Oshkosh Corporation today reported fiscal 2009 first-quarter net sales of $1.39 billion and a net loss of $20.6 million, or $0.28 per share. These results compare with earnings per share of $0.50 on net sales of $1.50 billion and net income of $37.3 million for the first quarter of fiscal 2008.
“We are obviously disappointed in the overall performance we are reporting today. It has been widely reported that global manufacturing orders and activity fell sharply in November and December 2008. Certain of our businesses shared this experience, which led to our weak performance in our first quarter. Fortunately, our defense, fire apparatus and domestic refuse collection vehicle businesses continued to report solid results,” commented Robert G. Bohn, Oshkosh Corporation chairman and chief executive officer.
Oshkosh Corporation today reported fiscal 2009 first-quarter net sales of $1.39 billion and a net loss of $20.6 million, or $0.28 per share. These results compare with earnings per share of $0.50 on net sales of $1.50 billion and net income of $37.3 million for the first quarter of fiscal 2008.
“We are obviously disappointed in the overall performance we are reporting today. It has been widely reported that global manufacturing orders and activity fell sharply in November and December 2008. Certain of our businesses shared this experience, which led to our weak performance in our first quarter. Fortunately, our defense, fire apparatus and domestic refuse collection vehicle businesses continued to report solid results,” commented Robert G. Bohn, Oshkosh Corporation chairman and chief executive officer.
“Our defense segment secured $1.6 billion of orders in the first quarter for our medium and heavy tactical vehicles. In addition, Pierce continued to experience market share gains and strong order flow as fire departments across the U.S. have responded positively to its robust lineup of safety-conscious, high performance fire trucks. Our strong outlook for these businesses, supported by significant backlog, will help us navigate through this recession and emerge as a stronger company.
“While we generated strong operating cash flow in the quarter, order activity slowed more sharply than we had expected in access equipment and other businesses. As a result, we do not expect that earnings for the remainder of the fiscal year will be sufficient for us to avoid violating a financial covenant in our credit agreement. We have commenced discussions with our lead banks to seek an amendment to our credit agreement in the second quarter of fiscal 2009. We believe that we will be successful in finalizing an amendment that will provide us with financial covenant relief. We anticipate that the amendment will entail upfront fees and higher interest costs than under our current credit agreement.
“In response to the weaker economic outlook, we have taken further measures to reduce our costs. These actions include a reduction in workforce of 7 percent, which is in addition to the workforce reduction concluded in the summer of 2008. Additionally, we have further reduced production, announced closures of a number of underutilized facilities and slashed spending in general. We understand these decisions will have wide-ranging effects on our employees, their families and the communities in which we operate, but we believe they are necessary in the current environment.”
Consolidated sales in the first quarter of fiscal 2009 decreased 7.6 percent compared to last year’s first quarter. The lower sales were the result of a decrease in sales in the company’s access equipment segment as a result of the slowdown in the worldwide construction markets, offset in part by strong demand for defense vehicles and armor kits.
First-quarter operating income decreased 84.5 percent to $17.1 million, or 1.2 percent of sales. An operating loss in the access equipment segment more than offset higher operating income in the defense segment and lower corporate expenses. Operating income in the first quarter of fiscal 2009 also included $14.3 million of provisions for bad debts and $8.3 million of charges related to cost reduction initiatives.