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    OSK_Q4_2008_Earnings_Release_Slides OSK_Q4_2008_Earnings_Release_Slides Presentation Transcript

    • Robert G. Bohn Chairman and Chief Executive Officer Charles L. Szews President and Chief Operating Officer David M. Sagehorn Executive Vice President and Chief Financial Officer Patrick N. Davidson Vice President of Investor Relations Built strong. Building for the future. Earnings Conference Call Fourth Quarter Fiscal 2008 November 3, 2008
    • 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 the Company’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. When used in this presentation, 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 identify 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. These factors include the consequences of financial leverage associated with the JLG acquisition, especially given recent turmoil in the credit markets, the level of the Company’s borrowing costs and the Company’s ability to maintain compliance with financial covenants in its credit agreement; the cyclical nature of the Company’s access equipment, commercial and fire & emergency markets, especially during a global economic downturn and credit crisis; the Company’s ability to offset higher steel and raw material costs through other cost decreases or product selling price increases; the expected level and timing of U.S. Department of Defense procurement of products and services and funding thereof; risks related to reductions in government expenditures and the uncertainty of government contracts; risks associated with international operations and sales, including foreign currency fluctuations; the Company’s ability to turn around its Geesink business; 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 and assumptions is contained in our filings with the SEC, including our Form 8-K filed November 3, 2008. Except as set forth in such Form 8-K, we disclaim any obligation to update such forward-looking statements. Built strong. OSK - Fiscal Q4 2008 Conference Call - Nov. 3, 2008 Building for the future. 2
    • Oshkosh Fiscal Q4 2008 Highlights Sales increased 5.8% OSK Q4 Performance to $1.9 billion (millions) Operating income decreased $300.0 $2,000 32% to $122 million $1,800 $1,897 Operating Income $250.0 $1,792 $1,600 EPS decreased 37% to $0.72, $1,400 Net Sales $200.0 but exceeded previous estimates $1,200 $1,000 $150.0 $179.2 Inventory reduced by $800 $904 $100.0 $600 $122.1 $241 million $400 $50.0 $76.6 $200 $202 million of debt reduction $0 $0.0 2006 2007 2008 Net Sales Operating Income Built strong. OSK - Fiscal Q4 2008 Conference Call - Nov. 3, 2008 Building for the future. 3
    • Oshkosh Fiscal 2008 Highlights Sales increased 13.2% to $7.1 billion – International sales 30% of total, reaching $2.1 billion – Market share gains and record orders at Pierce and domestic refuse Operating income decreased 1.5% to $582 million* EPS decreased 5.9% to $3.37* $283 million of debt reduction Decisive actions taken to raise prices, reduce costs and drive cash flow in the face of: – North American and European economic downturn, escalating steel and fuel costs and credit crisis Continued to improve talent across the Company * Figures exclude non-cash charges to operating income for asset impairment of $175.2 million or $173.1 million net of tax Built strong. OSK - Fiscal Q4 2008 Conference Call - Nov. 3, 2008 Building for the future. 4
    • Current State Conditions Market volatility and credit crisis make it very difficult to project fiscal 2009 Defense, fire and domestic refuse backlogs partially mitigate difficulties Better positioned to address challenging conditions – Improved cost structure; eliminated an expected $100 million of annual costs – Lowered debt and inventories – Actively sourcing in low-cost countries – Re-energizing operations with Global Manufacturing Services executive Moving forward with plan seeking to avoid or delay credit agreement amendment in fiscal 2009 – Action plans to drive $500 million or more in debt reduction – Will assess ability to achieve plan quarterly Continuing to invest in limited global and new product development initiatives Built strong. OSK - Fiscal Q4 2008 Conference Call - Nov. 3, 2008 Building for the future. 5
    • Access Equipment Strong results in emerging markets did not offset weakness in North America and, to a lesser extent, Western Europe – Second highest fiscal Q4 sales for JLG Timing of price increase limiting recovery of costs Responsible inventory reduction Outlook for 2009 – North America – Europe – ROW Built strong. OSK - Fiscal Q4 2008 Conference Call - Nov. 3, 2008 Building for the future. 6
    • Defense Continued truck and parts & service growth during quarter Recently announced FHTV contract (HEMTT A4) Additional MTVR reducible-height armor kit award UK LET 2 preferred bidder notification Built strong. OSK - Fiscal Q4 2008 Conference Call - Nov. 3, 2008 Building for the future. 7
    • Fire & Emergency Pierce continued to gain share and strengthen backlog, even with softer municipal spending Continued strong international airport products activity, primarily in Asia Recent uptick in broadcast vehicle activity Wilson Jones promoted to segment president Built strong. OSK - Fiscal Q4 2008 Conference Call - Nov. 3, 2008 Building for the future. 8
    • Commercial U.S. concrete markets remain depressed Domestic refuse collection vehicle sales grew in slightly down market CNG-powered market is growing – 40+% savings versus diesel – After credits, affordable upfront cost Geesink Norba exiting restructuring phase – Fiscal 2009 expected to benefit from actions taken in fiscal 2008 Built strong. OSK - Fiscal Q4 2008 Conference Call - Nov. 3, 2008 Building for the future. 9
    • Consolidated Results (Dollars in millions, except per share amounts) Fourth Quarter Comments 2008 2007 Sales led by defense, Net Sales $1,896.5 $1,792.4 fire & emergency and domestic refuse % Growth 5.8% 98.2% businesses Operating Income $122.1 $179.2 Margins impacted by: – Volume % Margin 6.4% 10.0% – Adverse sales mix % Growth (31.9)% 134.1% – Unrecovered steel and other costs Earnings Per Share $0.72 $1.14 $202 million of debt % Growth (36.8)% 72.7% reduction Built strong. OSK - Fiscal Q4 2008 Conference Call - Nov. 3, 2008 Building for the future. 10
    • Access Equipment (Dollars in millions) Comments Fourth Quarter 2008 2007 Lower revenues in North America and Net Sales $742.1 $840.0 Western Europe % Growth (11.7)% NA Margin decline due to: – Lower volume Operating Income $50.2 $114.5 – Steel costs % Margin 6.8% 13.6% – Adverse product mix % Growth (56.2)% NA Backlog down 61.4% vs. prior year Built strong. OSK - Fiscal Q4 2008 Conference Call - Nov. 3, 2008 Building for the future. 11
    • Defense (Dollars in millions) Comments Fourth Quarter 2008 2007 Increased truck and parts & service sales Net Sales $553.4 $422.5 % Growth 31.0% 28.6% Margin impacted by higher volume on lower margin contracts Operating Income $75.1 $72.4 % Margin 13.6% 17.1% Backlog down 22.9% % Growth 3.8% 32.0% vs. prior year due largely to timing of FHTV3 contract negotiations Built strong. OSK - Fiscal Q4 2008 Conference Call - Nov. 3, 2008 Building for the future. 12
    • Fire & Emergency (Dollars in millions) Fourth Quarter Comments 2008 2007 Sales driven by: Net Sales $366.5 $291.8 – Domestic fire apparatus – Timing of international % Growth 25.6% 8.7% fire apparatus deliveries – Airport products Operating Income $33.2 $26.3 Margins impacted by: % Margin 9.1% 9.0% – Volume % Growth 26.2% 22.8% – Higher costs Backlog up 9.6% vs. prior year Built strong. OSK - Fiscal Q4 2008 Conference Call - Nov. 3, 2008 Building for the future. 13
    • Commercial (Dollars in millions) Comments Fourth Quarter 2008 2007 Concrete markets remain weak in U.S. Net Sales $261.2 $249.6 % Growth 4.7% (21.8)% Continued gains with domestic refuse orders Operating Loss $(6.9) $(3.1) Margins impacted by: % Margin (2.6)% (1.2)% – Geesink rationalization % Growth (123.7)% (118.0)% and efficiency costs – Concrete volumes Backlog flat with prior year Built strong. OSK - Fiscal Q4 2008 Conference Call - Nov. 3, 2008 Building for the future. 14
    • Oshkosh Fiscal 2009 Estimates Revenue of $6.3 to $6.7 billion Expectations: Access Equipment sales to decrease approximately 30% Defense sales to increase approximately 20-25% Fire & Emergency sales to decrease approximately 5-10% Commercial sales flat to down approximately 10% Built strong. OSK - Fiscal Q4 2008 Conference Call - Nov. 3, 2008 Building for the future. 15
    • Oshkosh Fiscal 2009 Estimates Operating Income of $350 to $400 million Expectations: Access Equipment margins of approximately 3.5% to 4.5% Defense margins to decline by 200 to 250 bps Fire & Emergency margins to increase approximately 100 to 150 bps Commercial margins slightly better than break-even Corporate expenses flat to slightly down Built strong. OSK - Fiscal Q4 2008 Conference Call - Nov. 3, 2008 Building for the future. 16
    • Oshkosh Fiscal 2009 Estimates Other Estimates Interest expense and other Approximately $180 million (expense)* Effective tax rate 33% Equity in earnings Approximately $4.0 million (income) Average shares outstanding 75.0 million * Assumes no credit agreement amendment Built strong. OSK - Fiscal Q4 2008 Conference Call - Nov. 3, 2008 Building for the future. 17
    • Oshkosh Fiscal 2009 Estimates FY09 EPS estimate range* of $1.65 to $2.05 Loss expected in seasonally weak first quarter – Credit crisis impacting demand – Unrecovered steel and other costs * Assumes no credit agreement amendment Built strong. OSK - Fiscal Q4 2008 Conference Call - Nov. 3, 2008 Building for the future. 18
    • Oshkosh Financing Update $202 million debt reduction in Q4 – In compliance with financial covenants at Sept. 30, 2008 Driving plan seeking to avoid or delay credit agreement amendment in fiscal 2009 that requires: – Delivering earnings at higher end of estimate range – Achieving $500 million or more in debt reduction Tightly managing spending – Further reductions likely if demand softens Continuing actions to reduce working capital – Strong focus on inventory reduction – Negotiating European receivables sales program Limiting capital expenditures to $60 million Sufficient liquidity, even if amendment is necessary Built strong. OSK - Fiscal Q4 2008 Conference Call - Nov. 3, 2008 Building for the future. 19
    • Oshkosh Summary Global market conditions are volatile and difficult to project, but Oshkosh is moving forward with: – Powerful leading brands – Prudent investments in key global markets – Value-driven sourcing – Lower cost structure to mitigate weak market conditions – Manufacturing excellence initiatives – Cash generation to deliver debt reduction The Oshkosh team is Built Strong and … …committed to Building for the Future Built strong. OSK - Fiscal Q4 2008 Conference Call - Nov. 3, 2008 Building for the future. 20
    • Appendix: Non-GAAP Financial Measures The table below presents reconciliations of the Company’s presented non-GAAP measures to the most directly comparable GAAP measures for the fiscal year ended September 30, 2008 (in millions, except per share amounts): Non-GAAP operating income $ 581.5 Intangible asset impairment charges (175.2) GAAP operating income $ 406.3 Non-GAAP net income $ 252.4 Intangible asset impairment charges (175.2) Income tax benefit associated with intangible asset impairment charges 2.1 GAAP net income $ 79.3 Non-GAAP earnings per share $ 3.37 Intangible asset impairment charges per share (2.31) GAAP earnings per share $ 1.06 Non-GAAP pre-tax income $ 365.6 Intangible asset impairment charges (175.2) GAAP pre-tax income $ 190.4 Non-GAAP income tax expense $ 120.2 Income tax benefit associated with intangible asset impairment charges (2.1) GAAP income tax expense $ 118.1 Non-GAAP effective income tax rate 32.9% GAAP effective income tax rate 62.0% Built strong. OSK - Fiscal Q4 2008 Conference Call - Nov. 3, 2008 Building for the future. 21