oshkosh Q407_Earnings

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  • 1. Earnings Conference Call Fourth Quarter Fiscal 2007 November 1, 2007Robert G. BohnChairman and Chief Executive Officer Charles L. SzewsPresident and Chief Operating OfficerDavid M. Sagehorn Executive Vice President and Chief Financial Officer 1 Patrick N. Davidson November 1, 2007 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. 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, debt levels and cash flows, 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, estimate, anticipate, believe, should, plan, 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 2008, the Companys ability to integrate the acquired JLG Industries, Inc. business, the consequences of financial leverage associated with the JLG acquisition, the Companys ability to turn around the Geesink Norba Group business sufficiently to support its valuation resulting in no impairment charges for goodwill, the expected level of U.S. Department of Defense procurement of the Companys products and services, the cyclical nature of the Companys access equipment, commercial and fire & emergency markets, risks related to reductions in government expenditures, 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 November 1, 2007. Except as set forth in such Form 8-K, we disclaim any obligation to update such forward-looking statements. 2 November 1, 2007 3. Oshkosh Fiscal 2007 Highlights All-time records: OSK 5-yr Annual Performance $6.3 billion sales (millions) $590 million operating income $7,000.0 $700.0 $3.58 EPS $6,307.3 $6,000.0 $600.0 Repaid $256.5 million of debt Operating Income Sales Revenue $5,000.0 $500.0 $590.3 post JLG acquisition$4,000.0 $400.0 $3,427.4$2,959.9 $3,000.0 $300.0 Innovative new product offerings $325.9 $2,262.3 $267.2$1,926.0 $2,000.0 $200.0 Strengthened operating team $180.4 $1,000.0 $100.0 $129.2 Outstanding performance from $0.0$0.0 2003 20042005 20062007 JLG acquisition Sales RevenueOperating Income Continuing to work on JLG integration 3 November 1, 2007 4. Access Equipment Continued strength ininternational markets,particularly for aerial workplatforms Strong North American aerialwork platform business, butsofter telehandler business Increased operating incomemargin 4 November 1, 2007 5. Defense Continued strong performancedriven by tactical vehicle needs Solid visibility for fiscal 2008supported by high levels offunding from recent budgetsand supplementals LVSR production ramping up Delivered Bull MRAP IIvehicles for evaluation andtestingBull is a trademark of Ideal Innovations, Inc.5 November 1, 2007 6. Fire & Emergency Airport productsperformed well in Q4 Industry-leading fireapparatus maker Pierceincreased market share First commercial PUCdelivered to Miami-Dade Record year for Frontlinebroadcast vehicles6 November 1, 2007 7. Commercial Continued strong U.S. refuseresults Concrete placement sales declineddue to: Slowdown after 2007 engineemissions pre-buy Challenging U.S. residentialconstruction market Initiated restructuring plan forEuropean refuse business, withmore actions expected in fiscal2008 Facility consolidation Headcount reduction7 November 1, 2007 8. Consolidated Results Dollars in millions, except per share amountsFourth QuarterComments2006 2007Net Sales $1,792.4 $904.4 Access equipment % Growth98.2%9.8% and defense led theOperating Income$ 179.2$ 76.6way % Margin10.0% 8.5% JLG accretive to EPS % Growth 134.1% 3.5%by $0.54Earnings Per Share $ 1.14$ 0.66 Debt reduced by% Growth 72.7% 13.8%$31.6 million8 November 1, 2007 9. Access Equipment Dollars in millionsFourth QuarterComments 20062007 Strength around the worldNet Sales$840.0NA % Growth N/ANA Strong U.S. non-residentialconstruction helps offsetOperating Income $114.5NAsoft telehandler market % Margin13.6% NA Backlog up 32.3%(1) over % Growth N/ANAprior year(1) Compared to JLG stand-alone results. 9 November 1, 2007 10. Defense Dollars in millionsFourth Quarter Comments 20062007Net Sales$422.5 $328.6 Reaping benefits of production ramp-up in % Growth28.6%(7.4)% FHTV requirementsOperating Income $ 72.4 $ 54.8 Lower parts business % Margin17.1% 16.7% during the quarter % Growth32.0% (13.2)% Backlog up 82.4% over prior year10 November 1, 2007 11. Fire & Emergency Dollars in millions Fourth QuarterComments 20062007 Solid sales growth atNet Sales$291.8 $268.4Pierce and airport % Growth 8.7%27.0% productsOperating Income $ 26.3 $ 21.4 Improved performanceat Medtec % Margin 9.0% 8.0% Backlog down 10.2% % Growth22.8%12.6% 11 November 1, 2007 12. Commercial Dollars in millionsFourth QuarterComments 2006 2007 Continued weak concreteNet Sales$249.6 $319.1mixer demand, as % Growth (21.8)% 19.7%expectedOperating Income $ (3.1)$ 17.2 U.S. refuse sales up 5.6% % Margin(1.2)%5.4% GNG facility rationalizationcharges of $4.8 million % Growth(118.0)%278.4% Backlog down 54.3%12 November 1, 2007 13. Oshkosh Fiscal 2008 Estimates Sales of $7.1 to $7.3 billionExpectations: Access equipment sales toincrease about 20% Defense sales to grow20% to 25% Fire & emergency sales toincrease 5% to 10% Commercial sales to declineslightly 13 November 1, 2007 14. Oshkosh Fiscal 2008 EstimatesOperating Income of $690 to $715 MillionExpectations: Access equipment margins to improveby 150 to 200 bps Defense margins to decline by 200 to250 bps Fire & emergency margins to improveby 50 to 100 bps Commercial margins to decline slightly Corporate expense to increase byapproximately $30 million 14 November 1, 2007 15. Oshkosh Fiscal 2008 EstimatesOther EstimatesFiscal 2008 Estimates Interest expense and other$215 to $225 million (expense) Effective tax rate34.0% Equity in earnings$3.5 to $4.0 million (income) Average shares outstanding76,500,00015 November 1, 2007 16. Oshkosh Fiscal 2008 Estimates Estimated annual EPS range of $4.15 to $4.35 Q1 EPS estimate of $0.35 to $0.40 Seasonally weak quarter Difficult comparison due toprior year engine emissionsrelated pre-buy Anticipated capital spending of approximately $110 million Debt expected to be approximately $2.65 to $2.75 billion by September 30, 2008 16 November 1, 2007 17. Q4 2007 Summary Strong global outlook in access equipment Good visibility in defense, with margins moving into lower, more sustainable range Positive outlook for market share gains with Pierce Commercial segment faces headwinds in fiscal 2008, but looks better in fiscal 2009 ahead of 2010 engine emissions standards changes Complementary business segments underscore Oshkosh Trucks winning strategy17 November 1, 2007 18. 18 November 1, 2007