Dana Announces Third-Quarter Sales, Earnings Operating Income Increases 27% as Quarterly Revenues Top $3.1 Billion

Toledo, Ohio (PROTEXT) - Dana Corporation (NYSE: DCN) todayannounced record third-quarter sales of $3.1 billion, an increaseof nearly 6 percent over the same period last year. Operatingprofits after tax for the quarter rose 27 percent to $172million, and earnings per share on an operating basis were $1.03,in line with consensus estimates. (Photo: http://www.newscom.com/cgi-bin/prnh/19990903/DANA ) Net income for the quarter was a record $161.5 million, or 97cents per share. These figures include non-recurring, after-taxcharges of $10.5 million (6 cents per share). Dana's nine-month consolidated sales were $9.9 billion, up 5percent over the same period last year. Operating income aftertax for the first three quarters was $534 million, an increase of21 percent over the first nine months of 1998. Earnings per shareon a diluted basis before non-recurring items rose 21 percent forthe first three quarters to $3.20. Net income for this period was$513 million, or $3.07 per share. Dana Chairman Southwood J. Morcott said, "This was anothergood quarter for us in terms of sales volume, net income, andearnings per share, despite challenging conditionsinternationally. Profit growth still outpaces sales growth -- theresult of a continued focus on realizing acquisition synergies,as well as a disciplined pursuit of our Five-Point Plan. "Operating income after tax for the third quarter, as apercent of sales, increased to 5.5 percent, compared with 4.6percent a year ago, and operating margins improved, as well. Infact, all of our key operating ratios showed improvement for thequarter. "Thanks to strong North American light-truck, SUV, and medium-and heavy- duty truck markets, organic growth was up 10 percentin the Heavy Truck Group and 6 percent in the Automotive SystemsGroup. "In our Automotive Aftermarket Group, sales for the quarterwere up 3 percent and 5 percent year-to-date, primarily due toacquisitions. Organic sales for this group, however, wereessentially flat in all regions for the quarter as weakness inEurope and South America persisted and North American customerscontinued to consolidate. Nevertheless, operating profit aftertax for the group was up 35 percent over the third quarter of1998 on a 200-plus basis-point improvement in our operatingmargin, reflecting results from our aftermarket synergy plan." Joe Magliochetti, Dana president and CEO, said, "Despite thesuccesses we have had this year, we are still facing challengingeconomic conditions in many regions of the world. Frankly, we hadnot anticipated the softness we've seen in Europe this year,particularly in the U.K. and in key industrial and off-highwaymarkets. We had also planned on a recovery in South America bynow, which has yet to materialize. Europe and South Americaaccount for about 20 percent of our revenue year-to-date but havedelivered less than 8 percent of our net profit -- which is wellbelow expectations. We've been fortunate that strong demand inthe North American light- and heavy-truck markets in the firstnine months has allowed us to offset profit shortfalls elsewhere,but our sense is that this may not be sustainable in the fourthquarter. "We'll no doubt have a better read on all of this as we movethrough the fourth quarter. But, clearly, if current trendscontinue internationally, and we continue to feel -- as we dotoday -- that production may be weakening in North America, wehave to be prepared to take quick, decisive action. As a result,we are evaluating a number of alternatives aimed at rationalizingour global operations to be more efficient in the future. Thedepth of our actions will, of course, depend on market conditionsand the finalization of our plans but could potentially result infourth-quarter charges in the range of $100-$200 million beforetaxes. We see this rationalization plan as absolutely consistentwith the transformation elements of our Five-Point Plan that weare institutionalizing at Dana to better our company." FIVE-POINT PLAN PROGRESSES During the quarter, Dana continued with implementation of itsFive-Point Plan, which provides a blueprint for continued growthand increased profitability. The primary element of the plan isto "grow while focusing on returns and maintaining financialdiscipline." Among the plan's other elements is the divestiture of "non-strategic and non-performing operations." Since April, Dana hasannounced the divestiture of businesses with more than $700million in sales. Several of the divestitures could result ingains to be realized in the fourth quarter. Along with previously announced divestiture plans, in the lastthree months Dana has closed on the sale of its Special Productsfacility in Livonia, Mich., to a private investor and completedthe sale of Dana Commercial Credit's Technology Management Group.Also, the Dana Board of Directors today approved a definitiveagreement to sell the Sierra aftermarket marine and powerequipment operations to Colfax Corporation. The transaction,which is expected to close in the fourth quarter, is subject tothe approval of appropriate regulatory agencies. Sierra had salesof approximately $40 million in 1998. Another element of the plan is to "seek strategic, bolt-onacquisitions at reasonable valuations." In keeping with theplan, Dana completed the acquisition of Innovative Manufacturing,Inc., a manufacturer of outdoor power equipment components, inAugust. The bolt-on acquisition of Innovative Manufacturing, akey supplier, will strengthen the operations of Dana's SpicerOutdoor Power Equipment Components Division, part of the Off-Highway Systems Group. The Five-Point Plan also calls for Dana to "repurchase stockas the company generates cash." During the quarter, Danacontinued to repurchase its stock under a plan approved by theBoard of Directors in April. Through the end of the thirdquarter, Dana has repurchased more than one million shares ofcompany stock. The authorization, in effect through October 2000,allows the company to repurchase up to $350 million of its commonstock. The final element of the plan calls for Dana to "completeintegration efforts and realize synergy savings." Dana's planfor $120 million in new automotive aftermarket operational andsourcing synergies this year is ahead of schedule year-to-dateand on target for the full year. So far this year, the companyhas closed six manufacturing facilities and 13 distributioncenters. In all, Dana plans to close a total of 14 manufacturingfacilities and 29 distribution points as part of its aftermarketsynergy plan. NEW BUSINESS, PRODUCTS ANNOUNCED During the quarter, Dana announced that its FTE Automotivegroup was selected to supply Volkswagen AG with the firsthydraulic clutch actuation system the OEM will use in its compactcar models. Along with the hydraulic system, Dana also willsupply brake boosters, wheel cylinders, and brake hoses forVolkswagen's 2000 through 2003 compact car models. Additionally, Dana was chosen to supply anti-lock brakingsystems (ABS) for all BMW motorcycles, including the new K1200LTluxury motorcycle. The ABS will feature Dana's Mark II technologyand will be manufactured by Dana's FTE Automotive group. Also, Dana's Plumley Division recently launched production ofseven low- emission hoses for use in the fuel tank system on theNissan Altima. Dana will supply approximately 1.5 million hosecomponents annually to the Nissan Motor Manufacturing Corp. USAassembly plant in Smyrna, Tenn. The package could be expanded toinclude three additional hoses after testing has been finalized. COMPANY HONORED FOR MANAGEMENT, MANUFACTURING For the second straight year, Dana was named one of the"World's 100 Best- Managed Companies" by IndustryWeek magazine.Dana was recognized for its emphasis on global growth,decentralization, and employee education programs. "Dana has long relied on a style of management that emphasizestrust in people, individual responsibility, education, continuousimprovement, and decentralization in decision making. Receivingthis honor for the second year in a row reaffirms our uniquestyle of management," Morcott said. Dana was also recognized four times by its peers as one of the"best of the best" among automotive suppliers in AutomotiveIndustries magazine's annual "Quest for Excellence" survey. Danawas honored as a top supplier in the chassis suspension systems,systems integration, transmissions/drivetrain systems, andsealing/gaskets and packing categories. Dana Corporation wasalso recognized for its innovative, magnetic-pulse weldingtechnology, earning the Automotive Manufacturing Award atFinancial Times Automotive World magazine's 1999 GlobalAutomotive Awards held Sept. 15 at the Frankfurt, Germany,International Motorshow. FT Automotive World created the award tohonor the companies that made the most significant improvementsin manufacturing. Dana's Syracuse, Ind., Spicer Light Truck Axle Divisionfacility has been honored with the 1999 State of Indiana QualityImprovement Award. The Syracuse facility is a repeat winnerhaving also earned the award in 1998. Additionally, Dana's SpicerHeavy Systems Assembly Division facility in Lugoff, S.C., wasnamed a South Carolina Chamber of Commerce Manufacturer of theYear. QUARTERLY DIVIDEND APPROVED Dana's Board of Directors today approved a quarterly dividendof $0.31 per share payable Dec. 15, 1999, to shareholders ofrecord Dec. 1, 1999. This will mark Dana's 248th consecutivedividend - dating back to 1936 - without a decreased or missedpayment. Dana Corporation is one of the world's largest independentsuppliers to vehicle manufacturers and their relatedaftermarkets. Founded in 1904 and based in Toledo, Ohio, thecompany operates some 330 major facilities in 32 countries andemploys 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 SecuritiesLitigation Reform Act of 1995. These statements involveassumptions, uncertainties, and risks, and Dana's actual futureresults, performance, or achievements may differ materially fromthose expressed or implied in these statements. Among the factorsthat could affect Dana's actual results are the ability of itscustomers to achieve projected vehicle sales levels, the cyclicalnature of the automotive industry, and economic conditions.Additional factors are detailed in Dana's public filings with theSecurities and Exchange Commission. Dana does not undertake toupdate any forward-looking statements contained herein.

Dana Corporation

Statement of Income (Unaudited)

September 30, 1999

(in millions, except

per share amounts)

Three Months Ended September 30

1998

1999 Sales

$2,962.4 $3,126.9 Net Income

98.3

161.5 Net Income Per Common Share -

Basic

$0.59

$0.98

Diluted

0.59

0.97 Average Shares Outstanding -

For Basic EPS

164.9

165.8

For Diluted EPS

166.9

167.2

Nine Months Ended September 30

1998

1999 Sales

$9,431.8 9,915.1 Net Income

399.1

513.2 Net Income Per Common Share

Basic

$2.42

$3.10

Diluted

2.39

3.07 Average Shares Outstanding

For Basic EPS

164.9

165.8

For Diluted EPS

166.9

167.2 ots OriginalText Service: Dana Corporation Internet:http://www.newsaktuell.de Contact: Gary Corrigan of Dana, (USA)419-535-4813 Company News On-Call:http://www.prnewswire.com/comp/226839.html or fax, (USA) 800-758-5804, ext. 226839 Photo: http://www.newscom.com/cgi-bin/prnh/19990903/DANA or PR Newswire Photo Desk, (USA) 888-776-6555 or 201-369-3467 Web site: http://www.dana.com

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