Dana Corp. announced that it will restate net income downward by between $25 million and $45 million after tax.
The embattled auto-parts maker disclosed earlier this month that it had not properly accounted for certain items during 2004 and the first and second quarters of 2005. The restatements are intended to correct issues involving customer pricing and transactions with suppliers in Dana’s commercial-vehicle business, according to a statement.
Dana warned, however, that its internal investigation is not yet complete and that it may be required to restate results for prior periods as well.
It also announced it would slash its dividend to a penny per share from the 12 cents for share it had paid in recent quarters due to “the challenging circumstances facing both the company and the automotive industry.”
The struggling company added that it has received additional waivers through November 30, under its principal bank facility and accounts-receivable securitization agreement. Dana and its lenders are also considering changes to its existing facilities as well as alternative financing arrangements.
Dana stated that it is addressing possible non-compliance with covenants in two of its indentures and four leases with respect to furnishing financial statements in accordance with generally accepted accounting principles. It is continuing to assess the impact of these developments on its obligations under other leases and agreements, the company added.