Raises Fiscal 2016 EPS Estimate to Range of
$2.60 to $2.80
Declares Quarterly Cash Dividend of $0.19
Per Share
Oshkosh Corporation (NYSE: OSK) today reported fiscal 2016 third
quarter net income of $84.2 million, or $1.13 per diluted
share, compared to $89.9 million, or $1.13 per diluted
share, in the third quarter of fiscal 2015. Comparisons in this
news release are to the corresponding period of the prior year,
unless otherwise noted.
Consolidated net sales in the third quarter of fiscal 2016 were
$1.75 billion, an increase of 8.4 percent. Higher sales
in the defense, fire & emergency and access equipment segments
were partially offset by a slight decline in sales in the
commercial segment.
Consolidated operating income in the third quarter of fiscal
2016 was $146.8 million, or 8.4 percent of sales,
compared to $136.6 million, or 8.5 percent of sales, in
the prior year third quarter. The increase in operating income was
the result of higher defense, fire & emergency and commercial
segment operating income, offset in part by lower access equipment
segment operating income and higher corporate expenses.
“Our solid fiscal third quarter results were led by strong
performance in our defense and fire & emergency segments, each
of which recorded year-over-year increases in sales, operating
income and operating income margin,” said Wilson Jones, president
and chief executive officer of Oshkosh Corporation. “Our People
First culture, the further enhancement and execution of our MOVE
strategy and our innovative products contribute to Oshkosh being a
different integrated global industrial, enabling us to deliver
solid performance in a variety of economic conditions.
“The fiscal third quarter was highlighted by progress on many
fronts, most notably in our defense segment as we prepare to ramp
up production and deliver our revolutionary new Joint Light
Tactical Vehicle (JLTV). Our activities in fiscal 2016 are
preparing us to successfully deliver low rate initial production
JLTVs to our U.S. government customer starting late this fiscal
year. We also made progress this quarter on a large order we
received in our second fiscal quarter for an international defense
customer that is purchasing more than 1,000 of our Mine Resistant
Ambush Protected – All Terrain Vehicles (M-ATV). Most of these
vehicles will ship in fiscal 2017, but we do expect to sell
approximately 175 units under this contract in our fourth quarter
of this fiscal year.
“Our access equipment segment continues to manage production
levels while delivering high quality aerial products in a market
that we expect to be down compared with fiscal 2015,” added Jones.
“The team made great progress this quarter lowering inventory as we
work to optimize our working capital.
“As a result of improved defense and fire & emergency
segment expectations, we are raising our earnings per share
expectations for fiscal 2016 to a range of $2.60 to $2.80,” said
Jones.
Factors affecting third quarter results for the Company’s
business segments included:
Access Equipment – Access equipment segment net sales
increased 2.1 percent to $952.5 million in the third
quarter of fiscal 2016. The increase in sales was primarily due to
higher telehandler unit sales in North America, offset in part by a
challenging pricing environment.
Access equipment segment operating income decreased
10.4 percent to $122.1 million, or 12.8 percent of
sales, in the third quarter of fiscal 2016 compared to
$136.4 million, or 14.6 percent of sales, in the third
quarter of fiscal 2015. The decrease in operating income was
primarily the result of a challenging pricing environment and
higher incentive compensation expense, offset in part by lower
spending on engine emissions standards changes and the impact of
higher sales volume. In the third quarter of fiscal 2015, the
access equipment segment recorded a reduction in accrued incentive
compensation expense as a result of lowering its fiscal 2015
projected results.
Defense – Defense segment net sales for the third quarter
of fiscal 2016 increased 36.1 percent to $264.3 million.
The increase in sales was primarily due to increased sales of
Family of Heavy Tactical Vehicles (FHTV). The Company experienced a
break in production under the FHTV program in the third quarter of
fiscal 2015.
The defense segment recorded operating income of
$19.1 million, or 7.2 percent of sales, in the third
quarter of fiscal 2016 compared to an operating loss of
$7.1 million, or 3.7 percent of sales, in the third
quarter of fiscal 2015. The increase in operating results was
largely due to favorable product mix, contractual price increases
and the impact of higher sales volume.
Fire & Emergency – Fire & emergency segment net
sales for the third quarter of fiscal 2016 increased
24.4 percent to $248.5 million. Sales in the third
quarter of fiscal 2016 benefited from higher domestic fire
apparatus deliveries as a result of increased production rates to
meet higher demand. Improved operational efficiencies have allowed
the fire & emergency segment to increase its production
rates.
Fire & emergency segment operating income increased
105.0 percent to $19.7 million, or 7.9 percent of
sales, in the third quarter of fiscal 2016 compared to
$9.6 million, or 4.8 percent of sales, in the third
quarter of fiscal 2015. The increase in operating income was
primarily a result of the impact of higher sales volume and
improved pricing.
Commercial – Commercial segment net sales decreased
2.1 percent to $287.9 million in the third quarter of
fiscal 2016. The decrease in sales was primarily attributable to
lower refuse collection vehicles sales. Sales in the third quarter
of fiscal 2015 included a large international refuse collection
vehicle sale that did not repeat in the third quarter of fiscal
2016.
Commercial segment operating income increased 6.2 percent
to $23.8 million, or 8.3 percent of sales, in the third
quarter of fiscal 2016 compared to $22.4 million, or
7.6 percent of sales, in the third quarter of fiscal 2015. The
increase in operating income was primarily a result of improved
product mix.
Corporate – Corporate operating costs increased
$13.2 million in the third quarter of fiscal 2016 to
$37.9 million due primarily to higher incentive compensation
expense. Results for the third quarter of fiscal 2015 reflected a
credit for incentive compensation to reverse amounts accrued
earlier in fiscal 2015 as a result of a reduction in fiscal 2015
projected results.
Interest Expense Net of Interest Income – Interest
expense net of interest income increased $2.7 million to
$15.3 million in the third quarter of fiscal 2016 as a result
of borrowings to support increased working capital levels.
Provision for Income Taxes – The Company recorded income
tax expense of $48.4 million in the third quarter of fiscal
2016, or 36.6 percent of pre-tax income, compared to
$34.8 million, or 28.1 percent of pre-tax income, in the
third quarter of fiscal 2015. The Company recorded a year-to-date
adjustment in the third quarter of fiscal 2016 to increase tax
expense as a result of a higher estimated mix of domestic income
versus lower-tax rate foreign income. The Company recorded a
$7.5 million, $0.09 per share, benefit from the reduction
of income tax reserves in the third quarter of fiscal 2015 related
to settlement of tax audits and expiration of statutes of
limitations.
Share Repurchases – Share repurchases completed during
the previous twelve months benefited earnings per share in the
third quarter of fiscal 2016 by $0.07 compared to the prior year
third quarter. The Company did not repurchase any shares in the
third quarter of fiscal 2016.
Nine-month Results
The Company reported net sales for the first nine months of
fiscal 2016 of $4.52 billion and net income of
$154.9 million, or $2.08 per share. This compares with
net sales of $4.52 billion and net income of
$179.2 million, or $2.25 per share, in the first nine
months of the prior year. Consolidated net sales in the first nine
months of fiscal 2016 were essentially flat as increased defense
and fire & emergency segment sales were offset by significantly
lower access equipment segment sales. Results for the first nine
months of fiscal 2015 included after-tax costs of
$9.3 million, or $0.12 per share, incurred in connection
with the refinancing of the Company’s senior notes due 2020 and
$2.1 million, or $0.03 per share, after-tax other
postretirement benefit curtailment gain. Excluding these items,
adjusted1 net income for the first nine months of fiscal 2015 was
$186.4 million, or $2.34 per share. Improved operating
income results in each of the Company’s non-access equipment
segments in fiscal 2016 were not sufficient to offset the impact of
lower sales in the Company’s access equipment segment and higher
corporate expenses, including increased start-up costs of a shared
manufacturing facility and higher incentive compensation expense.
Earnings per share in the first nine months of fiscal 2016
benefited $0.13 compared to the prior year period as a result of
lower average diluted shares outstanding. Earnings per share for
the first nine months of fiscal 2016 were negatively impacted by
$0.03 as a result of the strengthening U.S. dollar.
Fiscal 2016 Expectations
The Company increased its fiscal 2016 earnings per share
estimate range to $2.60 to $2.80 on projected net sales of
$6.0 billion to $6.1 billion and operating income of
$340 million to $360 million. The increased estimate
range largely reflects higher defense and fire & emergency
segment sales and operating income, partially offset by lower
access equipment segment operating income, higher corporate costs
related to increased incentive compensation expense and a higher
effective income tax rate. The Company now expects to recognize
sales of approximately 175 M-ATVs in the fourth quarter of fiscal
2016 in the defense segment. The Company expects fiscal 2016 net
cash flow provided by operating activities of approximately
$500 million less additions to property, plant and equipment
of approximately $100 million to result in free cash flow of
approximately $400 million.
Dividend Announcement
The Company’s Board of Directors today declared a quarterly cash
dividend of $0.19 per share of Common Stock. The dividend will
be payable on August 29, 2016, to shareholders of record as of
August 15, 2016.
Conference Call
The Company will comment on its fiscal 2016 third quarter
earnings and its full-year fiscal 2016 outlook during a conference
call at 9:00 a.m. EDT this morning. Slides for the call will be
available on the Company’s website beginning at 7:00 a.m. EDT this
morning. The call will be webcast simultaneously over the Internet.
To access the webcast, listeners can go to
www.oshkoshcorporation.com at least 15 minutes prior to the event
and follow instructions for listening to the webcast. An audio
replay of the call and related question and answer session will be
available for 12 months at this website.
Forward-Looking
Statements
This news release 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 news 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 cyclical nature of the Company’s access
equipment, commercial and fire & emergency markets, which are
particularly impacted by the strength of U.S. and European
economies and construction seasons; the Company’s estimates of
access equipment demand which, among other factors, is influenced
by customer historical buying patterns and rental company fleet
replacement strategies; the strength of the U.S. dollar and its
impact on Company exports, translation of foreign sales and
purchased materials; the expected level and timing of U.S.
Department of Defense (DoD) and international defense customer
procurement of products and services and funding or payments
thereof; the Company’s ability to utilize material and components
which it has committed to purchase from suppliers; higher material
costs resulting from production variability due to uncertainty of
timing of funding or payments from international defense customers;
risks related to reductions in government expenditures in light of
U.S. defense budget pressures, sequestration and an uncertain DoD
tactical wheeled vehicle strategy; the impact of any DoD
solicitation for competition for future contracts to produce
military vehicles, including a future Family of Medium Tactical
Vehicle production contract; the Company’s ability to increase
prices to raise margins or offset higher input costs; increasing
commodity and other raw material costs, particularly in a sustained
economic recovery; risks related to facilities expansion,
consolidation and alignment, including the amounts of related costs
and charges and that anticipated cost savings may not be achieved;
global economic uncertainty, 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 Company or equity market expectations; projected
adoption rates of work at height machinery in emerging markets; the
impact of severe weather or natural disasters that may affect the
Company, its suppliers or its customers; 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 compliance with the Foreign Corrupt Practices Act; the
Company’s ability to comply with complex laws and regulations
applicable to U.S. government contractors; cybersecurity risks and
costs of defending against, mitigating and responding to a data
security breach; and risks related to 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
today. All forward-looking statements speak only as of the date of
this news release. The Company assumes no obligation, and disclaims
any obligation, to update information contained in this news
release. Investors should be aware that the Company may not update
such information until the Company’s next quarterly earnings
conference call, if at all.
About Oshkosh
Corporation
Oshkosh Corporation is a leading designer, manufacturer and
marketer of a broad range of access equipment, commercial, fire
& emergency, military and specialty vehicles and vehicle
bodies. Oshkosh Corporation manufactures, distributes and services
products under the brands of Oshkosh®, JLG®, Pierce®, McNeilus®,
Jerr-Dan®, Frontline™, CON-E-CO®, London® and IMT®. Oshkosh
products are valued worldwide by rental companies, concrete
placement and refuse collection businesses, fire & emergency
departments, municipal and airport services and defense forces,
where high quality, superior performance, rugged reliability and
long-term value are paramount. For more information, log on to
www.oshkoshcorporation.com.
®, TM All brand names referred to in this news release are
trademarks of Oshkosh Corporation or its subsidiary companies.
OSHKOSH CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF
INCOME (Unaudited; in millions, except share and per share
amounts) Three Months Ended
Nine Months Ended June 30, June
30, 2016 2015
2016 2015 Net
sales $ 1,747.5 $ 1,612.3 $
4,523.8 $ 4,519.8 Cost of sales
1,432.9
1,328.3
3,767.1
3,730.3 Gross income 314.6
284.0 756.7 789.5 Operating
expenses: Selling, general and administrative
154.7 134.2 448.7 437.5 Amortization
of purchased intangibles 13.1
13.2
39.5 40.0
Total operating expenses
167.8 147.4
488.2
477.5 Operating income
146.8 136.6 268.5 312.0 Other
income (expense): Interest expense (15.8 )
(13.2 ) (46.0 ) (56.4 )
Interest income 0.5 0.6 1.5 2.0
Miscellaneous, net 0.8
(0.2 )
(0.2 )
(0.2 ) Income before
income taxes and equity in earnings of unconsolidated
affiliates 132.3 123.8 223.8 257.4
Provision for income taxes 48.4
34.8
70.4 80.5
Income before equity in earnings of unconsolidated
affiliates 83.9 89.0 153.4 176.9
Equity in earnings of unconsolidated affiliates
0.3
0.9 1.5
2.3 Net income
$ 84.2
$ 89.9
$ 154.9
$ 179.2
Amounts available to common shareholders, net of tax: Net
income $ 84.2 $ 89.9 $
154.9 $ 179.2 Allocated to participating
securities -
(0.2 )
- (0.4
) Net income available to common
shareholders $ 84.2
$ 89.7
$ 154.9
$ 178.8
Earnings per share attributable to common shareholders:
Basic $ 1.15 $ 1.15 $
2.11 $ 2.28 Diluted 1.13
1.13 2.08 2.25 Basic
weighted-average shares outstanding 73,390,624
78,117,876 73,526,081 78,327,982 Dilutive
stock options and other equity- based compensation
awards 876,338 1,185,651 803,060
1,131,081 Participating restricted stock
- (119,450
) -
(114,641 ) Diluted
weighted-average shares outstanding
74,266,962
79,184,077
74,329,141
79,344,422 OSHKOSH CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited; in
millions) June 30, September 30,
2016 2015 ASSETS
Current assets: Cash and cash equivalents $
45.5 $ 42.9 Receivables, net
1,198.4 964.6 Inventories, net 1,254.9
1,301.7 Deferred income taxes, net 55.1
52.2 Other current assets
90.5 67.9
Total current assets 2,644.4 2,429.3
Property, plant and equipment: Property, plant and
equipment 1,134.3 1,093.7 Accumulated
depreciation (655.2
) (617.9
) Property, plant and equipment, net
479.1 475.8 Goodwill 1,001.0
1,001.1 Purchased intangible assets, net 566.7
606.7 Other long-term assets
101.5 100.1
Total assets $
4,792.7 $
4,613.0 LIABILITIES AND
SHAREHOLDERS' EQUITY Current liabilities: Revolving
credit facilities and current maturities of long-term
debt $ 127.0 $ 83.5 Accounts
payable 565.1 552.8 Customer advances
492.9 440.2 Payroll-related obligations
138.5 116.6 Other current liabilities
293.9 265.0
Total current liabilities 1,617.4
1,458.1 Long-term debt, less current maturities
840.0 855.0 Deferred income taxes, net
92.9 91.7 Other long-term liabilities
298.0 297.1 Commitments and contingencies
Shareholders' equity 1,944.4
1,911.1 Total
liabilities and shareholders' equity $
4,792.7 $
4,613.0 OSHKOSH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited; in millions) Nine Months
Ended June 30, 2016
2015 Operating activities: Net
income $ 154.9 $ 179.2
Depreciation and amortization 95.9 94.1
Stock-based compensation expense 16.0 16.4
Deferred income taxes (4.5 ) (7.1
) Foreign currency transaction losses 0.1
7.9 Gain on sale of assets (7.6 )
(8.6 ) Other non-cash adjustments 0.7
14.5 Changes in operating assets and liabilities
(93.6 )
(333.0 ) Net cash
provided (used) by operating activities 161.9
(36.6 ) Investing activities:
Additions to property, plant and equipment (62.3
) (100.0 ) Additions to equipment held for
rental (30.9 ) (19.8 )
Acquisition of business, net of cash acquired -
(8.8 ) Proceeds from sale of equipment held for
rental 33.7 25.5 Other investing
activities (1.5
) (0.7
) Net cash used by investing activities
(61.0 ) (103.8 ) Financing
activities: Proceeds from issuance of debt (original
maturities greater than three months) 323.5 345.0
Repayments of debt (original maturities greater than three
months) (278.5 ) (340.0 ) Net
decrease in short-term debt (16.5 ) -
Debt issuance costs - (15.5 )
Repurchases of common stock (100.1 )
(88.1 ) Dividends paid (41.9 )
(40.0 ) Proceeds from exercise of stock
options 8.8 7.3 Excess tax benefit from
stock-based compensation 1.3
4.3
Net cash used by financing
activities
(103.4 ) (127.0 ) Effect of
exchange rate changes on cash 5.1
(0.2 )
Increase (decrease) in cash and cash equivalents 2.6
(267.6 ) Cash and cash equivalents at beginning of
period 42.9
313.8 Cash and cash equivalents at
end of period $ 45.5
$ 46.2
OSHKOSH CORPORATION SEGMENT INFORMATION
(Unaudited; in millions)
Three Months Ended June 30,
2016 2015 External
Inter- Net External Inter- Net
Customers segment
Sales Customers
segment Sales Access
equipment Aerial work platforms $ 511.4
$ - $ 511.4 $ 542.7
$ - $ 542.7 Telehandlers
266.6 - 266.6 221.4 -
221.4 Other 174.5
- 174.5
168.5
- 168.5
Total access equipment 952.5 -
952.5 932.6 - 932.6
Defense 264.0 0.3 264.3 191.1
3.1 194.2 Fire & emergency
244.2 4.3 248.5 195.0 4.8
199.8 Commercial Concrete placement
164.6 - 164.6 158.0 -
158.0 Refuse collection 96.5 -
96.5 103.6 - 103.6 Other
25.7 1.1
26.8
32.0 0.4
32.4 Total commercial
286.8 1.1 287.9 293.6 0.4
294.0 Intersegment eliminations
- (5.7
) (5.7
) -
(8.3 )
(8.3 ) Consolidated net
sales $ 1,747.5
$ -
$ 1,747.5
$ 1,612.3
$ -
$ 1,612.3
Nine Months Ended June 30,
2016 2015 External
Inter- Net External Inter- Net
Customers segment
Sales Customers
segment Sales Access
equipment Aerial work platforms $ 1,128.5
$ - $ 1,128.5 $ 1,252.5
$ - $ 1,252.5 Telehandlers
593.1 - 593.1 891.5 -
891.5 Other 515.0
- 515.0
487.1
- 487.1
Total access equipment 2,236.6 -
2,236.6 2,631.1 - 2,631.1
Defense 877.7 1.6 879.3 617.9
4.3 622.2 Fire & emergency
686.8 9.6 696.4 549.1 20.6
569.7 Commercial Concrete placement
348.2 - 348.2 355.1 -
355.1 Refuse collection 295.0 -
295.0 269.9 - 269.9 Other
79.5 2.2
81.7
96.7 3.4
100.1 Total commercial
722.7 2.2 724.9 721.7 3.4
725.1 Intersegment eliminations
- (13.4
) (13.4
) -
(28.3 )
(28.3 ) Consolidated net
sales $ 4,523.8
$ -
$ 4,523.8
$ 4,519.8
$ -
$ 4,519.8 OSHKOSH
CORPORATION SEGMENT INFORMATION (continued)
(Unaudited; in millions)
Three Months Ended Nine Months Ended June
30, June 30,
2016 2015
2016 2015 Operating
income (loss): Access equipment $ 122.1
$ 136.4 $ 218.2 $ 350.5
Defense 19.1 (7.1 ) 70.1
(9.3 ) Fire & emergency 19.7
9.6 44.7 20.1 Commercial 23.8
22.4 49.9 43.4 Corporate (37.9
) (24.7 ) (114.4 ) (92.8
) Intersegment eliminations
- -
- 0.1
Consolidated $
146.8 $
136.6 $
268.5 $
312.0 June
30, 2016 2015
Period-end backlog: Access equipment $
374.6 $ 394.9 Defense 2,288.3
1,216.6 Fire & emergency 852.8
761.1 Commercial 206.3
218.0 Consolidated
$ 3,722.0
$ 2,590.6
Non-GAAP Financial
Measures
The Company reports its financial results in accordance with
generally accepted accounting principles in the United States of
America (GAAP). The Company is presenting various operating results
both on a reported basis and on a basis excluding items that affect
comparability of results. When the Company uses operating results
excluding certain items as described below, they are considered
non-GAAP financial measures. The Company believes excluding the
impact of these items is useful to investors in comparing the
Company’s performance to prior period results. Non-GAAP financial
measures should be viewed in addition to, and not as an alternative
for, the Company’s results prepared in accordance with GAAP. 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):
Nine Months Ended June 30,
2015 Adjusted net income (non-GAAP)
$ 186.4 OPEB curtailment / settlement, net of
tax 2.1 Debt extinguishment costs, net of tax
(9.3 ) Net income
(GAAP) $ 179.2
Adjusted earnings per share-diluted (non-GAAP)
$ 2.34 OPEB curtailment / settlement, net of
tax 0.03 Debt extinguishment costs, net of tax
(0.12 ) Earnings
per share-diluted (GAAP) $
2.25 Fiscal 2016
Expectations Net cash flows provided
by operating activities $ 500.0 Additions to
property, plant and equipment (100.0
) Free cash flow $
400.0
___________________________________
1 This news release refers to GAAP (U.S. generally accepted
accounting principles) and non-GAAP financial measures. Oshkosh
Corporation believes that the non-GAAP measures provide investors a
useful comparison of the Company’s performance to prior period
results. These non-GAAP measures may not be comparable to similarly
titled measures disclosed by other companies. A reconciliation of
these non-GAAP financial measures to the most comparable GAAP
measures can be found under the caption “Non-GAAP Financial
Measures” in this news release.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160728005290/en/
Oshkosh CorporationFinancial:Patrick DavidsonVice President,
Investor Relations920.966.5939orMedia:John DaggettVice President,
Communications920.233.9247
Oshkosh (NYSE:OSK)
Historical Stock Chart
From Mar 2024 to Apr 2024
Oshkosh (NYSE:OSK)
Historical Stock Chart
From Apr 2023 to Apr 2024