oshkosh Q206_Earnings_Presentation

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Transcript of oshkosh Q206_Earnings_Presentation

  • 1. Robert G. Bohn Earnings Conference Call Chairman, President and Chief Executive Officer Second Quarter Fiscal 2006 Charles L. Szews May 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 May 2, 2006. Except as set forth in such Form 8-K, we disclaim any obligation to update such forward-looking statements.2 3. Oshkosh Second Quarter 2006 Highlights Record Q2 financial results Second Quarter Results Sales increased 25.6% $1,000 $90$79.7 $900 Operating Income (in millions) $80 Operating income grew 27.3%$800 $844.8$62.6$70Sales (in millions) EPS increased 28.8%$700 $60 $672.4 $600$35.1 $50 Exceeded previous estimates$500 $518.2$40 $400 Re-affirmed fiscal 2006 $30 $300EPS estimate range of $20 $200 $10 $100 $2.55 - $2.65 $0$02004 20052006 3 4. Stewart & Stevenson Services, Inc. Auction On March 30, 2006,Oshkosh acknowledgedparticipation in auction Oshkosh cannot respondto questions on theauction or closely relatedmatters Stewart & Stevenson manufactures the U.S. Armys Family of Medium Tactical Vehicles. 4 5. Commercial Margin recovery continued in Q2 Pre-buy due to 2007 diesel engine emissions standards change accelerated in Q2 Expect segment sales to be strongthrough Q1 of fiscal 2007 Implementation of enterprise resource planning system The new Oshkosh S-Series Front-Discharge continuing at measured pace Concrete Mixer with Revolution drum wasintroduced at the World of Concrete show in Not expected to cause production January 2006.issues 5 6. Defense Strength of remanufacturing and new truck business drove exceptional results in Q2 But, struggle continues to locatevehicle carcasses forremanufacturing No award made yet on LVSR contract Bidding Australian Defence Forces contract in May 20066 7. Fire and Emergency Anticipated dip in earningsin Q2 Airport product sales heavily weighted to second half Component issues alsodelayed sales into Q3 Successful FDIC fireapparatus show Introduced 100 aluminum ladder Strong carrier and wreckerorders 7 8. Consolidated Results Dollars in millions Second Quarter Comments 20052006 Defense drove results Net Sales $844.8$672.4despite $14.1 million MTVR margin% Growth 25.6%29.7% adjustment in 2005 Operating Income$ 79.7$ 62.6 Commercial results% Margin9.4%9.3% also up sharply% Growth 27.3%78.5% Fire and emergency Earnings Per Share$ 0.67 $ 0.52 dip expected to be% Growth 28.8%67.7%temporary 8 9. Fire and Emergency Dollars in millions Second Quarter Comments20052006 Sharply lower airportproduct sales, as Net Sales $221.3$213.2anticipated% Growth3.8%57.2% Two component Operating Income$ 17.9$ 19.0 issues delayed% Margin8.1%8.9% revenue recognition% Growth (5.9)% 69.5% Recent price increase spurred orders Backlog up 6.1%9 10. Defense Dollars in millionsCommentsSecond Quarter20052006 Remanufactured and new truck sales nearly Net Sales $334.2 $209.6 doubled% Growth 59.4%24.7% MTVR margin Operating Income$ 65.8 $ 49.4adjustment of $14.1% Margin 19.7%23.6% million in Q2 of 2005% Growth 33.2% 114.4% Backlog up 17.0% 10 11. Commercial Dollars in millionsCommentsSecond Quarter20052006 Sales benefiting frompre-buy Net Sales $299.5 $255.3 European refuse% Growth 17.3% 17.2%profitable in Q2; $1.5 Operating Income$ 15.3$ 6.5million operating lossin Q2 of 2005% Margin5.1%2.5% Price increases% Growth137.5%(31.6)%benefiting earnings Backlog up 35.7%11 12. 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 12 13. Fiscal 2006 EstimatesOperating Income of $307.0 - $320.0 Million, Up 15% to 20% 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 points13 14. Fiscal 2006 Estimates Other Estimates (Dollars in millions)Fiscal 2006 Estimates Interest expense and other $0.5 (income) Effective tax rate 38.5% Minority interest$0.5 (expense) Equity in earnings $2.0 Average shares outstanding75,000,000 14 15. Fiscal 2006 Estimates Annual EPS estimate range of $2.55 to $2.65, up 17.0% to 21.6% Third quarter EPS of $0.53 to $0.57 compared to $0.52 in third quarter of fiscal 200515 16. Fiscal 2006 Estimates Capital spending expected to approximate $64 million Estimated balances at September 30,2006 Debt of $20.0 - $25.0 million Cash of $200.0 -$225.0 million 16