SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C. 20549
_________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13
or 15(d) of
the Securities Exchange Act of 1934
_________________
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| Date of Report |
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| (Date of earliest |
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| event reported): |
November 1, 2005 |
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Oshkosh Truck Corporation
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| (Exact name of registrant as specified in its charter) |
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Wisconsin
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1-31371
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39-0520270
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| (State or other |
(Commission File |
(IRS Employer |
| jurisdiction of |
Number) |
Identification No.) |
| incorporation) |
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P.O. Box 2566, Oshkosh, Wisconsin 54903
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| (Address of principal executive offices, including zip code) |
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(920) 235-9151
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| (Registrant's telephone number) |
Check the appropriate box below if
the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the
registrant under any of the following provisions:
| [_] |
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| [_] |
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| [_] |
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| [_] |
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c) |
| Item 2.02. |
Results of Operations and Financial Condition. |
On
November 1, 2005, Oshkosh Truck Corporation (the "Company") issued a press
release (the "Press Release") announcing its earnings for the fourth quarter and
fiscal year ended September 30, 2005 and its revised outlook for fiscal 2006. A copy
of such press release is furnished as Exhibit 99.1 and is incorporated by reference
herein.
On
November 1, 2005, the Company held a conference call in connection with the
Company's announcement of its earnings for the fourth quarter and fiscal year ended
September 30, 2005 and its revised outlook for fiscal 2006. A copy of the script
(the "Script") for such conference call is furnished as Exhibit 99.2 and is incorporated
by reference herein. An audio replay of such conference call and the related question
and answer session will be available for at least twelve months on the Company's web site
at www.oshkoshtruckcorporation.com.
The
information, including without limitation all forward-looking statements, contained in
the Press Release, the Script and related slide presentation on the Company's web site
(the "Slide Presentation") or provided in the conference call and related question
and answer session speaks only as of November 1, 2005. The Company has adopted a policy
that if the Company makes a determination that it expects the Company's earnings per
share for future periods for which projections are contained in the Press Release,
the Script and the Slide Presentation or provided in the conference call and related
question and answer session to be lower than those projections, then the Company will
publicly disseminate that fact. The Company's policy also provides that if the Company
makes a determination that it expects the Company's earnings per share for future
periods to be at or above the projections contained in the Press Release, the Script
and the Slide Presentation or provided in the conference call and related question
and answer session, then the Company does not intend to publicly disseminate that
fact. Except as set forth above, the Company assumes no obligation, and disclaims
any obligation, to update information contained in the Press Release, the Script and the
Slide Presentation or provided in the conference call and related question and
answer session. Investors should be aware that the Company may not update such
information until the Company's next quarterly conference call, if at all.
The
Press Release, the Script and the Slide Presentation contain, and representatives of
the Company made, during the conference call and the related question and answer
session, statements that the Company believes to be "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995. All
statements other than statements of historical fact included in the Press Release,
the Script and the Slide Presentation or made during the conference call and related
question and answer session, including, without limitation, statements regarding the
Company's future financial position, business strategy, targets, projected sales,
costs, earnings, capital expenditures, debt levels and cash flows, and plans and
objectives of management for future operations, are forward-looking statements. In
addition, forward-looking statements generally can be identified by the use of
forward-looking terminology such as "may," "will," "expect," "intend," "estimate,"
"anticipate," "believe," "should" or "plan," or the negative thereof or variations
thereon or similar terminology. The Company cannot provide any assurance that such
expectations will prove to have been correct. Important factors that could cause
actual results to differ materially from the Company's expectations include, without
limitation, the following:
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Accuracy
of Assumptions. The expectations reflected in the forward-looking statements, in
particular those with respect to projected sales, costs, earnings, capital
expenditures, debt levels and cash flows, are based in part on certain
assumptions made by the Company, some of which are referred to in, or as
part of, the forward-looking statements. Such assumptions include, without
limitation, the Company's ability to turn around the business of the Geesink Norba
Group sufficiently to support its current valuation resulting in no non-cash
impairment charge for Geesink Norba Group goodwill; the Company's ability to
increase its operating income margins at McNeilus Companies, Inc.; the Company's
ability to recover steel and component costs with increases in prices of its
products; the Company's estimates for the level of concrete placement
activity, housing starts and mortgage rates; the performance of the U.S. and the
European economies generally; the Company's expectations as to timing of
receipt of sales orders and payments and execution and funding of defense contracts;
the Company's ability to achieve cost reductions and operating efficiencies,
in particular at McNeilus Companies, Inc., the Geesink Norba Group and Medtec
Ambulance Corporation; the anticipated level of production and margins associated
with the Family of Heavy Tactical Vehicles contract, the Indefinite
Demand/Indefinite Quantity contract, the Medium Tactical Vehicle Replacement
follow-on contract and international defense truck contracts; the expected level of
U.S. Department of Defense procurement of replacement parts and services and
remanufacturing of trucks and funding thereof; the Company's estimates for
capital expenditures of municipalities for fire and emergency and refuse
products, of airports for rescue and snow removal products and of large
commercial waste haulers generally and with the Company; federal funding levels for
Department of Homeland Security and spending by governmental entities on
homeland security apparatus; the level of concrete placement and domestic
refuse sales demand in advance of a diesel engine emissions standards change
effective January 1, 2007; the availability of chassis components and
commercial chassis generally; the Company's planned spending on product development
and bid and proposal activities with respect to defense truck procurement
competitions and the outcome of such competitions; the Company's ability to
integrate acquired businesses and achieve expected synergies; the expected level of
commercial "package" body and chassis sales compared to "body only" sales; the
Company's estimates of the impact of changing fuel prices and credit
availability on capital spending of towing operators; anticipated levels of capital
expenditures, including for expansion of facilities; the Company's estimates
for costs relating to litigation, product warranty, insurance, personnel and
raw materials; and the Company's estimates for working capital needs and effective
tax rates. The Company cannot provide any assurance that the assumptions
referred to in the forward-looking statements or otherwise are accurate or will
prove to have been correct. Any assumptions that are inaccurate or do not
prove to be correct could have a material adverse effect on the Company's
ability to achieve the results that the forward-looking statements contemplate.
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Geesink
Norba Group Turnaround. Prior to the fourth quarter of fiscal 2005, the Geesink Norba
Group operated at a loss for five quarters due to the weak European
economy, declines in selling prices in its markets, operational
inefficiencies and increased material, labor and warranty costs related to the
launch of a new Geesink-branded rear loader. Although the Geesink Norba Group
operated at a small profit in the fourth quarter of fiscal 2005 and the Company has
taken steps to turn around the business of the Geesink Norba Group, including
reducing its work force, installing new executive leadership, implementing
lean manufacturing practices, introducing new products and outsourcing components to
lower cost manufacturing sites, the Company cannot provide any assurance
that the Geesink Norba Group will continue to operate profitably or that
such activities will be successful. In addition, the Company may incur costs to
implement any such turnaround beyond its current expectations for such
costs. If the Company is unable to turn around the business of the Geesink
Norba Group, then the Company may be required to record a non-cash impairment
charge for Geesink Norba Group goodwill, and there could be other material
adverse effects on the net sales, financial condition, profitability and/or cash
flows of the Company.
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Cyclical
Markets. A decline in overall customer demand in the Company's cyclical commercial or
fire and emergency markets could have a material adverse effect on the Company's
operating performance. The ready-mix concrete market that the Company serves
is highly cyclical and impacted by the strength of the economy generally, by
prevailing mortgage and other interest rates, by the number of housing
starts and by other factors that may have an effect on the level of concrete
placement activity, either regionally or nationally. Although the concrete
placement industry has recovered from a downturn compared to historical levels
and customers of the Company such as municipalities and large waste haulers have
increased their expenditures for fire and emergency and refuse equipment,
if these improvements do not continue or if these markets face downturns,
then there could be a material adverse effect on the net sales, financial condition,
profitability and/or cash flows of the Company. In addition, while showing
signs of improvement recently, the weak European economy, among other things,
has continued to have a material adverse effect on refuse sales by the Geesink Norba
Group. Furthermore, the recent surge in the Company's defense business is
due in significant part to demand for defense trucks, replacement parts and
services and truck remanufacturing arising from the conflict in Iraq. Events
such as this are unplanned, and the Company cannot predict how long this
conflict will last or the demand for its products that will arise out of such an
event. Accordingly, the Company cannot provide any assurance that the increased
defense business as a result of this conflict will continue.
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Government
Contracts. The Company is dependent on U.S. and foreign government contracts for a
substantial portion of its business. That business is subject to the following
risks, among others, that could have a material adverse effect on the
Company's operating performance:
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The
Company's business is susceptible to changes in the U.S. defense budget, which may
reduce revenues that the Company expects from its defense business. |
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The
U.S. government may not appropriate funding that the Company expects for its U.S.
government contracts, which may prevent the Company from
realizing revenues under current contracts. |
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Most
of the Company's government contracts are fixed-price contracts, and the Company's
actual costs may exceed its projected costs, which could result in
lower profits or net losses under these contracts. |
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The
Company is required to spend significant sums on product development and
testing, bid and proposal activities and pre-contract
engineering, tooling and design activities in competitions to have the opportunity
to be awarded these contracts. |
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Competitions
for the award of defense truck contracts are intense, and the Company cannot provide
any assurance that it will be successful in the defense truck
procurement competitions in which it participates. |
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Certain
of the Company's government contracts could be suspended or terminated and all such
contracts expire in the future and may not be replaced, which could
reduce expected revenues from these contracts. |
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The
Company's government contracts are subject to audit, which could result in
adjustments of the Company's costs and prices under these
contracts. |
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The
Company's defense truck contracts are large in size and require significant
personnel and production resources, and when such contracts end,
the Company must make adjustments to personnel and production resources. |
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Completion
and Financing of Acquisitions. A substantial portion of the Company's growth in the
past nine years has come through acquisitions, and the Company's growth
strategy is based in part upon acquisitions. The Company may not be able to
identify suitable acquisition candidates or complete future acquisitions, which could
adversely affect the Company's future growth. The Company's credit facility
also contains restrictive covenants that may limit the Company's ability to
take advantage of business opportunities, including acquisitions. The
Company may not be able to integrate or operate profitably its recent
acquisitions of Concrete Equipment Company, Inc. (CON-E-CO) and London Machinery Inc.
("London") or businesses the Company acquires in the future. Any acquisitions
could be dilutive to the Company's earnings per share. The Company's level of
indebtedness may increase in the future if the Company finances acquisitions with debt,
which would cause the Company to incur additional interest expense and could
increase the Company's vulnerability to general adverse economic and industry
conditions and limit the Company's ability to obtain additional financing. If the
Company issues shares of its stock as currency in any future acquisitions or
as a source of funds to finance acquisitions, then the Company's earnings per
share may be diluted as a result of the issuance of such stock.
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Steel
and Component Costs. The Company uses thousands of tons of steel annually and steel
cost increases have had a significant impact on production costs for the
Company's trucks and truck bodies. During fiscal 2004 and the first six
months of fiscal 2005, costs increased sharply for steel and component
parts containing steel. Although the Company believes steel costs
stabilized beginning in the third quarter of fiscal 2005, the Company could face
further steel cost increases in fiscal 2006. Steel and component costs that
increase further and/or are not recovered through increases in the Company's
selling prices could impact the Company in the following ways:
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• |
In
the commercial and fire and emergency businesses, the Company announced selling price
increases during fiscal 2005, some of which take effect in fiscal
2006, to recover increased steel and component costs and may further
increase prices. However, any such new product prices apply
only to new orders, and the Company does not anticipate being
able to recover all cost increases from customers due to the amount of orders in the
Company's backlog prior to the effective dates of new selling
prices for the Company's products. In addition, reaction to these
price increases has been adverse from some customers, and competitive conditions have
limited, and may limit in the future, price increases in some
market sectors. Furthermore, steel and component costs may again
rise faster than expected, and the Company's product price
increases may not be sufficient to recover such increases. |
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• |
In
the defense business, the Company is generally limited in its ability to raise prices
in response to rising steel and component costs as the Company
largely does business under firm, fixed-price contracts. The Company
attempts to limit its risk by obtaining firm pricing from
suppliers at contract award. However, if these suppliers,
including steel mills, do not honor their contracts, then the Company could face
margin pressure in its defense business. |
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Revolution(R)Composite
Concrete Mixer Drum. The Company has made and will continue to make significant
investments in technology and manufacturing facilities relating to the
Revolution(R)composite concrete mixer drum product, and the Company
anticipates that this product will contribute to growth in revenues and earnings
of the Company's commercial segment. However, the Company cannot provide any
assurance that such growth will result. Without limitation:
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The
Revolution(R)drum is a new product in the concrete placement market that uses new
technology, and the Company cannot provide any assurance that
the concrete placement market will broadly accept this product or that the
Company will be able to sell this product at targeted prices. |
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Even
if market demand for the Revolution(R)drum meets the Company's expectations, the
Company may not be able to sustain high volume production of this
product at projected costs and on projected delivery schedules, which
could result in lower profits or net losses relating to this
product. |
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The
Company's plans include taking additional actions and making additional investments to
introduce different versions of the Revolution(R)drum and to
introduce the product in markets outside the United States, and there
will be additional risks associated with these efforts. |
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The
Company cannot provide any assurance that competitors will not offer products in the
future that compete with the Revolution(R)drum, which would impact
the Company's ability to sell this product at targeted prices. |
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Because
the Revolution(R)drum is a new product, the Company has experienced and may continue to
experience higher costs for warranty and other product related
claims. |
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International
Business. For the fiscal year ended September 30, 2005, approximately 15.5% of the
Company's net sales were attributable to products sold outside of the United
States, and expanding international sales, including through acquisitions
such as the recent acquisition of London, is a part of the Company's growth strategy.
International operations and sales are subject to various risks, including
political, religious and economic instability, local labor market
conditions, the imposition of foreign tariffs and other trade barriers, the
impact of foreign government regulations and the effects of income and
withholding taxes, governmental expropriation and differences in business practices.
The Company may incur increased costs and experience delays or
disruptions in product deliveries and payments in connection with
international manufacturing and sales that could cause loss of revenues and
earnings. Unfavorable changes in the political, regulatory and business
climate could have a material adverse effect on the Company's net sales, financial
condition, profitability and/or cash flows.
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Foreign
Currency Fluctuations. The results of operations and financial condition of the
Company's subsidiaries that conduct operations in foreign countries are
reported in the relevant foreign currencies and then translated into U.S.
dollars at the applicable exchange rates for inclusion in the Company's
consolidated financial statements, which are stated in U.S. dollars. In
addition, the Company has certain firm orders in backlog that are denominated in U.K.
Pounds Sterling and certain agreements with subcontractors denominated in
U.K. Pounds Sterling and Euros, which will subject the Company to foreign
currency transaction risk to the extent they are not hedged. The exchange rates
between many of these currencies and the U.S. dollar have fluctuated
significantly in recent years and may fluctuate significantly in the future. Such
fluctuations, in particular those with respect to the Euro and the U.K. Pound
Sterling, may have a material effect on the Company's net sales, financial
condition, profitability and/or cash flows and may significantly affect the
comparability of the Company's results between financial periods.
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Interruptions
in the Supply of Parts, Components and Chassis. The Company has experienced, and may
in the future experience, significant disruption or termination of the supply
of some of the Company's parts, materials, components and final assemblies
that the Company obtains from sole source suppliers or subcontractors or incur a
significant increase in the cost of these parts, materials, components or
final assemblies. Certain chassis component and commercial chassis
suppliers have been unable to meet scheduled delivery dates to the Company
because of a sharp rise in demand for Class 8 trucks. While availability of
these items has not adversely impacted the Company to date, such availability could
become an issue over the next fourteen months. Such disruptions,
terminations or cost increases could delay sales of the Company's trucks and
truck bodies and could result in a material adverse effect on the Company's net
sales, financial condition, profitability and/or cash flows.
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Competition.
The Company operates in highly competitive industries. Several of the Company's
competitors have greater financial, marketing, manufacturing and
distribution resources than the Company and the Company is facing
competitive pricing from new entrants in certain markets. The Company's
products may not continue to compete successfully with the products of
competitors, and the Company may not be able to retain or increase its customer base
or to improve or maintain its profit margins on sales to its customers, all
of which could adversely affect the Company's net sales, financial
condition, profitability and/or cash flows.
|
Additional information concerning
factors that could cause actual results to differ materially from those in the
forward-looking statements is contained from time to time in the Company's filings with
the Securities and Exchange Commission.
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Item 9.01. |
Financial Statements and Exhibits. |
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(d) |
Exhibits.
The following exhibits are being furnished herewith: |
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(99.1) |
Oshkosh
Truck Corporation Press Release dated November 1, 2005. |
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(99.2) |
Script
for conference call held November 1, 2005. |
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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|
OSHKOSH TRUCK CORPORATION |
Date: November 1, 2005 |
By: /s/ Charles L. Szews |
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Charles L. Szews |
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Executive Vice President and |
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Chief Financial Officer |
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OSHKOSH TRUCK
CORPORATION
Exhibit Index to
Current Report on Form 8-K
Dated November 1, 2005
Exhibit
Number
(99.1) Oshkosh
Truck Corporation Press Release dated November 1, 2005.
(99.2) Script
for conference call held November 1, 2005.
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