TROY, Mich. – Meritor Inc. has reported financial results for its second fiscal quarter ended March 31, 2013.
For the second quarter of fiscal year 2013, Meritor posted sales of $908 million, down 22 percent from the same period last year. The company said this decrease was primarily due to lower sales in all global markets that the company serves, excluding South America.
"Our improved performance this quarter was in line with our expectations," said Chairman, CEO and President Chip McClure. "We drove higher EBITDA margins quarter-over-quarter as a result of net material performance, pricing actions and lower structural costs."
Commercial Truck & Industrial sales were $712 million, down $240 million from the same period last year.
The company’s Aftermarket & Trailer segment posted sales of $224 million, down $19 million from the same period last year, primarily due to lower volumes in North America.
In other related news, Meritor announced that it has signed a purchase and sale agreement to sell its 50 percent ownership interest in Suspensys Sistemas Automotivos LTDA to joint venture partner Randon S.A. Implementos E Participacoes at a purchase price of $195 million in cash and other consideration. The agreement is subject to Brazilian antitrust approval. The sale is expected to be complete by Meritor’s fiscal year end.
The company also completed the consolidation of remanufacturing operations from Mississauga, Ontario, Canada, into the North American remanufacturing center of excellence in Plainfield, Ind. The company’s corresponding Canadian customer service support was moved to its Brampton, Ontario, facility.
Meritor said it also executed a majority of the previously announced reductions of 200 salaried positions as well as 50 hourly positions to substantially mitigate the mix effects of the ramp-down in the FMTV military program. Targeted reductions also include the restructuring of the on-highway business in China, which is being transferred to Xuzhou Meritor Axle Co. Ltd., Meritor’s majority owned off-highway joint venture. These actions in China are intended to improve efficiency, preserve revenue growth potential and reduce overhead costs.
For fiscal year 2013, the company is reaffirming guidance for its continuing operations, inclusive of the impact of the Suspensys divestiture. The company anticipates revenues to be approximately $3.8 billion, with adjusted earnings per share from continuing operations to in the range of 25 cents to 35 cents.
"We are reconfirming our fiscal year 2013 guidance as we continue to expect revenue to be stronger in the second half of the year," said McClure. "Today, we’re announcing the launch of our three-year strategy, M2016, that we believe will improve our ability to expand our EBITDA margin, reduce net debt and drive incremental revenue. We plan to provide progress updates on these three metrics as we drive toward maximizing value for our shareholders, customers and employees."
