Exhibit 99
CONTACTS: Media Inquiries
Christine A. Zwicke
248/435-7774
[email protected]
D. Mike Pennington
248/435-1933
[email protected]
Investor Inquiries
Paul R. Ryder
248/435-4702
[email protected]
ARVINMERITOR, INC., MERGER COMPLETED; NEW COMPANY
BEGINS OPERATION TODAY AS A $7.5-BILLION PREMIER
TIER-ONE GLOBAL AUTOMOTIVE SUPPLIER
o ArvinMeritor begins trading on the New York Stock Exchange (NYSE:ARM)
today.
o There are immediate opportunities for considerable sales, operating and
cost synergies.
o Business integration is well under way.
o Face-to-face communication is building employee understanding, support
and involvement.
o First-year cost savings is estimated at $50 million.
TROY, Mich., (July 10, 2000) - ArvinMeritor, Inc., (NYSE:ARM), the $7.5-billion
global automotive supplier newly created by the merger of Arvin Industries,
Inc., and Meritor Automotive, Inc., today marked the historic launch of its
operations. The merger,
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effective late Friday, July 7, 2000, follows the shareholders' approval of the
merger. ArvinMeritor's stock begins trading on the New York Stock Exchange
(NYSE) today under the ticker symbol "ARM."
"This is a significant day for the automotive industry and an exciting day
for ArvinMeritor's employees, customers, shareholders and business partners
around the world," said ArvinMeritor Chairman and CEO Larry Yost. "We are
well-positioned to benefit from immediate opportunities that include
considerable sales, operating and cost synergies that, as separate companies,
would not have been possible. Overnight, we have substantially extended our
market reach to one another's established customer bases and forged new paths to
market. At the same time, our new organization has the capability to accelerate
growth; make strategic investments; enlarge our diversified product, service and
market portfolio; and enable the development of complete undercarriage and
drivetrain system technologies to serve both the light and commercial vehicle
industries. We intend to capitalize on our enhanced financial strength and
flexibility to take advantage of industry trends that favor companies such as
ArvinMeritor.
"We are committed to deliver annual average top-line growth of 10 percent
and earnings per share growth of between 15 and 18 percent to increase
shareholder value. The new ArvinMeritor has the scale and scope that forms a
strong foundation for additional strategic growth. As a result, we expect to
double the size of our new enterprise during the next five years," Yost said.
Yost continued to say that, as the world's eleventh largest automotive
supplier, ArvinMeritor begins operations with not only strong financials, but
also a solid leadership team. He said ArvinMeritor's experienced leadership is
focused on the timely achievement of the company's primary strategic goals.
Those goals are to:
o Build upon its full-systems initiatives to become the premier global,
single-source provider of undercarriage systems and complete drivetrains
across the light and commercial vehicle industries respectively;
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o Capitalize on expanded global capabilities in the areas of sales and
and marketing, distribution, technical expertise, service networks, new
geographic markets and the company's most valuable asset, its talented
and diverse workforce;
o Focus on continuously improved sales and service performance;
o Pursue an aggressive e-commerce strategy; and
o Leverage and expand the company's global footprint.
ArvinMeritor's management expects the merger to be accretive, contributing
positively to net earnings in the first year. It has identified cost synergies,
including process improvements, shared services, implementation and combined
companywide purchasing strength, which management estimates will produce pre-tax
cost savings of approximately $50 million in fiscal 2001 and $100 million by
fiscal 2003.
Product Fit Creates Engine for Growth
Bill Hunt, ArvinMeritor's vice chairman and president, expects revenue
growth opportunities from the company's strategic product fit: "Our
complementary product lines and technological expertise move us closer to
becoming a full undercarriage and drivetrain system integrator and corner module
provider, and position us to better support our customers' global needs. These
capabilities give us considerable strategic and competitive advantages and a
more powerful platform for growth. We want to emphasize that the real excitement
lies not in the merger itself, but in where we're going from here."
Hunt cited several opportunities among the company's eleven major product
areas that demonstrate immediate customer benefits of the merger. They are:
o Full corner module capability - ArvinMeritor will design and engineer
ride control and motion control products as integrated systems that are
assembled and sequenced for customers, regardless of their geographic
location. As a direct result of this merger, ArvinMeritor's Light Vehicle
Systems (LVS) will be capable of supplying more than 60 percent of the
content of a front-corner module to OEM customers. The company expects
corner modules to account for more than 50 percent of the new LVS Corner
Module and Assembly Group's business by 2005.
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o Environmental initiatives: heavy commercial truck emissions control
systems - The U.S. Environmental Protection Agency (EPA) has established
new proposals aimed at reducing emissions from trucks and buses equipped
with diesel engines. ArvinMeritor Exhaust Systems sees significant
opportunities to provide its proven emissions control and acoustics
technologies to heavy truck OEMs looking for effective emissions
solutions in both Europe and the Americas. Arvin has been the leading
supplier of exhaust systems for passenger cars.
o First-of-its-kind exhaust system - The first-ever, mass-market Titanium
Exhaust System was recently unveiled on the 2001 Corvette Z06. Using
Arvin T-3(TM) (for Titanium, Technology and Testing) proprietary
technology, the company can now provide race-quality performance to
street applications. Specifically, the titanium system is more than 40
percent lighter than stainless steel. The corrosion-immune and
cosmetically attractive system can also improve fuel economy and delivers
the superior performance goals set for the 2001 Corvette Z06.
o New products for heavy vehicle OEMs, aftermarket - Additional revenue
sources are expected to open up by leveraging Meritor's long-standing
relationships with heavy truck and trailer OEM dealers and parts
distributors. These established relationships will enable the new company
to cross-sell Arvin's well-established exhaust, ride control and filter
products, including Gabriel(R) shock absorbers and Purolator(R) filters,
to Meritor customers around the world.
o Aftermarket e-commerce - Later this year, ArvinMeritor expects to launch
a new online parts catalog and ordering system that will significantly
speed service for the company's commercial vehicle aftermarket
distributor and OEM customers. Later, it will handle replacement parts
ordering for the company's light vehicle aftermarket customers, as well.
o Business-to-business (B2B) real-time, Web-enabled customer data makes
it easier to do business with ArvinMeritor - Aftermarket customers,
through the company's online, secure Web portal, now have the ability to
"click" to instantly access order status. This new service includes
invoicing detail, accounts receivable information, application data and
competitive product interchange capabilities. The Web-enabled system
represents another element of the company's overarching e-business
strategy.
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o Added, innovative applications for Roll Coater products - ArvinMeritor's
Roll Coater business is actively pursuing new opportunities in the light
vehicle aperture (roofs and doors), commercial trailer products, and bus
and coach markets. As a result, the business sees an immediate
opportunity to capture new sales for this innovative process that is now
available for vehicle body applications. This natural path to market for
the new company did not exist to this extent, prior to the merger.
Employees Commemorate Historic First Day of Business
Today, ArvinMeritor is observing Day One for the new company with
ceremonies and employee celebrations at facilities around the world. Employees
at the company's world headquarters in Troy, Mich., will gather in a virtual
global celebration, via live satellite broadcast link-up with more than 100
ArvinMeritor locations worldwide. In the evening, Chairman and CEO Larry Yost
and Vice Chairman and President Bill Hunt will host ArvinMeritor customers,
suppliers, financial analysts, news media and government representatives at an
informal reception.
Following Day One, Yost, Hunt and other senior executives will go on a
worldwide tour, visiting plant cities to meet with employees, customers and
community leaders. The tour, named "You Have a Part in It," recognizes the
essential contribution all ArvinMeritor employees can make to the future success
of ArvinMeritor. It also salutes employees in their efforts to develop superior
products and solutions for customers, and to provide components and systems for
nearly every vehicle on the road. According to Yost, "Road Tour 2000 is a good
chance to remind our people of how important they are in our ability to deliver
to our customers."
Integrating the Combined Corporation
The process of integrating the two companies is well under way. Nineteen
teams of ArvinMeritor managers, representing all major business disciplines,
have met weekly since April. Their mission is to proactively develop strategies
and action plans to smoothly integrate the former Arvin and Meritor businesses
with little or no disruption in
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the company's operation. These teams continue to identify efficiencies, and
implement best practices that will increase sales, leverage capabilities and
deliver cost savings. The senior integration team meets weekly with the Office
of the Chairman to report on the progress of the company's integration. With the
merger's closing, Yost noted that the comprehensive integration plans are moving
forward on an aggressive timetable, with completion expected within one year.
ArvinMeritor, Inc. is a premier $7.5-billion global transportation industry
supplier of a broad range of integrated systems, modules and components, serving
light vehicle, commercial truck, trailer and specialty original equipment
manufacturers and related aftermarkets. In addition, the company is the leader
in coil coating applications, including those for the transportation, appliance,
construction and furniture industries. The company is headquartered in Troy,
Mich., and employs 36,500 people at more than 120 facilities in 25 countries.
ArvinMeritor is traded on the New York Stock Exchange under the ticker symbol
ARM. For more information on ArvinMeritor, visit the company's worldwide Web
site at: www.arvinmeritorinc.com.
# # #
This news release contains statements relating to future results that are
"forward-looking statements" as defined in the Private Securities Litigation
Reform Act of 1995. Actual results may differ materially from those projected as
a result of certain risks and uncertainties, including but not limited to those
detailed from time to time in the company's Securities and Exchange Commission
filings.
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ArvinMeritor, Inc.
Unaudited Pro Forma Combined Balance Sheet
As of March 31, 2000
(in millions)
ASSETS
Current assets:
Cash $ 117
Net receivables 1,333
Inventories 603
Other current 255
---------
Total current 2,308
Net property 1,410
Net goodwill 699
Other assets 483
---------
Total $ 4,900
=========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term debt $ 373
Accounts payable 1,089
Other current 536
---------
Total current 1,998
Long-term debt 1,266
Other liabilities 599
Minority interests 98
Capital securities 89
Stockholders' equity 850
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Total $ 4,900
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ArvinMeritor, Inc.
Unaudited Pro Forma Combined Statements of Operations
Fiscal Year 1998
(dollars in millions, except per share amounts)
Quarter Ended
-------------------------------------- Fiscal Year
12/31/97 3/31/98 6/30/98 9/30/98 1998
-------- ------- ------- ------- ----
Sales $ 1,516 $ 1,566 $ 1,652 $ 1,534 $ 6,268
-------- ------- ------- ------- --------
Operating earnings 99 109 133 98 439
percent to sales 6.5% 7.0% 8.1% 6.4% 7.0%
Equity in earnings of affiliates 4 7 11 10 32
Interest expense (19) (19) (20) (19) (77)
-------- ------- ------- ------- --------
Income before taxes 84 97 124 89 394
Provision for income taxes (33) (38) (47) (31) (149)
Minority interests (3) (2) (4) -- (9)
-------- ------- ------- ------- --------
Net income $ 48 $ 57 $ 73 $ 58 $ 236
======== ======= ======= ======= ========
Earnings per share (1)
Basic $ 0.64 $ 0.76 $ 0.97 $ 0.77 $ 3.13
======== ======= ======= ======= ========
Diluted $ 0.63 $ 0.75 $ 0.96 $ 0.76 $ 3.11
======== ======= ======= ======= ========
Average common shares outstanding (millions)
Basic 75.1 75.3 75.5 75.7 75.4
Diluted 75.7 75.8 76.0 76.1 75.9
Memo items:
Deprec./amort. exp. $ 44 $ 49 $ 49 $ 48 $ 190
Capital expenditures $ 54 $ 43 $ 58 $ 81 $ 236
Note: excludes special items.
(1) May not add due to rounding.
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ArvinMeritor, Inc.
Unaudited Pro Forma Combined Statements of Operations
Fiscal Year 1999
(dollars in millions, except per share amounts)
Quarter Ended
-------------------------------------- Fiscal Year
12/31/98 3/31/99 6/30/99 9/30/99 1999
-------- ------- ------- ------- ----
Sales $ 1,638 $ 1,909 $ 2,064 $ 1,880 $ 7,491
-------- ------- ------- ------- --------
Operating earnings 109 131 168 120 528
percent to sales 6.7% 6.9% 8.1% 6.4% 7.0%
Equity in earnings of affiliates 9 10 11 15 45
Interest expense (20) (29) (33) (30) (112)
-------- ------- ------- ------- --------
Income before taxes 98 112 146 105 461
Provision for income taxes (37) (43) (56) (39) (175)
Minority interests (2) (3) (2) -- (7)
-------- ------- ------- ------- --------
Net income $ 59 $ 66 $ 88 $ 66 $ 279
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Earnings per share (1)
Basic $ 0.78 $ 0.87 $ 1.16 $ 0.87 $ 3.67
======== ======= ======= ======= ========
Diluted $ 0.77 $ 0.87 $ 1.15 $ 0.86 $ 3.66
======== ======= ======= ======= ========
Average common shares outstanding (millions)
Basic 75.9 76.0 76.1 76.1 76.0
Diluted 76.3 76.3 76.4 76.4 76.3
Memo items:
Deprec./amort. exp. $ 50 $ 59 $ 65 $ 65 $ 239
Capital expenditures $ 76 $ 55 $ 74 $ 101 $ 306
Note: excludes special items.
(1) May not add due to rounding.
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ArvinMeritor, Inc.
Unaudited Pro Forma Combined Statements of Operations
Fiscal Year 2000
(dollars in millions, except per share amounts)
Quarter Ended
-------------------------------------- Fiscal Year
12/31/99 3/31/00 6/30/00 9/30/00 2000
-------- ------- ------- ------- ----
Sales $ 1,924 $ 2,061 $ -- $ -- $ 3,985
-------- ------- ------- ------- --------
Operating earnings 123 148 -- -- 271
percent to sales 6.4% 7.2% -- -- 6.8%
Equity in earnings of affiliates 12 10 -- -- 22
Interest expense (32) (34) -- -- (66)
-------- ------- ------- ------- --------
Income before taxes 103 124 -- -- 227
Provision for income taxes (37) (46) -- -- (83)
Minority interests 1 (3) -- -- (2)
-------- ------- ------- ------- --------
Net income $ 67 $ 75 $ -- $ -- $ 142
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Earnings per share (1)
Basic $ 0.90 $ 1.05 $ -- $ -- $ 1.95
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Diluted $ 0.90 $ 1.05 $ -- $ -- $ 1.95
======== ======= ======= ======= ========
Average common shares outstanding (millions)
Basic 74.3 71.1 -- -- 72.7
Diluted 74.4 71.3 -- -- 72.8
Memo items:
Deprec./amort. exp. $ 63 $ 65 $ -- $ -- $ 128
Capital expenditures $ 91 $ 66 $ -- $ -- $ 157
Note: excludes special items.
(1) May not add due to rounding.
