COVID-19 Cuts Access Equipment Sales for JLG in Fiscal Second Quarter
Access equipment segment operating income in the second quarter of fiscal 2020 tumbled 40.9 percent to $70.8 million, or 10.2 percent of sales, compared to $119.8 million, or 12.1 percent of sales in the second quarter of fiscal 2019. The decrease in operating income was primarily caused by lower sales volume and adverse absorption as a result of a planned slowdown in production, offset in part by lower incentive compensation accruals, lower intangible asset amortization and favorable product mix.
Sales of mobile elevating work platforms dropped from $463.5 million in the second quarter of fiscal 2019 to $273.7 million, a 41-percent decline. Sales of telehandlers declined from $319.5 million in the second quarter of fiscal 2019 to $217.6 million this year, a 31.9-percent decrease.
For the first six months of the fiscal year, access sales totaled $1,410.9 million compared to $1,814.1 million in the just-concluded six-month period, a 22.2-percent drop.
For Oshkosh Corp. as a whole, consolidated sales in the second quarter of fiscal 2020 decreased 9.7 percent to $1.8 billion compared to the year-ago second quarter as a result of lower sales in the access equipment segment and lower fire and emergency segment sales, offset in part by higher defense segment sales.
“We delivered adjusted earnings per share of $1.25 on sales of $1.8 billion during a challenging period for all companies” said Wilson Jones, Oshkosh Corp. president and CEO. “We remain committed to delivering mission-critical fire trucks, defense vehicles, refuse collection vehicles, concrete mixers and access equipment for those everyday heroes that build, serve and protect communities around the world. Oshkosh delivers essential products and services and we have large customer backlogs in both our defense and fire & emergency segments, providing good visibility for these businesses well into fiscal 2021. Despite excellent visibility in these two segments, we are facing uncertain demand in the access equipment and commercial segments as well as potential disruptions with supply chain continuity and team member availability in all of our segments. Our integrated supply chain is collaborating across the world to pursue alternatives with our supply partners and communicate frequently with our people to mitigate these risks.
“We quickly responded to uncertainties caused by COVID-19 to our customers, our suppliers and our business as well by reducing production levels and implementing a company-wide cost reduction plan that targets $80 million to $100 million in savings for the second half of fiscal 2020. The plan includes lower salaries, with executives and board members taking larger decreases; furloughs; temporary plant shutdowns; reduced travel expenses and project and other discretionary spending reductions.
“We believe these are the right actions for our company as we stay nimble and close to our team members, customers and suppliers. Our balance sheet is strong and our liquidity of approximately $1.2 billion at March 31 positions us well to navigate through the global pandemic. I am confident that Oshkosh will emerge stronger as we work to get to the other side of this global crisis.”
JLG Industries is based in McConnellsburg, Pa. Oshkosh Corp. is headquartered in Oshkosh, Wis.
About the Author
Michael Roth
Editor
Michael Roth has covered the equipment rental industry full time for RER since 1989 and has served as the magazine’s editor in chief since 1994. He has nearly 30 years experience as a professional journalist. Roth has visited hundreds of rental centers and industry manufacturers, written hundreds of feature stories for RER and thousands of news stories for the magazine and its electronic newsletter RER Reports. Roth has interviewed leading executives for most of the industry’s largest rental companies and manufacturers as well as hundreds of smaller independent companies. He has visited with and reported on rental companies and manufacturers in Europe, Central America and Asia as well as Mexico, Canada and the United States. Roth was co-founder of RER Reports, the industry’s first weekly newsletter, which began as a fax newsletter in 1996, and later became an online newsletter. Roth has spoken at conventions sponsored by the American Rental Association, Associated Equipment Distributors, California Rental Association and other industry events and has spoken before industry groups in several countries. He lives and works in Los Angeles when he’s not traveling to cover industry events.