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ArvinMeritor Reports Fourth-Quarter and Fiscal Year 2005 Results
Achieves Full-Year Income from Continuing
Operations, Before Special Items, at Upper
End of Guidance Range
TROY, Mich. (Nov. 15, 2005) —
ArvinMeritor, Inc. (NYSE: ARM) today reported financial results
for its full fiscal year and fourth quarter ended Sept. 30, 2005.
- In line with guidance previously provided,
full-year income from continuing operations, before special items, was $110
million, or $1.57 per diluted share.
- On a GAAP basis, income from continuing operations
was $33 million, or $0.47 per diluted share, which includes $72 million of
after-tax restructuring charges the company incurred to reshape the
business.
- Sales from continuing operations for fiscal year
2005 were $8.9 billion, up $870 million, or 11 percent, compared to the same
period last year.
- Fourth-quarter income from continuing operations
before special items was $29 million, or $0.41 per diluted share. On a GAAP
basis, income from continuing operations was $12 million, or $0.17 per diluted
share.
- Fourth-quarter sales were $2.1 billion, up 6
percent from the same period last year.
“ArvinMeritor delivered a
strong performance in the fourth quarter and throughout our 2005 fiscal year,
despite the tough challenges confronting the entire automotive industry,” said
Chairman, CEO and President Chip McClure. “Our experienced management team and
dedicated employees delivered excellent performance, enabling ArvinMeritor to
achieve full-year income from continuing operations, before special items, at
the high end of our guidance range.”
Fourth-Quarter Results
2005
For the fourth quarter of fiscal year 2005, ArvinMeritor
posted sales of $2.1 billion, a 6-percent increase over the same period last
year. The increase in sales was driven by continued strength in commercial
vehicle markets and an increase in sales from the company’s new Commercial
Vehicle Systems (CVS) axle joint ventures with the Volvo group in Europe.
Currency translation also increased sales by approximately $40
million.
Operating income, before special items, was $60 million in the
fourth quarter of fiscal 2005. Restructuring costs in the fourth quarter
of fiscal 2005 were $36 million, of which $33 million related to actions
announced in May. Steel costs, net of recovery, were approximately $15 million
higher in the fourth quarter than in the same period last year. Operating income
was $58 million in the fourth quarter of fiscal year 2004.
Income from
continuing operations, excluding special items, was $29 million, or $0.41 per
diluted share. Special items included $20 million of after-tax restructuring
costs associated with actions announced in May and $3 million of after-tax costs
associated with the debt exchange completed in September. In addition, income
from continuing operations excludes $6 million of one-time favorable tax
benefits.
Jim Donlon, ArvinMeritor’s CFO, said, “We are pleased with the
results of our CVS business, which saw sales of $997 million in the fourth
quarter of fiscal year 2005. Excluding $5 million of new restructuring costs and
higher net steel costs of $11 million, CVS operating margins would have been 6.3
percent, compared to the reported 5.3 percent in the fourth quarter of fiscal
year 2004.” Donlon added, “Light Vehicle Systems (LVS) is leading the way with
our restructuring efforts and have made excellent progress in reshaping the
business. Restructuring costs are on target and actions are proceeding as
planned.”
With regard to the Light Vehicle Aftermarket (LVA) business,
“Due to evolving industry dynamics, we now believe selling the businesses
individually, rather than as a whole, appears to be the right course of action
to maximize our shareowners’ value,” McClure said. “This change in strategy has
not materially impacted our view of the total expected proceeds. It does,
however, for accounting purposes, require us to evaluate fair value on an
individual business basis rather than LVA as a whole.” This resulted in an
after-tax non-cash impairment charge of $28 million, or $0.40 per diluted share
in certain LVA businesses. Loss from discontinued operations, including the
impairment charge, was $31 million, or $0.44 per diluted share, compared to a
loss of $183 million, or $2.67 per diluted share, last year.
Outlook for 2006
The
company’s fiscal year 2006 forecast for light vehicle production is 15.6 million
vehicles in North America and 16.4 million vehicles in Western
Europe.
ArvinMeritor’s forecast for North American Class 8 truck
production is 305,000 units in fiscal year 2006. The forecast for heavy and
medium truck volumes in Western Europe is 421,000 units.
For the first
quarter of fiscal year 2006, the sales forecast for continuing operations is
$2.1 billion. The company’s outlook for diluted earnings per share from
continuing operations is $0.13 to $0.17, before special
items.
ArvinMeritor’s sales outlook for continuing operations in 2006 is
expected to be approximately $8.6 billion, and the outlook for full-year diluted
earnings per share from continuing operations is in the range of $1.50 to $1.70.
This guidance excludes gains or losses on divestitures, restructuring costs, and
other special items, including extended customer shutdowns or production
interruptions.
“We are encouraged by the ongoing strong demand and volume
in our commercial vehicle business – and the growth opportunities we see for
both CVS and LVS in diesel emissions technology,” said McClure. “We are
actively pursuing these and many other growth opportunities both in U.S. and
international markets, while aggressively implementing actions to improve the
profitability of our business.”
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 29,000 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: 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 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 customers and suppliers; 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; successful integration of acquired
or merged businesses; the ability to achieve the expected annual savings and
synergies from past and future business combinations; 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 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; as well as other risks and uncertainties, including, but not limited
to, those detailed from time to time in the filings of the company with the
Securities and Exchange Commission.
Non-GAAP Measures
In addition to the results
reported in accordance with accounting principles generally accepted in the
United States of America (GAAP), the company has provided information regarding
income from continuing operations, diluted earnings per share, and segment
operating income and margins 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 segment
operating income plus or minus special items.
Management believes these
non-GAAP financial measures are useful to both management and investors in the
analysis of the company’s results of operations and financial position. These
non-GAAP measures should not be considered a substitute for the reported results
of operations prepared in accordance with GAAP. These non-GAAP financial
measures may not be comparable to related or other similarly titled measures
reported by other companies.
Included is a reconciliation of these
non-GAAP financial measures to the most directly comparable financial measures
calculated and presented in accordance with GAAP.
Fourth-Quarter and Fiscal Year 2005 Results Conference
Call
The company will host a telephone conference call and Web
cast to discuss the company’s fiscal year 2005 fourth-quarter and full year
financial results on Tuesday, Nov. 15, 2005, at 9 a.m. (ET). To
participate, call (706) 643-7449 approximately 10 minutes prior to the start of
the call. Please reference ArvinMeritor when dialing in to
participate. Investors can also listen to the conference call in real time
— or by recording for 90 days — by visiting www.arvinmeritor.com.
A replay
of the call will be available from 11 a.m. Nov. 15, until midnight, Nov. 17,
2005, by calling (800) 642-1687 (within the United States and Canada) or (706)
645-9291 (international calls). Please refer to conference ID number 1436150.
To access the listen-only audio 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
amount)
Quarter Ended Twelve Months
Ended
September 30, September
30,
2005 2004
2005
2004
(Unaudited)
Sales
$2,126 $2,014 $8,903
$8,033
Cost of
Sales
(1,974) (1,853) (8,267) (7,366)
GROSS
MARGIN
152 161
636 667
Selling, General, & Administrative
(88) (96) (376)
(385)
Restructuring
Costs
(36) (4)
(117) (15)
Gain
on Divestitures,
Net
-
-
4 20
Environmental Remediation Costs
(1) (3)
(7) (11)
Customer
Bankruptcies
- -
(10)
-
Costs for Withdrawn Tender
Offer
-
- -
(16)
OPERATING
INCOME
27 58
130 260
Equity in Earnings of Affiliates
8
7 28
19
Gain on Sale of Marketable
Securities -
-
-
7
Interest Expense, Net and
Other (38)
(30) (127) (107)
INCOME (LOSS) BEFORE
TAXES
(3) 35
31 179
Benefit (Provision) for Income Taxes
14 (5)
5 (44)
Minority
Interests
1
- (3)
(8)
Income From Continuing
Operations
12 30
33 127
Loss from
Discontinued Operations
(31) (183) (21)
(169)
NET INCOME
(LOSS)
$(19) $(153) $12
$(42)
DILUTED EARNINGS (LOSS) PER
SHARE
Continuing
Operations
$0.17 $0.44 $0.47
$1.85
Discontinued
Operations
(0.44) (2.67) (0.30)
(2.46)
Diluted Earnings (Loss) Per
Share $(0.27) $(2.23)
$0.17 $(0.61)
Diluted Shares
Outstanding
70.1 68.7
69.9
68.6
ARVINMERITOR,
INC.
CONSOLIDATED BUSINESS SEGMENT
INFORMATION
(In
millions)
Quarter Ended Twelve Months
Ended
September 30, September
30,
2005 2004
2005
2004
(Unaudited)
Sales:
Light
Vehicle
Systems
$1,129 $1,115 $4,849
$4,818
Commercial Vehicle
Systems
997 899 4,054
3,215
Total
Sales
$2,126 $2,014 $8,903
$8,033
Operating Income
(Loss):
Light Vehicle
Systems
$(18) $13
$(53) $123
Commercial
Vehicle
Systems
47 48
193 164
Segment Operating
Income
29 61
140 287
Unallocated Corporate
Costs
(2) (3)
(10) (27)
Total Operating
Income
$27 $58
$130
$260
ARVINMERITOR,
INC.
SUMMARY CONSOLIDATED BALANCE
SHEET
(In
millions)
September 30, September
30,
2005
2004
ASSETS
Cash and
Cash
Equivalents
$187
$132
Receivables,
Net
1,655
1,478
Inventories
541
523
Other Current
Assets
256
238
Assets of Discontinued
Operations
531
615
Net
Property
1,013
1,032
Goodwill
801
808
Other
Assets
886
813
TOTAL
ASSETS
$5,870
$5,639
LIABILITIES AND SHAREOWNERS'
EQUITY
Short-Term
Debt
$131
$3
Accounts
Payable
1,483
1,366
Other Current
Liabilities
667
622
Liabilities of Discontinued
Operations
242
282
Other
Liabilities
963
830
Long-Term
Debt
1,451
1,487
Minority
Interests
58
61
Shareowners'
Equity
875
988
TOTAL LIABILITIES AND SHAREOWNERS'
EQUITY
$5,870
$5,639
ARVINMERITOR,
INC.
SUMMARY CONDENSED CONSOLIDATED STATEMENT OF CASH
FLOWS
(In
millions)
Twelve Months
Ended
September
30,
2005
2004
OPERATING ACTIVITIES
Income
from Continuing
Operations
$33
$127
Adjustments to Income From Continuing
Operations
Depreciation and
Amortization
182
183
Gains on Divestitures
and
Marketable Securities,
Net
(4)
(27)
Restructuring Costs, Net of
Expenditures
75
(3)
Pension and Retiree Medical
Expense
110
130
Pension and Retiree Medical
Contributions
(164)
(212)
Proceeds from Termination of Interest Rate
Swaps
22
-
Changes in Receivable Securitization and Factoring
(19)
(187)
Changes in Assets and
Liabilities
(136)
164
Cash Flows Provided By Continuing
Operations
99
175
Cash Flows Provided By (Used
For)
Discontinued
Operations
(131)
44
CASH PROVIDED BY (USED FOR) OPERATING
ACTIVITIES
(32)
219
INVESTING
ACTIVITIES
Capital
Expenditures
(146)
(152)
Acquisitions of Businesses
and
Investments, Net of Cash
Acquired
(31)
(3)
Proceeds from Disposition
of
Property and
Businesses
49
85
Proceeds from Sale of Marketable
Securities
-
18
Net Cash Flows Provided By (Used
For)
Discontinued
Operations
153
(68)
CASH PROVIDED BY (USED FOR) INVESTING
ACTIVITIES
25
(120)
FINANCING
ACTIVITIES
Net Decrease in
Revolving Credit Facilities
-
(53)
Borrowings on Accounts
Receivable
Securitization
Program
112
-
Purchase of
Notes
(21)
-
Payments on Lines of Credit and
Other
(5)
(2)
Net Change in
Debt
86
(55)
Payment of Issuance Costs Associated
with
Debt
Exchange
(10)
-
Proceeds from Exercise of Stock
Options
6
6
Cash
Dividends
(28)
(28)
CASH PROVIDED BY (USED FOR) FINANCING
ACTIVITIES
54
(77)
EFFECT OF CHANGES IN FOREIGN CURRENCY
EXCHANGE
RATES ON
CASH
8
7
CHANGE IN CASH AND CASH
EQUIVALENTS
55
29
CASH AND CASH EQUIVALENTS AT BEGINNING OF
YEAR
132
103
CASH AND CASH EQUIVALENTS AT END OF
YEAR
$187
$132
ARVINMERITOR,
INC.
SELECTED FINANCIAL INFORMATION -
RECONCILIATION
Non-GAAP
(Unaudited, in millions)
(in millions, except per share
amounts)
Q4 FY 05 New Restructuring
Debt
Reported
Actions
Exchange
Sales
$2,126
$-
$-
Gross
Margin
152
-
-
Operating
Income
27
33
-
Income from Continuing Operations
12
20
3
Diluted Earnings (Loss)
Per
Share - Continuing
Operations
$0.17
$0.28
$0.04
Segment Operating
Income
LVS Operating Income
(Loss) $
(18)
$28 $
-
CVS Operating
Income
47
5
-
Segment Operating
Income
29
33
-
Unallocated corporate
costs
(2)
-
-
Total Operating
Income
$27
$33 $
-
Operating Margins
LVS
-1.6%
CVS
4.7%
Segment Operating
Margins
1.4%
Total Operating
Margins
1.3%
Income Taxes Q4 FY05
Adjusted
Sales
$-
$2,126
Gross
Margin
-
152
Operating
Income
-
60
Income from Continuing
Operations
(6)
29
Diluted Earnings (Loss)
Per
Share - Continuing
Operations
$(0.08)
$0.41
Segment Operating
Income
LVS Operating Income
(Loss)
$-
$10
CVS Operating
Income
-
52
Segment Operating
Income
-
62
Unallocated corporate
costs
-
(2)
Total Operating
Income
$-
$60
Operating
Margins
LVS
0.9%
CVS
5.2%
Segment Operating
Margins
2.9%
Total Operating
Margins
2.8%
ARVINMERITOR,
INC.
SELECTED FINANCIAL INFORMATION -
RECONCILIATION
Non-GAAP
(Unaudited, in millions)
(in
millions, except per share
amounts)
New
FY 05
Restructuring
Customer
Reported Actions
Environmental Bankruptcy
Sales
$8,903 $
- $
- $
-
Gross
Margin
636
-
-
4
Operating
Income
130
101
6
9
Income from Continuing
Operations
33
62
4
6
Diluted Earnings Per
Share -
Continuing
Operations
$ 0.47 $
0.89 $
0.06 $
0.09
Guidance
Segment
Operating Income
LVS Operating
Income
(Loss)
$(53) $
82 $
- $
9
CVS Operating Income
193
19
-
-
Segment Operating Income
140
101
-
9
Unallocated corporate
costs
(10)
-
6
-
Total Operating Income
$130 $
101 $
6 $
9
Operating Margins
LVS
-1.1%
CVS
4.8%
Segment Operating Margins 1.6%
Total Operating Margins
1.5%
ARVINMERITOR,
INC.
SELECTED FINANCIAL INFORMATION -
RECONCILIATION
NON-GAAP
(Unaudited, in
millions)
Income
Debt Exchange Taxes FY05
Adjusted
(in millions,
except
per share
amounts)
Sales
$ - $
- $
8,903
Gross
Margin
-
-
640
Operating
Income
-
-
246
Income from Continuing Operations
3
2
110
Diluted Earnings Per Share
-
Continuing
Operations
$0.04
$0.02 $
1.57
Guidance
$1.40 - $1.60
Segment Operating
Income $
-
-
$ 38
LVS Operating
Income (Loss)
-
-
212
CVS Operating
Income
-
-
250
Segment Operating
Income
Unallocated corporate
costs
-
-
(4)
Total Operating
Income $
- $
- $
246
Operating
Margins
LVS
0.8%
CVS
5.2%
Segment Operating
Margins
2.8%
Total Operating
Margins
2.8%
SOURCE ArvinMeritor, Inc.
-0- 11/15/2005
/CONTACT: Media: Lin Cummins, +1-248-435-7112,
linda.cummins@arvinmeritor.com, or Investors: Brian Casey, +1-248-435-0015,
brian.casey@arvinmeritor.com, both of ArvinMeritor, Inc. /
/Photo: http://www.newscom.com/cgi-bin/prnh/20010524/ARVINLOGO /
/Company News On-Call: http://www.prnewswire.com/comp/762401.html /
/Web site: http://www.arvinmeritor.com /
(ARM)
CO: ArvinMeritor, Inc.
ST: Michigan
IN: AUT MAC
SU: ERN CCA ERP
EM-MV
-- NYTU050 --
0930 11/15/2005 07:54 EST http://www.prnewswire.com
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