Oshkosh Truck Net Income Increases 63%
27 July 1998
Oshkosh Truck Net Income Increases 63%
OSHKOSH, Wis.--July 27, 1998--Oshkosh Truck Corporation (NASDAQ-OTRKB) today reported that net income increased 63% to $4.6 million, or $.54 per share, for the third quarter of fiscal 1998 on sales of $290 million. This compares to net income of $2.8 million, or $.33 per share, for the third quarter of fiscal 1997 on sales of $177 million. Excluding an extraordinary charge associated with the early repayment of debt incurred in connection with the acquisition of McNeilus Companies, Inc. ("McNeilus"), net income would have been $5.0 million, an increase of 79%.Operating income rose 124% to $15.3 million in the third quarter, compared to $6.8 million in the third quarter of fiscal 1997. This is largely because results include McNeilus' sales and earnings for the entire quarter. McNeilus sales totaled $120 million in the third quarter, reflecting strong growth in refuse body and concrete mixer sales.
"I am extremely pleased with our results. We were able to complete the acquisition of McNeilus and remain focused on serving our customers. McNeilus generated record sales during the quarter ended June 30. Strong earnings and cash flow contributed to debt repayment of $53 million since the February acquisition," stated Robert G. Bohn, President and Chief Executive Officer.
"Our defense business had another solid quarter," said Bohn. "We submitted our proposal to become a second-source supplier for the Family of Medium Tactical Vehicles on June 15. Now, we are preparing our bid for the Medium Tactical Vehicle Replacement contract for submittal in early Autumn."
"The fire apparatus business of the Company's Pierce Manufacturing Inc. ("Pierce") subsidiary achieved record sales in the quarter. Investments in the re-design of our Dash and Lance models, the introduction of the Nova Quintech aerial devices, and in upgrading information systems are being made to maintain Pierce's leadership position in the industry."
Net interest expense increased to $7.1 million in the third quarter of fiscal 1998 from $2.7 million in the third quarter of fiscal 1997 as a result of additional borrowings to acquire McNeilus.
Nine Month Results
The company reported that net income increased 60% to $11.0 million, or $1.31 per share, for the first nine months of fiscal 1998 on sales of $660 million compared to net income of $6.9 million, or $.80 per share, for the first nine months of fiscal 1997 on sales of $497 million. Excluding extraordinary charges associated with the early repayment of debt, net income would have been $12.2 million, an increase of 77%.
"Our acquisitions are paying off already, evidenced by the fact that through the first nine months we have exceeded last year's annual earnings," said Bohn.
Operating income rose 64% to $33.9 million in the first nine months of fiscal 1998 compared to $20.7 million in the first nine months of fiscal 1997, principally as a result of the acquisition of McNeilus and also due to lower engineering and administrative costs in the Company's defense business.
Dividend Announcement
Oshkosh Truck Corporation Board of Directors declared a quarterly dividend of $.10875 per share for Class A Common Stock and $.125 per share for Common Stock. These dividends, unchanged from the previous rate, will be payable August 13, 1998, to shareholders of record as of August 6, 1998.
Oshkosh Truck Corporation serves fire and emergency, defense, and commercial markets with specialty trucks and truck bodies marketed under the Oshkosh, Pierce and McNeilus brand names. Oshkosh's products are valued worldwide by fire and emergency units, defense forces, municipal and airport support services, construction and refuse businesses where high quality, superior performance, rugged reliability, and long-term value are paramount.
OSHKOSH TRUCK CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended Nine Months Ended
June 30, June 30,
----------------------------------------------
1998 1997 1998 1997
----------------------------------------------
(In thousands, except per share amounts)
Net sales $ 290,104 $ 176,596 $ 659,741 $ 497,381
Cost of sales 248,033 154,699 565,435 433,033
---------- ---------- ---------- ----------
Gross income 42,071 21,897 94,306 64,348
Operating expenses:
Selling, general and
administrative 21,728 11,742 48,204 34,383
Engineering, research
& development 2,313 2,211 6,656 5,957
Amortization of
goodwill and other
intangibles 2,721 1,117 5,559 3,352
---------- ---------- ---------- ----------
Total operating
expenses 26,762 15,070 60,419 43,692
---------- ---------- ---------- ----------
Income from operations 15,309 6,827 33,887 20,656
Other income (expense):
Interest expense (7,082) (2,848) (14,273) (9,571)
Interest income 10 130 544 484
Miscellaneous, net (181) (24) (344) (93)
---------- ---------- ---------- ----------
(7,253) (2,742) (14,073) (9,180)
---------- ---------- ---------- ----------
Income from operations
before income taxes,
equity in earnings of
unconsolidated
partnership and
extraordinary item 8,056 4,085 19,814 11,476
Provision for income
taxes 3,639 1,293 8,378 4,586
---------- ---------- ---------- ----------
4,417 2,792 11,436 6,890
Equity in earnings of
unconsolidated
partnership, net
of income taxes 583 - 760 -
---------- ---------- ---------- ----------
Income before
extraordinary item 5,000 2,792 12,196 6,890
Extraordinary charge
for early retirement
of debt, net of
income tax benefit (450) - (1,185) -
---------- ---------- ---------- ----------
Net income $ 4,550 $ 2,792 $ 11,011 $ 6,890
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Earnings per share:
Before extraordinary
item $ 0.59 $ 0.33 $ 1.45 $ 0.80
Extraordinary item (0.05) - (0.14) -
---------- ---------- ---------- ----------
Net income $ 0.54 $ 0.33 $ 1.31 $ 0.80
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Earnings per share
assuming dilution:
Before extraordinary
item $ 0.59 $ 0.33 $ 1.44 $ 0.80
Extraordinary item (0.05) - (0.14) -
---------- ---------- ---------- ----------
Net income $ 0.54 $ 0.33 $ 1.30 $ 0.80
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Cash dividends:
Class A Common Stock $ 0.10875 $ 0.10875 $ 0.32625 $ 0.32625
Common Stock $ 0.12500 0.12500 $ 0.37500 $ 0.37500
OSHKOSH TRUCK CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
June 30, Sept. 30,
1998 1997
----------------------
(In thousands)
ASSETS
Current assets:
Cash and cash equivalents $ 24,657 $ 23,219
Receivables, net 74,280 81,235
Inventories 135,109 76,497
Prepaid expenses 3,477 3,405
Deferred income taxes 14,073 9,479
---------- ----------
Total current assets 251,596 193,835
Deferred charges 390 1,067
Other long-term assets 15,033 6,660
Investment in unconsolidated partnership 12,934 -
Property, plant and equipment:
Land 8,768 7,172
Buildings 65,984 42,220
Machinery and equipment 89,316 78,270
---------- ----------
164,068 127,662
Less accumulated depreciation (78,006) (72,174)
---------- ----------
Net property, plant and equipment 86,062 55,488
Goodwill and other intangible assets, net 325,626 163,344
---------- ----------
Total assets $ 691,641 $ 420,394
---------- ----------
---------- ----------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 61,358 $ 48,220
Floor plan notes payable 9,073 -
Customer advances 46,517 30,124
Payroll-related obligations 21,411 15,157
Accrued warranty 13,203 12,320
Other current liabilities 36,890 22,901
Current maturities of long-term debt 4,516 15,000
---------- ----------
Total current liabilities 192,968 143,722
Long-term debt 294,406 120,000
Postretirement benefit obligations 10,653 10,147
Other long-term liabilities 6,165 3,173
Deferred income taxes 57,833 22,452
Shareholders' equity:
Class A Common Stock 3 4
Common Stock 90 89
Paid-in capital 14,243 13,591
Retained earnings 127,950 120,085
---------- ----------
142,286 133,769
Cost of Common Stock in treasury (12,670) (12,869)
---------- ----------
Total shareholders' equity 129,616 120,900
---------- ----------
Total liabilities and shareholders' equity $ 691,641 $ 420,394
---------- -----------
---------- -----------
OSHKOSH TRUCK CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended
June 30,
------------------------
1998 1997
------------------------
(In thousands)
Net cash provided from operating activities $ 78,982 $ 31,813
Investing activities:
Acquisition of businesses, net of
cash acquired (217,954) -
Additions to property, plant and
equipment (6,270) (4,613)
Proceeds from sale of property,
plant and equipment 320 333
Increase in other long-term assets (2,232) (114)
----------- -----------
Net cash used for investing
activities (226,136) (4,394)
Net cash used for discontinued operations (872) (1,079)
Financing activities:
Net borrowings (repayments) of long-term
debt 161,069 (15,411)
Debt issuance costs (8,507) -
Purchase of Common Stock, Common
Stock warrants and proceeds from
exercise of stock options, net 31 (6,642)
Dividends paid (3,129) (3,178)
----------- -----------
Net cash provided from (used for)
financing activities 149,464 (25,231)
----------- -----------
Increase in cash and cash equivalents 1,438 1,109
Cash and cash equivalents at beginning of
period 23,219 127
----------- -----------
Cash and cash equivalents at end of period $ 24,657 $ 1,236
----------- -----------
----------- -----------
Supplementary disclosure:
Depreciation and amortization $ 12,995 $ 10,538