PACCAR Announces Second Quarter 2001 Results
BELLEVUE, Wash.--July 25, 2001--"PACCAR Inc reported lower sales and net income for the second quarter of 2001 compared with the same period a year ago," said Mark C. Pigott, chairman and chief executive officer.Second quarter net sales and financial services revenues were $1.5 billion, 29 percent lower than the $2.1 billion reported for the comparable period in 2000. Net income of $39.5 million ($.51 per share diluted) decreased from $131.1 million ($1.71 per share diluted) earned in the second quarter of 2000.
Net sales and financial services revenues for the first six months 2001 were $3.1 billion. First-half income was $83.8 million, or $1.09 per diluted share.
Global Truck Market Update
"The truck market in North America remains weak and this trend is expected to continue for at least another 6 to 12 months," said Mark Pigott. "New Class 8 retail sales are 38 percent lower than a year ago. The industry continues to be impacted by lower freight tonnage, higher operating costs for truckers and a large number of used trucks."
"PACCAR is aggressively reducing costs throughout the company," Pigott added. "Second quarter 2001 production levels were similar to the first quarter this year. Third quarter financial results will include the effect of the traditional summer holiday factory closures at DAF and Leyland."
"As reported earlier this month, PACCAR is increasing Peterbilt Class 8 truck production build rate by 8 percent and the Class 6/7 vehicles manufactured at the Ste. Therese, Quebec, facility by 22 percent," noted Mr. Pigott. "Kenworth and Peterbilt trucks continue to demonstrate superior operating performance and lower operating costs, resulting in their vehicles having the highest resale value in North America. These factors, combined with new PACCAR Parts and Information Technology initiatives, have established our dealer network as the strongest in the industry."
David Hovind, president, commented, "PACCAR's geographic diversification is benefiting the company as the European truck market is having a good year. However, industry production in Europe will be 10 to 15 percent lower than the record level reached in 2000 as a result of the slowing Eurozone economy. DAF reduced production 5 percent in the second quarter in response to lower level of orders. DAF has redesigned its entire product range in the last four years and is vigorously increasing the number of dealer network service points throughout Europe. These actions have resulted in market share gains this year. The DAF CF Series was recently named as the U.K. Fleet Truck of the Year."
Financial Services Update
PACCAR's Financial Services segment represents a portfolio of over 100,000 trucks and trailers with total assets of nearly $5 billion. Included in this segment is PACCAR Leasing, a major full-service truck leasing company in North America, with a portfolio of 14,000 vehicles.
Financial Services second quarter revenues of $116 million were comparable to the same quarter of 2000, while pretax income at $8.1 million declined 58 percent from last year's second quarter. For the six-month period, revenue rose 5 percent to $237 million compared to $225 million for the same period a year ago. First-half pretax income was $19.8 million compared to $38.4 million in 2000.
"PACCAR Financial has experienced higher credit losses this year due to a recessionary truck market that has caused a record number of fleet bankruptcies and truck repossessions," stated Michael Tembreull, vice chairman. "PACCAR Financial's conservative approach to financing has enabled it to earn reasonable results in this turbulent market. PACCAR Financial Europe recently began business in the U.K. and will offer a range of industry-leading financial services to DAF truck operators in Western Europe."
PACCAR Winch, the largest industrial winch manufacturer in the world, had comparable earnings to first-half last year.
PACCAR Inc 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, DAF and Foden nameplates. It also provides financial services and distributes truck parts related to its principal business. In addition, the Bellevue, Washington-based company manufactures winches under the Braden, Gearmatic and Carco nameplates.
PACCAR Inc
Summary Income Statements
(in millions(a))
Three Months Ended Six Months Ended
June 30 June 30
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2001 2000 2001 2000
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Truck and Other:
Net sales $1,406.9 $2,024.7 $2,814.7 $4,247.5
Cost of sales 1,275.2 1,759.4 2,542.2 3,657.7
Selling, general and
administrative 92.3 101.7 191.3 212.1
Interest and other, net (.4) (10.4) (2.9) (9.1)
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Truck and Other Income
Before Taxes 39.8 174.0 84.1 386.8
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Financial Services:
Revenues 116.4 116.9 236.8 225.4
Costs and expenses 108.3 97.7 217.0 187.0
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Financial Services Income
Before Taxes 8.1 19.2 19.8 38.4
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Investment Income 9.2 11.1 18.8 21.9
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Total Income Before
Income Taxes 57.1 204.3 122.7 447.1
Income Taxes 17.6 73.2 38.9 161.1
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Net Income $ 39.5 $ 131.1 $ 83.8 $ 286.0
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Net Income Per Share
Basic $ .52 $ 1.72 $ 1.10 $ 3.71
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Diluted $ .51 $ 1.71 $ 1.09 $ 3.69
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Weighted average number of
basic shares outstanding 76.4 76.4 76.4 77.0
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Dividend declared per share $ .30 $ .30 $ .60 $ .60
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(a) Except per share amounts
PACCAR Inc
CONDENSED BALANCE SHEETS
(in millions of dollars)
June 30 Dec. 31
2001 2000
ASSETS
Truck and Other:
Cash and marketable securities $ 807.8 $ 909.7
Trade and other receivables, net 493.6 530.8
Inventories 277.5 303.1
Property, plant and equipment, net 829.7 882.6
Other assets 532.4 530.5
Financial Services Assets 4,859.3 5,114.2
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$ 7,800.3 $ 8,270.9
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LIABILITIES AND STOCKHOLDERS' EQUITY
Truck and Other:
Accounts payable, taxes and other $ 1,615.8 $ 1,634.9
Dividend payable 76.4
Term debt 143.3 193.8
Financial Services Liabilities 3,835.2 4,116.7
STOCKHOLDERS' EQUITY 2,206.0 2,249.1
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$ 7,800.3 $ 8,270.9
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