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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 Fourth Quarter Decrease

Wed Feb 8, 2017

146176938897029.jpgINDIANAPOLIS - Allison Transmission Holdings Inc. has reported net sales for the fourth quarter of $469 million, a 2 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 Global Off-Highway end markets partially offset by higher demand in the Outside North America On-Highway, Defense and Service Parts, Support Equipment & Other end markets, according to a press release.

Net Income for the quarter was $61 million compared to $13 million for the same period in 2015. Adjusted EBITDA, a non-GAAP financial measure, for the quarter was $158 million, or 33.8 percent of net sales, compared to $170 million, or 35.6 percent of net sales, for the same period in 2015. Net Cash Provided by Operating Activities for the quarter was $175 million compared to $175 million for the same period in 2015. Adjusted Free Cash Flow, a non-GAAP financial measure, for the quarter was $146 million compared to $147 million for the same period in 2015.

"Allison's fourth quarter 2016 results exceeded the full year guidance ranges we provided to the market on Oct. 24 principally due to stronger than anticipated demand conditions in North America Off-Highway service parts and Global On-Highway products," Allison Transmission Chairman and CEO Lawrence Dewey says. "Allison demonstrated solid operating margins and free cash flow while executing its well-defined approach to capital structure and allocation. During the fourth quarter, we settled $87 million of share repurchases and paid a dividend of $0.15 per share."

North America On-Highway end market net sales were down 14 percent from the same period in 2015 principally driven by lower demand for Rugged Duty Series and Highway Series models and down 3 percent on a sequential basis principally driven by lower demand for Transit/Other Bus and Pupil Transport/Shuttle Series models partially offset by higher demand for Rugged Duty Series models.

Service Parts, Support Equipment and Other end market net sales were up 14 percent from the same period in 2015 principally driven by higher demand for North America Off-Highway service parts and up 13 percent on a sequential basis principally driven by higher demand for North America Off-Highway and global On-Highway service parts.

Gross profit for the quarter was $218 million, a decrease of 2 percent from $222 million for the same period in 2015. Gross margin for the quarter was 46.4 percent, a decrease of 10 basis points from a gross margin of 46.5 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 and higher incentive compensation expense partially offset by lower manufacturing expense commensurate with decreased net sales.

Selling, general and administrative expenses for the quarter were $84 million, an increase of $2 million from $82 million for the same period in 2015. The increase was principally driven by higher incentive compensation expense partially offset by favorable product warranty adjustments.

Engineering – research and development expenses for the quarter were $25 million, an increase of $1 million from $24 million for the same period in 2015. The increase was principally driven by higher incentive compensation expense partially offset by the cadence of certain product development initiatives.

Net income for the quarter was $61 million compared to $13 million for the same period in 2015. The increase was principally driven by a 2015 Trade Name Impairment charge, favorable mark-to-market adjustments for our interest rate derivatives and favorable product warranty adjustments partially offset by decreased net sales and higher incentive compensation expense.

Adjusted EBITDA for the quarter was $158 million, or 33.8 percent of net sales, compared to $170 million, or 35.6 percent of net sales, for the same period in 2015. The decrease was principally driven by higher incentive compensation expense and decreased net sales partially offset by favorable product warranty adjustments.

Adjusted Free Cash Flow for the quarter was $146 million compared to $147 million for the same period in 2015, a decrease of $1 million. The decrease was principally driven by higher incentive compensation expense, decreased net sales and increased capital expenditures partially offset by favorable product warranty adjustments and increased incentive compensation accruals.

2017 Guidance

Allison expects 2017 net sales to be in the range of up 1.5 to 4.5 percent compared to 2016, an Adjusted EBITDA margin in the range of 33.5 to 35.5 percent and an Adjusted Free Cash Flow in the range of $345 to $385 million. Capital expenditures are expected to be in the range of $70 to $80 million, which includes maintenance spending of approximately $65 million. Cash income taxes are expected to be in the range of $55 to $65 million.