Navistar reported a net loss of $347 million, or $3.48 per diluted share for fiscal year 2020, versus net income of $221 million, or $2.22 per diluted share, for fiscal year 2019.
Revenues in the quarter were $2.1 billion versus $2.8 billion a year ago. Fourth quarter 2020 Core (Class 6-8 trucks and buses in the United States and Canada) charge outs were 13,200 versus 20,200 in fourth quarter 2019.
Revenue for fiscal year 2020 was $7.5 billion versus $11.25 billion in 2019. Fiscal 2020 Core charge outs were 50,400 versus 87,200 in fiscal 2019. The decrease in revenue and charge outs was primarily driven by the impact of COVID-19 on the trucking industry.
Fourth quarter 2020 results were impacted by $297 million of tax-affected significant items. Included in this amount is a $289 million accrual related to a profit sharing dispute, a $58 million settlement with the Department of Justice related to Navistar Defense and a $14 million charge related to pre-existing warranties, the company says.
Adjusted net income for the fourth quarter was $61 million versus $114 million in the fourth quarter of last year. Adjusted net income for fiscal year 2020 was $10 million versus $423 million in 2019.
Fourth quarter 2020 adjusted EBITDA was $169 million versus $219 million one year ago. Fiscal year 2020 adjusted EBITDA was $420 million versus $882 million in 2019.
Navistar finished fourth quarter 2020 with $1.8 billion in consolidated cash and cash equivalents.
“While our results were affected by the pandemic and the impact of certain legal matters, we have experienced consistent sequential improvement in our business since April, which reflects broader improvement in the economy and trucking industry as well as our business performance from the implementation of our Navistar 4.0 strategy,” says CEO Persio Lisboa. “I believe that the actions and investments we have made in the business during 2020 position us to emerge from the pandemic a much stronger company.”
The company says it continued to make progress on Navistar 4.0, its multi-year strategic plan. Navistar 4.0 is focused on achieving sustained success through putting the customer at the core of the company’s decision-making process, while increasing the company’s EBITDA margins by four percentage points by 2025. The company launched a new version of its International HX Series severe service truck, the first new product developed under Project Compass. Navistar also continued to make progress on emerging technologies, announcing that it will deliver a full electrification solution, including charging, route planning and infrastructure, to a school bus customer in British Columbia. The company also conducted a successful West Coast tour of its electric school bus.
In connectivity, Navistar launched Intelligent Fleet Care, which is standard for Navistar’s new on-highway vehicles. In addition to its Gateway Integrations partnerships now in place with seven leading telematics providers that enable customers to avoid hardware installation costs by using Navistar’s own factory-installed device, Intelligent Fleet Care adds additional solutions driven by vehicle performance and telematics data.
Navistar continues to make progress on capital investments that will help transform the company’s manufacturing and supply footprint, including the Huntsville, Ala., plant, where the company will produce its next generation of big-bore powertrains, and its new manufacturing facility in San Antonio.
The most significant announcement during the fourth quarter was Navistar’s planned merger with Traton SE. The merger will accelerate Navistar’s growth, providing it with access to new technologies, products and services while taking advantage of Traton’s global scale, the company says.
“Despite the challenges of 2020, the company pressed ahead with new steps that position Navistar well for the future, including sustained investments in our business and products and important strategic partnerships in emerging technologies,” says Lisboa. “Looking forward, our exciting opportunity with Traton will build further on this foundation, accelerating our progress and delivering long-term, sustainable benefits for our stakeholders.”
In fourth quarter 2020, the truck segment net sales were $1.5 billion, a 30 percent decrease compared with fourth quarter last year. In fiscal year 2020, the truck segment net sales decreased by $3.3 billion, or 38 percent, to $5.3 billion. The decrease was primarily due to lower volumes in core markets due to the pandemic.
The truck segment incurred a net loss of $10 million in fourth quarter 2020, compared with a profit of $86 million in fourth quarter 2019. For fiscal year 2020, the truck segment incurred a net loss of $141 million, compared to profit of $269 million in full-year 2019. The decrease was a result of lower revenues and reflects the impact of legal settlements and the sale of Navistar Defense in 2019.
For fourth quarter 2020, the parts segment net sales were $496 million, a 9 percent decrease from fourth quarter 2019. In fiscal year 2020, the parts segment net sales decreased by $399 million, or 18 percent, to $1.85 billion. The decrease was primarily due to lower volumes in the U.S. and Canada due to the pandemic.
The parts segments saw a fourth quarter profit of $129 million, compared with $161 million in fourth quarter 2019. In fiscal year 2020, the parts segment profit decreased by $150 million, or 25 percent, to $448 million. The decrease was due to the impact of lower revenues, the company says.
In fourth quarter 2020, the financial services segment net revenues decreased to $47 million, a 34 percent decrease from fourth quarter 2019. In fiscal year 2020, financial services segment net revenues were $217 million, a 27 percent decrease versus 2019. Revenues were lower in 2020 due to lower average yields from lower interest rates and lower average finance receivables on lower volumes.
The financial services segment recorded a profit of $14 million in the quarter, compared with $30 million in fourth quarter 2019. The financial services segment recorded a profit of $65 million in fiscal year 2020, a 47 percent decrease from 2019. The decrease was due to lower revenues, partially offset by lower interest expense resulting from lower borrowing requirements and rates, the company says.
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