July 29, 2014, Bellevue, Washington –
“PACCAR reported increased revenues and net income for the second
quarter of 2014,” said Ron Armstrong, chief executive
officer. “PACCAR’s second quarter results reflect the
benefits of improving truck sales in the U.S. and Canada and strong
aftermarket parts and financial services results worldwide. I am
very proud of our 22,600 employees who have delivered excellent results to
our shareholders and customers.”
PACCAR earned $319.2 million ($.90 per diluted share) for the second quarter
of 2014, an increase of 9 percent compared to $291.6 million ($.82 per
diluted share) earned in the second quarter of 2013. Second quarter
net sales and financial services revenues were $4.57 billion, a 6 percent
increase compared to $4.30 billion in the second quarter of 2013. For
the first six months of 2014, PACCAR reported net income of $593.1 million
($1.67 per diluted share) compared to $527.7 million ($1.49 per diluted
share) in 2013, an increase of 12 percent. Net sales and financial
services revenues for the first six months of 2014 were $8.95 billion, 9
percent higher than the $8.22 billion last year.
“PACCAR’s strong balance sheet and positive cash flows have
enabled the company to invest over $2.1 billion in new products and services
over the last three years. In the second quarter of 2014, DAF
introduced a new range of Euro 6 CF and XF four-axle trucks and tractors for
heavy-duty applications. These new vehicles expand DAF’s product
range in the construction, container and refuse markets and complement
DAF’s award-winning Euro 6 on-highway trucks. Kenworth and
Peterbilt also launched their new medium-duty cab-over-engine distribution
trucks,” added Armstrong. “These new vehicles will
contribute to PACCAR’s long-term global growth.”
DAF Euro 6 CF Four-Axle Truck
Regular Quarterly Dividend Increased
During the second
quarter, PACCAR’s Board of Directors approved a 10 percent increase to
the regular quarterly dividend to twenty-two cents ($.22) per share from
twenty cents ($.20). In the last five years, PACCAR’s regular
quarterly dividend has increased more than 140 percent. PACCAR’s
shareholder return averaged 12.7 percent each year in the last ten years,
compared to the S&P 500 Index average annual return of 7.8 percent for
the same period.
Financial Highlights – Second Quarter 2014
Highlights
of PACCAR’s financial results for the second quarter of 2014 include:
- Consolidated sales and revenues of $4.57 billion.
- Net income of $319.2 million, a 7.0% after-tax return on revenues.
- Record PACCAR Parts revenues of $778.0 million.
- Record Financial Services pretax income of $91.7 million.
- Manufacturing cash and marketable securities of $2.64 billion.
- Cash generated from operations of $555.1 million.
- Bank credit facilities of $2.0 billion renewed.
Financial Highlights – First Half 2014
Highlights
of PACCAR’s financial results for the first six months of 2014
include:
- Consolidated sales and revenues of $8.95 billion.
- Net income of $593.1 million.
- Record Financial Services pretax income of $177.2 million.
- Record PACCAR Parts revenues of $1.50 billion.
- Cash generated from operations of $840.8 million.
- Medium-term note (MTN) issuances of $913 million.
- Record shareholders’ equity of $7.16 billion.
Global Truck Markets
DAF is the market share leader in
the United Kingdom, the Netherlands and Belgium. “Customers
recognize DAF’s product quality leadership, low operating costs and
excellent resale value,” said Harrie Schippers, DAF president.
“DAF’s range of industry-leading vehicles has been enhanced by
the launch of the new DAF XF and CF Euro 6 four-axle vehicles. It is
estimated that industry sales in the above 16-tonne truck market in Europe
this year will be in the range of 210,000-230,000 units."
“Class 8 industry retail sales for the U.S. and Canada in 2014 are
improving and are expected to be in the range of 230,000-250,000
vehicles,” said Dan Sobic, PACCAR executive vice president.
“Our customers are benefiting from record levels of freight tonnage,
good freight rates and the excellent operating efficiency of the new
Kenworth and Peterbilt trucks for the on-highway and vocational segments.
Truck demand is being driven primarily by the ongoing replacement of
the aging truck population, economic growth and some expansion of fleet
capacity," added Sobic.
“Heavy-duty industry truck sales for South America in 2014 are
projected to be in the range of 140,000-150,000 vehicles,” said Bob
Christensen, PACCAR president and chief financial officer.
“PACCAR’s Kenworth vehicles have earned a significant
market share in the Andean region of South America for over 40 years.
The production of DAF trucks in Brasil will further enhance
PACCAR’s vehicle sales in South America.”
PACCAR Parts Achieves Record Quarterly Revenues
PACCAR
Parts generated record quarterly revenues of $778.0 million in the second
quarter of 2014, a 10 percent increase compared to $709.5 million of
revenues achieved in the second quarter of 2013. Second quarter 2014
pretax income was $126.7 million, an increase of 16 percent compared to the
$109.4 million earned in the second quarter of 2013. Parts first half
revenues were up 9 percent to $1.50 billion, compared to $1.38 billion for
the same period last year. Pretax profit increased 17 percent to
$238.8 million in the first six months of 2014, compared to $204.7 million
in the first six months of 2013.
“PACCAR Parts’ innovative dealer marketing programs, improving
fleet utilization and the age of the North American truck fleet are
contributing to excellent parts and service business. PACCAR’s
16 parts distribution centers support over 2,000 DAF, Kenworth and Peterbilt
dealer locations, which deliver industry-leading customer service,”
said David Danforth, PACCAR Parts general manager. “The PACCAR
and TRP all-makes brands have been good contributors to PACCAR’s
aftermarket sales growth. PACCAR is proud to celebrate the 20 year
anniversary of the TRP program, which consists of more than 100,000 part
numbers.”
PACCAR and TRP All-Makes Parts
PACCAR Parts is planning to begin construction of a new 176,000 square-foot
distribution center in Renton, Washington in the fourth quarter 2014.
“This new facility will more than double the distribution
capacity for our dealers and customers in northwestern United States and
western Canada,” noted Tony McQuary, PACCAR Parts assistant general
manager.
New Renton, Washington PACCAR
Parts Distribution Center (Architectural Drawing)
Capital Investments and Product Development
PACCAR’s
excellent long-term profits, strong balance sheet, and intense focus on
quality, technology and productivity have enabled the company to invest $5.8
billion in capital projects, innovative products and new technologies during
the past decade. Capital investments of $250-$300 million and R&D
expenses of $200-$225 million are targeted in 2014 for enhanced powertrain
development and increased operating efficiency of PACCAR assembly
facilities.
Kenworth and Peterbilt launched new medium-duty cab-over-engine trucks with
extensive exterior and interior enhancements in the second quarter.
The Kenworth K270 and K370 and the Peterbilt Model 220 have been
designed with an enhanced turning radius and shorter overall length to excel
in urban delivery applications. Kenworth and Peterbilt are delivering
industry-leading quality, innovation and comfort to the medium-duty
market.
New Kenworth and Peterbilt Medium-Duty
Cab-Over-Engine Trucks
PACCAR Engines
PACCAR has manufactured and installed
over 63,000 PACCAR MX-13 engines in Kenworth and Peterbilt trucks since the
start of North American engine production in mid-2010. The PACCAR
range of engines was expanded in 2013 with the introduction of the PACCAR
MX-11 engine in Europe. “The PACCAR MX-11 engine has been well
received by customers and dealers. Over 3,000 PACCAR MX-11 engines
have been installed in DAF XF and CF Euro 6 vehicles since its introduction
in October last year,” said Ron Borsboom, DAF director of
engineering.
Financial Services Companies Achieve Record Quarterly Results
PACCAR
Financial Services (PFS) has a portfolio of 161,000 trucks and trailers,
with total assets of $11.75 billion. PacLease, a major full-service
truck leasing company in North America and Europe with a fleet of over
35,000 vehicles, is included in this segment. During the second
quarter and first half of 2014, PFS profit increased due to growth in
portfolio balances and a lower provision for credit losses.
Second quarter PFS pretax income in 2014 improved to a record $91.7 million
compared to $81.5 million earned in the second quarter of 2013. Second
quarter 2014 revenues were $302.6 million compared to $288.8 million in the same
quarter of 2013. For the six-month period, Financial Services pretax
income was $177.2 million compared to $161.6 million last year.
First-half revenues were $596.3 million compared with $581.9 million for the
same period a year ago. “Dealers and customers appreciate PFS
providing leading-edge technology solutions, excellent customer service and
dedicated support of the transportation industry in all phases of the
business cycle,” said Bob Bengston, PACCAR senior vice
president.
“PACCAR’s 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 Todd Hubbard, PACCAR
Financial president. “A growing asset base and robust portfolio
performance are generating improved earnings. We have excellent access
to the commercial paper and medium-term note markets, allowing PFS to
profitably support the sale of PACCAR trucks in 23 countries on four
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 29, 2014, at 9:00 a.m. Pacific time.
Interested parties may listen to the call by selecting
“Webcasts” at PACCAR’s homepage. The Webcast will be
available on a recorded basis through August 5, 2014. 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 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.