oshkosh Q107_Slides

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oshkosh Q107_Slides

  1. 1. Earnings Conference Call First Quarter Fiscal 2007 February 2, 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
  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. 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., the 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 grow operating income in 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, 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, 2007. Except as set forth in such Form 8-K, we disclaim any obligation to update such forward- looking statements. 2
  3. 3. Oshkosh Q1 2007 Highlights • Closed on $3.1 billion OSK Q1 Performance acquisition of JLG Industries (millions) – Acquisition meeting our expectations $1,200 $100.0 $87.0 $83.6 $90.0 • Sales increased 27.4% to $1,000 $80.0 $67.6 Operating Income Sales Revenue $1,006.8 $1.01 billion $70.0 $790.3 $800 $60.0 $644.9 • Operating income decreased $600 $50.0 $40.0 3.9% to $83.6 million $400 $30.0 $20.0 • EPS down 23.6% to $0.55 $200 $10.0 $0 $0.0 • Increased fiscal 2007 EPS 2005 2006 2007 estimate range by $0.10; Sales Revenue Operating Income now $3.15 to $3.25 3
  4. 4. Defense • Tough quarterly comparison with 2006, as expected – Remanufacturing volume shifted to back half of fiscal 2007 – Parts & service business impacted by low funding • Increasing bid activity for armored vehicles • Expect large spring 2007 supplemental; solidifies outlook for fiscal 2008 4
  5. 5. Fire & Emergency • Exceptional performance by Pierce led the way • Velocity™ and Impel™ chassis gaining momentum • Solid results in towing and airport groups • Significant integration progress with recent acquisition, Oshkosh Specialty Vehicles (formerly known as AK Specialty Vehicles) 5
  6. 6. Commercial • Strong domestic results in advance of tighter 2007 engine emissions standards • Chassis availability issues in France continue and U.K. demand remains weak • IMT synergies and integration progressing as planned • Successfully implemented 3rd and final phase of McNeilus ERP system 6
  7. 7. Strategic Rationale for JLG • Continue track record of outstanding shareholder value creation • JLG is the world leader in aerial work platforms and telehandlers • OSK’s acquisition objectives: – Support growth rate of >15% – Diversify to complement strong and growing defense business – Provide scale in procurement and global reach – Execute within goals of long-term acquisition strategy 7
  8. 8. JLG Meeting Expectations • Fiscal 2007 outlook favorable – Favorable contract renewals – Prices increased – Favorable mix shift to aerial work platforms • Achieving scale as expected – Procurement – Global reach • Excellent integration cooperation – Strong cultural similarities with Oshkosh 8
  9. 9. Integration Activities • Formed value creation and back office integration teams • Created management team to drive business forward • Established 100 day goals • Communicated sales and growth objectives • Opportunities are matching expectations – Expect to deliver fiscal 2007 synergy targets 9
  10. 10. Driving JLG Forward OSK Annual Revenues (millions) • Focused on delivering $7,000 value to customers $6,000 • Implementing growth $5,000 drivers $4,000 $3,000 • Creating velocity $2,000 • Installing best practices $1,000 $0 - 96 01 02 03 04 05 20 6 E 0 07 19 20 20 20 20 20 20 2007E based on Company estimates in this presentation. 10
  11. 11. Consolidated Results Dollars in millions Comments First Quarter 2006 2007 • As expected, Net Sales $1,006.8 $790.3 defense results % Growth 27.4% 22.5% lower in quarter Operating Income $ 83.6 $ 87.0 • JLG dilutive to % Margin 8.3% 11.0% earnings in Q1 by % Growth (3.9)% 28.6% $0.13 Earnings Per Share $ 0.55 $ 0.72 • Strong results from % Growth (23.6)% 28.6% fire & emergency and commercial 11
  12. 12. Access Equipment Dollars in millions Comments First Quarter 2006 2007 • December sales are Net Sales $117.7 NA seasonally slow % Growth NA NA • Purchase accounting charges: Operating Income $ 2.4 NA - $3.5 million % Margin 2.0% NA inventory revaluation % Growth NA NA - $3.8 million amortization and depreciation • Backlog up 8.7% 12
  13. 13. Defense Dollars in millions Comments First Quarter 2006 2007 • Lower truck remanufacturing and Net Sales $311.7 $363.1 parts & service % Growth (14.2)% 68.5% Operating Income $ 54.6 $ 72.6 • Higher new product development and bid % Margin 17.5% 20.0% and proposal % Growth (24.8)% 40.5% spending • Backlog down 15.9% 13
  14. 14. Fire & Emergency Dollars in millions Comments First Quarter 2006 2007 • Substantially improved margins at Pierce Net Sales $266.0 $216.4 • Strong airport products % Growth 22.9% 11.5% results Operating Income $ 24.5 $ 20.9 • Includes $28.7 million % Margin 9.2% 9.7% of sales from OSV % Growth 17.3% 13.4% • Operating losses at Medtec and BAI • Backlog up 24.9% 14
  15. 15. Commercial Dollars in millions First Quarter Comments 2006 2007 • Strong domestic sales Net Sales $319.0 $221.2 • Pricing and cost % Growth 44.2% (8.4)% initiatives continue to produce solid results Operating Income $ 20.8 $ 8.3 3.8% • Operating loss of $4.2 % Margin 6.5% million in European % Growth 150.3% 47.6% refuse • Includes $27.6 million of sales from IMT • Backlog up 3.0% 15
  16. 16. Oshkosh Fiscal 2007 Estimates Sales of $6.05 to $6.15 billion • Access equipment sales expected to approximate $2.3 to $2.4 billion • Defense sales expected to increase by $150 to $200 million • Fire and emergency sales expected to rise 20 to 25% • Commercial sales expected to be slightly lower; includes impact of IMT 16
  17. 17. Oshkosh Fiscal 2007 Estimates Operating Income of $582 to $594 Million • Expect access equipment margins of about 9.5%, including purchase accounting charges of $63.0 to $65.0 million • Expect defense margins to decline about 50 to 100 bps • Anticipate fire & emergency margins to be up nearly 50 bps • Expect commercial margins to improve about 100 bps 17
  18. 18. Oshkosh Fiscal 2007 Estimates Other Estimates (Dollars in millions) Fiscal 2007 Estimates Interest expense and other $215 to $220 (expense) Effective tax rate 36.0% Minority interest $0.5 (expense) Equity in earnings $2.5 Average shares outstanding 75,250,000 18
  19. 19. Oshkosh Fiscal 2007 Estimates • Annual EPS estimate range of $3.15 - $3.25 • Q2 EPS estimate range of $0.50 - $0.57 • Capital spending expected to approximate $105 million • Expect debt between $3.1 and $3.2 billion at fiscal year-end 19
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