Allison Transmission Holdings this week reported net sales for the second quarter of $377 million, a 49 percent decrease from the same period in 2019. Allison says the decrease in net sales was principally driven by the ongoing effects of the COVID-19 pandemic on the global economy, resulting in lower demand in all end markets except for the Defense end market.
Net income for the quarter was $23 million compared to $181 million for the same period in 2019. Adjusted EBITDA, a non-GAAP financial measure, for the quarter was $115 million compared to $308 million for the same period in 2019.
“Once again, I would like to thank all of Allison’s employees, customers and suppliers for their continued dedication and resilience,” says David S. Graziosi, Allison president and CEO. “The health and well-being of Allison’s extended family remains our top priority, as we manage through this unprecedented period.”
Graziosi adds the company’s second quarter results reflect the significant impact the pandemic continues to have on global supply chains and customer demand. Despite these ongoing disruptions, he says all of Allison’s global facilities are currently producing transmissions and components, and the majority of its manufacturing operations have run continuously throughout 2020.
“To date, we have achieved uninterrupted delivery of our products and continued to generate earnings and positive cash flow,” Graziosi says. “We remain focused on aligning our operations, programs and spending with current end market conditions, while maintaining the flexibility to respond quickly and appropriately as these conditions evolve. Allison is well capitalized and positioned to realize opportunities that may emerge from the current environment, as a result of our long-standing commitment to prudent balance sheet management, ample liquidity and profitable operations.”
The pandemic continues to impact the United States and other major markets in which the company operates across the world, resulting in severe disruptions to global markets and supply chains, significant uncertainty and a weaker global outlook. The company reports it anticipates continued disruptions to its business for the foreseeable future, and continues to take a variety of measures to promote the safety and security of employees and to maintain operations with as minimal impact as possible to its stakeholders.
The Allison also team continues working to proactively align operations, programs and spending across the entire business with current end market conditions, including reduced compensation expense through restructuring initiatives of both hourly and salary employees, furloughs of a portion of our workforce, reduced overtime and assessing the timing and cadence of various capital investment and product development initiatives. During the second quarter, Allison reports it incurred $12 million in restructuring charges related to voluntary and involuntary separation programs for both hourly and salaried employees. Allison is reaffirming its full year 2020 capital expenditures target of approximately 35 percent lower, as compared to 2019.
We will continue to monitor market conditions and make adjustments accordingly, the company says.