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Oshkosh
 

Oshkosh

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    Oshkosh Oshkosh Presentation Transcript

    • Robert G. Bohn Earnings Conference Call Chairman, President and Chief Executive Officer Fourth Quarter Fiscal 2006 October 31, 2006 Charles L. Szews Executive Vice President and Chief Financial Officer Patrick N. Davidson Vice President of Investor Relations
    • Forward Looking Statements Our remarks that follow, including answers to your questions and these slides, include statements that we believe are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act. All of our statements, other than statements of historical fact, including statements regarding Oshkosh Truck’s future financial position, business strategy, targets, projected sales, costs, earnings, capital expenditures and debt levels, and plans and objectives of management for future operations, are forward-looking statements. In addition, forward-looking statements generally can be identified by the use of words such as “expect,” “intend,” “estimates,” “anticipate,” “believe,” “should,” “plans,” or similar words. We cannot give any assurance that such expectations will prove to be correct. Some factors that could cause actual results to differ materially from our expectations include the accuracy of assumptions made with respect to our expectations for fiscal 2007, the Company’s ability to close and integrate the JLG Industries, Inc. acquisition and integrate the AK Specialty Vehicles and Iowa Mold Tooling Co., Inc. acquisitions, the consequences of financial leverage associated with the JLG acquisition, the Company’s ability to turnaround the Geesink Norba Group business sufficiently to support its valuation resulting in no non-cash impairment charge for Geesink Norba Group goodwill, the Company’s ability to grow operating income in fiscal 2007 at certain of its business units that anticipate lower industry demand resulting from changes to diesel engine emissions standards effective January 1, 2007, the expected level of U.S. Department of Defense procurement of the Company’s products and services, the cyclical nature of the Company’s commercial and fire and emergency markets, risks related to reductions in government expenditures, the uncertainty of government contracts, the success of the launch of the Revolution® drum, and risks associated with international operations. Additional information concerning these and other factors is contained in our filings with the SEC, including our Form 8-K filed October 31, 2006. Except as set forth in such Form 8-K, we disclaim any obligation to update such forward-looking statements. 2
    • Oshkosh Fiscal 2006 Highlights • Tenth consecutive year of improving financial performance – Sales increased 15.8% to $3.43 billion – Operating income increased 22.0% to $325.9 million – Operating income margins up 50 b.p. to 9.5% – EPS up 26.6% to $2.76; higher than previous estimates • Closed two tuck-in acquisitions; expected to add $245 million of annual sales 3
    • Oshkosh Fiscal 2006 Highlights (cont.) • Improved business execution – All segments reported at least double-digit percentage gains in operating income – Commercial segment operating income margins began recovery – Geesink Norba Group restored to annual profitability • Lean initiative gaining steam – Chartered cost reduction teams making a difference • Continued innovation leadership – Launched Velocity® and Impel® – Awarded LVSR contract – Special services vehicle for command & communications 4
    • Recent Oshkosh Highlights Announced Agreement to Acquire JLG Industries, Inc. • Outstanding track record of shareholder value creation and acquisition integration • JLG is the world leader in aerial work platforms and telehandlers • Acquisition objectives: – Support growth rate of >15% Our Kind of Company – Diversify to complement fast- growing defense business – Execute within goals of long-term acquisition strategy 5
    • Oshkosh Fourth Quarter 2006 Highlights • Record Q4 financial results Fourth Quarter Results – Sales increased 9.8% $1,000 $90 – Operating income grew 3.5% $76.6 $900 $80 Operating Income (in millions) $74.0 – EPS increased 13.8% $800 $70 $904.4 Sales (in millions) $49.4 $700 – Exceeded previous estimates $60 $600 $823.7 $50 • Spent $272.8 million for $500 $651.1 $40 acquisitions $400 $30 $300 • Reaffirmed Oshkosh stand-alone $20 $200 fiscal 2007 EPS estimate range of $10 $100 $3.05 - $3.15 $0 $0 2004 2005 2006 6
    • Fire and Emergency • Robust orders in Q4 support fiscal 2007 outlook • Began integration of AKSV – Strong team – Larger than anticipated U.K. order • Inventory write-off and other charges at ambulance facility hampered results 7
    • Defense • Slow parts and service business in Q4 – Expect recovery in first half of fiscal 2007 • 2007 Defense Appropriations bill and Iraqi supplemental favorable to Oshkosh – Largely benefits fiscal 2008 • DoD planning for 140,000 troops in Iraq through 2010 • Increasing demand for armored troop carriers 8
    • Commercial • Margin recovery continued in Q4 • Orders remained strong in North America • Chassis issues in France pausing Geesink Norba Group recovery • Began integration of IMT – Strong team – Excellent synergy potential • Poised to implement third and final phase of ERP installation in Q1, 2007 9
    • Consolidated Results Dollars in millions Comments Fourth Quarter 2005 2006 • Commercial results Net Sales $904.4 $823.7 up sharply % Growth 9.8% 26.5% • Fire and emergency Operating Income $ 76.6 $ 74.0 also reported strong % Margin 8.5% 9.0% results % Growth 3.5% 49.6% • Defense parts and Earnings Per Share $ 0.66 $ 0.58 service business % Growth 13.8% 38.1% declined 10
    • Fire and Emergency Dollars in millions Comments Fourth Quarter 2005 2006 • Improved airport product sales mix, Net Sales $268.4 $211.4 partially offset by % Growth 27.0% 6.4% charges at Operating Income $ 21.4 $ 19.0 ambulance business % Margin 8.0% 9.0% • Includes $16.5 % Growth 12.6% 0.4% million of sales from AK • Backlog up 22.2% 11
    • Defense Dollars in millions Comments Fourth Quarter 2005 2006 • Parts and service sales and earnings Net Sales $328.6 $355.0 down due to tight % Growth (7.4)% 58.1% budget Operating Income $ 54.8 $ 63.2 • Remanufactured and % Margin 16.7% 17.8% new truck sales up % Growth (13.2)% 87.4% • Backlog down 29.0% 12
    • Commercial Dollars in millions Comments Fourth Quarter • Sales rose in concrete 2005 2006 placement Net Sales $319.1 $266.5 • Price increases % Growth 19.7% 13.7% benefiting earnings Operating Income $ 17.2 $ 4.5 • $0.9 million operating % Margin 5.4% 1.7% loss in European refuse in 2006 % Growth 278.4% (6.6)% • Includes $15.9 million of sales from IMT • Backlog up 92.2% 13
    • Oshkosh Stand-Alone Fiscal 2007 Estimates Sales of $3.65 - $3.75 billion • Fire and emergency sales, including AK Specialty, expected to rise by mid-teens percentage • Defense sales expected to grow by $125-$175 million • Commercial sales, including Iowa Mold Tooling, expected to decline slightly 14
    • Oshkosh Stand-Alone Fiscal 2007 Estimates Operating Income of $373.0 - $385.0 Million • Anticipate fire and emergency margins to be up about 50 basis points • Expect flat margins in defense • Expect commercial margins to improve over 100 basis points 15
    • Oshkosh Stand-Alone Fiscal 2007 Estimates Other Estimates (Dollars in millions) Fiscal 2007 Estimates Interest expense and other $6.5 (expense) Effective tax rate 37.0% Minority interest $0.8 (expense) Equity in earnings $1.8 Average shares outstanding 76,000,000 16
    • Oshkosh Stand-Alone Fiscal 2007 Estimates • Annual EPS estimate range of $3.05 - $3.15 Global Technology Center • Q1 EPS estimate range of $0.50 - $0.55 • Capital spending expected to approximate $65 million 17
    • Impact of JLG Acquisition on Fiscal 2007 Estimates • Expect acquisition to close in December or January • Anticipate acquisition to be modestly accretive in fiscal 2007 – Higher accretion anticipated in fiscal 2008 • Oshkosh expects to provide further details in February 2007, post-closing 18