News Details
Oshkosh Corporation Reports Fiscal 2015 Fourth Quarter and Full Year Results
Oct. 29, 2015
Provides Fiscal 2016
Prepared to Resume JLTV Work at Conclusion of GAO Protest Review
Repurchased 2.9 Million Shares of Common Stock in Fourth Quarter Fiscal 2015
Announces 12 Percent Increase in Quarterly Cash Dividend to
Results for the fourth quarter of fiscal 2015 were adversely impacted by
a combined
Consolidated net sales in the fourth quarter of fiscal 2015 were
Consolidated operating income in the fourth quarter of fiscal 2015 was
“Fourth quarter earnings were in line with our revised expectations,”
stated
“Our Defense business is rebounding and experiencing increased interest
in our expanding portfolio of tactical wheeled vehicles. More countries
are engaging with
“Today, we announced our expectations for fiscal 2016 earnings per share
of
“We expect to generate approximately $350 million of free cash flow in fiscal 2016 as we reduce access equipment inventory, while also investing in Defense working capital to fulfill international sales contracts. We expect to utilize about half of the free cash flow for share repurchases and dividends, including the increase to our quarterly dividend rate that we are announcing today,” concluded Szews.
Factors affecting fourth quarter results for the Company’s business segments included:
Access Equipment – Access equipment segment sales declined
17.5 percent to
Access equipment segment operating income decreased 55.7 percent to
Defense – Defense segment sales for the fourth quarter of fiscal
2015 increased 10.3 percent to
The defense segment recorded operating income of
Fire & Emergency – Fire & emergency segment sales for the
fourth quarter of fiscal 2015 increased 14.2 percent to
Fire & emergency segment operating income increased 89.2 percent to
Commercial – Commercial segment sales increased 3.8 percent to
Commercial segment operating income increased 14.6 percent to
Corporate – Corporate operating expenses decreased
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 – Earnings per share in the fourth quarter of
fiscal 2015 improved
Full-Year Results
The Company reported net sales for fiscal 2015 of
Fiscal 2016 Expectations
The Company announced its fiscal 2016 earnings per share expectations 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 2015 fourth quarter earnings and
its full-year fiscal 2016 outlook during a conference call at
Forward-Looking Statements
This press 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 press
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 U.S. and European economies;
the Company’s estimates of access equipment demand; the strength of the
U.S. dollar and its impact on Company exports, translation of foreign
sales and purchased materials; the expected level and timing of
About
®, TM All brand names referred to in this news release are
trademarks of
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CONDENSED CONSOLIDATED STATEMENTS OF INCOME | |||||||||||||||||
(Unaudited; in millions) | |||||||||||||||||
Three Months Ended | Fiscal Year Ended | ||||||||||||||||
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2015 | 2014 | 2015 | 2014 | ||||||||||||||
Net sales | $ | 1,578.3 | $ | 1,667.7 | $ | 6,098.1 | $ | 6,808.2 | |||||||||
Cost of sales | 1,328.6 | 1,378.2 | 5,058.9 | 5,625.5 | |||||||||||||
Gross income | 249.7 | 289.5 | 1,039.2 | 1,182.7 | |||||||||||||
Operating expenses: | |||||||||||||||||
Selling, general and administrative | 149.9 | 162.7 | 587.4 | 624.1 | |||||||||||||
Amortization of purchased intangibles | 13.2 | 13.7 | 53.2 | 55.3 | |||||||||||||
Total operating expenses |
163.1 | 176.4 | 640.6 | 679.4 | |||||||||||||
Operating income | 86.6 | 113.1 | 398.6 | 503.3 | |||||||||||||
Other income (expense): | |||||||||||||||||
Interest expense | (13.7 | ) | (14.1 | ) | (70.1 | ) | (71.4 | ) | |||||||||
Interest income | 0.5 | 0.6 | 2.5 | 2.0 | |||||||||||||
Miscellaneous, net | (4.7 | ) | (1.6 | ) | (4.9 | ) | (2.0 | ) | |||||||||
Income before income taxes and equity in earnings | |||||||||||||||||
of unconsolidated affiliates | 68.7 | 98.0 | 326.1 | 431.9 | |||||||||||||
Provision for income taxes | 18.7 | 21.4 | 99.2 | 125.0 | |||||||||||||
Income before equity in earnings of | |||||||||||||||||
unconsolidated affiliates | 50.0 | 76.6 | 226.9 | 306.9 | |||||||||||||
Equity in earnings of unconsolidated affiliates | 0.3 | 1.2 | 2.6 | 2.4 | |||||||||||||
Net income | $ | 50.3 | $ | 77.8 | $ | 229.5 | $ | 309.3 | |||||||||
Amounts available to common shareholders, net of tax: | |||||||||||||||||
Net income | $ | 50.3 | $ | 77.8 | $ | 229.5 | $ | 309.3 | |||||||||
Allocated to participating securities | (0.1 | ) | (0.3 | ) | (0.5 | ) | (1.2 | ) | |||||||||
Net income available to common shareholders | $ | 50.2 | $ | 77.5 | $ | 229.0 | $ | 308.1 |
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EARNINGS PER SHARE | ||||||||||||||||||
(Unaudited) | ||||||||||||||||||
Three Months Ended | Fiscal Year Ended | |||||||||||||||||
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2015 | 2014 | 2015 | 2014 | |||||||||||||||
Earnings per share attributable to common shareholders: |
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Basic | $ | 0.65 | $ | 0.94 | $ | 2.94 | $ | 3.66 | ||||||||||
Diluted | 0.64 | 0.93 | 2.90 | 3.61 | ||||||||||||||
Basic weighted-average shares outstanding | 76,988,788 | 82,514,910 | 77,990,432 | 84,123,949 | ||||||||||||||
Dilutive stock options and other equity-based compensation awards |
1,011,970 | 1,385,461 | 1,101,303 | 1,462,369 | ||||||||||||||
Participating restricted stock | (97,343 | ) | (208,841 | ) | (110,317 | ) | (206,155 | ) | ||||||||||
Diluted weighted-average shares outstanding | 77,903,415 | 83,691,530 | 78,981,418 | 85,380,163 |
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CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||||
(Unaudited; in millions) | |||||||||||
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2015 | 2014 | ||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 42.9 | $ | 313.8 | |||||||
Receivables, net | 964.6 | 974.9 | |||||||||
Inventories, net | 1,301.7 | 960.9 | |||||||||
Deferred income taxes, net | 52.2 | 66.3 | |||||||||
Prepaid income taxes | 22.8 | 22.7 | |||||||||
Other current assets | 45.1 | 45.7 | |||||||||
Total current assets | 2,429.3 | 2,384.3 | |||||||||
Investment in unconsolidated affiliates | 16.2 | 21.1 | |||||||||
Property, plant and equipment: | |||||||||||
Property, plant and equipment | 1,093.7 | 988.3 | |||||||||
Accumulated depreciation | (617.9 | ) | (582.8 | ) | |||||||
Property, plant and equipment, net | 475.8 | 405.5 | |||||||||
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1,001.1 | 1,025.5 | |||||||||
Purchased intangible assets, net | 606.7 | 657.9 | |||||||||
Other long-term assets | 83.9 | 92.4 | |||||||||
Total assets | $ | 4,613.0 | $ | 4,586.7 | |||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||
Current liabilities: | |||||||||||
Revolving credit facility and current maturities of long-term debt | $ | 83.5 | $ | 20.0 | |||||||
Accounts payable | 552.8 | 586.7 | |||||||||
Customer advances | 440.2 | 310.1 | |||||||||
Payroll-related obligations | 116.6 | 147.2 | |||||||||
Accrued warranty | 76.9 | 91.2 | |||||||||
Other current liabilities | 188.1 | 156.4 | |||||||||
Total current liabilities | 1,458.1 | 1,311.6 | |||||||||
Long-term debt, less current maturities | 855.0 | 875.0 | |||||||||
Deferred income taxes, net | 91.7 | 125.0 | |||||||||
Other long-term liabilities | 297.1 | 290.1 | |||||||||
Commitments and contingencies | |||||||||||
Shareholders' equity | 1,911.1 | 1,985.0 | |||||||||
Total liabilities and shareholders' equity | $ | 4,613.0 | $ | 4,586.7 |
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||
(Unaudited; in millions) | |||||||||||
Fiscal Year Ended | |||||||||||
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2015 | 2014 | ||||||||||
Operating activities: | |||||||||||
Net income | $ | 229.5 | $ | 309.3 | |||||||
Depreciation and amortization | 124.5 | 126.8 | |||||||||
Stock-based compensation expense | 21.4 | 25.0 | |||||||||
Deferred income taxes | (12.2 | ) | (19.8 | ) | |||||||
Foreign currency transaction (gains) losses | 10.4 | (2.3 | ) | ||||||||
Other non-cash adjustments | 4.8 | 4.3 | |||||||||
Changes in operating assets and liabilities | (295.9 | ) | (272.9 | ) | |||||||
Net cash provided by operating activities | 82.5 | 170.4 | |||||||||
Investing activities: | |||||||||||
Additions to property, plant and equipment | (131.7 | ) | (92.2 | ) | |||||||
Additions to equipment held for rental | (26.3 | ) | (32.7 | ) | |||||||
Acquisition of business, net of cash acquired | (10.0 | ) | - | ||||||||
Contribution to rabbi trust | - | (1.9 | ) | ||||||||
Proceeds from sale of equipment held for rental | 26.8 | 12.8 | |||||||||
Other investing activities | 1.1 | (0.8 | ) | ||||||||
Net cash used by investing activities | (140.1 | ) | (114.8 | ) | |||||||
Financing activities: | |||||||||||
Repayment of long-term debt | (270.0 | ) | (710.0 | ) | |||||||
Proceeds from issuance of long-term debt | 250.0 | 650.0 | |||||||||
Proceeds under revolving credit facility | 63.5 | - | |||||||||
Repurchases of Common Stock | (200.4 | ) | (403.3 | ) | |||||||
Debt issuance costs | (15.5 | ) | (19.1 | ) | |||||||
Proceeds from exercise of stock options | 8.6 | 50.9 | |||||||||
Dividends paid | (53.1 | ) | (50.7 | ) | |||||||
Excess tax benefit from stock-based compensation | 4.0 | 6.2 | |||||||||
Net cash used by financing activities | (212.9 | ) | (476.0 | ) | |||||||
Effect of exchange rate changes on cash | (0.4 | ) | 0.7 | ||||||||
Decrease in cash and cash equivalents | (270.9 | ) | (419.7 | ) | |||||||
Cash and cash equivalents at beginning of period | 313.8 | 733.5 | |||||||||
Cash and cash equivalents at end of period | $ | 42.9 | $ | 313.8 |
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SEGMENT INFORMATION | ||||||||||||||||||||||||
(Unaudited; in millions) | ||||||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||||||
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External | Inter- | Net | External | Inter- | Net | |||||||||||||||||||
Customers | segment | Sales | Customers | segment | Sales | |||||||||||||||||||
Access equipment | ||||||||||||||||||||||||
Aerial work platforms | $ | 374.5 | $ | - | $ | 374.5 | $ | 450.4 | $ | - | $ | 450.4 | ||||||||||||
Telehandlers | 234.6 | - | 234.6 | 315.4 | - | 315.4 | ||||||||||||||||||
Other | 160.4 | - | 160.4 | 166.9 | - | 166.9 | ||||||||||||||||||
Total access equipment | 769.5 | - | 769.5 | 932.7 | - | 932.7 | ||||||||||||||||||
Defense | 313.9 | 3.7 | 317.6 | 288.0 | 0.1 | 288.1 | ||||||||||||||||||
Fire & emergency | 242.4 | 3.0 | 245.4 | 205.7 | 9.2 | 214.9 | ||||||||||||||||||
Commercial | ||||||||||||||||||||||||
Concrete placement | 105.9 | - | 105.9 | 115.1 | - | 115.1 | ||||||||||||||||||
Refuse collection | 115.1 | - | 115.1 | 94.2 | - | 94.2 | ||||||||||||||||||
Other | 31.5 | 0.4 | 31.9 | 32.0 | 2.4 | 34.4 | ||||||||||||||||||
Total commercial | 252.5 | 0.4 | 252.9 | 241.3 | 2.4 | 243.7 | ||||||||||||||||||
Intersegment eliminations | - | (7.1 | ) | (7.1 | ) | - | (11.7 | ) | (11.7 | ) | ||||||||||||||
Consolidated net sales | $ | 1,578.3 | $ | - | $ | 1,578.3 | $ | 1,667.7 | $ | - | $ | 1,667.7 | ||||||||||||
Fiscal Year Ended | ||||||||||||||||||||||||
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External | Inter- | Net | External | Inter- | Net | |||||||||||||||||||
Customers | segment | Sales | Customers | segment | Sales | |||||||||||||||||||
Access equipment | ||||||||||||||||||||||||
Aerial work platforms | $ | 1,627.0 | $ | - | $ | 1,627.0 | $ | 1,746.0 | $ | - | $ | 1,746.0 | ||||||||||||
Telehandlers | 1,126.1 | - | 1,126.1 | 1,157.2 | - | 1,157.2 | ||||||||||||||||||
Other | 647.5 | - | 647.5 | 603.3 | - | 603.3 | ||||||||||||||||||
Total access equipment | 3,400.6 | - | 3,400.6 | 3,506.5 | - | 3,506.5 | ||||||||||||||||||
Defense | 931.8 | 8.0 | 939.8 | 1,724.2 | 0.3 | 1,724.5 | ||||||||||||||||||
Fire & emergency | 791.5 | 23.6 | 815.1 | 719.1 | 37.4 | 756.5 | ||||||||||||||||||
Commercial | ||||||||||||||||||||||||
Concrete placement | 461.0 | - | 461.0 | 428.2 | - | 428.2 | ||||||||||||||||||
Refuse collection | 385.0 | - | 385.0 | 309.1 | - | 309.1 | ||||||||||||||||||
Other | 128.2 | 3.8 | 132.0 | 121.1 | 7.5 | 128.6 | ||||||||||||||||||
Total commercial | 974.2 | 3.8 | 978.0 | 858.4 | 7.5 | 865.9 | ||||||||||||||||||
Intersegment eliminations | - | (35.4 | ) | (35.4 | ) | - | (45.2 | ) | (45.2 | ) | ||||||||||||||
Consolidated net sales | $ | 6,098.1 | $ | - | $ | 6,098.1 | $ | 6,808.2 | $ | - | $ | 6,808.2 |
Three Months Ended | Fiscal Year Ended | |||||||||||||||||
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2015 | 2014 | 2015 | 2014 | |||||||||||||||
Operating income (loss): | ||||||||||||||||||
Access equipment | $ | 56.5 | $ | 127.4 | $ | 407.0 | $ | 501.1 | ||||||||||
Defense | 18.5 | (2.0 | ) | 9.2 | 76.4 | |||||||||||||
Fire & emergency | 23.7 | 12.5 | 43.8 | 26.6 | ||||||||||||||
Commercial | 21.1 | 18.4 | 64.5 | 53.9 | ||||||||||||||
Corporate | (33.2 | ) | (43.3 | ) | (126.0 | ) | (154.7 | ) | ||||||||||
Intersegment eliminations | - | 0.1 | 0.1 | - | ||||||||||||||
Consolidated | $ | 86.6 | $ | 113.1 | $ | 398.6 | $ | 503.3 | ||||||||||
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2015 | 2014 | |||||||||||||||||
Period-end backlog: | ||||||||||||||||||
Access equipment | $ | 209.7 | $ | 384.3 | ||||||||||||||
Defense | 1,414.0 | 779.7 | ||||||||||||||||
Fire & emergency | 790.7 | 567.1 | ||||||||||||||||
Commercial | 193.0 | 159.9 | ||||||||||||||||
Consolidated | $ | 2,607.4 | $ | 1,891.0 |
Non-GAAP Financial Measures
The Company reports its financial results in accordance with generally
accepted accounting principles in
Three Months Ended | Fiscal Year Ended | |||||||||||||||||
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2015 | 2014 | 2015 | 2014 | |||||||||||||||
Adjusted access equipment segment operating | ||||||||||||||||||
income (non-GAAP) | $ | 59.0 | $ | 127.4 | $ | 409.5 | $ | 501.1 | ||||||||||
Workforce reduction charges | (2.5 | ) | - | (2.5 | ) | - | ||||||||||||
Access equipment segment operating income (GAAP) | $ | 56.5 | $ | 127.4 | $ | 407.0 | $ | 501.1 | ||||||||||
Adjusted defense segment operating income | ||||||||||||||||||
(non-GAAP) | $ | 18.5 | $ | 1.8 | $ | 5.8 | $ | 85.3 | ||||||||||
Pension and OPEB curtailment/settlement | - | (3.8 | ) | 3.4 | 1.8 | |||||||||||||
Contract pricing adjustment for OPEB costs | - | - | - | (10.7 | ) | |||||||||||||
Defense segment operating income (loss) (GAAP) | $ | 18.5 | $ | (2.0 | ) | $ | 9.2 | $ | 76.4 | |||||||||
Adjusted corporate expense (non-GAAP) | $ | (32.8 | ) | $ | (43.3 | ) | $ | (125.6 | ) | $ | (154.7 | ) | ||||||
Workforce reduction charges | (0.4 | ) | - | (0.4 | ) | - | ||||||||||||
Corporate expense (GAAP) | $ | (33.2 | ) | $ | (43.3 | ) | $ | (126.0 | ) | $ | (154.7 | ) | ||||||
Adjusted consolidated operating income (non-GAAP) | $ | 89.5 | $ | 116.9 | $ | 398.1 | $ | 512.2 | ||||||||||
Pension and OPEB curtailment/settlement | - | (3.8 | ) | 3.4 | 1.8 | |||||||||||||
Contract pricing adjustment for OPEB costs | - | - | - | (10.7 | ) | |||||||||||||
Workforce reduction charges | (2.9 | ) | - | (2.9 | ) | - | ||||||||||||
Consolidated operating income (GAAP) | $ | 86.6 | $ | 113.1 | $ | 398.6 | $ | 503.3 | ||||||||||
Adjusted consolidated net income (non-GAAP) | $ | 52.7 | $ | 80.2 | $ | 239.1 | $ | 309.8 | ||||||||||
Reduction of valuation allowance on net operating | ||||||||||||||||||
loss carryforward | - | - | - | 12.1 | ||||||||||||||
Debt extinguishment costs, net of tax | - | - | (9.3 | ) | (7.0 | ) | ||||||||||||
Pension and OPEB curtailment/settlement, net of tax | - | (2.4 | ) | 2.1 | 1.2 | |||||||||||||
Contract pricing adjustment for OPEB costs, net of tax | - | - | - | (6.8 | ) | |||||||||||||
Workforce reduction charges, net of tax | (2.4 | ) | - | (2.4 | ) | - | ||||||||||||
Consolidated net income (GAAP) | $ | 50.3 | $ | 77.8 | $ | 229.5 | $ | 309.3 | ||||||||||
Adjusted earnings per share-diluted (non-GAAP) | $ | 0.67 | $ | 0.96 | $ | 3.02 | $ | 3.62 | ||||||||||
Reduction of valuation allowance on net operating | ||||||||||||||||||
loss carryforward | - | - | - | 0.14 | ||||||||||||||
Debt extinguishment costs, net of tax | - | - | (0.12 | ) | (0.08 | ) | ||||||||||||
Pension and OPEB curtailment/settlement, net of tax | - | (0.03 | ) | 0.03 | 0.01 | |||||||||||||
Contract pricing adjustment for OPEB costs, net of tax | - | - | - | (0.08 | ) | |||||||||||||
Workforce reduction charges, net of tax | (0.03 | ) | - | (0.03 | ) | - | ||||||||||||
Earnings per share-diluted (GAAP) | $ | 0.64 | $ | 0.93 | $ | 2.90 | $ | 3.61 |
Fiscal 2016 | ||||||||
Expectations | ||||||||
Net cash flows provided by operating activities | $ | 475.0 | ||||||
Additions to property, plant and equipment | (100.0 | ) | ||||||
Net additions to equipment held for rental | (25.0 | ) | ||||||
Free cash flow | $ | 350.0 |
_______________________________
1 This press release refers to GAAP (U.S. generally accepted
accounting principles) and non-GAAP financial measures.
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