Oshkosh Truck Reports Record Earnings in Third Quarter
25 July 2000
Net Income Increases 45%, Operating Income Rises 23%
OSHKOSH, Wis. - Oshkosh Truck Corporation today reported that net income increased 45 percent to $15.3 million, or $0.90 per share, for the third quarter of fiscal 2000 on sales of $392 million. This compares to net income of $10.5 million, or $0.81 per share, for the third quarter of fiscal 1999 on sales of $330 million.Net sales for the quarter increased 19 percent. Operating income increased 23 percent to $28.8 million, or 7.4 percent of sales, compared to $23.5 million, or 7.1 percent of sales, in the prior year.
Commenting on the company's third quarter performance, Robert G. Bohn, chairman, president and chief executive officer of Oshkosh Truck said, "Our record earnings were balanced throughout our business segments, with each generating double digit sales and operating income growth. The highlights of our sales performance were the strength of shipments at Pierce, increased medium defense truck production, large international sales of aircraft rescue and firefighting vehicles and continuing strength in concrete placement markets."
Factors affecting results for the company's business segments included:
Commercial segment--Sales increased 11.7 percent to $219.2 million due to strong performance in the concrete placement market. Concrete placement sales were up 13.5 percent for the quarter, while refuse packer sales increased 4.9 percent.
Operating income increased 10.5 percent in the commercial segment to $18.4 million, or 8.4 percent of sales, compared to prior year operating income of $16.6 million, or 8.5 percent of sales. Bohn commented, "A strong mix of concrete mixers and continued cost reduction activities contributed to the commercial segment's strong earnings performance."
Fire and Emergency--Sales increased 24.0 percent to $103.5 million for the quarter. Operating income increased 16.9 percent to $9.5 million, or 9.2 percent of sales, compared to prior year operating income of $8.1 million, or 9.8 percent of sales. "The increase in operating income is primarily attributable to increased sales volume, including sales of lower margin aircraft rescue and firefighting units," explained Bohn.
Defense--Sales increased by 37.2 percent to $69.4 million for the quarter. Operating income for the defense segment increased 74.4 percent to $7.3 million, or 10.5 percent of sales, compared to $4.2 million, or 8.3 percent of sales, for the same quarter in fiscal 1999. "A ramp-up in MTVR sales and strong international demand contributed to higher defense sales in the quarter. Operating income benefited from a strong mix of heavy tactical trucks, and lower bid and proposal spending than planned," commented Bohn.
Corporate and other--Corporate expenses were $6.4 million for the quarter compared to $5.5 million in the prior year. Net interest expense for the quarter decreased to $4.8 million compared to $6.4 million in the prior year quarter generally as a result of prepayment of $93.5 million of term debt from proceeds of the company's November 24, 1999 offering of Common Stock.
Nine-Month Results
The company reported that net income increased 68 percent to $35.3 million, or $2.18 per share, for the first nine months of fiscal 2000 on sales of $966 million compared to $21.0 million, or $1.62 per share, for the first nine months of fiscal 1999 on sales of $851 million.
Operating income rose 32 percent to $70.1 million in the first nine months of fiscal 2000 compared to $53.2 million in the first nine months of fiscal 1999. The increase in operating income resulted from revenue growth across all business segments.
Gain on disposal of discontinued operations contributed $2.0 million, or $0.12 per share, to net income in fiscal 2000. Fiscal 1999 results included a $2.3 million after-tax charge for the settlement of litigation.
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 previous quarter dividend rate, will be payable August 14, 2000 to shareholders of record as of August 2, 2000.
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 and Pierce brand names. Oshkosh's products are valued worldwide by fire and emergency units, defense forces, municipal and airport support services, concrete placement 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,
------------------ -----------------
2000 1999 2000 1999
------ ------ ------ ------
(In thousands, except per share amounts)
Net sales $391,667 $329,821 $966,058 $851,048
Cost of sales 332,865 281,529 817,518 726,128
--------- --------- --------- ---------
Gross income 58,802 48,292 148,540 124,920
Operating expenses:
Selling, general and
administrative 27,213 22,023 70,125 63,322
Amortization of goodwill
and other intangibles 2,780 2,775 8,324 8,400
--------- --------- --------- ---------
Total operating expenses 29,993 24,798 78,449 71,722
--------- --------- --------- ---------
Operating income 28,809 23,494 70,091 53,198
Other income (expense):
Interest expense (5,116) (6,613) (16,314) (19,839)
Interest income 286 187 640 614
Miscellaneous, net 244 224 529 564
--------- --------- --------- ---------
(4,586) (6,202) (15,145) (18,661)
--------- --------- --------- ---------
Income before items
noted below 24,223 17,292 54,946 34,537
Provision for income taxes 9,253 7,199 21,957 14,700
--------- --------- --------- ---------
14,970 10,093 32,989 19,837
Equity in earnings of
unconsolidated partnership,
net of income taxes 304 452 894 1,169
--------- --------- --------- ---------
Income from
continuing operations 15,274 10,545 33,883 21,006
Gain on disposal of
discontinued operations,
net of income taxes of $1,235 - - 2,015 -
Extraordinary charge for early
retirement of debt, net of
income tax benefit of $356 - - (581) -
--------- --------- --------- ---------
Net income $ 15,274 $ 10,545 $ 35,317 $ 21,006
========= ========= ========= =========
Earnings per share:
Continuing operations $ 0.92 $ 0.83 $ 2.13 $ 1.65
Discontinued operations - - 0.13 -
Extraordinary item - - (0.04) -
--------- --------- --------- ---------
$ 0.92 $ 0.83 $ 2.22 $ 1.65
========= ========= ========= =========
Earnings per share assuming dilution:
Continuing operations $ 0.90 $ 0.81 $ 2.10 $ 1.62
Discontinued operations - - 0.12 -
Extraordinary item - - (0.04) -
--------- --------- --------- ---------
$ 0.90 $ 0.81 $ 2.18 $ 1.62
========= ========= ========= =========
Weighted average shares outstanding:
Basic 16,633 12,763 15,881 12,700
Assuming dilution 16,971 13,073 16,201 13,000
Cash dividends:
Class A Common Stock $0.07500 $0.07250 $0.22500 $0.21750
Common Stock $0.08625 $0.08333 $0.25875 $0.25000
OSHKOSH TRUCK CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, September 30,
2000 1999
----------- -----------
(Unaudited)
(In thousands)
ASSETS
Current assets:
Cash and cash equivalents $ 4,698 $ 5,137
Receivables, net 108,712 93,186
Inventories 214,895 198,446
Prepaid expenses 5,743 4,963
Deferred income taxes 12,498 14,558
----------- -----------
Total current assets 346,546 316,290
Investment in unconsolidated partnership 16,099 12,335
Other long-term assets 24,593 20,853
Property, plant and equipment 181,641 154,597
Less accumulated depreciation (78,127) (70,606)
----------- -----------
Net property, plant and equipment 103,514 83,991
Goodwill and other intangible assets, net 313,138 319,821
----------- -----------
Total assets $ 803,890 $ 753,290
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 85,625 $ 84,727
Floor plan notes payable 25,208 26,616
Customer advances 59,913 68,364
Payroll-related obligations 25,263 24,734
Accrued warranty 15,222 14,623
Other current liabilities 55,074 48,462
Revolving credit facility and
current maturities of long-term debt 23,774 5,259
----------- -----------
Total current liabilities 290,079 272,785
Long-term debt 156,648 255,289
Deferred income taxes 39,745 44,265
Other long-term liabilities 29,815 18,071
Commitments and contingencies - -
Shareholders' equity 287,603 162,880
----------- -----------
Total liabilities and
shareholders' equity $ 803,890 $ 753,290
=========== ===========
OSHKOSH TRUCK CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended
June 30,
-------------------------
2000 1999
---------- ----------
(In thousands)
Operating activities:
Income from continuing operations $ 33,883 $ 21,006
Non-cash adjustments 13,998 6,165
Changes in operating assets and
liabilities (34,203) (26,102)
---------- ----------
Net cash provided from operating
activities 13,678 1,069
Investing activities:
Acquisition of businesses, net of
cash acquired (7,287) -
Additions to property, plant and
equipment (11,783) (6,900)
Proceeds from sale of property,
plant and equipment 46 58
Increase in other long-term assets (5,663) (4,356)
---------- ----------
Net cash used for investing
activities (24,687) (11,198)
Net cash provided from discontinued
operations 2,015 -
Financing activities:
Net borrowings under revolving
credit facility 12,800 14,300
Repayments of long-term debt (93,842) (248)
Proceeds from Common Stock offering 93,736 -
Costs of Common Stock offering (334) -
Dividends paid (3,961) (3,163)
Other 156 1,059
---------- ----------
Net cash provided from financing
activities 8,555 11,948
---------- ----------
Increase (decrease) in cash and cash
equivalents (439) 1,819
Cash and cash equivalents at
beginning of period 5,137 3,622
---------- ----------
Cash and cash equivalents at end of
period $ 4,698 $ 5,441
========== ==========
Supplementary disclosure:
Depreciation and amortization $ 17,640 $ 17,018
OSHKOSH TRUCK CORPORATION
SEGMENT INFORMATION
(Unaudited)
Three Months Ended Nine Months Ended
June 30, June 30,
-------------------- --------------------
2000 1999 2000 1999
--------- --------- --------- ---------
(In thousands)
Net sales to unaffiliated customers:
Commercial $ 219,217 $ 196,294 $ 516,484 $ 461,961
Fire and emergency 103,482 83,465 281,863 243,095
Defense 69,368 50,562 168,111 146,992
Corporate and other (400) (500) (400) (1,000)
--------- --------- --------- ---------
Consolidated $ 391,667 $ 329,821 $ 966,058 $ 851,048
========= ========= ========= =========
Operating income (expense):
Commercial $ 18,351 $ 16,609 $ 45,214 $ 35,027
Fire and emergency 9,523 8,147 22,916 19,844
Defense 7,305 4,188 16,963 14,957
Corporate and other (6,370) (5,450) (15,002) (16,630)
--------- --------- --------- ---------
Consolidated $ 28,809 $ 23,494 $ 70,091 $ 53,198
========= ========= ========= =========
Backlog:
Commercial $ 82,391 $ 125,323
Fire and emergency 209,663 200,400
Defense 352,893 178,925
--------- ---------
Consolidated $ 644,947 $ 504,648
========= =========