Go Search
            Home   Contact Us
Our Company
Products and Services
Advanced Solutions
Work With Us
Investors
Suppliers
 
 
 
 
Investors
 
 
News Release
Printer Friendly Version View printer-friendly version
·Back
ArvinMeritor Reports Third-Quarter 2007 Results
TROY, Mich., July 30, 2007 /PRNewswire-FirstCall via COMTEX News Network/ -- ArvinMeritor, Inc. (NYSE: ARM) today reported financial results for its third quarter ended June 30, 2007.

Third-Quarter Fiscal Year 2007 Highlights
- Sales from continuing operations of $1.7 billion - 4 percent lower than the same period last year.
- Net loss from continuing operations on a GAAP basis was $4 million, or $0.06 per diluted share, reflecting the impact of ongoing restructuring programs.
- Diluted earnings per share of $0.25 from continuing operations, before special items.
- Continued year-over-year margin improvement in Light Vehicle Systems (LVS) business.
- Commercial Vehicle Systems (CVS) profitable in the trough of the North American Class 8 downturn.
- Performance Plus on track to achieve targets.
- Fiscal year 2007 diluted earnings per share guidance, before special items, revised to $0.75 to $0.80 from the previous range of $0.70 to $0.80.
- Free cash flow guidance reduced to a range of $50 million to $100 million outflow, compared to the previous guidance of $50 million to $100 million inflow.

"As we continue to work our way through a challenging operating environment, we are making solid progress in implementing our strategic initiatives," said Chairman, CEO and President Chip McClure. "As a result of the restructuring activities underway at ArvinMeritor and a focus on improving our operational performance, our CVS business maintained respectable margins despite the decline in the North American heavy truck market, and we saw continued margin improvement in our LVS business."

McClure continued, "Also during the quarter, we moved forward with plans to optimize our manufacturing footprint, announced new military contracts, and entered into a significant joint venture with Chery Motors in China. Although we continue to face the challenges we anticipated, we are taking the necessary actions to manage through the rough seas while competitively positioning ourselves for 2008 and 2009."

Fiscal Year 2007 Third-Quarter Results

For the third quarter of fiscal year 2007, ArvinMeritor posted sales of $1.7 billion, a 4-percent decrease from the same period last year. The primary factor that drove this decrease was the downturn in the North American Class 8 market, partially offset by strong Western Europe and Asia Pacific volumes.

Operating income in the third quarter of 2007, before special items, was $45 million, down 31 percent, compared to $65 million in the prior year's third quarter. EBITDA, before special items, was $85 million, down $16 million from the same period last year, reflecting lower commercial vehicle sales volume in North America.

Income from continuing operations, excluding special items, was $18 million, or $0.25 per diluted share, compared to $31 million, or $0.44 per diluted share, a year ago. Special items primarily included restructuring charges and totaled $22 million net of related tax benefits.

For the third quarter of fiscal year 2007, ArvinMeritor reported negative free cash flow of $156 million. Free cash flow was a positive $155 million in the third quarter of fiscal year 2006. The decline in free cash flow reflects increases in working capital of discontinued operations prior to the sale of the Emissions Technologies business group, a portion of which will be recovered in post-closing purchase price adjustments. Also contributing to the negative free cash flow was increases in working capital outside of North America, resulting from the strong commercial vehicle volumes in Western Europe and Asia Pacific.

Third-Quarter Performance Plus Accomplishments

As previously announced, ArvinMeritor expects restructuring and cost reductions resulting from its Performance Plus initiatives to generate $150 million in savings by 2009. The company remains on track to achieve that goal. Accomplishments this quarter include:

- Achieved growth in specialty business through contracts with International Military and Government, LLC, a wholly owned subsidiary of International Truck & Engine Corporation, and Armor Holdings, which represent 58 percent of the total Mine Resistant Ambush Protected Vehicles (MRAP) business awarded to date.
- Entered into significant joint venture with Chery Motors in China to produce light vehicle chassis products in Wuhu, China, which the company expects to represent $150 million of business by 2010 when related door and wheel businesses launch.
- Announced the closure of three plants in Brussels, Belgium; Frankfurt, Germany; and St. Thomas, Ontario, Canada.
- Implementing lean manufacturing across the company to build a stronger culture of operational excellence.

Fourth-Quarter and Full-Year 2007 Outlook

The company's fiscal year 2007 outlook for light vehicle production in North America is 15.1 million vehicles, down from 15.3 million vehicles in the previous forecast, and 16.5 million vehicles in Western Europe, up from the company's prior forecast of 16.1 million vehicles.

The outlook for North American Class 8 truck production is 238,000 units in fiscal year 2007, up from 224,000 units in the previous forecast. The company's fiscal year 2007 forecast for medium and heavy truck production in Western Europe is 510,000 units, up from 475,000 units in the previous forecast.

The company now expects sales from continuing operations in fiscal year 2007 to be in the range of $6.2 to $6.3 billion, up from $6.0 to $6.2 billion, and is narrowing its outlook for full-year earnings per share from continuing operations to be in the range of $0.75 to $0.80. This guidance excludes gains or losses on divestitures, restructuring costs, and other special items, including potential extended customer shutdowns or production interruptions.

In addition, free cash flow guidance is being lowered for fiscal year 2007 to a range of $50 million to $100 million outflow, due to working capital increases outside of North America driven by higher commercial vehicle volumes and the use of cash by the Emissions Technologies business prior to sale.

"Although we anticipated that the third fiscal quarter of 2007 would be a challenge, we were pleased to report positive results of $0.25 per share, before special items," said McClure. "Going forward, we will build on the strength of our global leadership team and the Performance Plus initiatives we are implementing to continually improve shareowner value."

About ArvinMeritor

ArvinMeritor, Inc. is a premier global supplier of a broad range of integrated systems, modules and components to the motor vehicle industry. The company serves light vehicle, commercial truck, trailer and specialty original equipment manufacturers and certain aftermarkets. Headquartered in Troy, Mich., ArvinMeritor employs approximately 19,000 people in 25 countries. ArvinMeritor common stock is traded on the New York Stock Exchange under the ticker symbol ARM. For more information, visit the company's Web site at: http://www.arvinmeritor.com/.

Forward-Looking Statements

All earnings per share amounts are on a diluted basis. The company's fiscal year ends on the Sunday nearest Sept. 30, and its fiscal quarters end on the Sundays nearest Dec. 31, March 31 and June 30. All year and quarter references relate to the company's fiscal year and fiscal quarters, unless otherwise stated.

This press release contains statements relating to future results of the company (including certain projections and business trends) that are "forward- looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are typically identified by words or phrases such as "believe," "expect," "anticipate," "estimate," "should," "are likely to be," "will" and similar expressions. Actual results may differ materially from those projected as a result of certain risks and uncertainties, including but not limited to global economic and market cycles and conditions; the demand for commercial, specialty and light vehicles for which the company supplies products; risks inherent in operating abroad (including foreign currency exchange rates and potential disruption of production and supply due to terrorist attacks or acts of aggression); availability and cost of raw materials, including steel; OEM program delays; demand for and market acceptance of new and existing products; successful development of new products; reliance on major OEM customers; labor relations of the company, its suppliers and customers, including potential disruptions in supply of parts to our facilities or demand for our products due to work stoppages; the financial condition of the company's suppliers and customers, including potential bankruptcies; possible adverse effects of any future suspension of normal trade credit terms by our suppliers; potential difficulties competing with companies that have avoided their existing contracts in bankruptcy and reorganization proceedings; successful integration of acquired or merged businesses; the ability to achieve the expected annual savings and synergies from past and future business combinations and the ability to achieve the expected benefits of restructuring actions; success and timing of potential divestitures; potential impairment of long-lived assets, including goodwill; competitive product and pricing pressures; the amount of the company's debt; the ability of the company to continue to comply with covenants in its financing agreements; the ability of the company to access capital markets; credit ratings of the company's debt; the outcome of existing and any future legal proceedings, including any litigation with respect to environmental or asbestos-related matters; rising costs of pension and other post-retirement benefits and possible changes in pension and other accounting rules; as well as other risks and uncertainties, including but not limited to those detailed from time to time in filings of the company with the SEC. These forward-looking statements are made only as of the date hereof, and the company undertakes no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise, except as otherwise required by law.

Non-GAAP Measures

In addition to the results reported in accordance with accounting principles generally accepted in the United States ("GAAP") included throughout this press release, the company has provided information regarding income from continuing operations, diluted earnings per share and operating income before special items, which are non-GAAP financial measures. These non- GAAP measures are defined as reported income or loss from continuing operations, reported diluted earnings or loss per share, and operating income or loss plus or minus special items. Other non-GAAP financial measures include "free cash flow." Free cash flow represents net cash provided by operating activities, less capital expenditures.

Management believes that the non-GAAP financial measures used in this press release are useful to both management and investors in their analysis of the company's financial position and results of operations. In particular, management believes that free cash flow is useful in analyzing the company's ability to service and repay its debt. Further, management uses these non-GAAP measures for planning and forecasting in future periods.

These non-GAAP measures should not be considered a substitute for the reported results prepared in accordance with GAAP. Free cash flow should not be considered a substitute for cash provided by operating activities, or other balance sheet or cash flow statement data prepared in accordance with GAAP, or as a measure of financial position or liquidity. In addition, the calculation of free cash flow does not reflect cash used to service debt or cash received from the divestitures of businesses or sales of other assets and thus does not reflect funds available for investment or other discretionary uses. These non- GAAP financial measures, as determined and presented by the company, may not be comparable to related or similarly titled measures reported by other companies.

Set forth on the following pages are reconciliations of these non-GAAP financial measures, if applicable, to the most directly comparable financial measures calculated and presented in accordance with GAAP.

Third-Quarter Results Conference Call

The company will host a telephone conference call and Web cast to discuss the company's third quarter 2007 financial results on Monday, July 30, 2007, at 9:00 a.m. (ET). To participate, call (866) 223-0615 ten minutes prior to the start of the call. Please reference participant Passcode 5629035 when dialing in. Investors can also listen to the conference call in real time - or for 90 days by recording - by visiting www.arvinmeritor.com.

A replay of the call will be available from 11 a.m. on July 30 to 11:59 p.m. on August 5 by calling (866) 247-4222. Please refer to Passcode 5629035#.

To access the Web cast, visit the ArvinMeritor Web site at http://www.arvinmeritor.com/ and click on the Web cast link on either the home page or investor page.



                               ARVINMERITOR, INC.
                      CONSOLIDATED STATEMENT OF OPERATIONS
                (Unaudited, in millions, except per share amounts)

                                           Quarter Ended   Nine Months Ended
                                              June 30,          June 30,
                                           2007     2006     2007     2006
                                            (Unaudited)       (Unaudited)

     Sales                                 $1,662   $1,735   $4,857   $4,828
     Cost of sales                         (1,526)  (1,618)  (4,474)  (4,442)
     GROSS MARGIN                             136      117      383      386
       Selling, general, and
        administrative                        (93)     (95)    (265)    (262)
       Restructuring costs                    (24)      (1)     (61)     (10)
       Other income                             -        3       12       23
     OPERATING INCOME                          19       24       69      137
       Equity in earnings of affiliates        10       10       24       23
       Interest expense, net                  (27)     (28)     (88)    (103)
     INCOME BEFORE INCOME TAXES                 2        6        5       57
       Income tax benefit (expense)            (1)       2       (2)      16
       Minority interests                      (5)      (4)     (10)     (11)
     Income (loss) from continuing
      operations                               (4)       4       (7)      62
     Income (loss) from discontinued
      operations                              (66)      16     (150)      37

     NET INCOME (LOSS)                       $(70)     $20    $(157)     $99

     DILUTED EARNINGS (LOSS) PER SHARE
       Continuing operations               $(0.06)   $0.06   $(0.10)   $0.89
       Discontinued operations              (0.93)    0.23    (2.14)    0.53
     Diluted earnings (loss) per share     $(0.99)   $0.29   $(2.24)   $1.42

     Diluted shares outstanding              70.8     70.1     70.1     69.9

Note: Amounts for the three and nine months ended June 30, 2006 have been restated for discontinued operations.



                              ARVINMERITOR, INC.
                  CONSOLIDATED BUSINESS SEGMENT INFORMATION
                                (In millions)

                                           Quarter Ended   Nine Months Ended
                                              June 30,          June 30,
                                           2007     2006     2007     2006
                                            (Unaudited)       (Unaudited)
    Sales:
      Light Vehicle Systems                  $613     $609   $1,687   $1,731
      Commercial Vehicle Systems            1,049    1,126    3,170    3,097
    Total Sales                            $1,662   $1,735   $4,857   $4,828


    Segment EBITDA:
      Light Vehicle Systems                   $12      $28      $34      $46
      Commercial Vehicle Systems               63       41      186      219
         Total Segment EBITDA                  75       69      220      265
     Unallocated Costs                         (7)      (2)      (8)      (4)
     ET Corporate Allocations                  (9)      (7)     (27)     (21)
         Total EBITDA                          59       60      185      240
     Loss on Sale of Receivables               (3)       -       (6)       -
     Depreciation and Amortization            (32)     (30)     (96)     (91)
     Interest Expense, Net and Other          (27)     (28)     (88)    (103)
     Benefit (Provision) for Income Taxes      (1)       2       (2)      16
     Income (Loss) From Continuing
      Operations                              $(4)      $4      $(7)     $62

Note: Amounts for the three and nine months ended June 30, 2006 have been restated for discontinued operations.



                              ARVINMERITOR, INC.
                      SUMMARY CONSOLIDATED BALANCE SHEET
                                (In millions)

                                                   June 30,      September 30,
                                                     2007              2006
     ASSETS                                       (Unaudited)
     Cash and cash equivalents                        $284              $350
     Receivables, net                                1,388             1,098
     Inventories                                       506               488
     Other current assets                              246               248
     Assets of discontinued operations                 130             1,206
     Net property                                      708               719
     Goodwill                                          514               503
     Other assets                                    1,006               896
     TOTAL ASSETS                                   $4,782            $5,508

     LIABILITIES AND SHAREOWNERS' EQUITY
     Short-term debt                                  $108               $56
     Accounts payable                                1,191             1,106
     Other current liabilities                         709               706
     Liabilities of discontinued operations             59               712
     Long-term debt                                  1,118             1,174
     Retirement benefits                               473               487
     Other liabilities                                 224               259
     Minority interests                                 77                64
     Shareowners' equity                               823               944
     TOTAL LIABILITIES AND SHAREOWNERS' EQUITY      $4,782            $5,508


    Note:  Amounts at September 30, 2006 have been restated for discontinued
operations.



                              ARVINMERITOR, INC.
                CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                                (In millions)

                                                        Nine Months Ended
                                                             June 30,
                                                      2007              2006
                                                           (Unaudited)
    OPERATING ACTIVITIES
    Income (loss) from continuing operations           $(7)              $62
      Adjustments to income (loss) from
       continuing operations
        Depreciation and amortization                   96                91
        Restructuring costs, net of payments            38               (17)
        Adjustment of impairment reserves              (10)                -
        Gain on divestitures                            (2)              (28)
        Loss on debt extinguishment                      6                 9
        Pension and retiree medical expense             99               102
        Other adjustments to income
         (loss) from continuing operations               6                 7
    Pension and retiree medical contributions         (182)              (79)
    Changes in receivable securitization
     and factoring                                     115               105
    Changes in assets and liabilities                 (231)              (48)
    Cash flows provided by (used for)
     continuing operations                             (72)              204
    Cash flows provided by (used for)
     discontinued operations                          (118)              108
    CASH PROVIDED BY (USED FOR) OPERATING
     ACTIVITIES                                       (190)              312

    INVESTING ACTIVITIES
      Capital expenditures                             (72)              (77)
      Proceeds from dispositions of
       property and businesses                          11                44
      Other investing activities                         3               (13)
      Net investing cash flows provided by
      (used for) discontinued operations               177               174
    CASH PROVIDED BY INVESTING ACTIVITIES              119               128

    FINANCING ACTIVITIES
        Change in U.S. accounts receivable
         securitization program                         49               (66)
        Debt issuance                                  200               470
        Debt buy back                                 (249)             (603)
        Payments on lines of credit and other,
         net                                             -               (14)
           Net change  in debt                           -              (213)
        Costs associated with debt
         extinguishment and issuance                   (10)              (28)
        Proceeds from exercise of stock options         21                 1
        Cash dividends                                 (21)              (21)
        Other financing activities                      (1)                -
        Net financing cash flows provided
         by discontinued operations                      -                (3)
    CASH USED FOR FINANCING ACTIVITIES                 (11)             (264)

    IMPACT OF CURRENCY ON CASH AND CASH
     EQUIVALENTS                                        16                 2

    CHANGE IN CASH AND CASH EQUIVALENTS                (66)              178
    CASH AND CASH EQUIVALENTS AT
     BEGINNING OF PERIOD                               350               187
    CASH AND CASH EQUIVALENTS AT END OF PERIOD        $284              $365

Note: Amounts for the nine months ended June 30, 2006 have been restated for discontinued operations.



                              ARVINMERITOR, INC.
               SELECTED FINANCIAL INFORMATION - RECONCILIATION
                                   Non-GAAP
            (Unaudited, in millions, except for per share amounts)

                                                                      Q3 FY 07
                                               Product                 Before
    (in millions, except per share    Q3 FY 07 Disrup- Restruc- Income Special
    amounts)                          Reported tions   turing   Taxes  Items
    Sales                               $1,662     $-     $-     $-   $1,662
    Gross Margin                           136      2      -      -      138
    Operating Income                        19      2     24      -       45
    Income from Continuing Operations       (4)     1     15      6       18
    Diluted Earnings Per Share -
     Continuing Operations              $(0.06) $0.02  $0.21  $0.08    $0.25

    Segment EBITDA
      Light Vehicle Systems                $12     $2    $17     $-      $31
      Commercial Vehicle Systems            63      -      2     $-       65
    Total Segment EBITDA                   $75     $2    $19     $-      $96

    Segment EBITDA Margins
      Light Vehicle Systems  (1)          2.0%                          4.9%
      Commercial Vehicle Systems          6.0%                          6.2%
    Total Segment EBITDA Margins          4.5%                          5.8%


(1) LVS margins before special items are adjusted to reflect the impact of reduced volumes in our Brussels operation.



                              ARVINMERITOR, INC.
               SELECTED FINANCIAL INFORMATION - RECONCILIATION
                                   Non-GAAP
            (Unaudited, in millions, except for per share amounts)

                                                         Tilbury

                                         Gain                    Q3 FY 06
                                          on              Work          Before
    (in millions, except per  Q3 FY 06  liquid- Restruct- Stopp- IncomeSpecial
    share amounts)            Reported   ation   uring     age    Taxes  Items
    Sales                       $1,735     $-     $-      $-      $-   $1,735
    Gross Margin                   117      -      -      45       -      162
    Operating Income                24     (5)     1      45       -       65
    Income from Continuing
     Operations                      4     (3)     1      28       1       31
    Diluted Earnings Per Share -
     Continuing Operations       $0.06 $(0.04) $0.01   $0.40   $0.01    $0.44

    Segment EBITDA
      Light Vehicle Systems        $28    $(5)    $-      $-      $-      $23
      Commercial Vehicle Systems    41      -      1      45      $-       87
    Total Segment EBITDA           $69    $(5)    $1     $45      $-     $110

    Segment EBITDA Margins
      Light Vehicle Systems       4.6%                                   3.8%
      Commercial Vehicle Systems  3.6%                                   7.7%
    Total Segment EBITDA Margins  4.0%                                   6.3%



                              ARVINMERITOR, INC.
                  EBITDA BEFORE SPECIAL ITEMS RECONCILIATION
                                   Non-GAAP
            (Unaudited, in millions, except for per share amounts)


                                                          Quarter Ended
                                                             June 30,
                                                      2007              2006
     Total EBITDA - Before Special Items               $85              $101
       Restructuring Costs                             (24)               (1)
       Product Disruptions                              (2)              (45)
       Gain on Divestitures                              -                 5
       Loss on Sale of Receivables                      (3)                -
       Depreciation and Amortization                   (32)              (30)
       Interest Expense, Net                           (27)              (28)
       Benefit (Provision) for Income Taxes             (1)                2
     Income (Loss) From Continuing Operations          $(4)               $4



                              ARVINMERITOR, INC.
                       FREE CASH FLOW - RECONCILIATION
                                   Non-GAAP
                           (Unaudited, in millions)

                                                        Three Months Ended
                                                              June 30,
                                                       2007              2006
     Cash provided by (used for) operating activities $(127)             $186

     Less: Capital expenditures (1)                     (29)              (31)

     Free cash flow                                   $(156)             $155

     (1) Includes capital expenditures of discontinued operations.


    (Logo:  http://www.newscom.com/cgi-bin/prnh/20010524/ARVINLOGO )

SOURCE ArvinMeritor, Inc.

Media Inquiries:
Lin Cummins
+1-248-435-7112
linda.cummins@arvinmeritor.com
Investor Inquiries:
Terry Huch
+1-248-435- 9426
terry.huch@arvinmeritor.com

 
 
 
 
2014 Meritor, Inc. All Rights Reserved.

Minimize Restore Close Delete Modify Shared Web Part Connections Export...