PACCAR Sales and Earnings Accelerate to Record Levels
20 October 1999
PACCAR Sales and Earnings Accelerate to Record Levels
BELLEVUE, Wash.--Oct. 20, 1999--PACCAR posted record earnings for the third quarter and first nine months of 1999, according to Mark C. Pigott, chairman and chief executive officer.Third quarter consolidated net sales climbed 17 percent to $2.2 billion compared to sales of $1.9 billion in the third quarter of 1998. Net income for the quarter increased to $144.7 million ($1.83 per diluted share), an increase of 50 percent compared with $96.6 million ($1.23 per diluted share) earned during the same quarter a year ago. This is the 11th consecutive quarter in which operating profits increased over comparable year-earlier periods.
For the first nine months of 1999, sales and earnings reached all-time highs. Sales for the period were $6.4 billion, an increase of 18 percent from the $5.5 billion recorded last year. Net income of $403.7 million ($5.12 per diluted share) for the first nine months of 1999 exceeded 1998 nine-month earnings of $301.9 million ($3.84 per diluted share) by 34 percent.
"PACCAR had an outstanding third quarter," said Pigott. "Our production was at record levels due in part to the continuing strength of industry truck demand in North America and Europe. The success of our extensive and innovative product line has enabled PACCAR to increase share in the North American medium- and heavy-duty truck markets. Although industry orders have moderated, backlogs remain healthy."
David Hovind, president, said, "Investments in production capacity, efficiency enhancements, Six Sigma, increasing parts sales and active cost management contributed to the excellent quarter."
Mike Tembreull, vice chairman, added, "Our success during the quarter and year-to-date was complemented by our growing financial services segment, specifically truck leasing and retail financing of new and used commercial vehicles."
In addition to the excellent financial results for the quarter, PACCAR also:
| -- | Completed the sale of its retail auto parts business for $143.2 million to CSK Auto, Inc. on October 1, 1999. The $17.5 million after-tax gain on the transaction will be included in fourth quarter's results. |
| -- | Opened a new, world-class, $85 million manufacturing facility in Ste. Therese, Canada, in September, which will be capable of producing 20,000 medium-duty Peterbilt and Kenworth trucks annually for the North American and export markets. |
| -- | Expanded its medium-duty product line with the introduction of a new Peterbilt Model 270 and the Kenworth K300. Both are Class 5-7 cab-over-engine (COE) trucks based on the highly successful DAF 45/55 Series. |
| -- | Began production of Peterbilt's new aerodynamic Class 8 Model 387, which will enable Peterbilt to offer another world-class product to a growing segment of the market. |
| -- | Formed two new divisions, Paccar.com and e-Paccar, as part of the company's e-commerce strategy aimed at directing investments in customer services, including offering finance and insurance programs to complement the company's premium product brands. |
| -- | Announced that it would begin manufacturing Foden trucks at its Leyland assembly plant in Lancashire, England, beginning March 1, 2000. The Leyland facility is described by many as one of Europe's most efficient truck assembly plants. |
| -- | Confirmed its commitment to advanced engine technology when it became the first manufacturer in Europe to introduce its 12.6-liter engine at 530 horsepower that meets Euro 3 emissions specifications two years before the legislation is effective. |
| -- | Won the prestigious 1999 Leadership and Excellence in the Application and Development of Integrated Manufacturing (LEAD) award from the Society of Manufacturing Engineers (SME) for "innovative and leading edge manufacturing techniques." This award recognized PACCAR's implementation of computer and automated robotics systems in the assembly of the Kenworth T2000 and the Peterbilt 387 at its Chillicothe, Ohio, and Denton, Texas, facilities. |
Financial Services Continues Strong Growth
PACCAR's financial services segment continued its significant asset growth and had record earnings during the third quarter and first nine months of 1999. Financial services represent a portfolio of over 90,000 trucks and trailers with total assets of over $4 billion. PACCAR Leasing is the seventh-largest full-service truck leasing company in North America, with a portfolio of 12,000 vehicles.
PACCAR, an $8 billion company, is a leader in the design, development and manufacture 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 industrial winches under the Braden, Gearmatic and Carco nameplates.
PACCAR shares are traded on the NASDAQ Exchange, symbol PCAR, and its homepage can be found at www.paccar.com.
PACCAR Inc
SUMMARY INCOME STATEMENTS
(in millions of dollars/a)
Three Months Ended Nine Months Ended
September 30 September 30
1999 1998 1999 1998
Truck and Other Net Sales $2,174.8 $1,857.3 $6,424.6 $5,459.0
Financial Services Revenues $ 95.3 $ 81.4 $ 269.1 $ 231.9
Income Before Taxes:
Truck and Other $ 194.9 $ 124.6 $ 549.4 $ 391.6
Financial Services 19.9 17.7 57.1 52.0
Investment Income 9.3 9.0 26.5 23.7
Other, Net 3.7 .6 1.4 5.9
Total Income Before
Income Taxes 227.8 151.9 634.4 473.2
Income Taxes 83.1 55.3 230.7 171.3
Net Income $ 144.7 $ 96.6 $ 403.7 $ 301.9
Net Income Per Share:
Basic $ 1.85 $ 1.24 $ 5.16 $ 3.87
Diluted $ 1.83 $ 1.23 $ 5.12 $ 3.84
(a) Except per share amounts.