PACCAR Announces Fourth Quarter 2001 Results
BELLEVUE, Wash.--Feb. 5, 2002--"PACCAR earned $50.4 million ($.65 per diluted share) for the fourth quarter of 2001," said Mark C. Pigott, PACCAR chairman and chief executive officer. "That compares with $62.7 million ($.82 per diluted share) for the same period a year ago. Fourth quarter net sales and financial services revenues were $1.5 billion compared to $1.7 billion for the comparable period in 2000."Consolidated net sales and financial services revenues for 2001 were $6.1 billion, a decrease of 23 percent from $7.9 billion in 2000. Net income of $173.6 million ($2.26 per share diluted) for the year was lower than 2000 earnings of $441.8 million ($5.73 per share diluted). PACCAR paid a $19.2 million ($.25 per share) extra cash dividend on January 7, 2002.
"PACCAR recorded its 62nd consecutive year of profitability in 2001, a remarkable achievement considering the cyclicality of the industry," Pigott added. "The company distinguished itself as a global leader in five major elements of the automotive business: product quality, aftermarket customer support, financial services, dealer network strength and the innovative use of technology. This has been accomplished through premium products, a balanced approach throughout business cycles and dedicated employees."
"Some competitor truck OEMs continue to experience deterioration in their used truck values," Pigott commented. "It appears that, at the present time, some competitors are maintaining aggressive residual guarantee programs, which was one of the primary contributors to the North American truck industry challenges last year."
Even in this difficult market, PACCAR continued to set the pace in financial performance for global truck manufacturers. Return on beginning shareholder equity (ROE) was 7.7 percent in 2001 compared to 20.9 percent earned in 2000. The company's 2001 after-tax return on sales (ROS) was 3.1 percent versus 5.9 percent a year earlier.
Global Truck Market Update
"Although the North American transportation industry has benefited recently from lower interest rates and fuel prices, these factors were more than offset by lower freight tonnage, higher insurance costs and declining used truck values. The result was a 13 percent reduction in North American Class 8 heavy-duty truck orders last year," said David Hovind, president. "It is anticipated that industry Class 8 orders this year will be comparable to 2001."
"The company has taken appropriate steps to adjust production rates as well as structurally reduce costs throughout the organization," Hovind added. "By being one of the leaders in the implementation of Six Sigma statistical analysis, PACCAR has been able to further improve production efficiency. PACCAR continues to invest in production facilities to ensure outstanding product quality and manufacturing capabilities," Hovind added.
Hovind stated, "The European truck market was good in 2001, comparable to 2000, with DAF increasing its market share. However, it is anticipated that the European truck market could be lower by 20-25 percent in 2002. One of the highlights of 2001 was the announcement that the DAF LF had earned the International Truck of the Year 2002 award. This prestigious award compiles the votes of the technical press from 20 European countries and is given to the vehicle that demonstrates advancement in the efficient carriage of goods and represents new standards for engineering design. This honor continues the tradition of innovative product development at DAF. The DAF 95XF was the International Truck of the Year for 1998."
Financial Services Update
PACCAR's Financial Services represents a portfolio of over 100,000 trucks and trailers with total assets of over $4.7 billion. Included in this segment is PACCAR Leasing, one of the largest full-service truck leasing companies in North America, with a portfolio of over 14,000 vehicles.
Fourth quarter revenues of $110 million were 13 percent lower than the same quarter in 2000, while pretax income declined by 60 percent to $7.0 million due to higher credit losses in the U.S. truck market. For the year, revenues decreased 4 percent to $459 million and pretax income was 54 percent lower at $35.0 million compared to $76.4 million last year.
Mike Tembreull, vice chairman, stated, "PACCAR's Financial Services companies generated net income, while providing an attractive source of financing to its customers. The ability to serve our customers worldwide was greatly enhanced in 2001 with the successful launch of PACCAR Financial Europe. In North America, credit losses continued as a result of the record number of fleet bankruptcies and truck repossessions. PACCAR Leasing achieved its eighth consecutive year of record profits. PACCAR's financial and credit efforts were strengthened as a result of technology investments throughout the year." Tembreull added, "The use of sophisticated credit analysis, on-line used vehicle catalogs and electronic data transfer procedures benefited customers worldwide."
PACCAR Winch, the largest diversified winch manufacturer in the world, had comparable earnings for the fourth quarter and the year compared with the same periods last year.
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, 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 shares are traded on the Nasdaq Stock Market, symbol PCAR, and its homepage can be found at www.paccar.com.
PACCAR Inc
SUMMARY INCOME STATEMENTS
(in millions (1))
Three Months Ended Full Year Ended
December 31 December 31
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2001 2000 2001 2000
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Truck and Other:
Net sales $1,426.1 $1,545.0 $5,630.0 $7,440.8
Cost of sales 1,274.5 1,379.8 5,072.6 6,500.8
Selling, general and
administrative 94.3 90.7 375.9 395.6
Interest and other, net (1.8) (.5) (3.5) (9.4)
--------- --------- --------- ---------
Truck and Other Income Before
Taxes 59.1 75.0 185.0 553.8
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Financial Services:
Revenues 110.1 127.0 458.8 479.1
Costs and Expenses 103.1 109.4 423.8 402.7
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Financial Services Income
Before Taxes 7.0 17.6 35.0 76.4
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Investment Income 8.0 1.2(b) 35.3 34.9(b)
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Total Income Before
Income Taxes 74.1 93.8 255.3 665.1
Income taxes 23.7 31.1 81.7 223.3
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Net Income $ 50.4 $ 62.7 $ 173.6 $ 441.8
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Net Income Per Share:
Basic $ .66 $ .82 $ 2.27 $ 5.76
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Diluted $ .65 $ .82 $ 2.26 $ 5.73
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Weighted average number of
Basic shares outstanding 76.6 76.2 76.5 76.7
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Dividends declared per share $ .55 $ 1.30 $ 1.45 $ 2.20
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(a) Except per share amounts.
(b) Includes $10 million ($6.3 million after-tax) to write off an
equity investment.
PACCAR Inc
CONDENSED BALANCE SHEETS
(in millions of dollars)
December 31
2001 2000
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ASSETS
Truck and Other:
Cash and marketable securities $1,023.1 $ 909.7
Trade and other receivables, net 396.3 530.8
Inventories 267.8 303.1
Property, plant and equipment, net 828.8 882.6
Other assets 639.4 530.5
Financial Services Assets 4,758.5 5,114.2
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$7,913.9 $8,270.9
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LIABILITIES AND STOCKHOLDERS' EQUITY
Truck and Other:
Accounts payable, taxes and other $1,709.5 $1,634.9
Dividend payable 19.2 76.4
Term debt 141.9 193.8
Financial Services Liabilities 3,790.7 4,116.7
STOCKHOLDERS' EQUITY 2,252.6 2,249.1
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$7,913.9 $8,270.9
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