UNITED STATES
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): October 28, 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, including area code) |
_________________
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
October 28, 2004, 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, 2004 and its revised outlook for fiscal 2005. A copy of
such press release is furnished as Exhibit 99.1 and is incorporated by reference
herein.
On
October 28, 2004, 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,
2004 and its revised 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 October 28, 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 1,000 Revolution® composite concrete mixer drums
in the U.S. in fiscal 2005 at favorable pricing and costs; the Company’s estimates
for concrete placement activity, housing starts and mortgage rates; a strong 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, in particular at McNeilus Companies, Inc. and the Geesink Norba Group; the
anticipated level of production and margins associated with the base Medium Tactical
Vehicle Replacement (“MTVR”) contract and MTVR-related contracts, the
Company’s various other U.S. Department of Defense contracts and international
defense truck contracts; the expected level of U.S. Department of Defense procurement of
replacement parts, service 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 fire and rescue products and of large commercial
waste haulers generally and with the Company; the Company’s targets for Geesink Norba
Group sales and operating income; 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 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; 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, product warranty, insurance and other raw materials; 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.
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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. The U.S. economy is now in strong recovery and the European
economy generally remains weak. 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,
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 the
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, service 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 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 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 JerrDan Corporation and BAI Brescia Antincendi
International S.r.l and BAI Tecnica S.r.l. (collectively, “BAI”), its pending
acquisition of Concrete Equipment, Inc. (CON-E-CO) 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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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. During the last fiscal year, costs have risen sharply for steel
and component parts containing steel, with further increases expected in fiscal 2005. 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 in
fiscal 2005. Without limitation, these conditions 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 2004 to offset increases in steel and component costs and may
further increase prices in fiscal 2005. 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 date of new selling prices for the Company’s products and because
competitive conditions have limited, and may limit in the future, price increases in some
market sectors. In addition, steel and component costs could continue to rise faster than
expected and the Company’s product price increases may not be realized in full or in
part. |
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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®
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. |
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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
exceeded expectations and delivery rates were slower than the Company expected. |
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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. |
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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. |
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Because
the Revolution® drum is a new product, the Company potentially may experience higher
costs for warranty and other product related claims. |
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International
Business. For the fiscal year ended September 30, 2004, approximately 16.7% 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 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.
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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 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.
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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
financial condition, profitability and cash flows.
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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.
Item 9.01. Financial
Statements and Exhibits.
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(c) |
Exhibits.
The following exhibits are being furnished herewith: |
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(99.1) |
Oshkosh
Truck Corporation Press Release dated October 28, 2004. |
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(99.2) |
Script
for conference call held October 28, 2004. |
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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: October 28, 2004 |
By: /s/ Charles L. Szews |
|
Charles L. Szews |
|
Executive Vice President and |
|
Chief Financial Officer |
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OSHKOSH TRUCK
CORPORATION
Exhibit Index to
Current Report on Form 8-K
Dated October 28, 2004
Exhibit
Number
| (99.1) |
Oshkosh
Truck Corporation Press Release dated October 28, 2004. |
| (99.2) |
Script
for conference call held October 28, 2004. |
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