Company Achieves Record Annual Revenues
January 31, 2013, Bellevue, Washington "PACCAR reported
record revenues for 2012 and its 74th consecutive year of net profit.
PACCAR's annual revenues of $17.05 billion were the highest in company
history and the $1.11 billion of net income was the fourth best in our
history," said Mark Pigott, chairman and chief executive officer.
"PACCAR's financial results reflect the company's premium-quality
products and services, the benefits of increased geographic diversification,
excellent aftermarket parts business and record PACCAR Financial Services
performance. I am very proud of our 21,800 employees who have
delivered outstanding industry-leading products and services."
"PACCAR's strong balance sheet and operating cash flow of $1.52 billion in
2012 enabled the company to deliver many new products, enhance manufacturing
efficiency and expand globally," said Ron Armstrong, president.
"PACCAR launched more new trucks in 2012 than in any other year.
The Kenworth T680, the Peterbilt Model 579 and the DAF XF Euro 6 are
the result of a $1 billion, multi-year program to design and develop the
highest quality, most efficient trucks in the industry," added Armstrong.
"We are pleased that DAF achieved record share in the European above
16-tonne market and Kenworth and Peterbilt achieved record share in the
Class 8 market in North America."
Revenues, Net Income and Dividends
PACCAR achieved
record revenues of $17.05 billion in 2012 compared to revenues of $16.36
billion in 2011. PACCAR reported net income of $1.11 billion in 2012
compared to $1.04 billion earned last year. PACCAR's 2012 earnings per
diluted share (EPS) of $3.12 increased by nine percent versus 2011 EPS of
$2.86. Fourth quarter net sales and financial service revenues were
$3.99 billion compared to $4.85 billion for the comparable period in 2011.
PACCAR earned $253.5 million ($.72 per diluted share) for the fourth
quarter of 2012 compared to $327.7 million ($.91 per diluted share) in the
fourth quarter of 2011.
PACCAR declared cash dividends of $1.58 per share during 2012, including a
fourth quarter special dividend of $.80 per share. Total dividends
declared in 2012 increased by 22 percent compared to 2011. PACCAR has
paid a dividend every year since 1941. PACCAR's total shareholder
return was 25.1 percent during 2012.
Business Highlights 2012
- PACCAR delivered 140,400 vehicles worldwide and introduced the Kenworth
T680, Peterbilt Model 579 and DAF XF Euro 6.
- PACCAR continued to expand its geographic footprint by beginning
construction of a new DAF assembly plant in Brasil, generating record
sales in Russia and delivering over 6,000 trucks to the Andean region of
South America.
- PACCAR invested $790.3 million in capital projects and research and
development.
- PACCAR was ranked 20th in InformationWeek magazine's
2012 Top 500 company listing.
- The DAF CF85 earned the U.K.'s Motor Transport award
for "Fleet Truck of the Year" for the eleventh time.
- The Peterbilt Model 210 and Model 587 earned the American Truck Dealers
Medium- and Heavy-Duty Commercial Truck of the Year awards.
- Kenworth Trucks ranked highest in the J.D. Power Heavy Duty Dealer
Service Customer Satisfaction Studysm* for the second consecutive year.
- Leyland Trucks was honored with the Manufacturing Leadership
Award for Operational Excellence in the annual
Manufacturing Excellence Awards.
- PACCAR has implemented 19,300 Six Sigma projects since 1997.
New Peterbilt Model 579 and New Kenworth
T680
Stock Repurchase Update
During 2012, PACCAR repurchased
4.19 million of its common shares for $162.1 million. Under the
current Board of Directors resolution authorizing $300 million of stock
repurchases, PACCAR has repurchased 4.99 million shares for $192.0 million.
"PACCAR's excellent net profits and strong cash flow make the
company's shares an attractive long-term investment. The stock
repurchase program reflects the Board's confidence in PACCAR's successful
global business growth," said Bob Christensen, PACCAR chief financial
officer and executive vice president. PACCAR's shareholder return
averaged 16.2 percent per year in the last ten years, compared to the
S&P 500 Index average annual return of 7.1 percent for the same period.
Financial Highlights Fourth Quarter 2012
- Consolidated sales and revenues of $3.99 billion.
- Net income of $253.5 million.
- Cash generated by operations of $602.4 million.
- Financial Services pretax income of $78.7 million.
- Research and development expenses of $66.4 million.
- Capital investments of $156.8 million.
- Manufacturing cash and marketable securities of $2.4 billion at December
31, 2012.
Financial Highlights Full Year 2012
- Record consolidated sales and revenues of $17.05 billion.
- Net income of $1.11 billion.
- Cash provided from operations of $1.52 billion.
- Record Financial Services pretax income of $307.8 million on assets of
$10.80 billion.
- Capital investments of $511.0 million.
- Research and development expenses of $279.3 million.
- Medium-term note (MTN) issuances of $2.16 billion.
- Dividend declarations and share repurchases of $722.0 million.
- Record year-end shareholders' equity of $5.85 billion at December 31,
2012.
Global Truck Market Update
"In 2012, DAF achieved a
record European market share of 16.0 percent in the above 16-tonne market,
the highest share in its 84-year history. DAF is the market leader in
the European tractor segment as fleets recognize DAF's product quality
leadership, low operating costs and excellent resale value," said Harrie
Schippers, DAF president. "Industry sales above 16-tonnes in Western
and Central Europe were 222,000 units in 2012. It is estimated that
industry sales in the above 16-tonne truck market in Europe in 2013 will be
in a range of 210,000-250,000 units as some customers are expected to
purchase Euro 5 vehicles ahead of the introduction of the Euro 6 emission
requirement in 2014. Production of the new DAF XF with the new PACCAR
MX-13 Euro 6 engine will commence in spring 2013. The new products
strengthen DAF's position as the leading provider of integrated transport
solutions," added Schippers.
New DAF XF Euro 6 Truck Powered
by the PACCAR MX-13 Engine
"Class 8 industry retail sales in the U.S. and Canada improved to 225,000
units in 2012 compared to 197,000 in 2011," said Dan Sobic, PACCAR executive
vice president. "Our customers are benefiting from good freight
tonnage and freight rates. In 2012, PACCAR achieved a record Class 8
retail market share in the U.S. and Canada of 28.9 percent as customers
benefited from Kenworth and Peterbilt vehicles' low operating cost.
Estimates for U.S. and Canada truck industry Class 8 retail sales in
2013 are in the range of 210,000-240,000 units, driven by ongoing
replacement of the aging fleet and the overall growth in the economy," added
Sobic.
South American Expansion
PACCAR continued construction
of its new 300,000-square-foot DAF assembly facility in Ponta Grossa,
Brasil. "Brasil is a major truck market with industry sales above six
tonnes expected to increase in 2013 to over 140,000 units. The DAF
product range offers premium quality, low operating costs, excellent
driveability and maneuverability, and the industry-leading PACCAR MX
engine," said Marco Davila, DAF Brasil president. "The production of
DAF trucks in Brasil in late 2013 is an exciting development which will add
to PACCAR's sales in South America."
PACCAR's Kenworth vehicles have earned a significant market share in many
South American countries in the Andean region for over 40 years.
"PACCAR delivered over 6,000 trucks in the Andean region of South
America in 2012," said Sam Means, PACCAR vice president.
Russia Expansion
"DAF and Kenworth delivered 2,700
trucks to Russian customers in 2012, an increase of 80 percent versus 2011,"
said Ron Bonsen, DAF director of sales. "PACCAR Parts established a
Parts Distribution Center (PDC) in Moscow in late 2011 which supports our
growing dealer network of 29 sales and service locations."
PACCAR in Asia
PACCAR's Shanghai office concentrates on
component purchases for production and aftermarket operations. "China
is the largest truck market in the world and PACCAR is benefiting from its
increased presence in the region," said Dan Sobic, PACCAR executive vice
president. "DAF is the third largest truck manufacturer in the above
16-tonne segment in Taiwan with a 10.4 percent market share. During
2012, DAF began its LF vehicle assembly joint venture in Taiwan."
PACCAR Parts Achieves Strong Performance
"PACCAR's
aftermarket parts business achieved excellent revenue in 2012," said Bob
Christensen, chief financial officer and PACCAR executive vice president.
"The ongoing growth in PACCAR's aftermarket part sales has been driven
by investment in parts processes and distribution, technology and products,
including the emergence of our global TRP brand. The company will
begin reporting the Parts division as a separate segment in PACCAR's 2012
annual report," added Christensen.
"Improving truck utilization and an aging North American truck fleet are
helping to generate excellent parts and service business. PACCAR
utilizes 15 strategically located parts distribution centers supported by
over 1,900 DAF, Kenworth and Peterbilt dealer locations to deliver
industry-leading customer service," said Darrin Siver, PACCAR Parts general
manager and PACCAR vice president. "A new 280,000-square-foot
distribution center in Eindhoven, the Netherlands, is due to open in April
2013 to enhance support to DAF customers and dealers in Europe."
PACCAR's Parts Distribution
Center in Eindhoven is due to open in April 2013
PACCAR Engines
In December 2012, PACCAR received
certification from the U.S. Environmental Protection Agency (EPA) for its
range of proprietary engines for 2013. The California Air Resources
Board (CARB) also certified PACCAR engines for the 2013 on-board diagnostics
(OBD) requirement. "PACCAR has installed over 30,000 MX engines in
Kenworth and Peterbilt trucks in North America since the start of production
in 2010. The PACCAR MX-13 engines include a new high pressure common
rail fuel injection system, enhanced on-board diagnostics and an expanded
rating of 500 hp," said Craig Brewster, PACCAR vice president.
Increased Capital Investments
In 2012, capital
investments of $511.0 million and research and development expenses of
$279.3 million were invested in global expansion initiatives, to enhance
manufacturing efficiency, and accelerate new PACCAR product development.
PACCAR's capital investments in 2013 are focused on the completion of
the DAF factory in Brasil. "Capital investments are projected to be
$400-$500 million and research and development expenses are estimated at
$225-$275 million in 2013," said George West, PACCAR vice president.
"Kenworth, Peterbilt and DAF are designing new products and services
to enable our customers to continue to improve profitability of their
businesses."
Environmental Leadership
PACCAR continues to be a
leader in the market for natural gas powered vehicles. Kenworth and
Peterbilt have been manufacturing trucks powered by liquefied natural gas
(LNG) and compressed natural gas (CNG) since 1996. PACCAR produced
over 1,400 natural gas powered vehicles in 2012, earning a 40 percent share
of the U.S. heavy-duty truck natural gas market. Kenworth and
Peterbilt trucks provide a wide range of vehicle solutions for
over-the-road, regional and vocational applications and are currently
available with either 9-liter or 15-liter natural gas engines.
"PACCAR's natural gas engine platforms offer an efficient and clean
technology that benefits customers in a wide range of applications,"
commented Craig Brewster, PACCAR vice president.
Financial Services Companies Achieve Excellent Results
PACCAR
Financial Services (PFS) finances a portfolio of 154,000 trucks and
trailers, with total assets of $10.80 billion. PacLease, a major
full-service truck leasing company in North America and Europe with a fleet
of 34,000 vehicles, is included in this segment. "During the fourth
quarter and full-year 2012, profit increased due to growth in portfolio
balances," said Bob Bengston, PACCAR vice president. Fourth quarter
pretax income was $78.7 million compared to the $67.4 million earned in the
fourth quarter of 2011. Fourth quarter revenues were $297.8 million
compared to $266.2 million in the same quarter of 2011. For the full
year, revenues were $1.10 billion compared to $1.03 billion in 2011 and
pretax income was $307.8 million in 2012 compared to $236.4 million a year
ago.
"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 four continents," said Todd
Hubbard, PACCAR Financial Corp. president. "A growing asset base and
excellent portfolio performance are generating improved earnings."
PACCAR Financial Services had excellent access to the debt markets in 2012,
issuing $2.16 billion in two-, three- and five-year term notes during the
year. "Strong investor demand for PACCAR's debt securities is a result
of PACCAR's consistent profitability, excellent cash flow and strong balance
sheet," said Robin Easton, PACCAR treasurer. "PFS borrows at
competitive rates which gives our customers an advantage in the
marketplace."
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 fourth
quarter earnings on January 31, 2013, at 9:00 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 February 10, 2013.
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.
* J.D. Power and Associates 2012 Heavy-Duty Truck Customer Satisfaction
Studysm. For more information please go to www.jdpower.com.