Add
PCAR to Portfolio
Set Alert
Email to a
Friend
| |||
|
|
Quotes & Info
|
| PCAR > SEC Filings for PCAR > Form 10-Q on 7-May-2009 | All Recent SEC Filings |
7-May-2009
Quarterly Report
RESULTS OF OPERATIONS:
PACCAR recorded lower sales and net income in the first quarter of 2009 compared to year-earlier levels. Net sales and revenues in the first quarter of 2009 were $1.99 billion compared to 3.94 billion in the first quarter of 2008. Net income was $26.3 million compared to the $292.3 million earned in the first quarter of the prior year. The translation effect of weaker foreign currencies decreased first quarter 2009 sales and revenues by $203.6 million and income before income taxes by $18.1 million compared to the first quarter of 2008.
Truck segment net sales and revenues decreased to $1.70 billion in the first quarter of 2009 from $3.58 billion in the first quarter of 2008 due to lower truck sales worldwide. Truck segment income before income taxes of $25.4 million decreased from $334.1 million in the prior year due to lower truck sales and margins in all markets, partially offset by lower spending on research and development and selling, general, and administrative expenses. First quarter 2009 gross margins of 9.6% declined from 14.9% in 2008, reflecting lower truck demand.
Truck retail sales in the U.S. and Canada were negatively impacted by continued economic weakness, including housing starts and auto production. Customers continue to delay purchasing decisions due to low freight tonnage and uncertain economic conditions. PACCAR'S Class 8 truck production in the U.S. and Canada was down from the first quarter of 2008. The Company expects industry Class 8 heavy-duty retail sales for the year to be in the range of 100,000 - 130,000 trucks.
Truck demand in Europe has also been negatively affected by an economic recession as DAF's heavy-duty truck production declined from the same period last year. Europe 2009 industry sales for the above 15 tonne truck market are expected to be in the range of 180,000 - 220,000 trucks.
Selling, general and administrative expense (SG&A) of $88.4 million decreased $37.7 million compared to the first quarter of 2008 as a result of rigorous cost reduction initiatives. As a percent of sales, SG&A increased to 5.1% from 3.5% reflecting lower sales volumes.
Financial Services segment revenues decreased to $254.8 million from $317.4 million in the first quarter of last year. Financial Services income before income taxes of $15.3 million in the first quarter of 2009 decreased from $67.3 million earned in the first quarter of 2008, primarily due to lower finance margins resulting from a declining portfolio and higher credit losses. Included in the lower finance margin in 2009 was $11.1 million of expense related to derivative contracts not subject to hedge accounting.
The provision for losses was $25.0 million in the first quarter of 2009 compared to $26.9 million in the fourth quarter of 2008 and $17.4 million in the first quarter last year. Credit losses were $28.3 million in the first quarter of 2009 compared to $32.4 million in the fourth quarter of 2008 and $15.3 million in the first quarter last year. In the current quarter, credit losses declined from the fourth quarter of 2008 due to lower credit losses in the U.S. and Canada partially offset by higher credit losses in Europe. First quarter 2009 credit losses increased over the first quarter of 2008 primarily due to increases in Europe.
Financial Services segment 30+ days past due accounts were 4.9% of the portfolio balances as of March 31, 2009 compared to 3.3% as of December 31, 2008 and 2.3% as of March 31, 2008. The increase in past due accounts in the first quarter of 2009 over the fourth quarter of 2008 was due to increases in Europe and Mexico as negative economic conditions exerted further pressure on truck operators. First quarter 2009 30+ days past due accounts in the U.S. and Canada were comparable to the fourth quarter of 2008.
The effective tax rate for the first quarter of 2009 was 28.1% compared to 31.0% last year reflecting the mix of income from foreign operations.
LIQUIDITY AND CAPITAL RESOURCES:
Total Truck and Other cash and marketable debt securities decreased $47.5 million to $2.03 billion at the end of the first quarter of 2009, as positive operating cash flow was offset by dividend payments and capital investments.
Cash provided by operations was $90.8 million in the first quarter of 2009 compared to $367.0 million in the first quarter of 2008.
In November 2008, PACCAR Inc filed a shelf registration under the Securities Act of 1933. In February 2009, the Company issued $750 million of fixed rate medium-term notes under this registration. The registration expires in 2011 and does not limit the principal amount of debt securities that may be issued during the period.
In January 2009, PACCAR's U.S. finance subsidiary, PACCAR Financial Corp. (PFC), issued $178.5 million of floating rate medium-term notes. The registration under which these were issued expires in November 2009 and does not limit the principal amount of debt securities that may be issued during the period. PFC intends to file a new shelf registration statement under the Securities Act of 1933 in November 2009.
At March 31, 2009, PACCAR's European finance subsidiary, PACCAR Financial Europe (PFE), had €480 million available for issuance under a €1.5 billion medium-term note program registered with the London Stock Exchange. The program is renewable annually.
The Company has line of credit arrangements of $3.51 billion, of which $3.28 billion was unused at the end of March 2009. Included in these arrangements are $3.0 billion of syndicated bank facilities. Of the $3.0 billion bank facilities, $2.0 billion matures in June 2009 and $1.0 billion matures in June 2012. The Company intends to replace these credit facilities as they expire with facilities of similar amounts and duration. These credit facilities are maintained primarily to provide backup liquidity for commercial paper borrowings and maturing medium-term notes.
The Company believes its strong liquidity position and AA- investment grade credit rating will continue to provide financial stability and access to capital markets at competitive interest rates.
Other information on liquidity and capital resources as presented in the 2008 Annual Report to Stockholders continues to be relevant.
FORWARD-LOOKING STATEMENTS:
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: a significant decline in industry sales; competitive pressures; reduced market share; reduced availability of or higher prices for fuel; increased safety, emissions, or other regulations resulting in higher costs and/or sales restrictions; currency or commodity price fluctuations; lower used truck prices; insufficient or under-utilization of manufacturing capacity; supplier interruptions; insufficient liquidity in the capital markets; fluctuations in interest rates; insufficient supplier capacity or access to raw materials; labor disruptions; shortages of commercial truck drivers; increased warranty costs or litigation; or legislative and governmental regulations.
|
|