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
_________________
| Date of Report |
|
| (Date of earliest |
| event reported): |
July 27, 2004 |
Oshkosh Truck Corporation
|
| (Exact name of registrant as specified in its charter) |
Wisconsin
|
1-31371
|
39-0520270
|
| (State or other |
(Commission File |
(IRS Employer |
| jurisdiction of |
Number) |
Identification No.) |
| incorporation) |
P.O. Box 2566, Oshkosh, Wisconsin 54903
|
| (Address of principal executive offices, including zip code) |
(920) 235-9151
|
| (Registrant's telephone number) |
Item 7. Financial
Statements and Exhibits.
| |
(c) |
Exhibits.
The following exhibits are being furnished herewith: |
| |
(99.1) |
Oshkosh
Truck Corporation Press Release dated July 27, 2004. |
| |
(99.2) |
Script
for conference call held July 27, 2004. |
Item 12. Results
of Operations and Financial Condition.
On
July 27, 2004, Oshkosh Truck Corporation (the “Company”) issued a press release
(the “Press Release”) announcing its earnings for the third quarter ended June
30, 2004, its revised outlook for fiscal 2004 and its outlook for fiscal 2005. A copy of
such press release is furnished as Exhibit 99.1 and is incorporated by reference
herein.
On
July 27, 2004, the Company held a conference call in connection with the Company’s
announcement of its earnings for the third quarter ended June 30, 2004, its revised
outlook for fiscal 2004 and its outlook for fiscal 2005. 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 and the Script or provided in the conference call and related question and
answer session speaks only as of July 27, 2004. 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 and the Script
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 and the Script, 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 and the Script 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 and the Script 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 and the Script 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 and debt levels, 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,” “estimates,” “anticipate,” “believe,”
“should” or “plans,” 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 and debt levels, 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 sale of approximately 400 and 1,000 Revolution® composite concrete
mixer drums in the U.S. in fiscal 2004 and 2005, respectively, at favorable pricing and
costs; the Company’s estimates for concrete placement activity, housing starts and
mortgage rates; a modest recovery in the U.S. economy and no economic recovery in the
European economy; 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; the anticipated level of production
and margins associated with the base Medium Tactical Vehicle Replacement
(“MTVR”) contract and MTVR-related contracts, international defense truck
contracts and the Family of Heavy Tactical Vehicles (“FHTV”) contract; the
expected level of U.S. Department of Defense procurement of replacement parts and
remanufacturing of trucks and funding thereof; the expected level of commercial
“package” body and chassis sales compared to “body-only” sales; the
Company’s estimates for capital expenditures of municipalities for fire and emergency
and refuse products, of airports for fire and rescue products and of large commercial
waste haulers generally and with the Company; the Company’s estimates for the impact
of steel and component cost increases and its ability to avoid such cost increases based
on its supply contracts or recover rising steel and component costs with increases in
prices of its products; the Company’s estimates of the impact of changing fuel prices
and credit availability on capital spending of towing operators; the Company’s
ability to sustain market share gains by its fire and emergency and refuse products
businesses; anticipated levels of capital expenditures, especially with respect to the
rollout of the Revolution® composite concrete mixer drum; the Company’s planned
spending on new product development; the Company’s estimates for costs relating to
litigation, insurance and other raw materials; the Company’s targets for Geesink
Norba Group sales and operating income; the Company’s planned spending on bid and
proposal activities with respect to defense truck procurement competitions and the outcome
of such competitions; and the Company’s estimates for debt levels, interest rates,
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 results that the forward-looking statements contemplate.
|
| |
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. The U.S. economy is only reflecting a modest recovery and the
European economy generally remains weak. Although the concrete placement industry has
begun to recover from a downturn compared to historical levels and customers of the
Company such as municipalities have begun to increase their expenditures for fire and
emergency and refuse equipment, if these recent improvements do not continue or if these
markets face downturns, then there could be a material adverse effect on the net sales,
profitability and cash flows of the Company. In addition, the weak European economy, among
other things, has continued to have a material adverse effect on refuse sales by Geesink
Norba Group. The Company cannot provide any assurance that its restructuring of the
Geesink Norba Group will be effective. Furthermore, the recent surge in the Company’s
defense business is due in significant part to demand for defense trucks, replacement
parts and truck remanufacturing arising from the conflicts in Iraq and Afghanistan. Events
such as these are unplanned, and the Company cannot predict how long such conflicts will
last or the demand for its products that will arise out of such events. Accordingly, the
Company cannot provide any assurance that the increased defense business as a result of
these conflicts 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:
|
| |
• |
The
Company’s business is susceptible to changes in the U.S. and the U.K. defense
budgets, which may reduce revenues that the Company expects from its defense business. |
| |
• |
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. |
| |
• |
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. |
| |
• |
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. |
| |
• |
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. |
| |
• |
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. |
| |
• |
The
Company’s government contracts are subject to audit, which could result in
adjustments of the Company’s costs and prices under these contracts. |
| |
• |
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. |
-4-
| |
Completion
and Financing of Acquisitions. A substantial portion of the Company’s growth in
the past eight 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, obtain financing for future acquisitions 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
acquisition of Jerr-Dan Corporation, its pending acquisition of BAI Brescia Antincendi
International S.r.l and BAI Tecnica S.r.l. (collectively, “BAI”) 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.
|
| |
Rising
Steel and Component Costs. The Company uses thousands of tons of steel annually and
steel cost increases have a significant impact on production costs for the Company’s
trucks and truck bodies. Over the last several months, costs have risen sharply for steel
and component parts containing steel, and some industry experts have estimated the
increase in steel costs over the last year at more than 90%, with further increases likely
in fiscal 2005. Although the Company has firm, fixed-price contracts for all steel
requirements for fiscal 2004 and has firm pricing contracts for most components that have
mitigated some of the impact of these conditions, the Company has not been able to hold
all of its steel suppliers to pre-negotiated prices and many of its component suppliers
have sought price increases. A surge in over-the-road truck sales has also created a
shortage of certain components the Company utilizes and resulted in periodic delays in
receipt of trucks scheduled for mounting of the Company’s truck bodies. The ultimate
duration and severity of these conditions is not presently estimable, but these conditions
are likely to continue into fiscal 2005. Without limitation, these conditions could impact
the Company in the following ways:
|
| |
• |
In
the commercial and fire and emergency businesses, the Company announced 3% to 4% price
increases effective in the third quarter of 2004 to offset increases in steel and
component costs. However, the new product prices apply only to new orders and the Company
does not anticipate being able to recover all of the cost increases from customers due to
the significant amount of orders in the Company’s backlog prior to the effective
date of the new selling prices for the Company’s products and because competitive
conditions have limited price increases in some market sectors. In addition, steel and
component costs could continue to rise faster than expected and the Company’s recent
product price increases may not be realized in full or in part. |
| |
• |
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. |
| |
Revolution®
Composite Concrete Mixer Drum. The Company has made and will continue to make
significant investments in technology and manufacturing facilities relating to the
Revolution® 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® 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. |
| |
• |
Even
if market demand for the Revolution® 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. During fiscal 2004, the Company’s production costs
have exceeded expectations and delivery rates have been slower than the Company expected. |
| |
• |
The
Company’s plans include taking additional actions and making additional investments
to introduce different versions of the Revolution® drum and to introduce the product
in markets outside the United States, and there will be additional risks associated with
these efforts. |
| |
• |
The
Company cannot provide any assurance that competitors will not offer products in the
future that compete with the Revolution® drum, which would impact the Company’s
ability to sell this product at targeted prices. |
| |
• |
Because
the Revolution® drum is a new product, the Company potentially may experience higher
costs for warranty and other product related claims. |
| |
International
Business. For the fiscal year ended September 30, 2003, approximately 15% 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 pending
acquisition of BAI, 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
financial condition, profitability and cash flows.
|
| |
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 financial condition, profitability and
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 and Components. The Company has 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. 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 financial condition,
profitability and cash flows.
|
| |
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
financial condition, profitability and 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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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.
|
OSHKOSH TRUCK CORPORATION |
Date: July 27, 2004 |
By: /s/ Charles L. Szews |
|
Charles L. Szews |
|
Executive Vice President and |
|
Chief Financial Officer |
-8-
OSHKOSH TRUCK
CORPORATION
Exhibit Index to
Current Report on Form 8-K
Dated July 27, 2004
Exhibit
Number
| (99.1) |
Oshkosh
Truck Corporation Press Release dated July 27, 2004. |
| (99.2) |
Script
for conference call held July 27, 2004. |
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