oshkosh   Q306_Presentation
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oshkosh   Q306_Presentation oshkosh Q306_Presentation Presentation Transcript

  • Robert G. Bohn Earnings Conference Call Chairman, President and Chief Executive Officer Third Quarter Fiscal 2006 Charles L. Szews August 1, 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 fiscal 2007, 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 sustain flat operating income in its commercial segment and to raise operating income in its fire & emergency segment in fiscal 2007 despite anticipated lower industry demand resulting from changes to diesel engine emission 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 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 August 1, 2006. Except as set forth in such Form 8-K, we disclaim any obligation to update such forward-looking statements. 2
  • Oshkosh Third Quarter 2006 Highlights • Record Q3 financial results Third Quarter Results – Sales increased 8.4% $1,000 $90 – Operating income grew 31.2% $82.6 $900 $80 Operating Income (in millions) $63.0 – EPS increased 38.5% $800 $70 $887.9 – Exceeded previous estimates Sales (in millions) $700 $60 $49.2 $600 • Increased fiscal 2006 EPS $818.9 $50 $500 estimate range to $2.70 - $2.75 $599.8 $40 $400 • Net cash rose to $193.1 million $30 $300 $20 $200 • Initiated fiscal 2007 EPS estimate $10 $100 range of $3.05 - $3.15 $0 $0 2004 2005 2006 3
  • Acquisition of AK Specialty Vehicles • $130 million manufacturer of broadcast, homeland security and medical truck bodies • Provides important technology and purchasing power in electronics/ broadcasting • Growing global use of mobile MRI, CAT and PET technologies • Expected to be $0.05 accretive to fiscal 2007 • To be reported in fire and emergency segment 4
  • Acquisition of Iowa Mold Tooling • $115 million manufacturer of service vehicles and niche articulated cranes • Supports Oshkosh’s service expansion strategy • Serves growing mining sector • Expected to be $0.05 accretive in fiscal 2007 • To be reported in commercial segment 5
  • Commercial • Margin recovery continued in Q3 • Orders remained strong in North America • Exceptional performance from CON-E-CO batch plant business – Should strengthen further in 2007 • Successfully implemented second phase of ERP installation in Q3 6
  • Defense • New and remanufactured truck business drove solid results in Q3 • LVSR contract awarded to OSK • Submitted bid for Australian Defence Forces contract in July 2006 7
  • Fire and Emergency • Sharply improved results in Q3 as anticipated – Pierce performed well – Airport product sales heavily weighted to second half • Two component issues in Q2 resolved in Q3 • Strong fire apparatus orders • Looking forward to FRI fire apparatus show in September 8
  • Consolidated Results Dollars in millions Third Quarter Comments 2005 2006 • Commercial drove Net Sales $887.9 $818.9 sharply improved results! % Growth 8.4% 36.5% Operating Income $ 82.6 $ 63.0 • Fire and emergency also reported strong % Margin 9.3% 7.7% results % Growth 31.2% 28.1% • Defense realized Earnings Per Share $ 0.72 $ 0.52 steady growth % Growth 38.5% 20.9% 9
  • Fire and Emergency Dollars in millions Third Quarter Comments 2005 2006 • Resolved component issue sales delays Net Sales $255.3 $222.7 • Improved airport % Growth 14.7% 56.2% product sales mix, Operating Income $ 29.8 $ 23.1 as anticipated % Margin 11.7% 10.4% • Recent price increase % Growth 28.7% 75.4% spurred orders • Backlog up 6.5% 10
  • Defense Dollars in millions Comments Third Quarter 2005 2006 • Remanufactured and new truck sales drove Net Sales $291.4 $281.0 results % Growth 3.7% 47.1% • Parts and service sales Operating Income $ 49.0 $ 46.0 down due to delayed % Margin 16.8% 16.4% Supplemental bill % Growth 6.7% 35.4% • MTVR margin adjustment of $2.1 million in Q3 of 2005 • Backlog down 9.3% 11
  • Commercial Dollars in millions Comments Third Quarter 2005 2006 • Sales improved across segment Net Sales $350.6 $322.3 • Price increases % Growth 8.8% 18.5% benefiting earnings Operating Income $ 25.4 $ 7.2 • European refuse % Margin 7.2% 2.2% profitable in Q3; $5.1 million operating loss % Growth 252.0% (46.0)% in Q3 of 2005 • Backlog up 69.9% 12
  • Fiscal 2006 Estimates Sales of $3.40 - $3.45 Billion, Up 14.9% - 16.6% • Fire and emergency sales expected to rise by mid-teens percentage • Defense sales expected to grow 25.0% to 27.0% • Commercial sales expected to rise by high single digits percentage 13
  • Fiscal 2006 Estimates Operating Income of $321.0 - $327.0 Million, Up 20% to 22% • 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 be 2.5X higher – European refuse expected to be modestly profitable – North American margins expected to be up over 200 basis points 14
  • Fiscal 2006 Estimates Other Estimates (Dollars in millions) Fiscal 2006 Estimates Interest expense and other $0.5 (expense) Effective tax rate 37.8% Minority interest $0.5 (expense) Equity in earnings $2.5 Average shares outstanding 74,500,000 15
  • Fiscal 2006 Estimates • Annual EPS estimate range of $2.70 to $2.75, up 24% to 26% • Fourth quarter EPS estimate range of $0.60 to $0.65 compared to $0.58 in fourth quarter of fiscal 2005 16
  • Fiscal 2006 Estimates • Capital spending expected to approximate $64 million • Estimated balances at September 30,2006 – Debt of $100.0 - $110.0 million – Cash of $15.0 - $20.0 million 17
  • 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 $100-$150 million • Commercial sales, including Iowa Mold Tooling, expected to decline slightly 18
  • 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 about 150 basis points 19
  • 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 20
  • Fiscal 2007 Estimates • Annual EPS estimate range of $3.05 - $3.15 • Capital spending expected to Global Technology Center approximate $65 million • Estimated balances at September 30, 2007 – Debt of about $40 million – Cash of $90 - $110 million 21