oshkosh Q108_earnings_slides

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oshkosh Q108_earnings_slides

  1. 1. Earnings Conference Call First Quarter Fiscal 2008 February 1, 2008 Robert G. Bohn Chairman and Chief Executive Officer Charles L. Szews President and Chief Operating Officer David M. Sagehorn Executive Vice President, Chief Financial Officer and Treasurer Patrick N. Davidson Vice President of Investor Relations
  2. 2. 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 of 1995. All statements other than statements of historical fact, including, without limitation, statements regarding Oshkosh Truck’s future financial position, business strategy, targets, projected sales, costs, earnings, capital expenditures, debt levels and cash flows, and plans and objectives of management for future operations, are forward-looking statements. Forward-looking statements generally can be identified by the use of words such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “should,” “project” or “plan,” or the negative thereof or variations thereon or similar terminology are generally intended to indentify forward-looking statements. These forward- looking statements are not guarantees of future performance and are subject to risks, uncertainties, assumptions and other factors, some of which are beyond the Company’s control, which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Those factors include the challenges of integrating the acquired JLG business; the consequences of financial leverage associated with the JLG acquisition; the Company’s ability to turn around its Geesink Norba Group business sufficiently to support its current valuation resulting in no impairment charge; the expected level and timing of U.S. Department of Defense procurement of products and services and funding thereof; the cyclical nature of the Company’s access equipment, commercial and fire & emergency markets, especially during a recession, which the U.S. economy may be entering; risks related to reductions in government expenditures and the uncertainty of government contracts; risks associated with international operations and sales, including foreign currency fluctuations; risks related to the collectibility of access equipment receivables and the potential for increased costs relating to compliance with changes in laws and regulations. Additional information concerning these and other factors is contained in our filings with the SEC, including our Form 8-K filed February 1, 2008. Except as set forth in such Form 8-K, we disclaim any obligation to update such forward-looking statements. 2
  3. 3. Oshkosh Fiscal Q1 2008 Highlights OSK Q1 Performance Sales increased 49.0% to $1.5 (millions) billion $1,800 $150.0 Operating income increased $1,600 $140.0 $1,500 $1,400 $130.0 Operating Income 31.5% to $109.9 million Sales Revenue $1,200 $120.0 $1,007 $1,000 $110.0 EPS down 9.1% to $0.50 $790 $800 $100.0 $109.9 $600 $90.0 Maintaining FY 2008 EPS $400 $80.0 $87.0 $83.6 estimate range of $4.15 to $200 $70.0 $0 $60.0 $4.35 2006 2007 2008 Sales Revenue Operating Income Global initiatives and cost reductions buttressing outlook 3
  4. 4. Oshkosh Corporate Initiatives Upgraded supply chain team with key hires – New CPO – New logistics management – Expanding Asian procurement team – Adding segment and corporate talent Announced proposed name change – Better represents our diverse portfolio – Pending shareholder approval 4
  5. 5. Access Equipment Strong international markets more than offset weaker North American telehandler sales Negotiations with large North American rental companies mostly complete, but not in backlog Continuing to focus on achieving synergy targets Opened new parts fulfillment center in Europe 5
  6. 6. Defense Solid FY08 outlook; pending supplemental bill would support strong FY09 Announcement of JLTV teaming agreement with Northrop Grumman – Fusion of tactical vehicle and communications expertise – Leaders in innovation, design, production and logistics – Team for the future, not just today Six unit test order for MRAP II Bull™ vehicles 6
  7. 7. Fire & Emergency Weaker municipal spending and effects from 2007 engine pre-buy are impacting fire apparatus market PUC continues to generate strong interest among fire departments Towing and recovery market impacted by high oil prices and economic conditions Continued strong international airport products activity Weaker mobile medical and broadcast vehicle market demand 7
  8. 8. Commercial U.S. concrete placement business operating at recession-like pace – Managing costs aggressively – Growing acceptance of Revolution® mixer drum Expect flat domestic refuse volume in modestly down market Geesink Norba Group (GNG) facility rationalization activities progressing on plan – Solid order activity 8
  9. 9. Consolidated Results (Dollars in millions) First Quarter Comments 2007 2008 • Strong results in access equipment and Net Sales $1,499.9 $1,006.8 defense % Growth 49.0% 27.4% • Economic weakness Operating Income $ 109.9 $ 83.6 impacting fire & % Margin 7.3% 8.3% emergency and % Growth 31.5% (3.9)% especially commercial Earnings Per Share $ 0.50 $ 0.55 • Solid cash generation in seasonally soft % Growth (9.1)% (23.6)% quarter 9
  10. 10. Access Equipment (Dollars in millions) First Quarter Comments 2007 2008 • North American results down; affected by weak Net Sales $610.5 $117.7 telehandler market % Growth NM NA • Generally strong results Operating Income $ 61.1 $ 2.4 in international markets % Margin 10.0% 2.0% • Backlog down 21.9% % Growth NM NA vs. prior year • Large North American rental company orders not yet in backlog 10
  11. 11. Defense (Dollars in millions) First Quarter Comments 2007 2008 • Continued strong demand for new and Net Sales $398.3 $311.7 remanufactured trucks % Growth 27.8% (14.2)% • Lower parts & service Operating Income $ 63.9 $ 54.6 volume % Margin 16.0% 17.5% • Backlog up 68.5% % Growth 16.9% (24.8)% 11
  12. 12. Fire & Emergency (Dollars in millions) First Quarter Comments 2007 2008 • Strong Pierce and airport products sales Net Sales $272.6 $266.0 % Growth 2.5% 22.9% • Weakness at JerrDan and Oshkosh Specialty Operating Income $ 22.2 $ 24.5 Vehicles % Margin 8.2% 9.2% • Backlog down 17.2% % Growth (9.3)% 17.3% 12
  13. 13. Commercial (Dollars in millions) Comments First Quarter 2007 • Weak market 2008 conditions, seasonal Net Sales $230.4 $319.0 softness and GNG % Growth (27.8)% 44.2% charges drove loss Operating Income $(10.2) $ 20.8 • Solid refuse orders % Margin (4.4)% 6.5% globally % Growth (149.1)% 150.3% • Cost reductions mitigating weak market conditions • Backlog down 33.0% 13
  14. 14. Oshkosh Fiscal 2008 Estimates Revenue of $7.1 to $7.3 billion Expectations: Access equipment sales to increase about 25% Defense sales to grow approximately 25% Fire & emergency sales to increase approximately 5% Commercial sales to decline 15% to 20% 14
  15. 15. Oshkosh Fiscal 2008 Estimates Operating Income of $675 to $700 million Expectations: Access equipment margins to improve by 150 to 200 bps Defense margins to decline by 250 to 300 bps Fire & emergency margins to approximate fiscal 2007 levels Commercial margins to decline by 150 to 200 bps Corporate expense to increase by approximately $30 million 15
  16. 16. Oshkosh Fiscal 2008 Estimates Other Estimates Fiscal 2008 Estimates Interest expense and other $215 to $220 million (expense) Effective tax rate 33.5% Equity in earnings $3.5 to $4.0 million (income) Average shares outstanding 75.2 million 16
  17. 17. Oshkosh Fiscal 2008 Estimates FY08 EPS estimate range of $4.15 to $4.35 Q2 EPS estimate range of $0.85 to $0.90 – Projecting near doubling of access equipment earnings and strong defense earnings Capital spending expected to approximate $110 million Expect debt between $2.65 and $2.75 billion at fiscal year-end 17
  18. 18. Fiscal Q1 2008 Summary Strong demand for access equipment and defense businesses Maintaining full year EPS estimates with global initiatives and cost reductions supporting outlook despite challenging economic landscape Key announcements for defense with JLTV teaming agreement and the Bull™ Slowdown after 2007 engine emissions pre-buy and macroeconomic issues pressuring commercial and fire & emergency segments 18

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