MOVING THE WORLD AT WORK Wilson R. Jones President and Chief - - PowerPoint PPT Presentation
MOVING THE WORLD AT WORK Wilson R. Jones President and Chief Executive Officer Oshkosh Corporation David M. Sagehorn (NYSE:OSK) Executive Vice President and Chief Financial Officer Second Quarter Fiscal 2017 Patrick N. Davidson Vice
Wilson R. Jones President and Chief Executive Officer David M. Sagehorn Executive Vice President and Chief Financial Officer Patrick N. Davidson Vice President, Investor Relations
MOVING THE WORLD AT WORK
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 presentation, 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
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 presentation. The Company assumes no obligation, and disclaims any
until the Company’s next quarterly earnings conference call, if at all.
April 26, 2017 OSK Second Quarter 2017 Earnings Call 2
MOVING THE WORLD AT WORK
Net Sales
(billions)
Adjusted EPS
3
April 26, 2017 OSK Second Quarter 2017 Earnings Call
$0.76* $0.76
$0.00 $0.10 $0.20 $0.30 $0.40 $0.50 $0.60 $0.70 $0.80
FY17 FY16 $1.62 $1.52
$0.0 $0.2 $0.4 $0.6 $0.8 $1.0 $1.2 $1.4 $1.6 $1.8 $2.0
FY17 FY16
* Non-GAAP results. See appendix for reconciliation to GAAP results.
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April 26, 2017 OSK Second Quarter 2017 Earnings Call 4
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April 26, 2017 OSK Second Quarter 2017 Earnings Call 5
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April 26, 2017 OSK Second Quarter 2017 Earnings Call 6
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April 26, 2017 OSK Second Quarter 2017 Earnings Call 7
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+ Higher defense segment sales − Lower access equipment and commercial segment sales
+ Higher defense and fire & emergency segment
+ Lower corporate expenses − Lower access equipment and commercial segment
− Higher prior year discrete tax benefits
(Dollars in millions, except per share amounts)
April 26, 2017 OSK Second Quarter 2017 Earnings Call 8
* Non-GAAP results. See appendix for reconciliation to GAAP results.
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9
– Higher defense and to a lesser extent fire & emergency segment sales to offset lower access equipment segment sales
– Higher consolidated sales, partially offset by lower commercial segment operating income – Excludes expected pre-tax impact of additional access equipment segment restructuring-related costs
Segment information Measure Access Equipment Defense Fire & Emergency Commercial
Sales (billions) ~ $2.8 ~ $1.85 ~ $1.0 ~ $0.975
Income Margin 8.75% - 9.0%* ~ 10.0% ~ 8.5% 5.0% - 5.5%
OSK Second Quarter 2017 Earnings Call April 26, 2017
* Non-GAAP results. See appendix for reconciliation to GAAP results.
MOVING THE WORLD AT WORK
Patrick N. Davidson Vice President, Investor Relations (920) 966-5939 pdavidson@oshkoshcorp.com Jeffrey D. Watt Director, Investor Relations (920) 233-9406 jwatt@oshkoshcorp.com
April 26, 2017 OSK Second Quarter 2017 Earnings Call 10
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April 26, 2017 OSK Second Quarter 2017 Earnings Call 11
(Dollars in millions)
− Lower telehandler volume − Competitive pricing + Higher used equipment and service sales
− Competitive pricing − Higher SG&A costs, including ConExpo impact
* Non-GAAP results. See appendix for reconciliation to GAAP results.
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(Dollars in millions)
April 26, 2017 OSK Second Quarter 2017 Earnings Call 12
+ Ramp-up of JLTV program + M-ATV international sales
+ Higher sales volume + Improved manufacturing absorption − Adverse product mix − Higher incentive compensation expense
MOVING THE WORLD AT WORK
− Lower international airport products volume + Improved pricing
+ Improved pricing
April 26, 2017 OSK Second Quarter 2017 Earnings Call 13
(Dollars in millions)
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April 26, 2017 OSK Second Quarter 2017 Earnings Call 14
(Dollars in millions)
− Lower RCV unit volume + Higher package (third party chassis) sales
− Lower sales volume − Adverse absorption − Costs related to a manufacturing facility accident
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April 26, 2017 OSK Second Quarter 2017 Earnings Call 15
comparable GAAP measures (in millions, except per share amounts):
Three Months
Ended March 31, 2017 Adjusted diluted earnings per share (Non-GAAP) 0.76 $ Restructuring-related costs, net of tax (0.18) Diluted earnings per share (GAAP) 0.58 $ Consolidated adjusted operating income (Non-GAAP) 97.6 $ Restructuring-related costs (17.2) Consolidated operating income (GAAP) 80.4 $ Access equipment segment adjusted operating income (Non-GAAP) 59.3 $ Restructuring-related costs (17.2) Access equipment segment operating income (GAAP) 42.1 $
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April 26, 2017 OSK Second Quarter 2017 Earnings Call 16
comparable GAAP measures (in millions, except per share amounts):
Low High Adjusted access equipment operating income margin (Non-GAAP) 8.75% 9.00% Restructuring-related costs (1.55%) (1.55%) Access equipment operating income margin (GAAP) 7.20% 7.45% Consolidated adjusted operating income (Non-GAAP) 415.0 $ 445.0 $ Restructuring-related costs (43.0) (43.0) Consolidated operating income (GAAP) 372.0 $ 402.0 $ Adjusted effective income tax rate (Non-GAAP) 33.0% 32.5% Impact of restructuring-related costs on effective income tax rate 2.9% 2.9% Effective income tax rate (GAAP) 35.9% 35.4% Adjusted diluted earnings per share (Non-GAAP) 3.20 $ 3.50 $ Restructuring-related costs, net of tax (0.50) (0.50) Diluted earnings per share (GAAP) 2.70 $ 3.00 $ Fiscal 2017 Expectations
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April 26, 2017 OSK Second Quarter 2017 Earnings Call 17
comparable GAAP measures (in millions):
Low High Net cash flows provided by operating activities 110.0 $ 160.0 $ Additions to property, plant and equipment (100.0) (100.0) Net additions to equipment held for rental (10.0) (10.0) Free cash flow
50.0 $ Fiscal 2017 Expectations
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18 April 26, 2017 OSK Second Quarter 2017 Earnings Call
ARFF Aircraft Rescue and Firefighting LVSR Logistic Vehicle System Replacement AWP Aerial Work Platform M-ATV MRAP All-Terrain Vehicle AMPS Aftermarket Parts & Service MRAP Mine Resistant Ambush Protected CapEx Capital Expenditures MSVS Medium Support Vehicle System (Canada) CNG Compressed Natural Gas NOL Net Operating Loss DGE Diesel Gallon Equivalent NPD New Product Development DoD Department of Defense NRC National Rental Company EMD Engineering & Manufacturing Development OCO Overseas Contingency Operations EMEA Europe, Middle East & Africa OH Overhead EPS Diluted Earnings Per Share OI Operating Income FAST Act Fixing America’s Surface Transportation Act OOS Oshkosh Operating System FDIC Fire Department Instructors Conference OPEB Other Post-Employment Benefits FHTV Family of Heavy Tactical Vehicles PLS Palletized Load System FMS Foreign Military Sales PUC Pierce Ultimate Configuration FMTV Family of Medium Tactical Vehicles R&D Research & Development GAAP U.S. Generally Accepted Accounting Principles RCV Refuse Collection Vehicle GAO Government Accountability Office RFP Request for Proposal HEMTT Heavy Expanded Mobility Tactical Truck ROW Rest of World HET Heavy Equipment Transporter SMP Standard Military Pattern (Canadian MSVS) HMMWV High Mobility Multi-Purpose Wheeled Vehicle TACOM Tank-automotive and Armaments Command IRC Independent Rental Company TDP Technical Data Package IT Information Technology TPV Tactical Protector Vehicle JLTV Joint Light Tactical Vehicle TWV Tactical Wheeled Vehicle JPO Joint Program Office UCA Undefinitized Contract Action JROC Joint Requirements Oversight Council UIK Underbody Improvement Kit (for M-ATV) JUONS Joint Urgent Operational Needs Statement UK United Kingdom L-ATV Light Combat Tactical All-Terrain Vehicle ZR Zero Radius LRIP Low Rate Initial Production