Oshkosh expecting to generate cash, continue to repay debt in 2010

By Jennifer Lanning Drey

Portland, Ore., March 2 - Oshkosh Corp. expects to generate cash and continue to pay down debt in fiscal 2010, Dave Sagehorn, chief financial officer of Oshkosh, said during a Tuesday presentation at the International Strategy & Investment Group Inc. Industrial Conference in New York.

The company has already reduced debt by $382 million in fiscal 2010, which ends in September.

"As we move through our fiscal 2010, we have plenty of headroom under our financial covenants under the credit agreement, significant liquidity and we expect solid free cash flow for debt reduction," Sagehorn said.

As previously reported, in February, Oshkosh announced a $500 million senior notes offering that will be used to pay down a portion of its term loan B facility.

The company also strengthened its balance sheet in 2009 through a combination of organic cash flow and a follow-on equity offering completed in the summer.

"We're a significantly different company than we were a year ago from a financial standpoint, as well as an outlook standpoint," Sagehorn said.

The CFO said he expects Oshkosh to have a strong year in fiscal 2010, driven by its defense business.

However, the markets for many of its other businesses may remain challenged before showing improvements in fiscal 2011, he noted.

Oshkosh is an Oshkosh, Wis.-based designer, manufacturer and marketer of specialty access equipment, commercial, fire and emergency and military vehicles and vehicle bodies.

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