Oshkosh Corporation First Quarter Fiscal 2012 January 31, 2012 · Oshkosh Q1 FY12 Results Sales of...

MISSION DRIVEN: To Move the World at Work

Oshkosh Corporation

First Quarter Fiscal 2012

January 31, 2012

Charles L. Szews

President and Chief Executive Officer

David M. Sagehorn

Executive Vice President and Chief

Financial Officer

Patrick N. Davidson

Vice President, Investor Relations


Forward Looking Statements

2

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 press

release, 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 expected level and timing of DoD procurement of products and services and funding thereof, including the impact of

the DoD’s allocation of certain tires which will restrict and delay certain FHTV sales; risks related to reductions in government expenditures in

light of U.S. defense budget pressures and an uncertain DoD tactical wheeled vehicle strategy; the cyclical nature of the Company’s access

equipment, commercial and fire & emergency markets, especially during periods of global economic uncertainty, lower municipal spending and

tight credit markets; the Company’s ability to produce vehicles under the FMTV contract at targeted margins; the duration of the ongoing global

economic weakness, 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 equity market expectations; the potential for the U.S. government to competitively bid the

Company’s Army and Marine Corps contracts; the consequences of financial leverage, which could limit the Company’s ability to pursue

various opportunities; increasing commodity and other raw material costs, particularly in a sustained economic recovery; the ability to pass on

to customers price increases to offset higher input costs; risks related to costs and charges as a result of facilities consolidation and alignment,

including that anticipated cost savings may not be achieved; 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; risks associated with international operations and sales, including foreign currency

fluctuations and compliance with the Foreign Corrupt Practices Act; the potential for increased costs relating to compliance with changes in

laws and regulations; risks related to disruptions in the Company’s distribution networks; risks related to actions of activist shareholders; and

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 January 31, 2012. 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.

OSK First Quarter 2012 Earnings Call January 31, 2012


Oshkosh Q1 FY12 Results

Sales of $1.9 billion and EPS of

$0.42

FMTV profitable this quarter,

ahead of most recent

expectations

Access equipment recovery

continuing

Investing in MOVE strategy

– Cost optimization

– New product innovations

– Emerging markets

January 31, 2012 3 OSK First Quarter 2012 Earnings Call

$1,879 $1,701

$0.42

$1.09

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

2012 2011

Net Sales EPS

Net

Sale

s

(millions)

OSK Fiscal Q1 Performance

EPS*

* Fiscal 2012 EPS includes discrete income tax benefits of $0.07 per share, after-tax restructuring related costs of $0.05 per share, foreign currency

transaction losses of $0.04 per share and proxy contest costs of $0.02 per share. Fiscal 2011 EPS includes discrete income tax benefits of $0.10

per share and after-tax restructuring related costs of $0.15 per share. Restructuring related costs include certain non-GAAP restructuring costs. A

reconciliation of these non-GAAP financial measures to the most comparable GAAP measure can be found at the back of these slides.


Market Conditions

President’s FY12 defense budget signed

– FY13 budget details not yet available

– Oshkosh is well positioned for new vehicle

programs

Bridge contract for FHTV through FY14

Access equipment replacement demand

continues to drive higher sales

– North America remains strongest region

– Previously announced price increase

effective January 2012

U.S. fire truck market remains weak

– Robust global opportunities have longer

sales cycle

Improving RCV outlook



Operations Update

Defense segment

– Strong progress from FMTV project teams

Access equipment segment

– European restructuring largely complete

– Reduced supply chain constraints

Benefiting from lean driven efficiencies

in commercial segment

Fire & emergency segment restructuring

– Addressing inefficiencies related to

relocation of ambulance and mobile

medical unit production to Florida



Consolidated Results

Sales impacted by: + FMTV volume

+ Traditional access equipment

demand

– Lower FHTV vehicle and M-ATV

aftermarket parts volume

Margins impacted by:

– Adverse sales mix in defense

segment

– Higher material costs in access

equipment segment

$40 million of debt

reduction


Comments (Dollars in millions,

except per share amounts) First Quarter

Net Sales $1,878.6 $1,700.8

% Change 10.5% (30.1)%

Operating Income $75.3 $168.7

% Change (55.3)% (51.7)%

% Margin 4.0% 9.9%

Earnings Per Share* $0.42 $1.09

% Change (61.5)% (48.1)%

2012 2011

* Operating income results include restructuring related costs of $6.8 million and proxy contest costs of $2.8 million in fiscal 2012 and restructuring

related costs of $14.7 million in fiscal 2011. Fiscal 2012 EPS includes discrete income tax benefits of $0.07 per share, after-tax restructuring related

costs of $0.05 per share, foreign currency transaction losses of $0.04 per share and proxy contest costs of $0.02 per share. Fiscal 2011 EPS

includes discrete income tax benefits of $0.10 per share and after-tax restructuring related costs of $0.15 per share. Restructuring related costs

include certain non-GAAP restructuring costs. A reconciliation of these non-GAAP financial measures to the most comparable GAAP measure can

be found at the back of these slides.


Updated Expectations for FY12*

Slightly higher corporate expenses

Tax rate of 32% to 34%

CapEx of $85 to $95 million

Slightly positive free cash flow


* All comparisons are vs. FY11.

Measure Defense Access

Equipment

Fire &

Emergency

Commercial

Sales ~15% lower 25% - 30%

higher

Up slightly ~15% higher

Operating

Income

Margin

Nearly 5% Mid to high

single digits

Very low

single digits

Low single

digits


For information contact:

Patrick N. Davidson

Vice President, Investor Relations

920 966-5939

[email protected]

Tina Schmiedel

Director, Investor Relations

920 233-9235

[email protected]


Appendix: Defense

Sales impacted by:

Lower FHTV vehicle and

M-ATV aftermarket parts

sales

+ Higher FMTV sales


Adverse sales mix

FMTV profitable ahead of

most recent expectations

Backlog down 21% vs.

prior year to $4.3 billion


Comments

Net Sales $1,051.0 $1,113.7

% Change (5.6)% (40.1)%

Operating Income $92.4 $217.9

% Margin 8.8% 19.6%

First Quarter

(Dollars in millions)

2012 2011


Appendix: Access Equipment

Sales impacted by:

Global demand, primarily for replacement

Higher M-ATV related intersegment sales


+ Improved absorption

+ Lower restructuring-related costs in current period

Higher material costs

Higher new product development spending

Backlog up 107% vs. prior year to $785 million


Comments

Net Sales $627.7 $327.3

% Change 91.8% (56.6)%

Operating Income $13.1 $(16.7)

% Margin 2.1% (5.1)%

First Quarter*


2012 2011

* Operating income results include restructuring related costs of $2.2 million in fiscal

2012 and $13.7 million in fiscal 2011. Restructuring related costs include certain

non-GAAP restructuring costs. A reconciliation of these non-GAAP financial

measures to the most comparable GAAP measure can be found at the back of

these slides.


Net Sales $163.0 $201.5

% Change (19.1)% (10.5)%

Operating Income $(10.0) $2.6

% Margin (6.2)% 1.3%

First Quarter*


2012 2011

Appendix: Fire & Emergency

Sales impacted by:

Lower airport products volume


Lower absorption

Continued production

inefficiencies, largely due to

facilities consolidation

Backlog up 13% vs. prior

year to $523 million


Comments

* Operating income results include restructuring related costs of $4.6 million in fiscal 2012 and $1.0 million in fiscal 2011. Restructuring related

costs include certain non-GAAP restructuring costs. A reconciliation of these non-GAAP financial measures to the most comparable GAAP

measure can be found at the back of these slides.


Appendix: Commercial

Sales impacted by:

+ Higher volume, primarily

RCV sales, supported by

improved concrete mixer

deliveries


+ Improved absorption

+ Lean driven efficiencies

Backlog up 30% vs.

prior year to $120

million


Comments

Net Sales $171.6 $119.5

% Change 43.6% (22.9)%

Operating Income $6.9 $(7.7)

% Margin 4.0% (6.5)%

First Quarter


2012 2011


Appendix: Non-GAAP Financial Measures


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):

2011 2010

Access equipment segment

Restructuring related costs 2.2$ 13.7$

Non-GAAP restructuring costs* (2.7) (2.4)

GAAP restructuring costs (credit) (0.5)$ 11.3$

Fire & emergency segment



GAAP restructuring costs 0.3$ 0.7$

Consolidated



GAAP restructuring costs (credit) (0.2)$ 12.0$

Non-GAAP restructuring related costs* 7.0$ 2.7$

Tax effect (2.6) (1.0)

Non-GAAP restructuring related costs, net of tax* 4.4$ 1.7$

Restructuring related costs per share 0.05$ 0.15$

Non-GAAP restructuring related costs per share* (0.05)$ (0.02)$

GAAP restructuring costs per share -$ 0.13$

Three Months Ended

December 31,

* Non-GAAP restructuring related costs include such costs as overtime, plant realignment costs, manufacturing inefficiencies / start-up costs,

costs to reconfigure bills of materials and work instructions and similar costs related to restructuring actions.


Appendix: Commonly Used Acronyms


ARFF Aircraft Rescue and Firefighting MECV Modernized Expanded Capability Vehicle

AWP Aerial Work Platform MRAP Mine Resistant Ambush Protected

CNG Compressed Natural Gas MSVS Medium Support Vehicle System (Canada)

DoD Department of Defense MTT Medium Tactical Truck

EAME Europe, Africa & Middle East NPD New Product Development

EMD Engineering & Manufacturing Development OI Operating Income

FHTV Family of Heavy Tactical Vehicles PLS Palletized Load System

FMS Foreign Military Sales PUC Pierce Ultimate Configuration

FMTV Family of Medium Tactical Vehicles RCV Refuse Collection Vehicle

HEMTT Heavy Expanded Mobility Tactical Truck RFP Request for Proposal

HET Heavy Equipment Transporter ROW Rest of World

HEWATT HEMTT-Based Water Tender TACOM Tank-automotive and Armaments Command

HMMWV High Mobility Multi-Purpose Wheeled Vehicle TAPV Tactical Armor Protected Vehicle (Canada)

JLTV Joint Light Tactical Vehicle TDP Technical Data Package

JPO Joint Program Office TFFT Tactical Fire Fighting Truck

JROC Joint Requirements Oversight Council TPV Tactical Protector Vehicle

JUONS Joint Urgent Operational Needs Statement TWV Tactical Wheeled Vehicle

L-ATV Light Combat Tactical All-Terrain Vehicle UCA Undefinitized Contract Action

LVSR Logistic Vehicle System Replacement UIK Underbody Improvement Kit (for M-ATV)

M-ATV MRAP All-Terrain Vehicle

Oshkosh Corporation First Quarter Fiscal 2012 January 31, 2012 · Oshkosh Q1 FY12 Results Sales of...

Documents

Transcript of Oshkosh Corporation First Quarter Fiscal 2012 January 31, 2012 · Oshkosh Q1 FY12 Results Sales of...