| Oshkosh Corp., parent company to JLG Industries, last week reported fiscal 2009 second-quarter net sales of $1.3 billion and a net loss of $17.7 million, or $0.24 per share, excluding non-cash intangible asset impairment charges compared with earnings per share of $0.97 on net sales of $1.8 billion and net income of $72.6 million for the second quarter of fiscal 2008. Including previously announced pre-tax non-cash impairment charges of $1.20 billion ($15.78 per share, net of taxes) related to goodwill and other long-lived assets, the company reported a net loss of $1.19 billion, or $16.02 per share, for the second quarter of fiscal 2009. “Our defense, Pierce fire apparatus and airport products businesses all delivered double-digit revenue increases and higher operating income in the second quarter,” said Robert Bohn, Oshkosh Corp. chairman and CEO. “These gains and significant additional cost reduction actions implemented in the quarter were not enough to overcome sharply lower demand at a number of our other businesses, particularly those serving construction-related markets, like our access equipment and concrete placement businesses. As a result, we posted a net loss of 24 cents per share, excluding the impact of the non-cash impairment charges that were recorded in the quarter. “While the global recession has had a significant impact on several of our businesses, we have been working diligently to manage through this challenging environment. During the quarter we implemented additional cost reductions to increase our expected fiscal 2009 savings from $150 million to more than $200 million. Even with these aggressive actions, the effects of the global recession and credit crisis lead us to believe Oshkosh will record a net loss for the full fiscal year, excluding the impact of the impairment charges recorded in the second fiscal quarter. We remain committed to continue doing what is necessary to further reduce our cost structure, drive operational improvements and increase cash generation to manage the business through this period of economic weakness.” The company reported that consolidated net sales in the second quarter of fiscal 2009 decreased 26.9 percent compared with last year’s second quarter. The lower sales were the result of a decrease in sales in the company’s access equipment and commercial segments, offset in part by double-digit growth in the company’s defense, domestic fire apparatus and airport products businesses. Operating income, excluding impairment charges, decreased 86.5 percent to $22.6 million, or 1.7 percent of sales, for the second quarter of fiscal 2009 compared with operating income of $168.2 million, or 9.5 percent of sales, in the prior year quarter. Higher operating income in the defense segment combined with lower consolidated operating expenses were not enough to offset a loss in the access equipment segment. Including impairment charges, the company reported an operating loss of $1.18 billion. During the second fiscal quarter, the company determined that goodwill and other long-lived assets were impaired at a number of the company’s reporting units. This determination was based upon a sustained decline in the price of the company’s common stock subsequent to the company’s fiscal 2008 year end when its share price approximated book value, depressed order rates during the second quarter, which historically has been a strong period for orders in advance of the North American construction season, as well as further deterioration in credit markets and the macro-economic environment. In the company’s access equipment segment, which includes its McConnellsburg, Pa.-based JLG Industries business unit, sales decreased 69.4 percent to $249.2 million for the second quarter of fiscal 2009 compared with the prior year quarter. Sales reflected substantially lower global demand arising from tight credit markets and recessionary economies. European, African and Middle Eastern equipment sales declined about 80 percent while equipment sales elsewhere, including North America, were down about 70 percent compared with the second quarter of fiscal 2008. “Never before has JLG experienced as rapid a decline in demand as in this recession,” said Charles Szews, Oshkosh president and chief operating officer. “We do expect a small seasonal uptick in our access equipment business in our third fiscal quarter as weather permits more construction activity and refurbishment.” Excluding impairment charges, the access equipment segment incurred an operating loss of $49.1 million, or 19.7 percent of sales, for the second quarter of fiscal 2009 compared with operating income of $123.6 million, or 15.2 percent of sales, in the prior year quarter. The decrease in operating results was primarily the result of lower sales volume, higher raw material costs and adverse product mix, offset in part by lower operating expenses as a result of cost reduction initiatives. Including impairment charges, the access equipment segment reported an operating loss of $941.6 million. |
Excluding impairment charges, the company reported a loss of $0.52 per share for the first six months of fiscal 2009 on sales of $2.7 billion and a net loss of $38.3 million, compared with earnings per share of $1.47 for the first six months of fiscal 2008 on sales of $3.3 billion and net income of $109.9 million. Including impairment charges, the company recorded a net loss of $1.21 billion, or $16.30 per share for the first six months of fiscal 2009. The lower sales were the result of decreases in sales at the company’s access equipment and commercial segments due to the tight credit markets and a global recession, offset in part by strong demand for defense vehicles and armor kits.
“Although we have reduced our outlook, we believe we are gaining share in many of our businesses, which is important in challenging times” said Bohn. “Additionally, we are working on several exciting opportunities in our defense segment and throughout the company that will position the business for the eventual economic recovery.”
Oshkosh Corp.’s board of directors did not declare a dividend for the third quarter of fiscal 2009. The amendment to the company’s credit agreement in March 2009 effectively limits the Company’s ability to pay dividends to $0.01 per share per quarter; however, the company is not likely to resume payment of dividends until there is a global economic recovery.
Headquartered in Oshkosh, Wis., Oshkosh Corp. is a leading designer, manufacturer and marketer of a broad range of specialty access equipment, military, commercial and fire & emergency vehicles and vehicle bodies.
