July 26, 2011, Bellevue, Washington PACCAR reported
improved revenues and net income for the second quarter of 2011, said Mark
Pigott, chairman and chief executive officer. PACCARs results reflect
the benefits of stronger truck sales in North America and Europe and an
improvement in aftermarket parts sales and financial services worldwide.
Strong worldwide truck industry demand and a robust increase in truck
build rates have created challenges for some suppliers. PACCAR is
working closely with its suppliers to increase their production capacity in
the next several months, Pigott added.
PACCARs excellent balance sheet, including $2.85 billion in manufacturing
cash and marketable securities, and positive operating cash flow have
enabled ongoing investments which extend PACCARs geographic footprint,
enhance operating efficiency and support the development of innovative new
products. These investments will contribute to the companys long-term
growth, said Pigott. I am very proud of our 22,000 employees who have
delivered excellent results to our shareholders as the industry rebounds
from the recession.
PACCAR earned $239.7 million ($0.65 per diluted share) for the second quarter
of 2011 compared to $99.6 million ($0.27 per diluted share) earned in the
second quarter last year. Second quarter net sales and financial
services revenues were $3.96 billion, compared to $2.46 billion reported in
2010. Net sales and financial services revenues for the first six
months of 2011 were $7.24 billion, up 54 percent compared to $4.69 billion
last year. For the first six months of 2011, PACCAR reported net
income of $433.0 million ($1.18 per diluted share), more than double the
$167.9 million ($0.46 per diluted share) in 2010.
PACCAR Increases Quarterly Dividend
PACCAR announced on
July 11, 2011, that it increased its regular quarterly dividend by 50
percent, to eighteen cents ($.18) per share from twelve cents ($.12), for
shareholders of record on August 18, 2011. The increased dividend will
be paid September 6, 2011.
Global Truck Markets
DAF achieved a market share of
15.3 percent in the above 15-tonne market in the first half of 2011.
DAFs medium-term market share goal is 20 percent. Over the last
two years, DAF has been the market share leader in the European tractor
market as fleets recognize DAFs quality leadership, low operating costs and
excellent resale value, said Harrie Schippers, DAF president. Our
estimate for 2011 industry sales in the above 15-tonne truck market in
Europe is 230,000-250,000 units.
The Kenworth T700 Earned the ATD
Heavy Duty
Commercial Truck of the Year Award in
2011
Class 8 industry retail sales in the U.S. and Canada are expected to be in
the range of 180,000-200,000 vehicles in 2011. We have lowered the
range due to the uneven economic recovery and supplier capacity constraints,
especially tires and chassis components. The good news is that
industry suppliers are investing in their facilities to meet increased
market demands. Our customers are benefiting from higher freight
tonnage and improved fleet utilization rates, resulting in strong growth of
our aftermarket parts sales, said Dan Sobic, PACCAR executive vice
president. For the first half of 2011, PACCAR achieved a Class 8
retail market share in the U.S. and Canada of 26.7 percent, an increase from
the 24.1 percent achieved for the year 2010.
Financial Highlights Second Quarter 2011
Highlights of
PACCARs financial results for the second quarter of 2011 include:
- Consolidated sales and revenues of $3.96 billion.
- Net income of $239.7 million.
- Manufacturing cash and marketable securities of $2.85 billion.
- Record stockholders equity of $5.91 billion.
- Cash generated from operations of $332.7 million.
- Financial Services pretax income of $56.9 million.
- Research and development expenses of $77.5 million.
- $2.0 billion of bank credit facilities renewed.
Financial Highlights First Half 2011
Financial
highlights for the first six months of 2011 include:
- Consolidated sales and revenues of $7.24 billion.
- Net income of $433.0 million.
- Cash generated from operations of $792.0 million.
- Financial Services pretax income of $107.2 million.
- Research and development expenses of $145.9 million.
- Medium-term note (MTN) issuances of $482 million.
- Capital investments of $193 million.
Global Business Opportunities
PACCAR launched the DAF
CF range in the Andean region of South America in the first half of 2011.
The model range will be further enhanced by the introduction of the
DAF LF range in the second half of the year. In addition, we are
nearing selection of a site in Brazil for a DAF assembly facility. The
South American truck markets are growing and will provide excellent
long-term opportunities for PACCAR, said Bob Christensen, PACCAR executive
vice president.
DAF XF105 in Moscow, Russia
In May, DAF Trucks opened a new marketing and sales office in Moscow to
enhance DAF's growth in the Russian market. The DAF subsidiary will
focus on marketing and sales activities as well as the further expansion of
the DAF dealer network. DAFs expansion in Russia will complement the
sales of Kenworth trucks, which have been sold there for over 30 years.
Environmental Leadership
PACCAR is a leader in the
development of environmentally friendly technologies, said Bob Christensen,
PACCAR executive vice president. All PACCAR manufacturing facilities
have earned the prestigious ISO 14001 environmental certification.
This distinction recognizes that the facilities have implemented
rigorous energy-saving measures and innovative design features. Many
PACCAR facilities in the U.S. and Europe have also successfully achieved
'zero waste to land-fill' status.
Other positive environmental initiatives include:
- Peterbilt recently received an order for 200 Model 367 liquefied natural
gas (LNG) vehicles.
- The DAF LF hybrid began production in late 2010, resulting in good
demand from customers in the Netherlands, U.K., Germany, France, Belgium
and the Czech Republic.
- For the third consecutive year, Kenworths manufacturing plant in Renton,
Washington, received a Best Workplace for Recycling and Waste Reduction
Award from King County. The award recognizes Kenworths outstanding
efforts to reduce, reuse and recycle.
Capital Investments, Product Development and Industry Recognition
PACCARs excellent long-term profits, strong balance sheet, and intense
focus on quality, technology and productivity have enabled the company to
invest $3.9 billion in capital projects, innovative products and new
technologies during the past decade. Capital investments of $400-$500
million and R&D expenses of $275-$300 million are targeted in 2011 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.
Peterbilt Motors Company earned the highest ranking in customer satisfaction
in the J.D. Power and Associates 2011 Heavy Duty Truck Customer Satisfaction
StudySM* in the vocational segment. Peterbilts vocational vehicles
consistently exceed customer expectations in a wide variety of
configurations and applications, said Bill Jackson, Peterbilt general
manager. We are proud that Peterbilts superior customer satisfaction
is reflected in the J.D. Power and Associates 2011 Study as customers rated
Peterbilts vocational vehicles as the best in the industry.
Peterbilt Model 367 Dump Truck
Kenworth Truck Company achieved the highest ranking in customer satisfaction
among Class 8 truck owners in the Heavy Duty Dealer Service Segment,
according to the recently released J.D. Power and Associates 2011 Heavy Duty
Truck Customer Satisfaction StudySM*. "Kenworth is honored to receive
the prestigious Heavy Duty Dealer Service Award from J.D. Power and
Associates," said Gary Moore, Kenworth general manager. "Kenworth
employees and dealers are committed to providing the highest quality service
and The Worlds Best trucks to customers."
DAF Trucks was recently honored as one of the top 100 Apprenticeship
Employers in the United Kingdom. DAF Trucks received the accolade for
its highly-acclaimed National Dealer Apprentice Program, the largest program
in the U.K. specializing in heavy-duty commercial vehicle repair and
maintenance skills.
Financial Services Companies Achieve Good Results
PACCAR
Financial Services (PFS) has a portfolio of 137,000 trucks and trailers,
with total assets of $8.69 billion. PacLease, a major full-service
truck leasing company in North America with a fleet of over 30,000 vehicles,
is included in this segment. During the second quarter and first half
of 2011, PFS profit increased due to better finance margins and reduced
credit losses.
Second quarter pretax income improved to $56.9 million compared to $34.0
million earned in the second quarter of 2010. The provision for credit
losses was $11.0 million in the second quarter compared to $17.4 million in
the second quarter of 2010. Second quarter revenues were $258.0
million compared to $239.3 million in the same quarter of 2010. For
the six-month period, pretax income was $107.2 million compared to $62.1
million in 2010. First-half revenues were $499.0 million, compared
with $485.7 million for the same period a year ago. Higher freight
volumes have led to improved used truck prices worldwide, with values up
10-15 percent compared to a year ago. Our customers improved
profitability has resulted in lower past-dues and credit losses compared to
last year, said Todd Hubbard, president, PACCAR Financial.
PACCARs strong balance sheet, complemented by its A+/A1 credit ratings,
enables PFS to offer competitive retail financing to Kenworth, Peterbilt and
DAF dealers and customers, said Bob Bengston, PACCAR vice president.
Strong credit quality, good margins and excellent portfolio management
are generating improved earnings, Bengston added. We continue to enjoy
excellent access to the commercial paper, medium-term note and syndicated
loan markets, allowing PFS to profitably support the sale of PACCAR trucks
in 20 countries on three continents.
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, provides financial services and
information technology and distributes truck parts related to its principal
business.
PACCAR will hold a conference call with securities analysts to discuss second
quarter earnings on July 26, 2011, at 9:00 a.m. Pacific time.
Interested parties may listen to the call by selecting Live Webcast at
PACCARs homepage. The Webcast will be available on a recorded basis
through August 5, 2011. PACCAR shares are listed on NASDAQ Global
Select Market, symbol PCAR, and its homepage can be found at www.paccar.com.
This release contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act. These statements are based
on managements 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 PACCARs filings with the
Securities and Exchange Commission.
* J.D. Power and Associates 2011 Heavy Duty Truck Studysm. Study was
based on 1,651 responses from principal maintainers of heavy-duty trucks.
For more information please go to www.jdpower.com.