Dana Second-Quarter Sales, Earnings at Record Highs /

Sales Top $3.4 Billion / Net Income Jumps 19% Toledo, Ohio (PROTEXT) - Dana Corporation (NYSE: DCN) today announced record second-quarter sales of $3.4 billion, an increase of more than 5 percent over the same period last year. Operating profits for the quarter rose to $195 million, and earnings per share on an operating basis were $1.17, in line with consensus estimates. Reported net income for the period rose 19 percent to a record $190 million, and earnings per share for the quarter rose 18 percent to $1.14. These figures include non-recurring, after-tax charges of $5 million (3 cents per share) for the second quarter of 1999 and $7.5 million (4 cents per share) in 1998. Dana's six-month consolidated sales were $6.8 billion, up 5 percent over the same period last year. Net income for the first two quarters was $352 million, an increase of 17 percent over the first six months of 1998. Earnings per share on a diluted basis also rose 17 percent for the first half of the year to $2.10. Dana Chairman Southwood J. Morcott said, "This was our best quarter ever in terms of sales volume, net income, and earnings per share. These record results are the product of continued focus on realizing acquisition synergies, as well as disciplined pursuit of our Five-Point Plan. By focusing on operational improvements while growing our businesses, we have seen excellent profit growth." "We're seeing the effects of the successful integration of our recent acquisitions, as well as continued strength in many of our core businesses. As a result, all key operating ratios have shown improvement," said Joe Magliochetti, Dana president and CEO. "Organic growth is up 8 percent in the Heavy Truck Group and 7 percent in the Automotive Systems Group. This is due in part to very robust North American light-truck and SUV and medium- and heavy-duty truck markets. In total, North American sales were up nearly 9 percent over the second quarter of last year." Return on sales for the second quarter increased to 5.7 percent, compared with 5.2 percent a year ago. For the quarter, all strategic business units except the Off-Highway Systems and Industrial groups showed increases in operating margin. Operating margins improved to 9.9 percent, 90 basis points higher than the second quarter of 1998, mainly due to restructuring and rationalization efforts, as well as ongoing cost-control initiatives. The quarter also saw aggressive implementation of the other elements of Dana's Five-Point Plan, unveiled in April. The plan, a tactical link to the company's overall strategic plan, provides a blueprint for continued growth and increased profitability. It includes the following five tactics: * Grow while focusing on returns and maintaining financial discipline; * Seek strategic, bolt-on acquisitions at reasonable valuations; * Divest non-strategic and non-performing operations; * Repurchase stock as the company generates cash; and * Complete integration efforts and realize synergy savings. In keeping with the plan, the company has announced plans to sell its Commercial Vehicle Systems Group, most of its Warner Electric industrial products businesses, its Sierra aftermarket marine and power equipment operations, and its Australian Truckline Parts Centres. These businesses had 1998 sales of more than $530 million and are part of an overall plan to divest operations with annual sales of approximately $850 million. During the quarter, the company also launched a program to repurchase its stock under a plan approved by the Board of Directors in April. The authorization, in effect until October 2000, allows the company to repurchase up to $350 million of its common stock. Finally, Dana's plan for $120 million in new automotive aftermarket operational and sourcing synergies this year is ahead of schedule year-to-date and on target for the full year. To date, the company has closed six manufacturing facilities and six distribution centers -- with a seventh distribution point slated for closure this month. By the end of the year, Dana plans to close 15 manufacturing facilities and 30 distribution points. NEW BUSINESS, PRODUCTS ANNOUNCED During the second quarter, Dana announced more than $150 million in new aftermarket business and $570 million in new structural business. The latter includes a multi-year contract -- beginning in model year 2002 -- for the global frame platforms for the Chevrolet S-10 and Isuzu pickup trucks. Dana also was selected to supply complete, heavy-duty chassis systems for Western Star Trucks Inc. In the spirit of Dana's Rolling Chassis(TM) module, the systems will include a ladder assembly frame, dressed front and rear axles, suspension, steering gear, electric and pneumatic connection harnesses, and other components. They will be delivered just in time, in sequence, to Western Star's new facility in North Charleston, S.C. Delivery is expected to begin late this year, with full production levels estimated at 6,000 units annually. Dana also unveiled a revolutionary new trailer module. Developed in alliance with Neway Anchorlok International, Inc., Dana's iPac module consists of an air-ride suspension, axles, wheel ends, and brakes. The innovative module offers improved performance, durability, assembly, and serviceability. COMPANY LAUDED FOR PERFORMANCE During the quarter, Dana was recognized as a Most Admired Manufacturer in the United States in the June 1999 issue of start magazine, a business publication focused on technological issues. In recognizing Dana, the magazine emphasized Dana's strategic objectives, focus on technology, employee involvement, and reputation. Also, Dana was rated No. 1 among the world's 44 best- performing automotive suppliers in a study based on measure of earnings, revenue growth, stock price, and return on assets. The results of the study, conducted by automotive consulting firm A.T. Kearney, Inc., were published in the June 21 issue of Automotive News. The companies studied were selected because of their focus on improved productivity of company assets, increased earnings, and aggressive growth. Dana common stock was listed as one of the most popular and widely held issues among investment clubs nationwide. The April 1999 issue of Better Investing magazine ranked Dana common stock 31st in terms of the number of shares held by investment clubs. Dana also ranked 39th in total value of shares held by investment clubs and 55th in the number of investment clubs holding the stock. The May 1999 issue of Better Investing featured a cover story of Dana as a "Stock to Study." BOARD APPROVES QUARTERLY DIVIDEND Dana's Board of Directors today approved a quarterly dividend of $0.31 per share payable Sept. 15, 1999, to shareholders of record Sept. 1, 1999. This will mark Dana's 247th consecutive dividend without a decreased 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 some 330 major facilities in 32 countries and employs more than 86,000 people. The company reported sales of $12.5 billion in 1998. Dana's internet address is 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 to achieve projected vehicle sales levels, the cyclical nature of the automotive industry, and 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. Dana Corporation (in millions, except per share amounts) Unaudited Three Months Ended June 30 1998 1999 Sales $ 3,236.6 $ 3,407.6 Net Income 160.2 190.2 Net Income Per Common Share - Basic $0.97 $1.15 Diluted 0.96 1.14 Average Shares Outstanding - For Basic EPS 164.6 165.9 For Diluted EPS 167.0 167.4 Six Months Ended June 30 1998 1999 Sales $ 6,469.4 $ 6,788.2 Net Income 300.8 351.7 Net Income Per Common Share Basic $1.83 $2.12 Diluted 1.80 2.10 Average Shares Outstanding For Basic EPS 164.6 165.9 For Diluted EPS 167.0 167.4 ots Original Text Service: Dana Corporation Internet: http://www.newsaktuell.de Contact: Greg Smietanski of Dana, (in the USA) 419-535-4636 Company News On-Call: http://www.prnewswire.com/comp/226839.html or fax, (in the USA) 800-758-5804, ext. 226839 Web site: http://www.dana.com Subscribers please note that material bearing the slug "PROTEXT" is not part of CTK's news service and is not to be published under the "CTK" slug. 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