Oshkosh Corporation Q1 2013 Earnings Conference Call Transcript - Thomson StreetEvents

Oshkosh Corporation Q1 2013 Earnings Conference Call Transcript

Oshkosh Corporation Q1 2013 Earnings Conference Call Transcript - Thomson StreetEvents
Oshkosh Corporation Q1 2013 Earnings Conference Call Transcript
Published Jan 25, 2013
Published Jan 25, 2013
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Abstract:

Edited Transcript of OSK earnings conference call or presentation 25-Jan-13 2:00pm GMT

  
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The following is excerpted from the question-and-answer section of the transcript.

(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)

Question: Stephen Volkmann - Jefferies & Co. - Analyst : I was hoping to dig in just a little bit on Access and maybe I will ask both my questions at once here. Can you just give us a sense of how things broke down between the Telehandlers and the kind of core Access stuff versus your expectations? Looks like a lot of strength in Telehandlers, what are you seeing in the orders? What are you seeing in the backlog? Is there any kind of shift in that mix happening that we should know about? And then the second follow-on is just on the margin. You obviously raised your margin target a bit here. Is that sort of price related? Is it efficiency related? It's obviously not volume related, so I'm just curious what's driving that. Thanks. companies.


Question: Stephen Volkmann - Jefferies & Co. - Analyst : So better mix means more AWP's?


Question: Stephen Volkmann - Jefferies & Co. - Analyst : Great. Thanks so much.


Question: Jamie Cook - Credit Suisse - Analyst : Hi, good morning and congrats on a good quarter. Just wanted to drill down a little bit on the defense business. The margins there really surprised relative to what I was thinking and I was just wondering if you could quantify, you talked about favorable adjustments on some contracts and warranty, if you could quantify that. And then, I guess, ex that I would assume that the margins are probably even better than you thought. So, has something sort of structurally changed versus when you laid out your margin targets in defense back in September at your Analyst Day? If so, what or should we view this sort of as more of a one-time thing? And my second question just on the cement mixer size. Guys, can you just sort of give us a sense for where that business -- you mentioned the increase, which was nice, but can you give us a sense of how big that business is and the profitability relative to prior peak so we can see what the potential upside is? Thanks and I'll get back in queue.


Question: Jamie Cook - Credit Suisse - Analyst : Sure.


Question: Jamie Cook - Credit Suisse - Analyst : But, Dave, even ex that your margins are pretty good?


Question: Jamie Cook - Credit Suisse - Analyst : No, but I guess -- I mean, is anything structurally changed since when you laid out your margin targets for the Analyst Day in September? companies.


Question: Jamie Cook - Credit Suisse - Analyst : But you are not feeling more bullish relative to where we were? It just seems that underlying margin performance could be better relative to what you guys had laid out, unless I am being too positive?


Question: Jamie Cook - Credit Suisse - Analyst : And then sorry on this (multiple speakers).


Question: Jamie Cook - Credit Suisse - Analyst : And then sorry, on the cement mixer side?


Question: Jamie Cook - Credit Suisse - Analyst : Okay. Great. Thank you and congrats. companies.


Question: Ann Duignan - JPMorgan Chase & Co. - Analyst : Just back to the Access equipment. Again, on the Telehandlers side, very solid performance there. I often think of that product going into the agricultural sector, are you seeing any strength or is that more of an European issue?


Question: Ann Duignan - JPMorgan Chase & Co. - Analyst : So, it is all construction? I just wanted to clarify that?


Question: Ann Duignan - JPMorgan Chase & Co. - Analyst : And then can you talk about on the AWP side or the Telehandlers side, a lot of discussion about large rental companies versus small rental companies. Can you just talk about the mix both in your backlog and then also, just in terms of the discussions you been having with customers on large versus small?


Question: Ann Duignan - JPMorgan Chase & Co. - Analyst : And just really, finally just your ending diluted share count for the quarter, just so we can model correctly?


Question: Ann Duignan - JPMorgan Chase & Co. - Analyst : Average.


Question: Ann Duignan - JPMorgan Chase & Co. - Analyst : But that's the ending diluted?


Question: Ann Duignan - JPMorgan Chase & Co. - Analyst : Right. Well, I guess we can figure it out if we know how many you bought back.


Question: Ann Duignan - JPMorgan Chase & Co. - Analyst : Okay, thank you. I will get back in line. Appreciate it.


Question: Unidentified Participant - BMO Capital Markets - Analyst : Good morning, guys this is Andrew on for Charley Brady. I was hoping you might be able to clarify on the Fire & Emergency segment just how much, I guess, was from the international order and how much was, I guess, not from that. And then on that second component, how do you see that kind of growing?


Question: Unidentified Participant - BMO Capital Markets - Analyst : Well, you mentioned kind of like broad-based demand, which I assume is not from the international order?


Question: Unidentified Participant - BMO Capital Markets - Analyst : And the next question just is what is kind of for refuse collectors when people are kind of, I guess, converting to CNG ones, is it more of like it's time to replace and they are replacing them or our people adding?


Question: Unidentified Participant - BMO Capital Markets - Analyst : Okay, great. Thank you, guys.


Question: Peter Skibitski - Drexel Hamilton - Analyst : Good morning, guys, great quarter. On the outlook for Access, your outlook for Access, you kept the top-line guidance intact despite a really nice backlog increase. I guess that was what you planned, but I was just wondering if you are anymore bullish today on the res and non-res construction outlook than you were one quarter ago?


Question: Peter Skibitski - Drexel Hamilton - Analyst : And just one quick follow-up. The RCV volumes were down pretty sharply. Is that kind of a timing thing or is that kind of the level of decline you are expecting for the balance of the year?


Question: Peter Skibitski - Drexel Hamilton - Analyst : Thanks, guys.


Question: Eli Lustgarten - Longbow Research - Analyst : Quick question, our surveys indicate that there was a price increase at the beginning of the year, looks like about 3%, 4% in Access that both you and sort of Terex. Can you talk about pricing in the industry and whether the upcoming price increase appeared to have maybe brought some business forward into the December quarter, combined with the fear that the bonus depreciation in section 179 were going to expire. And we sort of heard some talk like that. I just wonder if you can comments on it? companies.


Question: Eli Lustgarten - Longbow Research - Analyst : And the price increase was about 3% or 4% at January 1?


Question: Eli Lustgarten - Longbow Research - Analyst : And the fact that you kept the top-line forecast for Access unchanged with better margins is maybe a tip towards conservatism, not sure how everything will effect as opposed to realizing the strength of the December quarter?


Question: Eli Lustgarten - Longbow Research - Analyst : Thank you very much.


Question: Jerry Revich - Goldman Sachs - Analyst : Excellent margin performance in aerial this quarter. Dave, I am wondering if you could just help us parse out a little bit on what proportion of the margin improvement was MOVE initiatives and what was the full contribution of pricing and mix just to help us get a better feel for the underlying piece, so that would be great? companies.


Question: Jerry Revich - Goldman Sachs - Analyst : And the efficiency improvement in defense, was that across the platform or was that more concentrated on the FMTV side and, Charlie, can you comment on how you feel about potential incremental order outlook for more M-ATV's from here?


Question: Jerry Revich - Goldman Sachs - Analyst : Thank you.


Question: Alex Potter - Piper Jaffray - Analyst : Hi, guys, great quarter. I just wanted to touch on the Fire & Emergency segment here. Pretty good margin performance there this quarter as well. But I noticed you didn't tick that up in terms of guidance for the full year. Was just wondering what your thinking is behind that. Is that just because of mix and international coming in in the quarter benefiting you or what the thinking is there? Thanks.


Question: Alex Potter - Piper Jaffray - Analyst : But you'd say that the MOVE strategy and everything, as soon as you start getting volume trending the right direction you ought to be able to squeeze some additional margin out of that segment as well? companies.


Question: Alex Potter - Piper Jaffray - Analyst : Okay. Very good. Thanks.


Question: Walter Liptak - Barrington Research Associates, Inc. - Analyst : Hi, thanks good morning and congratulations, guys.


Question: Walter Liptak - Barrington Research Associates, Inc. - Analyst : Most of my questions have been asked, but did you mention now what FMTV or what the mix of defense products were in the quarter yet?


Question: Walter Liptak - Barrington Research Associates, Inc. - Analyst : And you mentioned in an earlier question about margins picking up, can you give us some idea of where margins are now with the FMTV? companies.


Question: Walter Liptak - Barrington Research Associates, Inc. - Analyst : Okay. Good enough. Thanks.


Question: Basili Alukos - Morningstar - Analyst : Just a question regarding defense, going back to your Analyst Day and looking at your long-term defense target. I think in 2015 you are $800 million. I saw a headline of a company that doesn't really have much of a defense business with a contract, I'm just wondering if you guys have at all re-thought your baseline defense outlook on the top-line and then of course if the flow through on that then to the bottom line as far as operating margins?


Question: Basili Alukos - Morningstar - Analyst : As far as -- I mean like the whole fiscal cliff or anything the way that that's been settled, there's kind of no impact as of now? Or are you still trying to assess where, how that might affect the business long-term?


Question: Basili Alukos - Morningstar - Analyst : Great. Those are all my questions. Good quarter, guys.


Question: Steve Barger - KeyBanc Capital Markets - Analyst : Of the $3.1 billion in the defense backlog, can you tell us what percentage is specifically slated to ship in the rest of the fiscal year?


Question: Steve Barger - KeyBanc Capital Markets - Analyst : And I won't ask you for your own deliveries, but do you have a forecast for industry deliveries for fire equipment in the US for 2013?


Question: Steve Barger - KeyBanc Capital Markets - Analyst : Got it. Okay. Thanks, I'll get back in line.


Question: Peter Skibitski - Drexel Hamilton - Analyst : Maybe just for Charlie, can you guys maybe update us in terms of where you are on the MOVE initiative investments? I just wonder how many quarters are left before those investments are done and maybe what the total Company investment was in Q1 or is it just kind of de minimis at this point?


Question: Peter Skibitski - Drexel Hamilton - Analyst : So, we should just think though that the performance improvements from MOVE will outpace the investments in MOVE, at least annually? Is that the way to think about it? companies.


Question: Peter Skibitski - Drexel Hamilton - Analyst : And one quick follow-up maybe for Dave. Just wondered what led to the reduction in the CapEx spend projected?


Question: Peter Skibitski - Drexel Hamilton - Analyst : Nothing really canceled or --?


Question: Peter Skibitski - Drexel Hamilton - Analyst : Okay, thank you.


Question: Alex Blanton - Clear Harbor Asset Managment - Analyst : I got so excited you changed your policy and started calling the buy side and I pushed the wrong button on my phone before.


Question: Alex Blanton - Clear Harbor Asset Managment - Analyst : Also got excited about the results here on this MOVE and the stock was up more than $4 a few minutes ago. But I wanted to ask you about the guidance that, the continuing guidance for 2015 which is $4 to $4.50, when you originally issued that guidance you said that you were making the draconian assumption that you would never get another order in the defense business, or at least not in that period. And so that forecast included a decline in the defense business to $800 million annually, which would represent what was currently in the backlog at that time but nothing else. So, now you are saying that you did get additional orders for the defense business. I'm not sure whether they go out to 2015, but if they do then given that, why haven't you raised the 400 to 450 estimate for 2015?


Question: Alex Blanton - Clear Harbor Asset Managment - Analyst : I can understand that, but you do agree that with my assumption that it still assumes only $800 million in defense business for 2015, so that if defense business is more than that it will add to that number?


Question: Alex Blanton - Clear Harbor Asset Managment - Analyst : I know you haven't quantified it, but --.


Question: Alex Blanton - Clear Harbor Asset Managment - Analyst : I understand that, but -- but it still is a very draconian assumption.


Question: Alex Blanton - Clear Harbor Asset Managment - Analyst : Okay. Thank you.

Table Of Contents

Oshkosh Corporation Q2 2013 Earnings Conference Call Summary – 2013-04-30 – $54.00 – Edited Brief of OSK earnings conference call or presentation 30-Apr-13 1:00pm GMT

Oshkosh Corporation Q2 2013 Earnings Conference Call Transcript – 2013-04-30 – $54.00 – Edited Transcript of OSK earnings conference call or presentation 30-Apr-13 1:00pm GMT

Oshkosh Corporation at ISI Industrial Conference Transcript – 2013-03-05 – $54.00 – Edited Transcript of OSK presentation 5-Mar-13 6:20pm GMT

Oshkosh Corporation Annual Shareholder Meeting Transcript – 2013-01-29 – $54.00 – Edited Transcript of OSK shareholder or annual meeting 29-Jan-13 2:00pm GMT

Oshkosh Corporation Q1 2013 Earnings Conference Call Summary – 2013-01-25 – $54.00 – Edited Brief of OSK earnings conference call or presentation 25-Jan-13 2:00pm GMT

Oshkosh Corporation at Robert W Baird Industrial Conference Transcript – 2012-11-06 – $54.00 – Edited Transcript of OSK presentation 6-Nov-12 8:05pm GMT

Oshkosh Corporation Q4 2012 Earnings Conference Call Summary – 2012-10-26 – $54.00 – Edited Brief of OSK earnings conference call or presentation 26-Oct-12 1:00pm GMT

Oshkosh Corporation Q4 2012 Earnings Conference Call Transcript – 2012-10-26 – $54.00 – Edited Transcript of OSK earnings conference call or presentation 26-Oct-12 1:00pm GMT

2012 Oshkosh Corporation Analyst Day Transcript – 2012-09-14 – $54.00 – Edited Transcript of OSK corporate analyst meeting</ 14-Sep-12 1:00pm GMT

Oshkosh Corporation at Jefferies Group, Inc. Global Industrial and Aerospace & Defense Conference Transcript – 2012-08-08 – $54.00 – Preliminary Transcript of OSK presentation 8-Aug-12 1:30pm GMT

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