Revenue during the quarter dropped 17.08 percent to $2,063 million from $2,488 million in the previous year period. Gross margin for the quarter contracted 41 basis points over the previous year period to 15.46 percent. Total expenses were 97.77 percent of quarterly revenues, up from 97.59 percent for the same period last year. That has resulted in a contraction of 18 basis points in operating margin to 2.23 percent.

Operating income for the quarter was $46 million, compared with $60 million in the previous year period.

However, the adjusted EBITDA for the quarter stood at $112 million compared with $209 million in the prior year period. At the same time, adjusted EBITDA margin contracted 297 basis points in the quarter to 5.43 percent from 8.40 percent in the last year period.

"In the fourth quarter and throughout the full year, we’ve demonstrated our ability to lower our break-even point and improve our operations," said Troy A. Clarke, Navistar president and chief executive officer. "We recorded our fourth consecutive year of adjusted EBITDA improvement and significantly improved our adjusted EBITDA margin year on year, despite a substantial decline in revenues primarily due to the challenging conditions in the Class 8 market."

Operating cash flow improves significantly
Navistar International Corporation has generated cash of $267 million from operating activities during the year, up 480.43 percent or $221 million, when compared with the last year.

The company has spent $67 million cash to meet investing activities during the year as against cash inflow of $316 million in the last year. It has incurred net capital expenditure of $224 million on net basis during the year, up 24.44 percent or $44 million from year ago.

The company has spent $353 million cash to carry out financing activities during the year as against cash inflow of $98 million in the last year period.

Cash and cash equivalents stood at $804 million as on Oct. 31, 2016, down 11.84 percent or $108 million from $912 million on Oct. 31, 2015.

Working capital drops significantly
Navistar International Corporation has witnessed a decline in the working capital over the last year. It stood at $556 million as at Oct. 31, 2016, down 33.33 percent or $278 million from $834 million on Oct. 31, 2015. Current ratio was at 1.17 as on Oct. 31, 2016, down from 1.22 on Oct. 31, 2015.

Cash conversion cycle (CCC) has decreased to 34 days for the quarter from 37 days for the last year period. Days sales outstanding went down to 39 days for the quarter compared with 41 days for the same period last year.

Days inventory outstanding was almost stable at 25 days for the quarter, when compared with the last year period. At the same time, days payable outstanding was almost stable at 29 days for the quarter, when compared with the previous year period.