oshkosh Q108_earnings_slides

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  • 1. Earnings Conference CallFirst Quarter Fiscal 2008February 1, 2008 Robert G. Bohn Chairman and Chief Executive OfficerCharles L. Szews President and Chief Operating OfficerDavid M. Sagehorn Executive Vice President, Chief Financial Officer and TreasurerPatrick N. Davidson Vice President of Investor Relations

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 of 1995. All statements other than statements of historical fact, including, without limitation, statements regarding Oshkosh Trucks 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. Forward-looking statements generally can be identified by the use of 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 indentify 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 Companys control, which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Those factors include the challenges of integrating the acquired JLG business; the consequences of financial leverage associated with the JLG acquisition; the Companys ability to turn around its Geesink Norba Group business sufficiently to support its current valuation resulting in no impairment charge; the expected level and timing of U.S. Department of Defense procurement of products and services and funding thereof; the cyclical nature of the Companys access equipment, commercial and fire & emergency markets, especially during a recession, which the U.S. economy may be entering; risks related to reductions in government expenditures and the uncertainty of government contracts; risks associated with international operations and sales, including foreign currency fluctuations; 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 is contained in our filings with the SEC, including our Form 8-K filed February 1, 2008. Except as set forth in such Form 8-K, we disclaim any obligation to update such forward-looking statements. 2 3. Oshkosh Fiscal Q1 2008 HighlightsOSK Q1 Performance Sales increased 49.0% to $1.5(millions) billion$1,800 $150.0Operating income increased $1,600 $140.0$1,500 $1,400 $130.0Operating Income 31.5% to $109.9 millionSales Revenue$1,200 $120.0$1,007$1,000 $110.0 EPS down 9.1% to $0.50$790 $800$100.0$109.9$600$90.0 Maintaining FY 2008 EPS $400$80.0 $87.0 $83.6estimate range of $4.15 to$200$70.0 $0$60.0 $4.35 2006 20072008Sales Revenue Operating IncomeGlobal initiatives and cost reductions buttressing outlook3 4. Oshkosh Corporate Initiatives Upgraded supply chain team with keyhires New CPO New logistics management Expanding Asian procurement team Adding segment and corporate talentAnnounced proposed name change Better represents our diverse portfolio Pending shareholder approval 4 5. Access Equipment Strong international markets morethan offset weaker North Americantelehandler salesNegotiations with large NorthAmerican rental companies mostlycomplete, but not in backlogContinuing to focus on achievingsynergy targetsOpened new parts fulfillment centerin Europe 5 6. DefenseSolid FY08 outlook; pending supplemental bill would support strong FY09 Announcement of JLTV teaming agreement with Northrop Grumman Fusion of tactical vehicle andcommunications expertise Leaders in innovation, design,production and logistics Team for the future, not just today Six unit test order for MRAP II Bull vehicles6 7. Fire & Emergency Weaker municipal spending andeffects from 2007 engine pre-buyare impacting fire apparatusmarketPUC continues to generate stronginterest among fire departmentsTowing and recovery marketimpacted by high oil prices andeconomic conditionsContinued strong internationalairport products activityWeaker mobile medical andbroadcast vehicle market demand7 8. Commercial U.S. concrete placement businessoperating at recession-like pace Managing costs aggressively Growing acceptance of Revolution mixer drumExpect flat domestic refuse volumein modestly down marketGeesink Norba Group (GNG)facility rationalization activitiesprogressing on plan Solid order activity 8 9. Consolidated Results (Dollars in millions) First QuarterComments2007 2008 Strong results in accessequipment and Net Sales $1,499.9 $1,006.8defense% Growth 49.0%27.4% Economic weakness Operating Income$ 109.9$ 83.6impacting fire &% Margin7.3% 8.3%emergency and% Growth 31.5% (3.9)% especially commercial Earnings Per Share$0.50 $ 0.55 Solid cash generationin seasonally soft % Growth(9.1)% (23.6)%quarter9 10. Access Equipment(Dollars in millions)First QuarterComments 2007 2008 North American results down; affected by weakNet Sales $610.5$117.7 telehandler market% Growth NM NA Generally strong resultsOperating Income$ 61.1 $ 2.4 in international markets% Margin10.0% 2.0% Backlog down 21.9%% Growth NM NA vs. prior year Large North American rental company orders not yet in backlog10 11. Defense (Dollars in millions) First QuarterComments2007 2008 Continued strong demand for new andNet Sales $398.3 $311.7 remanufactured trucks% Growth27.8%(14.2)% Lower parts & serviceOperating Income$ 63.9 $ 54.6 volume% Margin16.0%17.5% Backlog up 68.5%% Growth16.9%(24.8)% 11 12. Fire & Emergency (Dollars in millions)First Quarter Comments20072008 Strong Pierce and airport products salesNet Sales $272.6 $266.0 % Growth2.5%22.9% Weakness at JerrDan and Oshkosh SpecialtyOperating Income$ 22.2 $ 24.5 Vehicles % Margin8.2% 9.2% Backlog down 17.2% % Growth (9.3)% 17.3% 12 13. Commercial(Dollars in millions)Comments First Quarter2007 Weak market 2008 conditions, seasonalNet Sales $230.4 $319.0 softness and GNG % Growth(27.8)% 44.2% charges drove lossOperating Income$(10.2)$ 20.8 Solid refuse orders % Margin (4.4)%6.5% globally % Growth (149.1)%150.3% Cost reductions mitigating weak market conditions Backlog down 33.0% 13 14. Oshkosh Fiscal 2008 EstimatesRevenue of $7.1 to $7.3 billion Expectations: Access equipment sales to increase about 25% Defense sales to grow approximately 25% Fire & emergency sales to increase approximately 5% Commercial sales to decline 15% to 20%14 15. Oshkosh Fiscal 2008 EstimatesOperating Income of $675 to $700 millionExpectations: Access equipment margins to improve by 150 to 200 bps Defense margins to decline by 250 to 300 bps Fire & emergency margins to approximate fiscal 2007 levels Commercial margins to decline by 150 to 200 bps Corporate expense to increase by approximately $30 million15 16. Oshkosh Fiscal 2008 Estimates Other EstimatesFiscal 2008 Estimates Interest expense and other$215 to $220 million (expense)Effective tax rate 33.5%Equity in earnings$3.5 to $4.0 million (income)Average shares outstanding 75.2 million 16 17. Oshkosh Fiscal 2008 EstimatesFY08 EPS estimate range of $4.15 to $4.35 Q2 EPS estimate range of $0.85 to $0.90 Projecting near doubling of accessequipment earnings and strongdefense earnings Capital spending expected to approximate $110 million Expect debt between $2.65 and $2.75 billion at fiscal year-end 17 18. Fiscal Q1 2008 Summary Strong demand for access equipment and defense businesses Maintaining full year EPS estimates with global initiatives andcost reductions supporting outlook despite challengingeconomic landscape Key announcements for defense with JLTV teaming agreementand the Bull Slowdown after 2007 engine emissions pre-buy andmacroeconomic issues pressuring commercial and fire &emergency segments 18