Navistar International (NAV) 8 Mar 192019 Q1 Earnings call transcript

Good day, ladies and gentlemen, and welcome to the Navistar First Quarter 2019 Earnings Results Conference Call. At this time, all phone participants are in a listen only mode. [Operator Instructions] Later, we will conduct a question-and-answer session and instructions will follow at that time.

As a reminder, today’s conference may be recorded. I’d now like to introduce your host for today’s conference, Mr. of President Vice Ketelaar, Investor Relations. Marty go please ahead. Sir,

Executive International President prepared me With and from Officer. concluding thank Thanks, XXXX our Chief us Chief we’ll joining XX, morning, of Troy conference ended Walter fiscal take and Liz. Borst, participants. everyone, Chairman, you Navistar President performance for financial Today, discuss for for January Clarke, Financial we’ll XXXX. the period Good and our our call. the remarks, Corporation Navistar’s first questions are and today Officer; Executive Vice After quarter

us In Lisboa, for addition Operations. to Chief President Troy and President and Vice and Q&A Walter, Operating Persio of joining Phil are Truck Michael President Cancelliere, today of session and Officer; the Executive Parts; Christman,

that for release the expressly in includes suggested presentation statements. to has in these measures been disclaims differ from forward-looking our to page our the as can U.S. I obligation few morning’s could website The GAAP Before be presentation a materially equivalent well for our deck. issued this appendix and and those of Relations financial of are by like items. in posted press the the this the slides made release slide about statements update discussed copy to some future Today’s we we and performance expectations morning as presentation reference. this to of any press found call begin, company here. cover reconciled the Investor the A would Actual non-GAAP results comments

notes I’ll the to opening you in would statement differ material Harbor to Troy? today’s that to SEC filings. refer presented comments. for included information that, over We on information the and those today’s concerning cautionary our the factors call turn to Safe materially recent Clarke With subject. Troy in other results for additional further disclaimer actual For most cause presentation, please refer also from could

a Thanks I’m everyone. dealers and XXXX. margins the EBITDA, for good and strong few Hey, and quarter our operating is Okay. Navistar Walter during growth on work gains. good adjusted the then Hey, going all contributions dive. since morning, and quarter. share in team best thoughts provide revenue a significant a to thanks, QX four Marty, deeper to year-over-year This share Navistar’s going fact, achieved enjoyed quarter. improved to the their in segments in Navistar and hard market gross is and

and backlogs, will Navistar. XXXX the well for and confirms industry visibility that economic another capability demonstrate industry we the our analysis off very Growing will Navistar. peaks, XXXX into their historical averages. new above confident slightly are a factors that as economic indicators especially We great while are softening year of and of whole remain the U.S. XXXX for good Key be

the demand On has Class in January, remains X/X ATA industry industry’s sales times Class replacement steady. The industry’s Navistar’s backlog moved backlog strongest remain the the at held industry XXXX. Class steady, roughly it’s been equal been Both Index Truck X the with lower and well to the backlog X since build. order the is retail in but should Tonnage XXXX. Class average, side, and XX-year above orders X/X X.X slightly

reliability, are have attributes. customers’ exceed easing. new result driver in and trucks fuel added capacity supplier expectations and production constraints durability, products. our new We of These Share of economy growth terms

I’ve that it service a network to increased also of with remains agreement than the our Yesterday, continue Stops. promise. It variety Travel customers on our international industry’s to for Navistar X,XXX to alliance. locations opportunity said the Love’s share total provides North in to from And represents Navistar sales agreement some belief let brings reiterate. vehicle wide the has you, largest. volume. and repairs. service but of a market function partnership a to the the opportunity a of costs uptime come this we same-day economies access in in powertrain more of unique procurement significant build has integrated service me America, We that unique commercial to The announced before a gain ability industry. in as Navistar with And lower margins the increase Traton

no sales confirm enables expense access the superior In us share the powertrains opportunity addition, truck development. interest at balance To provides higher first Integrated belief of we service lower and costs, generate OEM lead reduce that technology other has cash and pay derisk improved flow better Traton value. alliance to our parts results debt, sheet. to up, to quarter lower sum our to shareholder and advanced margins ultimately as

So now turn me over Walter. details, it to for let the

XXXX Troy. off indeed well Thanks, for Navistar. has started

to First These were lineup. and product led industry strong, to healthy quarter success due of factors and the increase much guidance. financial results decision XXXX ongoing primarily our new improved first results conditions quarter our to

The points. Class the share up driven was results segment was truck gross X.X were reviewing points. X margin share modestly revenues sequentially from all X QX, segments, alliance lower mix, I’ll consolidated in standard. XXXX. $X for a QX of was SG&A by Class development costs XX.X%, medium partially an share units. last for largely bus XX% driven medium update was grew quarter, share spend quarter the adjusting but and Let’s the In core a as parts XXXX year-over-year XX% engineering due up our points was market offset Traton, Structural Compared revenues while on Year-over-year, truck on start X increased declined to during recognition operating higher market margins million. XX%, revenue for by expenses. increased by up $X.X in basis quarter, to X products new the at This quarter. by next-generation with the to first by after by as increase billion. partners improvement Navistar’s share on Gross grew well. Meanwhile, increased grew up then the core X.X and expectations. provide Total revenue increase by

expenses next-generation As decreased both other in periodic a certain XX.X% for and to structural XXXX percentage due XXXX lower reported income in expense revenue, represented and pension of the year. implementation the projects XXXX. another accounting be new that QX the to XX% increase of since last time, with two-year standard. expenses SG&A Please costs corresponding mark from March powertrains the in a are such introduced note done company increase, alliance as begin work as the on funding X formed early its alliance to reached to We’ve Traton. for point with being as the diesel where will

$X.XX a the XX% impacted Adjusted the a JND Defense quarter XX% one-time certain pension of modestly $XXX by years, million, in if million year or of was $XX of few the ownership and positive in was much such Canadian annuity first QX Net be time items, million, million structural a more ago. million spend including the $XX since $XXX rose loss related per share XXXX, to ourselves. growing that versus million, share While charge non-cash income to next Net $XXX our diluted than of for over transaction interest $XXX to after-tax the of efficient costs year. of will the or income will sales had $X.XX increase developed we the from $XX a to by or last company’s first business million gains EBITDA joint begin versus venture. Navistar products per and

adjusted a quarter. X.X% As to in X.X%, percentage of last compared first grew EBITDA revenue, year’s to

Moving to the segment results.

XX% costs million all ago. Our by a as improved grew increase volumes, Sales driven segments. costs, was $X.X The to in In profit took it in in volumes million reported sales in year quarter. XX%. largely higher The product the quarter, the $XX core quarter Truck $X another first of costs. particular, offset a growth was an compared step X/X partially of grew segment forward largely higher Class from profitability and production segment driven returned up to billion. expedited to commodities, The ramp by performance material the freight loss by

in quarter, Management, million. to The $XX which The assembly a million purchase a acquired we its of for interest Springfield, also shift $XX segment. XX% gain Navistar will new Navistar in end million the second Escobedo rates build Class recorded began parts of finalized Capital plus Year-over-year, Defense. $XXX the in Defense. series plant. from Cerberus Also Ohio chassis December, At production of included supply a the company supply price added a agreement with nearly of line XX% of exclusive agreement by quarter. and noteworthy in benefit successfully X/X to cash the and first Navistar our increased During truck the plant, long-term and

first ASC grew a in Navistar quarter, costs. Our new growth The reduced the results XXX, revenue revenue was beginning offset X% impacts year. parts $XX implementation In this year-over-year. Profit higher the were standard, revenues as which the businesses ASC and quarter. volumes solid label by comparable X%, segment lower was sales BDP of private freight delivered business On Parts million. million, impacted for quarter by XXX the the by another up basis, recognition $XXX

by of in profit declined a of compared foreign XXXX to engine largely the The currency year the interest from impact ownership from the weakening XX%. million translation $X in Profit rebounded $XX was the to yet dollar. venture million, joint the our a XX% XX%, volumes driven due percentage million, by Brazilian resulted ago. the XX% As segment to the revenue, from volumes margin JND higher gain sale and real for In to Global versus profit revenues U.S. was loss quarter Parts a $X of of segment, China. levels increased Operations that the

Our from balances Financial portfolio originations. higher Services the segment and loan grew U.S. its Mexico in

$XX drove strategies margin result, $XX on and leases. funding million, revenues higher depreciation from expenses to As income improved intercompany by higher despite interest a million. loans from Higher operating to XX% profitability XX% increased

business $XXX balance This A spend positions our being generated the cash. of quarter. interest volumes accelerated pension during cash. EBITDA notes million together more capital with cash company expenditures warranty more capital of in received to payoff operations manufacturing cash divestitures. funding, on the the expense positives of higher ended of a and The the billion due seasonally with with net quarter working couple convertible April XXXX than Moving the use resulted in from sequential payments, to excess by offset hand. cash. and Lower This, in company $X.X cash

results a balance and to sheet. Poor’s the into non-operating of pension and in annuity overall insurers and entered the obligations company company’s represented obligation. about improving the $XXX represents improved in we reflecting group earlier, received ratings our to from one-notch contracts taken Canada. January, action costs the alluded reduces Moreover, The transferred pension profile. This risks financial strengthen two administrative transaction with upgrade company million the another – credit step and financial I in our Standard towards & As X% we’ve

Moving guidance. XXXX to our

our first On the orders, quarter sequentially our XX% for XXXX. order and board strength higher in of filled the was backlog virtually up is

by We outlook are our year to it previously. raising XX.X% the from core share for point XX% a X.X market increasing

As expected Navistar the is for range year a adjusted we’re result to off of a raising a to to great billion to $XX million start year. by higher revenue our $XXX billion expectations the by to range $XXX of million million $XXX guidance $XX.XX million to $XX.XX for a and year. EBITDA also of volumes, the

Our proof points much a Navistar first quarter is cycle provides several performance more that play. than

look the I’ll turn a strong margins to will market delivering growth products our coming and additional for to on gives begin With operator the XXXX that, quarters. backlogs putting to evidence customers The back be are We want us further balance Navistar. recapturing we’re confidence Q&A. sheet. share, in in and it very more EBITDA and derisking year Board improving orders the forward We’re points the

from Our Research. Frohnapple line [Operator comes Buckingham the of Instructions] question first with Neil

open. Your line is now

Good on a Hi. morning and great quarter. congrats

Yes.

start to the on EBITDA wanted guidance increased year. First for the

had QX think than on but suggest historically, will expected quarter around XX% to at is the the certainly be first midpoint. the I XX% So Street QX year would guidance stronger the around than XX% full-year, a But anticipated. this

talk takes, Walter, about the some margins So of and EBITDA the for puts year? of could remainder on the you

Sure.

first quarter of We’re really happy all. first the with

And this did up year. some amount year, Last we of thanks we produce. to that downtime the for set volume the So better we additional increase to had do congratulations. could ourselves

we in quarter. better and year days working the quarter, this profitability units allowed more us to And more so in which build the have have did

confident those costs happy here. we As watch we do we’re kind of around to look types at commodities material freight plants year. year, be to be continue our continues to units are able the and of to supply to the and of watch expedited capacity highly base, over working the increase and for deliver which tight, our things to customers. we’re able be out and continue as those We produce the guidance balance we’ll the And that to

Okay. successful Do more and price? Thanks. then provide of net like a curious pricing? as feel you in the later embedded more truck can And you tailwind year cost implementing positive price on on a the granularity follow-up, new currently And in could what’s you were guidance? in the become

Persio Yes. expect call our had pricing beneficial last in jump beneficial in wants I’ll we then indicated for to quarter. start Michael. on would us and maybe it to for us and was We that the first be or

seeing in market even and share considerably. our volumes pricing been as So modest able improvements are to we some we’ve improve

it Thanks. great. Okay, I’ll pass on.

Adam Research. Uhlman Our with Cleveland next the question line comes from of

Your line now open. is

Hi, everybody. Good morning.

morning. Good

you production pricing year Have you up orders? XXXX and about talk your The the slots build follow-up year strategy slots how for are on this those you pricing question. filled? next considering Could opened already pricing yet your

Persio. is This

We have cost that that drive had price We the last – commodities different total and the product input costs. material basis try increases, other by price we two not year. costs, issued but up all cover we traditionally, have during We all material, obviously the only costs year. to lists

And planning no customers us most contracts do we to that but So to wages. have thing. are automatically, price to with allow same the that often do we some

will when change. [Multiple we by we have usually, So mid-year a Speakers] can is And

as cycle, performance as our XXXX. you I come digest products delivery we think the given those to the costs those the Persio – But phenomena increases referenced price that continue won’t such. the to – Troy, this market and we which typically of appropriate, order products commodities is until and come in is, into have the take like But will production see into is and the phenomena

probably year, the we’ll indicate So that this time. next more year at given that see in view there our is that this point pricing positive than of market would particular

mention expand on Class could Thanks. And X/X for and year? Okay, to vehicles through thanks. you big channel go the the how then the as be opportunity gotcha, production ramp could the still maybe new Navistar? we And

Yes.

applications products Class but these I that have. a down market should to large think, and is narrow of you we the the very market, that plus X/X range

share. in you We’re production and XX,XXX about right really unit market. gaining of talking partner, Then that XX,XXX us think are terms a between aggressive started our market to we But we now.

up ramping very successfully. production, We we are speak as

sold now So we’ll time… units those dealer in right at monitor sales, a the this lot going the initial are but to because inventory, units of them point are

us for be. we really hard extremely It’s forecast all how successful right positive now. mean, will I to are indications

basically, this vehicles I are capability the to build we think, have sold. all As year the

very off positive. getting very it’s to it’s a So, start good and

orders – to we’ll that’s and great opportunity question. So your fill as for but those look And create a we more, abreast. keep

Thanks. Congratulations.

you. Thank

comes of question wit JPMorgan. next Our from the Duignan Ann line

open. now is line Your

morning. good Hi,

morning. Good

How producing many just from the sold Maybe just modeling on said a know question. you follow-up are perspective? X/X year. our last for Class you that out I anticipating

X/X? Class

Class X/X, yes.

XX,XXX somewhere there. units we to are Yes. XX,XXX targeting between Well,

market then? And share gains aggressive that’s Speakers] [Multiple pretty

Yes.

have GM lion’s right. the will that, of So share

of thanks. And what relationships? what through color. from little bit the a here and parts – with a Speedco the appreciate anticipate Love’s And ramp and more about you year? can just sales Okay, kind – next should you relationship I from kind how you then would that we talk into and coming sales of of those think announced incremental

supporting important to very relationship, leadership position Well, about our is that this step we one we because uptime – want first the Persio, take. of Ann all, this is are the on of excited

those about, better anybody lost than trucks promise the making what the less than into XX would by that’s parts sure putting care really that is our the service. Well, that relationship off deliver hours, taking of that’s else back the we view in network customers, So road I’ll on generate is doing it what that that also that, is. we – get the see we Love’s and units

more going that that that, guidance don’t current that, sale. we’re our existing I a at of expanded of points think point but is provide have by think supplied you as XX% speak network to us. with So their we we to just be getting on

the hours, they available have I Yes. think more week seven I theory short mean, days is repairs. that a there

two to come have QX satisfy in But QX on stand – QX. in to setting so thing then customers in quarter. out this tranches, stores Ann, line, rolls don’t is, be better. systems there You training basically and Love’s and our of how the second will the in up And

of we’ll So a now be fiscal ramp-up year. and in end between the mode our

And that, is is cannibalizations? I incremental network? disenfranchising appreciate. any mean shipment. this of as I that, any your I there Okay, an is that risk to would an risk dealer shops stocking – there product of adjunct existing is presume mean,

dealer actually developed strategy our Absolutely overall was to expansion by in no bought conjunction Actually, network, our with this risk. our uptime. and endorsed dealers increase our off

by don’t totally dealers, So see performance. to supported our the cannibalization we’re adding we

the in I you. I’ll color. Thank appreciate back get line. Okay,

comes question Steve the from next of with line Jefferies. Our Volkmann

now line open. is Your

Hi, good what you. in of And bit relative morning, a just guys. guys to little are detail seeing Maybe with just you the maybe just start I’ll market.

detail stuff. in be lots quite book, seeing chart would tack market, a what out put like seeing what around around orders, your all of I you just you if could of types about that’s customers, some seeing then great? looks order come But filling you’re in the in some just of have you’re Thanks. different what more dealer I on strong terms dealer And us? applications, color of inventories it the what And your just just your you’re which that types to handout obviously don’t because You on you’re a how up if know bit. inventories, chart just feel relative provided product in comment type

into pass Yes. with inventory, at inventory to inventory, I’ll lead has we in really But a Well, supply, dealer up. which It’s we number The a gone in If regards – sales the in where up of you not we if although to that units of need days to rate normal manage range. very it’s monitor dealer or look market, then up. Persio. the of of – actual we need over you that. monitor, days take consideration, gone you terms robust to

level having. our the reengaging through gone we’re been the inventory so customers source level that important because to frankly, sales that appropriate kind contact very turnaround, that’s as encouraged, we’re are has And we’ve of with the for dealer of primary of the the extremely dealers Quite us. of

And so trucks basically important on lot the that. to very are

Yes.

all And there. good. our think, right? I business it in of We with. core and of quality heavies quality Troy said, very most that’s something like out activities is you is are segments, also the about the We thing And we’re important on enterprise, But that stays as in very saw the medium quarter guys first performance that. we was in – the seeing vocational, see then the backlog. the throughout off we the backlog – still the happy the the really believe

today a more strong believe to if name and going makes the – to of sold just really is which working specific we no has that half the can. units has the here customer be very we’re with Our to attached to backlog year majority us it, point can the remaining We of take high-quality. backlog is

managing them. we As are we supplier constraints, but have through alluded, Walter

gain capacity adding more we the and whenever in supply base that, adjust are once we we to build can. We production And share. our do

XXXX. for So that’s and strategy our XXXX

anything just of And don’t fleet, out large like type mix, cab I that? call small fleet, or day or relative know sort to sleeper of, application to stuff thanks. Okay, any

nothing help here unusual. in Well, normal, answer. the at we see think, But it’s I to Michael really least

No, that’s right.

not them temporarily place of a cab sometimes oriented, – day yet. throughout has another, We’re not – – – cab by number order that some sleeper way not that – or but the by orders, the over so the could changed or we were different orders, impacted day that one how trend see historical can’t trend year sleep, of time, they customers that’s swing

that Yes. It’s would expect. normal you a very mix

guys. you, Thank Great.

Our Wells Casey next Andy question of line comes from the with Fargo.

line Your now open. is

Good lot. a Thanks morning, everybody.

Hi, Andy.

a Just couple of questions.

have the an order It continue like recent the year. relative on you But specific. orders looks hesitation? hearing market, views grow seen our that. We there’s hoping more on give lower behind about you’re Class to industry backlog. you order trends, X we’ve appears us could feedback industry to some your First on guys last – I clearly, But be to was we what the what drivers industry-wide

– – really at look year, we’re that think a Actually, I happened not is XXX,XXX this the is XXX through a taking market. in at last and this Well, volumes was you the what right, of equivalent if seeing is August, orders range just September, XXX,XXX what unit industry Persio. to units, annualized

and now what orders to is all is phenomenon if So schedules happening the that just there. that’s and in the deliveries that have that There certainty a be is getting I orders getting and seeing we’re names, lot are them think they second-half the want to with a into year, how don’t will or just our on that really starting production indication we’re all backlog now we seeing for as cancellations customer the XXXX. reordering. talk last But of us operates adjustment And of industry we and an the placed I waiting backlog see can are industry perhaps, in with we’re terms it. take The we think, an look The they of I the the cancellations. reinforce about what this at it. off know and quality for in

that and gets customer And order because initially happens, then and a change order an or place a reordered. and deliberate day there’s we is that spec there a canceled sometimes change,

see a our normal on very We that digits. area. major that’s that of level side, seeing bit anything a but single little on We’re don’t of

and as the there. the an more order our activities So we last of saw We’ll we just go, but we monitoring XXXX with orders reduction on we standpoint, out of no level from is seeing, abnormal market the in normalization a be intake expect. what half are of of

still business. So we’re and customers with getting working our more

kind the adjusting takes As Yes. a to this in tell us the probably of what entire The more normal basis, still activity. those robust particular point just orders monitoring well, for backlog nature so at noted, range. being numbers this does of anymore on a very of say, Persio There’s industry monthly a really time? really is lot

As Persio indicated, continue the second-half and frankly, relative while. XXXX. builds and this we’re market We��re think a a for and excited placing builds strong is and into we optimistic, encouraged that quite we’re to for it’s going

Okay.

Andy, I would we actually some I’ve the indicate that XX% add note quarter. that just in our backlog increased to that did

Q. So there’s provide on and an but backlog increased industry element additional did orders our this, Navistar’s information to our in actually we

Yes. an replacement? you Are It expansion, Thank comments. And fleet a question. was guys more follow-on is or seeing to then just you. primarily of it industry those

are cases. expansion in We seeing some

We are happening that still. seeing

it was we XXXX. in latter but think are I more seeing intends part still the last to expansion year, of

Okay.

is addressed were have the would drivers more expansion the fleet. a lot a these the think, in is industry, being available. which size of we fleet very providing metered growth drivers But I think, by of if seen I

we With the haul a the fleet higher just GDP and need goods. economic activity, to larger

indicated, we’re – in as seeing of some portion orders. the what that’s Persio So

the are rest Okay, truck pace? used wondering you’re you. the saying is used is trucks, issue industry and to narrow you’re last difference if you’ve between evidence the starting the definitely I’m And of for We pricing that. thanks. one, starting one that realizing to see that corroborating behind then accelerating an at legacy the seeing been

NXX It’s inventory largely as really vehicles. moved the to we’ve narrowing from trucks of MaxxForce having

So we the closing are yes. gap,

and relatively Andy, as trucks, delivery use deliver trucks is they’re that we the in holding industry still to Yes. new trucks our I’m have. but until truck follow, is you competitors’ supply the on sure guys, new tight they

manage it’s year. we’ll something the So through in continue to

Thank very you much. Okay.

line Our UBS. Steven the of Fisher comes question next from with

is now line open. Your

Thanks. when are first the sense there I taking good guys changed. think dealer know as bring down? you start to start still I’m congratulations of trying dealer know Good to it what that said market are that to on pretty quarter. curious I guess, you and said But of orders morning, signals that I out inventory it’s you haven’t and But makes sort days really to a just forward looking the normalizing. down? inventory good a you

our good the and to But demand you not of on need very I sales, cramming this. the to full the frankly, that, do at leave currently that backlogs don’t mean, we’re the areas. the we work really want that wrong we Quite I don’t the the dealers quality have with thinking understanding somehow conclusion, dealers that. channel are pressurizes in that we

a particular that the is, There’s probability. don’t high a We with who in any first are it kind inventory much think got. themselves, with there’s by from are the who associated to dealer don’t that these has indicate units okay? a they kind very to units So know of want more majority signals because us units sell dealer that. adjustments in customer really specked So come of our what mind, stock ordering customer. as a of dealers not the it’s smaller trucks, of just sometimes they’ve those These customer Look, of because

the dealers you So, in get this working how the as seen when is orders in in start we like past their that have and at XXXX, line. their past, some look pulling pushing of back inventory the they back

now, I they’re dealers know, opportunities with pretty that our I the right don’t So, dealt Persio, there. are out again, optimistic,

on put orders that of we directly. know Not year, was only – we actually, had and of second-half lot priorities didn’t I a that deliver last customer to there

that to the really, it So as inventory. to the recompose from transition instance, we MV, took kind not dual of the actually, us for to from MV a start medium duty platform, while now

the right with I where place and want dealers to right So now, that. are we’re averaging be think, happy we

that you you seeing just no said the Okay, cab and severe curious underlying then service. know before day And sleepers. trend between about trends within that’s But up if just helpful. quarters. being you’re new is market? of there’s about then of severe I your market talk curious major is versus X,XXX could product? over And the several backlog kind XXX prior noticed about lapping that that I there by of much after products sequentially just up the How service X,XXX some to units

start to Michael, flip over Persio whoever say of and this. or I’ll it Well, want to

putting One seek of service. that of a didn’t attention XXX notice, really last completed people product portfolio get doesn’t year that because severe the those that just the service number applications was engine. think, severe engine of lighter the things, it we into by kind I a And of lot the

portfolio became product as the really full. so, And was kind of last year of mid

of okay? seeing So all be you on now a – to push very what orders, truck I units part there because we’re product a think, the there so don’t that we orders are manufacturers, have DTUs, to but said, portfolio. to able quite there’s – the broader body is these And stuff. at is, to That backlog and bodybuilders a uptake in equipment see the yet an

Well, that’s exactly to say. I was what going

the OTD truck with the launched. are all, products our better – seeing of of kind And out performance first what XXX we year, what new are bodybuilders. but in we last think, than of from experiencing started is, had is second-half we of in are with terms I the there, HV the last plants

to us into on new our good backlog going XXXX. big, for thing, bodybuilders we a share So is is out as get products is which now on the come as

as So well. positive optimistic and we’re about very that

if things, me, board… wrong. uptake of I’m – it’s all this see the across Persio, and correct – kind of I But again, is think, it’s we But and kind those

Yes.

presence a segments I strong in into we even there some we’re think, where the haven’t presence in past. …and But had establishing utility, our really in…

yes. in general, …construction

barrel I is mixer concrete products, think, and… …new

presence a just with bodybuilders. lot of I successful many NTA had in now think, show very we a

So…

Yes.

…we’re that. excited about

you. terrific. Okay, Thank

Okay. Thank Steve. you,

Our Instructions] the of question with Wertheimer [Operator Rob Research. from next Melius line comes

open. now is line Your

Good Thank you. morning, everybody.

Hey, Rob.

to obviously to about the you’re is talk I said, Just year. you’re up wanted And point I close capacity. a now bit great. filled sort mean, you inventory think the healthy and for share, which is of getting a

out to the continue that, or much you how to and next healthy year So industry you share? flex how be can gain flex you can if continues

of in shift saw planning to raised do well, base, acceleration get we raised Well, saw more schedule we because I our opportunity in constraints Actually, all We the Escobedo parts adjusted supply alluded in first we were our the Walter our broke to – in pulled we our facility. production. the We XXXX, plant. of that the think where some from – second had I a here.

what go. that’s And as is, we thing really the doing now think So adding we I – are we are capacity. market the we’re positive share, taking most as

are towards supply base, base We thing. of adding supply which usage the is positive to capacity we’re very necessarily a capacity Navistar, switching not

from taking those So we working adding two we is which keep fronts, capacity win. and how others, on

Right.

challenge them look, really Persio bottleneck to unsold we’re ways find we help we them. as component our Right we this existing of is – that them is sometimes internal that And And bottlenecks just towards there’s look, that unit So love our the competitor, supplier are same next in build them. by are give the dependent right geared now, there a We indicates, to right? it’s to largely bottleneck. more we challenge, us that so sometimes we suppliers, kind love love network. – units. really with more going These a the capacity, I upon is get not operations. But that that convince now,

As then we them up makes working permanent we business see add finishing it the where us. for capacity XXXX we to base all to question, on for enter and are that sense now and – supply

better. for So prepared we’ll be if the XXXX gets industry

Okay. Thanks.

of next Goldman Our the from Revich comes question Jerry with line Sachs.

open. Your line now is

pension interesting any just morning. parts And net that the more, the then point match with right? flesh your Really legacy work just similar you of wondering can in bit million just something $XXX Walter, to that on you just a if Canadian other clarify, able you do plan. opportunities have costs? Can that good that out on rolls been effectively annuities that the can reduction, we so contracts. of pension, footprint the liability with because you’ve to effectively Yes. to liability Hi, off terms expand I’m confirm

Yes.

kind size balance perspective So the XXX in sheet terms on the reported. of of opportunity is a

the that. on other are there side So assets of

because in and really and always in But that pension to converts all going the to go down, right? all sheet So reported shared in with we’re we management April funded We’ll sheet strong future for was through in of time. million fully that’s other like it do that We’ve assets annuity in direction, doing and we plan balance balance you, up we the have. this again we whether to here Canada you’re we to we liabilities so a insurers But October sheet things Canadian as for plan make of are continued the our insurers, opportunity we with a to transactions some done the same of see saw over not did risk don’t an about do looking deterioration look for pension balance opportunities $XXX want our ways pay risk mitigates space. debt an So and is here that. in management, like very and improve sure smaller unfunded or that balance. to couple like continue

opportunities course them. So due those find if we’ll on we’ll report we look for additional and in

Okay. standpoint, have And points you from for of just team, price. because the points really started obviously you your share it with comment you’ve specific guidance folks, marketer can you think in out that? guidance in compared executed well here. than there, basis their on market more like of in orders Can the more increase quarter, when increase XX points feels got you concentration order better a basis XX than a management say In had quarter, to I terms you the momentum as just

of it’s Some these Michael. –

getting these XXXX. of Some in placed start actually orders

it’s I get orders so. in think, or on kind orders the be think, all speak. this timing a so correlation, would just the to that, able order in time, from not comment the I now to look, line in point intake direct no But of order won’t because to benefit particular at right thought industry, the I all So again, really we there’s much, pressure share, too

didn’t the the the in medium full-year here I have And the up So first go of benefit in smartly we quarter. mean, Jerry, Yes. MV share last year, right?

for industry. we’ll that’s share guided total our you we’ve up have a goes core market But of X.X share in year-over-year lot year-over-year. points time points X.X improvement quarter kind to and – the As a have in comps we’ll and tougher was year, in for on, the the

that – we’re pretty away hope this good. So, I we’re feeling take you from

That’s rates will What because looking clear. production And tap that Troy, are low you at mentioned, we’re the coming look standpoint you what we to brakes indicators feel just, van ratios a at is folks to okay, you like bit see and spot the should from maybe tougher. a along. market

So what folks look you to do that at make when decision? and

on I June This as engage are kind mean, okay? one the I If In kind a September, good where that at into these probably the up freight. in July that large in alluded best to people We’ll the have that’s orders very many may year the the of those so XXXX, they large like contact of their well. guys with of windows. us the the very And on mean, a I takes what for the leaders and engage October us, XXXX for the mean, and be that until the for not pedal very to industry Michael use to Cancelliere timeframe, daily I haul Traditionally, is trucks – take of it’s I began of metal. going So another we choose is the a good good think two indicators right? in think almost July. assessment think season year, orders that fleets their customers or next production truck sign. and and very I this early past. seasons years That’s is I’ve and past place important line placing year. to us is, the pragmatic to level in think June

level, us window rates very And gives ecomm July look have, think, make think due June, lots And the and freight idea the timeframe. a and to I to capacity important staff the I October September, the the assessment. have that for pragmatic next I an we a opportunity, at And But an of [ph] the data. and for where as so time certainly who industry an then in that think, the engagement is us is at next headed. us major of is very customers with good market freight September freight it’s – market largely

I congrats strong the Okay. a discussion on and appreciate quarter.

you. Thank

comes question of Loop from Capital next with Jeff the Our Markets. Kauffman line

now open. is line Your

sentiments. you much, other and Thank I’ll very echo the all

have look it terrific of like So my congratulations a A quarter. and lot questions asked. been

coming to non-diesel go the bit bus the about you a what’s out. customers inquiries a a But from into deep alternative little bit. have want on talk the I So off I how full-year little in electric you little know you have about you pipeline? a Can – kind or these been – vehicles? talk can of fuel the bit And some of

main Yes. with for Jeff. lot them, our of it Persio, is A do is interest. This to it And not actually, do focus but them.

to and we’re with customers. our what partner lot investing a of actually time money So now is

have that their and we their product needs So meet the will absolutely exceed expectation.

how it charge a about just on are feedback. deliver so together the them their it’s ask medium operate, type to how able it operation, more not runs, of are put your the though, the product So you some is being immobility for consulting together products based a than supposed about to of truck duty product taking cycles we to the or and approach on really just now and bus customers which

opposite. we’re the So working doing we’re with upfront Se them.

it I great for bus a stuff, mean, okay. this out, kind space the is space of turns

you in in recall, have And has As in the are gave indicated. And absolute have the again, lot really interest country, it Persio of to gasoline we natural engine certain the lot propane opportunity under then as also in who interest that. again, was industry, parts know, there you partnerships, network And certain circumstances. of school – we become an segmented buses. buses. we kind that offering of a And us the in gas was that these to may and certain probably distribution a involved powered in in of the best able country parts create of

electrified we’re looking to on with product. the for to So, regards just build that opportunity an

satisfy to that dollar that leads can make a And spending investment very in we every way customers. so efficient that we’re sure

focus now, much area on is more trucks? on so the not So bus right the regional

and The medium-duty – is very of commonality for platform has – us platform the and a – the interesting thing is kind reuse. our bus high platform high very,

develop to the medium-duty it that to I is of I mean, a truck. we bolt-on, want So technology but it’s bus, a for I any mean, don’t say

So the – it that same of same to that to kind take us approach. really gives opportunity take

charging of other from the of think, to costs of and demand access of standpoint the grants to build get the incentives like I out those to do ability some and kinds have infrastructure, defer folks and some plenty a things things. bus the

fast to they’re So a be mover. willing

couple And because get advantage of take through a does learnings that think so that, it cycle quicker. we want of us to we

much, very and again, congratulations. you thank Well, Okay.

Thanks, Jeff.

Thank you, Jeff.

the Our Seth of next question comes from RBC with line Weber Markets. Capital

Your line is open. now

Hey, good everybody. morning,

Seth. Hi,

think the that still to higher? is Do number right about in that think back the How we question Just is something to – Class still wanted guys X. demand. Troy, X demand always is an thought earlier about growth replacement about for demand Thanks. you do moving replacement number is mean, market? a you go think Class that I range fleet Do to replacement you in and XXX,XXX about? number like think

roughly comment. that’s a replacement great obviously, right? of to up, has I there’s up slightly but support – lot of last gone I XXXX since that the X% economy it, believe was million basically, message think, that a mean, or And in less freight. year. GDP think a to in an I X.X that demand I Seth, all We growing the was year, trucks behind range

As has to there needs gone growth GDP trucks. more okay, up, be

million of size X kind is do X.X then units is needs up. just attribute if replacement demand by that, And something you million that fleet the to to And this goes GDP growth so go the sustained, to of one when definition higher. from

the longer a up don’t the are very think But think, at point the think – kind replacement volume, that. of overstating we on, demand hey, I goes historically this and mean, call we’ve viewed, in XX%, particular what that the points economy, where then the could, I economic better. in I think fact, go demand we’ve I lot, to speak. numbers what your but XX% as okay, – this that’s And demand behind – we for be expansion industry good capacity then that’s think at material time. some on and level adjust that will for the level and put look, the this point, whole we’re a over to think the required, ready that’s share industry. as satisfy replacement to And don’t that to don’t yet replacement the from our I them demand. in So, both I And supplier seen I

not it’s lot up press – I a will mean, we’re believe that’s related This do in So has has in and be It’s replacement good a a lot The a only consensus a related up industry. in of and to a year, us. good gone not there large we’re fashion. gone and demand think, But thing. material the I people. covered do I We between topic. is the the time the this trailblazing next of thing. journals think, now on this and

on drove Very that Is strength interesting, quarter? what in the a export on quick just and or the the the is more any Thanks. think color something that in here, sustainable thanks. just market. there strength follow-up then And you Mexico

basically strong. taking place. on We We taking are export market see activity

year, drives which We law They always more Mexico taking at we are end all a the at had there Mexico. Colombia. the even in the that scrap now a the of in second-half. are that really – now and And believe look monitoring stable, political actually environment opportunity expiring of was we

now in see balance to we Mexico But close dedicated we’re are a very in and that So in we see forecast the forecast changes a will U.S. – accordingly. between to monitoring the is and Mexico our – stability way. is our diligent today very there to a taking that anything just – production we try that approach if

guys. comments, the Great. much. you very appreciate I Thank

you. Thank

you. Thank

back like And closing that session. today’s remarks. call question-and-answer for Ketelaar to the to Mr. turn I’d concludes

look early you free in either for feel follow-up thank joining you we’ll Campbell. for forward myself everybody, If quarter Ryan otherwise, continued thank, please to or there’s with second your to and want questions, I us Navistar. And any this June talking in out for morning, Great. interest results. to to reach

Troy. in again for your Navistar. is It a lot Yes. Thanks interest

you tell, Marty well not enough excited to we’re Many that look, about can in able of us you As know QX, we’re we indicated, but you expect really results statement. that the accomplish would done. were

excited to be actually the the future Thanks. results deliver plan We’re more about year. to going a XXXX and in that great is we

conference. a and participation thank gentlemen, today’s you concludes This have program, disconnect. in and day. Everyone, Ladies may your the now you great for