Auto supplier Dana reports $38M loss

Alisa Priddle / The Detroit News

Dana Corp. reported a $38 million loss in the third quarter, a substantial improvement from the $256 million loss during the same period last year.

The Maumee, Ohio-based auto supplier said that while third-quarter sales of $1.33 billion were 31 percent lower from a year ago -- a $600 million drop -- the revenue was up $139 million from the second quarter. And earnings before interest, taxes, depreciation, amortization and restructuring (EBITDA) increased $7 million from the second quarter, to $101 million.

The auto supplier will continue to restructure and downsize, said Dana Chief Executive Jim Sweetnam in a conference call.

Dana has closed plants and shed jobs since it emerged from bankruptcy in February 2008 and was vulnerable when customers General Motors Co. and Chrysler Group LLC reduced production dramatically this year, but expects more business with increased production at Ford Motor Co., which is Dana's largest customer.

The ability to raise $250 million in new equity in the quarter contributed to strong liquidity, which the company will use to continue to restructure and to grow globally through acquisitions. About half the money was used to pay down debt, and Dana met covenant obligations during the period.

Dana ended the quarter with $814 million in cash compared with $553 million at the end of June. Total available liquidity rose by 39 percent to $920 million; net debt was reduced to $182 million, which represents a 67 percent decrease from the second quarter.

Sales increased in the quarter and are seen as a sign of an improving industry, Sweetnam said.

"We are pleased that our cost savings and operational improvements continued to take hold during the third quarter," Sweetnam said. "In combination with the successful equity offering, these improvements have provided us with strong liquidity and an improved balance sheet. While there is certainly more to do, we are well positioned for growth opportunities moving forward."

The global supplier of axles and driveshafts for light-duty and commercial vehicles, as well as off-highway markets, is working on its 2010 plan.

apriddle@detnews.com (313) 222 - 2504