales in the Heavy Vehicle Technologies and Systems Group totaled
$626 million in the fourth quarter of 2005 and $2,640 million for
the full year 2005, compared to $580 million and $2,299 million
respectively during the fourth quarter and full year 2004. On an
EBIT basis, the group expects to record a loss of $9 million during
the fourth quarter of 2005 and income of $72 million for the full
year 2005, compared to earnings of $36 million and $161 million
during the respective periods in 2004. 2005 Form 10-K Filing and
Investor Communications Dana will not file its 2005 Form 10-K by
the March 31, 2006, extended filing date because of the additional
time required to complete its financial statements and the related
non-financial disclosures, in light of the company's bankruptcy
filing on March 3, 2006, and to complete its assessment of internal
control over financial reporting. The company expects to file its
2005 Form 10-K by April 30, 2006. This report will include - in
addition to Dana's audited financial statements and management's
discussion and analysis of financial condition and results of
operations - information generally found in the proxy statement.
The company has suspended its quarterly conference calls and annual
shareholder meetings until further notice. About Dana Corporation
Based in Toledo, Ohio, Dana Corporation is a leading supplier of
axle, driveshaft, engine, frame, chassis, and transmission
technologies. Dana people design and manufacture products for every
major vehicle producer in the world - in the automotive, commercial
vehicle, and off-highway markets. The company and certain of its
U.S. subsidiaries are operating under Chapter 11 of the U.S.
Bankruptcy Code as debtors-in-possession. More information about
Dana can be found on the Internet at http://www.dana.com/.
Forward-Looking Statements Statements in this release that are not
entirely historical constitute "forward-looking" statements within
the meaning of the Private Securities Litigation Reform Act of
1995. These statements represent Dana's expectations based on
current information and assumptions. However, forward-looking
statements are inherently subject to risks and uncertainties. There
can be no assurance that the preliminary numbers reported in this
release will not change when the audit of Dana's financial
statements is completed or that Dana will file its 2005 Form 10-K
when currently contemplated. Forward-looking statements in this
release speak only as of the date of the release. Dana does not
undertake to update such forward-looking statements. Dana
Corporation Financial Summary (Unaudited)* (in millions, except per
share amounts) Three Months Ended Year Ended December 31, December
31, 2005 2004 2005 2004 Net sales $2,046 $1,988 $8,611 $7,775
Income (loss) from continuing operations $(231) $(72) $(1,172) $72
Loss from discontinued operations (143) (64) (434) (10) Effect of
change in accounting (2) 4 Net income (loss) $(376) $(136) $(1,602)
$62 Income (loss) from continuing operations $(231) $(72) $(1,172)
$72 Goodwill impairment 53 53 Realignment charges 45 34 45 39 Net
(gain) losses on divestitures, asset impairments and sales 7 (4) 19
(42) Valuation allowance against deferred tax assets 835 Loss on
repurchase of notes 96 96 Charge related to Ohio tax legislation 5
Income (loss) from continuing operations, excluding unusual items
$(126) $54 $(215) $165 Income (loss) from discontinued operations
$(143) $(64) $(434) $(10) Provision for loss on sale of engine hard
parts, fluid routing and pump businesses 123 398 Impairment and
restructuring charges 15 15 Sale of automotive aftermarket
businesses 30 43 Income (loss) from discontinued operations,
excluding unusual items $(20) $(19) $(36) $48 Diluted earnings
(loss) per share: Income (loss) from continuing operations $(1.54)
$(0.48) $(7.84) $0.48 Loss from discontinued operations (0.95)
(0.43) (2.90) (0.07) Effect of change in accounting (0.01) 0.03 Net
income (loss) $(2.50) $(0.91) $(10.71) $0.41 Income (loss) from
continuing operations, excluding unusual items $(0.83) $0.36
$(1.42) $1.09 Income (loss) from discontinued operations, excluding
unusual items (0.13) (0.13) (0.24) 0.32 Effect of change in
accounting (0.01) 0.03 - Net income (loss), excluding unusual items
(0.97) 0.23 (1.63) 1.41 Loss from unusual items (1.53) (1.14)
(9.08) (1.00) Net income (loss) $(2.50) $(0.91) $(10.71) $0.41 *
Subsequent to Dana's filing under chapter 11 of the U.S. Bankruptcy
Code on March 3, 2006, the company and certain of its U.S.
subsidiaries are operating as debtors-in-possession. Dana
Corporation Consolidated Statement of Income (Unaudited)* (in
millions, except per share amounts) Three Months Ended Year Ended
December 31, December 31, 2005 2004 2005 2004 Net sales $2,046
$1,988 $8,611 $7,775 Revenue from lease financing 4 4 15 18 Other
income (expense), net 22 (107) 73 (103) Total revenue 2,072 1,885
8,699 7,690 Costs and expenses Cost of sales 2,016 1,899 8,192
7,189 Selling, general and administrative expenses 143 97 500 416
Realignment and impairment charges 108 44 111 44 Interest expense
44 52 167 206 Total costs and expenses 2,311 2,092 8,970 7,855 Loss
before income taxes (239) (207) (271) (165) Income tax benefit
(expense) (5) 118 (935) 205 Minority interest (1) 2 (6) (5) Equity
in earnings of affiliates 14 15 40 37 Income (loss) from continuing
operations (231) (72) (1,172) 72 Income (loss) from discontinued
operations before income taxes (156) (69) (441) 17 Income tax
benefit (expense) of discontinued operations 13 5 7 (27) Loss from
discontinued operations (143) (64) (434) (10) Income before effect
of change in accounting (374) (136) (1,606) 62 Effect of change in
accounting (2) 4 Net income (loss) $(376) $(136) $(1,602) $62 Basic
earnings (loss) per common share Income (loss) from continuing
operations before effect of change in accounting $(1.54) $(0.48)
$(7.84) $0.48 Loss from discontinued operations (0.95) (0.43)
(2.90) (0.07) Effect of change in accounting (0.01) - 0.03 Net
income (loss) $(2.50) $(0.91) $(10.71) $0.41 Diluted earnings
(loss) per common share Income (loss) from continuing operations
before effect of change in accounting $(1.54) $(0.48) $(7.84) $0.48
Loss from discontinued operations (0.95) (0.43) (2.90) (0.07)
Effect of change in accounting (0.01) 0.03 Net income (loss)
$(2.50) $(0.91) $(10.71) $0.41 Cash dividends declared and paid per
common share $0.01 $0.12 $0.37 $0.48 Average shares outstanding -
Basic 150 149 150 149 Average shares outstanding - Diluted 150 151
151 151 * Subsequent to Dana's filing under chapter 11 of the U.S.
Bankruptcy Code on March 3, 2006, the company and certain of its
U.S. subsidiaries are operating as debtors-in-possession. Dana
Corporation Consolidated Balance Sheet (Unaudited)* December 31,
2005 and 2004 (in millions) Assets 2005 2004 Current assets Cash
and cash equivalents $762 $634 Accounts receivable Trade, less
allowance for doubtful accounts of $36 - 2005 and $39 - 2004 1,064
1,254 Other 244 437 Inventories 662 898 Assets of discontinued
operations 549 Other current assets 57 185 Total current assets
3,338 3,408 Goodwill 439 593 Investments, deferred taxes and other
assets 1,811 2,566 Investments in leases 186 281 Property, plant
and equipment, net 1,629 2,171 Total assets $7,403 $9,019
Liabilities and Shareholders' Equity Current liabilities Notes
payable, including current portion of long-term debt (1) $2,580
$155 Accounts payable 948 1,330 Accrued payroll and employee
benefits 429 378 Liabilities of discontinued operations 290 Other
accrued liabilities 463 611 Taxes on income 175 199 Total current
liabilities 4,885 2,673 Deferred employee benefits and other
noncurrent liabilities 1,910 1,759 Long-term debt 66 2,054 Minority
interest in consolidated subsidiaries 84 122 Total liabilities
6,945 6,608 Shareholders' equity Common stock, $1 par value, shares
authorized, 350; shares issued, 150 - 2005, 150 - 2004 150 150
Additional paid-in capital 194 190 Retained earnings 820 2,479
Accumulated other comprehensive loss (706) (408) Total
shareholders' equity 458 2,411 Total liabilities and shareholders'
equity $7,403 $9,019 * Subsequent to Dana's filing under chapter 11
of the U.S. Bankruptcy Code on March 3, 2006, the company and
certain of its U.S. subsidiaries are operating as
debtors-in-possession. (1) At December 31, 2005, although we had
obtained waivers of certain financial covenants through May 31,
2006, we had determined that following expiration of the waivers,
it was unlikely that we would be able to comply with such
covenants. As a consequence, under accounting requirements for debt
classification, we classified long- term debt that is subject to
acceleration in the event of non- compliance with the financial
covenants as debt payable within one year. Dana Corporation
Consolidated Statement of Cash Flows (Unaudited)* (in millions)
Three Months Ended Year Ended December 31, December 31, 2005 2004
2005 2004 Net income (loss) $(376) $(136) $(1,602) $62 Depreciation
and amortization 83 85 310 358 Asset impairments and other related
charges 183 13 473 37 Loss on asset sales 15 75 29 18 Effect of
change in accounting 2 (4) Working capital decrease (increase) 67
82 (126) (294) Deferred taxes 36 (53) 764 (125) Other 98 64 (36) 17
Net cash flows - operating activities 108 130 (192) 73 Purchases of
property, plant and equipment (104) (115) (297) (329) Payments
received from leases and partnerships 91 279 161 289 Proceeds from
divestitures and asset sales 7 650 183 968 Other (93) 10 (66) (12)
Net cash flows - investing activities (99) 824 (19) 916 Net change
in short-term debt - (212) 406 (31) Payments on long-term debt (1)
(1,052) (46) (1,457) Proceeds from long-term debt - 450 21 455
Dividends paid (1) (20) (55) (73) Other 25 - 13 16 Net cash flows -
financing activities 23 (834) 339 (1,090) Net change in cash and
cash equivalents 32 120 128 (101) Net change in cash - discontinued
operations - 2 - 4 Cash and cash equivalents - beginning of period
730 512 634 731 Cash and cash equivalents - end of period $762 $634
$762 $634 * Subsequent to Dana's filing under chapter 11 of the
U.S. Bankruptcy Code on March 3, 2006, the company and certain of
its U.S. subsidiaries are operating as debtors-in-possession. Dana
Corporation Reconciliation of Earnings Before Interest and Taxes
(EBIT) for the Segments to Income Before Income Taxes (Unaudited)*
(In millions) Three Months Ended Year Ended December 31, December
31, 2005 2004 2005 2004 Segment earnings before interest and taxes
- ASG $6 $49 $187 $300 HVTSG (9) 36 72 161 Total (3) 85 259 461
Other (91) (61) (290) (238) Earnings (loss) before interest and
taxes (EBIT), before unusual items (94) 24 (31) 223 Unusual items
(on an EBIT basis): Total operations (222) (254) (519) (269)
Discontinued operations 121 51 411 71 Continuing operations (101)
(203) (108) (198) Interest expense, excluding DCC (37) (43) (139)
(161) Interest income, excluding DCC 9 4 35 9 Interest expense, net
- excluding DCC (28) (39) (104) (152) DCC pre-tax income (loss)
(16) 11 (28) (38) Loss before income taxes $(239) $(207) $(271)
$(165) * Subsequent to Dana's filing under chapter 11 of the U.S.
Bankruptcy Code on March 3, 2006, the company and certain of its
U.S. subsidiaries are operating as debtors-in-possession.
http://www.newscom.com/cgi-bin/prnh/19990903/DANADATASOURCE: Dana
Corporation CONTACT: Michelle Hards of Dana Corporation,
+1-419-535-4636, Web site: http://www.dana.com/ Company News
On-Call: http://www.prnewswire.com/comp/226839.html
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