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RVIA Economic Impact Study

The Recreation Vehicle Industry Association commissioned an Economic Impact Study on the RV industry, released on June 7, 2016. The study found that the RV industry contributes about $49.7 billion in economic output or 0.28 percent of the Gross Domestic Product. Through its production and distribution linkages, the industry impacts firms in 426 of the 440 sectors of the United States economy.

Nationwide, the industry is responsible for 216,170 jobs, both directly and inderectly, creating an economic impact of $37.5 billion. The full study results, along with each individual state and congressional district's economic impact is available on the website by clicking here .

Allison Transmission Reports 12 Percent Decrease in Third Quarter

Wed Oct 26, 2016

146669996060929.jpgINDIANAPOLIS - Allison Transmission Holdings Inc. has reported net sales for the third quarter of $434 million, a 12 percent decrease from the same period in 2015.

The decrease in net sales was principally driven by lower demand in the North America On-Highway and Off-Highway end markets partially offset by stronger demand in the Outside North America On-Highway end market.

Net Income for the quarter was $45 million compared to $47 million for the same period in 2015. Adjusted EBITDA, a non-GAAP financial measure, for the quarter was $151 million, or 34.7 percent of net sales, compared to $174 million, or 35.3 percent of net sales, for the same period in 2015. Net Cash Provided by Operating Activities for the quarter was $128 million compared to $162 million for the same period in 2015. Adjusted Free Cash Flow, a non-GAAP financial measure, for the quarter was $116 million compared to $148 million for the same period in 2015.

"Allison's third quarter 2016 results are within the full year guidance ranges we provided to the market on July 27," Allison Transmission Chairman and CEO Lawrence Dewey says. "The year-over-year reductions in the North America On-Highway and Off-Highway and Service Parts, Support Equipment & Other end markets net sales are consistent with tempering demand conditions in the North America On-Highway end market and the previously contemplated impact of low energy prices. Allison continued to demonstrate solid operating margins and free cash flow while executing its prudent and well-defined approach to capital structure and allocation. During the third quarter, we settled $77 million of share repurchases, paid a dividend of $0.15 per share and refinanced our long-term debt. Given third quarter 2016 results and current end market conditions we are updating our full year net sales guidance to a decrease in the range of 8.5 to 9.5 percent year-over-year."

North America On-Highway end market net sales were down 15 percent from the same period in 2015 principally driven by lower demand for Rugged Duty Series, Highway Series and Pupil Transport/Shuttle models partially offset by higher demand for Transit/Other Bus models and down 15 percent on a sequential basis principally driven by lower demand for Rugged Duty Series, Pupil Transport/Shuttle Series and Highway Series models partially offset by higher demand for Transit/Other Bus models, according to a press release.

Service Parts, Support Equipment and Other end market net sales were down 6 percent from the same period in 2015 principally driven by lower demand for North America service parts and up 8 percent on a sequential basis principally driven by higher demand for global service parts.

Gross profit for the quarter was $205 million, a decrease of 13 percent from $236 million for the same period in 2015. Gross margin for the quarter was 47.1 percent, a decrease of 80 basis points from a gross margin of 47.9 percent for the same period in 2015. The decrease in gross profit from the same period in 2015 was principally driven by decreased net sales partially offset by lower manufacturing expense commensurate with decreased net sales and favorable material costs.

Selling, general and administrative expenses for the quarter were $80 million, a decrease of $7 million from $87 million for the same period in 2015. The decrease was principally driven by unfavorable product warranty adjustments in 2015 partially offset by higher incentive compensation expense.

Engineering – research and development expenses for the quarter were $21 million, a decrease of $3 million from $24 million for the same period in 2015. The decrease was principally driven by the cadence of certain product initiatives.

Net income for the quarter was $45 million compared to $47 million for the same period in 2015. The decrease was principally driven by decreased gross profit, expensing previously recorded deferred financing costs as a result of the long-term debt refinancing in 2016 and higher incentive compensation expense partially offset by the environmental remediation expenses charge in 2015, favorable market-to-market adjustments for the interest rate derivatives, unfavorable product warranty adjustments in 2015 and decreased engineering – research and development expense.