Navistar International (NAV) 4 Jun 192019 Q2 Earnings call transcript

Good day ladies and gentlemen and welcome to the Navistar Second Quarter 2019 Earnings Results conference call. At this time, all participants are in a listen-only mode. Later we will conduct a question and answer session and instructions will follow at that time. If anyone should require assistance during the conference, please press star then zero on your touchtone telephone.

As a reminder, this conference is being recorded.

to President host of like Marty today’s now Vice Ketelaar, Investor would introduce for your conference, I Relations.

You may begin.

Thanks you for period ended quarter everyone Navistar International and for performance XX, the the morning Today second fiscal for discuss call. XXXX Gigi. Navistar’s conference XXXX. of will financial April Corporation joining Good us we thank

and With Executive Chief our President Borst, President and Operating Officer; Financial Executive me and Chief Executive take today Lisboa, participants. are Troy concluding remarks, Clarke, our After Walter Chairman, President and Persio Officer; our Chief Officer. we’ll from Vice Vice prepared questions

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

goods tariffs guidance if our and and, industry the available, will accordingly. from possible XXXX financial border. Our crossing adjusted reassessed of When reflect guidance necessary, be not financial information impact Mexican does and industry becomes additional the

disclaimer in most also Safe in on you SEC today’s for differ factors this information results concerning filings. We refer subject. notes and to our material presented that our actual information recent to For please materially to statement cautionary included from those presentation, cause more other today’s Harbor would refer additional could

I’ll over comments. turn to call Clarke for that, Troy? opening With the Troy

call. detail through welcome outlook rest I’ll thoughts to and financial quarter then you and the company’s the of share the quarter industry, you Navistar earnings the year. more overall on on second the the take Marty, Okay, and for thank performance some will Walter

We revenues performance by adjusted core was XX%. driven company growth by Total and truck great had grew increased up income strong is volume, net in This year-over-year. another XX% quarter. which XX%

quarter to Second market XX.X% share the share X.X board X up up retail X.X points was medium Class nearly to across and up points share XX%. with

We’re not finished.

order share Class Our XX%. doubled truck X X through to

or production X/X new acceleration Additionally, is the the Class truck complete. of ramp almost

of suggest Key but The mixed economic GDP while healthy. the growth are upcoming is slowing U.S. remains signs quarters. very showing indicators forecasts economy risks to in

GDP strong, The quarter growth came remains average. remains ISM above spending high. growth confidence Manufacturing the X%. has above softened First XX-year consumer yet in Index Consumer

Freight new volumes. from also truck and moderated pricing demand market with peak line this mixed. for XXXX increased have in historical but increased, Key above remain are their has rates inventories from yet XXXX is trucking declining truck are indicators peaks the and averages. sales Used the

exceeded ago, XXXX, a in industry however, backlogs industry back. X Navistar October; have quarter recent by first from once Class pulled backlog. XX% expected, activity months of peaking second As the since and our orders order declined orders Through XX% adding year has core declined six have to solid again industry charge-outs,

rates. we and issues Supply competitors’ eased; range suppliers closely grew as of trade-ins chain the increased have taken and are remain with market towards truck we new low We’ve and of models diverse our inventories used inventories capacity balanced remains have tight. truck however, share. end while worked Our their normal line makes as we back

guidance, increasing XXXX detail. more has strong, and Since been Walter provide we’re industry core production industry will

the retail growth. share market generating is on focus this customer Our

our proprietary including experience customers, quarters. customers growing patterns fleets road. the One speak, and our These customers large with the pump, business the will provide parts the the as owner-operators, existing leaders, from buying among the growth the with down volumes products. sales and who future U.S., improve benefits value several and from to repeat major continue especially We’re fleets winning new influence is to truck will their also activity fleets increased so channel segment, trucks with in of pricing dealer many winning power and business these industry smaller in trains. heavily to share the for drive our priming of business are future benefit our for in largest Higher wallet opportunity of earn

gross products our along expect over margins and profit grow time deliver brand on promise our as to We uptime. with share of

the our roll-out we and customers, increasing and repair next of customers. our improving early in that times uptime enable national quarter, distribution opening track part center company Memphis. delivery will quarter This velocity and a to commitment to partnership new will announced on uptime, in the Love’s for dealers industry-leading is for parts our with be As service

engine Navistar us We We great agreement a risk achieved a annuitized profile to productive deal the Auto recently United with we the These pension past and our partner a found improve ratified we the for settlement months. down success. most and a position Workers, Defense, for debt, outstanding Canadian litigation. announced several over address future paid obligation, actions MaxxForce we

share financial our our revenues higher the generating you focus in grow to first year. versus further EBITDA adjusted of half with in the of even those gross on These come uptime, will will As retail margins, half second XXXX we guidance. walk margins year. expect through the this stronger reported result higher Walter a

for summary, another quarter was great Navistar. In QX

with generation improve effective availability, procurement the taken and next the and to profile. venture our and joint service in demonstrates our parts we’ve with cost the Navistar traction is opportunity actions to uptime gaining sector. is expand is real Market increasing, through the commitment best as progress alliance investment share customers we that cost access reducing technologies, Traton is to Our locations risk

Mexico. goods on I to the would tariffs comment like proposed on from

of reporting this companies out, works announcement. following results first it the we’re As one

recent the business. could to on assess of it’s announcement, have it too Given the the nature early our impact

associations trade monitor to continue this situation. We with and are our working

are we impacts. expect, working would you understand those to potential As

the tariffs suggest and a to made, setting aside, we’re with the begun Navistar, earnings while progress power XXXX But we’ve indications pleased only true that good the we’ve Navistar. show will for year the be new of early

like I’d to that, Walter. to it over With turn

Thanks Troy. focus. strong in performance second reflecting the customer our Navistar intense industry conditions again delivered and financial healthy quarter,

provide Let’s an results guidance. on begin our by before the second I reviewing update XXXX quarter

grew XX% volumes. Troy billion. $X in to driven The was the in core indicated, As increase a truck revenues quarter by XX% improvement

lines. share grew on sequential X% segments is points Also share market which in reflecting across both all up is year-over-year supporting and vehicle a X.X Our to X% all revenue basis. growth truck higher pricing, product to XX.X%, improved

quarter Gross margin was for the XX.X%.

second The due margins is customers. the mix point historically to customer strong from low leasing and quarter sales rental for to

over mix gross revenues for substantially revenues truck standard. while revenue year year impacted consolidated modestly segment as increased after adjusting grew margins addition, In parts the new recognition

have we higher previously, are so truck margins, gross margins parts truck sales quarter benefit the margins while are than future. lower, As in parts second discussed higher sales will the

from our result and customers settlement million fell as current EGR the during prior one-time engineering revenue SG&A expenses Adjusting liter as charge potential to are costs as percentage X.X% period in Higher the of for XX period. of XX.X% SG&A for well engines. and for XX MaxxForce legal a structural this charge, of $XXX settlements a liter the expenses a future quarter with including and

additional certain ongoing introducing a company the an million consider operational one-time underlying of The its items income, business, will operations. that help of we’re not company $XX charge. significant reported part net identified To the legal of loss from that exclude net metric, income the impact performance be included net which the the to does of assess adjusted

million after-tax versus rose to on in ago a million $XXX pre-tax an items income in basis, one-time excluding basis. Adjusted a million items net versus to XX% year. $XX the these second quarter XX% one-time on year EBITDA million adjusted $XXX after Excluding QX last grew $XXX

our by product production XX% XX% sales billion. Class Moving the trucks. increased all segments in grew of to quarter XX%. increase was Total in core volumes sales X/X truck the volumes Class segment results, ramp-up X/X new X grew to an plus driven Class $X.X segment the The growth and the

legal and commodities. doubled from largely partially the segment a of sale driven charge pricing, volumes majority profit and impact Navistar mentioned year increase a The improved was by truck in higher related interest Excluding ago. the to Defense earlier, of pressures offset I by the cost

ASC-XXX, parts grew Our segment revenue this were implementation delivered at million. On standard a X% The the adopted comparable $XX by revenue revenue revenues year. second parts Navistar impacted business which the The another results beginning basis, quarter this by standard, of recognition of reduced year-over-year. great new quarter.

reflecting to growing lower parts label segment grew was million quarter the profit due improved partially to U.S. results Part $XXX XX%. offset X% Blue Profit to for three operating nearly business, up Diamond points year-over-year volumes. margin by private

down operations global segment uncertainty, to segment, million however, recent political profitable. as Due the initially the economic in remains quickly recovering are Brazil In as not conditions were revenues year-over-year. expected; $XX

is opportunities. portfolio from average to services benefiting segment higher due Our financial financing balances increased

result, drove to million. Higher by XX% strategies As margin increased profitability interest and revenues a to higher inter-company from $XX $XX an XX% loan million. from income improved funding

$XXX of manufacturing the capital XXXX strong During cash from generated million April, a million. position strong in down, pay the the cash performance. EBITDA the hand. working with quarter quarter, $XXX Notwithstanding issued manufacturing notes the the In and million ended free with its favorable cash repaid $XXX company of largely second on adjusted flow convertible company company

borrowing syndicate company Term Standard acknowledging closed in Loan flexibility liquidity and have notch, On million new The provides new facility at $XXX financial and a increased XXXX. $XXX banks with B January, XX May for with its XX, & NFC performance upgraded strong repaid facility lower cost. revolving and five-year Since risk Poor’s, Fitch issued million profile. the Moody’s nearly a July lower credit our a one of additional

has added earnings including hand inventory I number company several to years. posted the our inventory of our new to total website. insights on provides additional highlight over is slide range chart days a want which This into the the normal chart levels, that on the in deck been to sales

We company XXX can in had more volumes. days, plan previously. the from versus are inventory company the ratio only low slide sales referencing XX slide at days higher to the to inventories the see hand the As total we shown forward. you provide of inventory going depicts reflecting absolute total days, This XX chart, of accurately range dealer inventories normal of on end

for take Let moment guidance our year. me to a also update the

tariffs As his Marty from this implements further require if Mexico revision opening U.S. imports near the on in term. the remarks, indicated in could guidance

growth, range guidance. the Because prior increase of our higher we’re believe year. billion volumes $XX.XX XXX,XXX also a units, industry million expectations expected from range by tariffs, such at unit billion XXXX XXX,XXX share together our of the between core to to industry $XXX will a revenue raising midpoint Excluding we $XX.XX for with volumes strong the market XXXX XX,XXX than to

Relatively truck more smaller magnifying truck segment growth from versus to higher mentioned customer sales I mix earlier. larger is both mix impacts revenue the coming and versus larger parts fleets,

the cost to the margin margins gross growth. constrain expect will year, we increase Although gross headwinds throughout remainder material of

Taken XX.XX% together, for and be we XX.XX% between will the now gross believe margins year.

we of funding Also generation alliance projects, power increase. year, the beginning in the diesel including next second trains, half to for expect

had structural spend products costs if over modestly few ourselves. by much we to than such will more grow be quarters, efficient our will the While begin next that developed

range by we million $XX result guidance a adjusted the share $XXX market million strong million of gains, the to and of $XXX year. for revenues are As EBITDA a higher to increasing

up summary, road to and year sheet taking actions is prepare growing strong is XXXX be share, to our a to the company ahead. and revenue Navistar. for strengthen balance shaping market The EBITDA, for very In recapturing

too. We’re hope about you future and very excited the are

To day help headquarters heading, you an better XX understand hosting we’ll at in be Lisle. where September on we’re our investor

improvements insights forward strategy, on leader. additional and lookout to to Our and the business, Be made attendance. we to becoming we’ve management road provide will a for look your market the our executive team map on information, our more

our developments XX, where to Show technology Atlanta this . October you can XX America North product see through attend invite and offerings latest you we the from Vehicle Commercial year’s Additionally, in

I’ll the operator it With turn Q&A. that, back to begin to the

[Operator instructions]

is Our Steven first Fisher from UBS. from question

Your now line open. is

Great, thanks. Good morning.

It that would and what Just have have sounds on the wanted to but alternatives to you Mexico and would and take some come action to you guidance that term, question. in term, to that, go? follow take medium up the like to given actually take what you strategies this political decide for near address things some the lumps are it on on these may

you certainly footprint frankly appreciate as that and an all we and supplier Mexico at important both question, we this the have and of Hey Steve, thanks part quite truck of that. Troy. is many our level. questions assembled for manufacturing level We Good is this, well. do know an your morning on

is of years and to then capacity It’s in a to so was outcomes of the understand The what much that second might it comment need thing speculate than make is all line utilization changes today I the would we details want ago, our handful higher really should just manufacturing with can of of frankly us, be. hard and or make don’t for we what really quite on we that.

be better take to that line to some able sight guidance But we a how guys have the I us analysis and up our take of and trust will as to we and - as think place in insights. speak, what we’ll specific more will we’re at you better it right elbows provide some on place, time of

Then now that about is talk of a put type back? in the been of for bold this actually the as ones trucks you and thanks. ordering Who profile downturn, further Great, XXXX get in customers which point? can months are at to we are this enough orders handful the holding new little now what we’ve order just into just bit of

to are Steve, really that carriers orders, the year, Hey What lot having to back significant volume is a orders even lots get this the with saw protect we of large were we a last orders they half you we of network, of Persio. go and got faced into Past leveling of peak the first as wanted all, of the placing if is today reserved to that these the right as dealer they XXXX the to point, trying OEMs. the first that and much possible we really were place.

of large doing because are we today orders What large fleets. business carriers and need we a still anyway placing for is seeing their is customers, that there have replacement

the are The we’re the come back all are total so cost thing of other new them products year, to important, we so that and from makes competitors, including the our a years products us, that the are model operations, different every is seeing more efficient is economy of market. improving delivering

half, monitor summertime see need volumes what future in that about last we for will but not obviously significant in the we they wide variety, a half, see those market placed year, the still now the we the them but So happens. first talking are see second so already to and

is of you Yes, economics still these who know, Steve, new of owning ordering very the compelling. we at the Persio referenced, trucks people some but looked very, people truck are the recognize still that a

appreciate are I that on and costs, and longer but ability systems in overall impact are and technology, sustained speak, has about say safety last out, in that uptime the orders the costs, years anticipate hanging economy performance strategic, and truck the old, fuel providing. the delivering just the alone to stuff by retain like trucks, attract who so in so fuel still years, I would is all five year we well that’s now the those. drivers. would who Over that guys save industry, driven to between still the portion opportunity got in call turns term the Those in and there’s their that a to It if $XX,XXX out let gals are Their solid, we’re and of XX you’ve a is demand, players what those about this, a their backlog also we replacement-plus, These which thought got customers in alone, XX ordering improvement say. $XX,XXX there. been their a to XX% are to folks you’ve

you. Terrific, thank

Thank you.

from Wells Fargo. question is next from Casey Our Andy

open. now is line Your

good for everyone. is questions. standing Hi, actually Andy. for Wu Patrick Thanks in our This taking morning

Hi Patrick.

this question a think your on how backlog some at is point. pretty I backlog Just - your had commentary about you good robust

Just just you positive the supporting guys, year are XXXX guys that for see your will is your and industry you wanted on do more think view that hearing a industry is is customers to positive business? perspective, what or commentary your an itself you from a be also from that

the Actually, today of we backlog the and tried pretty did really, of their much could seeing opportunity something opportunity, fleets What in is of that, that the beginning we the ahead so very that cannot just very Patrick. customers are to we is done Troy that production the again, Persio we production, the solid. to, have as importance one is I discount We is that referred is meaningful. mentioned things the we as from we’ve terms at This the and you, to replace of is pull year, increase as of successfully. to our

As we a well, trucks, made lot is deliver the of built we and we supply our reflection really raised our availability more actually trucks, share more could a out market and we had us. that the more our for managing rates as so to by base, customers on result that paid

seeing the about that, we orders have really several replace previous why the We So modern in they of are we what ones our for and what give new never truck, technologies. customers the we backlog, are their have coming backlog. try very so priority were think customers filled backlog trucks, the we to are new quality orders referred and really more fleet, that are that the customers the market want take to seeing we to feel to that want would and didn’t That’s today, get those our name. I are good that that that’s into we that a to calls, times in today, real with

in and provide and the the in orders next deliveries economy, delivery. say, a to wait XXXX, are opportunity order indicate see. Obviously a backlogs XX can fundamentals basically very to still it does some and Patrick, cases to customers so some with regards let’s business economic for are months, today XX happen hey, in would lot the but for good, take

be so through not I it backlogs, question have summer. works there fundamentals think opportunities again, frame, Now or some tell not? think is, shipping, be the we’ll shifting way I I the XXXX. happens is moderating, the freight to the to think actually that between in which typically to But time still that It’s the market certainly of support seems but how lower because economic really September hard only the discovered balance gear are has and its to yet seasonal but see July a increased, to

that’s helpful. it, super Got

X% up bit the same fiscal half that quarter? price mentioned X% at on second factors? thing Obviously price that in of your that little to gives some are in any share, but Are you the a market mentioned what primary number touching the comments up Just couple from gains share, shape the year? obviously can growth you that in guys this quarter on what seeing? of do confidence share are your continue in gaining guys understanding drove the some you all primary to already, versus you market a the are the what How you does market of the factors you that industry,

is This Persio again.

really, with in to years. them MV, product new of last been and share, to The all instance, a the the is re-launched power is medium direct fact product our entire all two half with without really, side of line. the winner. better is product me is both is new heavy performing duty exception years, had line three market refreshed year, the the platforms, the we really quality customers’ really touch The of trucks Market here. bus that of upside is lot that the and us on much amazing, is the product medium The last for a the trains, all, launched was all outgoing the the line, alternative a than entire it Let it the share. really result feedback vocational positive, well, of in so the to we of already first a that both--I’ll our try market providing from touch and share, product terms

in of new news truck. we we so today, and get the have product for new As a and International, lot product, to a they look customers looking market customers that’s for They one. the a that at that new are platform with are

the that, in point fact has important of so that I pricing positive is we segments for on all a comment data been us story we think Because well, the an industry pricing pricing can’t us. also as have but for positive

Great, thank you, super helpful.

you. Thank

is from Adam Our Cleveland Uhlman next question from Research.

line now is open. Your

the guess low Hi, raised maybe or bit. went good guidance Walter, We that Could up changes in a morning the only first by happening a EBITDA guidance million to so, gross within that of the provide sales us everyone. you expectations costs versus I earnings but structural to back what’s for guidance. the your $XXX by little leading are bridge margin and leverage? you,

Yes, sure.

in in the As the year, it of most come parts that had is impacting we our came revenues truck for would what we than anticipated quarter mix. the in have than remarks, so in thought stronger indicated be, stronger had you versus

so that’s margins are as parts whole. for margins, a not truck margin in the high and year quarter as Our gross our impacting the as

and the side, pressures well, and Secondly, some also those commodities we’re is customers industry of is customers customers, margins. relatively share on pretty more to well we and indicated, our to terms well more well the in hedged the thirdly, as selling the is due lower running but because tend have relatively seeing in in larger doing as because XXXX. year-over-year, growth, to that we’re well we that particular of to were materials some Then smaller doing with larger

Some have base just then here in ’XX, out. off supply full the running is of and rolled those secondly

roughly? costs up Okay, the and full your you much be then how do think material for will year,

be commodity be as than offset to increases will as on calls, our those prior side on But price made to that saw. cost pricing still significant results. material material we net the progress indicated that costs, a impact we’ve we the greater on that benefit to think and we’ve still expect We well

the highest long that about a profits remarks numbers? really prepared for thinking of financial second the the that’s What quarter, impact or an year great are you loan. The the time. here business? share had services inter-company Can think the Okay. you mentioned for was half us the had with I benefiting business how you in in a there

the loans higher truck past of probably volumes to had some area seen is the is We’ve had, to the just we’ve operations Yes, financing inter-company do that year giving of the think we in a half last dissimilar the the that. weeks, in financial another I benefit, they’ve example think call we service that secondly, second so ago, the or them in in between is couple principle we’ve financial we’ve is relentless and the the couple of down, date. opportunities; services what business the get costs manufacturing out, in not additional put is seen and funding place been that here but weeks trying I that and to segment, two things. One terms revolver their

services looking our to while trying costs We’re down they’re to work the our just continue for. funding providing customers

thank you. Okay,

you. Thank

Our next question is from Neil Frohnapple Buckingham Research. from

is line open. Your now

Hi, thanks. good morning,

back a the will Escobedo, in half, the in in quick November. largely or think continued supply there the margin. there the I moderate second anything from chain Adam’s to carryover that gross Were inefficiencies Just on or shift is that at Was behind? quarter any question headwinds adding back second quarter follow-up that in

to or we’ve continues it’s but surely might we seen, now. control us. got otherwise maybe the advantages ago. couple under behind less not largely quarters be think so that have we’re We tight, I supply the had getting constraints It a more of

related whether the than Could to as talk last retail you wanted share about X if share just trends? share just I Class relative core to order Okay. your back gains, directionally to follow-up, seeing you the expected just talk could where market increase a Just recent broad-based over than you’re about increase? guidance go few more XX%. months to faster a just in performance share it’s the greater

This as Neil. Basically I mentioned. is Persio, coming segments, from growth share the all is market

his remarks. had Troy actually in think I that

than at look bus, and we we you anticipated bus up are in really year. up If we we are up medium last Class significantly, stronger had are X significantly,

a coming to have significantly. is carriers, Walter is mentioned, business rental improvement, segments and a From is have. the from that growing us, all an important providing not larger there biggest So the as customer and the are actually segment that it seeing business specific we that we leasing standpoint, is and we

I performance terms XX% us you core how first confidence share. are the ahead as the X, half Class market we for is of lower, stay second the provides the we’ve initial on which are we we that monitoring why overall our the share. and think orders of revising order X think I well, for X taking that’s exceed said, the significant half a estimates would an in first guidance been half, Class so Actually, we where the position probably will a the we Class share were as orders, in although in and have maintained intake orders important that

X are confidence share, into share. that been overall of see lower, for retail continue that’s industry The our retail that order us we’ll share to Class and translate orders so has well while gives ahead running what here

time. over X that’s, I Class I or Walter, maybe Persio within my comment. think Yes, mean,

are unique now and share charge-outs, be guided the to, adding will count market have the backlog. we of share that backlog work that that what’s we’re so when of run charge-outs, to forecast can Class even is a the we think quarter share confidence month that should X out, to can greater run we on, with will quality convert, a gives math us about that continue expansion the ahead I has higher. but the Again, say orders or eventually than orders the our and in been market order high then

Troy. helpful, that’s Okay,

XX line-up last think XX, share precludes Navistar don’t anything to the, or there’s in the you experienced new guys from over XX% that call years getting back product historical so? You it the

for noted, as to with to No, the in to Persio that at portfolio our of had this really we ago of was to looking back us number call all no. customers called share-plus. Project revamp set originally and Horizon, fact, we get what what product what we time, Matter were point in project years be on used fair tune particular a off

You think uptime differentiating a of that fact that to about not of above to that well XX% the the last very who trucks. are kind range, know as for fair unique we’re guys but in services a like and how Navistar are least, share we’re we assign in just that, to so sell anything and great performing just here as providing at in company, number market, that fact all our products the us bunch

much. thanks right, so All

Thank you.

next question from is Our Morgan. Duignan JP from Ann

Your now open. line is

Hi, we of production assets I Mexico good what you manufacturing think your right based back out can is of Mexico? morning everybody. remind could percent in Troy, now? us coming of to go but your are Mexico, trucks XX%

I of hope operations, Mexico it the is--the you Well, about capacity to States. as Right and that have now, some not level two-thirds effective a footprint capacity between gives think sense in We do but we me type United this helpful. that’s have is in and have. we way. think--let flexibility, that again I put our of flexibility one-third the I total

is your truck total Mexico? to Just be clear, capacity two-thirds of

Yes, excluding be and bus. that would truck

I sure make to wanted right. get I bus. that Excluding exactly

business the that G-van van the And GM. for business, we excluding cutaway do

two have Springfield. in So SAP at lines and lines - at they’re two Mexico we

is is Springfield which at for we manufacturing Motors. General lines cutaway recall, you the of do contract operation, One a van will a

at make I’m have that what the than I is put know sure that tariffs they of My end we not looking levels indicator inventories. inventories be your then Maybe should inventories. you on Okay. second on normalized What a talk dealer just the either maybe don’t base get will for that I inventory Navistar just historically, sure on lower forward, but basis? we just a been have be own dealer for question for about and clear. history normalized that internal for inventories? inventories day. is they’re to or your level, wanted good a looking Can we your

chart, that’s take historical normalized. more If as that little provide run to XX that Ann, provide try maybe bit maybe to We that’s XXX, something midpoint the perspective. of to a of

at currently. We’re lower the of running end that

normal? That seems average, is the that very But my is XX really high. to is, point XXX, really that is

a auto on ideal on where is you come to is and XX days an we in talked circumstance this that from that’s--Ann, industry the days. industry, XX auto Yes, hand, hand certainly question the probably in days I in know

the type that the high they’re we through manufacturers, dealers, of not they go well go or that are utilization, fact pretty at that TEMs a when right products, portion out equipment especially to level to operate Given of through equipment auto manufacturers oftentimes our and that and some compared the to the sold even think this But tend this we’ve now, capacity maybe data, basically for at least that number that out it’s years days isn’t the on, that is XX average days. of around I industry years. days, a world think reports the suggest XXX so like something five some XX XX as last laid would and over whole more data to the

our of Again, more the it’s of So XX and you think I XX, I it’s don’t kind that. know, XX think think it’s uniqueness supports data or to industry. XX, like I the

or in then basically go of engineering Some kind is to and SQs schedule We go you able and that that be number orders, all through they and of source to dealers, require especially that have material, do so see. that the them the and then the number some time TEMs, activity. to special

because in as also, color. the automotive mind my brought what you. Okay, of my glad so base I’m back that’s up you thank I helpful the industry, that’s had

some Yes, meeting. I is about last questions chart think response a lot. at This the somewhat got we that in to

to do to need doesn’t the gross that really things. market business. up, right better because We’re doing goes make We - utilized. sure inventory are up all we’re inventory more pretty business, our story about convinced right we’re more our plants share with just go looking the Look, will at justice

asking question. for Thanks the

Yes, Thanks. it. appreciate

Thank you.

and ladies question, your then As you a reminder star on key please touchtone if gentlemen, the number one have a telephone. the press

is Our Sachs. Jerry next Revich question Goldman from from

line now is Your open.

capacity everyone. for do capacity your the update quarter, this us This just and at peak you this production capacity in to compared Ben some Hi, an good how cycle? your is you [ph] last, think Berude point hoping I on given was cycle competitors’ had last you morning production in on shifts could Jerry. compares your give to

of dependent The really on can supply make get Ben. factor happened when support total not did--we we supply to pull second us no actually and the that--you raise is last parts was but competitors us. driven couldn’t on of really year so spring the base capacity point you half what shift, XXXX, a to know, is of a as lot their there base. peak a really second we it the investment to we to seen trying provide to in one in year on well. Persio, is the is capacity ahead last to calculation we’ve have, own had to that do, we had capacity This the What the shift That to

which today supply performing now it factor last was the I the year. is than in [indiscernible] think capacity, is better much chain The industry

a base, determining have level alluded, entire is and we We as from better it a we but right factors so is have operating good very now parts much are I really can for still, we supply the probably of size the in Walter place the and tight, high at the control at still market. think many the we’re chain, get how

what in it. ago, update Can X on liter said know share you your share in think on us a an is the maybe share us you you recovery versus XX to help liter? opportunity I Can range. ultimate XX X% share help then year was update provide the XX Got there? and about liter that, in

around we Yes, on the last a where were the It’s XX is than share year I the point. time almost X% at for today. think same higher

seen the feedback we that that the that the more we in is miles to AXX trucks and from see from units performance customer XXX,XXX in than market and get, been we’ve us to compare XX finding very the of are now--the It with positive, is else’s data XXX,XXX everything and we dealer the a trucks, vehicles, and feedback engine start the we to getting first first from customers and really hitting getting have we get, have generation, everybody so the on performing that the it that because we that feedback the now. market well. XXX,XXX for far milestone are want it really, right new has the are the will on We customers liter, command are important connection an

So are think would upside. we the we of are say, overall, ramp definitely. to still mode, I market We a going that’s the that share, grow ton in AXX. of There is where

set and with year If and Because in year. time. sales reflected at much just gaining Persio numbers it, AXXs much, point share are increases market we share we large at making in X higher over higher XX nominally a not it’s it’s liters, as market sales are lot you much indicated, of in more look in Class a of this

that this seeing the a of do, increases, exceeding and into math we’ll are and the there to However, orders come, where has year. to again that in of us the charge-outs, thought second see we significant are share that confidence get that so growth and of half you degree more gives when primed, order pump some process is high been speak, we

Great, thank you.

you. Thank

Weber Our from is next RBC Seth question Markets. from Capital

Your is open. line now

is This Seth. Hi, Brendan for thanks. on

on of that early are are orders mentioned something your You construction, actually stretching? vocational end XXXX you’re are color second, weakening--or now is you color, you or how deliveries. any any into some markets, positive of that indications deep give on Any some rather, XXXX energy, else? your seeing for backlog in taking strengthening the can or Then or for currently strengthening weakening Thanks. within XXXX

again. Persio is this Yes,

We gas, that are but still We oil well. as still very in strong, vocational; don’t seeing any and business construction major are actually, utilities I in we up. think participate not is know, too you changes as much happening see

of there. changes lot a not So

to think XXXX we’re to deliver far we need because In how XXXX. into terms of the quality of into are the get we going backlog, I don’t

that’s that before, in those of that I and the ’XX have start is now, right to focus next we’ll the summertime all for half an us, the important orders as year and mentioned year of first the for year. part think we getting I units building really model

into orders The come is great are to us news being basically XXXX. slotted today that

sequential we the haven’t permit it’s they’re sometimes into those for the a order Now, sure orders, for be. this us but a great and of years in number position nature units given don’t spot a the of of for those of a been to build delivery book, XXXX, is

disruptive more regards segments of some so doubled robustly I more than order point perform on time don’t with XXXX vocational With share again, these in little out we we again gaining us go basis, a the doubled; in would as QX might the to like, share the XXXX just are an segments share service to service the because segments QX XXXX that severe we do severe than although QX as stuff, underlying XXXX gives delivery that participate tend where participate orders, in TEMs, they to and well. QX confidence to is we we order to

Okay, and quarter. the strong on thanks, congrats

Thank you.

from Jeff Capital from is Loop question next Kauffman Markets. Our

open. now is line Your

quick follow-up. much. everyone, so Thank you My do two have to going big been already Hey just a congratulations. questions very I’m answered,

you that us market. well I’m lost when XX all is, tell that you think that in liter XX was you market. where the liter to where going from I and we about liter away time spoke the back walk had your X% share share? share Could in XX share before

This is the reference just Persio, for you point quarter. give Jeff. a I’ll second

XX.X% and second last is of The in share it quarter the XX quarter our of now year, liter second XX.X%, was XXXX.

are issues, to XX, far better share, think that I XX had the we anticipated. that There XX% in performing when have. biggest growing as back the was as a we the liter on share, we and think XX days think and went we overall side, as the also upside were opportunity when liter down I most been the the way we’ve we than the one I both is not is so driving of

have. all I and that’s Okay, you, thank

Thank you.

Our next question Tiss BMO. is from from Joel

open. now is line Your

going? it how’s guys, Hey

Great.

wondered, can been rising a sense why it’s looks like quite a just give year? us this you I bit little the SG&A

some Then, you’re it increased that, as little to these from Joel, of of year-over-year reason rate. a run has of after numbers, that of that number main do in which alliance. to our us a is programs thing number, first the investing do which bit prepared I’d the remarks, a I million $XXX in seeing out the part you more mentioned have that you function the principally what train to power is pull is the in Well, so litigation get charges through

mode wasn���t and it while, growing I wonder finance in again. and like looks runoff the a that for Okay, business, it’s happened there. then now what

Well, describe that I it wouldn’t way.

the Mexico. most I we down of the know an an looking advertisement. if retail wholesale we don’t as excellent business But and both finance business know, so BMO, BMO here you’re with partnership, wholesale in does Our domestically, we retail do us, business, just do have you do for for

As our well, share to down, are our have coming improves NFC, and grown, doing has funding allows because is their results it costs which there actions as volumes sheet, there’s grown, to more our business customers. us for is do our taken industry for great market it the our improve even and we’ve more balance

give us sorry - that! free Great, manufacturing okay. Are I too or didn’t cash early? about willing about the for BMO it thing flow company know estimate to is you a XXXX,

No, just actuals. watching the keep

you right, much. very All thank

Joel. you, Thank

you. Thank

from a Our Uhlman next Cleveland follow-up from is Adam question Research.

open. now is line Your

the back for a to network? growth the so You us units trucks the X,XXX that Can or delivery remind X/X you GM? go of had quarter shipped. you this lot we Class from just Can what far, Thanks. the of there much the year, cadence yet? filled and international fill Is and has with is half inventory anything looks the dealer left been then channel second that there like through so

our just how unit think complete them around versus is probable a setting manufacturing XX we All how units so product sells still the all and way so acceleration sold we we’re ordered acceleration, in a be our the year. channel that initial far full demands it’s you I sitting fill number Yes, units largely as in dealer year, the are the and for thing. customer. the awareness products lots stages that they’re about satisfying good out much the product next the the more think fill, a Very on which out here taking create is suppliers, units for sell, different a the are product. we’ll if we acceleration year, XX Both is up final channel is gone of have the for lacking to first as further can a still sold we of finishing for Every they and off days. we’ll product, or overall, think so reach really and of by lot, driven with the unit produce, have into still, typically so characteristics. The seldom I GM

Persio?

You’re right, spot on.

We are the sold year. for out

I going think that’s the to comment was make. I

the that again? material Is maybe fall those were been to ramp-up there that with so? Has Okay. that or off exactly we full as get we be and a cost volumes, should looking full X,XXX a volumes what to units quarter

lost and number in number come the of friction which all or end acceleration, some It’s where the work the quarter-ish material costs. of contributes neighborhood there there problems, quarter to of at inefficiency basically that’s normal is are we’ll point of year. that it’s what out X,XXX business. of the behind the your one to the you’re course to costs, a frictional ringing is I in this at we in performance, would it’s does get you. fourth but in doesn’t we really any just of but background, some the acceleration performance a in But yes, full Springfield those day, in think as affect Yes, be elements in it that of I some and of units kind costs that those out doesn’t portion or so very doing you with you fall build I the plant acceleration again much the fully those assign today the at accelerated as but plant, those so can’t kind of a shared

Great, thanks.

Troy showing closing Clarke no I’m the Thank to further you. like over At call remarks. this turn back would to for time, I questions.

great want results. delivering us for being for Navistar. quarter Navistar. Okay, interest a for much very dealers thank with thank on in call your today, to the was employees for and our thanks QX and you I these strong

better are up, and actions performance really Our think, in setting strategic for future. we us much even the marketplace progress

and anything on September our Vehicle day now - with Relations indicated, interest our in Please our for significantly details questions late hosting forward results that great report any Investor company. you, and then. events, mark day. a or XX to America Communications additional to Show please those Have our results, third in for and quarter your when time look North for thanks out your As Walter you October. or between again the for calendars reach or Commercial impacts investor forward in to and again we we look peaking We Atlanta

your concludes Ladies today’s and conference. in gentlemen, This for you thank the participation program.

disconnect. You may now