PACCAR Announces Strong Sales and Earnings
BELLEVUE, Wash.--Oct. 22, 2002--"PACCAR Inc, reported excellent revenues and net income for the third quarter and first nine months of 2002 compared with the same periods a year ago," said Mark C. Pigott, chairman and chief executive officer.Third quarter net sales and financial services revenues were $2.0 billion, 33 percent higher than the $1.5 billion reported for the comparable period in 2001. Net income of $128.9 million ($1.11 per diluted share) increased more than 200 percent from the $39.4 million ($.34 per diluted share) earned in the third quarter of 2001.
Net sales and financial services revenues for the first nine months of 2002 were $5.3 billion compared to $4.6 billion last year. For the first nine months of 2002, PACCAR reported net income of $249.8 million ($2.15 per diluted share) compared to $123.2 million ($1.07 per diluted share) in 2001.
"In a turbulent truck market, PACCAR posted strong results due to its industry-leading quality products, comprehensive aftermarket programs and ongoing cost control measures," noted Pigott. "PACCAR continues to set the standard for the commercial vehicle industry worldwide by generating good profits and maintaining a strong balance sheet, with excellent credit ratings. PACCAR shareholder return has exceeded the Standard & Poor's 500 index for the previous one-, five-, and ten-year time periods," he added. "PACCAR's global presence, with over 40 percent of its revenues generated outside of the U.S., provides beneficial market diversity. Kenworth, Peterbilt and DAF have increased their share in their respective markets in North America, Australia and Europe. The continuity of management leadership for 97 years has resulted in a consistent approach towards achieving company objectives of quality, profitability and growth."
Recent PACCAR announcements and actions include the following:
| -- | PACCAR invested $100 million in 2002 to fund its pension plan obligations. |
| -- | PACCAR will begin expensing its stock options, effective January 1, 2003. |
| -- | PACCAR's proactive community leadership is illustrated by the environmental awards earned at its Renton, Chillicothe and Mexican facilities. |
| -- | PACCAR began installing production-ready compliant engines, which meet the new emission regulations. |
| -- | ISO 9001: 2000 quality certification has been earned by a number of PACCAR's divisions. |
"Last month PACCAR Inc's board of directors approved the purchase from time to time in the open market of up to three million shares of its outstanding common stock, recognizing that the company's stock is an excellent investment," Pigott said.
Global Truck Market Update
"PACCAR's third quarter 2002 North American production rates increased over 60 percent compared to a year ago," noted David Hovind, president. "This resulted from a surge in truck orders in first half 2002. Most of the increase in orders was due to 'pull-forward purchases,' as fleets tried to minimize the impact of more costly engines being introduced after October 1, 2002. Fourth quarter 2002 and first quarter 2003 industry production rates could be unfavorably impacted as a result of the accelerated buying, increased fuel prices and slow growth of general freight."
"European industry heavy-duty truck sales continue to be 10-15 percent lower in 2002 compared to the near record levels of 2001," stated Hovind. "DAF has increased its heavy-duty market share to over 12 percent. DAF continues to earn many industry awards and is recognized as the European truck quality leader, similar to how customers regard the Kenworth and Peterbilt brands in North America."
Hovind added, "PACCAR has achieved a record 6.4 percent registration share in the Class 6-7 truck and tractor market in North America. In addition, Kenworth and Peterbilt combined have earned the J.D. Power Customer Satisfaction Award for three consecutive years for medium-duty trucks. The growth in our medium-duty sales has generated increased contribution to our dealers' profitability."
Financial Services Earnings Improve
PACCAR's Financial Services segment represents a portfolio of nearly 110,000 trucks and trailers, with total assets of $4.9 billion. Included in this segment is PACCAR Leasing, a major full-service truck leasing company in North America, with a portfolio of over 15,000 vehicles.
Third quarter revenues were $110 million compared to $112 million in the same quarter of 2001, while pretax income of $22.6 million increased 176 percent from $8.2 million in third quarter 2001. For the nine-month period, revenues were $322 million compared to $349 million for the same period a year ago. Pretax income for nine months was $47.3 million in 2002 compared to $28.0 million in 2001.
"PACCAR's Financial Services companies continue to profitably support the sale of PACCAR trucks throughout North America, Europe and Australia with their comprehensive financing products," said Mike Tembreull, vice chairman. "Fleet bankruptcies and repossessions in the U.S. are declining and used truck prices for PACCAR vehicles continue to be 10-15 percent higher than the competition."
Investment income declined in the third quarter primarily as a result of a $4.1 million (pretax) write-down of an equity investment.
PACCAR Winch, the largest industrial winch manufacturer in the world, had earnings comparable to the first nine months of 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.
Certain information presented in this report contains forward-looking statements made pursuant to the Private Securities Litigation Reform Act of 1995, which are subject to risks and uncertainties that may affect actual results. Risks and uncertainties include, but are not limited to, global and local economic, political and industry conditions; competitive pressures; price changes impacting manufacturing and operating costs; insufficient or underutilization of manufacturing capacity; and legislation and governmental regulation.
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 Nine Months Ended
September 30 September 30
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2002 2001 2002 2001
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Truck and Other:
Net sales and revenues $1,886.1 $1,391.5 $4,977.6 $4,213.9
Cost of sales and revenues 1,623.9 1,257.2 4,379.7 3,802.6
Selling, general and
administrative 86.6 88.2 265.2 274.9
Interest and other, net (.1) 4.3 10.8 10.5
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Truck and Other Income Before
Taxes 175.7 41.8 321.9 125.9
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Financial Services:
Revenues 110.2 111.9 322.0 348.7
Costs and expenses 87.6 103.7 274.7 320.7
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Financial Services Income
Before Taxes 22.6 8.2 47.3 28.0
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Investment income 6.2 8.5 19.3 27.3
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Total Income Before Income
Taxes 204.5 58.5 388.5 181.2
Income taxes 75.6 19.1 138.7 58.0
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Net Income $128.9 $39.4 $249.8 $123.2
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Net Income Per Share:
Basic $1.11 $.34 $2.16 $1.07
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Diluted $1.11 $.34 $2.15 $1.07
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Weighted average shares
outstanding:
Basic 115.7 114.7 115.5 114.6
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Diluted 116.3 115.4 116.3 115.3
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Dividends declared per share $.20 $.20 $.60 $.60
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(a) Except per share amounts.
All share and per share amounts adjusted to reflect a 50% stock
dividend paid on May 28, 2002.
PACCAR Inc
SUMMARY BALANCE SHEETS
(in millions of dollars)
September 30 December 31
2002 2001
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ASSETS
Truck and Other:
Cash and marketable debt securities $1,252.5 $1,023.1
Trade and other receivables, net 522.9 396.3
Inventories 386.5 267.8
Property, plant and equipment, net 804.9 828.8
Equipment on lease, taxes and other 695.2 639.4
Financial Services Assets 4,939.2 4,758.5
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$8,601.2 $7,913.9
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LIABILITIES AND STOCKHOLDERS' EQUITY
Truck and Other:
Accounts payable, deferred revenues and other $2,109.9 $1,709.5
Dividend payable 19.2
Term debt 70.5 141.9
Financial Services Liabilities 3,875.0 3,790.7
STOCKHOLDERS' EQUITY 2,545.8 2,252.6
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$8,601.2 $7,913.9
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