Navistar International (NAV) 4 Mar 202020 Q1 Earnings call transcript

Ladies and gentlemen, thank you for standing by, and welcome to the Navistar first quarter 2020 earnings results conference call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during this session, you will need to press star, one on your telephone. Please be advised that today’s conference is being recorded.

further press any then require you assistance, star please zero. If

Relations. the now Ketelaar, to Investor go like would conference Vice you, ahead. to of Marty I Mr. hand over please today, your President Thank speaker

January Jimmy. International us Navistar’s joining fiscal Corporation call. we for first thanks financial the ended conference for will earnings the Good discuss morning XX, XXXX performance Thanks and Today for XXXX. everyone quarter of period Navistar

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

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

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

for evaluating you first the offer respond company updates for January call board is Today’s time. quarter purchase further on cash. in only remaining $XX Traton to we the our we Navistar’s any the know, received to per this Traton will of XX, at and the won’t unsolicited shares offer all results from and of share we XXXX, have you questions regarding directors offer. no As an cover

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

Thank the you Marty. few thanks a joining it quarter to I’ll highlights and XXXX, with hand I’ll for Walter Good then of on details. the morning thoughts some this us over and provide the to you through open balance then walk on morning.

quarter extremely demand. replacement-level right are morning. period fiscal As came years in mentioned of This in during we this off results the reflected is quarter our you’ve strong fourth call seen first December, the fell now transitioning and transition our I on two top where industry’s to

lower in year and not industry lower us are lower a Revenues to was actions we to This as over implemented caused volumes noted last costs loss in our year, the quarter. yet in the a incur the call, We December closely to monitoring developments operations event to the to it more to in meaningfully. surprise related begins guidance are our but achieve we on impact us. remain plan coronavirus provided

the we During also the and the In segments, in medium service. and see strong continued in rental school are and we purchases that bus share leasing quarter, we gains to seeing heavy of severe discussed impact December. weaker

growth to demand down are segments and lower. Today expected rental and these which in in our for ’XX. XX% large some orders penetration higher a share companies Their XXXX be trucks leasing from new much supported as from as of is have XXXX. We

are industry easing strong and the at consumer is offsetting GDP other construction and spending, economic These housing manufacturing basis replacement demand. weaknesses of In to The projected in confidence and around solid items supporting grow uncertainties. starts, That’s XXXX, U.S. market is labor and an X%. recessionary robust signals.

the As half. for second us lead a these be optimistic factors through uncertainties, stronger positive to the economy works

new a now This is number beginning through lot capacity a to two cycle. market however, an prices. adjust rates. take will truck demand. increased past their trucks rates of truck to of capacity Record the trucks, spot just recent deliveries classic constant over chasing years of months a more important to The step few the loads, still relatively has supply right is stabilized, work used freight to signaling this; pressuring have There is of depressing

as With were used up orders and since October industry as going were said, accelerate the nominally Industry the prices XXXX. uncertainties excess weak. forward market activity truck being order dissipate. for first that QX this will capacity, freight economic stabilize, through orders works January time

board, our dealers held cleaned order we’ve up also for some recent eliminating were cancellations. slots some we’ve and seen that customers, Recently, and certain

than Over the the and will results quarter the half the first that will we second improve experienced of in what stronger balance of XXXX year, our first. from we the be expect

and industry is as transition a the outlook coronavirus The on Navistar. I’m as absent economy and from as began we in well impact expected. our XXXX the issue, market the optimistic meaningful for

maintaining will I’m sequentially. XXXX our improve as are guidance We confident quarters succeeding

it to Walter. Let over turn me

Troy. Thanks

headwinds As Troy quarter. transition this the from impacted indicated, results industry our

pending we’re on guidance fiscal We’re of briefly coronavirus, from operations performance of improve taking changes on over I’ll to XXXX the our track shortly. touch steps the our the our to any and which impact to balance the year achieve

With that into introduction, let’s the dive results.

X/X quarter, core year. consistent Worldwide, as For we were were quarter, partially with billion, decline volumes. last reflecting XX% consolidated XX,XXX offset industry conditions. Core produced soft in revenues XX% XX% units the from the first year-over-year lower, charge-outs Class $X.X sales the guidance, in our down down

last XXXX. costs, XXXX were First against both and truck year-over-year. adjustments Interest XX% impacting was declined repayments volumes $XXX to higher due and Structural debt costs, from sequentially and down reserve SG&A expense gross to million, both parts year and truck million, XX.X%, down industry used inventories. margin $XX expenses quarter engineering headwinds including reflecting in

prior of income had million in of $XX share. million share. per loss the net year, first In we $X.XX a $XX per or incurred diluted or we total, quarter In the $X.XX diluted

the Adjusted items pre-tax was $XX an EBITDA after-tax net million on after loss basis. a in one-time million one-time was the first on in QX. excluding Excluding quarter items adjusted basis, $XX

the to by ramp-up of was segment by $X.X trucks. impacted In results, sales Moving the of truck the Class $XX and conditions. offset sales segment industry leasing weaker truck worldwide Troy charge-outs billion XX%, new by Compared the loss a of reflecting our and reported rental prior of X/X weaker QX, sales the year, segment the million. partially to mentioned decreased

manage adjustments the margin supplier adjustments EBIT was by benefited favorable proactively to used inventories. Warranty expenses preexisting warranty higher year impacted volume and from year-over-year reserve as recoveries. and truck lower prior the increased

which Additionally, impacted gain comparisons. from the year-over-year profit the sale and segment related prior of sales a benefited the year of defense $XX business, XX% Navistar million also to

profit Sales as in the Segment were a in whole. conditions million, lower parts million, to business reflecting our down parts which $XXX industry parts the weaker $XXX of XX%, representative decreased was volumes.

on year-over-year million. to The were segment foreign due and unfavorable volumes revenues lower of $XX maintained global softer operations profitability exchange Revenues breakeven rate movements.

in $X interest of profit the our period sale China gain to venture. the related the million the Additionally, in includes joint a prior

profit operations. truck was volumes due originations were Segment revenues and segment the impacted receivable Lower and to were million services results financial weaker lower average $XX balances. year-over-year also million. The $XX

We cash. the billion quarter ended first manufacturing with $X of nearly

operations. as to our offset QX. more as seasonality was used prepare working quarter, production EBITDA well net generated capital expenditures, than capital inventories for due of volumes interest together and with by to use cash the we pension increased cash a make This as During higher in payments, contributions

the Also during settlement U.S. MaxForce note that the the legal we final received in approval quarter, of EGR engine

we result, funded second of the million which beginning in totaled settlement our the fiscal a cash As $XX portion the of quarter.

on some moment to moving coronavirus. Before take let’s the forward, a share thoughts

have to chain date. and supply mitigate been our to disruptions monitoring able We’re minor

If to We’re part in production expediting guidance with the to closely our our our change, working freight including may suppliers, require status revision. were circumstances substitutions maintain certain a schedules. and

that let’s over XXXX. With balance look the said, of

bus of half greater overall vision; four, discussed on suppliers as operations school that typically six, stronger levels. for product We year; from lower and contracts call, throughout results want year; from scheduling; we well vocational including with in profits mentioned, stability our stronger two, seasonal in conditions, factors: as the improve important industry improving three, as X segments; through as in the worldwide second several enter efficiencies the revenues second expect logistics to half manufacturing which Navistar and material and due our have the our in results the actions and sales staffing benefit to Class international the and one, the more cost cost Troy cost five, December ongoing of year adjustments sales X.X robust higher these resulting our to implementing to new periods participate parts strategic production and long-term assembly from savings

first us These to performance. quarter the factors will allow upon improve

the expect level, We to at as for breakeven levels performance run adjusted XXXX half close to improve. net the market of first second in income then accelerates conditions the operating half

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

[Operator instructions]

Securities. comes Casey Fargo with Andy question Wells first Our from

Your is now open. line

morning. good Thanks,

you quarter North have potential the exposure are maybe the customers appreciate primarily end? any sort their you on Then about On coronavirus, also, but disruption to supply American used about you you seen China annual focused to basis truck? what have post on truck, stabilization business operations, I comments separately, then Thanks. telling of much your manufacturing quantify could your and how chain, an the through

what is supply Tier we province. have of is process Obvious on we Tier good Andy, have, XXX% area, have--we suppliers the that what this the and many won’t I monitoring well. specific of think, through to the to been of see. we’ve and I Hubei the we don’t base, Persio in Lisboa. direct that nominal our the a happens the suppliers that monitoring suppliers don’t we the us, have exposure can the provide supply we monitor Hey as spend, be base components in with need suppliers probably in most but for X surroundings them X Actually, for as and region,

we standpoint we a facts and rolling the almost readiness see based are we we month happens, but know. production, of the understand for disruptions, So on first from keep we seen haven’t that far ahead which us we today chain need this, is to monitoring a can major what one. our as as Troy as That’s alluded, supply

slowdown. on attributed and what We customers, economy impact of from but directly on how the say uncertainty our I part is seeing is business. think to that think can’t conversations there you’re may are on that the coronavirus, I impact

monitor to well. need a as will little We bit that

was--? question third The

Used truck prices stabilizing.

a make to Wholesale Yes, an are sales down. one it I we that is about we from in that I action just trucks. case are and saw know anything retail how think to data early uptick prices think used it’s so January, about retails. wouldn’t like here point say still prices is stabilizing. coming We but

Our that in still used trucks we’ll see the model through price reductions indicates summertime.

used on so bottoming in that summer, Yes, prices at or point plus of middle particular trucks, out used we minus in time. this of truck think the the happens

With network. some thing to add coronavirus, we is tightening the already of regards transportation regards, some the that I only would the in see

to supply fill goods not starts being our as especially the flow also all for in some is as a pipeline, commercial going need some sources, just premium using surge transportation then probably we’re and material and behind goods industrial and cases, refill, us or manufacturing additional As the to but transportation in well. but--because be chains to the in for there a gets coronavirus for

spot be think, of good when to slip things getting this so will telltale and us starts really things be indicators rates that a like a will sign, in lot So is I like that, this us. improvements really there behind behind

much. very thanks Okay,

Thank you.

Brian Funds. Gabelli comes next Our question with from Sponheimer

open. now is line Your

no in I bid. Hi, bid announced. commentary or I so about good to curious the just there’s customer everyone. this will behavior the as guess Traton full last appreciate any since change whether in be that morning been I’m month was there

is as say Persio. get behavior stakeholders, that I at can in change all, No, questions but usual. we from this Brian, many business not

Okay.

are as all As hand in backward field, where you the want is to be days we where as and looking to make you at want with dealer it? on under-production think about both inventory regarding know inventory inventory a far caveat the that that is sure the level dealer in order your you figure, you

right to be are quarter, the we planned we for actually. Well, where

we a so to first were remember on Actually December, plan. of retail was that days knew inventory dealer supply, XX% We in lower to the You do where production that the we part that was be, sales inventory the that adjusting XXX about when absolute was little XX%, look down. our at top but of up in because that days, although up ended quarter to and last the numbers, the monitor bit X% the off were of to we maintain at to lower of we supply range going days talked it stable. we you calculation. Dealer is going went said of our

going Second quarter, to back within be range. we’re

Yes, of actually first lot I calculation just the ratio lower declined about denominator that quarter, declined it’s might add just the of the more because that XX% portion a in the DTUs. inventory

So to XXX-day the that we within of second range XX the back anticipate quarter. be to by end

Understood, thank very much. you

Thank you.

Our next Duignan question Morgan. from comes JP with Ann

Your line is now open.

morning. good Hi,

point? not really and Just to much last QX have How if just great, up that, January-February-March, how good. HX expected confidence, at do into picked got visibility this you night production carrying were February in orders we in much on have you had orders sufficiently the very--not but cut not they

came positive, saw. as lower I think feel we February although Class in the X, Well, numbers in Ann, you

intake Our momentum I saw planned but saw we here. we have orders went severe so and we we share I the recovery think constraints is the some think in within overall we industry, to in are saw bus. of medium, industry we still Heavy total where as in up and be, recovery order recovery in

the You the and ended the quarter our February at better see first are we know, up is January, than first supporting forecast we for in is quarter hand. in quarter have so so still orders that we that production that know second quarter, you the and sequentially XX% the January, from our orders with fourth

schedules impact the second today, production of so fourth for quarter, time are quarter, about quarter lack that talking of, filled taking or we’re orders basically in third frame. the And kind

some to and We take alluded loss and down. I the we reservations did and in some that to board, board. usually we Troy coming we order Actually, may because rental, Exactly, it and leasing if that in down. that, leasing decided add of think to I did our rental clean-ups have order just

our that, place us fourth for right with than the even we quarter places for quarter think quarter, higher So net half. second second and the sequentially the XX% entering in which I is what orders in need

Just said XX%, to not you clarify, XX%?

X, X. percent. Fourteen Fourteen -

be used say Celadon Then top got the equipment significantly, I does make just to wanted to our sure. brand-news of Will used this Troy, Okay, are of Celadon? on Ritchie fall and on you through that a number Brothers this month. impacted of through of the by the liquidation being the prices, that liquidated trucks used continue you’ve database Were to course month? supplier trucks your that brand

We through, some volume. have us. not been for to and there’s We trucks look specific very a supplier hasn’t number at It’s of it our but a problem Celadon coming that ours significant. of not more--it’s there trend, the are to contributing trend. Celadon just not as that units specifically being our impacting industry liquidation pricing The volume the going pricing that through are caused

to comment, not Okay. On anything Traton, know timing? going you’re but on I

just call, We won’t let any this, on commenting to We’ll this Ann. time No, thanks. the continue process through the spend I board think just let we’ll work work.

I appreciate it. Okay, thank you.

you. Thank

with question Leiker Baird. next from comes Our David

Your now line is open.

Welcenbach about My general. first morning, a little is extrapolate Erin know mentioned what’s business. in the parts lower David. on this if question volumes in on is you could Good I going for you just some industry there bit

any that. you on Just color provide can

this as you industry. of the across a Yes, Parts, things. indicated, seeing Erin, kind of we’re couple

XX%. down We’re

to lower overall. we than We’ve little winter, these they other customers while to like We of It fairly has that a products the trying actually been is what was that’s can have studies information. it in secondly and things use so repair see that think well. factor, they’re to vehicles. McKay the saw so new, what that industry milder I as understand one a been at is waiting decline our look fleet a

the year we the this particular said, the industry would of second whole in sales in flat accelerate That over parts expect do will a we to year, that year, expect of half course as that accelerate, the be year. so relatively to over

Okay, that and driving you factors just the thanks. Can dig on growth school is well? just in the as severe segment share the Then both question second service. into market bus my

Erin. Persio, is This

First on basically features. all a bus, alternative line we safety trains. complete power of refreshed of the full have We’ve

marketplace so have the mitigation system only feeling in are available the system positive the that seeing in and We are active strongest, collision industry, today, we mitigation a penetration very the customers think, in I of collision the that, bus. as driver

picked part we Customers Vocational, and the lot of terms construction customers. is last doing really we market since was overall some we’ve HV, is in momentum launched specific been excited of have, performing which significantly pretty is better. now, about think, I good platform, right Horizon the are up that, product what and of a our

just it’s very performing are work and hard think I well. products the

taking Thanks questions. my Great. for

Thank you.

Our comes next Research. question Rob Melius with Wertheimer from

Your line open. is now

first morning. any My duty question pullback prior Can that visible is typical economic in otherwise? good Is excess characterize in behavior, caution rental the ordering and just that versus or in Thanks on medium you and or perfectly to due leasing there downturns? that is you mentioned. uncertainty the

it’s think than years in different a I bit little past.

these needs. putting they being capacity them trucks, the people, this happens contraction so they’re there can in fleet, leasing They’re use rental case, are or fleet utilized the astute the companies, into actually and for to lease and fully in is rental rental less be is they’ll from in fleet. because business leasing then lease trucks large a the market, their agencies taking under-utilized very need supply truck trucks when rental so and or, think I what rental there excess in this particular is

they market sight it’s on a the orders given with that needs work of proposition orders to is have They’re for a how today of it, the good risk this. back. and they them in sophisticated when so low do actually have because do available, there a timing any us, starts in where line like very they can very come to slots fill have they some those They market

it’s we’re because sell us, rental For in rents a this rental portion many business. of lower we of them it’s needs, you for a truck see on kind their We a an so a a impact exaggerated them is and they’re as leasing don’t selling to double kind have lease how they larger putting whammy. have then not of when a to need, so

companies, to the and problem to providing well, here, understand just over really they a In largest wave and rental of industry really very particular at to wave the a that you, case, we’ve part year, had now the but duty in I’d medium success Cancelliere to that purchased have the market. footprint XX%, Michael ride highlight a But is good good medium share the but bit. our of that not. so demonstrates business, superior total a ride some little think products would regards, think, it we I rather I a particular is our than because, about it portion I of in critical to are a it’s going look going occupy service we’ve to I’m in thing duty the made two in big trucks that

tightening this If I than of managing efficient more first so cycle past you in more being and said, therefore part what they’re understand the in up downturns? orders that

cuts we backlog. we because and Well very a have quarter aggressive we began to in very--we order have on want our production I want case, board to we fourth indicated became good early our cleaning make call, our particular on a to up as think

function costs right and so we fact orders Some that capacity are that plans and kind Walter and to a line. cost that we make of our how capacity noted the that can our tight the the production managing keep reductions in we’re really of material have backlog, interpret into of a manufacturing

past. little years I think than a it we’re more we managing aggressively have in

is production Year, know Perfect, and that say, uncertain, had stable, worse or but in had or this thank still you to is whether uncertainty it’s around This Are it able you getting will completely extended I is to it disruptions chain day, better everyone clarification. you supply afterwards, that chain? still one is it this be shutdowns may on for getting feeling be at you is have then obviously Chinese volatility severe manageable. to the difficult point, the answer. you it New day supply

to Persio. to difficult going really that’s give it answer, that given Well, I’m to

itself, Look, and talk visible I if and it more I contained think we is just think China clear. about

instance, difficult Tier gets have Tier there Italy that the okay, you like further to need those that areas it suppliers, the in going into, what are X joining think X another we are operating I more impact, areas countries for are now suppliers when and and of disruptions. get be get we to area,

handle worldwide, the what more got complex but we monitor on is so we it as it we the a spreads I think way, way I think same have see today. good

what alluded, yet is Troy we what’s don’t come. As to see

helpful, you Thanks Troy. Persio. Very thank

you. Thank

Our question next with Research. Wolfe Salmon Rob from comes

Your line is now open.

the to the incremental the of fiscal and morning, out? adjustments that did degrade What contemplating thanks that for regard used to quarter question. it the contemplating is good Hey, truck we the mark if first end prices market at kind to made, sense of second With get you I’m be to used you an should quarter, average quarter? a taking looking adjustment to sequentially trying the continue value,

on that. start let me Yes,

$XX at and a takes is and time, or a that quarter $XXX so about inventory staff truck about did quarter. inventories, our million, reserve that have against gross used take increase look just further typically further XX% We necessary. an controller publish a million adjustment we look results a We of in take look reserve see conditions if that the overall about is we market to every against our necessary before at also at top-up our we another

So of at to used year. weaken, that at could another of current of look that take were we’ll we’re current the are prices adjustments additional as quarter, some so to see truck the end course reserves continue today. our and you the if But over second I would say the there

new first the on the terms seeing the currently truck trended you of a us how of within price that in could and mix? pricing are give gears, a pricing, basis, cost quarter, you fiscal sense your what year-over-year Shifting helpful. guys That’s new between

the This is the that products new We market in monitor performance we’re try economy, blended What fuel is is so price We trade, think price to still that’s quarter, new were the is truck of pricing pricing a that is think slowing know, let’s truck used ago. of they is I much. I year instance, going truck are holding, balance market. terms there to companies Rob. new which that to the prices than there. somehow vehicles, or average a postpone gets over-allowances by Persio, pricing of itself is right in that, that really, for in very are I and their they is decide and it case the superior I’d tied that down, first the price combination But down because industry when factors happening why come pretty impacted which trade the more talk say a over-allowances net of because is there in not trade--you think for because, is the were mainly to changes you the used truck about trades, now used, availability are the the seeing for model forget company, in are getting bigger year

don’t we Now loss wait used [indiscernible]. this, we we’ll in saying, into take are a quarter huge for such customers truck another the so before get

our used take which as that a how the risk, The market we’re the year quarter, to happened in we’re it it for we about w first further potentially goes. to depending customers--look, year, where number really have questions, goals that then deals managing where would part write-downs, well. fact and and our into deteriorate lean that in information us could from the the of first we and the more thinking of then upon expose that’s previous And this pricing

stabilize right the On the that other and pricing we confident still capacity deteriorate so to just fact create wait year. market the damage We to that our and do they we’re can really a truck, throughout year need prices so much need improve begin of available then ultimately there’s feel the or But deals that out don’t truck we should having that in those basics now the don’t are that hand, pricing until improve, used lot our the the and a early demand. without because in to there.

feel than allows doing, need pricing demonstrate year this to is themselves model better. acquire as improve indicated, trick them. do to in do and the so Persio is because concept over-allowance, holding, operating companies we the products The as now think I this real the to of of that manage and results at as will the time really don’t it it point different through the we’re year go much it because pricing improve we us does, right

Thanks. the guys. time, Appreciate

you. Thank

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

now line Your is open.

the two Ryder it quick Two seeing rest half, XX%, your down about of being of more but out similar guidance? ago congratulations. and is the comments leasing specific in Penske National and company about at reductions questions. morning Ryder Good a about mostly capex industry? by much. reasons, and rental weeks came cut based the Lease Are with on and you very you their with Thank for

national. is is the This Jeff. All same, exactly industry doing the

not are both We to and pointing one rental that operate It’s specifically. happening leasing. all customers customer to

Okay.

share look to, in I the and alluded you the term Second you back that target anticipating? of up not XX% EBITDA that capable were you’re is to pick lead or you at and current factories you’re the of market believe investments Navistar as supplier longer to from uncertainty making some there X.X question, these of margin for or contracts and XX% hitting you’re seeing XXXX, step if anything market XXXX the -

no. Short answer would be

call, an very Navistar the of X.X of fact that on that the that. in I of it was more a the we’re realize company, as there’s inside our a first the the As matter difficult on say items. prepared was excited the need very be we’re to we’re really even to call expected explained quarter important plans just would around measured a prospects but because we company one be about and significant things the a creating fact, lot inside despite traction number of trying one,

speed making We ahead full great are and progress.

if you that larger that are potential normalizes, of you to years for much and capable this company? believe this being there three two executing earnings point to you out believe So market continue is the eventually

We in belief. as onion a is of we of opportunities amount here that think Yes. we that’s our term than trying peel continue quick outlined real excitement tremendous Navistar to the believe--I’m stronger the a strategy. on to X.X There

build. Our confidence to continues

you. have. right, I Thank that’s all All

you. Thank

As if a telephone. press the a your touchtone you’d press then ask question, you one reminder, To may key. pound question, your like withdraw to on star

next with Goldman Our comes Jerry question from Sachs. Revich

line now is open. Your

hi. and you retail share for coming this market the showing bit in quarter? that heavy trucks the medium a to next Class down past what standpoint slide for you quarters the morning. the and couple retail first on talk and a trucks, cadence on X the expand Can play course expand of Class maybe out duty time X-X share drove Yes, from of lower expect over Good the market share about

This is Persio.

they as drove as business, X the just the the driven mostly and market. trucks other starting there up business. that--and than we leasing mentioned, share a of I think As a go quarter, is that Walter seeing and element and very our That’s was in the what units second that, actually strong third seasonality, and by in we they medium any traditionally that a is reflection construction have buses the and of basically are duty quarter, natural the part we can more that’s alluded, orders, slowdown don’t Class so elaborate so the rental quarter of well, are

presence in also in picking in so our and strong I are those share order I segments now. a to those have you, mentioned We we about feel that forecast segments positive think up right January-February, our

because have I I guess that X number product so type might seen been the those haven’t as a share low issue get there Did have of not out on the market Persio, market share it lines, appreciate something folks X folks reason you truck concentration Class door? customer is heavy X%, looks heavy don’t production seasonality, a as there but the why we I comment like you seeing before. just Class I issue? remember for along or

the There specifically to. Nothing to was point happen. actually, production we issues were that production - adjusted can as planned no I

quarter year, was significant of that where and in December, for November-December be of marketplace. to to stock thing have fiscal the the are want the that, positive it most we they to to the also not inventories they that per we that in products no to But driving up didn’t or more plan put do we second We right the today. printed forget mentioned dealer going dealer recover out the as and turned also, are probably the pressure really our in not competitors, as have. calendar end year see do Let’s but Jerry, we’re a lot as we’re we where sales, concentrated that

you cost the in progress laid the team, us ’XX the update joint just and can cadence that versus what’s Traton on just Are benefit the seeing ’XX benefit? timing. partnership, upon out ’XX, expected you’re any savings that Troy, about of with purchasing Thanks. and targets how Okay. in the on we and with tracking forming you talk

our plan venture. I’m we that Jerry. Walter, have the procurement with projections say to continue for happy we on be It’s joint to

exit three with $XXX to on actually annual X $XXX cumulative in We’re we and million and of million this Year savings. years of continue be month, pace to

guidance? what in savings Walter, of within the are expectations ’XX the embedded the

do not out, but broken them We’ve those track internally. we

continue is plan, which the it opportunities the going on with three-phase on to target. into we’re to supply our I’m of not break work base. We’re the those call, but out find our partners second to with alliance phase to

Okay.

step if a talk standpoint, if absences--? your thinking to employee where folks facility point point. get do either inventory other through a contingency you from you’re can you to that plan Just about contingencies just us or get Lastly, builds about we how

really Yes, this obviously hard develop contingency those we’ve week to been working plans.

potentially the caused that together issues caused but by same like thing, me Let things. say just managed this coming other maybe they’re not through quickly. by very before, We’ve

lot that buttons, all recall inability those catch had in and have so the all we and of with so issues we push we with making just may to we sure we’re suppliers’ tactics them, regards XXXX when the know You a that high, to work. stuff, market up

and work basically us well production we and just is the to is with issue, issue. obviously have of past so know for even the we on to type impacts, the XXXX those we believe, like supply as to rather the works we’ve X/X, We assured, the our paid the ability how to our a exception very quickly and the things production work that is don’t Class into spent we of sensationalism to but shift really this and that have our One a still this facilities. be the want I prepared time two know XXXX, flexibility as just doing between between week plants, lot to of please capacity, add of rest still--I that. did we This far how chain, in get small

well supply Yes Jerry, any with to to just as to we’ve base you’re recently done add so companies. we’ve beginning other out week, what as both I’d as this employees our seeing for similar possibilities, them of the that as industrial employment, the prepare gone from with our

can went washing you about up hand assume times. XX But

can If over. Thanks any that guys please spare Purell, send you everyone.

questions this the further no showing Clarke like in back at I’d the I’m and time. Troy you, closing turn any call Thank to to remarks. for queue

and XXXX Navistar deliver was industry your our this to ability our really the dealers, planned to a strong second all our customers, I’d expected, to I’m Okay. and and of was reiterate like I this dedication half thank and guidance. for in for is want certainly on to optimistic employees, just support our brands. transition, you for.

our this, we get They’re We company. and glad certainly do on remain, I’m very question Navistar a exciting, inside goals. X.X on the did

X% take by XX% adjusted We’re range by margin the going annual EBITDA and to XXXX. from in our it to XX% XXXX in, XXXX, was

plans for these track. we’re achieve making right goals. the are Today us decisions still on Our to

for in for interest much thank a please your and IR you so reach everybody great follow-ups, wish want team day. additional to the questions, any any out For to our company. just I

participating. concludes gentlemen, you today’s conference Ladies and call. Thank for this

You may now disconnect.