Meritor Board Authorizes $125 Million for Share Repurchase Program
16 September 1999
Meritor Board Authorizes $125 Million for Share Repurchase Program
TROY, Mich., Sept. 15 -- Meritor Automotive Inc.'s
board of directors today authorized up to $125 million for the
purchase of the company's common stock, beginning immediately. Under the
repurchase program, the company expects to purchase shares periodically in the
open market or through privately negotiated transactions, as market conditions
warrant and in accordance with Securities and Exchange Commission rules.
Meritor's stock price closed at $19 15/16 on September 14, 1999. There are
approximately 69.1 million shares outstanding.
Meritor Chairman and Chief Executive Officer Larry D. Yost explained:
"Meritor's stock offers an attractive investment opportunity. We are proud of
our outstanding accomplishments, since becoming an independent, publicly-
traded company on October 1, 1997. We've delivered seven consecutive quarters
of double-digit earnings growth, exceeded most of our stated long-term
financial goals, successfully acquired and integrated three major businesses
and entered into an exciting joint venture with ZF Friedrichshafen AG, the
leading producer of commercial vehicle transmissions in Europe.
"This stock repurchase program is just one of several strategies we plan
on using to enhance long-term shareowner value. These include growing our
existing business base through market share gains and new product
introductions; business alliances and joint ventures; selective acquisitions;
restructuring and cost-reduction efforts to boost operating performance; and
disposition of selected product lines."
Yost continued, "In support of our long-term financial goals, Meritor has
built a portfolio of leadership businesses that reflects strength, balance and
diversity of products, customers and markets. We believe that we are well
positioned to take full advantage of industry trends and to expand our
leadership market shares which contribute to top-line growth."
In its first fiscal year as a public company, Meritor recorded sales
growth of 16 percent, operating margin expansion of 110 basis points, and an
earnings per share increase of 38 percent (before special items). Likewise,
in the first nine months of fiscal 1999, the company grew sales 15 percent,
expanded operating margins 30 basis points, and achieved an 18 percent
improvement in earnings per share (before a restructuring charge). The
results reflect strong markets, higher sales penetration, and company-wide
cost reduction programs. This year's results also reflect Meritor's
successful integration of three sizeable businesses acquired in December 1998
and January 1999.
Yost concluded, "Our solid financial position and strong cash flows
support this repurchase program, and also provide a basis for exploring future
strategic opportunities. The current outlook for our core markets remains
strong, aided by generally positive global economic conditions. This outlook,
together with our strategies for growth and track record of performance,
combine to make a compelling case for Meritor to take advantage of the
attractive investment opportunity offered by its own stock; hence, our
decision to repurchase shares."
Meritor, with 1998 sales of US $3.8 billion, is a global supplier of a
broad range of components and systems for commercial, specialty and light
vehicle OEMs and the aftermarket. Meritor consists of two businesses: Heavy
Vehicle Systems, a leading supplier of drivetrain systems and components for
medium- and heavy-duty trucks, trailers and off-highway equipment and
specialty vehicles, including military, bus and coach, and fire and rescue;
and Light Vehicle Systems, a major supplier of roof, door, access control,
suspension and seat adjusting systems and wheel products for passenger cars,
light trucks and sport utility vehicles.
Meritor Internet web site: http://www.meritorauto.com
This press release contains statements relating to future results of the
company (including certain projections and business trends) 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 various risks and uncertainties, including but not limited to global
economic and market conditions; the demand for commercial, specialty and light
vehicles for which the company supplies products; risks inherent in operating
abroad; OEM program delays; demand for and market acceptance of new and
existing products; successful development of new products; reliance on major
OEM customers; labor relations of the company, its customers and suppliers;
and competitive product and pricing pressures, as well as other risks and
uncertainties, including but not limited to those detailed from time to time
in the company's Securities and Exchange Commission filings. These forward-
looking statements are made only as of the date hereof, and the company
undertakes no obligation to update or revise the forward-looking statements,
whether as a result of new information, future events or otherwise.