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Oskosh Defense (NYSE: OSK).

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Oshkosh Defense is a leading provider of tactical wheeled vehicles and life cycle sustainment services. For more than 90 years, Oshkosh has been mobilizing military and security forces around the globe by offering a full portfolio of heavy, medium, light and highly protected military vehicles to support our customers' missions. In addition, Oshkosh offers advanced technologies and vehicle components such as TAK-4[R] independent suspension systems, TerraMax[TM] unmanned ground vehicle solutions, Command Zone[TM] integrated control and diagnostics system, and ProPulse[R] diesel electric and on-board vehicle power solutions, to provide our customers with a technical edge as they fulfill their missions. Every Oshkosh vehicle is backed by a team of defense industry experts and complete range of sustainment and training services to optimize fleet readiness and performance.

Oshkosh Corporation Reports Fiscal 2019 First Quarter Results

Raises Fiscal 2019 Estimated EPS Range

Declares Quarterly Cash Dividend of $0.27 Per Share

OSHKOSH, Wis.~(BUSINESS WIRE)- Oshkosh Corporation (NYSE: OSK) today reported fiscal 2019 first quarter net income of $109.0 million, or $1.51 per diluted share, compared to $56.4 million, or $0.74 per diluted share, in the first quarter of fiscal 2018. Results for the first quarter of fiscal 2019 included a $7.0 million tax charge related to an adjustment of the repatriation tax required under tax legislation passed in the United States in December 2017. Results for the first quarter of fiscal 2018 included after-tax charges of $14.1 million associated with restructuring actions in the access equipment and commercial segments as well as discrete tax benefits of $6.5 million related to implementation of tax legislation in the United States. Excluding these items, fiscal 2019 first quarter adjusted (1) net income was $116.0 million, or $1.61 per diluted share, compared to fiscal 2018 first quarter adjusted (1) net income of $64.0 million, or $0.84 per diluted share. Comparisons in this news release are to the corresponding period of the prior year, unless otherwise noted.

Consolidated net sales in the first quarter of fiscal 2019 increased 13.7 percent to $1.80 billion compared to the first quarter of fiscal 2018 due to higher access equipment and fire & emergency segment sales, offset in part by lower defense and commercial segment sales. Consolidated sales for the first quarter of fiscal 2019 without the adoption of the new revenue recognition standard would have been $1.77 billion, an increase of 11.3 percent compared to the first quarter of fiscal 2018.

Consolidated operating income in the first quarter of fiscal 2019 increased 115.4 percent to $160.5 million, or 8.9 percent of sales, compared to $74.5 million, or 4.7 percent of sales, in the first quarter of fiscal 2018. This increase was primarily a result of the impact of higher sales volume, the absence of restructuring-related charges and the application of the new revenue recognition standard. Consolidated operating income for the first quarter of fiscal 2019 without the adoption of the new revenue recognition standard would have been $135.3 million, or 7.7 percent of sales. Excluding $18.6 million of pre-tax charges and operating inefficiencies related to restructuring actions in the access equipment and commercial segments, adjusted (1) operating income in the first quarter of fiscal 2018 was $93.1 million, or 5.9 percent of sales.

"I am pleased to report strong performance by our team in the first quarter, with sales growth of 13.7 percent, adjusted (1) operating income growth of 72.4 percent and adjusted (1) earnings per share growth of 91.7 percent to $1.61," said Wilson R. Jones, president and chief executive officer of Oshkosh Corporation. "Fiscal 2019 is off to a good start and we remain confident in our outlook, supported by positive customer sentiment, elevated backlog and a focused Oshkosh team. Led by double digit sales growth in our access equipment and fire & emergency segments, the continued execution of our MOVE strategy drove higher operating income and higher operating income margins in all four segments.

"During the quarter, our defense segment received an order valued at $1.7 billion for our revolutionary light protected defense vehicle, the Joint Light Tactical Vehicle (JLTV). The JLTV is shaping the future of light military vehicles and continues to draw significant interest from international armed forces.

"As a result of our positive start to the year and improved outlook in our access equipment segment, we are raising our fiscal 2019 earnings expectations. We now expect full year earnings per share to be in a range of $6.90 to $7.40 and adjusted (1) earnings per share to be in a range of $7.00 to $7.50," said Jones.

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

Access Equipment - Access equipment segment net sales in the first quarter of fiscal 2019 increased 31.6 percent to $826.5 million. The increase in sales was led by an increase in telehandler sales in North America, reflecting continued favorable business conditions and improved production rates as the access equipment segment was completing the move of North American telehandler production in fiscal 2018. Higher pricing to cover material cost escalation also contributed to the increase in sales.

Access equipment segment operating income in the first quarter of fiscal 2019 increased 384.7 percent to $66.4 million, or 8.0 percent of sales, compared to $13.7 million, or 2.2 percent of sales, in the first quarter of fiscal 2018. The increase in operating income was primarily due to the impact of higher sales volume, improved pricing and the absence of restructuring-related expenses, offset in part by higher material costs and adverse product mix. The first quarter of fiscal 2018 also included a benefit of $5.5 million related to the collection of a receivable that had been fully reserved.

Access equipment segment results for the first quarter of fiscal 2018 included pre-tax charges and operating inefficiencies associated with restructuring actions of $16.1 million. Excluding these charges and inefficiencies, adjusted (1) operating income in the first quarter of fiscal 2018 was $29.8 million, or 4.7 percent of sales.

Defense - Defense segment net sales for the first quarter of fiscal 2019 decreased 6.0 percent to $464.1 million. The decrease in sales was due to the absence of international Mine Resistant Ambush Protected-AII Terrain Vehicle (M-ATV) sales in the first quarter of fiscal 2019, offset in part by the continued ramp up of sales to the U.S. government under the JLTV program and changes associated with the application of the new revenue recognition standard. Defense segment sales for the first quarter of fiscal 2019 without the adoption of the new revenue recognition standard would have been $449.5 million, a decrease of 8.9 percent compared to the first quarter of fiscal 2018.

Defense segment operating income in the first quarter of fiscal 2019 increased 8.1 percent to $71.1 million, or 15.3 percent of sales, compared to $65.8 million, or 13.3 percent of sales, in the first quarter of fiscal 2018. The increase in operating income was due to changes associated with the application of the new revenue recognition standard, including an increase in contract margins on the JLTV program upon the receipt of the large order in the quarter, and a favorable resolution of contract compliance matters, offset in part by the impact of lower sales volume and an adverse product mix. Defense segment operating income for the first quarter of fiscal 2019 without the adoption of the new revenue recognition standard would have been $51.9 million, or 11.5 percent of sales.

Fire & Emergency - Fire & emergency segment net sales for the first quarter of fiscal 2019 increased 29.0 percent to $295.5 million as a result of the timing of deliveries and changes associated with the application of the new revenue recognition standard. Fire & emergency segment sales for the first quarter of fiscal 2019 without the adoption of the new revenue recognition standard would have been $268.7 million, an increase of 17.3 percent compared to the first quarter of fiscal 2018.

Fire & emergency segment operating income in the first quarter of fiscal 2019 increased 57.7 percent to $39.9 million, or 13.5 percent of sales, compared to $25.3 million, or 11.0 percent of sales, in the first quarter of fiscal 2018. The increase in operating income was largely a result of the impact of higher sales volume. Fire & emergency segment operating income for the first quarter of fiscal 2019 without the adoption of the new revenue recognition standard would have been $34.1 million, or 12.7 percent of sales.

Commercial - Commercial segment net sales for the first quarter of fiscal 2019 decreased 8.0 percent to $222.2 million on a lower mix of package sales, which include third-party chassis.

Commercial segment operating income in the first quarter of fiscal 2019 increased 125.3 percent to $18.7 million, or 8.4 percent of sales, compared to $8.3 million, or 3.4 percent of sales, in the first quarter of fiscal 2018. The increase in operating income was largely a result of lower operating expenses, the absence of restructuring-related costs in the first quarter of fiscal 2019 and lower warranty expense. Excluding restructuring-related charges of $2.5 million in the prior year, adjusted (1) operating income was $10.8 million, or 4.5 percent of sales, in the first quarter of fiscal 2018.

Corporate - Corporate operating costs in the first quarter of fiscal 2019 decreased $3.0 million to $35.6 million due primarily to lower share-based compensation costs and a decrease in post-retirement liabilities.

Interest Expense Net of Interest Income - Interest expense net of interest income in the first quarter of fiscal 2019 decreased $2.2 million to $11.5 million.

Provision for Income Taxes - The Company recorded income tax expense in the first quarter of fiscal 2019 of $39.7 million, or 26.9 percent of pre-tax income, compared to $4.7 million, or 7.8 percent of pre-tax income, in the first quarter of fiscal 2018. Excluding $7.0 million related to an adjustment of the repatriation tax required under tax legislation passed in the United States in December 2017, adjusted (1) income tax expense in the first quarter of fiscal 2019 was $32.7 million, or 22.1 percent of pre-tax income. Excluding the tax impact of restructuring-related charges of $4.5 million as well as discrete tax benefits of $6.5 million related to the implementation of tax legislation in the prior year, adjusted (1) income tax expense in the first quarter of fiscal 2018 was $15.7 million, or 19.8 percent of adjusted pre-tax income. Adjusted (1) income tax expense included $0.3 million of discrete tax charges and $3.8 million of discrete tax benefits in the first quarter of fiscal 2019 and 2018, respectively, primarily related to share-based compensation tax benefits and the resolution of state tax matters.

Share Repurchases -The Company repurchased 2,563,087 shares of Common Stock for $170.0 million in the first quarter of fiscal 2019. Share repurchases completed during the previous twelve months benefited earnings per share in the first quarter of fiscal 2019 by $0.08 compared to the first quarter of fiscal 2018.

Fiscal 2019 Expectations

The Company is raising its fiscal 2019 full year outlook as a result of the positive start to the year and an improved outlook for the access equipment segment. The Company now expects consolidated sales to be $8.05 billion to $8.25 billion, an increase from the Company's previous sales estimate range of $7.85 billion to $8.15 billion.

The Company now expects its fiscal 2019 consolidated operating income to be $685 million to $735 million, an increase from the Company's previous sales estimate range of $640 million to $710 million.

The Company now expects its fiscal 2019 diluted earnings per share to be in the range of $6.90 to $7.40. Excluding the impact of discrete items associated with tax legislation in the U.S., the Company expects its fiscal 2019 adjusted (1) diluted earnings per share to be in the range of $7.00 to $7.50 compared to the prior diluted earnings per share estimated range of $6.50 to $7.25.

Dividend Announcement

The Company's Board of Directors today declared a quarterly cash dividend of $0.27 per share of Common Stock. The dividend will be payable on March 1, 2019, to shareholders of record as of February 15, 2019.

https://investor.oshkoshcorporation.com/investors/news-releases/news-releases-details/2019/Oshkosh-Corporation-Reports-Fiscal-2019-First-Quarter-Results/default.aspx
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Title Annotation:Leading Companies in the Industry
Publication:US Armaments
Geographic Code:1U3WI
Date:Aug 14, 2019
Words:2124
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