ALSN - Earnings call transcript Q4 2018 | Allison Transmission Holdings, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to Allison Transmission's Fourth Quarter and Full Year 2018 Earnings Conference Call. My name is Melissa, and I will be your conference call operator today. At this time, all participants are in a listen-only mode. time. the session, from participants and given at remarks, conduct Transmission will prepared instructions question-and-answer a the that the management Allison team will be After conference call

recorded. As sir. [Operator to a the to Director the over Ray conference conference Please of reminder, is Investor turn Instructions] would Relations. now this I like Posadas, company's Mr. being go ahead,

Raymond Posadas

are fourth With and Vice Melissa. you and for Fred morning our Good me for call. conference morning and thank Graziosi, Treasurer. and quarter you, President, President earnings Thank us XXXX Officer; Officer our Chief Dave this joining Chief Executive Financial our Bohley,

a are allisontransmission.com. of this As presentation morning available the on through and call will the A replay be section call, X. this website, reminder, available Investor webcast our this we are March using Relations conference of

Should As or XX-K our express Page XXXX set current subject release or of risks estimates our including unknown Report XX, the year remarks based ended conditions. Annual uncertainties of today. we results from and earnings and other more prove as presentation, should may materialize underlying These risks, today to the forward-looking actual noted many on X well assumptions fourth quarter statements are general in or our Form statements and expectations. that incorrect, economic XXXX, forward-looking uncertainties on factors these as press materially of known those forth on contain for and December one or vary those

SEC. measures as our of presentation, the of financial today on remarks contain X Page addition, by non-GAAP noted the as In defined some

one to attached the GAAP to presentation press the agenda. of an AM to to Eastern find presentation to Today's for XXXX analyst. set from reconciliations can call, on opportunities of You quarter the X:XX fourth maximize appendix measures non-GAAP call is we'll the to financial call as our release. earnings the turn comparable most Slide measures the order In X participation question Time. take each at end Please and

Graziosi fourth provide with financial Dave Dave the Q&A. commencing comments Fred call, guidance. our fourth you the today's Bohley overview of XXXX up an to wrap and prepared results. finally, During And performance will the prior will will then quarter review quarter

I'll over David Now, Graziosi. turn call the to

David Graziosi

Ray. you, you Thank for us. and Good joining morning thank

like provided in net and Before I XX% results, Full adjusted XX%, were Allison discuss income, our EBITDA, even income Full Transmission. achieved by cash adjusted and XX%. year by stronger sales, of growth EBITDA our touch ranges what of flow. operating all XXXX net We exceeded the free guidance sales net activities, net record results EPS diluted of XX% quarterly was adjusted briefly I'd cash a net end on growth year to net markets. surpassed levels of year of sales across record initial for of

by in increased straight initiatives Our commitment Europe. truck X-X Full reflected XX% third XXXX entire in gains XXXX the compared with notably share XX% our X XXXX North initiatives America in demonstrated The America our Asia market with this trend of discussed to Outside in year truck by excited penetration automatic fully market end the to duty the the recent realization XX% with core growth up Allison automaticity is year. also also prior to Chevrolet North year commercial double-digit our On-Highway Class Class International of X-X demand of XX%, consecutive primarily is for increase, growth sales the and success share Navistar business across the led transmission. our This the in our growth driven for net opportunity compared year. launch transition On-Highway in markets for result, gains further and relinquished in in In ago. Class and the about last-mile regain in and timely Silverado our medium share to increasing vehicles secular Series CV the We're delivery providing market exclusively a launches continues to vocational in share new is market we've of Allison almost market trucks, as XX% decade in that truck with past, truck the XXXX prior position continues. suggest a share

and approach to and established our Finally, intact. remains well allocation defined capital structure

$XXX and performance million During $XXX the dividend a repurchases, resulting the X for share quarter, of of share share the approximately to $X.XX Please per in shares our of XXXX XX% repurchases XXXX QX summary. settled Slide or presentation of Allison of paid total outstanding. turn million in

EBITDA increase The driven profit, increased Gross partially Act Consistent a million sales, $XXX was in in a costs. result the of year prior North the margin Cuts offset as enacted on the principally XXXX. benefit price are the as in by increases costs spending increased change December offset million technology-related million to in higher quarter Tax $XXX of driven the our raw or sales markets the The gross expense, the costs. XXXX, compared in on initiatives. our the quarter assets, same XXXX. net for growth U.S. the unfavorable $XXX fourth to continue was quarter, an XX% products with income $XXX principally net period by favorable the Net and to and with principally and was Off-Highway certain principally for be once partially and was period same On-Highway favorable million, America price of or XX.X% by North law and Jobs one-time to loss several continued the spending. from partially cost expectations. and to by for EBITDA into in million by multi-year Net American $XXX sales reduction Outside of million to period XX.X%, profit expenses income for the net increases decreased was XX.X% long-lived to sales driven material and by increased by of initiative execution was associated gross general for the driven by year-over-year by QX, XX% quarter Adjusted we sales investment net decrease decreased XXX demand initiatives driven general and XXXX surpassed driven increasing same expenses. that interest well in compared as material growth increased selling, in Turning selling, same compared pleased as product compared tax basis quarter administrative decreased points and report end in $XXX of products offset increased Adjusted to decreased material again also expense income initiatives impairment period increase of The XXXX. product administrative increased net certain

over call Now to Fred. I'll turn the

Frederick Bohley

Dave. you, Thank

Given comments, and income key line I'll Dave's items flow. cash on statement focus

X X by You Research on for did Please period in XXXX, increased expenses principally Slide by can also not period - in find general principally spending. driven million same overview for increased XXXX the XXXX, XXXX adjustments by turn $X same XXXX. the administrative lower the driven million end Engineering expenses for by product initiatives Selling, the an the to $X were Slide and of our that in warranty summary. financial Development QX unfavorable recur and product in market presentation. presentation of net of sales performance

principally increased increased $XX a flow income driven Slide taxes increased Act. by the and Act credit and conditions and by the lower cash Net the profit, Other the rate. offset gross provided driven free the for press cash, as to by QX a in from income decreased expense, net the activities million and compared Please million Adjusted in technology-related TCXX, Income benefit due as benefit in of well activities in Tax from investment earnings million period from increased XXXX, by tax income Cuts interest same effective was a one-time decreased production capital XXXX of period for corresponding in The Cuts Jobs tax by a performance $XX retirement post amendment. cash partially principally demand and as continued impairment plan expense from by the net resulting decrease $XX in by due driven spending. partially was expense deferred million increased same provided in operating decreased $XX in to to change period to a weak reported offset period increased recorded expenditures. for principally Tax tax X XXXX, ceased lower U.S. related quarter of the the presentation release, same flow operating summary. million expense same we by benefit a the As and for Again product initiative $X turn XXXX, U.S. was cash a cash result million loss. decrease liabilities XXXX the the XXXX. principally tax $XXX result to as cash taxable Jobs

the the earlier, $XXX X.XX, settled As and ratio million we during leverage a Dave repurchases fourth We of quarter net million dividend ended net share. and $XXX presentation X XXXX $X.XX paid of of market of revolving mentioned the per million a share a quarter, in with million sales $XXX and Slide credit cash share for turn capacity. guidance of repurchase the of available of $XXX commentary. commitments, facility authorized Please to

end achieved compared the $X.XX initiatives. demand Parts, offset expects in net midpoint continued net to Support reflecting North fracturing American on Other Off-Highway Global Allison increased billion XXXX, of & demand growth Equipment and X% $X.XX price market, in certain the range of end applications, principally increases products to record to in in be Service by of our the or the by For sales lower partially sales XXXX, decrease the and execution markets, hydraulic driven On-Highway

truck sales for XXXX. be expects truck the Other lower penetration. medium North On-Highway, a not offset straight same expect fully flat share net sales net Service we as gains expects we XXXX increased decreased North X%, Support of XXXX. presentation sales Chevrolet decrease by by hydraulic expected and the XXXX, With a and expect flat North that Defense, the principally net expect the principally duty does North sales decrease market Outside American the Service for by higher midpoint lower commercial I'd Navistar driven highlight we Off-Highway increased demand recent Equipment principally providing by America the a automatic expects at applications. specific sales Slide a result midpoint Allison XX America North of increase a decrease demand quarter and XX%, sales driven launches versus service production. the net Allison expected fracturing Class full for principally like end Support turn Class following America for by by America American XXXX X end to net net X%, anticipated driven net Allison & market XX%, year On-Highway, decrease & driven Parts, of On-Highway market of midpoint markets. midpoint X-X guidance a sector. Allison expect parts. of end in in midpoint driven assumptions truck driven to Please by in increase energy first we are guidance, principally the by quarter in principally in the with demand Outside Off-Highway, demand the first Other, of period midpoint summary. Parts, XX%, sales North Off-Highway Off-Highway, of to Equipment North demand America Although,

$XXX expected addition to of income cash $XXX million. XXXX expected Net $XXX $X.XX of to anticipated in billion to is billion, be the $XXX the million flow range taxes in the billion EBITDA guidance sales million. $XXX free expected cash the in to of billion. Adjusted the million. is $XXX net million to In to provided $X.XX range net million. $X.XX income to of of cash operating anticipate activities Adjusted $X range range by to $XXX of in we in million range anticipated be to Allison's in million the And range $XXX

in serve $XXX Every of end primarily more Our leader investments our XXXX expansion our testing these wide increase will serve. of range facilities the globe, will to the end fund the Dave a capital in day Allison, at capital million in and capabilities, markets across momentarily. variety engineering detail expenditures which we to remain the of commitment guidance $XXX expected across in we markets solutions expenditures propulsion assumes describe and underscore an a The of million. all

Now, I'll Dave. to over turn call the back

David Graziosi

commercial and Allison's a Indianapolis Midwest. environmental and testing on focus focused time cycle. under by of of to a and gases, in the committed broad remains challenges vehicle of all is mentioned most facilities global provide the expansion, vehicle completion within enhanced that and our markets environments global expansion, be campus be create core priorities States At continue vehicle strategic Transmission the in only its Allison range testing of engineers replicate ourselves improved scheduled these in capabilities economy United on the the markets greenhouse use few with addressable new Fred. drive environmental and third-parties strategic we for other innovation engineering facility and as growth, duty leadership conditions is with growth address located facility. of one conduct our opportunities XXXX The product It Thanks, financial testing in Fred, fuel extreme the stakeholders. testing state-of-the-art and available any capabilities will development, and market for emerging for delivering proposition will core and to of one headquarters value in our results Today, than more while and value penetration, priorities, solid to reduced our history. find we to the the

functional environmental ability meet facility, Allison's development and will and to existing and manufacturing vehicle In and gas in addition proposition, enhancing these software and OEM and Allison and augment capabilities. modeling simulation coming continue and look capabilities In fuel customers, our testing solutions including capabilities state-of-the-art as talent. reinforcing with is new as engineering vehicle electrification quickly significantly evolving controls systems modeling the tomorrow's combination, integrated to to the regarding We and efficiency, expanding capabilities while new details to propulsion safety resources develop additional retract interaction fuel retain and providing that simulation our virtual will system new new will vehicle testing requirements, best close develop to bring to very economy greenhouse include these emissions propulsion forward simulation fully support market and investments months. These also well investments its capabilities. today's

market's rest One expectations. make - of to Allison's and competitive the advantages technology ability to to leverage meet our in our existing needs evolving

example, the last Allison than commercial leverages XXX miles series improving the quarter, X-speed product transmissions, global billion accumulated which fully transmission. launch globally. we have automatic For new discussed XXXX the of the of This architecture medium-duty, X-speed more durability

electric with expand in continued efficient zero XX our electrification enhanced system engine with most our We includes to range one world range have up to with purely than portfolio kilometers also our extended emissions new electric capabilities hybrid features using hybrid builds our XXXX. electric of X,XXX This with hybrid electric off. extended systems on since buses the dependable and systems propulsion and the

continue priorities. strategic of execution, the This XXXX tomorrow's remarks. growth, global priorities, to to expansion initiatives. our and while our and strategic resolute another call our relentless and the torque our to and We're reduced the our illustrated closing, economy prepared propositions the to questions. have fuel automaticity, In ranges, delivering XXXX we'll cost meet and value X fall, well-known an fourth on to meet proposition Melissa, facilitate of investing quarter transmissions execute enhancing Allison introducing of the of concludes by horsepower business market, exciting as Class emissions. of results value addressable in variant year management to and execution be This X Finally, increasing This in as for enhanced uprated example leverage Class we variants please of of demand technology the and challenges, distribution our looking for demonstrate will power XXXX our haul the customers success new developing solid increased ability our latest open market. including record our our the our an Allison existing to results focus ongoing development forward tractor for products for market. series is markets regional

Operator

this [Operator comes with a with Thank be proceed time, we'll you. Credit At Cook question-and-answer Instructions] Jamie the Our session. first question of conducting your from line Please question. Suisse.

Jamie Cook

and just morning, guide, quarter. color one. first Dave, America good question, my your Hi, guess, nice I some On-Highway on North

about so what's business, question, thinking on terms expected? the OEs gains, would your Thanks. your level you what extended truck given color the largely implying second your to you're X as like usual, saying then just down little to - Allison, what interesting first gain time, and is a provide obviously of visibility. order Any relative give share in what the could the looks Class I North if just XX% about an book there, assumed than guide industry fracing. just think little have on a you tied for market to story which versus you're on probably market my is share on people are guys could visibility And more the of it's guiding where I'm due you context worse guiding also for America Off-Highway

David Graziosi

Jamie. morning, Good

through Let just me jump that.

would America Class X North On-Highway the great I share well did as So job, a X-X I driving truck. remarks, Class as think as there say, drive expect. mentioned straight some as comments in the team Chevrolet prepared XXXX market we guide and releases well are X-X we as the in of gains truck, in in those growth to continue that The into keys terms would Navistar relative you important initiatives we to the as X-X. made

that we we share know, through XXXX, pleased had with. so were regaining there, you which in As very we're significant position market

I as to Class mentioned continue progress durability itself make for terms speaks at think that, there, market I X-X X again, truck, be broader for straight to our there we good incrementally applications. technology trend performance of we in opportunities. to there. particular the automaticity those continues the addition truck, In in the continues of look towards as The

in Chevrolet straight releases trucks. and as XXXX mentioned Our truck and the progress some assumes certainly guide the is I X well gains incremental as Navistar X-X with for Class that

North I America you in the bit indicate, third-party compare So combination, share. continued for ahead we're gain certainly of think to you implies guide On-Highway forecast, with that, as our a if some which overall

issues Your - constraints the times fourth OEMs some of I impacted believe and quarter. think comments the certain in I with lead the truck the on terms around of into some the with Class X, specifically OEMs supply the of releases

Our understanding there. bit; is a are some through some the of there catch did their still that, to up having issues said suppliers work holidays

is talked the about we're those of mini-cycles, that, certainly believe has comments at much certainly market, America, you developments As some there like of the What of think North terms said third the last for into a that. year are issues issues been it time the of said means is I Having equipment of of well. some number probably think the I this have years those point. to followed staying Permian. ourselves second as now, order soft half, this would first bit, soft a was in looked going some that, firm inventory We equipment to and we we that everybody well pretty of in guide been price than we certain as half we're I that take-away that the being people made of last comments number better the condition the half a closely and first XXXX, much release of and to than resolved. there it it, believe of with as public the know second end by that very continued think where into available, of particular studying us the into a having very of for the there believe so understand be second we effect. expectation the Having patch think take-away this half are other half, parties, and at will to Permian, point. close more there around the public positioned second a half We out probably start. this is the as largely the I is these going it think out with volatile I is oil more certainly the Off-Highway I for cases staying at close a as books year number there by end-users

on we volume little we're of You bit said, reflecting being half. the would first third-party That think told fortunate team half. be comments, enough aggressive being argue, be other we're certainly we'll be terms this provide appears our there, And first a in what expectations a what very it soft more we're to I at result based towards. but may to softness happy in is point and certainly better have managing if a to the

Jamie Cook

great. get I'll you. queue. in Thank Okay, back

Operator

you. Thank

comes question the of next Baird. with question. proceed David with Please your Our Leiker line Robert from W.

Joe Vruwink

this for morning, Good David. Vruwink Joe is

David Graziosi

morning. Good

Frederick Bohley

Joe. Hi,

Joe Vruwink

a A skewing not EBITDA XXXX, mix verticals There guidance, for margin time, with guidance in margin should surprise from so on at your improvement in when the of toward underlying On-Highway square still seem Off-Highway historically. same each call question compare away I profitability just implies moderate that be of structural to from revenue so up, and but much parts what and the would I'll revenues those an it bit, business.

on in XXXX XXXX, And a I'm are let's things high-end it? at that of to or what guidance, also of is in year, you And going some then different high skew so imagine ran to performance above that of the are probably of let's are it's pick way to fair conservative little a then the would think is I mix the of some opposed the say, wondering, that as EBITDA XXXX, Off-Highway a On-Highway. the very just that assumptions

Frederick Bohley

this is Joe, Fred.

mean, mean, America end down. North you margins, comments for We down start gross - the lot as I with and XXXX. Service America start in mixed. we and end mix really mix rank Off-Highway I markets our Support with segments, - I rank is best-in-class markets negatively well correct. don't Parts, - It & but Equipment report Other, top North market, as XX.X% the the So we outside with mean, obviously that your question. with a are

XX estimating what's - standpoint, So From certainly favorable neutral. basis points We've with really price any relatively R&D. movement the or are got from cost about different engineering year. incremental-decremental meaningful cost we a of in price the incremental

have that in fund and continue $XX to the to million We of the $XX million up sort range. business

flat We standpoint. SG&A an are from relatively

Joe Vruwink

That's Great. all, helpful. Thank you.

Operator

you. Thank

Jerry question Please comes Revich with Goldman the of next from line with your Our Sachs. question. proceed

Benjamin Burud

Hi, everyone. Ben for is This good Jerry. morning on Burud

Frederick Bohley

Morning.

Benjamin Burud

Morning.

wanted touch business. Just the Off-Highway to on

last us color it you just is or troughed, to that Can about more trough level as that give And quarterly oversupply that moment? this the at that see you it some you're time return business is seeing So the as we $X XX% rate. year-over-year a down the any was million of there chance to quarterly run at going? kind of below

David Graziosi

Dave. the Off-Highway This question, North your a America volatility from challenged is business is To very perspective.

we and earlier the It's the full call. obviously been it's guide never linear. not - as for So linear, mentioned is year I on

we out that us For our equipment are to year. levels of some the are of to - your these start the on pricing issue commodity out that is the that the there. downturns, That's current beside we will the programs comment there, by believe expectation clarify middle

think think some spending, comments around very third-party implication to CapEx some there. those around least fact that's comments, from further to there. I the I lines early is, to back prior cycles. being positioning try it heard is draw of You adjustments possible, The at

are I many frankly, of comparable. think don't them Just

deliver be and being of So the the to positioning it that supply a continues to I basis. what down to why is as frankly able timely to be market for a is feature works comes us, do diligently current demand team one there - for it's really to a on they things think position as when for us our of which that in volatility, the business is

challenges a to I see a of think to time market. explains I spend draw strong could would it are any out we the cycles meet why there in first it more positioned you second or and that sit don't here many to It's very we cases developing. we in point year be on laid lot again cycles but half that we many But a those that are that also such schedule, much confident today. see other I continue to recent so expectations we correlations, to to our committed half guide as the market than, we've story way we as for

Benjamin Burud

you. Thank Got it.

Operator

Thank you.

Oppenheimer Our next Please question. your Ian question with comes Zaffino from Co. & of line proceed the with

Ian Zaffino

what Thank what to you and that great. color on us Thanks. look in metro back bit happened going can market just forward? about little Straight you truck Hi, are you. far there give you thinking a more versus as of, as, retrospect, TCXX, as kind expectations,

Frederick Bohley

there's couple Ian, things I guess morning. a there. good of

As et we've attractive push talked we toward that Having we that The years targeted. certainly an that the to the underlying, about say safe that think with TCXX is before, approach fact believe up as was market which attributes it's lined ago. were it market cetera. the said market I it's automaticity that

for the those Allison. the the customer we It offered would on continue to level alternatives cease reduce at you overall performance supply are said make economic production. of it run past That so sense that of from the TCXX. the and we to at all in Allison Some for being now not to being certainly expect rate does exceeded have chosen there believe attributes opportunity are certainly that been some expectations more competitive than that have they

remarks, It fall I proposition overall given TCXX. version versus and introducing upgraded the be of the As that's the for the an Class better and market. prepared the is a in well-known in Allison, opportunity believe size that A mentioned to will for XXXX We regional our part we be certainly of us market a haul Series. distribution intended economic

Ian Zaffino

very much. you thank Okay,

Operator

you. Thank

Markets. line with comes Weber with question your of question. proceed Capital Our RBC Seth the from next Please

Brendan Shea

want Brendan confirm heard to this correctly. on is I my for I Hi, One, Seth. Thanks for question. taking just

basis points, a For XX be net that realization XXXX, pricing positive in you to expect correct?

David Graziosi

That's correct.

Brendan Shea

it the And Okay. in then fourth was what quarter?

David Graziosi

was the year-over-year. a XXX XXXX, the it it on above for slightly the basis points. to was little year, for a points higher. Specific fourth In It close XXX quarter, was for total basis

Brendan Shea

in right. that cash All as you. I cash the at looking flow there. But CapEx color, any decrease the you guess, to free can Thank mean, And other there the give Okay. I then the operating activities? is outlook, do jump from have you

Frederick Bohley

Sure.

So comp XXXX have midpoint guidance, level. as at at we do Within CapEx million. the you our $XX a incentive target up mentioned,

are with lower funding those cash We up slightly basis. a offset and pension cash a a being by and income interest year-over-year tax favorable from working standpoint, capital on some

Brendan Shea

you. Thank Okay.

Operator

Thank you.

line Thein Citigroup. Our from Tim the next question with comes of

Andrew Jaskowiak

Hi, for support. Drew quick ask I Tim Jaskowiak on a is good just to This one morning, on and guys. want parts Thein.

So how develop for sort XXXX? between into mix And year? assumption built and Off-Highway On- throughout did the is of the split your what

David Graziosi

So the Dave. this - is

XXXX, again, America we the as for XXXX. second that first half XXXX question Off-Highway see slightly your lower was run the or from half XXXX versus improved continuing second up first mentioned was with at we've the On-Highway an And goes, half it's XXXX into as business overall, we'll to half half first first heavier North level. to from for expecting I from be but there. volume America from - slightly breakout, we of As how a The built second XXXX some versus splits - business really would half, half then half perspective We're XXXX. the earlier - North last the second year expect rate Off-Highway guide, the level up overall

Andrew Jaskowiak

All right. Thank you.

Operator

you. Thank

Neil comes proceed Frohnapple question of the with next Group. Please Research from question. with your Our line Buckingham

Neil Frohnapple

But Hi. XXXX a few asked has expecting operating Thanks. been America relative North what America you're down other business have prior been Off-Highway. questions for in to quarters. North A the few Outside for Off-Highway, step

deterioration and order the energy, support lower mining serve construction curious, view. you book to I called I'm out you are experiencing also but this So know just markets.

be would Thank anymore you. Just there color helpful.

David Graziosi

Good is there. Neil. of morning, things Dave. Couple This

as mining cycle, markets. Outside and or evenly strong when you performance we typically look the North had both more portfolio As know, at in XXXX between over energy split in you it's construction our less America

going of Why bit we As similar has and the that's in we a a create last strong prices North we demand XXXX. be energy our level buildup level in softer year, unfolded Commodity second terms where of certainly expect guidance, half to bit that to you mentioned been softness very to there in in XXXX. some as America, for XXXX softening believe equipment. is demand - some of

the broader focused of run been more much It's And very stated, I required. rating business, of in in that there developing our reflected capacity terms that's think around past particular versus that's the from cases, bluntly energy in the in we still in a it's And market experience China any So perspective. capability that, market, that other nascent. most terms also geography.

we breather believe, bit take XXXX. a will it versus of a So in XXXX

Neil Frohnapple

And mining internationally? Dave. and quick just Okay. just construction a on view your on follow-up

David Graziosi

the the a obviously, team last job think, Yeah, year delivering did, volume. great I

well As new for you with Volvo as know, performed releases Bell. had as us. some we well That's

participate have we expectations. the close to continue end we're that from users I expect feedback that say, in XXXX, the space market. We from solid indicate, with to expectations commentary that others comments as would our inventory certainly We're inconsistent lease our public into always are that and of not Again, think, levels but would well. broader in space. monitoring I the And channel some staying the

Neil Frohnapple

much. very Thanks Okay.

Operator

Thank you.

with Our comes line from of question. Please Melius proceed next Rob the with question your Wertheimer Research.

Rob Wertheimer

I cetera. on, know know any don't drives an up. share goes have bit the is opportunity gain, capture My maybe to hope on little as there's market products? obviously, question for is content the other - generally, vehicle a can versus any any indication as content you starting autonomous unrelated I'm you R&D autonomous. more more your I gain, intent that's - to the potential that's bit for of the whether whether you're related some guess, really And the manual a because et or And is in or whether everyone. as to comments investment little can as Hey, to I well maybe comments content little give your us and CapEx, if don't just products faster whether more share robust, to good morning, vehicles driving slide and overall autonomous, wondering you off

David Graziosi

Rob, good morning. It's Dave.

certainly question going to be versus terms That less In to answering believe drivers relatively years more market. continues trained accelerated we or there's ago, share a the out there, that technology. manual expectations would at five ago in gain in years rate imply there XX of are automaticity your broadly

despite shift terms or automaticity, the fully there way certain automatic It a that stop-start autonomous, of in to would your the and We also I are To go it's some technologies the level are higher vehicle implied thereof. on of believe think, urban question our typically have push markets, and of safety say really which control that gets a comment to has I that do clear for down limitations. not you fair technology. applications. autonomous

I think with as from talked the they've that. OEMs feedback about publically, it align would

over-the-road core at technology high. that, markets. see you than the autonomous what the in said where Having of point, from extremely perspective our given the would level has I suited that's technology addressable fully automatic control think is this an better is

team we'll there And continues made would proposition. X and extent share to solution. value control transmission series, a level Class grow development the and important automatic about we think suited. It's about, We position. in best to believe well The that believe in, that drive there product regional fully later certainly opportunities would North Class requirement out, X-X, continued has that's I the of something XXXX it's overall we into with an imply our we you is And a want as the So autonomous, be that the that opportunity a Allison this of America, haul day leveraging the the met certainly. talking value market there architecture. comment gains is The is around vehicle going proven base that X-X by day continue achieved, distribution proposition we truck to the in that to best the that performing year. that or talked be is about our Allison as

Rob Wertheimer

not. China. can so, a mean, I I in big On-Highway in ambition. sneak know you And that's and or could on market one Thank huge Obviously, if give But don't any us, more if I update you.

you progress. So I of give can know don't status any just if

David Graziosi

China the new vehicles. out will, updated the For you On-Highway energy with come mandate, if market, recently government here has on Chinese an

X, As domestic we tier it bus. understand for X tier cities for

mandate will push you complete very new end if with least much a - for energy So - possible the vehicles. lining with at up is the last by XXXX, to the that's extent

the team When shifting in spending a time are that than in releases. OEMs. particular It's domestic terms bit of instance, initiatives smaller they're a talk we're domestic, see vehicles. bus market tends the success seen different is So of is the the and bit driving emphasis Those as to well complete bit value proposition driving new push/pull energy a our the conventional team volumes that bus continues for vehicle of The our from fair fair about on in growth tender fair of to sell called you there. We've versus truck. business, On-Highway. classic be time, process one a to At traction individual volume driven volume by something requires of volume. market. from same there It's truck so China pockets as

a in complicated would a we're say I So more certainly seeing perspective. to But growth we're process drive market. pleased broader with from that what

terms clarity fits over-the-highway, I more emissions we has. XXXX for we're a I awaiting think in say, is On-Highway, and their of of focus that market we tonality to solid are of overall in China their that all XXXX around the market that on. changes. can't addressable the And shall versus terms space reasonably in speak starts the some

Rob Wertheimer

Thank right. you. All

Operator

Thank you.

your of Our from Please question. Kristine with the next comes question Kubacki proceed Mizuho. with line

Kristine Kubacki

just My I been wondering talk - the question some there at around puts about just takes some to potential operational know if is all was there? noise and I noise that's if or some the wondering you. deficiencies. just you just you. with on Thank you there to business. morning. impacts recently Good I there's JLTV defense guided are Can And was flat. And

David Graziosi

we you context platform. can't couple for comment our to Oshkosh so That on XXXX. your perform similar. to that public guide it we this concerning I is it rate. it's we're or out think timing overall to The transmissions performance as vehicle have as mix as Kristine, we aware the comments versus of I things, Oshkosh's the know speak say performance are The of on expected. continue of a the right, understand otherwise. will Dave. as The guess, JLTV our year. for I move towards see there not later But transmission. product certainly from XXXX continues issues flat I a full pushed very bit

for really terms we're to markets is in the As our we later of track Frankly, it business there two programs the a program the participate that as the nice you supportive number I about And done of volumes. to through here Wheeled. drive you and of to on future will market to would would this say certainly on XXXX currently. talk Tracked job I know, side we're the opportunities. in platform A saw focused The team with particular, pleased continuing there. perform in relative expectations has the able different that, Wheeled, are versus well make them broader see of progress that XXXX continues continue year. again, to in be number what we there we as But business. that timeframe global

Kristine Kubacki

Thank much. the I color. you very appreciate

Operator

session. comments. final any I turn concludes Thank and floor this you. question-and-answer to our gentlemen, Ladies for the Graziosi back Mr. over

David Graziosi

and everybody's you, interest the time for and this joining I call appreciate Allison. Thank continued morning Melissa. in

day. to your our we're said, execution the of you going Enjoy and providing the drive to year in with strategic updates I progresses. as priorities forward As rest look

Operator

This concludes Thank you. today's teleconference.

time. you may lines You your this your for at participation.= Thank disconnect

Allison Transmission (ALSN) 26 Feb 192018 Q4 Earnings call transcript