Oshkosh Corporation First Quarter Fiscal 2012 January 31, 2012 · Oshkosh Q1 FY12 Results Sales of...
Transcript of Oshkosh Corporation First Quarter Fiscal 2012 January 31, 2012 · Oshkosh Q1 FY12 Results Sales of...
MISSION DRIVEN: To Move the World at Work
Oshkosh Corporation
First Quarter Fiscal 2012
January 31, 2012
Charles L. Szews
President and Chief Executive Officer
David M. Sagehorn
Executive Vice President and Chief
Financial Officer
Patrick N. Davidson
Vice President, Investor Relations
MISSION DRIVEN: To Move the World at Work
Forward Looking Statements
2
This presentation contains statements that the Company believes to be “forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995. All statements other than statements of historical fact, including, without limitation, statements
regarding the Company’s 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. When used in this press
release, words such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “should,” “project” or “plan” or the negative thereof or
variations thereon or similar terminology are generally intended to identify forward-looking statements. These forward-looking statements are
not guarantees of future performance and are subject to risks, uncertainties, assumptions and other factors, some of which are beyond the
Company’s control, which could cause actual results to differ materially from those expressed or implied by such forward-looking statements.
These factors include the expected level and timing of DoD procurement of products and services and funding thereof, including the impact of
the DoD’s allocation of certain tires which will restrict and delay certain FHTV sales; risks related to reductions in government expenditures in
light of U.S. defense budget pressures and an uncertain DoD tactical wheeled vehicle strategy; the cyclical nature of the Company’s access
equipment, commercial and fire & emergency markets, especially during periods of global economic uncertainty, lower municipal spending and
tight credit markets; the Company’s ability to produce vehicles under the FMTV contract at targeted margins; the duration of the ongoing global
economic weakness, which could lead to additional impairment charges related to many of the Company’s intangible assets and/or a slower
recovery in the Company’s cyclical businesses than equity market expectations; the potential for the U.S. government to competitively bid the
Company’s Army and Marine Corps contracts; the consequences of financial leverage, which could limit the Company’s ability to pursue
various opportunities; increasing commodity and other raw material costs, particularly in a sustained economic recovery; the ability to pass on
to customers price increases to offset higher input costs; risks related to costs and charges as a result of facilities consolidation and alignment,
including that anticipated cost savings may not be achieved; risks related to the collectability of receivables, particularly for those businesses
with exposure to construction markets; the cost of any warranty campaigns related to the Company’s products; risks related to production or
shipment delays arising from quality or production issues; risks associated with international operations and sales, including foreign currency
fluctuations and compliance with the Foreign Corrupt Practices Act; the potential for increased costs relating to compliance with changes in
laws and regulations; risks related to disruptions in the Company’s distribution networks; risks related to actions of activist shareholders; and
the Company’s ability to successfully execute on its strategic road map and meet its long-term financial goals.
Additional information concerning these and other factors is contained in the Company’s filings with the Securities and Exchange Commission,
including the Form 8-K filed January 31, 2012. The Company assumes no obligation, and disclaims any obligation, to update information
contained in this presentation. Investors should be aware that the Company may not update such information until the Company’s next
quarterly earnings conference call, if at all.
OSK First Quarter 2012 Earnings Call January 31, 2012
MISSION DRIVEN: To Move the World at Work
Oshkosh Q1 FY12 Results
Sales of $1.9 billion and EPS of
$0.42
FMTV profitable this quarter,
ahead of most recent
expectations
Access equipment recovery
continuing
Investing in MOVE strategy
– Cost optimization
– New product innovations
– Emerging markets
January 31, 2012 3 OSK First Quarter 2012 Earnings Call
$1,879 $1,701
$0.42
$1.09
$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
2012 2011
Net Sales EPS
Net
Sale
s
(millions)
OSK Fiscal Q1 Performance
EPS*
* Fiscal 2012 EPS includes discrete income tax benefits of $0.07 per share, after-tax restructuring related costs of $0.05 per share, foreign currency
transaction losses of $0.04 per share and proxy contest costs of $0.02 per share. Fiscal 2011 EPS includes discrete income tax benefits of $0.10
per share and after-tax restructuring related costs of $0.15 per share. Restructuring related costs include certain non-GAAP restructuring costs. A
reconciliation of these non-GAAP financial measures to the most comparable GAAP measure can be found at the back of these slides.
MISSION DRIVEN: To Move the World at Work
Market Conditions
President’s FY12 defense budget signed
– FY13 budget details not yet available
– Oshkosh is well positioned for new vehicle
programs
Bridge contract for FHTV through FY14
Access equipment replacement demand
continues to drive higher sales
– North America remains strongest region
– Previously announced price increase
effective January 2012
U.S. fire truck market remains weak
– Robust global opportunities have longer
sales cycle
Improving RCV outlook
January 31, 2012 4 OSK First Quarter 2012 Earnings Call
MISSION DRIVEN: To Move the World at Work
Operations Update
Defense segment
– Strong progress from FMTV project teams
Access equipment segment
– European restructuring largely complete
– Reduced supply chain constraints
Benefiting from lean driven efficiencies
in commercial segment
Fire & emergency segment restructuring
– Addressing inefficiencies related to
relocation of ambulance and mobile
medical unit production to Florida
January 31, 2012 5 OSK First Quarter 2012 Earnings Call
MISSION DRIVEN: To Move the World at Work
Consolidated Results
Sales impacted by: + FMTV volume
+ Traditional access equipment
demand
– Lower FHTV vehicle and M-ATV
aftermarket parts volume
Margins impacted by:
– Adverse sales mix in defense
segment
– Higher material costs in access
equipment segment
$40 million of debt
reduction
January 31, 2012 6 OSK First Quarter 2012 Earnings Call
Comments (Dollars in millions,
except per share amounts) First Quarter
Net Sales $1,878.6 $1,700.8
% Change 10.5% (30.1)%
Operating Income $75.3 $168.7
% Change (55.3)% (51.7)%
% Margin 4.0% 9.9%
Earnings Per Share* $0.42 $1.09
% Change (61.5)% (48.1)%
2012 2011
* Operating income results include restructuring related costs of $6.8 million and proxy contest costs of $2.8 million in fiscal 2012 and restructuring
related costs of $14.7 million in fiscal 2011. Fiscal 2012 EPS includes discrete income tax benefits of $0.07 per share, after-tax restructuring related
costs of $0.05 per share, foreign currency transaction losses of $0.04 per share and proxy contest costs of $0.02 per share. Fiscal 2011 EPS
includes discrete income tax benefits of $0.10 per share and after-tax restructuring related costs of $0.15 per share. Restructuring related costs
include certain non-GAAP restructuring costs. A reconciliation of these non-GAAP financial measures to the most comparable GAAP measure can
be found at the back of these slides.
MISSION DRIVEN: To Move the World at Work
Updated Expectations for FY12*
Slightly higher corporate expenses
Tax rate of 32% to 34%
CapEx of $85 to $95 million
Slightly positive free cash flow
January 31, 2012 7 OSK First Quarter 2012 Earnings Call
* All comparisons are vs. FY11.
Measure Defense Access
Equipment
Fire &
Emergency
Commercial
Sales ~15% lower 25% - 30%
higher
Up slightly ~15% higher
Operating
Income
Margin
Nearly 5% Mid to high
single digits
Very low
single digits
Low single
digits
MISSION DRIVEN: To Move the World at Work
For information contact:
Patrick N. Davidson
Vice President, Investor Relations
920 966-5939
Tina Schmiedel
Director, Investor Relations
920 233-9235
MISSION DRIVEN: To Move the World at Work
Appendix: Defense
Sales impacted by:
Lower FHTV vehicle and
M-ATV aftermarket parts
sales
+ Higher FMTV sales
Margins impacted by:
Adverse sales mix
FMTV profitable ahead of
most recent expectations
Backlog down 21% vs.
prior year to $4.3 billion
January 31, 2012 9 OSK First Quarter 2012 Earnings Call
Comments
Net Sales $1,051.0 $1,113.7
% Change (5.6)% (40.1)%
Operating Income $92.4 $217.9
% Margin 8.8% 19.6%
First Quarter
(Dollars in millions)
2012 2011
MISSION DRIVEN: To Move the World at Work
Appendix: Access Equipment
Sales impacted by:
Global demand, primarily for replacement
Higher M-ATV related intersegment sales
Margins impacted by:
+ Improved absorption
+ Lower restructuring-related costs in current period
Higher material costs
Higher new product development spending
Backlog up 107% vs. prior year to $785 million
January 31, 2012 10 OSK First Quarter 2012 Earnings Call
Comments
Net Sales $627.7 $327.3
% Change 91.8% (56.6)%
Operating Income $13.1 $(16.7)
% Margin 2.1% (5.1)%
First Quarter*
(Dollars in millions)
2012 2011
* Operating income results include restructuring related costs of $2.2 million in fiscal
2012 and $13.7 million in fiscal 2011. Restructuring related costs include certain
non-GAAP restructuring costs. A reconciliation of these non-GAAP financial
measures to the most comparable GAAP measure can be found at the back of
these slides.
MISSION DRIVEN: To Move the World at Work
Net Sales $163.0 $201.5
% Change (19.1)% (10.5)%
Operating Income $(10.0) $2.6
% Margin (6.2)% 1.3%
First Quarter*
(Dollars in millions)
2012 2011
Appendix: Fire & Emergency
Sales impacted by:
Lower airport products volume
Margins impacted by:
Lower absorption
Continued production
inefficiencies, largely due to
facilities consolidation
Backlog up 13% vs. prior
year to $523 million
January 31, 2012 11 OSK First Quarter 2012 Earnings Call
Comments
* Operating income results include restructuring related costs of $4.6 million in fiscal 2012 and $1.0 million in fiscal 2011. Restructuring related
costs include certain non-GAAP restructuring costs. A reconciliation of these non-GAAP financial measures to the most comparable GAAP
measure can be found at the back of these slides.
MISSION DRIVEN: To Move the World at Work
Appendix: Commercial
Sales impacted by:
+ Higher volume, primarily
RCV sales, supported by
improved concrete mixer
deliveries
Margins impacted by:
+ Improved absorption
+ Lean driven efficiencies
Backlog up 30% vs.
prior year to $120
million
January 31, 2012 12 OSK First Quarter 2012 Earnings Call
Comments
Net Sales $171.6 $119.5
% Change 43.6% (22.9)%
Operating Income $6.9 $(7.7)
% Margin 4.0% (6.5)%
First Quarter
(Dollars in millions)
2012 2011
MISSION DRIVEN: To Move the World at Work
Appendix: Non-GAAP Financial Measures
January 31, 2012 13 OSK First Quarter 2012 Earnings Call
The table below presents a reconciliation of the Company’s presented non-GAAP measures to the most directly
comparable GAAP measures (in millions, except per share amounts):
2011 2010
Access equipment segment
Restructuring related costs 2.2$ 13.7$
Non-GAAP restructuring costs* (2.7) (2.4)
GAAP restructuring costs (credit) (0.5)$ 11.3$
Fire & emergency segment
Restructuring related costs 4.6$ 1.0$
Non-GAAP restructuring costs* (4.3) (0.3)
GAAP restructuring costs 0.3$ 0.7$
Consolidated
Restructuring related costs 6.8$ 14.7$
Non-GAAP restructuring costs* (7.0) (2.7)
GAAP restructuring costs (credit) (0.2)$ 12.0$
Non-GAAP restructuring related costs* 7.0$ 2.7$
Tax effect (2.6) (1.0)
Non-GAAP restructuring related costs, net of tax* 4.4$ 1.7$
Restructuring related costs per share 0.05$ 0.15$
Non-GAAP restructuring related costs per share* (0.05)$ (0.02)$
GAAP restructuring costs per share -$ 0.13$
Three Months Ended
December 31,
* Non-GAAP restructuring related costs include such costs as overtime, plant realignment costs, manufacturing inefficiencies / start-up costs,
costs to reconfigure bills of materials and work instructions and similar costs related to restructuring actions.
MISSION DRIVEN: To Move the World at Work
Appendix: Commonly Used Acronyms
January 31, 2012 14 OSK First Quarter 2012 Earnings Call
ARFF Aircraft Rescue and Firefighting MECV Modernized Expanded Capability Vehicle
AWP Aerial Work Platform MRAP Mine Resistant Ambush Protected
CNG Compressed Natural Gas MSVS Medium Support Vehicle System (Canada)
DoD Department of Defense MTT Medium Tactical Truck
EAME Europe, Africa & Middle East NPD New Product Development
EMD Engineering & Manufacturing Development OI Operating Income
FHTV Family of Heavy Tactical Vehicles PLS Palletized Load System
FMS Foreign Military Sales PUC Pierce Ultimate Configuration
FMTV Family of Medium Tactical Vehicles RCV Refuse Collection Vehicle
HEMTT Heavy Expanded Mobility Tactical Truck RFP Request for Proposal
HET Heavy Equipment Transporter ROW Rest of World
HEWATT HEMTT-Based Water Tender TACOM Tank-automotive and Armaments Command
HMMWV High Mobility Multi-Purpose Wheeled Vehicle TAPV Tactical Armor Protected Vehicle (Canada)
JLTV Joint Light Tactical Vehicle TDP Technical Data Package
JPO Joint Program Office TFFT Tactical Fire Fighting Truck
JROC Joint Requirements Oversight Council TPV Tactical Protector Vehicle
JUONS Joint Urgent Operational Needs Statement TWV Tactical Wheeled Vehicle
L-ATV Light Combat Tactical All-Terrain Vehicle UCA Undefinitized Contract Action
LVSR Logistic Vehicle System Replacement UIK Underbody Improvement Kit (for M-ATV)
M-ATV MRAP All-Terrain Vehicle