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oshkosh Q207_Slides

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    oshkosh   Q207_Slides oshkosh Q207_Slides Presentation Transcript

    • Earnings Conference Call Second Quarter Fiscal 2007 May 3, 2007 Robert G. Bohn Chairman, President and Chief Executive Officer Charles L. Szews Executive Vice President and Chief Financial Officer and President, JLG Industries, Inc. 1 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 integrate the JLG Industries, Inc., Oshkosh Specialty Vehicles and Iowa Mold Tooling Co., Inc. acquisitions, the consequences of financial leverage associated with the JLG acquisition, the Company’s ability to turn around the Geesink Norba Group and Medtec businesses sufficiently to support their valuations resulting in no non-cash impairment charges for goodwill, the Company’s ability to adjust its operating expenses in the second half of 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 access equipment, commercial and fire & emergency markets, risks related to reductions in government expenditures, the uncertainty of government contracts, 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 May 3, 2007. Except as set forth in such Form 8-K, we disclaim any obligation to update such forward-looking statements. 2
    • Oshkosh Q2 2007 Highlights • Sales increased 96.6% to OSK Q2 Performance $1.66 billion (millions) • Operating income $2,000 $160.0 $1,800 increased 69.1% to $134.8 $140.0 $1,600 $1,661 Operating Income $120.0 Sales Revenue $1,400 $134.8 million $100.0 $1,200 $79.7 $1,000 $80.0 • EPS up 1.5% to $0.68 $62.6 $800 $60.0 $845 $600 $672 $40.0 • Large contract awards for $400 $20.0 $200 defense $0 $0.0 2005 2006 2007 • Met fiscal 2007 debt Sales Revenue Operating Income retirement target six months early 3
    • Access Equipment • Met financial and operations expectations in Q2 • Strong international markets, particularly in Europe • Strong aerial work platform business in U.S., but softer traditional telehandler business • BAUMA demonstrated power of JLG brand 4
    • Defense • Lower sales and operating income compared to prior year quarter – Scheduled deliveries shifted to second half of 2007 – Lower margin driven by product mix and FHTV contract renewal • Multiple contract awards during quarter – FHTV – MRAP – TPER – MTT • Strong funding outlook – Budget – Spring supplemental 5
    • Fire & Emergency • Continuing strong performance at Pierce • Successful PUC launch at FDIC show • Solid results in airport products and towing equipment groups • Consolidating activities at Oshkosh Specialty Vehicles 6
    • Commercial • Continued margin improvement at McNeilus • 2007 engine emissions standards changes expected to impact second half results • Significant progress at Geesink Norba Group in Q2: – Rationalized workforce and facilities – Leveraging facilities with JLG – Required Q2 charges • IMT integration progressing with solid results 7
    • JLG Integration Update • Met or exceeded significant 100 day goals • Numerous customer visits and trade shows – Power of cream and orange is evident • Expect to exceed previous fiscal 2007 synergy, earnings and cash flow targets • Solid progress building team and strategies to drive JLG forward 8
    • Consolidated Results Dollars in millions, except per share amounts Second Quarter Comments 2006 2007 • Defense timing and Net Sales $1,660.7 $844.8 product mix adversely % Growth 96.6% 25.6% impacted results Operating Income $ 134.8 $ 79.7 • JLG dilutive to EPS by $0.02 per share % Margin 8.1% 9.4% • $10.1 million ($0.09 % Growth 69.1% 27.3% per share) of inventory Earnings Per Share $ 0.68 $ 0.67 revaluation charges in Q2 % Growth 1.5% 28.8% • Re-priced Term Loan B and executed interest rate swap 9
    • Access Equipment Dollars in millions Second Quarter Comments 2006 2007 • Sales up in all regions Net Sales $707.9 NA worldwide(1) % Growth NA NA • Purchase accounting Operating Income $ 53.2 NA charges: % Margin 7.5% NA - $8.5 million inventory revaluation % Growth NA NA - $16.1 million recurring amortization and depreciation • Backlog up 26.0%(1) (1) Compared to JLG stand-alone results. 10
    • Defense Dollars in millions Second Quarter Comments 2006 2007 Net Sales $306.0 $334.2 • Results consistent with previous estimates % Growth (8.4)% 59.4% • Product mix and FHTV Operating Income $ 52.8 $ 65.8 contract renewal % Margin 17.3% 19.7% affected margins % Growth (19.8)% 33.2% • Production increase on schedule • Backlog up 46.0% 11
    • Fire & Emergency Dollars in millions Second Quarter Comments 2006 2007 • Sales and margin Net Sales $294.2 $221.3 growth at Pierce % Growth 32.9% 3.8% • Solid towing product Operating Income $ 27.6 $ 17.9 and airport product % Margin 9.4% 8.1% results % Growth 54.6% (5.9)% • Includes $35.8 million of sales from OSV • Backlog up 11.9%, including OSV 12
    • Commercial Dollars in millions Second Quarter Comments 2006 2007 • Continued strong Net Sales $361.9 $299.5 domestic sales volume % Growth 20.9% 17.3% (pre-buy carryover for Operating Income $ 22.1 $ 15.3 both concrete & refuse) % Margin 6.1% 5.1% • Workforce reductions and other adjustments % Growth 44.3% 137.5% totaled $4.9 million • Includes $28.8 million of sales from IMT • Backlog down 31.1%, including IMT 13
    • Oshkosh Fiscal 2007 Estimates Sales of $6.1 to $6.2 billion • Expect access equipment sales between $2.35 and $2.45 billion • Anticipate defense sales increase of $100 to $150 million • Expect fire and emergency sales to increase by approximately $200 million • Commercial sales expected to be flat; includes impact of IMT 14
    • Oshkosh Fiscal 2007 Estimates Operating Income of $568 to $580 Million • Anticipate access equipment margins of about 9.5%, including purchase accounting charges of $63 to $65 million • Expect defense margins to decline by approximately 50 to 100 bps • Project fire & emergency margins to be even with prior year • Commercial margins expected to decline by 50-100 bps 15
    • Oshkosh Fiscal 2007 Estimates Other Estimates Fiscal 2007 Estimates Interest expense and other $205 to $215 million (expense) Effective tax rate 36.0% Minority interest $0.5 million (expense) Equity in earnings $5.5 million (income) Average shares outstanding 75,000,000 16
    • Oshkosh Fiscal 2007 Estimates • Estimated annual EPS range of $3.15 - $3.25 • Estimated Q3 EPS range of $0.90 - $0.95 • Anticipated capital spending of approximately $105 to $115 million • Debt expected to be approximately $3.0 - $3.1 billion at fiscal year-end 17
    • Q2 2007 Summary • Reduced business risk – Strong debt pay-down – Aggressive steps taken to improve European refuse business • Defense margins moving into lower, more sustainable range, but outlook is strengthening • Access equipment beginning to contribute to overall performance – Forecasting stronger earnings • Success of diversification strategy is evident 18
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