oshkosh truck corp. earning presentation

Earnings Conference CallSecond Quarter Fiscal 2009April 30, 2009

Robert G. BohnChairman and Chief Executive Officer

Charles L. SzewsPresident and Chief Operating Officer

David M. SagehornExecutive Vice President and Chief Financial Officer

Patrick N. DavidsonVice President of Investor Relations

Built strong.Building for the future.

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OSK - Earnings Conference CallSecond Quarter Fiscal 2009April 30, 2009

Forward Looking StatementsOur remarks that follow, including answers to your questions and these slides contain 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 presentation, 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 consequences of financial leverage associated with the JLG acquisition, including the level of the Company’s borrowing costs, the increased interest rates the Company would face if it experienced a deterioration or downgrade in credit agency ratings and the Company’s ability to maintain compliance with its financial covenants under its credit agreement; the cyclical nature of the Company’s access equipment, commercial and fire & emergency markets, especially during a global recession and credit crisis; the duration of the global recession and its adverse impact on the Company’s share price, which could lead to additional impairment charges related to many of the Company’s intangible assets; the expected level and timing of U.S. Department of Defense procurement of products and services and funding thereof; risks related to reductions in government expenditures and the uncertainty of government contracts; the potential for commodity costs to rise sharply in a future economic recovery; risks associated with international operations and sales, including foreign currency fluctuations; the Company’s ability to turn around its Geesink business; risks related to the collectability of receivables during a recession, particularly for those businesses with exposure to construction markets; and the potential for increased costs relating to compliance with changes in laws and regulations. Additional information concerning these and other factors is contained in our filings with the SEC, including our Form 8-K filed April 30, 2009. Except as set forth in such Form 8-K, we disclaim any obligation to update such forward-looking statements.

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Proactive Management Continued

■

Successfully amended credit agreement

■

Continued cost reduction:

–

Increased annual overhead and operating expense savings

from $150 to $200+ million

–

Negotiated rollback of 2008 commodity cost increases

–

Intensifying lean efforts

■

Improved ability to match production with volatile demand

■

Leaning forward to aggressively pursue sales opportunities, leading to share gains in multiple markets

■

Maintained focus on cash generation

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Oshkosh Fiscal Q2 2009 Results

■

Sales decreased 26.9% to $1.3 billion

■

$1.2 billion non-cash impairment charges

■

Net loss of $17.7 million*

■

$174.4 million of debt reduction

■

Inventory reduced by $75 million

from fiscal Q109; down $250 million

from prior year

* Figure does not include non-cash charges for goodwill and other long-lived asset impairment

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Fiscal 2009 Business Conditions

■

Positive outlook for defense, select municipal and airport products markets

–

Defense: Strong backlog, multiple new business and lean opportunities

–

Fire apparatus/airport products:

Significant share gains, full backlog for fiscal 2009

–

Domestic refuse vehicles:

Strong backlog, CNG gaining momentum

■

Severe downturns for construction-related businesses

–

Access equipment, concrete placement

■

General economic weakness and tight credit impacting

other product lines

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Access Equipment■

Severe worldwide downturn

–

Extreme weakness in Europe

–

Lower utilization & rental rates

■

Customers remain cautious and have limited capital spending

■

Intense focus on cost management balanced with ability to participate in eventual recovery

–

>40% staffing reduction; >50% on FTE staffing basis

■

Brazil, Australia, India and Singapore service facilities bolster global capabilities

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Defense

■

New president of defense segment

■

Strong vehicle deliveries

■

TAK-4™

suspensions for MRAP vehicles

■

Solid funding for Oshkosh products in FY09 Supplemental funding request

■

New business opportunities:

–

M-ATV ID/IQ contract decision due shortly

–

Australia Land 121 evaluation vehicles

delivered in early April

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Fire & Emergency

■

Airport products and Pierce fire trucks remain bright spots

■

Softer municipal activity evident throughout North America

■

Multiple new product launches

at FDIC show

■

International airport expansions support long-term outlook

■

Economy negatively impacting other businesses in segment

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Commercial■

North American concrete placement and service vehicle markets remain extremely weak

■

Strong domestic refuse collection vehicle (RCV) performance in a softer market

–

Maintaining prime position with fleet customers

–

First New York City shipments in 2H09

■

CNG-powered vehicle market continuing to grow and present new opportunities

–

Winning bid for Chicago-based collector

–

Actively quoting several multi-unit opportunities

–

U.S. stimulus package funding opportunity

■

European RCV update–

Rightsizing benefits taking hold

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Credit Agreement Amendment Highlights

■

Greater flexibility on Debt/EBITDA and Interest Coverage Ratios

■

Interest increase of ~425 bps on outstanding debt balance

–

Higher, if future rating agency downgrade

■

Upfront fees of ~$20 million

■

Limits on capital expenditures ($80 million each in 2009 and 2010), dividends (~$0.01/qtr) and acquisitions

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Consolidated Results

■

Significantly lower access equipment and commercial sales

■

Higher defense and fire & emergency sales

■

Margins impacted by:–

Volume–

Unrecovered material costs–

Adverse sales mix–

Cost reductions■

Reversal of European tax incentive driving tax rate

■

$174.4 million of debt reduction

Net Sales

$1,295.9

$1,772.6% Change

(26.9)%

6.7%

Operating Income

$22.6

$168.2% Margin

1.7%

9.5%% Change

(86.5)%

24.8%

Earnings Per Share

$(0.24)

$0.97% Change

(124.7)%

42.6%

(Dollars in millions, except per share amounts)

Comments2009* 2008

Second Quarter

* Figures other than net sales exclude non-cash charges to operating income for asset impairment of $1.20 billion

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Access Equipment

Net Sales

$249.2

$813.1% Change

(69.4)%

14.9%

Operating Income

$(49.1)

$123.6% Margin

(19.7)%

15.2%% Change

(139.7)%

132.5%

Comments■

Lower sales in all regions

■

AWP sales down more than telehandlers

■

Margin decline due to:−

Lower volume

−

Unrecovered material costs

−

Adverse product mix

■

Backlog down 89.1% vs. prior year

2009* 2008Second Quarter

(Dollars in millions)

* Figures other than net sales exclude non-cash charges to operating income for asset impairment of $892.5 million

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Defense

Net Sales

$590.2

$450.8% Change

30.9%

47.3%

Operating Income

$75.0

$59.7% Margin

12.7%

13.2%% Change

25.7%

13.0%

Comments2009 2008Second Quarter


■

New truck demand drove Q2 sales increase

■

Margin reflects continued shift to lower margin contracts

■

Backlog up 60.6%

vs. prior year due largely to timing of FHTV3 contract award

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Fire & Emergency

Net Sales

$293.1

$272.3% Change

7.7%

(7.4)%

Operating Income

$24.7

$20.6% Margin

8.4%

7.6%% Change

20.2%

(25.6)%

Comments■

Fire apparatus and airport products growth drove performance

■

Margins impacted by:

−Higher volume

−Improved product mix

■

Backlog up 8.9% vs. prior year

2009* 2008

Second Quarter(Dollars in millions)


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Commercial

Net Sales

$188.9

$250.9% Change

(24.7)%

(30.7)%

Operating Loss

$(8.2)

$(5.5)% Margin

(4.4)%

(2.2)%% Change

(50.7)%

(124.8)%

Comments

2009* 2008

Second Quarter


■

Unprecedented decline in concrete placement products demand

■

Domestic RCV business steady

■

Margins impacted by:−

Lower volume−

Improved Geesink efficiencies−

Cost reductions

■

Backlog down 46.7% compared with prior year


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Expectations Going Forward

■

Mixed, but generally difficult market conditions

–

Likely full year loss, excluding impairment charges

■

Targeted new product development

■

Aggressive management of costs, inventories and cash flow

■

Intense pursuit of “right”

sales opportunities

–

Multiple large Defense opportunities to be decided over

next 6-9 months

■

Taking necessary actions until economic recovery

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Appendix: Non-GAAP Financial MeasuresThe tables below present reconciliations of the Company’s presented non-GAAP measures to the most directly comparable GAAP measures (in millions, except per share amounts):

oshkosh truck corp. earning presentation

Investor Relations

forwardlooking statements

companys ability

fiscal q109

companys control

oshkosh fiscal q2

companys access equipment

companys share price

statements of historical