TROY, Mich. - ArvinMeritor, Inc reported financial results for its third quarter ended June 30, 2008.

Financial Highlights for Third-Quarter Fiscal Year 2008

Sales of $2.0 billion - approximately $340 million higher than the same period last year
- Net income was $44 million, or $0.60 per diluted share, compared to a net loss of $70 million, or $0.99 per diluted share, in the third quarter of fiscal year 2007.
- Income from continuing operations, before special items, was $56 million, or $0.77 per diluted share, compared to $18 million, or $0.25 per diluted share, one year ago.
- Cash flow from operations, net of capital expenditures, was $59 million compared to an outflow of $156 million in the same period last year.
- Commercial Vehicle Systems (CVS) EBITDA margins increased by 1.2 percentage points, before special items, in the third quarter of fiscal year 2008 compared to the same period last year.
- Light Vehicle Systems (LVS) sales, largely driven by overseas markets, increased by $34 million, a 6-percent increase over the same period last year (down five-percent on a constant currency basis).
- "ArvinMeritor's favorable product, customer and geographic mix, combined with a dedicated focus across the company to implement and maintain cost reduction initiatives, drove strong results this quarter." said Chairman, CEO and President Chip McClure. "I am pleased that the hard work and commitment of our global team is being reflected in our financial results."

Results for the Third-Quarter Fiscal Year 2008
In the third quarter of fiscal year 2008, ArvinMeritor posted sales from continuing operations of $2.0 billion, up from $1.7 billion in the same period last year. Approximately one-half of this increase was due to stronger currencies outside the U.S. The remaining increase is comprised of higher medium and heavy duty truck production in Western Europe; favorable industry conditions in South America and Asia Pacific; a steady demand for the company's light vehicle product mix in Europe; and increased specialty sales, including military products in North America and off-highway products in China.

EBITDA, before special items, was $121 million, up $36 million from the same period last year. This increase is primarily due to higher medium and heavy duty truck volumes in Europe and South America, and continued higher specialty and aftermarket sales.

On a GAAP basis, the company's income from continuing operations was $51 million or $0.70 per diluted share, compared to a loss from continuing operations of $4 million or $0.06 per diluted share in the same period last year.

Income from continuing operations, before special items, was $56 million, or $0.77 per diluted share, compared to $18 million, or $0.25 per diluted share a year ago.

Earnings benefited from the favorable resolution of certain tax issues. These tax benefits were included in the company's full-year guidance previously provided.

Free cash flow (cash flow from operations net of capital expenditures) was $59 million in the third quarter, increased from an outflow of $156 million in the same period last year. This increase is primarily due to stronger earnings this quarter as compared to the third fiscal quarter of 2007, in addition to the negative impact on cash flow in the third quarter of last year resulting from activities associated with discontinued operations.

Update on Plans to Spin-Off Light Vehicle Systems
On May 6, 2008, the company announced its intent to spin off its LVS business to ArvinMeritor shareholders, with the commercial vehicle business - consisting of truck, trailer, specialty products and the commercial vehicle aftermarket - remaining with ArvinMeritor. The new LVS business will be named Arvin Innovation. On May 28, Arvin Innovation filed the initial registration document (Form 10), and provided an update to the market via webcast. On July 28, the company filed its first amendment to the Form 10.

LVS achieved the third quarter milestones required in order to complete the spinoff, and is on track to achieve fourth quarter performance milestones. Information related to the spinoff is available on the company's website at arvinmeritor.com.

Performance Plus "Wave 2"
The company is currently launching Wave 2 of Performance Plus designed to drive idea generation and implementation with an emphasis on the company's business in Europe. ArvinMeritor's initial Performance Plus initiative, launched in December 2006, will fully achieve the company's 2008 target of $75 million in savings net of material cost increases. ArvinMeritor is in the process of re-energizing and refreshing the internal resources dedicated to the program. This team will review processes, products and operations across the business to identify additional ways to:

"Through Performance Plus, we are cultivating an environment of innovation and continuous improvement," said Jay Craig, chief financial officer, who played a key role in leading Performance Plus since its launch in 2006. "It is not a short-term solution - it's more like a long-distance race with no finish line." Wave 2 will add confidence to the company's targeted goal of $75 million in savings for fiscal year 2009, in spite of unprecedented cost increases in raw materials.

Growth in Commercial Vehicle Aftermarket
ArvinMeritor recently announced another strategic move to expand its commercial vehicle aftermarket business with the acquisition of Trucktechnic, a remanufacturer and distributor of commercial vehicle disc and air system components based in Liege, Belgium.

Trucktechnic's line of brake kits, components, and testing equipment expands and complements ArvinMeritor's existing European aftermarket portfolio both in product breadth and market depth and will be key in supporting the company's continued growth in that region. This acquisition follows the company's purchase of Mascot Truck Parts in December 2007.

Since that time, the company announced a multi-million-dollar supply agreement to provide remanufactured transmissions and axle carriers to Navistar Parts, and has recently entered into agreements with PACCAR to support its Peterbilt and Kenworth dealer networks in Canada with the Mascot brand of remanufactured transmissions and axle carriers.

Courtesy: ArvinMeritor Inc, USA

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Posted by Naresh Koshti on 30 July, 2008 11:39:48 AM IST #