oshkosh Q106_Presentation

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Transcript of oshkosh Q106_Presentation

  • 1. Robert G. Bohn Earnings Conference CallChairman, President and Chief Executive Officer First Quarter Fiscal 2006 Charles L. Szews February 2, 2006Executive Vice President and Chief Financial Officer

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 Trucks 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 beyond, the Companys 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 Companys ability to increase its operating income margins at McNeilus, the ability of the Company to recover steel and component cost increases from its customers, risks associated with a three-phase enterprise resource planning system implementation at McNeilus, the expected level of U.S. Department of Defense procurement of the Companys products and services, the cyclical nature of the Companys 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 February 2, 2006. Except as set forth in such Form 8-K, we disclaim any obligation to update such forward-looking statements.2 3. Oshkosh First Quarter 2006 Highlights Record financial resultsFirst Quarter Results Sales increased 22.5%$1,000 $90$87.0 Operating income grew 28.6% $900Operating Income (in millions)$80$800$67.6 $70 EPS increased 28.6%$790.3 Sales (in millions)$700$60 Exceeded previous estimates $600$644.9$46.7 $50$500 Increased fiscal 2006 EPS$40 $493.2$400 estimate range to $2.55 - $2.65$30$300$20$200 Raised dividend rate by 48% to $10$100 $0.10 / share$0$02003 2004 20053 4. Progress on Key Initiatives In First Quarter Fiscal 2006 The Geesink Norba Group delivered second consecutive profitable quarter Cost reductions should accelerate in 2006 as outsourcing strategy gains ground Positive progress on McNeilus turnaround Launch of enterprise resource planning system and configurator for mixers impacted production and sales Production back on schedule by December 31 Improved pricing largely offset impact of lower sales volume on earnings4 5. Commercial Earnings exceeded expectations for first quarter Positive outlook for European refuse business for 2006 Outsourcing strategy meeting expectations Significant lean opportunities Demand favorable in U.S. concrete placement and refuse London is the most popular brand Modest pre-buy expected from 2007 diesel of concrete mixer in Canada. engine emissions standards change Continue to expect margin improvement in second and third quarters of fiscal 20065 6. Commercial Revolution Introduced to Front-Discharge Mixers Launched at World ofConcrete in mid-January Offers full 2,000 poundweight savings Reduces annual operatingcosts by $7,500Oshkosh S-Series front-discharge mixer withRevolution drum 6 7. Defense Significantly outperformed again Sales of $363.1 million, up 68.5% New and remanufactured heavy-payloadtrucks, and parts and service sales, eachup over 60% Received LVSR request for proposal Submitted bid on time in 30 days Decision anticipated in third quarter offiscal 2006 Bridge supplemental bill passed in December 2005 Provided significant funding for fiscal2007 and fiscal 2008 sales7 8. Fire and Emergency Earnings exceeded firstquarter expectations Significant new productintroductions JerrDan 60-ton Rotator Revolutionary JerrDan Side Loading Vehicle Retriever Pierce expansion on track tomeet demand End markets remain healthy 8 9. Consolidated Results Dollars in millions First QuarterComments20052006 Defense drove results Net Sales $790.3 $644.9 Favorable defense% Growth 22.5% 30.8% adjustments totaling Operating Income$ 87.0 $ 67.6 $12.2 million in 2005 ($0.10 per share)% Margin 11.0% 10.5%% Growth 28.6% 44.7% Favorable product liability settlements Earnings Per Share$ 0.72$ 0.56 totaling $4.2 million% Growth 28.6% 33.3% at Corporate in 2005 ($0.04 per share)9 10. Fire and Emergency Dollars in millions First QuarterComments 20052006 Strong fire apparatussales and improved Net Sales $216.4 $194.2pricing benefited% Growth 11.5% 58.0%earnings Operating Income$ 20.9 $ 18.4 Lower airport product% Margin9.7%9.5% sales% Growth 13.4% 58.9% Expansion-related costs also impacted quarter Backlog up 4.1% 10 11. Defense Dollars in millionsCommentsFirst Quarter 2005 Truck and parts and2006service sales each up Net Sales $363.1$215.5 more than 60%% Growth 68.5%13.2% MTVR adjustment of$8.5 million in 2005 Operating Income$ 72.6 $ 51.7 Recovery of pre-contract% Margin 20.0%24.0% costs of $3.7 million in2005% Growth 40.5%39.1% Backlog down 3.0%, butbridge supplementalfunding not yet undercontract 11 12. Commercial Dollars in millions Comments First Quarter Sales impacted by ERP2005 2006implementation Net Sales $221.2 $241.6 European refuse% Growth (8.4)%32.0%profitable in Q1; $2.6million operating loss Operating Income$8.3 $ 5.6in 2005% Margin3.8% 2.3% Price increases% Growth 47.6%(21.7)%beginning to benefitearnings Backlog up 29.1% 12 13. Fiscal 2006 Estimates Sales of $3.3 - $3.4 Billion, Up 11.5% - 15% Fire and emergency salesexpected to rise by low teenspercentage Defense sales expected to grow22.5% to 27.0% Commercial sales expected to riseby low single digits percentage 13 14. Fiscal 2006 EstimatesOperating Income of $316.5 - $329.0 Million, Up 18% to 23% Anticipate flat margins in fire and emergency Expect defense margins to decline about 200basis points No MTVR margin adjustments expected in 2006 Expect commercial margins to double European refuse expected to be modestly profitable U.S. margins expected to be up over 100 basis points14 15. Fiscal 2006 Estimates Other Estimates (Dollars in millions)Fiscal 2006 Estimates Interest expense and other $3.5 (expense) Effective tax rate 39.0% Minority interest$0.5 (expense) Equity in earnings $2.0 Average shares outstanding75,500,000 15 16. Fiscal 2006 Estimates Annual EPS estimate range of $2.55 to $2.65, up 17.0% to 21.6% Second quarter EPS of $0.58 to $0.62 compared to $0.52 in second quarter of fiscal 2005 16 17. Fiscal 2006 EstimatesGround-breaking for New ProductDevelopment Center Capital spending expected to approximate $60 million Estimated balances at September 30,2006 Debt of $20.0 - $25.0 million Cash of $200.0 -$225.0 million17