Oshkosh Corp., parent company of JLG Industries, and a leading manufacturer of specialty vehicles and vehicle bodies, posted fiscal first-quarter net sales of $2.43 billion and income from continuing operations of $191.2 million or $2.10 per share, an 83-percent increase compared with $1.33 billion for the same period last year.
Access equipment segment sales increased 97.6 percent to $728 million compared with the prior-year quarter. First-quarter fiscal 2010 sales included $527.6 million of intercompany M-ATV-related sales to the defense segment as the company was able to leverage significantly under-utilized facilities in the access equipment segment and call back idled employees to meet defense production requirements. Sales to external customers decreased 45.6 percent to $200.4 million for the first quarter of fiscal 2010 compared with the previous year’s quarter. External customer sales reflected substantially lower global demand for access equipment as a result of recessionary economies and tight credit markets.
Sales of new access equipment declined about 60 percent compared with the prior-year quarter as the first quarter of fiscal 2009 benefited from shipments from a strong backlog entering that quarter.
The access equipment segment reported operating income of $13.5 million, or 1.9 percent of sales, for the quarter, compared with an operating loss of $47 million or 12.8 percent of sales in the year-ago quarter. Operating results benefited from the recognition of intercompany M-ATV sales at mid single-digit margins, as well as a decrease in material costs, lower provisions for credit losses and restructuring charges and the benefit of cost reductions from prior-year initiatives.
“End markets for our access equipment business remained weak across much of the world but we do believe they bottomed,” Oshkosh president and chief operating officer Charlie Szews told analysts on the company’s conference call. “Equipment utilization of rental rates remained weak and access to credit continued to be a challenge for our customers in this industry. Looking at the regions of the world, North America and Europe, Africa and the Middle East has stabilized albeit at low levels while we are seeing more quoting activity and potential buying interest in Asia, Australia, South America, North Africa and parts of the Middle East. We continue to reduce our inventory in this segment during the quarter and we have reached a point where we have recently started recalling additional employees to produce models where inventory has decreased to levels no longer sufficient to meet customer demand.”
Szews praised the work of JLG for leveraging its manufacturing capacity to meet the requirements of the M-ATV program. “I cannot say enough about the hard work and outstanding result that we have seen at JLG as they assemble M-ATV crew capsules and also build about half of the complete vehicles.”
Oshkosh Corp. is based in Oshkosh, Wis.; JLG Industries is based in McConnellsburg, Pa.