Oshkosh Q1 results exceed its expectations; revenues hit $1.76 billion

By Lisa Kerner

Charlotte, N.C., Jan. 25 - Oshkosh Corp. chief executive officer Charlie Szews said he was happy to kick off 2013 with "another strong performance for the company."

"We're reporting results that exceeded our expectations with revenues of $1.76 billion and adjusted EPS of 60 cents for the first quarter," Szews said during the company's earnings call on Friday for the first quarter of fiscal 2013, which ended Dec. 31.

"We also generated $39 million of free cash flow in the quarter, which helped support our repurchase of approximately 4.25 million shares of Oshkosh common stock."

According to chief financial officer Dave Sagehorn, the company paid an average of $29.43 per share, or a total of $125 million, for the 4.25 million shares.

Oshkosh is targeting to spend an additional $175 million to repurchase shares over the next nine to 15 months, a company news release said.

Previously, the company announced plans to repurchase up to $300 million of its common stock over a 12- to 18-month period.

Szews said as a result of its strong first fiscal quarter and its outlook for the remainder of the year, Oshkosh is increasing its outlook for full-year fiscal 2013 adjusted earnings from continuing operations to the range of $2.80 to $3.05 per share.

The CEO also commented on improvements in the U.S. housing market that are expected to positively impact the business, especially the sale of cement trucks.

Szews also said he expects Oshkosh to achieve the goals of its MOVE initiative to deliver shareholder value.

"We are currently doing a lot of blocking and tackling and striving for continuous improvement, and it's working," said Szews.

Financial highlights

For the first quarter, Oshkosh reported consolidated net sales of $1.76 billion, a 6.1% decline from the prior-year period. The decrease was attributed to lower defense segment sales, while sales to external customers increased in all non-defense segments.

Oshkosh reported first-quarter adjusted consolidated operating income of $97.7 million, or 5.6% of sales, compared with $79.2 million, or 4.2% of sales, in the same quarter last year.

"Continued improved year-over-year performance in the non-defense segments drove the higher adjusted consolidated operating income margin," Sagehorn said.

"We are especially pleased with the significant year-over-year improvements in the access equipment and fire and emergency segment results."

Access equipment segment sales to external customers grew 15.1% to $581.2 million for the period from the prior-year first quarter.

First-quarter fire and emergency segment sales rose 20.7% from the same period last year to $193.3 million.

Net income for the fiscal first quarter was $46.2 million, or $0.51 per diluted share, compared with $38.9 million, or $0.43 per diluted share, in the first quarter of fiscal 2012.

Adjusted net income was $55.1 million, or $0.60 per diluted share, compared with $34.6 million, or $0.39 per diluted share, in the first quarter of fiscal 2012, according to the release.

Oshkosh generated consolidated free cash flow of $39.2 million, versus free cash flow of $45.3 million for the first quarter of fiscal 2012.

For the full-year fiscal 2013, Oshkosh is targeting free cash flow of between $100 million and $125 million and revenue in the range of $7.4 billion to $7.7 billion.

The company had cash and cash equivalents totaling $455.7 million at Dec. 31, compared with $540.7 million for the quarter ended Sept. 30 and $440.3 million for the quarter ended Dec. 31, 2011.

Long-term debt minus current maturities totaled $938.7 million, compared with the prior quarter total of $955.0 million, according to the earnings presentation.

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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