Navistar International (NAV) 9 Sep 202020 Q3 Earnings call transcript

Ladies and gentlemen, thank you for standing by and welcome to the Navistar’s Third Quarter Earnings Results Conference Call. [Operator Instructions] I would now like to turn the call over to Marty Ketelaar. Please go ahead.

Good morning, everyone and thank you for joining us for Navistar’s third quarter 2020 earnings conference call. Today, we will discuss the financial performance of Navistar International Corporation for the fiscal period ended July 31, 2020. Persio our and Chief Executive are and Executive Financial today Borst, Walter Vice me Lisboa, Chief President Officer Officer. With President and from our concluding prepared we take After remarks, questions will participants.

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

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

have call the cover questions to this unsolicited Today’s quarter Persio for time. shares third Board we XXXX, won’t Navistar’s and comments. per offer. we an of is in $XX turn would that, XX, opening Lisboa this offer at for I regarding the With Directors respond TRATON the company results to our like share June to you Persio? will over we on call of only any and received no TRATON know, you evaluating the to from updates As purchase remaining further offer cash. for

thank where first to you and the dedication loyal Navistar a to customers, am you for today. dealers partners morning, you and my It’s for talk and joining Good want today pleasure new Navistar. Marty. call their everyone support addressing to I their to and I thank is you, Thank you this our of us brands. CEO employees, as as

is of Project is in on track of costs those discussing in committed thoughts are principles. accelerating very am spend few expand parts that architecture founding excited we our initiative you I strategy its models Compass. platforms the quarter, Before we trucks the XXXX. for to a to generation will I a am progress reduction outlining call of many want believer development goals, and in our starting strategy minutes progressing average well. and X.X of our to in This CEO. material towards to initiative buses pace goals an modular as Navistar some further across I next share significant our The as several with my having and suppliers its is Today, our of deliver that we several reduce

cost is XX track now. from and benchmark the months deliver assembly strategy the on also of materials costs than manufacturing less from Our cost to in to of conversion logistics

Antonio spring XXXX. in San of launches new Our plant the

manufacturing on a process Antonio be that in today be pleased no of our San truck, will same line. core robust We will assemblies. plant electric to and diesel electric full trucks are the to announce with building produced with capable offline both built model be that the assembly fully first XXX%

we also recalibrating Finally, our returns. allocations resource to are optimize shareholder

partnership emphasized we company partnerships Technologies, will free return the These appointments announcements that and portfolio. the platform. The autonomous up technologies, that non-critical with revisit cancel oversee our accelerate charge third is eMobility this our programs business to the Solutions redundant product have were prioritized in President result autonomous to use of quarter, had of of to By result unit, we streamlining a our Walsh, programs key of in the make best development One offerings Recent will we was of NEXT creating advanced during platforms and to were our investments and the our strategic Navistar’s pandemic, resources. portfolio. shift As redeployed newest Bob executive Related Planning. into is other be return opportunity our of investments Vice significant progress. low in pace announced Bob as and the also our technological strategic investment partnerships and we capacity. the able conventional Strategy and programs, appointment to Emerging TuSimple. that

full local is technology phase its of the to expect in and entering XXXX. we development final Our trucks production in now launch

agreement access include XC’s Solutions using company Just solutions fleet solutions health as announced of and electric area Solutions vehicle the monitoring. Los with their Subscriptions Angeles, device. unit, Geotab new an And choice provide Energy, process. In we technology, Samsara will our California, consulting charging selected with offering approach of our business to be our remote our factory management assembly integrated further productivity, customers. an of infrastructure based with complete services partnerships to NEXT vehicle will eMobility our trucks, have services to energy telematics this including diagnostics service In-Charge and fully into our installed eMobility aligning provide in signed for in of area customers with electric and and providers, the streamlined

key the of of the executive after is role appointment Another Friedrich expansion [indiscernible]. Baumann’s retirement pending

consolidate for dealer our customers fully will dealers. let’s the leader tenure the move now introduced his am We as the and years. X.X Marketing XXXX. to Sales, And and the international of has network the commercial in Friedrich, the as North our Navistar Friedrich a the America. comprehensive that implement With call Aftersales, complete it plan goals in of Under has we quarter. that, it confident for take will to to Vision necessary of vision. process President coming entire the as Friedrich of support the responsible And growth steps his I strongest be As leadership Aftersales, network materialize

We have a to cover. lot

in So, let’s quick results. our pieces. take of overview a will I with start third these quarter

discuss and economy will and the market the industry trucking I our share. Next,

saving savings Finally, our touch actions. will on and cost I

results, our quarter fiscal the many First, opened of in ended our third and economy sections middle of the on reopening. orders stay-at-home the

as and Our both this results reflect sequentially and were lower volumes truck parts year-over-year.

$X billion we million. $X.X an was revenue and quarter adjusted loss net Third of incurred

in strong strong Our from recovering Walter generated and and May. free know you flow through The as close walk cash gradually economy you manufacturing liquidity. operations shortly. will more is details positive maintained April pandemic

seen the as improved an industry. and vaccine. carrier unemployment see the increased seen the well well above have reopening has rate Spot improved, several pre-pandemic the factors, of April, are We been X employment indicating hauling and with as recovering. The since rate have resulting routes businesses spending a is rates The runs. also ISM dedicated trucking volumes new COVID recovery stage or in above Carriers but of including XX effective development cases depends on also and improved dry The still Consumer and is goods levels. in restocking. been months past index have steadily impacted. of divide manufacturing treatment confidence We have and refrigerated flatbeds trucking next industry the gradually profits. clear still

or in all depressed However, leasing in utilization be in these of product moment. rent general the continues freight segments, a to

Additionally, school districts lowed the pursuing of instructional has for bus variety approaches school as a are fall. industry this

situation reflecting both. few since are The have in methods a April, economic while learning others traditional and in-classroom improvement Some others combination the using education X Class conditions. are remains strengthened of industry orders virtual using fluid. gradually

orders, As To with has recovering, the production rebounding the improved stabilizing, pandemic inventory levels. shown come backlogs lows. summarize, economy continued of is improved demand, reflecting pricing to it industry have down. truck exceed but Used is balanced from signs

industry about the of We for work road economy industry are through. and optimistic trucking cautiously there fewer but ahead number to the uncertainties, needs are the the

the Our leasing trucking down earlier medium I and This divide and mentioned it segment. share lower sector business from be the due and rental impacted heavy it largely the to product in is is to year-over-year. continues by

X space. our COVID by rental total economy around provide leasing in of We X of are about segment renting with the that Class through XXXX, of XX%, in down the points some area The to X segment better rebound. combined is other and for XX%. segment is the market have the but share overall brand. year our will share leasing Class Class the service through on has superior rent industry impacted in the segment than product continues are segment have X historic market down while This over pandemic, industry. segments international leasing trucks slowdown both our industry by through more year me in the X the overall and volumes quarter product far share With registrations once heavily successful X XX%. X of that trucking Let the up represented an In strength segments amount, improve product the down this maintaining been Thus sequentially. and and color. a the believe construction performed The been government grow of XXXX, we

in our close through to on lots. their them the to trucks we remain contact, dealers, Turning assisting work

We dealer continue to company and work down inventories.

continue volumes normal retail fourth are on the above range. performance. to down our XXX hand parts our our down and which causing year-to-date truck sales sales day inventory inventories lower This inventory caused are to aligns year, increase come Aftersales, sales to trend recovering. the down to sales to as well. day nearly XX%, industry However, days improve expected quarter, to respect ratio sales With with In are

be buses. driven that and of sales. vehicles to school since good April. Fewer have rent impacted recovery seen by is The continue parts news leasing means realization miles We we fewer on lower in

the to actions billion been and third These successful number liquidity. the in have quarter $X.X we we with have of manufacturing call, cash. discussed As bolster actions taken conserve ended of a our as last cash

during Additionally, quarter. our the declined XX% nearly SG&A

learnings We are pandemic. on on sustainable productivity employment the focused based now efficiency the of increased and and driving

that not So, the we takeaway done. are is

total X.X. actions, continue parts. the exact cash and future. can Today, on to volumes both will will will tied matters Walter sustainable to improvement actions from in trucking or transitioning is the provide the the of to are of trucks cost while to The cost Targeted sustainable more more industry are take with focus pace on But vaccine for technologies, lead priorities advanced We we strategic improvements combined Navistar recovering temporary treatment. we pandemic investments saving control. an our conservation details. closely as actions even in saving gradually a effective maintaining and actions, be

so industry stronger conditions full of are forward when its benefits on pace arise. advantage the we take can pull X.X, progress they of We Navistar accelerating and

Let who will Walter you over me to now through turn the Walter? it walk financials.

during began our admirably performed fiscal third Navistar orders in it were Thanks, when stay-at-home a quarter, May number Persio. of considering in place.

began front. economy the gradually the conditions weigh for As the and results today, thoughts took segments fourth liquidity our I position on of as will third actions pandemic results. remarks, the up our to improved well. quarter my recover, by the operating will comments begin we review and next my on on I some effectiveness year. continues quarter Even the wrap then reviewing business and that to COVID-XX however, and

First, the we And capital effective of manufacturing production including third cash quarter, $XXX maintaining have million the as cash million $XXX liquidity strong actions in source payments quarter. notes April, billion implemented increased working by net cash. together quarter cash with during was we net capital interest This of liquidity, working been of senior became partially expense, a the position. raising offset and ended secured resulting used contributing a The EBITDA in positive flow $XXX $X.X spend of excess for in million cash positive of with flow. free in of manufacturing in warranty

resulted recovery which date. XXXX of of points Following completed our the maturity rate interest refinancing while quarter, the close in a of maintaining their the XX lower percentage we zone bonds,

the results Now, third the let’s for review quarter.

from also for of coronavirus, improved the comparable While bears pandemic balance through and results lows. year’s recovered parts the underlying May’s the that of the quarter by results the gradually prior the weakened prior as It impact cycle. orders trucks our industry of quarter at the were noting reflects economy peak

marketing from QX rebounded third Third despite volume. XX.X%, core last half down Structural billion, quarter charge-outs the from year-over-year the SG&A XXXX and down and were XX,XXX Gross in XX% revenues costs, lower reduced were XX%. year projects, and expenses, lower contractor essentially to including quarter margin advertising flat XX% services, truck vehicles, travel came engineering SG&A down expense both Savings notes due million, one-time million in an After curtailed $X.XX offset million third and fell manufacturing of SG&A expenses, with fell year higher period, on partially diluted and $XXX a a expenditures from certain was XX%. lower up to approximately due was legacy secured Prior in April. in related new and $XX Driving approval of year-over-year. gain release we and engine loss This expense year-over-year. prior per was technology financial sequentially to interest excluding largely included to the related $XX balances incurred million litigation. $X.X lower employee this senior issuance quarter net $XX debt Interest of the average spending by lower the expense share. rates. shorter expense interest workweeks, activities. the information the lower to All-in,

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

Truck segment Truck declined of to segment result resulting weaker industry as year-over-year segment fell billion, a Worldwide segment the to Moving sales in loss XX% $XX in conditions. million. volumes of a $X.X results.

During plant production dealers. and coronavirus during lost we the utilization lower third resulted continued was The lost particularly the repairs days as and rental vehicle our to reduced school vehicles true parts quarter, negatively This the leasing for the industry buses. and quarter. in impact XX service for past second days

their uncertainty led they own conserving as manage to capital. Additionally, has economic cash dealers working

make $XX sales As earlier Segment receivable good. who actions near segment financial and as during also $XX balances. services segment deferrals XX% a The remained the year. operations. now XX% profit this XX% are payment The originations our including remains profit result, were million. segment and customers, $XXX overall segment cost million parts despite beginning results credit to lower Certain the operation million global revenues volumes Low revenues The benefited segment and $XX fell again. falling truck pandemic, taken to million. to year-over-year breakeven payments was declined was to impacted to quality, $XX the lower portfolio, weaker average received due million

to forward, move challenges we has in a trucking number As worked I industry proud team COVID-XX the respond to to our pandemic. how am of the turn together the from

as downturn really headcount we began we That reduction in XXXX. a global response we December, XX% cyclical accomplished. the in X, cash actions have in successful balance. On salary series response to given coronavirus. XXXX. April, implemented the strong announced in Our has to we employee of program as actions in cash anticipated near-term well. Then conserve deferral In been been These industry’s September ended the a our

the from accountability expenses. further broadening to lower service footprint and third-party during with activities such us since revisiting to cost offices, we can fewer reducing productivity size efficiency savings as This work. other and savings be prompted the can home has structure moved personnel attention cost our turning sustainable evaluate done automated Now, have also accelerate of push improvements actions. Employee service and the as from shared as experienced centers, we and work that or value-added to we pandemic also processes done opportunities, decision-making, streamlined lower pursuing to organizational non rose our be organization in providers, facilities our eliminated

our our revenues Our expenses so supporting Navistar goal is strategic of to be to to all our of structure the between we cost plans market at cycle. at that with align while SG&A X% can We points profitable maintain plan simultaneously X% conditions X.X.

expect call continues Class between industry fluid. not we chain between disruptions, XXX,XXX plant and and and share and open Before some situation balance recover XXXX supply Class and I your is thoughts assume time inherently XXXX. up Providing X/X official volumes to the XXXX and this between we units we the industry units. is volumes then This would during range But to industry the questions, XXX,XXX volumes shutdowns or units. the the XXX,XXX to by X to includes and if on and guidance XXX,XXX remains further impacted economy of production want XXX,XXX bus difficult XXX,XXX

in segments, Due Navistar, into expected balance to school to-date. we the particularly areas of quarter. expect both to our our our segment volume the operations the recovery for In believe truck the volumes through and impact these key continue in QX we parts effectively In product truck continue rental where to of are are results have meaningfully. of overall participate to year liquidity. profitable will slower been and rental that relates next for for year leaders, pandemic product increase allowing impacting we segment and industry the the is and the and in in segments. trucking and industry company we be to has is and and rebound, the possibly segment Nevertheless, it certain consolidated to As bus. more managing maintained bus That the product overall market leasing downturn recovery in the summary, strong the leasing even us will participation XXXX,

certain However, impact of to areas our it continues business.

cost to industry more market to and deliver further are will to that, structure Q&A. turn our the X.X our I back improve the We align improve will realities. With operator the begin Navistar as to This us conditions allow adjusting meaningfully it results goals. at position us with to our

Jefferies. from Your Volkmann comes [Operator Instructions] first from question Stephen

Your line is open.

Good everybody. morning, Hi.

Good morning, Steve.

thinking you guess I guess I clear on cost Walter, am but not both what on additional opportunities, firstly quite bit about. quite of sort I about we talked are a So,

So like buckets it seems is here. there

or We a you give have that push of Difficulty]? investment that maybe handful had cases guess to some opportunities, provide [Technical I

bit. up quite breaking a are you Steve,

[Technical Difficulty]

are bit, You a Steve. breaking quite

have… both we So

are just that savings actions in think are taking mentioned your of you that kind prepared buckets question cost what remarks? thinking the about you your that is major I of the

Yes.

that Is right?

yes. Yes, yes,

Okay.

difficulty of the bit little audio. we So having with are a

here were gain our indicated, of temporary in having employee a are year exclude reduced contractor watchful our eye all, including travel have So guess first I And on some about as been IT of expenses investments. during mean, and costs related nature, But is year-over-year. XX% you cost. we doing one-time we COVID what after those none and of last measures I expenses,

what take by, already cost to in the sustainable, those So on measures at a guess we X% want temporary long X% are I you revenues, say is reductions. should turn do we range focusing look when it, we into all by term I divided to are SG&A

outsource that we home decision our activities. starting work locations that think are we need things, that, look So whether at we the so demonstrates can do can more activities other And and to including in those are And do we because our take do more recent we the there. all from currently is facilities experience have A that folks we there’s are we again, can to we footprint, don’t And is to making as all of thirdly, found a office. can increase And facilities speed. quickly taking improve home that we we moving making at are presently days future. in second we the these the given working then capabilities decision pretty other the where to downsize trucking. we looking look Or for we workforce have? the area prepare a need our our market also that

structure. of so, to down a us on to we have we at look And streamline give the whether our how do and layers management the is just that take opportunity making organization decision that to in one can organizational we that way and that so many push will

we would best guess years. taking given benchmark actions be this we benchmarking taken in some as are are costs the do first in on to better done that are at, look the have to kind focused the So, we based more industry, at the just cycle. savings already we are the the production cortile the us and over a activities we have is we And permanent that And put the X% we what actions profitable the want than that think have opposed we last and during costs, I several the at X% can looking period. of and much those points all on with temporary we media across that to of in make areas

Duignan Ann JPMorgan. Your will come from next from question

Your open. line is

does expect bit more talk about that’s in above days Hi, Can going producing you into Thanks. nominal based in segments? well going terms XX? what that the volume is do under mean all do you on of morning. that Yes. activities, a by retail more are Or school in work QX based good order like and you talk end for back of low QX going and in to there range to at above maybe even have to just retail of producing XXX in and the fiscal your do reduce you think retailer about range be especially rental leasing that the of bus the some little what to on

XXX sale Good also first Persio. is this the in the dealer days lower impacted for a network experienced our the actually that is experienced ratio Ann you all What for Hi morning. that sales Thank dealer is question. of the the quarter.

the we getting on planned market have markers So our additional back with as overtime. reduction in will plan range is sales are consistently the X% say QX And What since we we to production is volume for rates is managing last was way a for actually, they growing X%. of its sequential that is the see few beginning we And rates wouldn’t the following. I that slight production no cover to are are normal potential demand. the with that expect been that we in but rebounding

the segment because of We adjustment, but truck point this will QX do lowered that again bus time. segment also only lower this is We in traditionally as at is the because fourth the under know quarter. a bus the business not QX. has that I my And in more pressure in seasonality bus remarks rate mentioned than of in

the and than production support first up but lower in do quarter we account are decision we that on that back today. the area. as will activity have first point, the n rates be are where QX were quarter. expect monitoring Obviously, for in us the are actually intakes we up of the the backlog seeing we in that the a us stronger makes picking quarter. rates We your higher to to because now line supporting bringing QX order we i the But days and that the closely production the are So back you is it again actually first in right and for

I think… Okay,

we sales this in think expect Day the I range end QX. should the the closer down coming upper to end of by of

is think the and are in levels still The range. is there I the low, denominator calculation ratio other but there numerator that of so denominator, thing will sales, in retail our are obviously which inventory a in drive been improving much that’s and better back shape. normal what has into that

It’s you And for ‘XX? appreciate average inventories, sales. a anticipating builds lots moving about outlook QX dealer in into X-month fiscal go I Yes, talk into similarly those assuming the in of any QX dealer don’t Silverado because then retail or am what Silverado, could are and versus I you that. if of terms for

the that’s are and and we that we QX QX probably think I seeing for flat pretty visibility now have.

We are any major specifically. changes not in line that seeing

GM? Okay. Silverado be manufacturer the for in-house a And at to or for don’t you yesterday, with badger of producer done your be or expect Nikola partner you GM that announcement the considered but that one will as to impact business would or contract by facilities the

any agreement see to – right with contract manufacturing the that we it’s GM long-term don’t have agreement. now, We risk the that’s

it as GM with relationship that continuing to today. forward is look really we So,

line. that. Okay, appreciate I thank get I back will in you.

Okay, thank you.

comes from Funds. from Sponheimer question Gabelli Brian next Your

is open. Your line

and Walter Marty, how hi, morning, Good you? Persio. morning, Good are

Good morning.

Good morning, Brian.

lot of have exciting you things So, a here. got

temporary You that some that cuts found can costs dismissed. be structurally were

an easy plant You the have on got rise.

You have connectivity.

have Then bid You a autonomy. from cash you trading. $XX have

from argument what’s giving soon? I for benefit given is that owning of company days coming guess brighter which guess point is the you I So upside mean, larger I the the the up are a these here,

not will the indicated, start. as we comment Look, are on I going bid. to TRATON Marty Yes,

to to attention. points as on job management you were think the I Our team put continue And the board. is paying

we a working on. You referenced things of in are variety

can more than there we is think lot we do. So a

On the in will the partnerships excited advanced space. to we cost continue revenues the and side, the we our grow business about in technology are

of So, I glad those took things. am note you all

you an add lot that don’t technologies I because Walter’s we part noticing if have on is thank the strategy. is improvement area maybe can know and but an advanced been it here, of for I anything change, Navistar the that’s our comments the investing to X.X integral a

appreciate the commentary. I you. Thank

the a any systems though there question plant about on is engine go? Just all or new changes Huntsville, that

No, that’s pretty results stable, tests have so Huntsville platform global Brian. – with exciting right prepared and summer on much developed We getting are partner now, very being actually our alliance running is the track we far.

We track. to the Huntsville on in is forward going now everything The So, look that. be completing future to us. what development is of and for

on is plan the So, track.

them. strategic in of investments, this one we projects As in is portfolio I my X.X terms remarks, protected made of revisiting changes mentioned are the of but we all and Navistar the

much pretty track. on it’s So,

will you, forward to with all and And to you Persio later. speaking wishes best pray my I look

Brian. very Thank you much,

And Capital question your Weber next RBC Seth will Markets. from from come

Your line is open.

to My to Hi, inventory what particularly for first can right and on talk are thanks. the truck related seeing pricing? now in is Brendan Seth. is This you market, just levels used you

first think to is overall absolutely. I starting in stabilize used Yes, Well, volume. trucks, terms of

on the give the pieces, two QX If you in marketing I data used at trucks the just is being time one trucks. that there pricing that wholesale stabilizing can some upsetting sales standpoint we same retail Navistar. each But kind higher we a is you retail of see activity was take XX% XX% – wholesale see and pricing other from quarter-over-quarter will for point, maybe used for now a and lower

opportunities will reduced have that the we I what’s lower they retail on are to that QX, We got indicator that well. units activity just reduced reasons mentioned. Most as happen been start most usually And trucks further. the are up and believe receipts an have the as activity receipts as declines related of any growth are going early QX, lower, being inventories that And of function pricing not of reduced of used to carriers although Really, picking we receipts. and seeing seeing in on inventory is happening a is sales got the up trading as some well.

seeing start some their the back and we are are that’s they now placing in So the carriers market trades reduction inventory, executing. big but new in purchases get that they and

level going are little of up inventory, see that to and the going made bit We a receipts

chain you. a impacts current you do on any see COVID from rebounded strength And provide little supply that of the being or then Okay, has of you strained? guess the largely still thank I can color your and

been no, of say fairly would reasonable it’s cases we but I No, monitor less actually, that cases than say closely. to a few a we have handful

at always risk supply where we we the have of any in supply our chain anything of a terms seen that material those last management quarter. Although in take look assessment is But us we overall being for monitor disruptions, haven’t lot and base the health the a we put suppliers. we

So company’s of most production. where for and are It’s shutdowns and supporting there actually and were really at good rebound least. from closed stable operating not QX been us

there. thank will leave Alright, I it you.

comes Goldman And Sachs. from your Revich next question from Jerry

is line open. Your

everyone morning, Hi, Yes, and Persio. good

Okay, congratulations.

Jerry. you, Thank

needing as the plan companies sustainability the should you talk cells. planning ability here? of those to points if that to at partnership base be when, take given do to obviously, levels of on in addition in about R&D of I could maintain hydrogen those fuel expenses evolution extent you to technology can what TRATON talk terms we to R&D to Can you rates for opposed expand areas the R&D leverage in about Persio, how wonder just current thinking you electric higher the about vehicles, supply current run the

Jerry. Sure,

in and our a during the virtues of we sure I revisiting mentioned, lot is adapt And the reasons what it in process a overall being priorities beginning profitably because was the is pandemic significantly. Now, quickly. started marketplace our first the full adjust and beginning investments projects started the really we second up process want changing operate where we pretty And only cash as revision conservation most and general on good we R&D, for of team I of one of portfolio leadership of the all, ended as first, that are our that that not well. here very the capital review think but this we off make for with really the of Navistar at off growing can two to as being have could on

doing market you terms see have see what if make and advanced ended planned even a we take before. just that to have have up providing that business to we those we the changes in So sure we that be the of we look as the areas mentioned And resources at technologies, things that. that remove, we strategic we to of more

part why simple resources redeploying in advanced you with we doing that into just to orders. announcement quarter, they on heard in are bottom XXXX it. some X you us is our availability Level we of heard what not the some down of are And we talking returned those those X we technologies. being most projects, are and the saying some some we That’s are projects that’s driven bought the actually relationship made we about So line, resources, cancelled we and the

You heard with Geotab, goes basically Samsara trading the module the but that us have that, today more TRATON. for which and with launches was into from joint about connectivity that connectivity by that enabled a on today, trucks with module than instance the we that a came all talking our was program alliance

of Antonio us cost conversion are we now Antonio, was heard San footprint San new – about and plan. talking strategic from the electrification taking our have that a big cost reduction You part

dual capable is that plant electric a vehicles. vehicles is fully Antonio diesel San building and Now, of

So, resources are mentioned just of the before. redeployment things those the that from all of coming I

excited very it. are about We

know as in many, strategic and keep planned can dynamic we we we doing see will marketplace and within as the we changes our forecasted many think that I plan have being that budget in the contain it that been last the has months. that we very

am view the the And side vehicles, delivered of diesel expertise you have the success strong to products what dealer Navistar really the vehicles on the all company’s on of side? differentiating and factors has strong by you Persio, on you you network hydrogen the wondering compared fuel as that been folks is can to truck demand company’s But what there. dealer side, do the talk cell obviously, diesel the type I driven designs then network about environment electric for the expect in aspects differentiate

the important comprehensive of you those we Yes. you in is not there be buses talk network I about will school touched had strength something school give is connectivity local the we our dealer at now to district, think, in difference will – controls a Well, for the to authorities, customers. first put special through that to really our first locally, the of electric very dealers of when were makes to place just I support big British of for all, example that support buses an delivered. delivery the buses, of delivery Columbia, the our

much a the products, electrification those the way the services around are of that – our to comprehensive the go there not And So, the pretty pretty but products services. just with and we strength is deliver how as we support able products plan network. is as dealer

differentiation. see a So, as we big that

several will And doing companies terms San – that terms a is the supplies fast why small electric of today customers, as fast. of mentioned be out seeing and say that are we completely The be want to put production platform vehicles What we getting The is to are and just deliver get theories different. but able Antonio. process. we and it are product startups long that in provides we we production the approach a are taking robustness in is second in is line, of fact scale our of capability we the the would will in one us what market products not in I a production we there amount that that the a have digital tremendous quality. developed in basically build the it is I And doing is a scale scale together apart, as assembly that come What will to the to reliable able can will fully very to electrified reason because with plant capable platform. back be are several,

that’s as to say. like be driving costs are taking that, a to differentiation I will what also approach versus lot of have lot that And a that be I – going of lower think a competitors will work we assume well. the driven

discussion. I the Thanks. appreciate

And Fargo. Wells Casey your next from will question Andy come from

Your line is open.

Good Thanks. morning, and Persio. everybody congratulations,

Thanks.

you faster to follow-up you the Four if wanted equipped development of bit. vehicles, discuss canceling I post zero specifically engine co-development you made a changes program? some Can question XXXX are welcome. market a expecting Jerry’s the are little including given emissions program You Big adoption for rate

first but trends seeing there and that. all, there are that market are we going that, are While also regulatory indicating changes are promote of to these

just that products recently on you penetration no real of I Act was or If take the California, diesel electric products, mean. in a approved requirement Airclean there is

but of way when come that forces that, will invite, that getting to we are take batteries the not and two just technology seeing an those we we more the down there adoption. So the fact continuing by early believe then advanced, be cost

that Class areas on But probably still adoption that area when the fuel next. the a cell truck, for as are and thinking as prepared X that medium into a up biggest up We like technology. for duties which segment is that go is of buses get comes will you a in come instance, school very

is going we prepared are hard there XXXX. much So, the or is of the acceleration where end of are But to be predict that. that to by it’s of we part be how we believe overall to getting that our an in going decade for mix

our prepared to Antonio of the ability not insight that. getting So the we is scale of for are San facility reasons why one up

period just Okay, development thanks stuff that deceit some question financing offer get attractive financing programs the I to favorable programs a do of customers. And additional appears that this off guess, there might then you ground? to market of, It an fairly through some for expect on in the be, the appear, really market, ready the space, kind Persio. that, new for of competitors

I think have. we don’t

how First there with you the residuals commercial of many think are on different passenger to all, see today more market in what important vehicles vehicle which side. concepts, concepts in even of I than is electric a car many, mainly you go because

the can law be when the would market of trend as fleeced So more there that batteries first so you that is say probably no models that proceeding are there it will be adopted. using a of deal part different

market off is are financing, that’s no the if unit batteries we it our electric product, right but the leasing the should case. the but not We products, to go as something only of be sale regular is are now the leasing open not the with considered of we going and absolutely even the and to that that’s that considering pretty and you eventually

done short-term very Okay, thanks. question be very, And it’ll me. a and then for

expectations basis QX you the is rate is or on a was at QX for it of are segment to You grow expect run growing the looking mentioned growth? parts the trends exiting segment just and that

part on QX see been think we pretty we still have have still we side, in side we is increase recovery, which I that happening. the parts it’s of the type and an are seeing steady that

month X% to we So parts our that’s days. X% think the XX I ballpark at perspective, itself and saying the overall say for take going we have up should how our fourth in actually just month rates steady last been first be about of I think when look lower in increase will quarter. QX than quarter. daily the the pretty rates But daily we would over it follow is steadily

have really under have belt growth got the daily aligned have of QX. increasing since we our call We what very actually already a so been months recovery. into rates internal have continuing that But forecast seen can we May, three been swoosh and so that see they our with we

Okay, thank you much. very

from UBS. will question next Fisher come from Steven Your

Your is open. line

morning, Good guys. Thanks.

images thinking of are on mean your has can which frame about targets, that to trying most of aspects of you targets kind those you any you And a think to talk you accelerate you And you. achievable? that Thank terms are in changed bit? about I of on talked X.X how that most plan? Navistar little are focused some Just

capital. Navistar remain our we think our I investments of I Well, revision Sure. protected we said X.X overall as and in

that, I had parts generating think us. X.X parts And platform that, break is, we going have we have investor are to to is still stay able so for EBITDA pieces, which aggressive project to was reduction reduction get are target ago a I our on the X.X who to to by with in use if a that in suppliers we this will We targeting or also XXXX have or actually piece Navistar it going software our of a a we the communicate amount by during a concept doing track competence, those of we lot on providing projects. reduce I with that we additional very be strategy And costs of come in those we scale year will small call modular. an had, of That’s just

is that very months few It with is on next track. a about launches in very good and the XX starts much that. So feel we

technologies we here. The that second launch, our for as well. at piece that in how X.X so I actually which on it keep advanced of materialized we mentioned probably to it is are about of then already about San the we the partnerships well. doing as is manufacturing you are that the strategy in as partnerships the the during And perceived have length going all pretty quarter. future Antonio XXXX I taking have plant being And track that that’s talked the and the everything approach is strategic good feel of And spring – through

that lower a are X.X and Navistar cost. see place. they coming of a get blocks that that going months the believe once there building in next to we the lot in plant all much launches, XX cost. is the right see I we is have the have the the better game, we together launched conversion So, we products And

EBITDA they adjusted So through goal our support to increase we XXXX. things our those to get as

you are guess was of you XXXX, for targeted if the aspects guess Thanks. I of some about in about a of accelerating wondering is margin sort on what predicated XXXX? I a are have thinking talking was that number. sort we know are XX% I we XX% about had should margin? billion – here, How revenue how And think that thinking $XX we I that margin

tied is to as well. to really where were Yes, be I industries think the it

though, that of take are in still thinking we the that reasons you XXXX, not business market well, how the of hasn’t the about actions obvious perform. So, always that, that’s changed. When we say, replacement we believe deliver need place. the have what’s demand will that performance. that That XXXX, – how to to or that that’s we will all ready replacement obvious get to that and monitor we straight we by close can’t have on into level whether understand no will. the we And but support demand to we structure percentage We going we have be in which have and

that is And that it. confirm say I you be Got heard I think right? profitable you a just to the quick in segment clarification, expect QX, just truck to

Right.

Okay, terrific. Thank you.

Thanks.

And next your Rob question comes from from Research. Wolfe Salmon

line open. Your is

levels on cost comments with an the of your can segment and more broadly last these to regard we comments Walter overall cash about some thanks of in kind forward? the give for some the the guess the truck think terms question. I good for as actions impact of earlier of actions Hey, deal breakeven taking piggybacking and you morning us of just update the looking

where time about posted we will we the that of but breakeven we to manufacturing December the in this we that talk I next to expect think cash do not the $X.X on too the cash balances, from cash that levels as billion QX, we strong look front do in here forward. year, some forward probably will but end with going be dissimilar year typically

Okay. to segment? in you improvement quarter, remain month-over-month you May. even customer to terms it I leasing increasing to daily in Are that fourth rates since curious, am guess that back expecting of are uptick depressed seeing recovering you seeing circling and nicely and know rental your see are the market? had underlying that activity about I starting within And you that but also parts the mentioned I end in commentary parts

one on rental as to coming that the which and have rental they that leasing rental segment the means their with companies, and Well, early OEMs when that segment the are being biggest the – the And markets they fleeting, probably into the that truck rental the that now right seeing the for a transfer they operation. that of leasing fact I down, back overall inventory units really is come comment framing started on those and back. not the ago, call a utilized challenge the rental they take if few and based is leasing which I process we quarters start when us, I is go because I as basically leasing – will indications business is

end positive starting having without So, they new with they we right almost that’s it’s of rental creation the coming a I can of new X where getting contracts is months the actually to thing we units. very a another That to we seeing an the And is an truck. think own And last to now the support of when it’s very to to fulfill acquire which start to a leasing OEM contracts asset, basically in is our to rental play deflating their fleet would where the that happening that conversations see packages the very coming I throughout back in area are large are year, which is for strongly. use say process. Navistar, end but market, with are since are they close the customers, the indicating that first they happened market

that seeing happening. are So, we

we coming see more as of is rent the So, packages will coming traditionally see next the lease months, get well. the they which we that on fleet into season in probably and when

happens And we get be as an positive. year. that is But indications well, in so assume but as next will opportunity not more for we parts into QX, are as far, there quarter of monitoring We the on that. first that upside the only

time. the for Thanks

Thank you.

to session. back closing This for of our remarks. turn I us over Q&A the the call end brings

you. Okay. Well, thank

Navistar So moving. supporting while while as we the keep summarized, our customers pandemic, America through is the drivers, and effectively managing

effective and growth a questions customer, any the the leadership Navistar their This solutions the thank with and focus we margins delivering We additional deliver progress, to on longer requirements. listening and let resources close, grow time you customers’ Navistar each for and have to pace need understanding in its team company X.X This As customer’s business mission. accelerate term. addressing Please me reinforce with our of company starts our interest up this focusing team the will to day. great our to reach our on and IR position your our out the needs.

This everyone. today’s conference will you Thank call. conclude

disconnect. now may You