News Details
Oshkosh Corporation Reports Fiscal 2018 Second Quarter Results
Apr. 26, 2018
Increases Fiscal 2018 Revenue Expectations
Raises Fiscal 2018
Declares Quarterly Cash Dividend of
Consolidated net sales in the second quarter of fiscal 2018 were
Consolidated operating income increased 93.9 percent to
“We are pleased to report another quarter of solid results highlighted
by growth in revenue, adjusted operating income and adjusted earnings
per share,” said
“During the quarter, our defense segment was awarded the
“As a result of our solid second quarter performance and our positive
outlook for the remainder of the year, we are raising our full-year
fiscal 2018 earnings per share estimate range to
Factors affecting second quarter results for the Company’s business segments included:
Access Equipment - Access equipment segment net sales increased
28.3 percent to
Access equipment segment operating income increased 132.1 percent to
Defense - Defense segment net sales for the second quarter of
fiscal 2018 decreased 4.0 percent to
Defense segment operating income decreased 1.8 percent to
Fire & Emergency - Fire & emergency segment net sales for the
second quarter of fiscal 2018 increased 15.0 percent to
Fire & emergency segment operating income increased 65.1 percent to
Commercial - Commercial segment net sales increased 22.2 percent
to
Commercial segment operating income increased 173.3 percent to
Corporate - Corporate operating costs increased
Interest Expense Net of Interest Income - Interest expense net of
interest income decreased
Provision for Income Taxes - The Company recorded income tax
expense of
Share Repurchases - The Company deployed cash of
Six-month Results
The Company reported net sales for the first six months of fiscal 2018
of
Fiscal 2018 Expectations
As a result of the combined impacts of the positive second quarter
results, improved demand outlook for access equipment sales, challenges
related to the ramp up in production in the access equipment segment and
material cost increases, the Company is raising its fiscal 2018 full
year outlook. The Company now expects consolidated sales to be
The Company now expects its fiscal 2018 consolidated operating income to be $540 million to $590 million. Excluding anticipated charges and inefficiencies associated with announced restructuring actions in the access equipment and commercial segments, the Company expects its fiscal 2018 adjusted1 operating income to be $575 million to $625 million, compared to its previous estimated adjusted operating income range of $550 million to $600 million. The increase is attributable to expected higher sales in the access equipment segment and improved margins in the defense and fire & emergency segments, offset in part by expected lower margins in the access equipment segment.
The Company now expects its fiscal 2018 diluted earnings per share to be
in the range of
Dividend Announcement
The Company’s Board of Directors today declared a quarterly cash
dividend of
Conference Call
The Company will comment on its fiscal 2018 second quarter earnings and
its full-year fiscal 2018 outlook during a conference call at
Forward Looking Statements
This news release 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 news
release, 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
statements. These factors include the cyclical nature of the Company’s
access equipment, commercial and fire & emergency markets, which are
particularly impacted by the strength of
About
Founded in 1917,
Today,
®, ™ All brand names referred to in this news release are
trademarks of
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In millions, except share and per share amounts; unaudited) |
|||||||||||||||||
Three Months Ended |
Six Months Ended |
||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||
Net sales | $ | 1,886.4 | $ | 1,618.3 | $ | 3,472.7 | $ | 2,829.7 | |||||||||
Cost of sales | 1,551.0 | 1,357.0 | 2,895.1 | 2,368.7 | |||||||||||||
Gross income | 335.4 | 261.3 | 577.6 | 461.0 | |||||||||||||
Operating expenses: | |||||||||||||||||
Selling, general and administrative | 170.3 | 169.8 | 328.1 | 320.8 | |||||||||||||
Amortization of purchased intangibles | 9.2 | 11.1 | 19.8 | 23.6 | |||||||||||||
Total operating expenses | 179.5 | 180.9 | 347.9 | 344.4 | |||||||||||||
Operating income | 155.9 | 80.4 | 229.7 | 116.6 | |||||||||||||
Other income (expense): | |||||||||||||||||
Interest expense | (16.1 | ) | (15.1 | ) | (31.5 | ) | (29.8 | ) | |||||||||
Interest income | 8.1 | 1.0 | 9.8 | 1.8 | |||||||||||||
Miscellaneous, net | (0.8 | ) | 1.2 | (0.3 | ) | 2.5 | |||||||||||
Income before income taxes and earnings of unconsolidated affiliates | 147.1 | 67.5 | 207.7 | 91.1 | |||||||||||||
Provision for income taxes | 36.2 | 23.6 | 40.9 | 28.8 | |||||||||||||
Income before earnings of unconsolidated affiliates | 110.9 | 43.9 | 166.8 | 62.3 | |||||||||||||
Equity in earnings (losses) of unconsolidated affiliates | (0.1 | ) | 0.4 | 0.4 | 1.2 | ||||||||||||
Net income | $ | 110.8 | $ | 44.3 | $ | 167.2 | $ | 63.5 | |||||||||
Earnings per share: | |||||||||||||||||
Basic | $ | 1.49 | $ | 0.59 | $ | 2.24 | $ | 0.85 | |||||||||
Diluted | 1.47 | 0.58 | 2.21 | 0.84 | |||||||||||||
Basic weighted-average shares outstanding | 74,519,741 | 74,696,616 | 74,685,082 | 74,486,209 | |||||||||||||
Dilutive stock options and other equity-based compensation awards | 977,808 | 1,086,846 | 1,077,722 | 1,095,693 | |||||||||||||
Diluted weighted-average shares outstanding | 75,497,549 | 75,783,462 | 75,762,804 | 75,581,902 |
CONDENSED CONSOLIDATED BALANCE SHEETS (In millions; unaudited) |
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|
|
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2018 | 2017 | ||||||||
Assets | |||||||||
Current assets: | |||||||||
Cash and cash equivalents | $ | 287.9 | $ | 447.0 | |||||
Receivables, net | 1,457.3 | 1,306.3 | |||||||
Inventories, net | 1,321.8 | 1,198.4 | |||||||
Other current assets | 86.6 | 88.1 | |||||||
Total current assets | 3,153.6 | 3,039.8 | |||||||
Property, plant and equipment: | |||||||||
Property, plant and equipment | 1,210.3 | 1,188.8 | |||||||
Accumulated depreciation | (751.6 | ) | (718.9 | ) | |||||
Property, plant and equipment, net | 458.7 | 469.9 | |||||||
|
1,020.4 | 1,013.0 | |||||||
Purchased intangible assets, net | 490.4 | 507.8 | |||||||
Other long-term assets | 71.4 | 68.4 | |||||||
Total assets | $ | 5,194.5 | $ | 5,098.9 | |||||
Liabilities and Shareholders' Equity | |||||||||
Current liabilities: | |||||||||
Revolving credit facilities and current maturities of long-term debt | $ | 8.7 | $ | 23.0 | |||||
Accounts payable | 706.0 | 651.0 | |||||||
Customer advances | 566.2 | 513.4 | |||||||
Payroll-related obligations | 154.9 | 191.8 | |||||||
Other current liabilities | 304.0 | 303.9 | |||||||
Total current liabilities | 1,739.8 | 1,683.1 | |||||||
Long-term debt, less current maturities | 818.8 | 807.9 | |||||||
Other long-term liabilities | 286.3 | 300.5 | |||||||
Commitments and contingencies | |||||||||
Shareholders' equity | 2,349.6 | 2,307.4 | |||||||
Total liabilities and shareholders' equity | $ | 5,194.5 | $ | 5,098.9 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions; unaudited) |
|||||||||
Six Months Ended |
|||||||||
2018 | 2017 | ||||||||
Operating activities: | |||||||||
Net income | $ | 167.2 | $ | 63.5 | |||||
Depreciation and amortization | 61.3 | 64.4 | |||||||
Stock-based compensation expense | 13.8 | 12.2 | |||||||
Deferred income taxes | (21.8 | ) | 1.0 | ||||||
Gain on sale of assets | (0.6 | ) | (4.2 | ) | |||||
Foreign currency transaction (gains) losses | (0.7 | ) | 0.2 | ||||||
Other non-cash adjustments | 1.1 | 0.5 | |||||||
Changes in operating assets and liabilities | (176.4 | ) | 10.5 | ||||||
Net cash provided by operating activities | 43.9 | 148.1 | |||||||
Investing activities: | |||||||||
Additions to property, plant and equipment | (37.9 | ) | (28.0 | ) | |||||
Additions to equipment held for rental | (2.9 | ) | (24.6 | ) | |||||
Proceeds from sale of equipment held for rental | 4.4 | 19.8 | |||||||
Other investing activities | (0.5 | ) | (0.9 | ) | |||||
Net cash used by investing activities | (36.9 | ) | (33.7 | ) | |||||
Financing activities: | |||||||||
Proceeds from issuance of debt | 13.1 | — | |||||||
Repayments of debt | (17.9 | ) | (20.0 | ) | |||||
Repurchases of common stock | (136.2 | ) | (3.0 | ) | |||||
Dividends paid | (35.9 | ) | (31.3 | ) | |||||
Proceeds from exercise of stock options | 12.5 | 33.2 | |||||||
Net cash used by financing activities | (164.4 | ) | (21.1 | ) | |||||
Effect of exchange rate changes on cash | (1.7 | ) | (1.8 | ) | |||||
Increase (decrease) in cash and cash equivalents | (159.1 | ) | 91.5 | ||||||
Cash and cash equivalents at beginning of period | 447.0 | 321.9 | |||||||
Cash and cash equivalents at end of period | $ | 287.9 | $ | 413.4 |
SEGMENT INFORMATION (In millions; unaudited) |
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Three Months Ended |
|||||||||||||||||||||||||
2018 | 2017 | ||||||||||||||||||||||||
External
Customers |
Inter-
segment |
Net
Sales |
External
Customers |
Inter-
segment |
Net
Sales |
||||||||||||||||||||
Access equipment | |||||||||||||||||||||||||
Aerial work platforms | $ | 487.2 | $ | — | $ | 487.2 | $ | 369.4 | $ | — | $ | 369.4 | |||||||||||||
Telehandlers | 234.9 | — | 234.9 | 161.6 | — | 161.6 | |||||||||||||||||||
Other | 205.8 | — | 205.8 | 192.2 | — | 192.2 | |||||||||||||||||||
Total access equipment | 927.9 | — | 927.9 | 723.2 | — | 723.2 | |||||||||||||||||||
Defense | 427.8 | 0.4 | 428.2 | 445.7 | 0.4 | 446.1 | |||||||||||||||||||
Fire & emergency | 269.1 | 4.0 | 273.1 | 233.5 | 4.0 | 237.5 | |||||||||||||||||||
Commercial | |||||||||||||||||||||||||
Concrete placement | 114.6 | — | 114.6 | 112.7 | — | 112.7 | |||||||||||||||||||
Refuse collection | 117.8 | — | 117.8 | 79.1 | — | 79.1 | |||||||||||||||||||
Other | 29.1 | 2.4 | 31.5 | 22.3 | 1.9 | 24.2 | |||||||||||||||||||
Total commercial | 261.5 | 2.4 | 263.9 | 214.1 | 1.9 | 216.0 | |||||||||||||||||||
Corporate & eliminations | 0.1 | (6.8 | ) | (6.7 | ) | 1.8 | (6.3 | ) | (4.5 | ) | |||||||||||||||
$ | 1,886.4 | $ | — | $ | 1,886.4 | $ | 1,618.3 | $ | — | $ | 1,618.3 |
Six Months Ended |
|||||||||||||||||||||||||
2018 | 2017 | ||||||||||||||||||||||||
External
Customers |
Inter-
segment |
Net
Sales |
External
Customers |
Inter-
segment |
Net
Sales |
||||||||||||||||||||
Access equipment | |||||||||||||||||||||||||
Aerial work platforms | $ | 810.7 | $ | — | $ | 810.7 | $ | 603.1 | $ | — | $ | 603.1 | |||||||||||||
Telehandlers | 364.4 | — | 364.4 | 254.9 | — | 254.9 | |||||||||||||||||||
Other | 381.0 | — | 381.0 | 354.4 | — | 354.4 | |||||||||||||||||||
Total access equipment | 1,556.1 | — | 1,556.1 | 1,212.4 | — | 1,212.4 | |||||||||||||||||||
Defense | 921.0 | 0.7 | 921.7 | 739.9 | 0.7 | 740.6 | |||||||||||||||||||
Fire & emergency | 494.0 | 8.2 | 502.2 | 462.6 | 7.4 | 470.0 | |||||||||||||||||||
Commercial | |||||||||||||||||||||||||
Concrete placement | 226.1 | — | 226.1 | 197.1 | — | 197.1 | |||||||||||||||||||
Refuse collection | 219.0 | — | 219.0 | 171.3 | — | 171.3 | |||||||||||||||||||
Other | 56.1 | 4.1 | 60.2 | 43.8 | 3.0 | 46.8 | |||||||||||||||||||
Total commercial | 501.2 | 4.1 | 505.3 | 412.2 | 3.0 | 415.2 | |||||||||||||||||||
Corporate & eliminations | 0.4 | (13.0 | ) | (12.6 | ) | 2.6 | (11.1 | ) | (8.5 | ) | |||||||||||||||
$ | 3,472.7 | $ | — | $ | 3,472.7 | $ | 2,829.7 | $ | — | $ | 2,829.7 |
Three Months Ended |
Six Months Ended |
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2018 | 2017 | 2018 | 2017 | ||||||||||||||||||||
Operating income (loss): | |||||||||||||||||||||||
Access equipment | $ | 97.7 | $ | 42.1 | $ | 111.5 | $ | 66.5 | |||||||||||||||
Defense | 47.8 | 48.7 | 113.0 | 72.5 | |||||||||||||||||||
Fire & emergency | 36.0 | 21.8 | 61.1 | 38.8 | |||||||||||||||||||
Commercial | 16.4 | 6.0 | 24.7 | 10.6 | |||||||||||||||||||
Corporate | (42.0 | ) | (38.2 | ) | (80.6 | ) | (71.8 | ) | |||||||||||||||
$ | 155.9 | $ | 80.4 | $ | 229.7 | $ | 116.6 | ||||||||||||||||
|
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2018 | 2017 | ||||||||||||||||||||||
Period-end backlog: | |||||||||||||||||||||||
Access equipment |
$ |
1,788.8 |
$ | 737.9 | |||||||||||||||||||
Defense | 1,699.8 | 1,827.7 | |||||||||||||||||||||
Fire & emergency | 1,028.4 | 1,005.9 | |||||||||||||||||||||
Commercial | 424.0 | 353.8 | |||||||||||||||||||||
$ |
4,941.0 |
$ | 3,925.3 | ||||||||||||||||||||
Non-GAAP Financial Measures
The Company reports its financial results in accordance with generally
accepted accounting principles in
Three Months Ended |
Six Months Ended |
|||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Access equipment segment operating income (GAAP) | $ | 97.7 | $ | 42.1 | $ | 111.5 | $ | 66.5 | ||||||||
Costs and inefficiencies related to restructuring actions | 5.2 | 17.2 | 21.3 | 17.2 | ||||||||||||
Adjusted access equipment segment operating income (non-GAAP) | $ | 102.9 | $ | 59.3 | $ | 132.8 | $ | 83.7 | ||||||||
Commercial segment operating income (GAAP) | $ | 16.4 | $ | 6.0 | $ | 24.7 | $ | 10.6 | ||||||||
Restructuring costs | 1.8 | — | 4.3 | — | ||||||||||||
Adjusted commercial segment operating income (non-GAAP) | $ | 18.2 | $ | 6.0 | $ | 29.0 | $ | 10.6 | ||||||||
Consolidated operating income (GAAP) | $ | 155.9 | $ | 80.4 | $ | 229.7 | $ | 116.6 | ||||||||
Costs and inefficiencies related to restructuring actions | 7.0 | 17.2 | 25.6 | 17.2 | ||||||||||||
Adjusted consolidated operating income (non-GAAP) | $ | 162.9 | $ | 97.6 | $ | 255.3 | $ | 133.8 | ||||||||
Provision for income taxes (GAAP) | $ | 36.2 | $ | 23.6 | $ | 40.9 | $ | 28.8 | ||||||||
Income tax benefit of costs and inefficiencies related to restructuring actions | 1.2 | 3.5 | 5.7 | 3.5 | ||||||||||||
Revaluation of net deferred tax liabilities | — | — | 23.9 | — | ||||||||||||
Repatriation tax | — | — | (17.4 | ) | — | |||||||||||
Adjusted provision for income taxes (non-GAAP) | $ | 37.4 | $ | 27.1 | $ | 53.1 | $ | 32.3 | ||||||||
Net income (GAAP) | $ | 110.8 | $ | 44.3 | $ | 167.2 | $ | 63.5 | ||||||||
Costs and inefficiencies related to restructuring actions, net of tax | 5.8 | 13.7 | 19.9 | 13.7 | ||||||||||||
Revaluation of net deferred tax liabilities | — | — | (23.9 | ) | — | |||||||||||
Repatriation tax | — | — | 17.4 | — | ||||||||||||
Adjusted net income (non-GAAP) | $ | 116.6 | $ | 58.0 | $ | 180.6 | $ | 77.2 | ||||||||
Earnings per share-diluted (GAAP) | $ | 1.47 | $ | 0.58 | $ | 2.21 | $ | 0.84 | ||||||||
Costs and inefficiencies related to restructuring actions, net of tax | 0.07 | 0.18 | 0.25 | 0.18 | ||||||||||||
Revaluation of net deferred tax liabilities | — | — | (0.31 | ) | — | |||||||||||
Repatriation tax | — | — | 0.23 | — | ||||||||||||
Adjusted earnings per share-diluted (non-GAAP) | $ | 1.54 | $ | 0.76 | $ | 2.38 | $ | 1.02 |
Fiscal 2018 Expectations | |||||||||
Low | High | ||||||||
Consolidated operating income (GAAP) | $ | 540 | $ | 590 | |||||
Costs and inefficiencies related to restructuring actions | 35 | 35 | |||||||
Adjusted consolidated operating income (non-GAAP) | $ | 575 | $ | 625 | |||||
Earnings per share-diluted (GAAP) | $ | 5.10 | $ | 5.55 | |||||
Costs and inefficiencies related to restructuring actions, net of tax | 0.38 | 0.38 | |||||||
Revaluation of net deferred tax liabilities | (0.31 | ) | (0.31 | ) | |||||
Repatriation tax | 0.23 | 0.23 | |||||||
Adjusted earnings per share-diluted (non-GAAP) | $ | 5.40 | $ | 5.85 |
____________________________
1 This news release refers to GAAP (
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