oshkosh Q32007slides
-
Upload
finance44 -
Category
Economy & Finance
-
view
345 -
download
3
description
Transcript of oshkosh Q32007slides
August 1, 2007
1
Earnings Conference CallThird Quarter Fiscal 2007August 1, 2007
Robert G. BohnChairman, President and Chief Executive Officer
Charles L. SzewsExecutive Vice President and Chief Financial Officer
Patrick N. DavidsonVice President of Investor Relations
August 1, 2007
2
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 and fiscal 2008, 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 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, risks associated with international operations and risks related to the collectibility of access equipment receivables. Additional information concerning these and other factors is contained in our filings with the SEC, including our Form 8-K filed August 1, 2007. Except as set forth in such Form 8-K, we disclaim any obligation to update such forward-looking statements.
August 1, 2007
3
Oshkosh Q3 2007 Highlights• Sales increased 108% to
$1.85 billion
• Operating income increased 133% to $192.7 million
• EPS up 68% to $1.21
• Increased fiscal 2007 EPS estimate range to $3.35 to $3.40; initiated fiscal 2008 EPS estimate range of $4.15 to $4.35
• Oshkosh pursuit of MRAP business continues
OSK Q3 Performance(millions)
$1,847
$888$819
$192.7
$82.6
$63.0
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
$2,000
2005 2006 2007$0.0
$50.0
$100.0
$150.0
$200.0
$250.0
Sales Revenue Operating IncomeSa
les
Reve
nue
Operating Incom
e
August 1, 2007
4
Access Equipment
• Craig Paylor named president of segment
• Integration efforts continue to yield success
• Strong international markets, particularly in Europe
• Strong aerial work platform business in U.S., but softer telehandler business
August 1, 2007
5
Defense• Strong performance driven by
need for heavy and medium tactical trucks
• Increased levels of:– Employees
– Truck production rates
• Continuing pursuit of MRAP-type contracts, with significant available capacity:– Prime– Subcontractor
– Teaming (ex. the Bull™)Killeen, Texas
August 1, 2007
6
Fire & Emergency• Tom Fenner named
president of segment
• Strong performance at fire apparatus maker Pierce
• Recent new product launches continue to gain traction
• Large airport products contracts ship in Q4
• OSV integration is progressing
August 1, 2007
7
Commercial
• Lower concrete placement sales due to:– Slowdown after engine
emissions pre-buy – Weakness in U.S. residential
construction
• U.S. refuse sales remained strong
• Necessary steps being taken at Geesink Norba Group
• IMT integration continues on track
August 1, 2007
8
Consolidated Results
Net Sales $1,847.3 $887.9
% Growth 108.1% 8.4%
Operating Income $ 192.7 $ 82.6
% Margin 10.4% 9.3%
% Growth 133.2% 31.2%
Earnings Per Share $ 1.21 $ 0.72
% Growth 68.1% 38.5%
Dollars in millions, except per share amounts
Comments
• Access equipment and defense led the way
• JLG accretive to EPS by $0.35 per share
• Debt reduced by $23 million
2007 2006
Third Quarter
August 1, 2007
9
Access Equipment
Net Sales $873.8 NA
% Growth N/A NA
Operating Income $ 98.3 NA
% Margin 11.3% NA
% Growth N/A NA
Dollars in millions
Comments2007 2006
Third Quarter
(1) Compared to JLG stand-alone results.
• Sales up in all regions- Particularly strong in
Europe• Purchase accounting
charges:- $2.0 million inventory
revaluation- $16.8 million recurring
amortization and depreciation
• Backlog up 38.2%(1)
August 1, 2007
10
Defense
Net Sales $376.3 $291.4
% Growth 29.1% 3.7%
Operating Income $ 65.3 $ 49.0
% Margin 17.3% 16.8%
% Growth 33.1% 6.7%
Dollars in millions
Comments
• Production ramp-up in full swing
• Strong volumes in new and remanufactured trucks
• Sharply lower aftermarket sales
• Backlog up 65.4%
2007 2006
Third Quarter
August 1, 2007
11
Fire & Emergency
Net Sales $290.2 $255.3
% Growth 13.7% 14.7%
Operating Income $ 29.0 $ 29.8
% Margin 10.0% 11.7%
% Growth (2.7)% 28.7%
Dollars in millions
Comments• Growth in U.S. fire
apparatus
• Higher-margin airport product sales heavily weighted to Q4
• Supplier issues in 2006 affect comparison
• Includes $31.9 million of sales from OSV
• Backlog up 9.4%, including OSV
2007 2006Third Quarter
August 1, 2007
12
Commercial
Net Sales $317.8 $350.6
% Growth (9.3)% 8.8%
Operating Income $ 17.8 $ 25.4
% Margin 5.6% 7.2%
% Growth (29.7)% 252.0%
Dollars in millions
Comments• Concrete placement
demand declined after ’07 engine pre-buy
• U.S. refuse sales up 14.4%• Geesink Norba
performance improved from Q2
• Includes $25.4 million of sales from IMT
• Backlog down 51.1%, including IMT
2007 2006
Third Quarter
August 1, 2007
13
Oshkosh Fiscal 2007 Estimates
Expectations:
• Access equipment sales of approximately $2.5 billion
• Defense sales to grow about 10%
• Fire and emergency sales to increase over 20%
• Commercial sales to grow about 5%
Sales of $6.3 to $6.35 billion
August 1, 2007
14
Oshkosh Fiscal 2007 Estimates
Expectations:
• Access equipment margins slightly greater than 9.5%, including purchase accounting charges of $65 to $67 million
• Defense margins to decline by approximately 100 to 150 bps
• Fire & emergency margins to be slightly lower than previous year
• Commercial margins to decline by 50 to 100 bps
Operating Income of $576 to $583 Million
August 1, 2007
15
Oshkosh Fiscal 2007 Estimates
Interest expense and other $195 to $200 million (expense)
Effective tax rate 36.0%
Equity in earnings $7.0 million (income)
Average shares outstanding 75,000,000
Fiscal 2007
Estimates
Other Estimates
August 1, 2007
16
Oshkosh Fiscal 2007 Estimates
• Raising full-year EPS estimate range to $3.35 to $3.40
• Estimated Q4 EPS rangeof $0.90 to $0.95
• Anticipated capital spending of approximately $105 million
• Debt expected to be approximately $3.0 to $3.1 billion at fiscal year-end
August 1, 2007
17
Oshkosh Fiscal 2008 Estimates
Expectations:• Access equipment sales to
increase 15.0% to 20.0%• Defense sales to grow
over 20.0%• Fire and emergency sales to
increase approximately 5.0%• Commercial sales to be up
slightly
Sales of $7.0 to $7.2 billion
August 1, 2007
18
Oshkosh Fiscal 2008 Estimates
Expectations:
• Access equipment margins to improve by 100 to 150 bps
• Defense margins to decline by approximately 200 to 250 bps
• Fire & emergency margins to improve by 50 to 100 bps
• Commercial margins to improve by 100 to 150 bps
• Corporate expense to grow by approximately $30 million
Operating Income of $705 to $730 Million
August 1, 2007
19
Oshkosh Fiscal 2008 Estimates
Interest expense and other $220 to $230 million (expense)
Effective tax rate 34.5%
Equity in earnings $3.0 million (income)
Average shares outstanding 76,500,000
Fiscal 2008
Estimates
Other Estimates
August 1, 2007
20
Oshkosh Fiscal 2008 Estimates
• Estimated annual EPS range of $4.15 to $4.35
• Anticipated capital spending of approximately $110 million
• Debt expected to be approximately $2.65 to $2.75 billion by September 30, 2008
August 1, 2007
21
• Very strong performance by access equipment
• Defense business coming on strong, with margins moving into lower, more sustainable range
– Remain in hunt for MRAP-type business
• Commercial segment in the down cycle of the engine emissions pre-buy
• Favorable outlook through fiscal 2008
• Success of diversification strategy is evident
Q3 2007 Summary
August 1, 2007
22