PACCAR Announces Higher Sales and Earnings
BELLEVUE, Wash.--July 25, 2002--"PACCAR Inc reported higher sales and net income for the second quarter and first half of 2002 compared with the same periods a year ago," said Mark C. Pigott, chairman and chief executive officer.Second quarter net sales and financial services revenues were $1.8 billion, 18 percent higher than the $1.5 billion reported for the comparable period in 2001. Net income of $73.7 million ($.63 per diluted share) increased 87 percent from the $39.5 million ($.34 per diluted share) earned in the second quarter of 2001.
Net sales and financial services revenues for the first six months of 2002 were $3.3 billion compared to $3.1 billion last year. For the first six months of 2002, PACCAR reported net income of $120.9 million ($1.04 per diluted share) compared to $83.8 million ($.73 per diluted share) in 2001. On May 28, 2002, PACCAR paid a 50 percent stock dividend of the Company's common stock (i.e., one additional share for each two shares held).
"PACCAR has earned a profit for 62 consecutive years, through all stages of the business cycle. The market recognizes PACCAR's excellent balance sheet, the superior quality of Kenworth, Peterbilt, DAF and Foden trucks, as well as the industry-leading aftermarket support provided to our customers," said Pigott. "During the quarter, PACCAR made a $77 million final payment on the debt incurred for the 1996 acquisition of DAF Trucks. Additionally, PACCAR contributed $70 million to the Company's pension plans to reduce the funding deficit which existed at year-end 2001."
"PACCAR has a 97-year history of being a leader in strong internal controls and a well-deserved reputation for ethical, high-integrity business practices," Pigott commented. "PACCAR positively endorses the rigorous standards being applied in the reporting of company financial results."
Global Truck Market Update
"Industry heavy-duty truck net orders in North America surged nearly 75 percent higher in the first half of 2002 compared to the first half of 2001," noted Pigott. "Most of the increase in orders has been due to `pull-forward purchases,' as fleets try to minimize the impact of more costly engines being introduced on October 1, 2002. Fourth quarter 2002 industry truck sales could be unfavorably impacted as a result of the current accelerated buying and slow growth of general freight. In response to higher demand for their high-quality vehicles, Kenworth and Peterbilt steadily increased Class 8 production rates for the U.S. and Canada during the second quarter. PACCAR's current production rates for those markets are 75 percent higher than first quarter 2002. Kenworth and Peterbilt Class 6/7 trucks continue to increase their market share."
"European industry heavy-duty truck sales are 15 percent lower in 2002 compared to the near record levels of 2001," stated David Hovind, president. "DAF has offset the market decline somewhat with an increase in its market share to a record 13 percent, which makes DAF the fourth largest heavy-duty truck OEM in Europe. The DAF CF vehicle won the U.K. 2002 Motor Transport Fleet Truck of the Year award for an unprecedented fifth time. DAF is increasing its infrastructure and technology investments, has recently opened a new dealership in Berlin and is launching a new web-enabled material logistics software for its distribution network."
Financial Services Earnings Improve
PACCAR's Financial Services segment represents a portfolio of nearly 110,000 trucks and trailers, with total assets of $4.8 billion. Included in this segment is PACCAR Leasing, a major full-service truck leasing company in North America, with a portfolio of 14,800 vehicles.
Second quarter revenues were $107 million, compared to $116 million in the same quarter of 2001, while pretax income of $15.0 million increased 85 percent from $8.1 million in second quarter 2001. For the six-month period, revenue decreased to $212 million compared to $237 million for the same period a year ago. First-half pretax income was $24.7 million compared to $19.8 million in 2001.
"PACCAR's Financial Services companies continue to profitably support the sale of PACCAR trucks throughout North America, Europe and Australia with its comprehensive financing products," said Mike Tembreull, vice chairman. "Fleet bankruptcies in the U.S. are moderating and used truck prices for PACCAR vehicles continue to improve."
Investment income declined in the second quarter primarily as a result of a $5.1 million (pretax) write-down of an equity investment to market value.
PACCAR Winch, the largest industrial winch manufacturer in the world, had earnings comparable to first-half 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(a))
Three Months Ended Six Months Ended
June 30 June 30
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2002 2001 2002 2001
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Truck and Other:
Net sales and revenues $ 1,694.8 $ 1,414.6 $ 3,091.5 $ 2,822.4
Cost of sales and
revenues 1,500.0 1,276.0 2,755.8 2,545.4
Selling, general and
administrative 90.6 90.1 178.6 186.7
Interest and other, net 8.3 8.7 10.9 6.2
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Truck and Other Income
Before Taxes 95.9 39.8 146.2 84.1
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Financial Services:
Revenues 107.0 116.4 211.8 236.8
Costs and expenses 92.0 108.3 187.1 217.0
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Financial Services Income
Before Taxes 15.0 8.1 24.7 19.8
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Investment income 3.7 9.2 13.1 18.8
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Total Income Before
Income Taxes 114.6 57.1 184.0 122.7
Income taxes 40.9 17.6 63.1 38.9
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Net Income $ 73.7 $ 39.5 $ 120.9 $ 83.8
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Net Income Per Share:
Basic $ .64 $ .34 $ 1.05 $ .73
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Diluted $ .63 $ .34 $ 1.04 $ .73
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Weighted average number
of basic shares
outstanding 115.6 114.6 115.5 114.6
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Dividends declared
per share $ .20 $ .20 $ .40 $ .40
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(a) Except per share amounts.
PACCAR Inc
CONDENSED BALANCE SHEETS
(in millions of dollars)
June 30 December 31
2002 2001
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ASSETS
Truck and Other:
Cash and marketable debt securities $ 1,093.9 $ 1,023.1
Trade and other receivables, net 546.0 396.3
Inventories 288.5 267.8
Property, plant and equipment, net 826.5 828.8
Equipment on lease, taxes and other 734.2 639.4
Financial Services Assets 4,819.6 4,758.5
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$ 8,308.7 $ 7,913.9
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LIABILITIES AND STOCKHOLDERS' EQUITY
Truck and Other:
Accounts payable,
deferred revenues and other $ 2,016.8 $ 1,709.5
Dividend payable 19.2
Term debt 71.1 141.9
Financial Services Liabilities 3,776.1 3,790.7
STOCKHOLDERS' EQUITY 2,444.7 2,252.6
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$ 8,308.7 $ 7,913.9
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