Download - oshkosh Q207_Slides

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Earnings Conference CallSecond Quarter Fiscal 2007May 3, 2007

Robert G. BohnChairman, President and Chief Executive Officer

Charles L. SzewsExecutive Vice President and Chief Financial Officerand President, JLG Industries, Inc.

Patrick N. DavidsonVice President of Investor Relations

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Forward Looking StatementsOur 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 Truck’s 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 2007, the Company’s ability to integrate the JLG Industries, Inc., Oshkosh Specialty Vehicles and Iowa Mold Tooling Co., Inc. acquisitions, the consequences of financial leverage associated with the JLG acquisition, the Company’s ability to turn around the Geesink Norba Group and Medtec businesses sufficiently to support their valuations resulting in no non-cash impairment charges for goodwill, the Company’s ability to adjust its operating expenses in the second half of fiscal 2007 at certain of its business units that anticipate lower industry demand resulting from changes to diesel engine emissions standards effective January 1, 2007, the expected level of U.S. Department of Defense procurement of the Company’s products and services, the cyclical nature of the Company’s access equipment, commercial and fire & emergency markets, risks related to reductions in government expenditures, the uncertainty of government contracts, 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 3, 2007. Except as set forth in such Form 8-K, we disclaim any obligation to update such forward-looking statements.

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Oshkosh Q2 2007 Highlights• Sales increased 96.6% to

$1.66 billion

• Operating income increased 69.1% to $134.8 million

• EPS up 1.5% to $0.68

• Large contract awards for defense

• Met fiscal 2007 debt retirement target six months early

OSK Q2 Performance(millions)

$1,661

$845

$672

$134.8

$79.7

$62.6

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

$2,000

2005 2006 2007$0.0

$20.0

$40.0

$60.0

$80.0

$100.0

$120.0

$140.0

$160.0

Sales Revenue Operating IncomeSa

les

Reve

nue

Operating Incom

e

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Access Equipment• Met financial and operations

expectations in Q2

• Strong international markets, particularly in Europe

• Strong aerial work platform business in U.S., but softer traditional telehandler business

• BAUMA demonstrated power of JLG brand

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Defense• Lower sales and operating income

compared to prior year quarter– Scheduled deliveries shifted to second

half of 2007– Lower margin driven by product mix

and FHTV contract renewal• Multiple contract awards during

quarter– FHTV– MRAP– TPER– MTT

• Strong funding outlook– Budget– Spring supplemental

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Fire & Emergency

• Continuing strong performance at Pierce

• Successful PUC launch at FDIC show

• Solid results in airport products and towing equipment groups

• Consolidating activities at Oshkosh Specialty Vehicles

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Commercial• Continued margin

improvement at McNeilus• 2007 engine emissions

standards changes expected to impact second half results

• Significant progress at Geesink Norba Group in Q2:– Rationalized workforce and

facilities– Leveraging facilities with JLG– Required Q2 charges

• IMT integration progressing with solid results

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JLG Integration Update

• Met or exceeded significant 100 day goals

• Numerous customer visits and trade shows– Power of cream and orange is

evident

• Expect to exceed previous fiscal 2007 synergy, earnings and cash flow targets

• Solid progress building team and strategies to drive JLG forward

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Consolidated Results

Net Sales $1,660.7 $844.8

% Growth 96.6% 25.6%

Operating Income $ 134.8 $ 79.7

% Margin 8.1% 9.4%

% Growth 69.1% 27.3%

Earnings Per Share $ 0.68 $ 0.67

% Growth 1.5% 28.8%

Dollars in millions, except per share amounts

Comments• Defense timing and

product mix adversely impacted results

• JLG dilutive to EPS by $0.02 per share

• $10.1 million ($0.09 per share) of inventory revaluation charges in Q2

• Re-priced Term Loan B and executed interest rate swap

2007 2006

Second Quarter

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Access Equipment

Net Sales $707.9 NA

% Growth NA NA

Operating Income $ 53.2 NA

% Margin 7.5% NA

% Growth NA NA

Dollars in millions

Comments

• Sales up in all regions worldwide(1)

• Purchase accounting charges:- $8.5 million

inventory revaluation- $16.1 million recurring

amortization anddepreciation

• Backlog up 26.0%(1)

2007 2006

Second Quarter

(1) Compared to JLG stand-alone results.

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Defense

Net Sales $306.0 $334.2

% Growth (8.4)% 59.4%


% Margin 17.3% 19.7%

% Growth (19.8)% 33.2%

Dollars in millions

Comments

• Results consistent with previous estimates

• Product mix and FHTV contract renewal affected margins

• Production increase on schedule

• Backlog up 46.0%

2007 2006

Second Quarter

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Fire & Emergency

Net Sales $294.2 $221.3

% Growth 32.9% 3.8%


% Margin 9.4% 8.1%

% Growth 54.6% (5.9)%

Dollars in millions

Comments

• Sales and margin growth at Pierce

• Solid towing product and airport product results

• Includes $35.8 million of sales from OSV

• Backlog up 11.9%, including OSV

2007 2006Second Quarter

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Commercial

Net Sales $361.9 $299.5

% Growth 20.9% 17.3%


% Margin 6.1% 5.1%

% Growth 44.3% 137.5%

Dollars in millions

Comments• Continued strong

domestic sales volume(pre-buy carryover for both concrete & refuse)

• Workforce reductions and other adjustments totaled $4.9 million

• Includes $28.8 million of sales from IMT

• Backlog down 31.1%, including IMT

2007 2006

Second Quarter

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Oshkosh Fiscal 2007 Estimates

• Expect access equipment sales between $2.35 and $2.45 billion

• Anticipate defense sales increase of $100 to $150 million

• Expect fire and emergency sales to increase by approximately $200 million

• Commercial sales expected to be flat; includes impact of IMT

Sales of $6.1 to $6.2 billion

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• Anticipate access equipment margins of about 9.5%, including purchase accounting charges of $63 to $65 million

• Expect defense margins to decline by approximately 50 to 100 bps

• Project fire & emergency margins to be even with prior year

• Commercial margins expected to decline by 50-100 bps

Operating Income of $568 to $580 Million

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Interest expense and other $205 to $215 million (expense)

Effective tax rate 36.0%

Minority interest $0.5 million (expense)

Equity in earnings $5.5 million (income)

Average shares outstanding 75,000,000

Fiscal 2007

Estimates

Other Estimates

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• Estimated annual EPS range of $3.15 - $3.25

• Estimated Q3 EPS rangeof $0.90 - $0.95

• Anticipated capital spending of approximately $105 to $115 million

• Debt expected to be approximately $3.0 - $3.1 billion at fiscal year-end

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• Reduced business risk– Strong debt pay-down

– Aggressive steps taken to improve European refuse business

• Defense margins moving into lower, more sustainable range, but outlook is strengthening

• Access equipment beginning to contribute to overall performance– Forecasting stronger earnings

• Success of diversification strategy is evident

Q2 2007 Summary