ArvinMeritor’s 2Q sales up 18% over a year ago

ArvinMeritor, Inc. today reported sales of $2 billion and net income of $24 million, or $0.36 per diluted share, for its second fiscal quarter ended March 31, 2003. Sales increased $306 million, or 18%, as compared to last year's second quarter. The company's acquisition of the remaining 51% interest in Zeuna Starker added sales of $198 million in the second fiscal quarter, and the stronger euro also favorably impacted sales by approximately $100 million. Without these items, sales would have been essentially flat, as compared to the second quarter of fiscal year 2002. Net income declined $11 million, as compared to last year's second quarter net income of $35 million. Results for the second quarter of fiscal year 2003 included previously announced restructuring costs of $11 million ($7 million after-tax, or $0.10 per diluted share). ArvinMeritor Chairman and Chief Executive Officer Larry Yost said, "We are pleased with the performance of our Commercial Vehicle Systems business group, which benefited from the stronger North American Class 8 truck and trailer volumes. Some of our other businesses, however, did not meet our expectations and remain challenged due to softening demand in the markets they serve, higher steel costs, and continued pricing pressures from vehicle manufacturers. We are continuing to be aggressive in addressing these challenges by implementing programs aimed at lowering costs, including facility rationalizations and workforce reductions." Operating income for the second quarter of fiscal year 2003 was $63 million, compared to $82 million for the same period last year. Restructuring costs of $11 million associated with the LVS segment were included in operating income in the second fiscal quarter of 2003. Operating margin declined to 3.2 percent, from 4.9 percent in the second quarter of fiscal year 2002.Net interest expense of $27 million was up slightly from $25 million in last year's second quarter. The effective tax rate was 32 percent in the second quarter of fiscal years 2003 and 2002. The company expects the full-year effective tax rate to approximate the second-quarter rate of 32 percent.