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oshkosh   Q106_Presentation
 

oshkosh Q106_Presentation

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    oshkosh   Q106_Presentation oshkosh Q106_Presentation Presentation Transcript

    • Robert G. Bohn Earnings Conference Call Chairman, President and Chief Executive Officer First Quarter Fiscal 2006 Charles L. Szews February 2, 2006 Executive Vice President and Chief Financial Officer
    • 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 2006 and beyond, the Company’s ability to continue the turnaround of the business of the Geesink Norba Group sufficiently to support its valuation resulting in no non-cash impairment charge for Geesink Norba Group goodwill, the Company’s ability to increase its operating income margins at McNeilus, the ability of the Company to recover steel and component cost increases from its customers, risks associated with a three-phase enterprise resource planning system implementation at McNeilus, 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 challenges of identifying, completing and integrating acquisitions, 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 February 2, 2006. Except as set forth in such Form 8-K, we disclaim any obligation to update such forward-looking statements. 2
    • Oshkosh First Quarter 2006 Highlights • Record financial results First Quarter Results – Sales increased 22.5% $1,000 $90 $87.0 – Operating income grew 28.6% $900 Operating Income (in millions) $80 $800 $67.6 $70 – EPS increased 28.6% $790.3 Sales (in millions) $700 $60 – Exceeded previous estimates $600 $644.9 $46.7 $50 $500 • Increased fiscal 2006 EPS $40 $493.2 $400 estimate range to $2.55 - $2.65 $30 $300 $20 $200 • Raised dividend rate by 48% to $10 $100 $0.10 / share $0 $0 2003 2004 2005 3
    • Progress on Key Initiatives In First Quarter Fiscal 2006 • The Geesink Norba Group delivered second consecutive profitable quarter – Cost reductions should accelerate in 2006 as outsourcing strategy gains ground • Positive progress on McNeilus turnaround – Launch of enterprise resource planning system and configurator for mixers impacted production and sales – Production back on schedule by December 31 – Improved pricing largely offset impact of lower sales volume on earnings 4
    • Commercial • Earnings exceeded expectations for first quarter • Positive outlook for European refuse business for 2006 – Outsourcing strategy meeting expectations – Significant lean opportunities • Demand favorable in U.S. concrete placement and refuse London® is the most popular brand – Modest pre-buy expected from 2007 diesel of concrete mixer in Canada. engine emissions standards change • Continue to expect margin improvement in second and third quarters of fiscal 2006 5
    • Commercial Revolution® Introduced to Front-Discharge Mixers • Launched at World of Concrete in mid-January • Offers full 2,000 pound weight savings • Reduces annual operating costs by $7,500 Oshkosh® S-Series front-discharge mixer with Revolution® drum 6
    • Defense • Significantly outperformed again – Sales of $363.1 million, up 68.5% – New and remanufactured heavy-payload trucks, and parts and service sales, each up over 60% • Received LVSR request for proposal – Submitted bid on time in 30 days – Decision anticipated in third quarter of fiscal 2006 • Bridge supplemental bill passed in December 2005 – Provided significant funding for fiscal 2007 and fiscal 2008 sales 7
    • Fire and Emergency • Earnings exceeded first quarter expectations • Significant new product introductions – JerrDan® 60-ton Rotator – Revolutionary JerrDan Side Loading Vehicle Retriever • Pierce expansion on track to meet demand • End markets remain healthy 8
    • Consolidated Results Dollars in millions First Quarter Comments 2005 2006 • Defense drove results Net Sales $790.3 $644.9 • Favorable defense % Growth 22.5% 30.8% adjustments totaling Operating Income $ 87.0 $ 67.6 $12.2 million in 2005 ($0.10 per share) % Margin 11.0% 10.5% % Growth 28.6% 44.7% • Favorable product liability settlements Earnings Per Share $ 0.72 $ 0.56 totaling $4.2 million % Growth 28.6% 33.3% at Corporate in 2005 ($0.04 per share) 9
    • Fire and Emergency Dollars in millions First Quarter Comments 2005 2006 • Strong fire apparatus sales and improved Net Sales $216.4 $194.2 pricing benefited % Growth 11.5% 58.0% earnings Operating Income $ 20.9 $ 18.4 • Lower airport product % Margin 9.7% 9.5% sales % Growth 13.4% 58.9% • Expansion-related costs also impacted quarter • Backlog up 4.1% 10
    • Defense Dollars in millions Comments First Quarter 2005 • Truck and parts and 2006 service sales each up Net Sales $363.1 $215.5 more than 60% % Growth 68.5% 13.2% • MTVR adjustment of $8.5 million in 2005 Operating Income $ 72.6 $ 51.7 • Recovery of pre-contract % Margin 20.0% 24.0% costs of $3.7 million in 2005 % Growth 40.5% 39.1% • Backlog down 3.0%, but bridge supplemental funding not yet under contract 11
    • Commercial Dollars in millions Comments First Quarter • Sales impacted by ERP 2005 2006 implementation Net Sales $221.2 $241.6 • European refuse % Growth (8.4)% 32.0% profitable in Q1; $2.6 million operating loss Operating Income $ 8.3 $ 5.6 in 2005 % Margin 3.8% 2.3% • Price increases % Growth 47.6% (21.7)% beginning to benefit earnings • Backlog up 29.1% 12
    • Fiscal 2006 Estimates Sales of $3.3 - $3.4 Billion, Up 11.5% - 15% • Fire and emergency sales expected to rise by low teens percentage • Defense sales expected to grow 22.5% to 27.0% • Commercial sales expected to rise by low single digits percentage 13
    • Fiscal 2006 Estimates Operating Income of $316.5 - $329.0 Million, Up 18% to 23% • Anticipate flat margins in fire and emergency • Expect defense margins to decline about 200 basis points – No MTVR margin adjustments expected in 2006 • Expect commercial margins to double – European refuse expected to be modestly profitable – U.S. margins expected to be up over 100 basis points 14
    • Fiscal 2006 Estimates Other Estimates (Dollars in millions) Fiscal 2006 Estimates Interest expense and other $3.5 (expense) Effective tax rate 39.0% Minority interest $0.5 (expense) Equity in earnings $2.0 Average shares outstanding 75,500,000 15
    • Fiscal 2006 Estimates • Annual EPS estimate range of $2.55 to $2.65, up 17.0% to 21.6% • Second quarter EPS of $0.58 to $0.62 compared to $0.52 in second quarter of fiscal 2005 16
    • Fiscal 2006 Estimates Ground-breaking for New Product Development Center • Capital spending expected to approximate $60 million • Estimated balances at September 30,2006 – Debt of $20.0 - $25.0 million – Cash of $200.0 - $225.0 million 17