News Column

Meritor Posts 1st Quarter Fiscal Year 2014 Results

February 4, 2014

Meritor, Inc. reported financial results for its first fiscal quarter ended Dec. 31, 2013 . "We expanded our Adjusted EBITDA margin by 250 basis points from the same quarter last year despite the planned step down in our defense business," said Chairman, CEO and President Ike Evans . "We're executing well on our M2016 performance initiatives which are continuing to drive improved financial results." In a release on January 29 , the Company reported that for the first quarter of fiscal year 2014, it posted sales of $907 million , up 2 percent from the same period last year. The increase was primarily due to higher commercial truck production in Europe and South America , partially offset by lower defense revenue and continued weakness in India . Net income from continuing operations, on a GAAP basis, was $11 million or $0.11 per diluted share, compared to a loss from continuing operations of $16 million or $0.17 per diluted share in the prior year. The increase in net income from continuing operations was primarily driven by the execution of global pricing initiatives throughout calendar year 2013, lower material and structural costs and slightly higher revenues. Adjusted income from continuing operations in the first quarter of fiscal year 2014 was $12 million , or $0.12 per diluted share, compared to an adjusted loss from continuing operations of $11 million , or $0.11 per diluted share, a year ago. Adjusted EBITDA was $70 million , compared to $46 million in the first quarter of fiscal year 2013. Adjusted EBITDA margin for the first quarter of fiscal year 2014 was 7.7 percent, compared to 5.2 percent in the same period last year. Cash flow used by operating activities in the first quarter of fiscal 2014 was negative $4 million , compared to negative $91 million in the same period last year. Free cash flow for the first quarter of fiscal year 2014 was negative $16 million , compared to negative $106 million in the same period in the prior year. The improvement is primarily due to an increase in factored receivables, less cash used for working capital and higher net income. Commercial Truck & Industrial sales were $727 million , up $12 million , compared with the same period last year. This increase was primarily driven by higher revenue in Europe and South America , partially offset by lower defense revenue and continued weakness in India . Segment EBITDA for the Commercial Truck & Industrial segment was $53 million for the quarter, up $19 million or 56 percent from the first quarter of fiscal year 2013. Segment EBITDA margin increased to 7.3 percent, up from 4.8 percent in the same period last year. Year-over-year reductions in material and structural costs and the favorable impact of higher revenue in Europe and South America more than offset the unfavorable impact of the planned step- down in the company's defense revenue. The Aftermarket & Trailer segment posted sales of $208 million , up $5 million from the same period last year. Segment EBITDA for Aftermarket & Trailer was $19 million , up $6 million or 46 percent from the first quarter of fiscal year 2013. Segment EBITDA margin improved to 9.1 percent from 6.4 percent in the first quarter of fiscal year 2013. The increase in segment EBITDA margin was primarily due to pricing actions executed throughout calendar year 2013 and lower material and structural costs. Outlook for Fiscal Year 2014 The company is reaffirming guidance as follows: -Revenue to be approximately $3.7 billion . -Adjusted EBITDA margin to be approximately 7.5 percent. -Adjusted earnings per share from continuing operations in the range of $0.30 to $0.40 . -Total free cash flow to be about breakeven to $25 million . The company continues to anticipate the following for the entire company: -Capital expenditures in the range of $80 million to $90 million . -Interest expense in the range of $105 million to $115 million . -Cash interest in the range of $85 million to $95 million . -Cash income taxes in the range of $45 million to $55 million . "We're confident that our business initiatives and cost management actions will enable us to improve margins for the year despite our expectations for flat year-over-year revenue," said Evans. More information: meritor.com ((Comments on this story may be sent to newsdesk@closeupmedia.com ))


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