Allison Transmission Holdings has reported an 11 percent increase in fourth quarter net sales from the same period in 2021, leading to record full year net sales and diluted EPS, driven by the realization of growth initiatives and further improvement in operating performance.
David S. Graziosi, chairman and CEO of Allison Transmission, commented, “2022 was a record year for Allison as strong customer demand across our Global On-highway and Off-highway end markets resulted in record full year revenue. Net sales growth of 15 percent was surpassed by even stronger growth in net income, up 20 percent, and diluted EPS, up 34 percent.”
Graziosi continued, “Our prudent and well-defined approach to capital allocation once again had a meaningful impact on earnings per share. In 2022, we repurchased $279 million of our common stock, representing nearly 8 percent of outstanding shares. As a result of the execution of our growth initiatives, we are guiding to another record revenue year for 2023 as we continue to increase our penetration and expand our addressable markets.”
Full Year and Fourth Quarter Financial Highlights
Net sales for the year were $2,769 million. Annual results were led by:
- A 15 percent increase in net sales in the North America On-Highway end market principally driven by strength in customer demand for last mile delivery, regional haul and vocational trucks and year over year share increases in North America,
- Record net sales in the Outside North America On-Highway end market, up 22 percent year over year, driven by the continued execution of our growth initiatives, including:
- A 28 percent increase in Europe, Middle East and Africa net sales, led by strong sales in vocational truck and wheeled defense,
- A 14 percent increase in Asia-Pacific net sales, led by a 59 percent increase in China, despite a decline in production of more than 40 percent in the Chinese commercial truck and bus market, and
- A 38 percent increase in South America net sales, led by strong sales in bus and wheeled defense,
- A 51 percent increase in net sales in the Global Off-Highway end market principally driven by demand for hydraulic fracturing applications in the energy sector and higher demand in the mining and construction sectors, and
- A 14 percent increase in net sales in the Service Parts, Support Equipment and Other end market principally driven by global service parts and support equipment and price increases on certain products.
Net income for the year was $531 million. Diluted EPS for the year was $5.53. Adjusted EBITDA, a non-GAAP financial measure, for the year was $961 million. Net cash provided by operating activities for the year was $657 million. Adjusted free cash flow, a non-GAAP financial measure, for the year was $490 million.
Net sales for the quarter were $718 million. Year over year results were led by:
- A 19 percent increase in net sales in the North America On-Highway end market principally driven by continued strength in customer demand for last mile delivery, regional haul and vocational trucks,
- Record quarterly net sales in the Outside North America On-Highway end market, as a result of a 24 percent increase in net sales driven by the continued execution of our growth initiatives in Europe, Asia and South America, and
- A 9 percent increase in net sales in the Service Parts, Support Equipment and Other end market principally driven by price increases on certain products.
Net income for the quarter was $141 million. Diluted EPS for the quarter was $1.52. Adjusted EBITDA, a non-GAAP financial measure, for the quarter was $245 million. Net cash provided by operating activities for the quarter was $224 million. Adjusted free cash flow, a non-GAAP financial measure, for the quarter was $132 million.
Full Year and Fourth Quarter Net Sales by End Market
| End Market | 2022 Net Sales ($M) | Year over Yea % Variance | Q4 2022 Net Sales ($M) | Year over Yea % Variance | ||||
| North America On-Highway | $1,359 | 15% | $333 | 19% | ||||
| North America Off-Highway | $86 | 48% | $24 | (11%) | ||||
| Defense | $146 | (22%) | $47 | (13%) | ||||
| Outside North America On-Highway | $463 | 22% | $131 | 24% | ||||
| Outside North America Off-Highway | $127 | 53% | $29 | (17%) | ||||
| Service Parts, Support Equipment & Other | $588 | 14% | $154 | 9% | ||||
| Total Net Sales | $2,769 | 15% | $718 | 11% |
Full Year 2023 Guidance
Allison said it expects 2023 Net Sales in the range of $2,825 to $2,925 million, Net Income in the range of $500 to $550 million, Adjusted EBITDA in the range of $965 to $1,025 million, Net Cash Provided by Operating Activities in the range of $605 to $665 million, Capital Expenditures in the range of $125 to $135 million, and Adjusted Free Cash Flow in the range of $480 to $530 million.
The company said its 2023 guidance reflects higher net sales across all of its end-markets driven by price increases on certain products and the continued execution of growth initiatives.
