Navistar Reports First Quarter 2019 Results

March 8, 2019
6:22 am

Reports first quarter 2019 net income of $11 million, or $0.11 per diluted share, on revenues of $2.4 billion
Delivers strong operational performance, with revenues up 28 percent
Generates $173 million of adjusted EBITDA in the first quarter, up 66 percent year over year
Achieves 1.8 share point growth in Core market share, led by a six-point share increase in Class 6/7
Grows backlog 18 percent sequentially during first quarter

LISLE, Ill., March 8, 2019 /PRNewswire/ — Navistar International Corporation (NYSE: NAV) today announced first quarter 2019 net income of $11 million, or $0.11 per diluted share, compared to a first quarter 2018 net loss of $73 million, or $0.74 per diluted share.

Revenues in the quarter were $2.4 billion, a 28 percent increase compared to $1.9 billion in the first quarter last year. The revenue increase was driven by a 50 percent increase in the company’s Core volumes, which represent its sales of Class 6-8 trucks and buses in the United States and Canada.

First quarter 2019 EBITDA was $96 million, compared to first quarter 2018 EBITDA of $55 million. Adjusted EBITDA was $173 million versus $104 million in first quarter 2018. Results were impacted by certain one-time items, including a non-cash charge related to a Canadian pension annuity transaction of $142 million (or $104 million after-tax), and aggregate gains of $59 million from the sales of 70 percent of the Navistar Defense business and the company’s ownership interest in the JND joint venture.

Navistar finished the first quarter 2019 with $1.24 billion in consolidated cash, cash equivalents and marketable securities and $1.19 billion in manufacturing cash, cash equivalents and marketable securities.

“We had our best first quarter since 2010 as customer acceptance of our new products translated to extended gains in our Core market share,” said Troy A. Clarke, Chairman, President and CEO. “In addition to our ongoing growth in Class 8, our medium-duty market share grew by six points during the quarter, the largest year-over-year medium share gain in the industry.”

The company’s first quarter featured a number of positive marketplace developments. Continuing its cadence of new product launches, Navistar unveiled its new International® CV™ Series line of Class 4/5 vehicles, the only Class 4/5 truck that is designed, distributed and supported by a manufacturer specializing in commercial vehicles. Year-over-year growth in the company’s Core market share was up 1.8 points, led by a six-point share increase in Class 6/7, which was attributable to strong sales of the MV® Series of medium-duty trucks. Additionally, the company’s International® HX™ Series and International® HV™ Series vehicles built improved vocational order share resulting in a strong backlog. The company reported backlog growth of more than 8,000 units in its Core markets, up 18 percent since the end of fourth quarter 2018.

Also in the quarter, the company completed group annuity transactions with two Canadian insurers that transferred $268 million in pension obligations of defined benefit pension plans in Canada, reducing the company’s non-operating financial risk and administrative costs.

Announced just yesterday, Navistar entered a service partnership agreement with Love’s Travel Stops, which adds more than 315 Love’s Truck Tire Care and Speedco locations to the International® service network, creating the commercial transportation industry’s largest service network and bringing the total International® service network to more than 1,000 locations in North America. Building on the company’s commitment to Uptime leadership, this partnership will expand customers’ access to same-day service for a wide array of light mechanical repairs, and will also provide customers with increased repair velocity, so more customers can get their trucks repaired the same day.

The company reiterated its 2019 industry guidance and raised the following financial guidance:

Industry retail deliveries of Class 6-8 trucks and buses in the United States and Canada are forecast to be 395,000 to 425,000 units, with Class 8 retail deliveries of 265,000 to 295,000 units.
Revenues are expected to be between $10.75 billion and $11.25 billion.
Adjusted EBITDA is expected to be between $850 million and $900 million.

“As our ongoing improvements demonstrate, the company has strong opportunities to benefit from capturing additional market share, growing parts revenue, improving margins and further de-risking the balance sheet,” Clarke said. “Given the progress made in the first quarter, and our positive outlook for the remainder of the year, we are confident that 2019 will move Navistar forward on the path to generate superior shareholder returns compared to the industry.”