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Meritor to keep leverage in range of about 1.5x over next three years
By Devika Patel
Knoxville, Tenn., Nov. 13 – Meritor, Inc. achieved 1.6x net debt to adjusted EBITDA compared to its objective of 1.5x leverage ratio, for fiscal year 2019.
This does include the impact related to the AxleTech acquisition. Excluding this impact, the company would have achieved a 1.3x net debt to adjusted EBITDA ratio.
Management plans to keep leverage in this range over the next three years.
“Our financial target was to achieve 1.5x net debt to adjusted EBITDA,” president and chief executive officer Jeffrey Craig said on the company’s fourth quarter and year ended Sept. 30 earnings conference call on Wednesday.
“Excluding the financing associated with the AxleTech acquisition, we achieved 1.3x or 1.6x if we include it.
“We are also committed to [a] strong credit profile and retaining flexibility to invest for the long term.
“We intend to hold leverage in a similar range through the three-year period.
“The company retains a significant liquidity buffer should additional investment opportunities, internal or external, present themselves over the coming years,” he said.
Adjusted EBITDA was $116 million for the quarter, compared to $118 million for the fourth quarter of 2018, and $520 million for the full year, compared to $474 million for fiscal year 2018.
Free cash flow for the fourth quarter was $22 million, compared to free cash flow of $8 million for the same period last year.
Free cash flow for the full fiscal year was $153 million, compared to $147 million for fiscal year 2018.
Cash and cash equivalents were $108 million as of Sept. 30, 2019, compared to $115 million as of Sept. 30, 2018.
Long-term debt was $902 million as of Sept. 30, 2019, compared to $730 million as of Sept. 30, 2018.
Meritor is a Troy, Mich., supplier of drivetrain, mobility, braking and aftermarket solutions for commercial vehicle and industrial markets.
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