Heavy Equipment Guide Logo

This ad will close in 15 seconds

Allison Transmission announces record results for full year 2018

Net Income for the quarter was $147 million compared to $215 million for the same period in 2017.
Net Income for the quarter was $147 million compared to $215 million for the same period in 2017.

Company info

One Allison Way
Indianapolis, IN
US, 46222-3271

Website:
allisontransmission.com

Read more

Allison Transmission Holdings Inc. reported net sales for the fourth quarter of $647 million, a 10 percent increase from the same period in 2017. The increase in net sales was principally driven by higher demand in the Outside North America Off-Highway and North America On-Highway end markets.

Net Income for the quarter was $147 million compared to $215 million for the same period in 2017. Fourth quarter 2017 included a one-time income tax benefit of $152 million as a result of the U.S. Tax Cuts and Jobs Act enacted into law in December 2017. Adjusted EBITDA, a non-GAAP financial measure, for the quarter was $261 million compared to $210 million for the same period in 2017. Net Cash Provided by Operating Activities for the quarter was $232 million compared to $166 million for the same period in 2017. Adjusted Free Cash Flow, a non-GAAP financial measure, for the quarter was $184 million compared to $115 million for the same period in 2017.

David S. Graziosi, President and Chief Executive Officer of Allison Transmission commented, "I am pleased to report that 2018 was a record year for Allison Transmission. Full year results exceeded our initial Net Sales guidance ranges across all of our end markets. Furthermore, Allison achieved record levels of Net Sales, Net Income, Adjusted EBITDA, Net Cash Provided by Operating Activities and Adjusted Free Cash Flow. Full year net sales growth of 20 percent was surpassed, by even stronger growth in Net Income, up 27 percent, Diluted EPS, up 42 percent and Adjusted EBITDA, up 30 percent. And notably, double digit growth was realized in the Outside North America On-Highway end market for the third consecutive year." Graziosi continued, "Throughout the year, we continued our well-defined approach to capital structure and allocation. During the fourth quarter, we paid a dividend of $0.15 per share and settled $153 million of share repurchases, resulting in $609 million of total share repurchases in 2018 or approximately 10% of our outstanding shares."

Fourth Quarter Highlights

North America On-Highway end market net sales were up 6 percent from the same period in 2017 principally driven by higher demand for Rugged Duty Series and Highway Series models and down 9 percent on a sequential basis principally driven by lower demand for Rugged Duty Series and Pupil Transport/Shuttle Series models.

North America Off-Highway end market net sales were down $11 million from the same period in 2017 and up $5 million sequentially, in both cases principally driven by fluctuations in demand from hydraulic fracturing applications.

Defense end market net sales were up $11 million from the same period in 2017 principally driven by higher Tracked demand and down $6 million on a sequential basis principally driven by lower Wheeled and Tracked demand.

Outside North America On-Highway end market net sales were down 3 percent from the same period in 2017 principally driven by lower demand in South America and Asia and down 1 percent sequentially.

Outside North America Off-Highway end market net sales were up $36 million from the same period in 2017 principally driven by improved demand in the energy, mining and construction sectors and up $1 million on a sequential basis.

Service Parts, Support Equipment & Other end market net sales were up 7 percent from the same period in 2017 principally driven by higher demand for North America On-Highway service parts and global support equipment and down 9 percent sequentially principally driven by lower demand for North America service parts.

Gross profit for the quarter was $338 million, an increase of 17 percent from $288 million for the same period in 2017. Gross margin for the quarter was 52.2 percent, an increase of 320 basis points from a gross margin of 49.0 percent for the same period in 2017. The increase in gross profit from the same period in 2017 was principally driven by increased net sales, price increases on certain products and favorable material costs.

Selling, general and administrative expenses for the quarter were $90 million, a decrease of $7 million from $97 million for the same period in 2017. The decrease was principally driven by unfavorable product warranty adjustments in 2017 that did not recur in 2018.

Engineering - research and development expenses for the quarter were $37 million, an increase of $6 million from $31 million for the same period in 2017. The increase was principally driven by increased product initiatives spending.

As a result of continued weak demand conditions for the TC10 transmission we ceased production and recorded a corresponding $4 million impairment loss compared to a $32 million impairment loss for the same period in 2017.

Income tax expense for the quarter was $27 million compared to a $131 million benefit for the same period in 2017. The change was principally driven by a one-time income tax benefit resulting from a decrease in deferred tax liabilities in 2017 as a result of the U.S. Tax Cuts and Jobs Act enacted into law in December 2017 and increased taxable income partially offset by a decrease in effective tax rate as a result of the U.S. Tax Cuts and Jobs Act.

Net income for the quarter was $147 million compared to $215 million for the same period in 2017. The decrease was principally driven by the enactment of the U.S. Tax Cuts and Jobs Act in December 2017, increased product initiatives spending and increased interest expense partially offset by increased gross profit, decreased loss associated with the impairment of long-lived assets, decreased technology-related investment expense and decreased selling, general and administrative expenses.

Net cash provided by operating activities was $232 million compared to $166 million for the same period in 2017. The increase was principally driven by increased gross profit, decreased cash income taxes and decreased cash interest expense partially offset by increased product initiatives spending.

Fourth Quarter Non-GAAP Financial Measures

Adjusted EBITDA for the quarter was $261 million compared to $210 million for the same period in 2017, an increase of $51 million. The increase in Adjusted EBITDA was principally driven by increased gross profit and decreased selling, general and administrative expenses partially offset by increased product initiatives spending.

Adjusted Free Cash Flow for the quarter was $184 million compared to $115 million for the same period in 2017, an increase of $69 million. The increase was driven by increased cash provided by operating activities and decreased capital expenditures.

Full Year 2019 Guidance

Allison expects 2019 net sales to be in the range of $2,580 to $2,680 million, Net Income in the range of $535 to $585 million, Adjusted EBITDA in the range of $1,000 to $1,060 million, Net Cash Provided by Operating Activities in the range of $710 to $750 million, Adjusted Free Cash Flow in the range of $550 to $600 million and cash income taxes in the range of $100 to $110 million.

Our 2019 net sales guidance reflects lower demand in the North America Off-Highway and Service Parts, Support Equipment & Other end markets principally driven by hydraulic fracturing applications partially offset by increased demand in the North America On-Highway end market, price increases on certain products and continued execution of our growth initiatives.

Although we are not providing specific first quarter 2019 guidance, Allison does expect first quarter net sales to be flat from the same period in 2018 principally driven by increased demand expected in the North America On-Highway end market offset by decreased demand expected in the North America Off-Highway and Service Parts, Support Equipment & Other end markets.

More from Industry News

Doosan Bobcat opens digital innovation center in Fargo

Doosan Bobcat (Bobcat) has opened The Studio, a data innovation centre located in Fargo, North Dakota. The Studio will advance development through digitalization and new technologies by bringing members of the company's research and development teams together with academic centres, entrepreneurs and emerging companies to advance community innovation and foster hands-on collaboration in a high-tech environment.

New Holland demoing landscaping and snow removal solutions at GIE+EXPO

New Holland will showcase a variety of light construction, landscaping and snow removal equipment at GIE+EXPO (Green Industry & Equipment Expo) October 16–18 in Louisville, Kentucky. Attendees can see the latest New Holland equipment in booth #1054 in the exhibition hall, or test drive it for themselves in the outdoor demo area (booth #7538D).

Willmar High School Manufacturing and Production (MAP) class tours Rotochopper facility

Now in its second year, the Manufacturing and Production (MAP) class from Willmar High School recently toured the Rotochopper facility as part of their final day with West Central Steel, Inc. In addition to ten students enrolled in the class, the group included teachers, staff and business leaders that support the program. The day started at Rotochopper with a facility tour, which was followed by visits to a steel mill and a job site. 

ASV introduces new warranty and no-derailment guarantee

ASV Holdings Inc. is backing up the quality of its equipment with a new 2-year, 2,000-hour warranty for its Posi-Track and skid-steer loaders. The comprehensive warranty covers compact track loader tracks for the entire warranty period, giving customers peace of mind that they've chosen the most reliable option. In addition, the warranty goes a step further to feature the industry's first and only compact track loader no-derailment guarantee.

New construction management tools from Earthwave cut inefficiencies

Earthwave introduces their new Construction Management Solution (CMS), a wireless telematics system developed specifically for "yellow iron" construction projects.  The new GS-364 hardware platform connects directly to the computer/bus of off-road equipment, delivering real-time data from pavers, excavators, loaders, dozers, and virtually any other construction tool.  Actionable data, including hour-meter readings, RPMs (is machine idle or working), fuel usage, temperatures, asset auto-assignment to job and more, is delivered from the jobsite to a phone, tablet or laptop.  This allows users to monitor, manage, and optimize equipment, personnel and workflows, streamlining projects and enhancing profitability.  Earthwave's Construction Management Solution was developed specifically for the heavy construction industry and is ideal for off-road construction projects of all sizes and types.

Subscribe to our free newsletter

Get our newsletter

Learn more

Wacker Neuson sharpens its focus on core products and sells its concrete power trowel business

"Our Strategy 2022 puts our customers at the heart of everything we do," explains Martin Lehner, CEO of the Wacker Neuson Group. "Sharpening our focus on core competencies and products enables us to offer our customers premium quality and outstanding service solutions. In line with our strategic pillar of ‘focus', which aims to optimize our portfolio of competitive construction equipment, we have decided to concentrate even more on our core businesses, namely compact equipment, compaction equipment, utility and concrete consolidation with internal and external vibrators, and to divest the trowel business."

Haulotte inaugurates new California branch

During the week of September 23rd, Haulotte North America officially opened the doors to its California branch based in Long Beach. The branch hosted both an internal ribbon-cutting ceremony and an inauguration event in conjunction with its 2019 Open Days for customers. "We are excited to finally announce the opening of our Long Beach branch here in California, said Carlos Hernandez, Zone Manager for Americas. The opening has been part of our strategic plan for several years, in order to better serve customers, especially those on the west coast". Alexandre Saubot, CEO of Haulotte Group, cut the ribbon that officially inaugurated the California branch and offered a toast to the attending employees. The new branch will serve as a machine distribution center.

Daimler Trucks North American alternative energy efforts earn 2019 Clean Air Technology nod

Daimler Trucks North America LLC has been recognized with the 2019 Clean Air Technology award from the South Coast Air Quality Management District (South Coast AQMD). DTNA was recognized for its Innovation Fleet from Freightliner, a 30-vehicle fleet of battery electric medium- and heavy-duty trucks currently testing integration of battery electric commercial vehicles into large-scale transportation operations.

Washington State bridge goes up in shorter span thanks to Manitowoc MLC300

Ceccanti, a Tacoma, Washington-based construction company, needed a crane with superior maneuverability that could handle heavy loads at great heights to assist with the replacement of an old wooden bridge in Ridgefield, Washington. The contractor found the MLC300 crawler crane had the right features to get the job done in the shortest time possible.

Prinoth specialty vehicle designed for tough jobs in extreme Antarctic conditions

Prinoth has developed a new vehicle designed to transport very large loads with less personnel and less impact on the environment. The new transport vehicle was designed for Troll, a Norwegian research station in Antarctica. The company says that the aim of the project is to reduce overall operational costs. This is achieved through lower fuel consumption, reduced total time of transport and by minimizing the number of people dedicated to transporting fuel and goods in the Antarctic region.

Subscribe to our free magazine

Get Our Magazine

Paper or Digital delivered monthly to you

Subscribe or Renew Learn more

Westech Coyote hydrovac a compact and cost-effective solution

Westech Vac Systems, a provider of rugged, high-quality vacuum truck-mounted solutions, introduced the compact Coyote hydrovac for utility, municipal and contractor customers in Canada. The mid-sized unit was designed as an ideal option for customers working in urban and metro environments who need maximized legal payloads and who value a rugged, durable and industrial-grade hydrovac truck that can easily maneuver in tight, confined spaces without compromising productivity, performance or legal payload.

Case holding contest to win trip to Tomahawk with country artist Jon Pardi to learn how to operate equipment

Case Construction Equipment has partnered with ACM/CMA award-winning artist Jon Pardi to launch a contest designed to recruit new operators to the construction industry. Contest winners will have the opportunity to learn how to operate equipment alongside the country music singer, who in addition to working construction in the past has a passion for the industry and Case equipment.

SMS Equipment and Wirtgen Group mutually terminate distribution agreement

Wirtgen America, Inc. and SMS Equipment, Inc. have mutually agreed to terminate the distribution agreement for Wirtgen Group products (Wirtgen, Hamm, Vogele and Kleemann). SMS will no longer be an authorized Wirtgen Group dealer after November 30, 2019, will no longer be a Wirtgen Group-authorized service centre after January 31, 2020, and will no longer be an authorized dealer of Wirtgen Group OEM parts after February 28, 2020. The Wirtgen Group and SMS are committed to ensuring that this transition is smooth and not disruptive. As this transition occurs, the Wirtgen Group and SMS will remain in communication to make this as seamless as possible.

Self-loading trailer from Felling valuable for any fleet

Felling Trailers, Inc.'s Self Loading Turret Reel trailer is a valuable tool for any fleet. With a 360 degree hydraulically operated rotating turret assembly, the FT-14-2 R Turret can lock into any position when the directional control valve is released. Keeping mindful of equipment, time, and operator safety the turret's self-loading feature eliminates the need to have extra equipment and operators on-site to lift and load the reel as on a fixed reel trailer.

Subscribe to our free newsletter

Get our newsletter

Learn more

K-Tec recognizes Dealers of Excellence at Manitoba event

K-Tec Earthmovers held its first Dealership Network Scraper Symposium event in Manitoba on September 17 & 18, 2019. The event hosted 56 professionals representing 22 different organizations, taking time out of their hectic schedules, and travelling from as far away as Japan, Sweden and Australia to hear the latest advancements in K-Tec's efficient earthmoving product offerings.

DEUTZ, Sany plan joint venture in Chinese city

Joint venture partners SANY and DEUTZ AG have signed an agreement with representatives of the government of Changsha during the foundation stone laying ceremony at the production site in Changsha. DEUTZ AG and SANY, China's largest construction equipment manufacturer, had already signed the agreement to establish a joint venture in June this year. The aim of the two companies is to build a factory to produce high-performance engines in the province of Hunan. 

Timken acquires BEKA Lubrication

The Timken Company has reached an agreement to acquire BEKA Lubrication for approximately $165 million. The company serves a diverse range of industrial sectors including wind, food and beverage, rail, on- and off-highway and other process industries. BEKA sales are expected to be around $135 million for the full year 2019.

Viewpoint unveils analytics package for One Construction Management Suite

Viewpoint, a Trimble Company, unveiled a data platform providing self-service reporting and predictive analytical capabilities to contractors. Called Viewpoint Analytics, the solution will enable contractors to track operational and financial performance of their projects, processes, people and ultimately, their business. Previewed at the Viewpoint Collaborate Conference in Portland, Ore., the platform uses real-time information entered from the field to analyze projects and help clients achieve on-time, on-budget performance.

Manitou begins construction of new aerial work platform factory in France

The Manitou group has started construction of a new factory dedicated to aerial work platforms. Michel Denis, Group president & CEO, and Jacqueline Himsworth, chair of the Board of Directors, laid the first stone in the presence of a number of elected representatives. This factory fits in with a global investment plan and confirms the Group's ambitions in this market.

Subscribe to our free magazine

Get Our Magazine

Paper or Digital delivered monthly to you

Subscribe or Renew Learn more