Oshkosh Corp. posted a 33.9-percent decrease in consolidated net sales in the third quarter of fiscal 2020 to $1.58 billion. The decrease was largely the result of a 61-percent decrease in sales in the Access Equipment segment as the COVID-19 pandemic significantly impacted demand in this segment.
“I am very pleased with the response of Oshkosh leaders and team members as we have worked together to protect our people and deliver solid financial performance while balancing the needs of our customers, communities and business partners during these difficult times,” said Wilson Jones, Oshkosh corporation CEO. “In the face of unprecedented challenges brought on by the COVID-19 pandemic, our businesses pulled together, executed with discipline and implemented temporary cost reductions that allowed us to deliver fiscal third quarter adjusted operating income of $128.8 million and adjusted earnings per share of $1.29 despite a decline in revenues of 34 percent.
“While we performed well in the current volatile environment, we must stay vigilant as we seek to navigate the challenging conditions in our markets. Early in the pandemic, we announced a series of temporary cost reduction actions to deal with the conditions we were facing. With the ongoing uncertainty in the economy, we have announced several permanent cost actions to further simplify our businesses and reduce costs. In our Access Equipment segment, we are closing our facility in Romania and moving that production to factories in Pennsylvania, Mexico and China. In our Commercial segment, we are relocating concrete mixer production from Dodge Center, Minnesota, and consolidating production in our other North American facilities to simplify whole goods manufacturing in this segment.
“Once fully implemented, we expect these actions to generate $30 million to $35 million of annual pre-tax savings, with some benefits in fiscal 2021 and the full impact in fiscal 2022. We expect pre-tax implementation costs of $35 million to $40 million, including approximately $20 million of non-cash charges.”
Access Equipment segment operating income in the third quarter of fiscal 2020 decreased 82.4 percent to $33.5 million, or 6.9 percent of sales, compared to $189.9 million, or 15.2 percent of sales, in the third quarter of fiscal 2019. The decrease in operating income was primarily because of the impact of lower sales volume and adverse absorption as a result of lower production, offset in part by favorable price/cost dynamics, lower incentive compensation accruals, lower spending as a result of temporary cost reductions in response to the COVID-19 pandemic and lower intangible asset amortization. Excluding $7.6 million of pre-tax restructuring charges, adjusted operating income in the third quarter of fiscal 2020 was $41.1 million, or 8.4 percent of sales.
The company reported net sales for the first nine months of fiscal 2020 of $5.07 billion and net income of $224.5 million, or $3.26 per diluted share. This compares with net sales of $6.19 billion and net income of $429.4 million, or $6.05 per diluted share, in the first nine months of 2019, an 18-percent revenue drop.
The access segment, JLG Industries, reported $800.7 million in sales for the first nine months of fiscal 2020, compared to $1,465.4 million, a 45-percent decline. Telehandler sales decreased from $947.9 million in last year’s nine-month period to $546.5 million in the first nine months of this year, a 42.3-percent decrease. Other decreased from $649.9 million to $543.6 million, a 16.3-percent drop.
“As a different integrated global industrial, we remain confident in the long-term strengths of the company, especially our strong ‘people first’ culture,” added Jones. “We are focused on winning in our markets as we continue to invest in new products, new technologies and lifecycle services to position the company for future success.”
