Oshkosh Truck Reports Income From Continuing Operations Down
5% in Q2
Business Editors
OSHKOSH, Wis.--April 26, 2001--Oshkosh Truck
Corporation today reported that second quarter income
from continuing operations decreased 5 percent to $11.3 million, or
$0.66 per share, on sales of $342 million for the quarter ended March
31, 2001. This compares with income from continuing operations of
$11.9 million, or $0.70 per share, on sales of $331 million for last
year's second quarter. These results are consistent with Oshkosh's
pre-announcement on March 16, 2001 of estimated second quarter
earnings per share of $0.65 to $0.70.
Oshkosh also tightened its earnings per share estimate for the
full fiscal year ended September 30, 2001 from $2.80 - $3.00 per
share, to about $2.80 per share. The lower end of the previous range
of estimates more accurately reflects the company's current rate of
concrete placement orders.
Sales increased 3.5 percent in the second quarter. Operating
income decreased 14.7 percent to $21.0 million, or 6.2 percent of
sales, compared to $24.7 million, or 7.5 percent of sales, in the
prior year's second quarter.
The company's second quarter performance included the results of
Medtec Ambulance Corporation ("Medtec"), which was acquired in October
2000, favorable income tax adjustments of $1.3 million, or $0.08 per
share, due to settlement of certain tax audits in the period and a two
percentage point increase in Medium Tactical Vehicle Replacement
("MTVR") contract margins following approval to commence full rate
production under this contract in August 2001, which contributed $0.04
per share in the quarter.
Commenting on results and the current outlook, Robert G. Bohn,
chairman, president and chief executive officer, said, "Double-digit
sales and operating income growth in Oshkosh's defense and fire and
emergency segments significantly cushioned the impact of a 19.8
percent dip in the commercial segment, which has historically been the
most sensitive to broader economic fluctuations. While ready-mix
producers continue to pour at near-record levels, difficult economic
conditions have caused them to take a cautious approach to investing
in new concrete mixer trucks.
"Key drivers of company performance for the remainder of fiscal
2001 will be the continued vigor of the defense and fire and emergency
businesses. In addition, customer orders in our refuse business picked
up during the second quarter, and we expect substantially better
results in that business during the remainder of the fiscal year. We
anticipate our sales to increase each quarter in the second half of
fiscal 2001 compared to last year."
Factors affecting second quarter results for the company's
business segments included:
Fire and emergency--Fire and emergency segment sales increased 13
percent, to $116.0 million, for the quarter. Operating income was up
14 percent, to $10.9 million, or 9.4 percent of sales, compared to
prior year income of $9.5 million, or 9.2 percent of sales. Sales and
earnings were strong across all product lines in the segment. Sales
and operating income for the second quarter of fiscal 2001 also
included the operations of Medtec. Excluding the impact of the Medtec
acquisition, segment sales and operating income increased 8 percent
and 7 percent, respectively.
Defense--Defense sales increased 75 percent, to $80.3 million, for
the quarter due to increased parts and international vehicle sales and
the continued ramp-up of production under the company's contract to
supply medium trucks to the U.S. Marines under the MTVR contract.
Operating income was up 213 percent, to $6.8 million, or 8.4
percent of sales, compared to prior year income of $2.2 million, or
4.7 percent of sales. Margins on the MTVR contract were increased two
percentage points during the quarter due to increased visibility of
final truck configuration as a result of achieving Milestone 3
approval to commence full rate production in August 2001. The benefit
of this margin increase was offset by increased spending on the Future
Medium Tactical Vehicle ("FMTV") prototype contract proposal submitted
in February.
Commercial--Commercial sales declined 19.8 percent, to $145.9
million, for the quarter. Operating income declined 57.1 percent to
$7.6 million, or 5.2 percent of sales, due to the lower sales volumes.
Concrete placement sales were down 27.8 percent while refuse sales
were up 9.0 percent, respectively, from second quarter 2000 results.
Prior year concrete placement sales were favorably impacted by strong
economic conditions. This year, concrete placement sales have
declined, largely due to customer concerns regarding general economic
conditions. Refuse sales increased this year due to an increased mix
of package chassis and body sales, while unit sales declined.
Corporate and other--Operating expenses and inter-segment profit
elimination decreased from $4.8 million to $4.3 million as a result of
cost reduction initiatives and variable compensation adjustments. Net
interest expense for the quarter decreased to $4.8 million compared to
$5.1 million in the prior year. Higher borrowings due to the Medtec
acquisition and from the purchase of inventory and certain assets from
Temco, a subsidiary of Trinity Industries Inc., offset the benefits
from interest rate reductions in the quarter.
Six-Month Results
The company reported that income from continuing operations
increased 5 percent to $19.5 million, or $1.14 per share, for the
first six months of fiscal 2001 on sales of $623 million compared to
$18.6 million, or $1.18 per share, for the first six months of fiscal
2000 on sales of $574 million. On a proforma basis, assuming the
company's November 1999 common stock offering had occurred at the
beginning of the year, earnings per share from continuing operations
for the first six months of fiscal 2000 would have been $1.14.
Operating income declined $2.5 million, or 6 percent, to $38.8
million in the first six months of fiscal 2001 compared to $41.3
million in the first six months of fiscal 2000. Double-digit increases
in defense and fire and emergency sales and operating income were not
enough to offset revenue declines in the more profitable commercial
segment.
Gain on Disposal of Discontinued Operations and Extraordinary
Charge--In the quarter ended March 31, 2000 the company recorded $2.0
million (net of income taxes of $1.2 million), or $0.13 per share,
from the sale of technology and collection of certain previously
written-off receivables from a foreign affiliate, which was part of a
business that the company exited in 1995. The company also recorded a
$0.6 million charge (net of income taxes of $0.4 million) for the
early retirement of debt from proceeds of its November 1999 common
stock offering.
The company will comment on second quarter earnings and
expectations for fiscal 2001 during a live conference call at 11:00
a.m. Eastern Daylight Time this morning. 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.
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 May 14, 2001 to shareholders of
record as of May 3, 2001.
OSHKOSH TRUCK CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended Six Months Ended
March 31, March 31,
------------------- -----------------
2001 2000 2001 2000
------- ------- ------- -------
(In thousands, except per share amounts)
Net sales $341,970 $330,524 $623,487 $574,391
Cost of sales 291,466 280,763 529,716 484,653
------- ------- ------- -------
Gross income 50,504 49,761 93,771 89,738
Operating expenses:
Selling, general and
administrative 26,526 22,334 49,145 42,912
Amortization of goodwill
and other intangibles 2,946 2,772 5,810 5,544
------- ------- ------- -------
Total operating expenses 29,472 25,106 54,955 48,456
------- ------- ------- -------
Operating income 21,032 24,655 38,816 41,282
Other income (expense):
Interest expense (5,160) (5,412) (9,818) (11,198)
Interest income 310 188 479 354
Miscellaneous, net 5 171 5 285
------- ------- ------- -------
(4,845) (5,053) (9,334) (10,559)
------- ------- ------- -------
Income before items
noted below 16,187 19,602 29,482 30,723
Provision for income taxes 5,292 7,964 10,667 12,704
------- ------- ------- -------
10,895 11,638 18,815 18,019
Equity in earnings of
unconsolidated partnership,
net of income taxes 389 275 692 590
------- ------- ------- -------
Income from continuing
operations 11,284 11,913 19,507 18,609
Gain on disposal of
discontinued operations, net
of income taxes of $1,235 - 2,015 - 2,015
Extraordinary charge for
early retirement of debt,
net of income tax benefit
of $356 - - - (581)
------- ------- ------- -------
Net income $ 11,284 $ 13,928 $ 19,507 $ 20,043
======= ======= ======= =======
Earnings (loss) per share:
Continuing operations $ 0.68 $ 0.72 $ 1.17 $ 1.20
Discontinued operations - 0.12 - 0.13
Extraordinary charge - - - (0.04)
------- ------- ------- -------
Net income $ 0.68 $ 0.84 $ 1.17 $ 1.29
======= ======= ======= =======
Earnings (loss) per share
assuming dilution:
Continuing operations $ 0.66 $ 0.70 $ 1.14 $ 1.18
Discontinued operations - 0.12 - 0.13
Extraordinary charge - - - (0.04)
------- ------- ------- -------
Net income $ 0.66 $ 0.82 $ 1.14 $ 1.27
======= ======= ======= =======
Weighted average shares
outstanding:
Basic 16,678 16,628 16,673 15,508
Assuming dilution 17,120 16,943 17,097 15,820
Cash dividends:
Class A Common Stock $0.07500 $0.07500 $0.15000 $0.15000
Common Stock $0.08625 $0.08625 $0.17250 $0.17250
OSHKOSH TRUCK CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, September 30,
2001 2000
--------- -------------
(Unaudited)
(In thousands)
ASSETS
Current assets:
Cash and cash equivalents $ 4,979 $ 13,569
Receivables, net 141,385 106,805
Inventories 289,725 201,210
Prepaid expenses 5,207 5,424
Deferred income taxes 11,503 14,708
------ ------
Total current assets 452,799 341,716
Investment in unconsolidated partnership 17,268 15,179
Other long-term assets 14,046 9,995
Property, plant and equipment 219,499 206,507
Less accumulated depreciation (94,221) (87,748)
------- -------
Net property, plant and equipment 125,278 118,759
Goodwill and other
intangible assets, net 323,259 310,731
------- -------
Total assets $932,650 $796,380
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $107,154 $ 84,215
Floor plan notes payable 40,297 23,925
Customer advances 81,807 58,493
Payroll-related obligations 18,884 23,465
Accrued warranty 15,626 15,519
Other current liabilities 61,867 52,310
Revolving credit facility and current
maturities of long-term debt 64,439 8,544
------ -----
Total current liabilities 390,074 266,471
Long-term debt 148,833 154,238
Deferred income taxes 41,429 46,414
Other long-term liabilities 34,129 28,200
Commitments and contingencies
Shareholders' equity 318,185 301,057
------- -------
Total liabilities and
shareholders' equity $932,650 $796,380
======== ========
OSHKOSH TRUCK CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended
March 31,
------------------------------
2001 2000
------------------------------
(In thousands)
Operating activities:
Income from continuing operations $ 19,507 $ 18,609
Non-cash adjustments 11,714 10,500
Changes in operating assets and
liabilities (47,324) (45,425)
------------------------------
Net cash used for operating
activities (16,103) (16,316)
Investing activities:
Acquisition of businesses, net of cash
acquired (26,423) (5,625)
Additions to property, plant and
equipment (9,311) (9,469)
Proceeds from sale of property, plant
and equipment 25 46
Increase in other long-term assets (4,598) (1,489)
------------------------------
Net cash used for investing
activities (40,307) (16,537)
Net cash provided from discontinued
operations - 2,015
Financing activities:
Net borrowings under revolving credit
facility 54,800 33,200
Repayment of long-term debt (4,310) (93,742)
Proceeds from Common Stock offering - 93,736
Costs of Common Stock offering - (334)
Dividends paid (2,866) (2,531)
Other 196 31
------------------------------
Net cash provided from financing
activities 47,820 30,360
------------------------------
Decrease in cash and cash equivalents (8,590) (478)
Cash and cash equivalents at beginning
of period 13,569 5,137
------------------------------
Cash and cash equivalents at end
of period $ 4,979 $ 4,659
==============================
Supplementary disclosure:
Depreciation and amortization $ 13,441 $ 11,515
SEGMENT INFORMATION
(Unaudited)
Three Months Ended Six Months Ended
March 31, March 31,
------------------ ----------------
2001 2000 2001 2000
---- ---- ---- ----
(In thousands)
Net sales to unaffiliated
customers:
Commercial $ 145,946 $ 181,873 $251,972 $ 297,267
Fire and emergency 116,007 102,804 209,753 178,381
Defense 80,327 45,847 162,072 98,743
Corporate and other (310) - (310) -
------- --------- ------- ---------
Consolidated $ 341,970 $ 330,524 $ 623,487 $ 574,391
======= ======= ======= =======
Operating income (expense):
Commercial $ 7,640 $ 17,809 $ 13,812 $ 26,863
Fire and emergency 10,850 9,478 18,205 13,393
Defense 6,779 2,163 15,325 9,658
Corporate and other (4,237) (4,795) (8,526) (8,632)
------ ------ ------ ------
Consolidated $ 21,032 $ 24,655 $ 38,816 $ 41,282
====== ====== ====== ======
Backlog:
Commercial $ 124,933 $ 168,260
Fire and emergency 258,690 228,773
Defense 358,008 342,839
------- -------
Consolidated $ 741,631 $ 739,872
======= =======
