NAVISTAR REPORTS FISCAL 1991 FINANCIAL RESULTS
NAVISTAR REPORTS FISCAL 1991 FINANCIAL RESULTS CHICAGO, Dec. 5 /PRNewswire/ -- Navistar International Corp.
(NYSE: NAV) today reported a net loss of $165 million, or $.77 per common share, for its fiscal year ended Oct. 31, 1991. This compares with a net loss of $11 million, or $.16 per common share, for 1990.
Consolidated sales and revenues from the company's manufacturing and financial services operations totalled $3.460 billion, approximately 10 percent below the $3.854 billion reported for fiscal 1990. For the fourth quarter of 1991, Navistar reported a loss of $67 million, or $.29 per common share, on consolidated sales and revenues of $817 million. This compares to a loss of $7 million, or $.06 per common share, on consolidated sales and revenues of $971 million, for the fourth quarter of 1990. Navistar's fourth quarter sales were the lowest for any quarter in 1991 as overall demand for medium and heavy trucks, which had begun to improve at mid-year, weakened in line with trends in the U.S. and Canadian economies. Truck assembly operations were suspended for nine to 25 days at Navistar's various production facilities during the fourth quarter to balance production with demand. James C. Cotting, chairman and chief executive officer of Navistar, said that as a result of the continued decline in key sectors of the U.S. and Canadian economies, 1991 industry sales of medium and heavy trucks declined 21 percent to 229,000 units from the 288,800 sold in 1990. The 1991 total was 35 percent below the 350,800 units sold in 1988, the peak year of the current industry cycle, and was the lowest industry sales level since 1983. Although the continued decline in industry-wide sales of medium and heavy trucks and increases in purchased material and employment costs adversely affected Navistar's sales and earnings, Cotting pointed to a number of accomplishments during the year. Navistar increased its overall share of the combined North American retail market for medium and heavy trucks to an all-time high of 29.3 percent in 1991, from 27.2 percent in 1990. Over the course of 1991, the company introduced a number of new products and product enhancements, including two new transit style school bus chassis models, and a fuel-efficient vehicle package for the 9400 conventional and 9700 cabover heavy tractor models. In October, Navistar began offering its turbocharged DTA-466 diesel engines as an option in its 8100 model heavy trucks. Navistar also achieved its objective of reducing the initial projection of 1991 costs by $167 million through improvements in quality, manufacturing efficiency, product design, and overhead costs. Navistar's retail sales of medium and heavy trucks totalled 67,200 for 1991, a decline of 15 percent from last year. For the fourth quarter of 1991, Navistar reported retail sales of 17,100 medium and heavy trucks, 20 percent below the same period last year. Lower industry demand also affected the sale of mid-range diesel engines, resulting in a nine percent decline in engine shipments for the fourth quarter, and a 26 percent decline for the year. Service parts sales decreased five percent for the quarter and the year. As the company enters fiscal 1992, Cotting noted that the short-term economic outlook in the U.S. and Canada remains uncertain. Although it appeared that the U.S. economy may have begun to recover between July and September, this is now in doubt. Most economists forecast a slow recovery, but the timing is difficult to predict. The company projects that fiscal 1992 industry medium truck demand will be at 121,000 units, about level with 1991. Heavy truck demand is projected to reach 119,000 units, a nine percent increase from 1991's level. Sales of mid-range diesel engines to original equipment manufacturers are expected to increase 14 percent in 1992, based on higher shipments to new and existing OEM customers. Navistar also projects that sales of truck and engine replacement parts will grow two percent over the 1991 level. Navistar forecasts that truck production for the first quarter of 1992 will be approximately three percent lower than the first quarter of 1991. Based on this level of production, the company expects to report a loss in the first quarter of 1992. Navistar Report of Fiscal 1991 Financial Results. Cotting also said that based on current post-retirement medical benefit plans, the company would recognize an estimated $1.5 billion to $2.5 billion liability when it adopts the new Statement No. 106 of the Financial Accounting Standards Board, covering future costs for retirement benefits. The company has not determined when it will adopt the accounting standard, but will do so no later than the first quarter of fiscal 1994. The new accounting standard permits an employer to recognize the obligation for employee service already rendered either immediately as a one-time charge to earnings or to amortize the obligation through charges to earnings over a period of 20 years. The company estimates that annual pre-tax expenses would increase in the range of $75 to $200 million assuming the obligation were amortized over the permissible 20-year period. In 1991, Navistar paid $138 million in postretirement medical and life insurance benefits for about 41,000 retirees, in addition to providing pension benefits. The company is conducting an assessment of current benefit programs to develop various alternatives for providing health care and associated benefits at cost levels which the company can support on a long-term basis. Navistar is the North American market share leader in medium and heavy trucks and is a worldwide leader in the production of mid-range diesel engines. NAVISTAR INTERNATIONAL CORP. AND CONSOLIDATED SUBSIDIARIES Financial Highlights (millions of dollars, except per share data) Periods ended Three months Twelve months Oct. 31 1991 1990 1991 1990 Sales and Revenues: Manufacturing $ 766 $ 916 $3,259 $3,643 Financial services 51 55 201 211 Total $ 817 $ 971 $3,460 $3,854 Net income (loss) $ (67) $ (7) $ (165) $ (11) Net income (loss) per common share $ (.29) $ (.06) $ (.77) $ (.16) Average common and dilutive common equivalent shares outstanding (millions) 251 252 251 252 As of Oct. 31 1991 1990 Consolidated: Assets $3,443 $3,795 Total debt $1,206 $1,381 Shareowners' equity $ 577 $ 815 Manufacturing: Assets $2,149 $2,339 Short-term debt $ 9 $ 12 Long-term debt $ 145 $ 152 Shareowners' equity $ 577 $ 815 Capitalization (long-term debt and shareowners' equity) $ 722 $ 967 Long-term debt as a percent of Total Capitalization 20 16 Financial Services: Assets $1,540 $1,774 Total debt $1,052 $1,248 Shareowner's equity $ 237 $ 279 Capital expenditures $ 77 $ 182 Research and development expenditures $ 87 $ 84 -0- 12/5/91 /CONTACT: Mary Moster, 312-836-3240 or Deborah Spak, 312-836-3232, both of Navistar International/ (NAV) CO: Navistar International Corp. ST: Illinois IN: AUT SU: ERN SH -- NY008 -- 9488 12/05/91 08:49 EST
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|Date:||Dec 5, 1991|
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