Highlights – First Quarter 2012Highlights of PACCAR’s results during the first quarter of 2012 include:
- Consolidated sales and revenues of $4.78 billion.
- Net income of $327.3 million.
- Truck and Other cash and marketable securities of $2.78 billion.
- Financial Services pretax income of $71.3 million.
- Truck and Other SG&A percent to sales of 2.8 percent.
- Research and development expenses of $72.3 million.
- Capital investments of $112.8 million.
- Issued $609.5 million in five-year medium-term notes.
- Record total assets of $18.16 billion.
Share Repurchase UpdateDuring the first quarter of 2012, PACCAR repurchased approximately 400,000 of its common shares for $15.6 million. PACCAR had 356.7 million outstanding common shares as of March 31, 2012. “Over the past nine months, PACCAR has bought 9.56 million shares for a total investment of $353.2 million,” said Ron Armstrong, PACCAR president. “PACCAR’s excellent net profits and strong cash flow make the company’s shares an attractive investment.” PACCAR has earned a profit for 73 consecutive years and has paid a dividend every year since 1941. South American Expansion PACCAR held a groundbreaking ceremony for its new DAF assembly plant in Ponta Grossa, Brasil, on January 9, 2012. The ceremony, led by Mark Pigott, PACCAR chairman and chief executive officer, and the State of Paraná Governor Beto Richa, was attended by state and local officials, supplier partners, key transport companies and other business and educational leaders. "Brasil is a major truck market with industry sales above six tonnes of 165,000 units in 2011. The DAF product range offers premium quality, low operating costs, excellent driveability and maneuverability, and the industry-leading PACCAR MX engine," said Bob Christensen, PACCAR executive vice president. "The production of DAF trucks in Brasil in mid-2013 is an exciting development which is expected to deliver additional sales in South America," added Christensen. For over 40 years, PACCAR's Kenworth vehicles have earned a significant market share in many South American countries in the Andean region. "The successful introduction of DAF vehicles into Chile, Ecuador and Peru in 2011 helped PACCAR achieve a record level of vehicle sales in the region," said Sam Means, PACCAR vice president. “Truck deliveries of 2,700 units in the Andean region of South America more than doubled in the first quarter of this year, compared to the first quarter of 2011.”
Capital Investments, Product Development and Industry RecognitionPACCAR’s excellent long-term profits, strong balance sheet, and intense focus on quality, technology and productivity have enabled the company to invest $4.7 billion in capital projects, innovative products and new technologies during the past decade. Capacity expansion of over 40 percent in the last five years and annual productivity improvements have enhanced the capability of the company’s manufacturing and parts facilities. Capital investments of $450-$550 million and R&D expenses of $275-$300 million are targeted in 2012 for new products and enhancing manufacturing operating efficiency. “Kenworth, Peterbilt and DAF are investing in new industry-leading products and services to enable our customers to achieve excellent results in their businesses,” said Ron Armstrong, PACCAR president. DAF Trucks showcased its new range of ATe vehicles at the RAI truck show held in Amsterdam in mid-April. The models include solutions that have been developed to further reduce fuel consumption and emissions, and improve truck efficiency. “The Advanced Transport Efficiency models have enhanced the DAF product range, providing improved fuel efficiency of 3-5 percent,” said Ron Bonsen, DAF director of sales. PACCAR will expand and improve its global network of 15 strategically located parts distribution centers (PDCs) in 2012. PACCAR plans to construct a new $40 million, 280,000-square-foot PDC in Eindhoven, the Netherlands. The PDCs in Madrid, Spain and Lancaster, Pennsylvania will increase their capacity with the addition of a combined 100,000 square feet of warehouse. The American Truck Dealers (ATD) named the Peterbilt Model 587, with the PACCAR MX engine, in the heavy duty category and the Peterbilt Model 210 in the medium duty category as "2012 ATD Commercial Trucks of the Year" during their annual Convention in February 2012. This is the first time that a truck manufacturer has won both categories in the same year. "Peterbilt is honored to have two vehicles selected as ATD's Commercial Trucks of the Year," said Bill Kozek, Peterbilt Motors Company general manager and PACCAR vice president. “Peterbilt designs and manufactures a complete range of high-quality commercial vehicles that offer industry-leading reliability, versatility and low operating cost."
Financial Services Companies Achieve Good ResultsPACCAR Financial Services (PFS) has a portfolio of 147,000 trucks and trailers, with total assets of $9.98 billion. PACCAR Leasing, a major full-service truck leasing company in North America and Europe with a fleet of over 32,000 vehicles, is included in this segment. PFS’s first quarter 2012 pretax income was $71.3 million compared to the $50.3 million earned in the first quarter of 2011. First quarter 2012 revenues were $261.4 million compared to $241.0 million in 2011. “During the first quarter of 2012, profit increased due to lower borrowing costs and growth in portfolio balances,” said Bob Bengston, PACCAR vice president. “Dealers and customers appreciate PFS’s commitment to providing leading-edge technology solutions, excellent customer service capabilities and dedicated support of the transportation industry in all phases of the business cycle.” "PACCAR's excellent balance sheet, complemented by its A+/A1 credit ratings, enables PFS to offer competitive retail financing to Kenworth, Peterbilt and DAF dealers and customers in 23 countries on three continents," said Todd Hubbard, PACCAR Financial Corp. president. "Higher freight volumes and increasing freight rates have improved our customers' profitability leading to lower past dues and credit losses. Used truck prices have improved from prior year levels by 5-10 percent." PACCAR is a global technology leader in the design, manufacture and customer support of high-quality light-, medium- and heavy-duty trucks under the Kenworth, Peterbilt and DAF nameplates. PACCAR also designs and manufactures advanced diesel engines and provides financial services and information technology and distributes truck parts related to its principal business. PACCAR shares are traded on the NASDAQ Global Select Market, symbol PCAR. Its homepage is www.paccar.com. PACCAR will hold a conference call with securities analysts to discuss first quarter earnings on April 24, 2012, at 8:00 a.m. Pacific time. Interested parties may listen to the call by selecting “Live Webcast” at PACCAR’s homepage. The Webcast will be available on a recorded basis through April 30, 2012.
This release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act. These statements are based on management’s current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from those included in these statements due to a variety of factors. More information about these factors is contained in PACCAR’s filings with the Securities and Exchange Commission.
|SUMMARY INCOME STATEMENTS|
|(in millions except per share amounts)|
|Three Months Ended|
|Truck and Other:|
|Net sales and revenues||$||4,514.7||$||3,042.6|
|Cost of sales and revenues||3,919.9||2,632.3|
|Research and development||72.3||68.4|
|Selling, general and administrative||125.8||109.9|
|Interest and other (income) expense, net||(2.1||)||4.0|
|Truck and Other Income Before Income Taxes||398.8||228.0|
|Interest and other||158.5||157.0|
|Selling, general and administrative||24.1||23.2|
|Provision for losses on receivables||7.5||10.5|
|Financial Services Income Before Income Taxes||71.3||50.3|
|Total Income Before Income Taxes||479.0||286.3|
|Net Income Per Share:|
|Weighted Average Shares Outstanding:|
|Dividends declared per share||$||.18||$||.12|
|CONDENSED BALANCE SHEETS|
|March 31||December 31|
|Truck and Other:|
|Cash and marketable debt securities||$||2,779.8||$||2,900.7|
|Trade and other receivables, net||1,195.9||977.8|
|Property, plant, and equipment, net||2,062.9||1,973.3|
|Equipment on operating lease and other||1,324.8||1,209.1|
|Financial Services Assets||9,975.6||9,401.4|
|LIABILITIES AND STOCKHOLDERS' EQUITY|
|Truck and Other:|
|Accounts payable, deferred revenues and other||$||4,103.9||$||3,846.7|
|Financial Services Liabilities||8,184.8||7,811.6|
|Common Shares Outstanding||356.7||356.8|
|GEOGRAPHIC REVENUE DATA|
|Three Months Ended|
|United States and Canada||$||2,930.0||$||1,588.7|
|CONDENSED CASH FLOW STATEMENTS|
|Three Months Ended March 31||2012||2011|
|Depreciation and amortization:|
|Property, plant and equipment||48.6||47.1|
|Equipment on operating leases and other||122.0||115.3|
|Net increase in wholesale receivables on new trucks||(257.7||)||(75.8||)|
|Net (increase) decrease in sales-type finance leases and dealer direct loans on|
|All other operating activities||(97.5||)||147.0|
|Net Cash Provided by Operating Activities||126.3||459.3|
|Acquisition of property, plant and equipment||(70.7||)||(62.2||)|
|Acquisition of equipment for operating leases||(229.3||)||(295.3||)|
|Net increase in financial services receivables||(126.9||)||(43.2||)|
|Net increase in marketable securities||(26.3||)||(525.8||)|
|All other investing activities||88.1||75.8|
|Net Cash Used in Investing Activities||(365.1||)||(850.7||)|
|Cash dividends paid||(314.4||)||(43.8||)|
|Purchase of treasury stock||(15.6||)|
|Stock compensation transactions||4.9||1.6|
|Net increase in debt||347.5||31.8|
|Net Cash Provided by (Used in) Financing Activities||22.4||(10.4||)|
|Effect of exchange rate changes on cash||32.8||50.7|
|Net Decrease in Cash and Cash Equivalents||(183.6||)||(351.1||)|
|Cash and cash equivalents at beginning of period||2,106.7||2,040.8|
|Cash and cash equivalents at end of period||$||1,923.1||$||1,689.7|