PACCAR Announces Strong Sales and Earnings
BELLEVUE, Wash.--Feb. 4, 2003--"PACCAR Inc reported strong revenues and net income for the fourth quarter and full year 2002 compared with the same periods a year ago," said Mark C. Pigott, chairman and chief executive officer.PACCAR earned $122.2 million ($1.05 per diluted share) for the fourth quarter 2002. That compares with $50.4 million ($.44 per diluted share) earned for the same period a year ago. Fourth quarter net sales and financial services revenues were $1.9 billion versus $1.5 billion for the fourth quarter of 2001.
Consolidated net sales and financial services revenues for 2002 were $7.2 billion, an increase of 18 percent from $6.1 billion in 2001. Net income of $372 million ($3.20 per diluted share) for the year more than doubled 2001 earnings of $173.6 million ($1.50 per diluted share). Dividends of $1.50 per share were declared during 2002, including a special dividend of $.70.
"PACCAR had its fourth best year in its 98-year history and recorded its 63rd consecutive year of net profitability. PACCAR has set the standard for the commercial vehicle industry by generating strong profits and maintaining a solid balance sheet, with excellent credit ratings. PACCAR's credit rating of AA- from Standard & Poor's is one of the best in the automotive industry. These are exceptional achievements, especially considering the challenging conditions of the global truck market," noted Pigott. "PACCAR's focus on producing the highest quality product in the market, complemented by rigorous cost controls and the innovative use of technology in all facets of its business, enabled the company to achieve steady growth in 2002. PACCAR's total shareholder return was nine percent last year and has exceeded the Standard & Poor's 500 index for the previous one-, five- and ten-year time periods."
PACCAR continued to establish the benchmark for financial performance by global truck manufacturers. Return on beginning shareholder equity (ROE) was 16.5 percent in 2002 compared to 7.7 percent in 2001. The company's 2002 after-tax return on sales (ROS) was 5.5 percent versus 3.1 percent a year earlier.
Significant PACCAR accomplishments and actions during the year include the following:
| -- | PACCAR invested $169 million in cash in 2002 to fund its pension plan obligations. |
| -- | PACCAR declared a 3-for-2 stock dividend, effective in May 2002. |
| -- | PACCAR began expensing its stock options, effective January 1, 2003. |
| -- | The Peterbilt Model 330 earned the J.D. Power and Associates Customer Satisfaction Study(SM) award in the conventional medium-duty truck segment for its Class 6-7 vehicle for the third time in the last four years. Kenworth won the award in 2000. |
| -- | DAF Trucks' Model XF was second in the 2003 International Truck of the Year competition. DAF's LF won the award in 2002 and DAF's 95XF won the award in 1998. |
| -- | DAF, PACCAR Parts and PACCAR Australia established new records in sales and profits in 2002. |
| -- | PACCAR shareholder equity increased to $2.6 billion. |
"It is refreshing to note that the financial markets now value companies that have an established tradition of delivering cash dividends as a sign of corporate strength. Due to PACCAR's conservative business approach, the company has issued a cash dividend since 1941 and has increased its regular quarterly dividend 110 percent in the last five years. In 2002, the company declared $174 million in dividends to its shareholders," added Pigott.
Global Truck Market Update
"PACCAR produced over 92,000 trucks last year. In the fourth quarter 2002, PACCAR's North American production rates were 25 percent higher compared to a year ago," noted David Hovind, vice chairman. "Kenworth and Peterbilt increased their U.S. Class 8 retail sales market share from 19.7 percent in 2001 to a record 23.7 percent in 2002. Kenworth continues to be the market share leader in Mexico and Australia. Customers recognize the superior quality that Kenworth and Peterbilt trucks deliver, as well as the high residual value earned after three to five years of rigorous use, both of which are critical factors in the decision to buy a premium product. Pre-owned Kenworth and Peterbilt trucks achieve 10-15 percent higher prices than the competition. DAF increased its record market share to 12.2 percent in the above 15T market, as well as increasing its market share in the 6-15T market to over 8 percent. It is anticipated that industry Class 8 orders for North America and Europe in 2003 could be in the same range as 2002, depending on economic recovery."
Tom Plimpton, president, added, "PACCAR achieved a record 6.7 percent registration share in the Class 6-7 truck and tractor market in the U.S. and Canada. Kenworth and Peterbilt are the fastest growing medium-duty products in the marketplace and this growth has contributed to our dealers' profitability. PACCAR has established a solid framework for growing its medium-duty market share with the goal of eventually being comparable to its Class 8 market share."
Financial Services Earnings Improve
PACCAR's Financial Services segment represents a portfolio of over 115,000 trucks and trailers, with total assets of $5.1 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. Fourth quarter revenues were $111 million compared to $110 million in the same quarter of 2001, while pretax income improved to a quarterly record of $24.9 million from $7.0 in fourth quarter 2001. For 2002, revenues were $433 million compared to $459 million last year. Pretax income for 2002 was $72.2 million compared to $35.0 million in 2001. The improvement in both the quarterly and annual periods is the result of higher portfolio margins and lower credit losses. PACCAR Leasing achieved its ninth consecutive year of record operating profits.
"PACCAR 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. "PACCAR Financial is one of the leading commercial vehicle finance companies in North America and Europe and is steadily increasing its market share in the industry. PACCAR's financial and credit efforts were strengthened in 2002 as a result of new technology investments throughout the year, which enabled customers to receive sophisticated credit analysis in an expedient manner."
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(a))
Three Months Ended Full Year Ended
December 31 December 31
----------------------------------------------------------------------
2002 2001 2002 2001
----------------------------------------------------------------------
Truck and Other:
Net sales and revenues $1,808.4 $1,427.8 $6,786.0 $5,641.7
Cost of sales and revenues 1,563.5 1,276.5 5,947.2 5,079.1
Selling, general and
administrative 93.3 92.2 354.5 367.1
Interest and other expense, net .1 10.9 10.5
----------------------------------------------------------------------
Truck and Other Income Before
Taxes 151.5 59.1 473.4 185.0
----------------------------------------------------------------------
Financial Services:
Revenues 110.6 110.1 432.6 458.8
Expenses 85.7 103.1 360.4 423.8
----------------------------------------------------------------------
Financial Services Income
Before Taxes 24.9 7.0 72.2 35.0
----------------------------------------------------------------------
Investment Income 9.2 8.0 28.5 35.3
----------------------------------------------------------------------
Total Income Before Income
Taxes 185.6 74.1 574.1 255.3
Income taxes 63.4 23.7 202.1 81.7
----------------------------------------------------------------------
Net Income $122.2 $50.4 $372.0 $173.6
======================================================================
Net Income Per Share:
Basic $1.06 $.44 $3.22 $1.51
======================================================================
Diluted $1.05 $.44 $3.20 $1.50
======================================================================
Weighted Average Shares
Outstanding:
Basic 115.7 114.9 115.6 114.7
======================================================================
Diluted 116.5 115.7 116.4 115.4
======================================================================
Dividends declared per share $.90 $.37 $1.50 $.97
======================================================================
(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
CONDENSED BALANCE SHEETS
(in millions of dollars)
December 31
----------------------------------------------------------------------
2002 2001
----------------------------------------------------------------------
ASSETS
Truck and Other:
Cash and marketable debt securities $1,273.4 $1,023.1
Trade and other receivables, net 404.7 396.3
Inventories 310.6 267.8
Property, plant and equipment, net 818.4 828.8
Equipment on lease, taxes and other 783.1 639.4
Financial Services Assets 5,112.3 4,758.5
----------------------------------------------------------------------
$8,702.5 $7,913.9
======================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Truck and Other:
Accounts payable, deferred revenues and other $1,955.6 $1,709.5
Dividend payable 71.4 19.2
Term debt 71.6 141.9
Financial Services Liabilities 4,003.2 3,790.7
STOCKHOLDERS' EQUITY 2,600.7 2,252.6
----------------------------------------------------------------------
$8,702.5 $7,913.9
======================================================================