Reports Increased Backlog in all
Segments
Increases Fiscal 2017 Estimated EPS
Range
Declares Quarterly Cash Dividend of $0.21
Per Share
Oshkosh Corporation (NYSE: OSK) today reported fiscal 2017
second quarter net income of $44.3 million, or $0.58 per
diluted share, compared to $56.1 million, or $0.76 per
diluted share, in the second quarter of fiscal 2016. Results for
the second quarter of fiscal 2017 included after-tax charges of
$13.7 million associated with previously announced
restructuring actions in the access equipment segment. Excluding
these charges, fiscal 2017 second quarter adjusted1 net income was
$58.0 million, or $0.76 per diluted share. Comparisons in
this news release are to the corresponding period of the prior
year, unless otherwise noted.
Consolidated net sales in the second quarter of fiscal 2017 were
$1.62 billion, an increase of 6.2 percent. A significant
increase in sales in the defense segment was offset in part by
lower sales in the access equipment and commercial segments.
Consolidated operating income in the second quarter of fiscal
2017 was $80.4 million, or 5.0 percent of sales, compared
to $91.4 million, or 6.0 percent of sales, in the prior
year second quarter. Excluding $17.2 million of pre-tax
restructuring-related charges in the access equipment segment,
adjusted1 operating income in the second quarter of fiscal 2017 was
$97.6 million, or 6.0 percent of sales. The increase in
adjusted1 operating income was primarily the result of higher sales
in the defense segment, improved performance in the fire &
emergency segment and lower start-up costs related to a
corporate-led manufacturing facility, offset in part by lower
access equipment and commercial segment performance.
“Our positive momentum continued in the second quarter, as we
delivered adjusted1 earnings per share of $0.76, matching our
performance of last year and ahead of our expectations,” said
Wilson R. Jones, president and chief executive officer of Oshkosh
Corporation.
“We are pleased with our second quarter results and have a
positive outlook. Our positive outlook is supported by favorable
market dynamics in our defense and fire & emergency segments as
well as opportunities to drive additional shareholder value through
continued execution of our MOVE strategy and the benefit of aging
customer fleets that will eventually need to be replaced. As we
celebrate our 100th anniversary, our team members are engaged and
energized about the future.
“As a result of our solid performance in the first half of
fiscal 2017 and positive outlook for the remainder of the year, we
are raising our full-year fiscal 2017 earnings per share estimate
range to $2.70 to $3.00 and our adjusted1 earnings per share
estimate range to $3.20 to $3.50,” said Jones.
Factors affecting second quarter results for the Company’s
business segments included:
Access Equipment – Access equipment segment net sales
decreased 4.1 percent to $723.2 million in the second
quarter of fiscal 2017. The decline in sales was primarily due to
lower telehandler sales volumes in North America and Europe as well
as a more competitive pricing environment, offset in part by higher
sales of used equipment and service.
Access equipment segment operating income decreased
44.4 percent to $42.1 million, or 5.8 percent of
sales, in the second quarter of fiscal 2017 compared to
$75.7 million, or 10.0 percent of sales, in the second
quarter of fiscal 2016. Excluding restructuring-related charges,
access equipment segment adjusted1 operating income in the second
quarter of fiscal 2017 was $59.3 million, or 8.2 percent
of sales. The decline in operating income was primarily due to a
more competitive pricing environment, along with higher selling,
general and administrative expenses, including higher trade show
expenses.
Defense – Defense segment net sales for the second
quarter of fiscal 2017 increased 50.2 percent to
$446.1 million. The increase in sales was primarily due to the
ramp-up of sales to the U.S. government under the Joint Light
Tactical Vehicle program and higher international Mine Resistant
Ambush Protected All Terrain Vehicle sales.
Defense segment operating income increased 75.2 percent to
$48.7 million, or 10.9 percent of sales, in the second
quarter of fiscal 2017 compared to $27.8 million, or
9.4 percent of sales, in the second quarter of fiscal 2016.
The increase in operating income was largely due to higher sales
volume and improved manufacturing absorption as a result of higher
sales, offset in part by adverse product mix and higher incentive
compensation expense.
Fire & Emergency – Fire & emergency segment net
sales for the second quarter of fiscal 2017 decreased
1.2 percent to $237.5 million. The decrease in sales was
primarily due to lower international Airports Products unit volume,
which was offset in part by improved pricing.
Fire & emergency segment operating income increased
46.3 percent to $21.8 million, or 9.2 percent of
sales, in the second quarter of fiscal 2017 compared to
$14.9 million, or 6.2 percent of sales, in the second
quarter of fiscal 2016. The increase in operating income was
primarily a result of improved pricing.
Commercial – Commercial segment net sales decreased
8.7 percent to $216.0 million in the second quarter of
fiscal 2017. The decrease in sales was primarily due to lower
refuse collection vehicle unit volumes, offset in part by higher
package sales, which include third-party chassis.
Commercial segment operating income decreased 65.1 percent
to $6.0 million, or 2.8 percent of sales, in the second
quarter of fiscal 2017 compared to $17.2 million, or
7.3 percent of sales, in the second quarter of fiscal 2016.
The decrease in operating income was primarily a result of lower
sales volumes and underabsorption due to lower production driven by
lower order activity in the first fiscal quarter. Commercial
segment second quarter fiscal 2017 results also included
$1.3 million of costs related to an accident at one of its
manufacturing facilities.
Corporate – Corporate operating costs decreased
$6.0 million in the second quarter of fiscal 2017 to
$38.2 million due primarily to improved operating results
related to a corporate-led manufacturing facility, which incurred
higher start-up costs during the second quarter of fiscal 2016.
Interest Expense Net of Interest Income – Interest
expense net of interest income decreased $1.0 million to
$14.1 million in the second quarter of fiscal 2017.
Provision for Income Taxes – The Company recorded income
tax expense of $23.6 million in the second quarter of fiscal
2017, or 35.0 percent of pre-tax income, compared to
$20.3 million, or 27.0 percent of pre-tax income, in the
second quarter of fiscal 2016. Excluding impacts of
restructuring-related charges, adjusted1 income tax expense in the
second quarter of fiscal 2017 was $27.1 million, or
32.0 percent of adjusted1 pre-tax income. The Company recorded
$1.5 million and $4.4 million of discrete tax benefits in
the second quarter of fiscal 2017 and fiscal 2016,
respectively.
Six-month Results
The Company reported net sales for the first six months of
fiscal 2017 of $2.83 billion and net income of
$63.5 million, or $0.84 per diluted share. This compares with
net sales of $2.78 billion and net income of
$70.7 million, or $0.95 per diluted share, in the first six
months of the prior year. Excluding $13.7 million of after-tax
restructuring-related charges in the access equipment segment,
adjusted1 net income for the first six months of fiscal 2017 was
$77.2 million, or $1.02 per diluted share. Higher defense
segment sales, improved performance in the fire & emergency
segment and lower start-up costs of a corporate-led manufacturing
facility were partially offset by lower access equipment segment
sales, lower performance in the commercial segment and higher
incentive compensation expense.
Fiscal 2017 Expectations
The Company increased its fiscal 2017 diluted earnings per share
estimate range to $2.70 to $3.00 on estimated operating income of
$372 million to $402 million. The Company also increased
its fiscal 2017 adjusted1 diluted earnings per share estimate range
to $3.20 to $3.50 on projected net sales of $6.6 billion to
$6.7 billion and adjusted1 operating income of
$415 million to $445 million. The adjusted1 diluted
earnings per share and adjusted1 operating income estimates exclude
the impact of expected access equipment segment
restructuring-related charges.
Dividend Announcement
The Company’s Board of Directors today declared a quarterly cash
dividend of $0.21 per share of Common Stock. The dividend will
be payable on May 26, 2017, to shareholders of record as of May 12,
2017.
Conference Call
The Company will comment on its fiscal 2017 second quarter
earnings and its full-year fiscal 2017 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 acceptance of and funding
or payments for such products and services; 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, including any delays as a result of an accident at the
Company’s Dodge Center manufacturing facility; 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
Founded in 1917, Oshkosh Corporation is 100 years strong and
continues to make a difference in people’s lives. Oshkosh brings
together a unique set of integrated capabilities and diverse end
markets that, when combined with the Company’s MOVE strategy and
positive long-term outlook, illustrate why Oshkosh is a different
integrated global industrial. The Company is a leader in designing,
manufacturing and servicing a broad range of access equipment,
commercial, fire & emergency, military and specialty vehicles
and vehicle bodies under the brands of Oshkosh®, JLG®, Pierce®,
McNeilus®, Jerr-Dan®, Frontline™, CON-E-CO®, London® and IMT®.
Today, Oshkosh Corporation is a Fortune 500 Company with
manufacturing operations on four continents. Its products are
recognized around the world for quality, durability and innovation
and can be found in more than 150 countries around the globe. As a
different integrated global industrial, Oshkosh is committed to
making a difference for team members, customers, shareholders,
communities and the environment. For more information, please visit
www.oshkoshcorporation.com.
®, ™ 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 Six
Months Ended March 31, March
31, 2017
2016 2017
2016 Net sales $
1,618.3 $ 1,524.3 $ 2,829.7
$ 2,776.3 Cost of sales
1,357.0
1,265.0
2,368.7
2,334.2 Gross income 261.3
259.3 461.0 442.1 Operating
expenses: Selling, general and administrative
169.8 154.7 320.8 294.0 Amortization
of purchased intangibles 11.1
13.2
23.6 26.4
Total operating expenses
180.9 167.9
344.4
320.4 Operating income
80.4 91.4 116.6 121.7 Other
income (expense): Interest expense (15.1 )
(15.6 ) (29.8 ) (30.2 )
Interest income 1.0 0.5 1.8 1.0
Miscellaneous, net 1.2
(1.0 )
2.5 (1.0
) Income before income taxes and equity
in earnings of unconsolidated affiliates 67.5
75.3 91.1 91.5 Provision for income
taxes 23.6
20.3 28.8
22.0 Income before
equity in earnings of unconsolidated affiliates
43.9 55.0 62.3 69.5 Equity in
earnings of unconsolidated affiliates
0.4 1.1
1.2
1.2 Net income
$ 44.3
$ 56.1
$ 63.5
$ 70.7
Earnings per share attributable to common shareholders:
Basic $ 0.59 $ 0.77 $
0.85 $ 0.96 Diluted 0.58
0.76 0.84 0.95 Basic
weighted-average shares outstanding 74,696,616
73,118,295 74,486,209 73,593,439 Dilutive
stock options and other equity- based compensation
awards 1,086,846
743,045
1,095,693
766,421 Diluted weighted-average
shares outstanding 75,783,462
73,861,340
75,581,902
74,359,860 OSHKOSH CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited; in
millions) March 31, September
30, 2017 2016
ASSETS Current assets: Cash and cash
equivalents $ 413.4 $ 321.9
Receivables, net 945.1 1,021.9 Inventories,
net 1,455.1 979.8 Other current assets
90.1
93.9 Total current assets
2,903.7 2,417.5 Property, plant and equipment:
Property, plant and equipment 1,135.0 1,110.6
Accumulated depreciation (689.3
) (658.5
) Property, plant and equipment, net
445.7 452.1 Goodwill 994.4
1,003.5 Purchased intangible assets, net 529.7
553.5 Other long-term assets
115.3 87.2
Total assets $
4,988.8 $
4,513.8 LIABILITIES AND
SHAREHOLDERS' EQUITY Current liabilities: Revolving
credit facilities and current maturities of long-term
debt $ 10.0 $ 20.0 Accounts
payable 694.6 466.1 Customer advances
672.0 471.8 Payroll-related obligations
143.3 147.9 Other current liabilities
273.4 261.8
Total current liabilities 1,793.3
1,367.6 Long-term debt, less current maturities
817.1 826.2 Other long-term liabilities
345.1 343.5 Commitments and contingencies
Shareholders' equity 2,033.3
1,976.5 Total
liabilities and shareholders' equity $
4,988.8 $
4,513.8 OSHKOSH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited; in millions) Six Months
Ended March 31, 2017
2016 Operating activities: Net
income $ 63.5 $ 70.7
Depreciation and amortization 64.4 63.7
Stock-based compensation expense 12.2 11.4
Deferred income taxes 1.0 (7.0 )
Gain on sale of assets (4.2 ) (6.3
) Foreign currency transaction losses 0.2
0.3 Other non-cash adjustments 0.5 (0.2
) Changes in operating assets and liabilities
10.5 (36.6
) Net cash provided by operating
activities 148.1 96.0 Investing
activities: Additions to property, plant and equipment
(28.0 ) (40.3 ) Additions to
equipment held for rental (24.6 ) (22.7
) Proceeds from sale of equipment held for rental
19.8 26.1 Other investing activities
(0.9 )
(1.0 ) Net cash used by
investing activities (33.7 ) (37.9
) Financing activities: Proceeds from
issuance of debt - 273.5 Repayments of
debt (20.0 ) (190.0 ) Net
decrease in short-term debt - (21.3 )
Repurchases of common stock (3.0 )
(101.6 ) Dividends paid (31.3 )
(28.0 ) Proceeds from exercise of stock
options 33.2 1.9 Excess tax benefit from
stock-based compensation -
0.9 Net cash used by financing
activities (21.1 ) (64.6 )
Effect of exchange rate changes on cash
(1.8 )
2.0 Increase (decrease) in cash and
cash equivalents 91.5 (4.5 ) Cash and
cash equivalents at beginning of period
321.9 42.9
Cash and cash equivalents at end of period
$ 413.4
$ 38.4 OSHKOSH
CORPORATION SEGMENT INFORMATION (Unaudited; in
millions) Three Months Ended March
31, 2017
2016 External Inter-
Net External Inter-
Net Customers
segment Sales
Customers segment
Sales Access equipment Aerial work
platforms $ 369.4 $ - $
369.4 $ 375.1 $ - $
375.1 Telehandlers 161.6 - 161.6
214.7 - 214.7 Other
192.2 -
192.2
164.5 -
164.5 Total access
equipment 723.2 - 723.2 754.3
- 754.3 Defense 445.7 0.4
446.1 296.8 0.2 297.0 Fire
& emergency 233.5 4.0 237.5
237.2 3.2 240.4 Commercial
Concrete placement 112.7 - 112.7
111.3 - 111.3 Refuse collection
79.1 - 79.1 99.5 - 99.5
Other 22.3
1.9 24.2
25.2
0.7 25.9
Total commercial 214.1 1.9 216.0
236.0 0.7 236.7 Corporate &
eliminations 1.8
(6.3 )
(4.5 )
- (4.1
) (4.1
) $
1,618.3 $
- $
1,618.3 $
1,524.3 $
- $
1,524.3 Six Months Ended
March 31, 2017
2016 External Inter- Net
External Inter- Net
Customers segment
Sales Customers
segment Sales Access
equipment Aerial work platforms $ 603.1
$ - $ 603.1 $ 617.1
$ - $ 617.1 Telehandlers
254.9 - 254.9 326.5 -
326.5 Other 354.4
- 354.4
340.5
- 340.5
Total access equipment 1,212.4 -
1,212.4 1,284.1 - 1,284.1
Defense 739.9 0.7 740.6 613.7
1.3 615.0 Fire & emergency
462.6 7.4 470.0 442.6 5.3
447.9 Commercial Concrete placement
197.1 - 197.1 183.6 -
183.6 Refuse collection 171.3 -
171.3 198.5 - 198.5 Other
43.8 3.0
46.8
53.8 1.1
54.9 Total commercial
412.2 3.0 415.2 435.9 1.1
437.0 Corporate & eliminations
2.6 (11.1
) (8.5
) -
(7.7 )
(7.7 )
$ 2,829.7
$ -
$ 2,829.7
$ 2,776.3
$ -
$ 2,776.3
Three Months Ended Six Months Ended
March 31, March 31,
2017 2016
2017 2016
Operating income (loss): Access equipment $
42.1 $ 75.7 $ 66.5 $
96.1 Defense 48.7 27.8 72.5
51.0 Fire & emergency 21.8 14.9
38.8 25.0 Commercial 6.0 17.2
10.6 26.1 Corporate (38.2 )
(44.2 ) (71.8 ) (76.5 )
Eliminations -
- -
- $
80.4 $
91.4 $
116.6 $
121.7 March
31, 2017 2016
Period-end backlog: Access equipment $
737.9 $ 664.8 Defense 1,827.7
1,680.5 Fire & emergency 1,005.9
903.4 Commercial 353.8
289.4
$ 3,925.3
$ 3,538.1
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 GAAP basis and on a basis excluding items that affect
comparability of results. When the Company excludes 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):
Three Months Six Months
Ended Ended March
31, 2017 Access equipment segment adjusted
operating income (Non-GAAP) $ 59.3 $
83.7 Restructuring-related costs
(17.2 )
(17.2 ) Access equipment
segment operating income (GAAP) $
42.1 $
66.5 Consolidated adjusted
operating income (Non-GAAP) $ 97.6 $
133.8 Restructuring-related costs
(17.2 )
(17.2 ) Consolidated
operating income (GAAP) $
80.4 $
116.6 Adjusted provision for
income taxes (Non-GAAP) $ 27.1 $
32.3 Income tax benefit for restructuring-related
costs (3.5 )
(3.5 ) Provision
for income taxes (GAAP) $
23.6 $
28.8 Adjusted net income
(Non-GAAP) $ 58.0 $ 77.2
Restructuring-related costs, net of tax
(13.7 )
(13.7 ) Net income
(GAAP) $ 44.3
$ 63.5
Adjusted diluted earnings per share (Non-GAAP) $
0.76 $ 1.02 Restructuring-related costs,
net of tax (0.18
) (0.18
) Diluted earnings per share (GAAP)
$ 0.58
$ 0.84
Fiscal Year Ended September 30, 2017
Expectations Low
High Adjusted operating income
(Non-GAAP) $ 415.0 $ 445.0
Restructuring-related costs (43.0
) (43.0
) Operating income (GAAP)
$ 372.0
$ 402.0
Adjusted diluted earnings per share (Non-GAAP) $
3.20 $ 3.50 Restructuring-related costs
(0.50 )
(0.50 ) Diluted earnings
per share (GAAP) $ 2.70
$ 3.00
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.
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version on businesswire.com: http://www.businesswire.com/news/home/20170426005314/en/
Oshkosh CorporationFinancial:Patrick DavidsonVice President,
Investor Relations920.966.5939orMedia:Bryan BrandtVice President,
Global Branding and Communications920.966.5982
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