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31st January 2005 - ArvinMeritor Reports Fiscal Year 2005 First-Quarter Results ArvinMeritor, Inc. today reported financial results for its first fiscal quarter, ended Dec. 31, 2004.
“While many aspects of our business are performing well, our financial results continue to be affected by a number of challenging industry-wide issues – led by the escalating cost of steel and other raw materials,” said Chairman, Chief Executive and President Charles G. “Chip” McClure. “Although these issues are challenging, we are actively seeking ways to address them and mitigate their impact on our business.” For the first quarter of fiscal year 2005, the company posted sales of $2.1 billion, a nine-percent increase when compared to the same period last year. Factors increasing sales during the first three months of fiscal year 2005 included currency translation, which increased sales by approximately $115 million, primarily due to the stronger euro in relation to the U.S. dollar – and higher CVS market volumes, which added approximately $105 million in sales. In addition, the formation of two joint ventures with the Volvo Group added approximately $55 million to CVS sales, but this increase was offset by the divestitures of certain previously announced LVS businesses. Operating income from continuing operations in the first quarter of fiscal year 2005 was $36 million, down $6 million from the prior year’s first quarter. The benefits from the higher CVS volumes were offset by higher steel costs and lower Light Vehicle Systems (LVS) volumes. During the first fiscal quarter, ended Dec. 31, 2004, steel costs, net of recoveries, increased approximately $30 million, when compared to the same period last year. Income from continuing operations was $12 million, or $0.17 per diluted share, compared to $15 million, or $0.22 per diluted share, a year ago. These results are at the mid-point of our guidance provided in November 2004. Income from discontinued operations was $6 million, or $0.09 per diluted share, compared to $4 million, or $0.06 per diluted share, last year. Net income, including discontinued operations, was $18 million, or $0.26 per diluted share, compared to $19 million, or $0.28 per diluted share last year. “We are committed to rationalizing our businesses and refocusing on our core automotive operations,” said McClure. “During the first quarter of fiscal year 2005, we continued to make significant progress to rationalize our businesses. As part of our efforts, we completed the sale of our Roll Coater and automotive stampings and components manufacturing businesses. These divestitures generated $195 million in cash proceeds, which we used to strengthen our balance sheet. We are also making progress with the previously announced sale of our Light Vehicle Aftermarket business, which we expect to complete during the 2005 fiscal year.” Specific business segment financial results include:
“As part of our ongoing strategy to rationalize and refocus the company, we are implementing a plan to consolidate and combine certain global facilities as well as close or sell under performing plants,” said McClure. “In addition to these actions, the company will eliminate approximately 400 to 500 salaried positions around the world and delay the merit increase for its salaried employees. We are also significantly reducing the number of contractors, consultants and other discretionary spending, and we will continue to be aggressive in finding opportunities to eliminate waste and reduce costs through our continuous improvement processes and White Shirt program.” The company expects to announce further details and the cost of its restructuring actions in the current fiscal quarter. “These actions, while they are difficult ones to take, will support ArvinMeritor’s efforts to be a leaner and more flexible, productive and efficient company,” said McClure. “While we are seeking prudent ways to reduce costs, we are also committed to investing in our future to ensure that we continue to provide our customers with superior engineering expertise, innovative technologies, and high-quality products and services.” Outlook The company’s fiscal year 2005 outlook for light vehicle production is 15.8 million vehicles in North America and 17.0 million vehicles in Western Europe. The forecast for North American Class 8 truck production is 302,000 units in fiscal year 2005, up from the 275,000 units cited in our previous outlook. McClure said, “Our sales outlook for continuing operations in fiscal year 2005 remains strong, and is expected to be approximately $8.9 billion, up about 11 percent from fiscal year 2004. The stronger euro and higher forecasted North American truck volumes are contributing to the increase in our sales outlook from November 2004. “Although we expect steel costs to be higher than our previous estimates, we are taking action to mitigate its impact on the company. While we are maintaining our full-year outlook of $1.60 to $1.80, there are a number of factors that make our ability to forecast the second half of the year challenging, including the volatility of light vehicle production volumes and the unpredictability of the price and recovery of steel costs. “For the second quarter of fiscal year 2005, our sales forecast is $2.3 billion, and our outlook for diluted earnings per share from continuing operations is $0.30 to $0.35,” McClure continued. The second-quarter and full-year earnings outlook does not include the additional restructuring actions that will be announced in the current fiscal quarter. ArvinMeritor, Inc. is a premier $8 billion 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 related aftermarkets. Headquartered in Troy, Mich., ArvinMeritor employs approximately 31,000 people at more than 120 manufacturing facilities 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: www.arvinmeritor.com Source: ArvinMeritor Press Release |