Oshkosh Truck Reports Sales up 17.9% and Net Income up 31.2% in First Quarter

OSHKOSH, Wis.--Jan. 23, 2003--Oshkosh Truck Corporation, a leading manufacturer of specialty trucks and truck bodies, today reported that first quarter net income increased 31.2 percent to $11.3 million, or $0.65 per share, on sales of $426.3 million for the quarter ended December 31, 2002. This compares with net income of $8.6 million, or $0.50 per share, on sales of $361.5 million for last year's first quarter.

Sales increased 17.9 percent in the first quarter on increases in all segments, but especially in the commercial segment due to a much higher mix of chassis and truck body "package" sales. Operating income increased 14.5 percent to $20.4 million, or 4.8 percent of sales, compared to $17.8 million, or 4.9 percent of sales, in the prior year's first quarter. Net interest expense declined $2.9 million to $3.2 million to further contribute to higher reported net income in the first quarter of fiscal 2003.

"Several recent developments are instrumental to Oshkosh's long-term financial performance. Our selection as preferred bidder for the U.K. Ministry of Defence Wheeled Tanker program reflects Oshkosh's ability to engineer and deliver top-performance military vehicles and provide the best value for money. In addition, we broke ground and are on schedule for a new U.S. manufacturing facility for our Revolution(TM) composite mixer drum which is expected to be operational late this fiscal year," commented Robert G. Bohn, chairman, president and chief executive officer.

Bohn continued, "Higher sales and operating income in each business segment reflect aggressive performance initiatives we implemented across the corporation. We also benefited in the quarter from lower interest expense resulting from a continuing focus on working capital management and prior year debt reduction. Our outlook for the year remains positive; however, we remain guarded as to the direction of the global economy. We re-affirm our estimate of fiscal year 2003 earnings per share of about $3.70."

Factors affecting first quarter results for the company's business segments included:

Fire and emergency--Fire and emergency segment sales increased 17.8 percent to $113.0 million for the quarter. Operating income was up 29.3 percent to $10.0 million, or 8.9 percent of sales, compared to prior year income of $7.8 million, or 8.1 percent of sales. Increased sales volume, improved product sales mix and favorable manufacturing cost performance at the company's Pierce Manufacturing Inc. subsidiary were responsible for most of the improved earnings in this segment compared to results in the prior year quarter.

Defense--Defense sales increased 8.8 percent to $148.6 million for the quarter as a result of increased sales of heavy-payload vehicles under the company's Family of Heavy Tactical Vehicles ("FHTV") contract, which were partially offset by lower parts sales.

Operating income increased 19.2 percent to $9.6 million, or 6.5 percent of sales, compared to prior year income of $8.0 million, or 5.9 percent of sales. Increased sales of higher-margin, heavy-payload vehicles under the FHTV contract contributed to the increase in operating income in the quarter compared to the prior year. Margins on the Company's Medium Tactical Vehicle Replacement ("MTVR") contract were 3.3 percent in the first quarter of fiscal 2002. Margins on the MTVR contract were increased in the third quarter of fiscal 2002 to 4.3 percent and have remained at that level since then, including the first quarter. The difference in the margin percentage added approximately $0.7 million to the defense segment operating income in the first quarter compared to the prior year quarter. Bid and proposal spending continued at a high rate during the first quarter as the Company submitted its initial bid on the multi-year Family of Medium Tactical Vehicles ("FMTV") contract in November 2002 and pursued other defense programs in the United Kingdom.

Commercial--Commercial sales increased 28.8 percent to $166.8 million for the first quarter. Concrete placement and refuse product sales were up 66.8 percent and 4.1 percent, respectively, from first quarter 2002 results. Increased chassis and truck body "package" sales compared to "body-only" sales drove the revenue increases. Domestic refuse sales decreased 9.4 percent due to substantially lower shipments to large, commercial waste haulers in spite of a higher mix of "package" sales. While European refuse sales were up 26.7% compared to the prior year's first quarter, most of the increase also resulted from higher "package" sales.

Operating income increased 4.9 percent to $7.7 million, or 4.6 percent of sales, compared to prior year income of $7.3 million, or 5.6 percent of sales. Operating income margins declined largely due to the increase in "package" sales compared to "body-only" sales. Margins on "package" sales are lower because they include a purchased commercial chassis. First quarter results in fiscal 2003 also benefited from a $0.5 million gain on the sale of certain operating equipment.

Corporate and other--Operating expenses and inter-segment profit elimination increased from $5.3 million to $6.9 million in the first quarter of fiscal 2003, consistent with a previously reported plan to increase investments in people and services. Net interest expense for the quarter decreased $2.9 million to $3.2 million, compared to the prior year quarter. Lower interest costs were largely due to prior year debt reduction resulting from "performance-based" payments received on the multi-year MTVR and FHTV contracts and free cash flow from operations. Also, first quarter results in fiscal 2002 included a $0.9 million credit, or $0.05 per share, related to a settlement of certain tax audits.

Dividend Announcement

Oshkosh Truck Corporation's Board of Directors declared a quarterly dividend of $0.07500 per share for Class A Common Stock and $0.08625 per share for Common Stock. These dividends, unchanged from the prior quarter, will be payable February 13, 2003 to shareholders of record as of February 6, 2003.

Oshkosh Truck Corporation is a leading designer, manufacturer and marketer of a broad range of specialty commercial, fire and emergency and military trucks and truck bodies under the Oshkosh, McNeilus, Pierce, Medtec, Geesink and Norba brand names. Oshkosh's products are valued worldwide by fire and emergency units, defense forces, municipal and airport support services, and concrete placement and refuse businesses where high quality, superior performance, rugged reliability and long-term value are paramount.

Oshkosh Truck Corporation officials will comment on first quarter earnings and their current outlook for fiscal 2003, including a discussion of the factors underlying the 2003 earnings estimates, during a live conference call at 10:00 a.m. Eastern Standard Time today. The call will be available simultaneously via a webcast over the Internet as a service to investors. It will be listen-only format for on-line listeners. To access the webcast, investors should go to www.oshkoshtruck.com at least 15 minutes prior to the event and follow instructions for listening to the broadcast. An audio replay of such conference call and related question and answer session will be available for thirty days at this website.


                 OSHKOSH TRUCK CORPORATION
        CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                        (Unaudited)

                                                 Three Months Ended
                                                    December 31,
                                              ------------------------
                                                  2002        2001
                                              ------------ -----------
                                                   (In thousands,
                                             except per share amounts)

Net sales                                      $  426,336  $  361,493
Cost of sales                                     368,697     311,469
                                              ------------ -----------
Gross income                                       57,639      50,024

Operating expenses:
  Selling, general and administrative              35,675      30,805
  Amortization of purchased intangibles             1,602       1,440
                                              ------------ -----------

Total operating expenses                           37,277      32,245
                                              ------------ -----------

Operating income                                   20,362      17,779

Other income (expense):
  Interest expense                                 (3,409)     (6,422)
  Interest income                                     187         285
  Miscellaneous, net                                 (276)       (250)
                                              ------------ -----------
                                                   (3,498)     (6,387)
                                              ------------ -----------
Income before provision for income taxes and
 equity in earnings of unconsolidated
 partnership                                       16,864      11,392

Provision for income taxes                          6,204       3,304
                                              ------------ -----------

Income before equity in earnings of
 unconsolidated partnership                        10,660       8,088

Equity in earnings of unconsolidated
 partnership, net of income taxes                     632         520
                                              ------------ -----------

Net income                                     $   11,292  $    8,608
                                              ============ ===========

Earnings per share                             $     0.67  $     0.51

Earnings per share assuming dilution           $     0.65  $     0.50

Weighted average shares outstanding:
  Basic                                            16,941      16,716
  Assuming dilution                                17,392      17,123

Cash dividends:
  Class A Common Stock                         $  0.07500  $  0.07500
  Common Stock                                 $  0.08625  $  0.08625


                      OSHKOSH TRUCK CORPORATION
                CONDENSED CONSOLIDATED BALANCE SHEETS

                                                December    September
                                                   31,         30,
                                                  2002        2002
                                              ------------ -----------
                                              (Unaudited)
                                                   (In thousands)
                  ASSETS
Current assets:
  Cash and cash equivalents                    $   19,367  $   40,039
  Receivables, net                                138,668     142,709
  Inventories                                     233,214     210,866
  Prepaid expenses                                  8,255       7,414
  Deferred income taxes                            31,155      26,008
                                              ------------ -----------
      Total current assets                        430,659     427,036
Investment in unconsolidated partnership           23,088      22,274
Other long-term assets                             11,013      11,625
Property, plant and equipment                     265,277     261,045
Less accumulated depreciation                    (123,964)   (120,684)
                                              ------------ -----------
  Net property, plant and equipment               141,313     140,361
Purchased intangible assets, net                  103,309     104,316
Goodwill                                          326,009     318,717
                                              ------------ -----------
Total assets                                   $1,035,391  $1,024,329
                                              ============ ===========


    LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
  Accounts payable                             $  101,084  $  116,422
  Floor plan notes payable                         29,474      23,801
  Customer advances                               125,758     119,764
  Payroll-related obligations                      25,891      34,474
  Income taxes                                     17,534       8,597
  Accrued warranty                                 25,088      24,015
  Other current liabilities                        51,089      47,754
  Revolving credit facility and current
   maturities of long-term debt                     9,777      18,245
                                              ------------ -----------
      Total current liabilities                   385,695     393,072
Long-term debt                                    127,997     131,713
Deferred income taxes                              40,332      39,303
Other long-term liabilities                        48,375      50,481
Commitments and contingencies
Shareholders' equity                              432,992     409,760
                                              ------------ -----------
Total liabilities and shareholders' equity     $1,035,391  $1,024,329
                                              ============ ===========


                       OSHKOSH TRUCK CORPORATION
            CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                              (Unaudited)

                                                 Three Months Ended
                                                    December 31,
                                              ------------------------
                                                  2002        2001
                                              ------------ -----------
                                                   (In thousands)
Operating activities:
  Net income                                   $   11,292  $    8,608
  Non-cash adjustments                                 49       3,000
  Changes in operating assets and liabilities     (16,962)     31,516
                                              ------------ -----------
      Net cash provided from (used for)
       operating activities                        (5,621)     43,124

Investing activities:
  Additions to property, plant and equipment       (5,174)     (1,727)
  Proceeds from sale of property, plant and
   equipment                                        1,879           -
  Decrease (increase) in other long-term assets       743        (757)
                                              ------------ -----------
      Net cash used for investing activities       (2,552)     (2,484)

Financing activities:
  Net repayments under revolving credit
   facility                                             -     (37,200)
  Repayment of long-term debt                     (12,194)     (3,242)
  Dividends paid                                   (1,459)     (1,437)
  Other                                               893           5
                                              ------------ -----------
      Net cash used for financing activities      (12,760)    (41,874)

Effect of exchange rate changes on cash               261        (131)
                                              ------------ -----------

Decrease in cash and cash equivalents             (20,672)     (1,365)

Cash and cash equivalents at beginning of period   40,039      11,312
                                              ------------ -----------

Cash and cash equivalents at end of period     $   19,367  $    9,947
                                              ============ ===========

Supplementary disclosure:
  Depreciation and amortization                $    6,106  $    6,072


                       OSHKOSH TRUCK CORPORATION
                          SEGMENT INFORMATION
                              (Unaudited)

                                                 Three Months Ended
                                                    December 31,
                                              ------------------------
                                                  2002         2001
                                              ------------ -----------
                                                   (In thousands)
Net sales to unaffiliated customers:
  Commercial                                   $  166,751  $  129,429
  Fire and emergency                              112,956      95,866
  Defense                                         148,609     136,575
  Intersegment eliminations                        (1,980)       (377)
                                              ------------ -----------
      Consolidated                             $  426,336  $   361,493
                                              ============ ===========

Operating income (expense):
  Commercial                                   $    7,652  $    7,296
  Fire and emergency                               10,025       7,753
  Defense                                           9,588       8,042
  Corporate and other                              (6,903)     (5,312)
                                              ------------ -----------

      Consolidated                             $   20,362  $   17,779
                                              ============ ===========

Period-end backlog:
  Commercial                                   $  152,412  $  134,412
  Fire and emergency                              315,811     307,871
  Defense                                         606,040     407,381
                                              ------------ -----------

      Consolidated                             $1,074,263  $  849,664
                                              ============ ===========


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