Navistar Names New CEO, Reports Q1 Results

March 7, 2013

Navistar International Corporation’s board of directors has appointed Troy A. Clarke president and CEO of the company, effective April 15, 2013. Clarke, who is currently Navistar’s president and chief operating officer, will also join the board.

Lewis B. Campbell, who has served as executive chairman and interim CEO since August 2012, will step down. James H. Keyes, a board member since 2002, will become non-executive chairman, effective April 15.

"I am honored to take on the role of CEO and join the board of Navistar," Clarke said. "In six short months, we have made significant progress on our turnaround, and I want to thank Lewis for his guidance and leadership during this period. Working together, we have implemented a number of important actions to set Navistar on the right path, and the company now has a strong platform to build upon going forward.”

Navistar also announced its first quarter earnings for 2013. The company experienced a net loss of $123 million, compared to a first quarter 2012 net loss of $153 million. Excluding discontinued operations, Navistar recorded a first quarter 2013 loss from continuing operations of $114 million, compared to a first quarter 2012 loss from continuing operations of $144 million.

"We are beginning to see concrete progress on each of our near-term priorities—improving our quality, launching our new SCR engine programs on schedule and delivering on our 2013 operating plan, which will put us on a path to profitability. Although we reported a first quarter loss, we believe we made solid progress in the first quarter toward these goals," said Campbell. "That progress includes submitting our 13-liter SCR engine for certification ahead of schedule, kicking off of pilot production for ProStar+ vehicles with the 13-liter SCR engine earlier this week, strengthening our quality performance and effectively managing things that we can control. These include aggressively managing inventories and significantly reducing discretionary spending enterprise-wide."

The company finished the first quarter 2013 with $1.19 billion in manufacturing cash and marketable securities, exceeding its cash guidance range of $950 million to $1.05 billion. Contributing factors included improvements in net working capital, delayed capital expenditures and better than expected structural costs.

"In order to move forward on our path to profitability, we recognize the need to do even more given current industry volumes and our short-term market share outlook in North America," said Campbell. "We believe our market share will begin to improve in the second half of 2013 with the full launch of our clean engine lineup. And while we are already on track to exceed our goal of reducing structural costs by $175 million this year, we recently launched a benchmarking initiative that has already identified additional cost savings to further lower our breakeven point in 2013."