Commercial vehicle supplier Meritor Inc. reported increased revenue and net income in its fiscal first quarter as well as new significant contracts with leading trailer makers.
For the period ended Dec. 31, net income was $90 million, or $1.03 per diluted share, compared with a net loss of $36 million, or 41 cents, in the same period a year ago.
The company recognized $31 million of income related to remeasuring its Maremont Corp. asbestos liability in the current period. In addition, Meritor incurred $77 million of tax expense in the prior year related to the enactment of the Tax Cuts and Jobs Act that did not repeat.
Revenue climbed to $1.03 billion, up 15% compared with $903 million a year earlier.
“Higher truck production combined with market share gains in North America drove the majority of the revenue increase. But we also had year-over-year sales growth in South America and India as well as in North American aftermarket, trailer and industrial [segments],” CEO Jay Craig said during an earnings call Jan. 29.
He said Meritor officials recently signed three significant contracts for new trailer business.
“We are also excited to announce today that we have signed a two-year agreement with Great Dane. This is a conquest win that gives us standard position for loose axles and automatic slack adjusters. This is a meaningful word that allows us to strengthen our relationship with Great Dane in these product lines and also provides further revenue opportunity with this important customer,” Craig said.
“In addition, we now have standard position with Stoughton for loose axles and preferred position for the Meritor Tire Inflation System. With these agreements, Meritor has solidified its position with three of the top six trailer manufacturers,” he said.
The latest wins come on the heels of the its three-year renewal with Wabash National Corp., announced in December, that maintains Meritor’s loose axles in standard position on all Wabash dry and refrigerated van trailer products. Also with the Wabash contract, the Meritor Tire Inflation System is the preferred automatic tire inflation system.
Optional products for all Wabash configurations include air disc brakes, the trailing arm suspension and our recently launched MTec6 trailer axle, according to the company.
Additionally, Meritor announced on Jan. 22 that Maremont, a nonoperating subsidiary of Meritor, and Maremont’s three wholly-owned, non-operating subsidiaries, Maremont Exhaust Products Inc., AVM Inc., and Former Ride Control Operating Co. Inc. have filed for Chapter 11 of the U.S. Bankruptcy Code. (Meritor and its other subsidiaries are not part of the Chapter 11 filing and will continue to operate as usual.)
“Meritor’s business operations, employees and customers are not impacted by today’s action by our nonoperating subsidiary, Maremont,” Craig said. “Through this process, Maremont is seeking a constructive and equitable resolution for claimants by establishing a trust that will treat all individuals fairly and consistently while definitively addressing its historical asbestos-related liabilities.”