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TheStreet Open House

Oshkosh Corporation Reports Fourth Fiscal Quarter And Fiscal 2012 Results

Stocks in this article: OSK

Fire & Emergency – Fire & emergency segment sales for the fourth quarter of fiscal 2012 increased 14.3 percent from the prior year quarter to $228.9 million. The increase in sales primarily reflected the concentration of large international sales of fire apparatus in the fourth quarter of fiscal 2012.

The fire & emergency segment reported operating income of $0.9 million, or 0.4 percent of sales, for the fourth quarter of fiscal 2012 compared to an operating loss of $5.3 million, or 2.7 percent of sales, in the prior year quarter. Results for the fourth quarter of fiscal 2012 included pre-tax restructuring related charges of $10.1 million and charges associated with the curtailment of pension and other postretirement benefit plans of $2.0 million. Results for the fourth quarter of fiscal 2011 included pre-tax restructuring related charges of $6.1 million and impairment charges of $2.0 million. Excluding these items, fire & emergency segment operating income was $13.0 million, or 5.7 percent of sales, in the fourth quarter of fiscal 2012, compared to operating income of $2.8 million, or 1.4 percent of sales, in the prior year quarter. Operating income benefitted from production efficiencies and favorable absorption in the fourth quarter of fiscal 2012.

Commercial – Commercial segment sales increased 34.2 percent to $181.5 million in the fourth quarter of fiscal 2012 compared to the prior year quarter. The increase in sales was attributable to increased volume for both concrete placement and refuse collection vehicles.

The commercial segment reported operating income of $9.2 million, or 5.1 percent of sales, for the fourth quarter of fiscal 2012 compared to $2.6 million, or 1.9 percent of sales, in the prior year quarter. The increase in operating income was primarily a result of higher sales levels and improved manufacturing efficiencies, offset in part by investments in MOVE initiatives.

Corporate – Corporate operating expenses increased $9.6 million to $35.5 million for the fourth quarter of fiscal 2012 compared to the prior year quarter. The increase in corporate expenses from the fourth quarter of fiscal 2011 was related to higher share-based compensation costs as a result of the increase in the price of the Company’s Common Stock during the fourth quarter of fiscal 2012 and additional incentive compensation costs.

Interest Expense Net of Interest Income – Interest expense net of interest income decreased $0.8 million to $18.4 million in the fourth quarter of fiscal 2012 compared to the prior year quarter. The decrease was largely due to the expiration of the Company’s interest rate swap in December 2011, offset in part by the acceleration of $2.1 million of deferred financing fees as a result of the refinancing of the Company’s credit agreement in the fourth quarter of fiscal 2012. Fourth quarter fiscal 2011 interest expense included $3.1 million of expense related to the Company’s interest rate swap.

Provision for Income Taxes – The Company recorded income tax expense of $0.5 million in the fourth quarter of fiscal 2012, or 0.6 percent of pre-tax income, compared to 32.3 percent of pre-tax income in the prior year quarter. The current year quarter included $26.5 million, or $0.29 per share of discrete tax benefits generally related to a September 2012 settlement of income tax audits, benefits of a European tax incentive, reduction in valuation reserves for net operating losses benefitted in the quarter and expiration of statutes of limitations.

Share Repurchases – During the fourth quarter of fiscal 2012, the Company repurchased 546,965 shares of its Common Stock at a cost of $13.3 million.

Full-Year Results

The Company reported consolidated net sales for the fiscal year ended September 30, 2012 of $8.18 billion and income from continuing operations of $230.5 million, or $2.51 per share. This compares with net sales of $7.57 billion and income from continuing operations of $279.0 million, or $3.05 per share, for fiscal 2011. Results for fiscal 2012 included pre-tax restructuring related charges of $18.6 million, charges associated with the curtailment of pension and other postretirement benefit plans of $3.4 million, costs incurred in connection with a proxy contest of $6.6 million and discrete tax benefits of $40.3 million. Results for fiscal 2011 included pre-tax restructuring related charges of $18.2 million, impairment charges of $2.0 million and discrete tax benefits of $11.1 million. Excluding these items, fiscal 2012 income from continuing operations was $208.5 million, or $2.27 per diluted share, compared to $280.8 million, or $3.07 per diluted share, in fiscal 2011. The decrease in income from continuing operations was primarily attributable to an adverse product mix and lower sales in the defense segment, offset in part by significantly improved access equipment and commercial segment results.

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