ArvinMeritor Inc., Troy, Mich., saw net income increase dramatically for its third quarter ended June 30, compared to the same quarter last year.
Sales of $2 billion were approximately $340 million higher than the sam 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.
Approximately one-half of this increase was due to stronger currencies outside the U.S. The remaining increase is thanks to 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.
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 5 percent on a constant currency basis).
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.
Earnings benefited from the favorable resolution of certain tax issues. These tax benefits were included in the company's full-year guidance previously provided.
On May 6, 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.
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.
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.
The company's calendar year 2008 forecast for North America Class 8 truck production 195,000 to 205,000 units; and heavy and medium truck volumes in Western Europe to be in the range of 550,000 to 560,000.
ArvinMeritor's fiscal year 2008 forecast for North American Class 8 truck production is in the range of 185,000 to 195,000 units. The company's fiscal year 2008 forecast for heavy and medium truck volumes in Western Europe is 565,000 to 575,000.
"We look forward to 2009 with optimism," said McClure. "We have improved our results consistently through the first three quarters of fiscal year 2008 despite deterioration in the North American and European markets. Next year, we expect to benefit from Class 8 commercial vehicle production volumes in North America which are forecast to increase in the range of 20 to 40 percent."
Sales of $2 billion were approximately $340 million higher than the sam 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.
Approximately one-half of this increase was due to stronger currencies outside the U.S. The remaining increase is thanks to 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.
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 5 percent on a constant currency basis).
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.
Earnings benefited from the favorable resolution of certain tax issues. These tax benefits were included in the company's full-year guidance previously provided.
On May 6, 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.
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.
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.
The company's calendar year 2008 forecast for North America Class 8 truck production 195,000 to 205,000 units; and heavy and medium truck volumes in Western Europe to be in the range of 550,000 to 560,000.
ArvinMeritor's fiscal year 2008 forecast for North American Class 8 truck production is in the range of 185,000 to 195,000 units. The company's fiscal year 2008 forecast for heavy and medium truck volumes in Western Europe is 565,000 to 575,000.
"We look forward to 2009 with optimism," said McClure. "We have improved our results consistently through the first three quarters of fiscal year 2008 despite deterioration in the North American and European markets. Next year, we expect to benefit from Class 8 commercial vehicle production volumes in North America which are forecast to increase in the range of 20 to 40 percent."
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