ArvinMeritor, Inc., global provider of automotive systems, modules and components for light vehicle, commercial truck, trailer and specialty original equipment manufacturer Tuesday reported financial results for its first fiscal quarter which ended Dec. 31, 2009. During Q1 of FY-2010, ArvinMeritor posted sales from continuing operations of $1.1 billion, an increase of 16 percent from the Q4 2009, and a decrease of approximately six percent from the same period last year.
Net income on a GAAP basis was breakeven compared to a GAAP loss of $961 million in the same period last year.
Income from continuing operations, before special items, was also breakeven compared to a loss of $47 million in Q1 of FY-2009. Loss from continuing operations on a GAAP basis for Q4 was $2 million compared to a loss of $920 million in during the same time period last year.
Q1 EBITDA from continuing operations, before special items, was $56 million, up $16 million compared to the Q4 of FY-2009, and up $40 million compared to Q1 of FY-2009.
Income from continuing operations, before special items, was breakeven compared to a loss of $47 million, or $0.65 per diluted share, a year ago.
Free cash flow was $2 million in Q1 of FY-2010 compared with free cash outflow of $386 million in the same period last year. The company's Q1 free cash flow reflects stable working capital levels, improved earnings and represents the third consecutive quarter of positive performance in this area.
The company had $105 million in cash balances and unutilized commitments of $605 million under its revolving credit facility as of Dec. 31, 2009.
EBITDA for the LVS segment was $6 million in Q1 of FY-2010 compared to negative $252 million in Q1 2009. The improved EBITDA performance is primarily due to significant cost reductions associated with LVS overhead costs and improved financial performance in the Body Systems business - which was recently awarded several new customer contracts. In addition, the company recognized non-cash asset impairments totaling $209 million in this segment in the prior year.
"Our financial results for the first quarter demonstrate that as we experience growth in our global markets we are successfully retaining the benefits of our previously executed cost reductions," said Chip McClure, president, chairman, and CEO.
"This quarter, we were able to convert on incremental revenue while maintaining structural cost improvements and reinstating full salaries to our employees. At the same time, we announced a nearly $10 million planned investment in South America to support our expansion into new product segments, and an additional planned investment of approximately $10 million to increase production capacity at our off-highway axle joint venture in Xuzhou, China. Both of these investments support the strong growth we are experiencing in emerging markets," said McClure.
In Q2, the company expects revenues, EBIDTA, and income before taxes to be flat. They further speculate free cash flow to be slightly negative primarily due to the company's semi-annual interest payment on its fixed debt securities.
"We will maintain an acute focus on becoming a leading commercial on- and off-highway company in our defined segments by introducing new products that meet our customers' needs, entrenching ourselves in emerging markets, and making investments that enable us to grow profitably," said McClure. "At the same time, we will be diligent in managing our costs."