ALSN - Earnings call transcript Q2 2019 | Allison Transmission Holdings, Inc.

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Operator

Good morning, ladies and gentlemen, and thank you for standing by. Welcome to Allison Transmission's Second Quarter 2019 Earnings Conference Call. My name is Sherry. 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 Transmissions will prepared instructions question-and-answer a the that their management Allison team will be After conference call [Operator Instructions]

call I like the Director Investor would of sir. Mr. Please ahead, to the company's go now Relations. Ray over turn Posadas, to

Ray Posadas

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

and As contain are presentation page two a expectations. August forward-looking reminder, Relations allisontransmission.com. this today conference presentation, the call the current on of of are call, section morning through of webcast will this replay noted our our available remarks website, the statements A X.As using on Investor many on of we based available this be

known our press those are XX, including and XXXX, ended subject risks, forward-looking December our and and for release quarter These second Form the annual report year to statements XX-K unknown on in XXXX uncertainties forth set earnings materialize results and should estimates as as that economic uncertainties conditions. other today. underlying one more may actual of risks or prove those factors assumptions or incorrect, vary materially or express general we these Should well or from

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

release. reconciliations attached second presentation find our of financial and to measures the press as XXXX can You to GAAP non-GAAP earnings quarter most appendix measures the the an comparable to

the each we’ll maximize a.m. turn the Eastern Slide analysts. participation X for agenda. take at one is call opportunities in time X:XX from call Today's order the to Please presentation of to question end to call, on set

will XXXX Graziosi performance will update. an second review results. second our quarter Dave overview Fred guidance During financial and with you the of then provide Bohley the call, today's quarter

to prior the prepared will Dave commencing remarks the Finally, conclude Q&A.

the Now Dave turn over call to Graziosi. I'll

Dave Graziosi

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

second exceeded second provided per to to EPS $XXX adjusted the million, quarterly quarter record diluted guidance X% are sales record to EBITDA quarter We income of XXXX that quarterly increased expectations and was the net a $XXX Year-over-year $XXX million, our report results of April net million $X.XX increased market was XX. on XX% to another pleased share. ranges and

share quarter. We and share allocation, that are and of Allison its to approach million dividend settling report to continues paying execute repurchases well-defined to second capital during $XXX the $X.XX per a pleased of structure

May, in quarter. stock increase of in of a approved remaining billion end the Board resulting share of billion the Directors of Additionally, capacity the $X in repurchase repurchase existing authorized as $X.XX the authorization,

guidance adjusted given full raising XXXX cash free and income, second cash more adjusted quarter flow. and momentarily. net current we are year Finally, net end net by will our provided guidance EBITDA, update sales, detail discuss conditions, the XXXX in market results for activities Fred operating

the same our of partially performance in Outside X% America Net the to the North market X-X the net in in Off-Highway demand in North by growth principally and The attributed Service in America higher led and market $XXX to Equipment Support Other for Parts, period X turn end demand Class demand of truck. by offset in QX market. presentation continued to Please summary. initiatives million America the gains by sales On-Highway the the XXXX, increase execution driven Off-Highway market, is increased to share North higher XXXX lower end sales & also compared end Slide

certain compared XX.X% points by for principally compared period increased sales on million by price an gross to of XX.X%, basis and $XXX Net as $XXX The profit, increase Gross and product driven net income interest to increased same in increases partially offset increased increase by margin initiatives for driven for for the the same increased in quarter expense. the the was XX million was XXXX, was XXXX. spending principally period quarter products.

the sales also compared increased initiatives profit, net in by $XXX in offset Adjusted XXXX. was $XXX million gross principally net was or period quarter of product for XX.X% for XX.X% The same EBITDA spending. EBITDA adjusted of million, increased the partially increase sales to by driven

I'll to Fred. turn over the call Now

Fred Bohley

Dave. Thank you,

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

were XXXX an sales for on find presentation performance by QX and by Please also by administrative market offset increased to the net product lower expense spending. can period financial of XXXX and activity of warranty product end driven overview presentation. the You in our XXXX same from warranty the adjustments, commercial the Slide flat expenses X general summary. X Selling, XXXX, principally of turn Slide favorable

presentation by million Engineering, research by X driven turn for flow XXXX QX increased operating decreased principally initiatives capital provided income XXXX, increased period and expense, Please profit, $XX Net performance from by and period cash interest in development in the working increased the requirements increased lower to Slide cash expenses cash $X increased from taxes. principally activities XXXX, operating the offset by gross summary. the million same cash same spending. driven of product partially

XXXX, capital $XX by increased increased activities, operating increased the by from cash Adjusted expenditures. free same by driven net in cash principally flow provided offset partially million period

and settled mentioned the earlier, dividend of share. Dave million we per X% outstanding the shares repurchases $X.XX of second equivalent during quarter share paid $XXX of a of or As

approved in the existing Board $X of billion Directors the stock Additionally, to increase repurchase authorization. May, a

repurchase cash, X of XXXX guidance and $XXX commitments billion We turn $XXX with facility of quarter authorized the $X.XX to Slide ended million capacity. the presentation available the of ratio X.XX, Please share a for of leverage update. net of credit revolving million

$X.XXX from the expectation taking billion. to in conditions, billion we Net a net an the prior As are in full the sales be range range of expected guidance is of second sales of XXXX are This billion. consideration year increase as result outperformance during to end of $X.XX current market $X.XX raising into billion and the to $X.XXX our quarter follows: our

$XXX are up billion to to our prior is range from in by billion, cash the expectations range expected $X.XXX to $XXX $XXX million cash $XXX the range to to our be to income the of expected expected our be expectation $X.XX in cash billion. activities an to million. in million, of $XXX of Net million from Adjusted $XXX expectations range Net million Adjusted prior to $XXX is be expected of of free million $XXX prior operating of is to expected provided to million to of an to from be increase compared $XXX the increase our billion million. $XXX of the to EBITDA expectation in flow our $XXX million, million million $XXX $X.XXX And $X million. $XXX from of up million range $XXX of million, $XXX million taxes to to to is in million. expectation be $XXX income prior prior

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

also the million. capital expenditures $XXX guidance updated to Our XXXX in range of assumes million $XXX

capabilities. current the facilities propulsion principally we innovator funding the our ongoing investments testing remain in vehicle to expansion of a leading end commercial is the CapEx year, As discussed increase in across serve. engineering all our and in the underscore These commitment earlier solutions markets spending

Dave. over now And to the I'll you. back turn call Thank

Dave Graziosi

previously end our markets on Fred. product vehicle to of our Thanks, improved of initiatives facility of is test announced It solid in and market reduced address challenges Among mind to markets with established financial XXXX. while focus operational focus and global core that propositions that growth value delivering the to simultaneously development is programs state-of-the-art new be emerging leadership stakeholders, continue that in economy this creating results for and fuel environmental and strategic greenhouse expansion, expected addressable we global gases. the we value priorities penetration emphasize all

initiatives other chambers simulating vehicle investment capable broad Consistent of Once complete, facility duty range a and include a and of two with XX,XXX cycles temperature this of our for will facility environments be in completion vehicle new square-foot that located center, is will construction and altitudes announced XXXX. on-road this the new innovation June and within development Allison's grades, in including product extremes, other we scheduled Indianapolis conditions. programs, environmental campus and

to The customer, support system and including fuel innovation supplier functional safety. greenhouse capacity relationships, and as well as virtual focused emissions center partner and unique and and on will feature regulatory reduction simulations development validation compliance simulation efficiency gas physical expanded capabilities,

and new the hybrid Together, electric and significantly external and enhance optimization ability manufacture concepts integration will as center facilitate and best to innovation future differentiated systems internal talent. modeled, for to the our technology quickly and customers, tested we propulsion across and and new will and electric these generated, develop, consolidate all reinforce The Allison's support performance bring in initiatives, product refinement. serve. of efficiently closer engineering simulated develop these and product facilities solutions including to markets state-of-the-art will well propulsion improvements capabilities with our very collaboration end promote on and attract, retain fully market resources The being ability our OEM vehicle development groups as

global propulsion. to leader closing, vehicle a In Allison is be committed in commercial

all for demonstrate our of fuel strategic Allison again while develop of enhance to Our prudently and innovation we second the and value compelling quarter our deliver priorities, invest stakeholders, to once ability propositions secure and and our customers. create value to to results continue to further our opportunistically power growth

Sherry, for prepared call remarks. open our concludes This please the questions.

Operator

At is Revich Our we’ll Please Instructions] a question with from question-and-answer conducting Thank question. proceed this Sachs. your [Operator with you. Jerry time, Goldman session. be first

Jerry Revich

everyone. morning Good Yes.

Dave Graziosi

Good morning Jerry.

Jerry Revich

place required recent Yes. that are Dave, you another going that in a the be architecture? key Do should we your propulsion on folks of systems on the here say said of about you be more capabilities the pieces way, how the here? out thinking of you key following capital developing parts looking the in to working can terms have about toward allocation M&A basis? acquisition range build for you're from to multiyear fully Or

Dave Graziosi

– or that we're of question deliver provide on innovation. electric. focused global approach right terms in well position. call the your mean acquisition, leadership from conventional, solutions. it's We're the impact on. through announcements position current the our that solutions. is with continue certainly in The range positioned to and allocation AxleTech on Vantage cap we is we our Sure. what range would gas do of That we're full Power view to propulsion a we diesel to To whether by our requires entire that, as April talked to able What That the EVS and of

we've as However, said, of not will be investment cadence the linear.

OEMs, that's users, There's to we looking at the whether back we full are solutions. for and market of cost it's etc., involved. on dependent electric fuel as control about market, system variables we end staying as also close also Frankly, well demand alternative very be not from is to the That from a the as to conventional fuels attributes performance. many But actual vehicles. that fuels that but to going again, to do range solutions, includes cell of think electric that are number

So complete we market with and the range look a that forward existing technology our through as pulling very technologies appropriate. to see

Jerry Revich

versus terms linear the framework? capital saw M&A. a about Can toward follow-up, in but in this in rough allocation technologies a that year terms type forward? just going And you these the of give just should deployment dividend we flow free of cash capital just terms for Is that deployment, us not capacity we of think appreciate placeholder of buyback of

Dave Graziosi

for objective balance return the appropriate which hasn't our our cash, to returns changed, shareholders. of to invest is Look, generate cash and

the this as earlier we we've environmental – we will Having year the as investments as fund said environment we positioned. So the the center. we're see vehicle including today, innovation said, I test we're facility various well that, believe as well announced

shareholders. few positioned broader which years I it's to would you the define for very objective, from absolute point to think tell capacity returns us is perspective for the balance but well, appropriate generate in our think premature return other than the and terms we're a invest allocation I of as try I that to well cash, next at this

Operator

Our with Cook Suisse. next proceed question with from question. Credit Please is Jamie your

Jamie Cook

to of Hi On-Highway sort some market, North questions. market. impressed by morning. two better the ability sales expected. quarter. was were I in Obviously, the but good guess One, than was I outgrow America it Nice of the

year? So you your expectations about are is to potentially relative can the where think a market you down how ability and talk indeed about if to XXXX outgrow we

questions the EBITDA half then the on of And guidance. back

be to going we're that versus consensus implies still down the sort it is. think I of where

that that you on conservatism? Is just that? cautious? the something provide it Thank you're little out So around Allison you more typical macro there just side can a seeing framework you. there Is makes a

Dave Graziosi

cover it's couple continues Jamie, to on question Dave. second the team share second I'll of sales things. morning comments believe, the well A the On The the Good – gains, in quarter pleased performance, extremely we with. appreciating half. let EBITDA in relative certainly Fred America. execute, to we're North your performance,

we're a better through the decade. Class in know, and part you by series Silverado truck have As positions to access regaining position of as well in we had returning the well CV X-X platform been Navistar the market. Frankly, have GM not received to the

So we've there. made good progress

allowed as vocational well to execute agenda and for the have automation. talked in of by market The as Class to value the our before continue terms proposition continued push forward push markets continues strong as team X us about straight well The Metro. we've with to

I think your with we're we're forward, think, about pleased execute well to continuing process very comment So To cycles. going prior again, that. their I placed that

I'd softer markets. that a in volume number book of of sustain fact of in a higher certainly tend share that the business to municipal themselves our has sub-segments highlight

So versus cases, a continue we volatile be exposure. business in to line-haul others over-the-road, less have that those as type some

for planning of outcomes. are we a So different number

the think perspective, half. very the operational said proud initiatives well here we're well from on second a and earlier, focused the capacity of time the I focusing I in as same quarter while placed performance As and team's second on excellence at

let cover your rate question second I'll in of terms half. for run And Fred the

Fred Bohley

in million service new parts primarily We half Off-Highway do increased our we Consistent outlook. to the half. half. with significantly. call, majority what the about by Jamie, second HX really expect year-over-year have driven with be units the second the talked down engineering Sure. second up of top the of we have versus is that R&D QX the $XX in in R&D line We view the and vast still on about increased

support expect initiatives. achieved elevated the is the basis favorable that of in our points And slightly expenses seen Commercial in where HX pricing, you've in half for pricing half. to we've second with approximately we of second the really XX consistent growth continue

Jamie Cook

Okay. I color. appreciate the you. Thank

Operator

question. Our is question with Robert & from W. Leiker next David proceed with your Baird Company. Please

Erin Welcenbach

David. is Good morning, on Erin Welcenbach for this

of ago. give question end little end days run is your really through relative market outlook for the the my of to to puts So the and you XX sort a for shifted that? maybe outlook Can bit markets? kind State of Union us of you the you're your takes Maybe and has how

Dave Graziosi

started Aaron. – That's in Yes, the results, outlook you our there – appreciate of as terms quarter bit. market about markets. second the Tougher a of morning Dave. on the a the a focused comments of it's of the to backdrops stands would we outperformed as shifting, terms the This different so update and full I as we we the in of said second speak, what we really terms tell is pretend. number year, think from guidance rolled half positioning would you our to in but year Good through balance number comps in end our in can talked

I much. has as started the year broader I that, really I guidance we the think say would Beyond tonality tell shifted you wouldn't of

Off-Highway we really year so given in as for service view a of situation the continues the particular, though I of well highlight by last think providers to number week started the as I or would the support North being comments constraints that suppliers America into in public deployed we terms maintenance into on much hard Frankly, focus half, The currently versus that get investments. very rationing see as there being capital up second the set that of with. space. around new it as the we

the that of point. that rationing is A fair this sector different. in think in excess as what equipment bit so I capital is is focus it different on at would we understand say market a I not more

and So with through trying to obviously about XXXX. ourselves close enter are I beyond first performance to continued as success think think start the pleased it's for XXXX. as something we that, But we team's we're the half position staying we're to

Erin Welcenbach

for taking my question. Great, thanks

Operator

Please question. is your Our with next Joe with Partners. O'Dea proceed question from Vertical Research

Joe O'Dea

Hi morning. good

On toward? would year, of in thinking you in half that rate going back step a the that that And the the then anything implied in be something call up forward? particular that's should R&D out about as is moving we run

Dave Graziosi

it's morning, Good Joe, Dave.

our of number them linear of all of a we Frankly, there's talked number across as Fred as of frankly a before, we're markets. driving see as not many the As second mentioned, that the are half, initiatives, end well. we've initiatives

levels are than as there timing, on are well say that and I e-axle but other frankly activity is our point I Vantage in of anything which would there's particular out So bringing necessarily opportunities effort obvious, the execution, the not off that driven program Power. would the as

initiatives we're of a is There part of pursuing that. number as that

As externally, working you We're existing other on a that our technologies of as of also and to on as done would can controls now delivering improvements internally. describe terms products. being in either continuing variance internally new transmission done well or know, be work to number I next-generation

opportunities end but busy markets. with we very think of team's where again, going pleased cadence drive into XXXX. we're So we'll From sit, generally and to standpoint, continue I position a around all those ourselves across our

Joe O'Dea

by America you step kind outside view And is so, China that here? And do North Or of fracking? you a up? this established that a is then as trend being temporary led there's if energy, on something think

Dave Graziosi

that equipment. and and digested where for versus four, up see to stable outside is years of was it levels there to I a ramped answer They tied users fair significantly largely North that demand levels. as maturing America is the That frankly as ago. a investment energy going end now, matured They've your more The of five of We market in is Yes. bit market forward. China. point think, say terms

That being as commodity a market. energy volatile said, you know all is

we and that for so that market we've will is of volatility structured we business around our that So within stable. – level in confuse lead be times don't what to It but relatively our from carry that in the at model the end number looking in capital And duration. frankly, the deliver a perspective. light such business is different cycles given ourselves underlying market, of it's asset have levels to its way inventory business typically users, terms very short options there appears of a

Operator

is question Blair. next Our question. your proceed from De Please with William Larry Maria with

Larry De Maria

guys. Hey Good morning everybody.

much curious Just believe I everybody's about path talking see fleet the of comment there you rate idling which obviously how out? cannibalization know be how fleet, on run energy obviously other maintenance the made is – is change, that Can into more that no new. and discuss next there's I service downside what you In unlikely, declines you was you of if versus fairly were would going you following parts plays positive – which and the etc., excess year? words, in obviously, half second based of might where characterize in cannibalization, the parts about, the seeing.

Dave Graziosi

few it's things there. Dave. Larry, A

with in year would a obviously of a I muted started run we market – think pretty overall. out pretty the say I of terms view rates, the

I there's if that That take think, sets for a as continue to of public potentially earlier, steeper a really some itself as been opportunities of being market very little going The unfortunately think number that been for be curve public said, comments level say would less capital I I made on. I mentioned to rationing up have that itself seem is of I bounce comments the out. they've literally, you made, to the that's borne going would hard back. spending. – think suppress

I as So seems is think would just stacked not I the fair to well. is service, we're into spent to it getting soft be the unable level bit market your equipment of And be stacked I question at I on I the been be of going seems positioning to informed the given think of it's that say of to returned cannibalization, think as to a would prior some patch such this age now. there's been. be particular will being or that incapable be is overall than the fact surprised if equipment as a to cycles. better equipment fleets probably money

really by the that's be into said, rationing dictated being to capital space. That back going

return So quickly the is investors opportunity feel that funding question there real if there. At some is and extended. to point, the going is it's how

I available has level going some be in forward. will damage overall lasting that the think capability fleet of of terms that

inventory that as fielded, intensity been So can, level, some still equipment usage well It's we've when in the or broader units not either in otherwise as really but changed. leveraged matter has are the that stacked the the But overhaul as ultimately parked. assumed utilization rates at best it's fact relatively very which or at of that's pretends new that that's is broader be as will a a to terms of the market point the of so equipment units capacity high is maintenance. with utilized, is high capacity require they

Larry De Maria

thanks that for So, Dave.

overhaul of rate being likely? Or for service parts second cannibalization in back into further to we'll it to the much in new that run said, the Or see out the bring with keep next stabilizing characterize and half that's – downside capacity are decent would Is and for parts doesn't end going it you it market parts more if rebuilds they hard of shape guys? is year? there change, to there now, is service how those from to excess you So in tell? the

Dave Graziosi

the into year. this I going based half the our I pretty step would next comments, necessarily of not don't year. think a you into half of outcome public on expect implies – can guidance different and first significant a second down – expectation

that of different our for number terms utilize that repair there So some would level scenarios. let of of channel cannibalization. us to opportunities is I in checks to equipment tell you your a expect Also, I out point, know there's would would certainly

that we made. that would this near-term anything from been that point at don't outlook change So public have see comments

Operator

from with Oppenheimer Our next Ian Please question with Zaffino your proceed question. is & Company.

Ian Zaffino

thanks. Great Hi.

a real should where kind your here. Thanks. question comments? was parts service you the line given quick the we Just energy all that settle expect previous in, that have? piece item And actual of to What of just

Dave Graziosi

in morning, in it's question Run Dave. good specifically, we America for call rates $XX terms the parts. million of, Off-Highway – parts, of Ian, Off-Highway your America Off-Highway a range are service QX, it, North North

Ian Zaffino

should we to assume And Is that X. goes about close Okay. that it? the way think to

Dave Graziosi

certainly a run a No, it's say step extreme, is I of would second the it's down. terms – meaningful step X expected in to in expectation down the is half rate. but definitely of bit an

Operator

with Our question from Seth with your proceed Please Capital Weber next is question. RBC Markets.

Seth Weber

guys. Good morning. Hey

wanted channel? seeing ask been kind the through sales most of Inventory of the of about Just ratios in ramping year. you're to kind first up here what half to have the of

Sorry, – in market? on the channel comments in inventory feeling straight you're the about truck any levels Just thanks. how

Dave Graziosi

volume your Good point not terms Seth, X, overall inventory I Dave. in so of X, sales up to – it's morning, of to certainly terms The insignificant in and ratio, an – year-over-year, number. guess retail

the to less managing of there probably year so-called look you views of a year sales it's sales in higher If But comfortable at of the ratio, pressure into range, optimal actual we we think on look you shall necessarily I year-over-year terms say. industry end there's straight, the units. is optimal versus the high inventory that mark a a ratio, to balance percentage at when that X/X X the the Class X/X inventories which retail at on going retail as what Clearly, of basis in range. at higher

than – been of certainly, words, I dealer The there of much look broadly, supply that's Certainly, of situation resolved. a But terms think that it communicated other dealer as in In at aren't quality when at waiting has the levels situations of say think has within from the would level exceptions. we us, better into it's well the improved. improved. parts, it's inventory OEMs sitting thing I understand than that that some it of And the the trucks out what's that been. the parked, as to of There channel has been bodybuilders. the as number is it's dig as you – to are spot I are other

you That's a a bit which indicative really of more of a you lead the that in bodybuilders, seem to start also have I say visibility. bit times think get terms come down to is would situation where could the I ratio mentioned. not levels as to now that are interpret there – back goes there heavier I X if out is so available Class adequate side, the that truck in straight and inventory just that

industry So strong I they've I be think broader been. but be look for to the fulsome, to close as continue think not that for to as as will to XXXX the the of market into orders the going end we stay manage year relatively critical a start. The

but are another outcome the XXXX. started in well. the it, already of manage But positioning for understand I that's terms as end the full they're into going has how think reasonably, for as I the we the of half, think OEMs to year second

Operator

Yakavonis Courtney your Stanley. Morgan with question. with question next from proceed is Please Our

Courtney Yakavonis

the for Thanks Hi. questions.

On-Highway to the wanted quarter. [indiscernible] Just this understand

given and the through in both about also mentioned You outgrowth then Class markets. much understand how Can market some X just outside down segment last for versus XX%. I your And where America think you X-X this about gains guidance you how us opportunities to share North some Off-Highway Class had $XX help that markets? of was [indiscernible] core you from of pretty and also quarter, peaked X million, X-X [indiscernible] considerably then Class in

Dave Graziosi

Dave. – morning, Yes, good Courtney, I'm it's sorry

your repeat question. briefly Just

times a of up number You there. broke

Courtney Yakavonis

Sorry about that.

much beat how you X So X disaggregate can On-Highway North the gains continued down quarter, Class also share X? just on time through X market you through North on was then just this North I X in beef, Class last Outside gains gave you America the Off-Highway from guidance was better-than-expected versus for there and where think And XX%. – America about in

earlier there. comments in are you beef a quarter, ton the this visibility that Appreciating of given had segment? you've you what embedding your of that have So don't some

Fred Bohley

what Courtney, X-X this talked be gains the to the in launches. those on OEM of QX. Fred, market and quantify are question the the share I'll outperform about Class the part an recent is first Certainly, we've versus take appears easy to with in

only that's the Class picking about year. X%. by We gains The up Class suggesting toward us lean points publish Certainly, we're outperform X-X. of price. in We straight, year-over-year. share basis XX resulting in of in We the a market talked to X balance expect X% some share would price outgrow once

in XXXX. that of early the part publish We'll

see production get but new fleets move volume fully via out driving volumes in just in automatics. second You is used a primarily conquesting strong such, manuals transmission. manual quarter. there that general There are restated to performance from away certainly team's do and The the

So communicate easy I to a straight Class be X-X position X quantify, to Class XXXX. as in in final will X-X, mentioned, pretty share early

Dave Graziosi

outside On there. briefly of release, is question Dave. strong this of in as truck, the quarter, off Courtney, mentioned America really performance North Europe in there we your second terms demand press in higher

Japan Asia South Malaysia. and regions, very number I use team's the think demand doing well of export agriculture. res lower growth driving as really focused countries like well as is America, a for Australia on America, in trucks in South initiatives The

As in market. XXXX was strong a you very know, Australia

we of terms of we year European in in the performance We're talked starting given the the strong OEMs. market, the by higher overall reasonably year XXXX, see, of in driven think, terms balance as level regions, just I those saw some demand in major Europe truck, entering that to about of expect the that at softness

some in Asia, the – that good as activity business China are India targeted to well changes implemented, that the with to starting exports. would emissions through bus I values of have have our the started as well vehicle initiatives with terms overall performance there expected drive be as Truck growth that we China say, team. in as very

were We some expecting growth there.

then other we've recently BRT I received. initiatives that for expected that we're as truck via Australia Korea of work the America, well done strong some out would driving has bus I of the Columbia offset more in That's in partially pretty some Some and duty bus. mentioned well activity in overall been year market South terms say, on particularly their light terms in frankly as earlier performance of

exception I Argentina. macroeconomic challenges to to the region continues think the be one that for

Operator

question Duignan proceed question. your from Morgan. with is Please next JP Ann with Our

Ann Duignan

growth good X-X? it million. North just revenue much On-Highway, what you us morning. how in sounds Class was back could that just to $XX Hi, in $XX tell America circle Can If to I the of the due million

Fred Bohley

is this Ann, Fred. Hi

Class between of the the looking $XX driven to So you're million $XX quarter, at $XX million somewhere by in X-X. million

Ann Duignan

customer in in my be have in commentary companies to you been but Off-Highway were of and Okay. traded most CapEx That's Is of down terms the for that days. your XXXX. yours a Halliburton questions but again, recent this alluding publicly is helpful. called segment then other to comments they've again, significant what And of on answered, year, in

Dave Graziosi

last you week Dave. it's Yes. other noted over America Ann, consistent in as understand but morning Good have the so the users that the it North the was That's alluding we frac, among certainly board. we or as I across to – tonality is pretty what that end

Operator

have Graziosi our the back the I of like We closing call over Dave for to session. to question-and-answer reached remarks. turn would end

Dave Graziosi

Thank you, Sherry.

drive As exciting be forward to and interest we at continued your you to an find in before, Enjoy to time the months come. for more your participating for the rest of in any look day. Thank call. with than providing updates in today's growth and you we history, on said opportunities We with of our time other ourselves today Alison. and it's innovation part to Allison further

Operator

concludes This conference. today’s you. Thank

You may wonderful a this and have time, disconnect your lines at day.

Allison Transmission (ALSN) 2 Aug 192019 Q2 Earnings call transcript