USA: ArvinMeritor fiscal year result up $US52 million to $107 million
ArvinMeritor has increased sales by $181 million, or 12%, to $1.7 billion and net income by $42 million to $41 million for its fourth fiscal quarter ended September 30.
Net income for the full fiscal year was $107 million, up $52 million from 2001.
Net 2002 income included restructuring costs ($10 million after-tax), the effect of a goodwill accounting change ($42 million after-tax) and a gain on sale of the exhaust accessories manufacturing operations ($4 million after-tax).
Results for the fourth quarter of fiscal year 2001 included restructuring costs and other one-time charges of $30 million ($21 million after-tax or $0.32 per diluted share). Excluding these charges, net income increased by $21 million, or 105%, from last year's fourth quarter.
Sales for the commercial vehicle systems business group increased by $107 million, or 21%, as Class 8 truck buyers purchased early to avoid new US emissions standards that took effect on October 1.
Higher light vehicle production in North America and Western Europe also had a favourable impact on sales.
Operating income for the fourth quarter of fiscal year 2002 was $91 million, compared to $34 million for the same period last year.
Included in operating income in the fourth quarter of fiscal year 2001 were restructuring costs and other one-time charges of $30 million. Operating margin improved to 5.2%, up from 4.1% in the fourth quarter of fiscal year 2001, excluding these items. The commercial vehicle systems segment drove the operating income increase.
Equity in losses of affiliates improved by $3 million, compared to the same period last year, primarily due to a reduced loss from a commercial vehicle affiliate. Net interest expense decreased $4 million, or 13%, compared to the same period last year, as a result of lower average debt levels and favourable interest rates.
Light vehicle systems (LVS) sales were $875 million, up $69 million, or 9%, from the fourth quarter of fiscal year 2001. Strong light vehicle production in North America and Western Europe and favourable currency translation contributed to the increase. Operating margin declined to 4.5%, from 4.8% in last year's fourth quarter. Pricing pressure from the vehicle manufacturers continued to affect operating margin as did higher steel costs.
Commercial vehicle systems (CVS) sales were $612 million, up $107 million, or 21%, from last year's fourth quarter with the increase in Class 8 truck production in North America the major factor. CVS operating margin improved to 5.2%, up from 1.8% in the fourth quarter of fiscal year 2001. Stronger truck production, along with a lower fixed cost structure resulting from restructuring programmes and other cost-reductions, helped the significant operating margin improvement.
Light vehicle aftermarket (LVA) sales were $219 million, up $8 million, or 4%, from last year's fourth quarter, driven by strong filter demand. Operating margin improved to 8.2% compared to 8.1% in the prior year's fourth quarter.
For fiscal year 2002, sales were $6.9 billion, up $77 million, or 1%, compared to fiscal year 2001. Operating income was $343 million, an increase of $124 million, compared to fiscal year 2001.
Operating income in fiscal years 2002 and 2001 includes restructuring costs of $15 million and $67 million, respectively. Fiscal year 2002 results also include a gain on sale of business of $6 million, and fiscal year 2001 results include one-time charges of $17 million.
Operating margin improved to 5.0%, up from 3.2% last year. The company has been able to improve its operating margin through savings generated by cost-reductions and restructuring.
Net income in fiscal year 2001 included restructuring costs ($45 million after-tax) and one-time charges related to employee separation and environmental liability ($11 million after-tax).
ArvinMeritor’s 2003 outlook for light vehicle production is 16.0 million vehicles in North America and 16.5 million vehicles in Western Europe.
It expects expect that North American Class 8 truck production will decline about 4% in fiscal year 2003 to 161,000 units.
The sales outlook for fiscal year 2003 is approximately $7.1 billion, up about 3% from fiscal year 2002.”