Adjusted net income for the fourth quarter was $114 million versus $189 million in the same period one year ago. Adjusted net income for fiscal year 2019 increased 29 percent to $423 million versus $327 million in 2018. Additionally, the company states fourth quarter 2019 adjusted EBITDA was $219 million versus $322 million one year ago. Fiscal year 2019 adjusted EBITDA increased seven percent to $882 million, versus $826 million in 2018.
This marks the company’s seventh consecutive year of annual growth in adjusted EBITDA, Navistar says.
“During 2019, we grew adjusted EBITDA and adjusted net income while growing our Core market share to 19 percent, for a total of three points of share gain in the last three years,” says Troy A. Clarke, Navistar chairman, president and CEO. “Our Navistar 4.0 strategy builds on this performance and incorporates major investments in the business that will deliver strong benefits for both customers and shareholders.”
The company announces revenues in the fourth quarter were $2.8 billion, down 16 percent compared to fourth quarter 2018. The revenue decrease was largely driven by very strong fourth quarter 2018 vehicle chargeouts following supplier production constraints in the third quarter of that year, the impact of the sale of Navistar Defense in December 2018, and lower industry demand in the quarter.
Revenue for fiscal year 2019 was up 10 percent to$11.25 billion, led by a 26 percent increase in worldwide chargeouts to 106,500 units for the year. During the year, Navistar’s Core market share grew by 1.3 points, to 18.8 percent. The company adds it also increased its school bus market share to 35.8 percent, where it is once again the industry leader, increased its Class 6-7 medium-duty market share to 27 percent, as well as increased its Class 8 market share to 14.1 percent. This marks the company’s third consecutive year of Core market share growth.
Navistar finished fourth quarter 2019 with $1.4 billion in consolidated cash, cash equivalents and marketable securities, and with $1.3 billion in manufacturing cash, cash equivalents and marketable securities. For the year, the company says it generated $263 million of manufacturing free cash flow.
Navistar 4.0, the company’s five-year improvement strategy which was presented at the company’s Investor Day in September, lays out a plan to increase the company’s EBITDA margins to 12 percent by the end of 2024. The plan commits to advanced operational approaches, including a unified enterprise platform strategy, advanced modular architecture and the most capable manufacturing network in the industry.
The company also announces it plans a capital investment of more than $250 million in a new industry benchmark manufacturing facility in San Antonio, Texas, which will have best-in-class lean processes and will be Industry 4.0 ready. This is in addition to the company’s June announcement of investing $125 million in its Huntsville, Ala., manufacturing facilities to produce next-generation, big-bore powertrains being developed with Navistar’s global alliance partner Traton Group.
Looking ahead, the company reiterated its 2020 industry guidance and updated the following full-year financial guidance:
- Industry retail deliveries of Class 6-8 trucks and buses in the United States and Canada are forecasted to be in the range of 335,000 to 365,000 units, with Class 8 retail deliveries between 210,000 and 240,000 units.
- Revenues are expected to be in the range of $9.25 billion to $9.75 billion.
- Adjusted EBITDA is expected to be in the range of $700 million to $750 million.
“With a proven track record of managing costs and improving operating results, Navistar is in a much better position than in the past to do well even during cyclical downturns,” Clarke says. “We are taking actions to adjust our business to current market conditions, including reducing production rates and SG&A expenses while restructuring our global and export operations.
“Building on the strong gains achieved over the last several years, Navistar has a clear roadmap in place for sustained growth that will set it apart from the industry.”
