Allison(US:ALSN)2023-04-28 00:59Financial Data and Key Metrics Changes - The company achieved record revenue of $741 million in Q1 2023, an increase of 9% from the same period in 2022 [7][18] - EPS grew to $1.85, up 42% year-over-year [7][20] - Gross profit for the quarter was $361 million, a 13% increase from $320 million in Q1 2022 [19] - Adjusted EBITDA for the quarter was $276 million, compared to $244 million in the same period last year [20] - The company increased its quarterly dividend by 10% to $0.23 per share, marking the fourth consecutive year of dividend increases [9][22] Business Line Data and Key Metrics Changes - Service, parts, support equipment, and other end-markets saw a $44 million increase, leading to record quarterly sales of $183 million [18] - North American on-highway end-market net sales increased by $30 million, driven by demand for medium-duty and Class 8 vocational trucks [19] Market Data and Key Metrics Changes - The company noted strong demand in North America, particularly in the medium-duty and vocational truck segments [38] - International sales accounted for 29% of revenue in defense end-markets, with expectations to grow to over 50% in the coming years [14] Company Strategy and Development Direction - The company is focused on expanding its market share amid cost inflation, leveraging its value proposition of quality, durability, and reliability [8] - Strategic partnerships, such as with SANY for the Indian market, are aimed at enhancing global penetration in the mining dump truck sector [10] - The company is committed to investing in both conventional and next-generation propulsion products while returning capital to shareholders [8][9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of core end-markets and the potential for further market share gains due to rising vehicle prices [7][8] - The defense end-market is expected to see growth driven by increased global defense spending and ongoing partnerships with the U.S. Department of Defense [13][17] - Management anticipates continued improvement in aftermarket services due to an aging fleet and increased demand [28] Other Important Information - The company ended Q1 with a net leverage ratio of 2.2x and $344 million in cash [22] - Full-year 2023 guidance was raised, expecting net sales between $2.9 billion and $3 billion, with net income projected between $550 million and $600 million [23] Q&A Session Summary Question: On the service parts and support equipment growth - Management indicated that the growth in this segment is expected to continue due to improvements in supplier delivery and backlog management [26][28] Question: Update on the wide-body dump market and JLTV A2 revenue opportunity - Management noted that the realization of the $100 million growth initiative in India will depend on OEM success in penetrating the market [32][34] Question: Order book visibility for 2023 and 2024 - Management confirmed strong demand for 2023 but indicated it is too early to forecast 2024 [38] Question: Defense segment growth expectations - Management remains comfortable with an 8% growth expectation for the defense segment despite a challenging first quarter [45] Question: Price cost impact in the quarter - Management reported $56 million in price increases, with expectations for continued positive price-cost dynamics throughout the year [48][49]