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
_________________
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| Date of Report |
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| event reported): |
August 1, 2006 |
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Oshkosh Truck Corporation
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| (Exact name of registrant as specified in its charter) |
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
August 1, 2006, Oshkosh Truck Corporation (the “Company”) issued a press release
(the “Press Release”) announcing its earnings for the third quarter ended June
30, 2006 and its revised outlook for fiscal 2006 and beyond. A copy of such press release
is furnished as Exhibit 99.1 and is incorporated by reference herein.
On
August 1, 2006, the Company held a conference call in connection with the Company’s
announcement of its earnings for the third quarter ended June 30, 2006 and its revised
outlook for fiscal 2006 and beyond. 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 August 1, 2006. 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, those relating to the Company’s ability to
continue the turnaround of 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 sustain flat operating income in the commercial
segment and to raise operating income in its fire and emergency segment in fiscal 2007
despite anticipated lower industry demand resulting from changes to diesel engine
emissions standards effective January 1, 2007; the Company’s estimates for the level
of concrete placement activity, housing starts and mortgage rates; the performance of the
U.S. and 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. and the Geesink Norba Group; the anticipated level
of production and margins associated with the Family of Heavy Tactical Vehicles contract,
the Indefinite Demand/Indefinite Quantity truck remanufacturing 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 funding thereof; the Company’s estimates for capital expenditures of
municipalities for fire and emergency and refuse products, of airports for aircraft rescue
and snow removal products and of large commercial waste haulers generally and with the
Company; federal funding levels for U.S. Department of Homeland Security and spending by
governmental entities on homeland security apparatus; the availability of chassis
components including engines 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 expected level of
commercial “package” body and purchased chassis sales compared to “body
only” sales; the Company’s ability to integrate acquired businesses and achieve
expected synergies; the Company’s ability to close the Iowa Mold Tooling Co., Inc.
(“IMT”) acquisition; 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; the Company’s estimates for costs relating to litigation,
acquisition investigation, product warranty, insurance, stock options and restricted stock
awards, personnel and raw materials; the Company’s ability to negotiate expiring
union contracts on a satisfactory basis; the Company’s estimates for debt levels,
interest rates, working capital needs and effective tax rates; and that the Company does
not complete any further acquisitions other than AK Specialty Vehicles (“AK”)
and IMT. 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 profit in the fourth quarter of fiscal 2005 and the
first three quarters of fiscal 2006 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 the fourth quarter of fiscal 2006, the Company
expects the Geesink Norba Group to have break-even results due to seasonal factors,
softness in demand in the United Kingdom and chassis availability issues in France. In
addition, the Company may incur costs to continue to implement any such turnaround beyond
its current expectations for such costs. Further, if the Company is unable to continue to
turnaround 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 is strong in fiscal
2006 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 in fiscal 2006, 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. Furthermore, the Company’s
commercial business has seen an increase in orders in fiscal 2006 as customers pre-buy
truck chassis in anticipation of changes in diesel engine emissions standards effective
January 1, 2007, which the Company believes is likely to result in a reduction in sales in
2007. Additionally, 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 or receiving additional orders that the Company anticipates it will receive. |
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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 defense products undergo rigorous testing by the customer and are subject
to highly technical requirements. Any failure to pass these tests or
to comply with these requirements could result in unanticipated retrofit costs, delayed
acceptance of trucks or late or no payments under such 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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The
Company also is currently experiencing difficulties with sourcing sufficient vehicle
carcasses to maintain its defense truck remanufacturing business, which creates
uncertainty for this area of the Company’s business in the short-term. |
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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, including the acquisition of IMT,
which could adversely affect the Company’s future growth. The Company may not be able
to integrate or operate profitably its recent acquisition of AK, its proposed acquisition
of IMT or businesses the Company acquires in the future. The Company’s credit
facility also contains restrictive covenants that may limit the Company’s ability to
take advantage of business opportunities, including acquisitions. Any acquisitions could
be dilutive to the Company’s earnings per share. The Company’s level of
indebtedness will increase in the future as the Company finances acquisitions with debt,
which will 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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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. |
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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. |
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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 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, 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. 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. A recent surge in over-the-road
truck sales has created shortages of certain components utilized by the Company,
especially certain engines utilized in the Company’s defense business. The shortages
have also caused periodic delays or limitations on the receipt of chassis scheduled for
mounting of the Company’s truck bodies across both its fire and emergency and
commercial segments. It is possible that some or all of such shortages could intensify
during calendar 2006, which may cause the Company to miss forecasted sales and earnings
estimates or incur additional costs to manage production when key components are delivered
late.
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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.
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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.
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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 August 1, 2006. |
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(99.2) |
Script
for conference call held August 1, 2006. |
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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: August 1, 2006 |
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 August 1, 2006
Exhibit
Number
| (99.1) |
Oshkosh
Truck Corporation Press Release dated August 1, 2006. |
| (99.2) |
Script
for conference call held August 1, 2006. |