Oshkosh Corporation (NYSE: OSK), a leading innovator of
mission-critical vehicles and essential equipment, is making two
announcements this morning.
Fiscal Year Change
The Company’s Board of Directors approved a change in the
Company’s fiscal year to a calendar year beginning on January 1 and
ending on December 31, effective for the fiscal year beginning
January 1, 2022 (Calendar 2022). Historically, the Company’s fiscal
year began on October 1 and ended on September 30. Oshkosh is
taking this action to better align the timing of its business
planning and reporting activities with those of its customers.
To facilitate the transition to the new fiscal year, the Company
will have an abbreviated fiscal year from October 1, 2021 to
December 31, 2021 (Stub Period).
Business Update
The Company is also providing an update on current business
conditions that impacted the fourth quarter of fiscal 2021 and will
likely continue into Calendar 2022.
While Oshkosh is seeing strong growth in demand, the Company is
experiencing significant supply chain and logistics disruptions as
well as material and freight cost inflation similar to other
companies that are beyond the Company’s prior expectations. The
unavailability of parts has impacted the Company’s ability to
produce and ship units, particularly at Access Equipment, and has
also contributed to labor inefficiencies. As a result, Oshkosh now
expects to report both revenues and diluted earnings per share
(EPS) for the fourth quarter of fiscal 2021 that are lower than
what the Company discussed on its fiscal third quarter conference
call.
“We implemented multiple price increases in our non-Defense
segments over the past six to nine months to combat unprecedented
raw material inflation and freight cost escalation,” said John C.
Pfeifer, Oshkosh Corporation President and Chief Executive Officer.
“Based on current conditions, we expect that our pricing actions
will cover our higher input costs. However, due to our backlogs, we
do not believe this price catch-up will occur until the end of the
second quarter of Calendar 2022. If cost escalation persists, we
will take additional pricing actions.”
The Company is in the process of closing its books and compiling
its fiscal 2021 financial statements, so final results are not yet
available. Preliminarily, the Company expects to report fourth
quarter fiscal 2021 revenues of ~$2.05 billion, leading to diluted
EPS of approximately $1.10 to $1.15 and adjusted1 diluted EPS of
approximately $0.90 to $0.95. The Company expects the current
challenges to persist into the Stub Period and expects
substantially lower EPS compared to the fourth quarter of fiscal
2021.
“Despite the near term pressure, we maintain a positive outlook
for our businesses as we expect robust customer demand to continue
for our Access Equipment, Fire & Emergency and Commercial
segments. Additionally, we remain confident in our Defense segment
with its strong foundation of current programs complemented by
significant recent program wins, including the U.S. Postal
Service’s Next Generation Delivery Vehicle and the U.S. Army’s
Medium Caliber Weapons System. We are navigating the current
environment by taking all appropriate actions within our control,
and we remain confident that Oshkosh is well-positioned to drive
long-term profitable growth,” added Pfeifer.
More detailed commentary and updates will be provided in the
Company’s year-end fiscal 2021 earnings release and conference call
to be held on October 28, 2021.
Preliminary Results and Forward-Looking
Statements The preliminary financial results for the
fourth quarter of fiscal 2021 represent the most current
information available to management and reflect estimates and
assumptions. Our actual results may differ materially from these
preliminary results due to the completion of our financial closing
procedures, final adjustments and other developments that may arise
between the date of this release and the time that financial
results for the fourth quarter of fiscal 2021 are finalized. The
preliminary financial results have not been audited by our
independent registered public accounting firm nor has our
independent registered public accounting firm performed any
procedures with respect to this information or expressed any
opinion or any form of assurance regarding such information. These
preliminary financial results should not be viewed as a substitute
for full financial statements prepared in accordance with U.S.
GAAP.
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 performance issues with suppliers or
subcontractors, particularly as demand rebounds from the COVID-19
pandemic; the Company’s ability to increase prices or impose
surcharges to raise margins or to offset higher input costs,
including increased raw material, labor and freight costs; 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 historical customer buying
patterns and rental company fleet replacement strategies; the
Company’s ability to attract production labor in a timely manner;
the strength of the U.S. dollar and its impact on Company exports,
translation of foreign sales and the cost of purchased materials;
the Company’s ability to predict the level and timing of orders for
indefinite delivery/indefinite quantity contracts with the U.S.
federal government; risks related to reductions in government
expenditures in light of U.S. defense budget pressures and an
uncertain DoD tactical wheeled vehicle strategy; the impact of any
DoD solicitation for competition for future contracts to produce
military vehicles; the impacts of budget constraints facing the
USPS and continuously changing demands for postal services; the
impact of severe weather, natural disasters or pandemics 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
associated with international operations and sales, including
compliance with the Foreign Corrupt Practices Act; risks that a
trade war and related tariffs could reduce the competitiveness of
the Company’s products; 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 data security threats and breaches
impacting the Company; the Company’s ability to successfully
identify, complete and integrate acquisitions and to realize the
anticipated benefits associated with the same; 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. 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.
1This 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 the Company’s presented non-GAAP
measures to the most directly comparable GAAP measures can be found
under the caption “Non-GAAP Financial Measures” in this news
release.
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 earnings per share 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:
Three Months Ended
Q4 FY21 expectations
September 30, 2021
Low
High
Earnings per share-diluted (GAAP)
$
1.10
$
1.15
Benefit from tax loss carryback to prior
years
(0.05
)
(0.05
)
Release of valuation allowance on deferred
tax assets
(0.15
)
(0.15
)
Adjusted earnings per share-diluted
(non-GAAP)
$
0.90
$
0.95
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