Dana Corporation Completes Restatements of Financial Statements
December 30 2005 - 10:40AM
PR Newswire (US)
TOLEDO, Ohio, Dec. 30 /PRNewswire-FirstCall/ -- Dana Corporation
(NYSE:DCN) announced today that it has completed the restatements
of its financial statements for the first two quarters of 2005, the
year 2004, and prior years, and has filed amended annual and
quarterly reports for the applicable periods with the U.S.
Securities and Exchange Commission. Specifically, the company has
filed a Form 10-K/A for the fiscal year ended Dec. 31, 2004, and
Forms 10-Q/A for the quarters ended March 31 and June 30, 2005.
(Logo: http://www.newscom.com/cgi-bin/prnh/19990903/DANA) As a
result of these restatements, the total reduction in net income
after tax for all periods restated was $44 million. The primary
items in the restatements impacting the reduction in aggregate net
income were inappropriate recognition of certain customer pricing
increases and supplier reimbursement costs in the company's
Commercial Vehicle business, which prompted internal
investigations. As announced on Dec. 23, the reduction was also
affected by a correction to the prior calculation of the company's
2004 LIFO inventory reserves with respect to steel surcharges.
Filings Mark Conclusion of Company's Investigations The
restatements were based upon the findings of internal
investigations conducted by management and the Audit Committee of
Dana's Board of Directors, in consultation with independent
investigators retained by the Audit Committee, and have been
reviewed by the company's independent registered public accounting
firm, PricewaterhouseCoopers LLP. "We are pleased to have completed
our review and the filing of our restated financials," said Dana
Chairman and CEO Michael J. Burns. "During our investigations, we
identified material weaknesses in our system of internal control
over financial reporting and we have taken - and will continue to
take - appropriate actions to remediate these weaknesses." The
filing of Dana's restated financial statements cures a default in a
covenant in certain of the company's indentures requiring it to
maintain its financial statements in accordance with generally
accepted accounting principles, and satisfies a delivery
requirement for these financial statements pursuant to existing
waivers under the company's bank and accounts receivable
agreements. As previously announced, Dana is in discussions with
its lenders regarding possible modifications to its existing
facilities, or alternative financing arrangements. Company Expects
to Report Third-Quarter Results in Early January 2006 Dana also
announced today that it expects to file its Form 10-Q for the
quarter ended Sept. 30, 2005, in early January 2006. In conjunction
with this filing and the issuance of its third-quarter 2005
earnings release, Dana Chairman and CEO Michael J. Burns and Chief
Financial Officer Bob Richter will discuss the company's
third-quarter 2005 and nine-month results in detail in a conference
call, the date of which will be announced separately. Improving
Dana's Position for the Future "This has been a difficult time for
Dana's investors, customers, suppliers, and employees," Mr. Burns
said. "Putting the restatements behind us allows Dana and our
people to focus on improving operating and financial performance to
benefit our stakeholders." Among the strategic and operational
initiatives the company is pursuing are: - Renewing its focus on
light- and heavy-vehicle drivetrain, structural, sealing, and
thermal products; - Divesting three non-core businesses - engine
hard parts, fluid products and pump products - with annual revenues
of $1.3 billion; - Restructuring within the Automotive Systems and
Heavy Vehicle Technologies and Systems groups; - Increasing
business efficiency and making workforce reductions; - Reducing
benefit costs; - Taking steps to dissolve its joint venture with
DESC S.A. de C.V. to enable Dana to acquire full ownership of core
operations based in Mexico that manufacture and assemble axles and
driveshafts; - Consolidating the North American operations of the
Thermal Products group to reduce operating and overhead costs and
strengthen competitiveness; and - Establishing an off-highway axle
and transmission assembly facility in Gyor, Hungary, that is
expected to begin production in the first quarter of 2006. "These
actions reflect our commitment to improved operating efficiency,
while continuing to profitably grow our business," Mr. Burns said.
"We intend to build upon these actions to provide world-class
products, service, and support to all of our customers in the
global market segments we know best." About Dana Corporation 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 Statements in this
release that are not entirely historical, including those regarding
Dana's future strategic and operational initiatives and the
expected timing of the company's filing of its third-quarter 2005
Form 10-Q, 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. Forward-looking statements are
inherently subject to risks and uncertainties and there can be no
assurances that the anticipated future initiatives will be
implemented as currently contemplated or that the timing of Dana's
third-quarter filing will not differ from what is currently
expected. 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.
http://www.newscom.com/cgi-bin/prnh/19990903/DANA
http://photoarchive.ap.org/ DATASOURCE: Dana Corporation CONTACT:
Investor Relations, Michelle L. Hards, +1-419-535-4636, or , or
Media Relations, Todd M. Romain, +1-419-535-4727, or , both of Dana
Corporation Web site: http://www.dana.com/ Company News On-Call:
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