MOVING THE WORLD AT WORK · 2019. 6. 13. · Oshkosh Corporation (NYSE:OSK) MOVING THE WORLD AT...

MOVING THE WORLD AT WORK

Second Quarter Fiscal 2017 April 26, 2017

Wilson R. Jones President and Chief Executive Officer David M. Sagehorn Executive Vice President and Chief Financial Officer Patrick N. Davidson Vice President, Investor Relations

Oshkosh Corporation (NYSE:OSK)


Forward-Looking Statements This presentation contains statements that the Company believes to be “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 cyclical nature of the Company’s access equipment, commercial and fire & emergency markets, which are particularly impacted by the strength of U.S. and European economies and construction seasons; the Company’s estimates of access equipment demand which, among other factors, is influenced by customer historical buying patterns and rental company fleet replacement strategies; the strength of the U.S. dollar and its impact on Company exports, translation of foreign sales and purchased materials; the expected level and timing of U.S. Department of Defense (DoD) and international defense customer procurement of products and services and acceptance of and funding or payments for such products and services; higher material costs resulting from production variability due to uncertainty of timing of funding or payments from international defense customers; risks related to reductions in government expenditures in light of U.S. defense budget pressures, sequestration and an uncertain DoD tactical wheeled vehicle strategy; the impact of any DoD solicitation for competition for future contracts to produce military vehicles, including a future Family of Medium Tactical Vehicle production contract; the Company’s ability to increase prices to raise margins or offset higher input costs; increasing commodity and other raw material costs, particularly in a sustained economic recovery; risks related to facilities expansion, consolidation and alignment, including the amounts of related costs and charges and that anticipated cost savings may not be achieved; global economic uncertainty, which could lead to additional impairment charges related to many of the Company’s intangible assets and/or a slower recovery in the Company’s cyclical businesses than Company or equity market expectations; projected adoption rates of work at height machinery in emerging markets; the impact of severe weather or natural disasters that may affect the Company, its suppliers or its customers; risks related to the collectability of receivables, particularly for those businesses with exposure to construction markets; the cost of any warranty campaigns related to the Company’s products; risks related to production or shipment delays arising from quality or production issues, including any delays as a result of an accident at the Company’s Dodge Center manufacturing facility; risks associated with international operations and sales, including compliance with the Foreign Corrupt Practices Act; the Company’s ability to comply with complex laws and regulations applicable to U.S. government contractors; cybersecurity risks and costs of defending against, mitigating and responding to a data security breach; and risks related to the Company’s ability to successfully execute on its strategic road map and meet its long-term financial goals. Additional information concerning these and other factors is contained in the Company’s filings with the Securities and Exchange Commission, including the Form 8-K filed today. All forward-looking statements speak only as of the date of this presentation. The Company assumes no obligation, and disclaims any obligation, to update information contained in this presentation. Investors should be aware that the Company may not update such information until the Company’s next quarterly earnings conference call, if at all.

April 26, 2017 OSK Second Quarter 2017 Earnings Call 2


Continuing to Execute in FY17

Q2 adjusted EPS* of $0.76

− Equal to prior year Q2 EPS

− Above Company expectations

Continued positive outlook

− Driven by market dynamics, MOVE strategy and fleet ages

Positive macroeconomic environment and customer sentiment

Increasing full year FY17 adjusted EPS* outlook to $3.20 to $3.50

Net Sales (billions) Adjusted EPS

3

OSK Fiscal Q2 Performance

April 26, 2017 OSK Second Quarter 2017 Earnings Call

$0.76* $0.76

$0.00

$0.10

$0.20

$0.30

$0.40

$0.50

$0.60

$0.70

$0.80

FY17 FY16

$1.62 $1.52

$0.0

$0.2

$0.4

$0.6

$0.8

$1.0

$1.2

$1.4

$1.6

$1.8

$2.0

FY17 FY16

* Non-GAAP results. See appendix for reconciliation to GAAP results.


Access Equipment Solid Q2 performance Continued lower North American

replacement demand and challenging pricing environment

U.S. construction indicators generally positive

Continued improving customer sentiment in the U.S. − Positive comments at recent trade

shows International market conditions

remained mixed Restructuring actions on track



Defense

Solid execution in the quarter

JLTV program remains a top priority as manufacturing ramps up to support program testing

Remain busy internationally − M-ATV shipments to Middle East − Continued JLTV marketing

Committed to a strong proposal for FMTV recompete

Monitoring U.S. Defense budget progress



Fire & Emergency Continued progress toward double

digit operating income margin U.S. fire apparatus market expected

to be up modestly in FY17 − Despite annual market volume

continuing to run ~20% below pre-recession levels

Strong fire apparatus order rate in Q2 − Some likely related to price increase

timing − Exited Q2 with record segment backlog

Pierce launching multiple new Ascendant configurations at FDIC − Builds on strength of Pierce’s highly

successful new model introduction



Commercial

Challenging quarter − Lower shipments due to order

slowdown in prior quarter − Adverse absorption − Impact of January accident

Orders rebounded in Q2 − Especially RCVs

Strong activity at ConExpo − Positive concrete mixer customer

sentiment, but expect cautiousness to continue

− Multiple new product launches



Consolidated Results

Sales impacted by: + Higher defense segment sales

− Lower access equipment and commercial segment sales

Adjusted EPS* impacted by: + Higher defense and fire &

emergency segment operating income

+ Lower corporate expenses

− Lower access equipment and commercial segment operating income

− Higher prior year discrete tax benefits

(Dollars in millions, except per share amounts)

Second Quarter

Net Sales $1,618.3 $1,524.3 % Change 6.2% (1.9)% Adjusted Operating Income $97.6* $91.4 % Change 6.8% (16.7)% % Margin 6.0% 6.0% Adjusted EPS $0.76* $0.76 % Change 0.0% (6.2)%

2017 2016


Q2 Comments



FY17 Expectations

9

Revenues of $6.6 to $6.7 billion

Adjusted operating income* of $415 million to $445 million

Adjusted EPS* of $3.20 to $3.50

Q3 Commentary Expect higher sales vs. prior year

– Higher defense and to a lesser extent fire & emergency segment sales to offset lower access equipment segment sales

Expect higher adjusted EPS vs. prior year – Higher consolidated sales, partially offset by lower

commercial segment operating income – Excludes expected pre-tax impact of additional

access equipment segment restructuring-related costs

Additional expectations Corporate expenses of ~ $145 million Adjusted tax rate* of 32.5% - 33.0% CapEx of ~$100 million Free Cash Flow* of $0 to $50 million Assumes share count of ~76.0 million

Segment information

Measure Access Equipment Defense Fire &

Emergency Commercial

Sales (billions) ~ $2.8 ~ $1.85 ~ $1.0 ~ $0.975

Adj. Operating Income Margin 8.75% - 9.0%* ~ 10.0% ~ 8.5% 5.0% - 5.5%

OSK Second Quarter 2017 Earnings Call April 26, 2017



For information contact:

Patrick N. Davidson Vice President, Investor Relations (920) 966-5939 [email protected]

Jeffrey D. Watt Director, Investor Relations (920) 233-9406 [email protected]



Appendix: Access Equipment


Net Sales $723.2 $754.3 % Change (4.1)% (23.2)% Adjusted Operating Income $59.3* $75.7 % Change (21.7)% (44.7)% % Margin 8.2% 10.0%

Second Quarter 2017 2016

(Dollars in millions)

Sales impacted by: − Lower telehandler volume − Competitive pricing + Higher used equipment and

service sales

Adjusted operating income* impacted by: − Competitive pricing − Higher SG&A costs, including

ConExpo impact

Backlog up 11% vs. prior year to $738 million

Q2 Comments



Appendix: Defense

Net Sales $446.1 $297.0 % Change 50.2% 87.1% Operating Income $48.7 $27.8 % Change 75.2% 333.0% % Margin 10.9% 9.4%

Second Quarter


2017 2016


Sales impacted by: + Ramp-up of JLTV program + M-ATV international sales

Operating income impacted by: + Higher sales volume + Improved manufacturing

absorption − Adverse product mix − Higher incentive compensation

expense

Backlog up 9% vs. prior year to $1.8 billion

Q2 Comments


Appendix: Fire & Emergency

Sales impacted by: − Lower international airport

products volume + Improved pricing

Operating income impacted by: + Improved pricing

Backlog up 11% vs. prior year at $1.0 billion


Net Sales $237.5 $240.4 % Change (1.2)% 18.5% Operating Income $21.8 $14.9 % Change 46.3% 66.0% % Margin 9.2% 6.2%



Q2 Comments


Appendix: Commercial


Net Sales $216.0 $236.7 % Change (8.7)% 7.1% Operating Income $6.0 $17.2 % Change (65.1)% 99.0% % Margin 2.8% 7.3%



Sales impacted by: − Lower RCV unit volume + Higher package (third party

chassis) sales

Operating income impacted by: − Lower sales volume − Adverse absorption − Costs related to a manufacturing

facility accident

Backlog up 22% vs. prior year to $354 million

Q2 Comments



Appendix: Non-GAAP to GAAP Reconciliation

• The table below presents a reconciliation of the Company’s presented non-GAAP measures to the most directly comparable GAAP measures (in millions, except per share amounts):

Three Months Ended

March 31, 2017

Adjusted diluted earnings per share (Non-GAAP) 0.76$ Restructuring-related costs, net of tax (0.18) Diluted earnings per share (GAAP) 0.58$

Consolidated adjusted operating income (Non-GAAP) 97.6$ Restructuring-related costs (17.2) Consolidated operating income (GAAP) 80.4$

Access equipment segment adjusted operating income (Non-GAAP) 59.3$ Restructuring-related costs (17.2) Access equipment segment operating income (GAAP) 42.1$




• The table below presents a reconciliation of the Company’s presented non-GAAP measures to the most directly comparable GAAP measures (in millions, except per share amounts):

Low High

Adjusted access equipment operating income margin (Non-GAAP) 8.75% 9.00%Restructuring-related costs (1.55%) (1.55%)Access equipment operating income margin (GAAP) 7.20% 7.45%

Consolidated adjusted operating income (Non-GAAP) 415.0$ 445.0$ Restructuring-related costs (43.0) (43.0) Consolidated operating income (GAAP) 372.0$ 402.0$

Adjusted effective income tax rate (Non-GAAP) 33.0% 32.5%Impact of restructuring-related costs on effective income tax rate 2.9% 2.9%Effective income tax rate (GAAP) 35.9% 35.4%

Adjusted diluted earnings per share (Non-GAAP) 3.20$ 3.50$ Restructuring-related costs, net of tax (0.50) (0.50) Diluted earnings per share (GAAP) 2.70$ 3.00$

Fiscal 2017 Expectations




• The table below presents a reconciliation of the Company’s presented non-GAAP measures to the most directly comparable GAAP measures (in millions):

Low HighNet cash flows provided by operating activities 110.0$ 160.0$ Additions to property, plant and equipment (100.0) (100.0) Net additions to equipment held for rental (10.0) (10.0) Free cash flow -$ 50.0$

Fiscal 2017 Expectations


Appendix: Commonly Used Acronyms

18 April 26, 2017 OSK Second Quarter 2017 Earnings Call

ARFF Aircraft Rescue and Firefighting LVSR Logistic Vehicle System Replacement AWP Aerial Work Platform M-ATV MRAP All-Terrain Vehicle AMPS Aftermarket Parts & Service MRAP Mine Resistant Ambush Protected CapEx Capital Expenditures MSVS Medium Support Vehicle System (Canada) CNG Compressed Natural Gas NOL Net Operating Loss DGE Diesel Gallon Equivalent NPD New Product Development DoD Department of Defense NRC National Rental Company EMD Engineering & Manufacturing Development OCO Overseas Contingency Operations EMEA Europe, Middle East & Africa OH Overhead EPS Diluted Earnings Per Share OI Operating Income FAST Act Fixing America’s Surface Transportation Act OOS Oshkosh Operating System FDIC Fire Department Instructors Conference OPEB Other Post-Employment Benefits FHTV Family of Heavy Tactical Vehicles PLS Palletized Load System FMS Foreign Military Sales PUC Pierce Ultimate Configuration FMTV Family of Medium Tactical Vehicles R&D Research & Development GAAP U.S. Generally Accepted Accounting Principles RCV Refuse Collection Vehicle GAO Government Accountability Office RFP Request for Proposal HEMTT Heavy Expanded Mobility Tactical Truck ROW Rest of World HET Heavy Equipment Transporter SMP Standard Military Pattern (Canadian MSVS) HMMWV High Mobility Multi-Purpose Wheeled Vehicle TACOM Tank-automotive and Armaments Command IRC Independent Rental Company TDP Technical Data Package IT Information Technology TPV Tactical Protector Vehicle JLTV Joint Light Tactical Vehicle TWV Tactical Wheeled Vehicle JPO Joint Program Office UCA Undefinitized Contract Action JROC Joint Requirements Oversight Council UIK Underbody Improvement Kit (for M-ATV) JUONS Joint Urgent Operational Needs Statement UK United Kingdom L-ATV Light Combat Tactical All-Terrain Vehicle ZR Zero Radius

LRIP Low Rate Initial Production

MOVING THE WORLD AT WORK · 2019. 6. 13. · Oshkosh Corporation (NYSE:OSK) MOVING THE WORLD AT...

Documents

Transcript of MOVING THE WORLD AT WORK · 2019. 6. 13. · Oshkosh Corporation (NYSE:OSK) MOVING THE WORLD AT...