TROY, Mich., Oct. 3 /PRNewswire-FirstCall/ -- Today at the Deutsche Bank
Leveraged Finance Conference in Scottsdale, Ariz., ArvinMeritor's (NYSE: ARM)
Senior Vice President, Strategic Initiatives, and Treasurer, Mary Lehmann,
told investors that ArvinMeritor is revising its forecast for diluted earnings
per share from continuing operations.
Jim Donlon, executive vice president and chief financial officer, who also
attended the conference, said, "In North America, we are encountering a weaker
than anticipated economic environment in our Commercial Vehicle Systems
business group resulting from decreased freight volumes largely due to the
decline in housing construction. Our customers expect the housing recession to
delay the recovery cycle for North America commercial vehicle production into
the 2008 calendar year. In addition, we are incurring premium freight and
labor inefficiencies mainly in Europe, associated with unanticipated demand
for higher production of truck parts, which is creating capacity issues for
the entire supply chain.
"We anticipate that the company's earnings for the fourth quarter of
fiscal year 2007 will be negatively impacted by approximately $0.20 per
diluted share due to the combination of these market conditions," he
continued. "In addition, we will also report non-recurring items in the fourth
quarter related to suppliers in financial distress, and tax law changes in
Germany, which will require a write-down of the value of certain deferred tax
assets. We expect these items to reduce our earnings per share for the fourth
fiscal quarter of 2007 by approximately an additional $0.20 per share."
Fiscal Year 2008 Outlook
"In fiscal year 2008, we anticipate the current soft market conditions
will continue in the short term with recovery later in the year resulting in a
range of $1.40 to $1.60 earnings per share from continuing operations before
special items for fiscal year 2008," Donlon said.
"While we continue to be challenged by market conditions, we are
encouraged by the results we are seeing from our Performance Plus profit
improvement program. As previously reported, we expect to deliver cost
improvements of $75 million in 2008.
"We also are pleased by our Performance Plus growth initiatives, including
ArvinMeritor being sourced as the supplier on 55 percent of the MRAP vehicles
awarded thus far, with additional potential upside as new awards are
announced, and our arrangement with Chery Motors in China that will ramp up to
anticipated sales of $150 million annually by 2010. In addition, our pension
and retiree medical costs will decrease, largely because of improved funding
and modifications to plan benefits. We anticipate that these savings, combined
with our aggressive internal programs to reduce SG&A costs, will help to
mitigate the soft market conditions in fiscal year 2008."
To continue to maintain financial flexibility, the company has amended its
revolving credit facility to modify certain covenants through the third
quarter of fiscal year 2008.
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.
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:
SOURCE ArvinMeritor, Inc.
CONTACT: Media, Krista McClure, +1-248-435-7115,
email@example.com; or Investors, Terry Huch, +1-248-435-9426,
firstname.lastname@example.org, both of ArvinMeritor, Inc.
Web site: http://www.arvinmeritor.com