JLG Parent Company Reports First $1 Billion Revenue Quarter

February 5, 2007 • Oshkosh, Wis.-based Oshkosh Truck Corp., parent company of JLG Industries, reported its first quarter of fiscal 2007 earnings per share was $0.55 on sales of $1.0 billion, and its net income reached $41.2 million. These results compare with EPS of $0.72 on sales of $790.3 million and net income of $53.1 million for last year's first quarter.

 

Oshkosh's EPS exceeded its most recent earnings estimate range of $0.35 to $0.40 per share, which included an estimated $0.15 per share dilution to EPS from the $3.1 billion acquisition of JLG on Dec. 6, 2006. Actual dilution in the first quarter from the acquisition of JLG was $0.13 per share. The company also increased its earnings per share estimate range for fiscal 2007 to $3.15 to $3.25 per share, which includes an estimated $0.10 per share accretion to EPS from the acquisition of JLG for the fiscal year.

 

In the first quarter of fiscal 2007, the company's sales increased 27.4%. Operating income decreased 3.9% to $83.6 million, or 8.3% of sales. Net income was down 22.4 percent to $41.2 million, or $0.55 per share, in the first quarter. The decrease in earnings compared to the prior year quarter was driven primarily by a decrease in defense sales and operating income and the timing of the JLG acquisition. Due to the impact of certain purchase accounting adjustments and the closing of the JLG acquisition during the seasonally slow holiday period, the acquisition of JLG was dilutive to EPS for the first quarter of fiscal 2007 by $0.13.

 

"While our existing businesses performed ahead of our expectations, the most exciting news during the quarter was our closing on the acquisition of JLG Industries, which becomes another important business segment within Oshkosh,” said Robert G. Bohn, chairman, president, and chief executive officer of Oshkosh Truck. JLG makes up Oshkosh Truck's access equipment segment.

 

Bohn continued: “Our integration work is well underway, and we continue to work hard with the JLG team as they become a core component of our great company. We believe that JLG will be about $0.10 accretive to EPS in fiscal 2007 and significantly more accretive to EPS in fiscal 2008."

 

The new access equipment segment of Oshkosh Truck contributed sales of $117.7 million and operating income of $2.4 million. Access equipment sales represent sales by JLG from the date of acquisition through the end of the first quarter. These results included charges of $3.5 million related to the revaluation of inventory at the acquisition date of JLG and $3.8 million related primarily to the amortization of intangible assets.

 

"While the effects of purchase accounting and the timing of the JLG acquisition adversely impacted first quarter performance of the new access equipment segment, we are optimistic about the longer term opportunities for this business," Bohn said.