Toledo's Dana Corp. expects to restate profits by up to $45 million as part of an accounting overhaul that may wind up going back further than last year.
Also, in a move reminiscent to the largest restructuring in the Fortune 500 company's history, Dana board members yesterday decided to once again chop the company's quarterly dividend to a penny.
Finally, the auto parts firm said it plans to announce this week further restructuring measures to improve its financial condition.
The announcement, made after the stock market closed, follows the Dana's disclosure this month that it would restate earnings for 2004 and the first half of this year to correct issues with customer pricing and supplier transactions in its commercial vehicle business.
The company revealed yesterday that restatements may have to go back even further, with the overall reduction expected to total $25 million to $45 million. The firm had a profit last year of $82 million and for the first half of this year of $69 million. If restatements are contained to those six quarters, the possible profit cut would be 17 to 30 percent.
However, Dana made clear that its internal investigation of its accounting woes is not finished.
Still, to shore up its bottom line, the company board cut the quarterly dividend from 12 cents
a share to a penny, a move the firm called appropriate "given the challenging circumstances facing both the company and the automotive industry."
Four years ago, Dana cut its dividend for the first time in 65 years from 31 cents to a penny, one of several cost-cutting measures that followed previous attempts to rein in expenses when the auto industry began to sputter. It subsequently eliminated hundreds of jobs, closed factories, and sold operations.
The Toledo firm yesterday did not disclose what "operational and strategic measures" it would make this time, but said it expected to reveal them in the next three or four days.
Dana said it has received loan waivers through Nov. 30 and is in discussions with lenders to modify agreements and to arrange alternative financing, a problem apparently created by its accounting and financial problems.
The company, headquartered on Dorr Street, has about 46,000 employees worldwide and sales of $9.1 billion last year, a far cry from the 85,000 employees it had when sales peaked at $13.2 billion in 1999.