12th November 2009 - ArvinMeritor Reports Fourth-Quarter and Fiscal Year 2009 Results

Sees Improving Conditions in Global Markets

ArvinMeritor, Inc has reported financial results for its fourth quarter and full fiscal year ended Sept. 30, 2009.

Fourth-Quarter Highlights

Fourth-Quarter Results 2009

“We are proud of our performance in the fourth quarter and the 2009 fiscal year,” said Chairman, CEO and President Chip McClure. “Our team has not only generated positive free cash flow for two consecutive quarters, we’ve also reported cost savings in our commercial vehicle businesses of $195 million, complied with all debt covenants, and completed various other actions that we believe will strengthen the company as we benefit from improving conditions in global markets – particularly in China, India and Brazil,” said McClure.

For the fourth quarter of fiscal year 2009, ArvinMeritor posted sales of $984 million, down thirty-six percent from the same period last year. This decrease in sales was primarily due to continued weakness in the global markets. As compared to the third quarter of fiscal year 2009, sales in the fourth quarter increased four percent as markets began to show signs of a recovery.

EBITDA from continuing operations (which excludes the wheels business), before special items, was $40 million, compared to $87 million in the fourth quarter of fiscal year 2008. EBITDA from continuing operations, before special items, increased 43 percent in the fourth quarter of fiscal year 2009 from the third quarter of fiscal year 2009. EBITDA margin from continuing operations, before special items, was 4.1 percent in the fourth quarter, down from 5.7 percent in the same period last year.

Loss from continuing operations, on a GAAP basis, was $49 million or $0.68 per diluted share, compared to a loss from continuing operations of $160 million or $2.22 per diluted share in the prior year.

Loss from continuing operations during the fourth quarter of fiscal year 2009, before special items, was $20 million, or $0.28 per diluted share, compared to income from continuing operations, before special items, of $26 million, or $0.35 per diluted share, a year ago.  The loss from continuing operations, before special items, was driven by incremental tax expenses during the quarter due to the inability to recognize the tax benefit of losses in certain countries.

Free cash flow was $22 million in the fourth quarter compared to free cash flow of $103 million in the fourth quarter of fiscal year 2008. The company had $95 million in cash balances and an unutilized commitment of $611 million under its revolving credit facility as of Sept. 30, 2009.

Fiscal Year 2009 Results

“Our team remained focused and delivered on our 2009 priorities, while simultaneously managing the company through a global recession that affected all of our segments and customers worldwide,” said McClure. “As we transform into a commercial vehicle and industrial company, we believe the results we demonstrated in each of these areas will make ArvinMeritor a leaner, more efficient organization well-positioned for future growth.”

Achieved cost savings of $195 million in our core businesses for fiscal year 2009 due to swift and preemptive actions including workforce and temporary salary reductions; selective reductions in capital spending; extended manufacturing shutdowns; elimination of training programs; suspension of the quarterly dividend and elimination of all non-critical discretionary spending. The company also announced the closure of its Carrollton, Ky. assembly, machining and casting operation and the Tilbury, Ontario, Canada braking systems facility.

Further implemented production system methodology; optimized manufacturing footprint; lowered inventory; strategically focused capital spending on core processes to lessen dependency on layered capacity; and maintained focus on direct material optimization activities – with more than 900 of approximately 1,700 initiatives implemented.

Completed the sale of the company’s entire ownership interest in Gabriel de Venezuela and Meritor Suspension Systems Company (finalized in October 2009) joint ventures; and sold both the Wheels business and Gabriel Ride Control Products North America, thus reducing the company’s overall light vehicle business to 25 percent of total sales at the conclusion of fiscal year 2009.

Working with Lockheed Martin Systems Integration and BAE Systems U.S. Combat Systems on a technology demonstrator contract for the Joint Light Tactical Vehicle (JLTV) program; began production of Navistar MXT for British Ministry of Defense; added two key product families to expanding aftermarket portfolio for commercial vehicles including remanufactured Allison automatic transmissions and all-makes power steering gears and pumps.

Introduced MXL greaseable drivelines for linehaul customers; launched  PlatinumShield™ coating for both aftermarket and OE brake applications; completed internal integration of smart systems™ technology to further incorporate controls and electronics into the commercial vehicle advanced engineering group; opened technical center in Bangalore, India; preparing to launch MT-14X tandem axle in North America in 2010.

Business Segments
ArvinMeritor has revised its reporting segments following the recent divestitures of several light vehicle businesses. For continuing operations, the company will now report results as defined within Commercial Truck, Industrial, Aftermarket & Trailer and Light Vehicle Systems. Of these four segments, Commercial Truck, Industrial, and Aftermarket & Trailer are considered core to ArvinMeritor.

Supplies drivetrain systems and components, including axles, drivelines, braking and suspension systems, primarily for medium and heavy duty trucks in North America, South America and Europe.

Supplies drivetrain systems including axles, brakes, drivelines and suspensions for off-highway, military, construction, bus and coach, fire and emergency, and other industrial applications. This segment also includes the company’s business in Asia Pacific, including all on- and off-highway activities.

Supplies axles, brakes, suspension parts and other replacement and remanufactured parts, including transmissions, to commercial vehicle aftermarket customers. Also supplies a wide variety of undercarriage products and systems for trailer applications.

Supplies primarily roof and door systems for passenger cars to original equipment manufacturers; also includes company’s remaining Chassis operations.

2010 Priorities

ArvinMeritor has defined six key priorities for fiscal year 2010. The company believes it is imperative to execute well in each of these areas and has developed specific action plans to achieve strong results.

Outlook for 2010
The company’s financial guidance for the first quarter of fiscal year 2010 is for expected results from continuing operations, which includes all four of ArvinMeritor’s current segments. For the first quarter of fiscal year 2010 (compared to the fourth fiscal quarter of 2009), the company anticipates:

In addition, on an absolute basis, the company anticipates:

For fiscal year 2010, ArvinMeritor expects to report results in the following ranges for capital expenditures, interest expense, cash income taxes and income tax expense.

“With the steps we have taken to manage costs – in addition to our efforts to secure new multi-year contracts, develop advanced solutions for our customers, and focus talent and resources on strategic segments of our business – we believe we are on track to benefit from future recoveries in the global markets,” said McClure.

About ArvinMeritor

ArvinMeritor, Inc. is a premier global supplier of a broad range of integrated systems, modules and components to original equipment manufacturers and the aftermarket for the transportation and industrial sectors. The company marks its centennial anniversary in 2009, celebrating a long history of 'forward thinking.' The company 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

Source: ??? Press Release