Allison(US:ALSN)2025-10-30 13:06Financial Performance - In Q3 2025, total net sales decreased by 16% to $693 million compared to $824 million in Q3 2024[102] - North America On-Highway net sales fell by 28% to $327 million, primarily due to lower demand for Class 8 vocational and medium-duty trucks[102] - Defense end market net sales increased by 47% to $78 million, driven by higher demand for tracked vehicle applications[104] - Adjusted EBITDA for Q3 2025 was $256 million, representing 36.9% of net sales, compared to $305 million or 37.0% in Q3 2024[113] - Net income for Q3 2025 was $137 million, or 20% of net sales, down from $200 million or 24% in Q3 2024[116] - Net sales for the quarter ended September 30, 2025 were $693 million, a decrease of 16% from $824 million in the same quarter of 2024[118] - Gross profit for the quarter ended September 30, 2025 was $329 million, down 17% from $396 million in the same quarter of 2024[121] - Operating income for Q3 2025 was $204 million, representing 29% of net sales, compared to $260 million or 31% in Q3 2024[117] - For the nine months ended September 30, 2025, net sales were $2,273 million, a decrease of 6% from $2,429 million in the same period of 2024[129] Expenses and Costs - Cost of sales decreased by 15% to $364 million for the quarter ended September 30, 2025, compared to $428 million for the same period in 2024[119] - Selling, general and administrative expenses decreased by 4% to $82 million for the quarter ended September 30, 2025, compared to $85 million in the same quarter of 2024[122] - Engineering expenses for the quarter ended September 30, 2025 were $43 million, a decrease of 16% from $51 million in the same quarter of 2024[123] - Direct material costs accounted for approximately 66% of the cost of sales for the nine months ended September 30, 2025[107] Cash Flow and Liquidity - As of September 30, 2025, total available cash and cash equivalents were $902 million, up from $781 million as of December 31, 2024[140] - Cash flows provided by operating activities for the nine months ended September 30, 2025, were $593 million, a slight increase from $590 million in the same period of 2024[150] - Cash used for investing activities increased to $108 million for the nine months ended September 30, 2025, compared to $70 million in 2024, primarily due to a $33 million increase in capital expenditures[151] - Cash used for financing activities rose to $368 million for the nine months ended September 30, 2025, compared to $287 million in 2024, driven by higher stock repurchases[152] - The company repurchased $283 million of its common stock under the Repurchase Program during the nine months ended September 30, 2025, with approximately $1,236 million available under the program as of that date[148] Debt and Leverage - The company had $510 million of indebtedness associated with ATI's Term Loan as of September 30, 2025[143] - The first lien net leverage ratio was 0.35x as of September 30, 2025, indicating strong compliance with financial covenants[145] - The company has entered into a Commitment Letter for up to $2,000 million of borrowing capacity under the Bridge Facility to finance a portion of the Acquisition[147] Future Outlook and Strategic Initiatives - The company expects decreased net sales in the North America On-Highway end market in 2025, partially offset by price increases and increased demand in the Defense market[101] - The company is considering strategic acquisitions to enhance its product portfolio and market presence[159] - The company plans to enhance customer engagement through improved service offerings, which is expected to boost retention rates by G%[159] - Future guidance indicates a focus on sustainability initiatives, with a commitment to reduce carbon emissions by H% by 2025[159]