TROY, Mich., Feb. 4 /PRNewswire-FirstCall/ -- ArvinMeritor, Inc.
(NYSE: ARM) today reported financial results for its first fiscal
quarter ended Dec. 28, 2008. First-Quarter Highlights -- Sales from
continuing operations of $1.4 billion, down $293 million, or 18
percent, from the same period last year (down 11 percent on a
constant currency basis). -- On a GAAP basis, net loss from
continuing operations was $991 million or $13.71 per diluted share,
compared to a net loss from continuing operations of $1 million or
$0.01 per diluted share in the same period last year. -- GAAP
results reflect non-cash charges of $944 million, including
valuation reserves for certain deferred tax assets, and other asset
impairments primarily for Light Vehicle Systems (LVS) goodwill and
fixed assets. -- Loss from continuing operations, before special
items, of $56 million, or $0.77 per diluted share, compared to
income from continuing operations, before special items, of $6
million, or $0.08 per diluted share in the same period last year.
-- Free cash outflow (cash outflow from operations, net of capital
expenditures) of $386 million compared to an outflow of $305
million in the first quarter of fiscal year 2008. "Although
significant volume declines and charges associated with the LVS
business negatively affected our results this quarter, we are
aggressively executing a series of actions to help mitigate the
effects of the ongoing economic crisis," said Chip McClure,
chairman, CEO and president. "Through continued focus on reducing
costs, strengthening the aftermarket business and gaining new
military contracts, the Commercial Vehicle Systems (CVS) business
performed well. Despite the severe downturn in heavy truck markets
in most regions of the world, the CVS team was able to offset the
negative volumes with minimal impact on performance. These results
clearly underscore the validity of our aggressive Performance Plus
cost savings and growth initiatives." First-Quarter Fiscal Year
2009 Results For the first quarter of fiscal year 2009,
ArvinMeritor posted sales from continuing operations of $1.4
billion, a decrease of approximately 18 percent from the same
period last year. EBITDA, before special items, was $10 million,
down $72 million from the same period last year. This decrease is
primarily due to lower production volumes in most original
equipment manufacturer market segments globally. Loss from
continuing operations, before special items, was $56 million, or
$0.77 per diluted share, compared to income of $6 million, or $0.08
per diluted share, a year ago. Special items for the quarter
reflect non-cash charges including valuation reserves for certain
deferred tax assets, other asset impairments primarily related to
LVS, restructuring charges and certain costs incurred in
anticipation of the previously planned spin-off or sale of the LVS
business. Free cash outflow was $386 million in the first quarter
of fiscal year 2009 compared with free cash outflow of $305 million
in the same period last year. The decrease in free cash flow
reflects lower cash earnings, higher inventories due to the
dramatic rate of unplanned production declines, and previously
announced settlement payments to resolve claims with certain unions
and customers. Cost-Reduction Actions ArvinMeritor has implemented
a number of initiatives to help manage cash, and is prepared to
take additional actions if needed. Initiatives in process include:
-- Implemented workforce reductions of more than 1,500 employees.
-- Extended shutdowns and reduced work weeks at all plants. --
Reduced and rebalanced capital spending. -- Initiated a 10-percent
salary reduction for all U.S. executive-level employees; and a
5-percent reduction in salary for all other U.S. salaried
employees, in addition to similar actions in other parts of the
world. -- Eliminated matching contribution to the U.S. 401-K. --
Suspended merit increases for fiscal year 2009. -- Reduced
discretionary spending by approximately 30 percent year-over- year.
-- Reduced Board of Directors annual compensation by 10 percent. --
Suspended quarterly dividend. LVS Transaction As previously
announced, economic conditions do not support the company's
strategy to divest the entire LVS business at this time. "Due to
continued deterioration in the global markets, it is now our
priority to complete the divestiture of these businesses separately
at acceptable returns to shareowners," said McClure. In January,
the company executed multiple actions to reduce fixed costs within
the LVS business, which are expected to result in $57 million in
annual savings. These actions included the elimination of the LVS
divisional organization, resulting in a headcount reduction of more
than 100 positions. The Body and Chassis businesses are now being
managed to realize maximum cost efficiencies, with additional
actions currently under consideration. The Wheels business, located
in Brazil and Mexico, will be retained by ArvinMeritor. Business
Highlights ArvinMeritor's strong product position on a variety of
military platforms continues to be a significant contributor to the
company's results. These products clearly demonstrate the company's
unique technology and advanced engineering competencies.
ArvinMeritor anticipates additional business as its customers are
awarded new contracts: -- BAE awarded 8,400 additional Family of
Medium Tactical Vehicles (FMTVs). -- Navistar Defense awarded 400
more MaxxPro Dash vehicles, in addition to more than 800 previously
awarded and delivered in January. -- Navistar Defense awarded up to
1,300 medium support vehicles for the Canadian Department of
National Defense. -- Navistar Defense awarded 600 WorkStar variants
for U.S. forces in Iraq. Cash and Liquidity At the end of the first
quarter, the company had $158 million in cash and cash equivalents.
The company is in compliance with the financial covenants in its
material borrowing arrangements, including its $664 million
revolving credit facility, of which $141 million (including $38
million in letters of credit) was utilized at the end of the
quarter. ArvinMeritor maintains full access to committed
securitization lines. Outlook "ArvinMeritor is operating with the
expectation that global markets will remain weak for an extended
period of time," said McClure. "Given the deterioration of the
market environment and the current global constraints on credit,
the management team remains intensely focused on maintaining the
liquidity necessary to operate our business. We expect to be in
compliance with the financial covenants in our material borrowing
arrangements for the remainder of the year and believe that the
actions we are taking today will help position the company well
when economics and volumes improve." 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 marks its centennial anniversary in 2009,
celebrating a long history of 'forward thinking.' ArvinMeritor
serves commercial truck, trailer and specialty original equipment
manufacturers and certain aftermarkets, and light vehicle
manufacturers. 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 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. There are risks and uncertainties relating to the
planned disposition of the Body Systems and Chassis businesses of
ArvinMeritor's LVS business, including the timing and certainty of
completion and the terms of any transaction or transactions. In
addition, 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,
including the recent global economic crisis; whether our liquidity
will continue to be affected by declining vehicle production
volumes in the future; 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; 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 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 sharply rising
cost of raw materials, including steel and oil; 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;
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; potential adjustment of
the value of deferred tax assets; competitive product and pricing
pressures; the amount of the company's debt; 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; the outcome of actual and potential
product liability and warranty and recall claims; 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.
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. 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 or loss 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 EBITDA plus or minus special items. Other non-GAAP financial
measures include "free cash flow." EBITDA is defined as income or
loss from continuing operations before interest, income taxes,
depreciation and amortization and loss on sale of receivables. We
use EBITDA as the primary basis to evaluate the performance of each
of our reportable segments. 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 EBITDA is a
meaningful measure of performance as it is commonly utilized by
management and the investment community to analyze operating
performance and entity valuation; and 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. EBITDA should not be considered as an
alternative to net income as an indicator of our operating
performance or to cash flows as a measure of liquidity. Free cash
flow should not be considered a substitute for cash provided by
operating activities, or other 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.
First-Quarter 2009 Conference Call The company will host a
conference call and Web cast to present the company's fiscal year
2009 first-quarter financial results on Wednesday, Feb. 4, 2009, at
9 a.m. (ET). To participate, call (617) 213-4864, ten minutes prior
to the start of the call. Please reference Passcode 71784700 when
dialing in. Investors can also listen to the conference call in
real time - or for seven days by recording - by visiting
http://www.arvinmeritor.com/. To access the listen-only audio Web
cast, visit the ArvinMeritor Web site at
http://www.arvinmeritor.com/ and select the Web cast link from the
home page or the investor page. A replay of the call will be
available from 12 p.m. Feb. 4, 2009 to 11:59 p.m. Feb. 11, 2009, by
calling (888) 286-8010 (within the United States) or (617) 801-6888
for international calls. Please refer to replay Passcode number
95181012. ARVINMERITOR, INC. CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited) (In millions, except per share amounts) Quarter Ended
December 31, 2008 2007 Sales $1,370 $1,663 Cost of sales (1,297)
(1,533) GROSS MARGIN 73 130 Selling, general and administrative
(106) (92) Restructuring costs (26) (10) Asset impairment charges
(279) - OPERATING INCOME (LOSS) (338) 28 Equity in earnings of
affiliates 4 11 Interest expense, net (22) (27) INCOME (LOSS)
BEFORE INCOME TAXES (356) 12 Provision for income taxes (645) (10)
Minority interests 10 (3) LOSS FROM CONTINUING OPERATIONS (991) (1)
LOSS FROM DISCONTINUED OPERATIONS - (11) NET LOSS $(991) $(12)
DILUTED LOSS PER SHARE Continuing operations $(13.71) $(0.01)
Discontinued operations - (0.16) Diluted loss per share $(13.71)
$(0.17) Basic and diluted average common shares outstanding 72.3
71.9 ARVINMERITOR, INC. CONSOLIDATED BALANCE SHEET (Unaudited, In
millions) December 31, September 30, 2008 2008 ASSETS: Cash and
cash equivalents $158 $497 Receivables, trade and other, net 934
1,114 Inventories 610 623 Other current assets 122 218 Net property
529 775 Goodwill 427 522 Other assets 406 925 TOTAL ASSETS $3,186
$4,674 LIABILITIES AND SHAREOWNERS' EQUITY (DEFICIT) Short-term
debt $207 $240 Accounts payable 933 1,287 Other current liabilities
582 610 Long-term debt 1,172 1,063 Retirement benefits 656 690
Other liabilities 307 247 Minority interests 56 75 Shareowners'
equity (deficit) (727) 462 TOTAL LIABILITIES AND SHAREOWNERS'
EQUITY (DEFICIT) $3,186 $4,674 ARVINMERITOR, INC. CONSOLIDATED
BUSINESS SEGMENT INFORMATION (Unaudited, In millions) Quarter Ended
December 31, 2008 2007 Sales: Commercial Vehicle Systems $956
$1,080 Light Vehicle Systems 414 583 Total sales $1,370 $1,663
EBITDA: Commercial Vehicle Systems $36 $71 Light Vehicle Systems
(308) 2 Total Segment EBITDA (272) 73 Unallocated Corporate Costs
(16) (1) Total EBITDA (288) 72 Loss on Sale of Receivables (4) (4)
Depreciation and Amortization (32) (32) Interest Expense, Net (22)
(27) Provision for Income Taxes (645) (10) Loss from Continuing
Operations $(991) $(1) ARVINMERITOR, INC. CONDENSED CONSOLIDATED
STATEMENT OF CASH FLOWS (Unaudited, In millions) Three Months Ended
December 31, 2008 2007 OPERATING ACTIVITIES Loss from continuing
operations $(991) $(1) Adjustments to loss from continuing
operations: Depreciation and amortization 32 32 Asset impairment
charges 279 - Deferred income tax expense (benefit) 638 36
Restructuring costs, net of payments 14 - Pension and retiree
medical expense 21 26 Other adjustments to loss from continuing
operations, net (1) (4) Pension and retiree medical contributions
(48) (22) Changes in off-balance sheet receivable securitization
and factoring (4) 115 Changes in assets and liabilities (277) (449)
Cash flows used for continuing operations (337) (267) Cash flows
used for discontinued operations, net (1) (4) CASH USED FOR
OPERATING ACTIVITIES (338) (271) INVESTING ACTIVITIES Capital
expenditures (48) (34) Acquisitions of businesses and investments,
net of cash acquired - (43) Proceeds from disposition of property
and businesses 2 8 Net investing cash flows provided by
discontinued operations - 23 CASH USED FOR INVESTING ACTIVITIES
(46) (46) FINANCING ACTIVITIES Borrowings (payments) on accounts
receivable securitization program (18) 70 Borrowings on revolving
credit facility 103 4 Borrowings (payments) on lines of credit and
other, net (6) 7 Net change in debt 79 81 Debt issuance and
extinguishment costs - (6) Cash dividends (8) (7) CASH PROVIDED BY
FINANCING ACTIVITIES 71 68 EFFECT OF CHANGES IN FOREIGN CURRENCY
EXCHANGE RATES ON CASH AND CASH EQUIVALENTS (26) 4 CHANGE IN CASH
AND CASH EQUIVALENTS (339) (245) CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 497 409 CASH AND CASH EQUIVALENTS AT END OF
PERIOD $158 $164 ARVINMERITOR, INC. SELECTED FINANCIAL INFORMATION
- RECONCILIATION Non-GAAP (Unaudited) (In millions, except per
share amounts) LVS Impair- Separ- Income Q1 FY 09 Q1 FY 09
Restruct- ment ation Tax Before Reported uring Charges Costs
Charges Special Items Sales $1,370 $- $- $- $- $1,370 Gross Margin
73 - - - - 73 Operating Loss (338) 26 279 6 - (27) Loss from
Continuing Operations (991) 26 238 6 665 (56) Diluted Loss Per
Share - Continuing Operations $(13.71) $0.36 $3.29 $0.08 9.21
$(0.77) Segment EBITDA: Commercial Vehicle Systems $36 $8 $8 $- $-
$52 Light Vehicle Systems (308) 15 252 - - (41) Total Segment
EBITDA $(272) $23 $260 $- $- $11 Segment EBITDA Margins Commercial
Vehicle Systems 3.8% 5.4% Light Vehicle Systems -74.4% -9.9% Total
Segment EBITDA Margins -19.9% 0.8% ARVINMERITOR, INC. SELECTED
FINANCIAL INFORMATION - RECONCILIATION Non-GAAP (Unaudited) (In
millions, except per share amounts) Q1 FY 08 Before Q1 FY 08
Restruct- Income Special Reported uring Taxes Items Sales $1,663 $-
$- $1,663 Gross Margin 130 - - 130 Operating Income 28 10 - 38
Income (Loss) from Continuing Operations (1) 6 1 6 Diluted Earnings
(Loss) Per Share - Continuing Operations $(0.01) $0.08 $0.01 $0.08
Segment EBITDA: Commercial Vehicle Systems $71 $- $- $71 Light
Vehicle Systems 2 10 - 12 Total Segment EBITDA $73 $10 $- $83
Segment EBITDA Margins Commercial Vehicle Systems 6.6% 6.6% Light
Vehicle Systems 0.3% 2.1% Total Segment EBITDA Margins 4.4% 5.0%
ARVINMERITOR, INC. EBITDA BEFORE SPECIAL ITEMS RECONCILIATION
Non-GAAP (Unaudited, in millions) Three Months Ended December 31,
2008 2007 Total EBITDA - Before Special Items $10 $82 Asset
Impairment Charges, (1) (266) - Restructuring Costs (26) (10) LVS
Separation Costs (6) - Loss on Sale of Receivables (4) (4)
Depreciation and Amortization (32) (32) Interest Expense, Net (22)
(27) Provision for Income Taxes (645) (10) Loss From Continuing
Operations $(991) $(1) (1) Net of minority interests. ARVINMERITOR,
INC. FREE CASH FLOW - RECONCILIATION Non-GAAP (Unaudited, in
millions) Quarter Ended December 31, 2008 2007 Cash flows used for
continuing operations $(337) $(267) Cash flows used for
discontinued operations (1) (4) Cash expenditures (48) (34) Free
cash flow - full company $(386) $(305) (Logo:
http://www.newscom.com/cgi-bin/prnh/20010524/ARVINLOGO )
http://www.newscom.com/cgi-bin/prnh/20010524/ARVINLOGO
http://photoarchive.ap.org/ DATASOURCE: ArvinMeritor, Inc. CONTACT:
Media Inquiries: Lin Cummins, +1-248-435-7112, ; Investor
Inquiries: Terry Huch, +1-248-435- 9426, Web site:
http://www.arvinmeritor.com/ Company News On-Call:
http://www.prnewswire.com/comp/762401.html
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