Oshkosh Truck Posts Improved Q2 Results
May 3, 2007 • Oshkosh Truck Corporation,
Sales in the second quarter of fiscal 2007 nearly doubled, increasing 96.6 percent as compared to the second quarter of fiscal 2006. The recent acquisition of JLG Industries, Inc. contributed sales of $707.9 million to the second quarter of fiscal 2007. Sales also grew in the company's fire and emergency and commercial segments, while the company's defense segment sales declined because of an anticipated decrease in parts and service sales.
Operating income increased 69.1 percent to $134.8 million, or 8.1 percent of sales. The company's access equipment segment contributed operating income of $53.2 million. Operating income grew at double-digit percentages in the fire and emergency and commercial segments, while the defense segment experienced a double-digit percentage decrease in operating income.
Access equipment segment sales were $707.9 million for the quarter, while operating income was $53.2 million, or 7.5 percent of sales. These results included charges totaling 3.5 percent of sales, consisting of $8.5 million related to the revaluation of inventory at the acquisition date of JLG and $16.1 million related primarily to recurring amortization of intangible and tangible assets established in the preliminary purchase accounting for the JLG acquisition. Sales reflected strong demand in Europe for all products and for aerial work platforms in North America, but the segment experienced softer demand for traditional telehandler business in
"We're pleased with this most recent performance, and especially encouraged by the strength we continue to experience with JLG, which comprises our new access equipment segment,” said Robert Bohn, chairman, president and CEO. “JLG is the latest and largest of Oshkosh Truck's acquisitions, and is proving to be the strong and transformational business that we thought it would be. In addition to the solid results from JLG this quarter, we also increased our sales and earnings expectations for JLG for fiscal 2007 and now expect the acquisition to be approximately $0.25 - $0.35 accretive to earnings in fiscal 2007."
Bohn also said the company had reduced its debt by $221 million during the second quarter, achieving its fiscal 2007 debt reduction target six months early.
Six-month Results
The company reported that earnings per share decreased 11.5 percent to $1.23 per share for the first six months of fiscal 2007 on sales of $2.7 billion and net income of $92.1 million compared to $1.39 per share for the first six months of fiscal 2006 on sales of $1.6 billion and net income of $102.9 million. The JLG acquisition contributed significantly to both the increase in sales and decrease in net income compared to the prior year. 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 earnings per share for the first six months of fiscal 2007 by $0.15 per share. Lower defense sales and operating income, due to an adverse truck product mix and lower parts and service sales, also contributed to the decline in earnings per share for the first half of fiscal 2007.
Operating income increased 31.0 percent to $218.4 million, or 8.2 percent of sales, in the first six months of fiscal 2007 compared to $166.7 million, or 10.2 percent of sales, in the first six months of fiscal 2006. The increase in operating income compared to the prior year was driven primarily by the JLG acquisition.
