oshkosh Q306_Presentation

Click here to load reader

Embed Size (px)

description

 

Transcript of oshkosh Q306_Presentation

  • 1. Robert G. Bohn Earnings Conference CallChairman, President and Chief Executive Officer Third Quarter Fiscal 2006 Charles L. Szews August 1, 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 fiscal 2007, 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 sustain flat operating income in its commercial segment and to raise operating income in its fire & emergency segment in fiscal 2007 despite anticipated lower industry demand resulting from changes to diesel engine emission standards effective January 1, 2007, 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 August 1, 2006. Except as set forth in such Form 8-K, we disclaim any obligation to update such forward-looking statements.2 3. Oshkosh Third Quarter 2006 Highlights Record Q3 financial results Third Quarter Results Sales increased 8.4%$1,000 $90 Operating income grew 31.2%$82.6 $900$80 Operating Income (in millions) $63.0 EPS increased 38.5%$800$70$887.9 Exceeded previous estimatesSales (in millions) $700 $60$49.2 $600 Increased fiscal 2006 EPS $818.9$50 $500 estimate range to $2.70 - $2.75$599.8 $40 $400 Net cash rose to $193.1 million $30 $300 $20 $200 Initiated fiscal 2007 EPS estimate$10 $100 range of $3.05 - $3.15$0$0 2004 2005 2006 3 4. Acquisition of AK Specialty Vehicles $130 million manufacturer ofbroadcast, homeland security andmedical truck bodies Provides important technology andpurchasing power in electronics/broadcasting Growing global use of mobile MRI, CATand PET technologies Expected to be $0.05 accretive tofiscal 2007 To be reported in fire and emergencysegment4 5. Acquisition of Iowa Mold Tooling $115 million manufacturer of service vehicles and niche articulated cranes Supports Oshkoshs service expansion strategy Serves growing mining sector Expected to be $0.05 accretive in fiscal 2007 To be reported in commercial segment5 6. Commercial Margin recovery continued in Q3 Orders remained strong in North America Exceptional performance from CON-E-CO batch plant business Should strengthen further in2007 Successfully implemented second phase of ERP installation in Q3 6 7. Defense New and remanufactured truck business drove solid results in Q3 LVSR contract awarded to OSK Submitted bid for Australian Defence Forces contract in July 20067 8. Fire and Emergency Sharply improved resultsin Q3 as anticipated Pierce performed well Airport product sales heavily weighted to second half Two component issues inQ2 resolved in Q3 Strong fire apparatusorders Looking forward to FRI fireapparatus show inSeptember 8 9. Consolidated Results Dollars in millions Third QuarterComments20052006 Commercial drove Net Sales $887.9 $818.9 sharply improved results!% Growth8.4% 36.5% Operating Income$ 82.6 $ 63.0 Fire and emergency also reported strong% Margin9.3%7.7% results% Growth 31.2% 28.1% Defense realized Earnings Per Share$ 0.72$ 0.52 steady growth% Growth 38.5% 20.9%9 10. Fire and Emergency Dollars in millions Third QuarterComments 20052006 Resolved componentissue sales delays Net Sales $255.3 $222.7 Improved airport% Growth 14.7% 56.2% product sales mix, Operating Income$ 29.8 $ 23.1 as anticipated% Margin 11.7% 10.4% Recent price increase% Growth 28.7% 75.4% spurred orders Backlog up 6.5% 10 11. Defense Dollars in millions CommentsThird Quarter 20052006 Remanufactured andnew truck sales drove Net Sales $291.4$281.0results% Growth3.7% 47.1% Parts and service sales Operating Income$ 49.0 $ 46.0 down due to delayed% Margin 16.8% 16.4% Supplemental bill% Growth6.7% 35.4% MTVR margin adjustment of $2.1 million in Q3 of 2005 Backlog down 9.3% 11 12. Commercial Dollars in millions CommentsThird Quarter 20052006 Sales improved across segment Net Sales $350.6$322.3 Price increases% Growth8.8%18.5% benefiting earnings Operating Income$ 25.4$ 7.2 European refuse% Margin7.2%2.2% profitable in Q3; $5.1 million operating loss% Growth252.0% (46.0)% in Q3 of 2005 Backlog up 69.9% 12 13. Fiscal 2006 Estimates Sales of $3.40 - $3.45 Billion, Up 14.9% - 16.6% Fire and emergency sales expected to rise by mid-teens percentage Defense sales expected to grow 25.0% to 27.0% Commercial sales expected to rise by high single digits percentage13 14. Fiscal 2006 EstimatesOperating Income of $321.0 - $327.0 Million, Up 20% to 22% Anticipate flat margins in fire and emergency Expect defense margins to decline about 200 basis points No MTVR margin adjustments expected in 2006 Expect commercial margins to be 2.5X higher European refuse expected to be modestly profitable North American margins expected to be upover 200 basis points14 15. Fiscal 2006 Estimates Other Estimates (Dollars in millions)Fiscal 2006 Estimates Interest expense and other $0.5 (expense) Effective tax rate 37.8% Minority interest$0.5 (expense) Equity in earnings $2.5 Average shares outstanding 74,500,000 15 16. Fiscal 2006 Estimates Annual EPS estimate range of $2.70 to $2.75, up 24% to 26% Fourth quarter EPS estimate range of $0.60 to $0.65 compared to $0.58 in fourth quarter of fiscal 2005 16 17. Fiscal 2006 Estimates Capital spending expected toapproximate $64 million Estimated balances atSeptember 30,2006 Debt of $100.0 - $110.0 million Cash of $15.0 - $20.0 million 17 18. Fiscal 2007 EstimatesSales of $3.65 - $3.75 billion Fire and emergency sales, including AK Specialty, expected to rise by mid-teens percentage Defense sales expected to grow by $100-$150 million Commercial sales, including Iowa Mold Tooling, expected to decline slightly 18 19. Fiscal 2007 Estimates Operating Income of $373.0 - $385.0 Million Anticipate fire and emergency margins to be up about 50 basis points Expect flat margins in defense Expect commercial margins to improve about 150 basis points 19 20. Fiscal 2007 Estimates Other Estimates (Dollars in millions) Fiscal2007Estimates Interest expense and other $6.5 (expense) Effective tax rate 37.0% Minority interest$0.8 (expense) Equity in earnings $1.8 Average shares outstanding76,000,000 20 21. Fiscal 2007 Estimates Annual EPS estimate range of $3.05 - $3.15 Capital spending expected toGlobal Technology Centerapproximate $65 million Estimated balances at September 30, 2007 Debt of about $40 million Cash of $90 - $110 million21