OSK - Earnings call transcript Q1 2018

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Operator

Greetings, and welcome to the Oshkosh Corporation Fiscal 2018 First Quarter Results Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mr. of for President Corporation. Vice Davidson, Investor Oshkosh Relations Pat Thank you. Mr. begin. Davidson, may you

Pat Davidson

replay the on morning us. call call, a XXXX presentation, and that first of Please joining thanks is results. of which is and financial today, two copy presentation approximately to measures we website. will The Good is during for our for non-GAAP slide that of available audio our being also it's Earlier webcast and refer accompanied be oshkoshcorporation.com. website our this slide at we and available published will slide A website on on includes GAAP use release presentation. now our Today's reconciliation to available by quarter months. a XX

follow, forward-looking questions, Private Our to are These believe or statements. the SEC including that a stated with call or our statements, any call, we statements your those this forward-looking to described our at with and from These a filed next earnings the quarter we be our the risks not implied meaning others, on risks be could quarterly of be make fiscal may or all. actual answers fiscal expressed by year, in among Act. references to morning conference which otherwise. statements statements if we Form to year filings to update to the X-K other unless such disclaim have Reform include, We forward-looking All that SEC. this results obligation quarter these are include updated until forward-looking to within cause matters materially subject different that Litigation remarks Securities that

Chief you, turn Jones, slide Sagehorn, X turn I'll Our President and Please and to President and Wilson. Executive presenters Dave today it to Chief Financial Officer. include Officer Wilson Vice over Executive and

Wilson Jones

a we by was expectations. XXXX in exceeded the strong consolidated Thanks, everyone. a results and we positive Pat the to consolidated few The four XX%, announce the across our backlog We're conditions positive order four and than approximately Adjusted This quarter share we triple this was to work in know at Order the macroeconomic was broader, of US. the morning, to seeing, conditions segments quarter finished up segments. believe in $X.XX earnings we $X.XX these start continue non-defense in that last through defense, all XXXX. But segments with the more and in especially reported of quarters, that driven team good per takes experienced that digit pleased do. great activity entire really We positive for economic of XXXX. increases performance. our start the reflects the were performance and pride least double new sales we have in will we access intake equipment all in and commercial percentage growth segments. It’s result way year to the our more with

this to as drivers expected result access slide down break to along impact share with announce earnings equipment business will the year of access law, increase adjusted a a that I and of tax outlook, as XX% in the regarding outlook Please segments. The each a interactions segment as in X.X the to $X.XX. rental level do the better the with pleased backlog they outlook the our times segment. discussion compared the these year is quarter. This minutes. most few The I’ll than positive our market. that leading of the concluded typically are the quarter the of from equipment the $X with prior annual negotiations with in team exiting businesses Dave to more in with turn positive for our was purchase consistent of and large X national full new big orders were their than off takeaway begin communicated reflected large quarter, a rental start was I'm to received prior quarter. of of companies As range our we up the the customers Orders the raising to our quarter. results in estimate positive year per

that to customers confidence this had orders the year. We’re place annual larger encouraged

time due in the economy few their the years, cautious past to view more the approach might customers in and rental recall orders a some executed You just of to market.

year, an While in this orders every of we'd there's it's this at in quarter to timing that here. percentage element increase like obvious large see play

increasing however a positive year market estimate more environment. result our of this are range as the sales for full We segment

We demand still well as this America continue international quarter solid although to in weak. remains see Latin

reflected today. Turning reporting have year the of prior due the in results tough adjusted to operations, equipment knew access we quarter was higher going segment is to comparison to material we’re cost. the impact a The that to

however a than We actions related we experienced year to complete implementing quarter, that caused additional issues made this planned. in taking we’d inefficiencies to progress, significant restructuring are costs. we quarter, are and the longer operational disappointed ago but the announced program that Coming restructuring originally actions,

JLTV the international the slide annualized the segment. turn delivery a to continued incur of team that strong focused to of the for been is Please opened still quarters. future and we heavy quarter, we actions additional the defense we lifting behind expect believe Defense now of we led continue in discussion by and Now, with and M-ATVs. completed, is have savings optimization us a some X will of costs realize to team projected. that majority on year originally The the but the program ramp-up

for our JLTVs JLTV delivery additional decision. work of Defense JLTVs XXXX order December, is working program full in with rate to office. the pleased we test QX, in previously, late the discussed production We're with we've an a have team lockstep the As as In our XXXX. achieved placed results for Department

this We orders expect later more JLTV year.

of international terms vehicles. designed the best in recently and They them JLTV We Oshkosh and know know challenging significant evolving where to globe. the JLTV tactical also through discussions are looking and Oshkosh where around with US trade situations both support customer they in community, to promote are interest individual generated shows allies Dubai the continue the to vehicles there that meet threats be will the for

continue XXXX, We planned production beginning follow JLTV in in government’s to sales expect XXXX. orders the will milestone likely US international full rate with

step services. pursuit international We We moved deals on for one the approval process. the proposed of also additional remain actively as tangible next were in in the Oshkosh saw the contract products engaged progress to defense in and of quarter orders we in the

opportunities of as about remain changed we negotiations in opportunities we've assessment hasn’t the talked Our on previously.

during quarter. On we for currently expect the the to this FMTV recompete customer winner contract program, sometime this the announce

to stated AX the XXXX, we've FMTVs begin will version we to will supplier new on contract excuse up XXXX. into As the production deliver the under occasions, believe in FMTV continue me, XXXX. of previous ramp current We

into Finally, impacted for the as US with to do timing trucks summer. at another levels. We in could not for budget the be government if fully resolution our year. for impact funding expect federal sales continues under still stretch XXXX, continuing orders late FYXX booked FYXX the the of But continuing we’re resolutions operating XXXX the capped continuing resolution

challenging first quarter slide with saw XXXX emergency from Fire a for over also operational truck up continued for recently final year's truck to income fire delivered XXXX, drove first contributing in deliveries. industry customer this segment orders our to XXXX. foundation industry airport truck below The margins last orders offset were The XXXX approximately more The the a discuss a up we levels. lower quarter, the in still continued America to operating turn in quarter, X%, X segment’s momentum XX%. the segment. fire from outlook. XX% in the international year-over-year.XXX in performance We of strong Pierce growth rescue of the and airport units airport group large largely sales income The and for of grew than and emergency sales comparison data an fire it's operating to year fire products quantity Let’s for but product strong a received historical firefighting performance little perspective. strong North making

expectations will segment. and class confident tax industry this positive and support the outlook Municipal age our fire positive continue remain our said, for be for market. to that our slightly continue to fleets replaced. of increase leading pumpers as our the market for friend areas in the is We product of need to Pierce lineup aerials truck Ascendant receipts to in custom flat strength be to Our we've often and reference that

about be are X our on Asia, customers. commercial objective particularly and in segment. East in a will been result believe operational to There of to That well lower number international mentioned Please earlier, pursuing. many the due this said, slide in large I the turn we As continue China our shipments shipments opportunities in to will bullish the be Middle talk of the part we'll prior that year. as quarter more business servicing attack creating we business. activities. are new structure results accountability, our increasing Commercial in with first as or and our in of and which with complexity line drives effectively segment’s team quarter supplying The the focusing that the implementing efficiencies the Commercial our on business we throughout value were improved most team continues has expectations. greater to were

of will up effort to levels. In concrete levels, backlog a do. pre-recession Las are time World members get mid in in at portion refuse Concrete Trade year. exit first should impact current prior this growth, Vegas, percent Many pre-recession age. there's to and vehicle take the mixer is Show to so to work market a grew in quarter a remains in recently compared of did year continue a however team market this busy view still which we noted digit XXXX of the sentiment this of with collection compared mixer concrete this the and of higher business. We're the below the perspective, aggressive From this significantly exceeded fleets ago. our our backlog, calls, contrast we’ve to the as good for much RCV seeing market the We week customer Annual domestic prior As conference single

it business longer-term we our outlook over to greater turn for and Looking on the mixer up detail. financials I’m wraps in concrete going to it discuss bullish remain outlook XXXX That the and four Dave RCV for both markets. to for our segments. updated forward,

Dave Sagehorn

good segments good mentioned, order were sales strong of deliveries down up percent RCVs, where and the increase concrete slightly. Sales strong mixers with was environment commercial from the Middle emergency, North equipment both that Wilson the East, market received quarter. America solid to the exception continued Europe, reflected in didn't all digit up turn in the prior and were led The Access increasing start prior of more Africa which to by year, driven X. pattern. and M-ATVs segment final the in We XX.X% by a double of fire any sell slide M-ATVs Thanks, a for order sales We segment and JLTV Consolidated year sales deliveries saw normal quarter. region. to morning, in year sales full-year sales in up The the defense were confidence ramp quarter increases significant the a outlook. the under $X.XX international XXXX. billion, gives and us Wilson net in reflecting the had reversion Please and everyone. our delivery

income volume million segment, first recall $XX.X defense compared segment quarter. last the sales year, $XX.X the quarter. the prior in that performance. in first operating X.X% which for pause experienced benefited higher improved segments quarter of or in operating sales the or this led may higher You Adjusted All was consolidated and income, of from a to million adjusted year the by X% delivered orders

for incremental During in said year the call, for expected segment and results we experienced. $XX.X miscellaneous what the our with the mix prior the for the our quarter a access and of Higher reserve material that's actions. margin. inefficiencies also quarter lower equipment costs million incremental incremental unfavorable we customer along that margin foreign with contributed accounted exchange last associated adverse challenging equipment margin to of to the earnings compared we Access adjustments and lower of terms charges restructuring majority exclude adjusted and

reflect in by increasing execute to and restructuring project. the are fulfillment transition completely warehousing production additional costs year restructuring our estimated telehandler required the million actions last total and We time to included to and activities aftermarket effort launched $XX the the

partially this higher to $X.X We information offset segment operational the one-time to charges by related results adjusted deliver basis. tax pricing on continue volume. This results segment actions million appendix these the exclude all savings higher on improved segment implementation And quarter up to execution, fire tax of and Commercial expect and benefited was of reflect business implementation attributable on non-defense expenses. sales of to was $XX first to million reform. however were slide the the quarter excludes commercial entries of an information in ongoing higher new emergency the $XX million the adjusted segment be backlog, Better to can from segment results structure. annualized restructuring segments first Further to rate initial segment’s for which found quarter rate results, including XX.X%. deck. The in operating

a the The deferred rate was these discrete to tax tax that includes rate effect three Specifically, the XX.X% statutory record excuse and statutory these rate $X.X -- of the a The to the record the benefits tax our entries. months The foreign at Again, these tax of compensation. rate are tax and rate stock-based full on earnings. adjust of to me, quarter also our to XX.X% from federal blended of our one-time year the entries tax new XX% benefit. impact nine entries months to XX%. tax excludes new old for at adjusted million rate tax deferred net taxes reflect unrepatriated includes reflects rate

our are we approximately estimating now full that will adjusted tax XXXX, rate XX%. For year be

The of normal annual domestic in earned to XXX $X.XX by to share impact earnings in the XX% Going our be to of in US. forward, deduction. offset the on the manufacturing reform will corporate quarter per compared reflecting income we statutory XX%, tax rate from adjusted tax approximate $X.XX the Adjusted be reduction point to Oshkosh quarter tax in tax XX%. the will our for biggest Corporation reduction believe from the be will rate rate current elimination benefit income partially first basis This of the an XXXX. XX% was

share per share impact record of results from reform. initial related and XXXX per restructuring commercial Quarter $X.XX from one-time and costs the benefit exclude segments access the to First tax in the US an after entries $X.XX tax implementation equipment an

share the rate repurchased result an blended during stock tax our First tax applying the as $X.XX year adjusted quarter per the common earnings law. the benefit XXX,XXX We of full quarter. rate a versus of old includes under expected shares

repurchase updated assumption to average flat earnings for to shares review that count last Please hold assumed noted our the that we On call, share turn year-over-year. our expectations for share slide count would we enough a X of our XXXX.

start outlook to as result XXXX year our lower a positive equipment follows. demand are revising we access As full our rate, the year, for of and improved outlook tax

from are range a of We billion billion our to $X.X billion $X.X $X.X estimated consolidated to range sales increasing billion. to $X.X

Approximately completion and X% the national $X.X negotiations XX% the tax billion, range reform. companies. access stronger XXXX. segment US We're increasing $X.X reflecting $XXX to new billion $X.X tax $X.XX. $XXX adjusted market the upon rental a outlook operating to We range $X.X quarter estimate estimate And the million sales of This to adjusted represents excludes the million. order are our EPS we’re to reflect segment the reform. billion increase range our the making $XXX to activity million entries tax implementation to of to change following to from in from we're range EPS increasing more increasing after of in to a level, of income range $XXX rate to billion $X.XX range At to one-time sales positive $X.XX from our the of $X estimate The to million a with range estimate the range due of $X.XX recorded is from changes. adjusted equipment a increase adjusted

XX.XX% a are adjusted expected, offset seeing we we've raising part revised are We reflects margin XX% of expected XX.X% as of to to sales range a higher than in impact mix segment’s heavier also a this income the previously volume, XX.XX%. to telehandlers. for range from This favorable margin operating by demand estimate estimate less the range

expense X.X% to We segment. estimate income a segment range we in commercial minutes rate to estimate range. adjustment margin mentioned year from points defense X.XX% operating XX%. XX%, the approximately increasing making performance million it segment, And emergency to as strong that segment of XX of also first the tax And I for from we're now be $XXX this a corporate to million increasing XX.XX% will are similar the the the basis In few the sales margin reflecting million approximately range the fire to operating to quarter the million, previous ago, a adjusted $XXX to to income $XXX increasing tightening and range, X.XX% $XXX $XXX XX.XX%. high are to we’re end estimate the by estimating We're the million.

to are required reflect expectations increasing flow couple Wilson. free largely I from our back turn estimate second on Finally, quarter to of to we of tax approximately before A our quick cash million payments. $XXX comments it the million, impact lower over $XXX

adjusted higher sales of quarter by expect in non-defense all the rate. a to We earnings higher XXXX, second earnings led lower segments tax and and compared

We of partially be expect turn JLTV to lower closing for it as comments. sales some earnings will over lower, now to International back only M-ATVs. and Wilson defense sales offset I'll higher sales

Wilson Jones

we’re pleased outlook. Thanks, had Dave. to to increase good full quarter a In summary, we be first and our year able

on and opportunities said do. last to our capture more we have call, work we to As

the and communities partner a value customers, work. started. Q&A Our we great to Corporation I'll it team and we to our as make place get driving to turn suppliers is back work which business a Pat shareholder in to committed work Oshkosh to to over great

Pat Davidson

back like additional please if one ask up, a period in Thanks, get limit you'd queue the plus questions to ask that we up. questions. follow question-and-answer this After remind follow to Wilson. please everybody the begin I'd Operator, your you of call. like to

Operator

first from Instructions] Citigroup. line Our comes the with [Operator question Tim Thein of

Tim Thein

you a alluded mix. less favorable to product on Just had a question access,

then Just year, just of we neutral? driven relative does how access. or quarter's the revenue does wondering customer based at positive through if you include guidance the in can Was increase just assumption customer a of the strength, sales into the negative, perspective that all comment as look mix to last terms And guidance? either the on the from delta order volume play on second, price for that, any remainder or

Dave Sagehorn

Tim heavier national rental actually we saw we Sure. than NRCs, companies quarter, last a mix what the really of first was in saw year.

backlog actually access the at think relatively year IRC. to flat the of kind -- from Looking revert here, standpoint remainder so of team we’ll and customer end up year-over-year what a going we mix that that's telling from is the us, over to the mix NRC,

think standpoint, from a a Europe standpoint, little region actually thought. a I we from than saw stronger percentage we be bit

a think, now of I then. compare thought where you what couple think Europe were back little ago, said So is that and to we to going to be be going America we months Europe it a vis-a-vis back we North stronger

of into came guide, the going to we get year That assuming we're our In the is still terms and revenue backlog price. expectation. some

So hasn't changed standpoint pricing from three our ago. what you from we really told months a outlook much

increased all look as So the that is revenue we at really driven. volume guidance,

Operator

comes line of And the next the with Stanley Elliott Stifel. from question

Stanley Elliott

ago, this just in way. terms sounds back wasn't anything not that Congratulations lot is you of a to talking a cycle couple for fair? a current marketplace and access demand the me to Is a years and question. meet in replacement like being question, discussion, this so All purchased. of whole there the equipment about of go we're taking my with in Quick thanks

Wilson Jones

had or what saying ’XX we've some quarter that up just showed No. we replacement. the replacement should been demand in ’XX we pick and believe Stanley, in

of a we Our But on if demand replacement in quarter, it’s customers do don't order replacement signal believe pick to like us the saw demand or up. some for it's starting demand. construction we

Stanley Elliott

basis start on secondly can you of as, when about thinking out all the along defense quickly international Great you JLTV assuming business, international an news. could, it how works units in with on the that switching ramp domestics? And of gears I then it think the kind terms

Wilson Jones

in this standpoint capacity in all time, it orders. JLTV any clear international focus They're a point, anticipate month. discussions, We're when we at building M-ATVs looking those yet. of don't XXXX, lot but of lot just a were to we're Stanley, this we a if from starting ramping Yeah. were not interest, at XXXX at back you planning of and a dial problems, up building back

JLTV have slow and we positioned of rate So, there in full the a production QX we’ll JLTV But the to move ramp we've orders. up in production we capacity ’XX. decision here build lowered ramp now, and up well got to we're to international

Operator

you. Thank

line Our next question Goldman Sachs. the of Jerry from with Revich comes

Jerry Revich

’XX? you ramp if supply I’m we're that demand make chain on wondering your the fair key steps steps the as of for portfolio are are you could the across talk has across the you’re allocation folks -- up to across about folks industrials. over to about you how should seeing components sure the in What impact that taking manage taking And of really a course think price we components? critical cost

Wilson Jones

Well, suppliers. this. fill start sales planning of close a do with operation through and chain you works some and standpoint, team commentary planning our our lot supply We our in a From process. around Dave, I'll Jerry, global and the procurement advanced Jerry, of can very inventory

in ahead where been our as terms plenty So of our giving advanced we're our goal of stay with as of we're knowledge we has going, suppliers, can forecasting. to even always planning, them far what

So our we suppliers. close stay to very

go supply up Over in volumes. really the that a and -- run our our of as -- build up good chain our team and helping job supply done years, we we've consolidating can down chain getting be suppliers has at to one do done

spot standpoint. navigating We've we're material through It's from supply always good chain. think a I negotiation that. in been a with So a

into we forecast from area forecast that just QX shared As a today. we’ll current outlook was about, an for our our quarter material supply but that's Dave a us, built financial continue to is tough and talked chain negotiate

Jerry Revich

clarification. a just sorry, And

be to to is the say, So XX% upside, if think folks ramp, the if laying able you chain supply today? help what equipment to XX% to you'll you than you're the let’s to do out stronger respond surpasses get demand, actually, demand

Wilson Jones

Yeah. tell on so. can think suppliers the forecast, ifs suppliers more you, session with what I we they can and too. teams not, do again, secondary do it's Jerry, planning the lot we that, advanced always support of then the that brainstorming we have a believe And of where would if we that a

Dave Sagehorn

And Jerry, customers and more that more one you of look some of that, you at of be it's from saw may customers, it things challenge puts this more That a us able order earlier up, we that terms kind we a But them, continuing quarter, our or supply the outlook saw the but just get support recall pattern it's we the time better last on approach. in we're good ramp get a have. in notice base if to the extent year specifically certainly the of access does help giving that ready system, two, the our with in advanced to little to a better as pressure to demand coming.

Wilson Jones

Yeah.

the Dave we last needing good order with intake just in through orders XX% order our to with where the we've we sit and call complete had down quarter intake The the the discussions going long there. a can into obviously, we to planning very of that and see customers and you have finished quarter and point. I on porch been think terms years, of short what a makes couple of quarters

suppliers of out only now several of quarters that a in off our planning not and pressure and stress too. but lot our operations, takes We’re

Operator

comes next line Our question from of the JPMorgan. Duignan Ann with

Ann Duignan

the were pick talk what just you about Can you of to little backlog just where in wanted access, sales sit and bit a given the about on up orders just there. I talking cadence today?

Dave Sagehorn

off It's Ann, is cadence No through year. think the typical indications normally we're we expect drop and bit. quarter would seasonal that going anything to QX standpoint. going that little we to going to going see. lowest is QX up from to of QX probably be I then ramp the should that a different see the

Ann Duignan

exactly it’s little you restructuring of into to there, issues. uncharacteristic kind what and of have deeper restructuring and Oshkosh on the pushback the can And then just a dig timing going on the operational is of

Wilson Jones

certainly Two happened to that moving our question a we big with you XPO. we're One, really know, Ann, pleased good were, there. aftermarket as parts not we and one a what's issues. were

out to Vegas well. was move and went that very first The

the was to The Atlanta get to several out kind didn't months move planned. of expedite There There some was smooth with of the JLG had and our planned. that And several final issues keep than were of process were that as second move as hand-offs that, the some training some completely longer team new facilities from workforce. redundant with the issues you to And get obviously causing causing facility. last open freight issues XPO labor, all us to then going. Ohio go

sales to issue, production. that there Europe as completed. Those and telehandler to came sales telehandler quicker actually knew we in were than for We be this expected. that year. goal were our you the in we the that US. consolidating more We consolidating was side other moving in opportunity of know, going an get that The And was

did was these up of more Europe. thing, So more the we create ramp sales lines but were a US complexity as good consolidating and in it the in

has The are time metrics team right my from those the on fulfillment will I a main here. are recovery direction did in rate, job pointing prepared nice delivery. as the issues. in the remarks, I So, the And all done of two say

lifting at heavy us believe point. the behind this we So is

Ann Duignan

now savings? full timing the achieve what's year the rate And run to

Dave Sagehorn

this impact to and it's morning I for I we expected Ann, of that's that we're that going that we going of to see result, guidance year, reflected a to to that delay. have ’XX. start do as don't a little later little benefits segment. the see think less are bit believe we're a going going updated the this and little a probably benefits to providing we’re the in partially a them

Operator

question next Suisse. Credit of Cook Jamie comes from line Our the with

Jamie Cook

generally the concerned question, the strength the just have order strength a that would anything quarter? first most have and that you're back of it ahead strengthen the lead order forward, given you quarter, times the Understanding of of I about in you more rental or orders, first second how and national the you you big months, I saw good sort created whether was and market side. stuff then And ordering they do a about question think but ordering? on price guess like guess was impacts that? think pull where you nine in independents there said companies. that the increases in mix how customer How have unusual Are about aerial first share the thinking favorable to remaining to trend that was certain get the my from starting think I order they

Dave Sagehorn

and start, get if Jamie he anything, in can. Wilson wants to I’ll then

that similar to put it the of I number in of think we we a this see of kind more we we ordering. to those saw of few seen. things approach did time had on in you of one couple years, alluded in question another the a of of was more that the and taking advanced were to last historically kind number just we of were would a and larger customers have them and these their And an to some year a of order, decide what saw customers

here. So that play was at certainly

X. effective terms starting January or In increase trying ahead get was price increases? The price after of they deliveries to questioning, January your for X of were

as reflection in wasn't US, that So we in the not confidence this a -- see their think and have saw in economy. internationally customers part the strength it. it's our the well. just of their we did increased of that and a is overall, overall And strength rental market businesses only I

So broad that from it's fairly standpoint. based

Wilson Jones

think of national on Dave their we is, had to with add quarter, quarter companies in that couple normally agreements to we I the working the worked a us just timing last us. actually with rental into them that more saw this

from So previous thing that was quarter. that one changed

Jamie Cook

mentality, generally, when how going, because about And there independents then independents i.e., impacting the is the sorry, thoughts herd that's ordering, the follow? start nationals a

Dave Sagehorn

exercise with year. every go that nationals, The through them we

certainly as timing do. activity some quarter, the can't what them the going mentioned, there. well. I think that from are as saw in look when necessarily independents is We good Wilson We quarter we predict the at had to we volume there the in again

companies however we board. What I think just strong across of in did that this growth remainder quarter-after-quarter of don't orders is, through rental coming It wasn't sure we expect understand we the everyone year. with should magnitude orders. say the was the national the make

for of So year, cadence year, guys vis-à-vis big -- certainly positive. year-over-year I to we timing but overall the very especially the is with where the I down they last think, would slow little orders a of did the expect think some bit, placing

Wilson Jones

Yeah.

customer think said earlier our we're the mix you through had year. a full year we I Dave, and in Jamie, expecting, as similar it CIRC last

Operator

of comes Global with Mike the Seaport line Shlisky next Our Securities. question from

Mike Shlisky

of line here? up of can kind has defense, kind In the JLTV for backlog there of of of how just the that kind top here. are rest Besides big done remind in left, of the the the model cadence there any us, ramp year the kind JLTV, lumps of the

Dave Sagehorn

it's those to No going to sec, of kind QX to just in of see, but I those versus quarterly going going through QX, don't flattish think think three stand don't three. others, going from in to is at cadence the out the quarters. on, standpoint, I really it's one across general, out fingertips be I quarter a think be just you're hang largely numbers have a my lumpy. I real Mike,

Wilson Jones

other. Versus prior each year versus or

Dave Sagehorn

No. Versus each other the within year.

Mike Shlisky

the generally, then here. [indiscernible], you outlook the point but of secondly suggests in high just kind slow the that talked there, of the down of Got that segment. is going you. for year fiscal And that kind And QX to it’s from to commercial, XXXX

that’s a year, changed of point anything it here there is So, order cadence but of that year’s this the was and has a on mix strange bit last that else little high it’s kind lumpy segment? where QX obvious for going

Dave Sagehorn

so it's think last really this reflection a of year, I not much year, Mike.

did QX, we last recall, QX. order you pause that As have year an both impacted our

QX and last a You in year. catch saw of occurring QX bunch up

dynamics, to But there. things really that, changing going about nothing distort whole when really throughout is probably that's we this than fiscal think other year. market So

Operator

comes question of from Stephen with next line Our Volkmann the Jefferies.

Stephen Volkmann

sort quick of one follow-up. So

reserve in that legal there some Just were higher and adjustments. you mentioned release the inventory

put size that Is in around I way access. that? to that any Was material? there think a was

Dave Sagehorn

of we We was often quarter about all probably them this and biggest What Steve year-over-year was helping everything that same around quarter. a we really we kind The direction, more terms saw was should the amounts. what talked that add to of and move none coming. was performance it in component see, driver the in knew you the seemed call them of every out reserves than that describe segment. but large of we not, none move significant, together, offset felt quarter Typically, material when and last things you'll move

Stephen Volkmann

change opportunities? repatriated a picture cash And or you And that question, and not I rates you way do return have you a more of your shareholders? think tax of widely secondarily, to view of I just of do your environment opportunities Wilson, internal strategically? change now raised then the hurdle just available? I'm change you suppose external are little more look a tax about little investment a bit due to more estimate that flow cash it then for mean and type How will obviously, of there curious, maybe in that becomes you does better but the or big any bit that's maybe

Wilson Jones

Yeah.

from with robust a I with. think Steve, allocation it's regular a work just going capital on we're we that board a to process basis stay, process, our

$XX it's us, For million.

not allocation to as previous yet, from but significant of any it's our things, divert in of scheme strategy. So it's us the make significant,

course. we're to going So stay due

having the We'll over not thing. bad keeping the as want a years, we goal continue. year. said be repurchase Dave opportunistic are come every those is share our some cash and to with there our about, count see focus continue dividend mentioned we've year As to shares then so when opportunities our of out level. and raising We if this keep there We’ll to opportunities. some

Operator

comes of Nicole Deutsche Our the Bank. with from next DeBlase line question

Nicole DeBlase

if what you year continued to I'm to is you there costs you have start new rest with pulling the I year move full guidance, together how Access. just the my gauge to and did that inflation, guess about for relative is trying I thought to before? And risk of much continues. question the when guided to So want scale had embed any material Just higher additional

Dave Sagehorn

there we pretty expectation I half would cost consistently actually say seen, a talked we believe the take is everybody but to a material in the mills to might year. a of Nicole in little. half that out additional But consideration hearing did are second the we -- talk seems general, see they're down there's that we're requests, price that to year. steel see of an drift we've what to going second steel into People we in what where have cost increase with that tick down the

Nicole DeBlase

And like pretty then you're nicely, up up the for backlog F&E, but year-on-year, guiding in shifting revenue flattish was segment. to X% think only I

So I'm some it's just curious just to if conservatism? the disconnect there,

Dave Sagehorn

maybe standpoint. Nothing lead or other from say sticks times visibility would timing. out from long the I way the benefit good we really do and certainly and one that

So, timing. would based thing are the mind that production only to standpoint, just be we on a comes scheduling where from really

Operator

Dobre of comes question with Baird. Robert the from Mircea next Our line W.

Mircea Dobre

mind little like in something to quarter. billion like for the my orders one. to quarter numbers this wrap you a find is X.XX had and back to of correct around. here looks are ye here, want hard a well I’m I tell me If to math access orders a go I'll we anything my as And that worth just that

past of or think get first of But Is understand something the of something sudden what is the maybe materially so? seen order a in the in expect decade things this, range? changing some your we've even question full-year versus structurally between than quarter. we all about different historically, the cadence, you end my you high that Should XX% market just guess the in forward. XX% to that is anywhere been I So have I when pulled order

Wilson Jones

No, Mircea. -- increased confidence think the it's confidence market. what I in don't I the has -- think changes

seeing that planning, we're then some they next getting getting the of and are I little couple think more bit starting into commentary replacement a you're quarters. also the planning just -- you're having advanced is better cycles

it structurally, either benefit anything. don't So didn't pricing was or forward we not orders that. to see like anything one – pull around There

is starting its commentary we're the hearing and believe really replacement then is more cycle that advanced we planning. is there So just

Mircea Dobre

me would robust I demand that you're orders for you're to if argue continued to deliveries with imply means any get the corollary that of going pushed going guess are running this out. taking, forward? maybe rest here new significant How and is, solid, would you be backlog year, this dealing that Then for this pricing that the for a really with that which pretty essentially is

Dave Sagehorn

of of year to occur to need and fair deliver and was still amount we the discussions certainly start, there through lot here a to I'll to again, rest year. the continue capture of need timing a the orders some

you will but and I still You the fair hear does the QX June really of yet there's overall, the QX a certainly through capture us today, think year, about the orders for all into talk year. into and time May, get timeframe to amount decide but that take us backlog the

Operator

of line Seth the from with comes question next Our Weber Markets. RBC Capital

Seth Weber

cadence certainly for the the should about margin I implies year. margin a big at get guidance and pretty Ann's your year, about access restructuring point, we wanted XX% to how of because be question of the half here, the north some back to go back thinking to for to incremental the it

I'm out quarter So at get to there kind of Dave? Is the model in all not this? quarter there the X.X half Or right the trying the help how assume you first from are to benefit any XX should large? that figure we the second if year, just here very way in for and to to could back then that is incrementals in the just

Dave Sagehorn

a it give shot. we’ll Well,

we you quarter-after-quarter is material going drag impact overall, should year, go at by there. really the through couple as the about the high things. the improving level, a cost as incrementals from I lessen of year-over-year we through go think think to One, driven

will certainly help. that So,

You had benefits the upon touched restructuring. of the

more QX, of think of we’ll that little QX. that but -- a that in and in see so I of QX more

two the big the of those incremental remainder would So of how are really cadence the margin drivers view driving the for I year.

Seth Weber

that's -- it? and more Is do of aerials the an come a perhaps goes bit that in half back year perspective towards usually that assumption independents from telehandlers. sales as mix kind from the and just a the well like they of part little better from the your is perspective, of versus back also in, margin And

Dave Sagehorn

of pieces couple there. other moving a Well,

as to of heavier the see did year. be that's we a first saw -- the mix think NRCs. earlier in quarter, But So course going mentioned the of we do the in call, we the over balanced we

know, as saw we yes, of the mix one I going then the heavier believe go go seeing three that's differential do and NRCs the the actually a other drive of you So to we're telehandlers line. be we things way, in between we product mix we IRCs because standpoint, there remaining things as platform than was, probably first out a think to better for will work is product -- margin there and And demand called telehandlers through the aerial quarters quarter. from a

Seth Weber

Right.

So of back half the you don't expect to that by normalize the year.

Is year. I’m So that you stronger the what telehandlers think are for hearing?

Dave Sagehorn

Yes.

expect you pretty we at quarter, – For there first wasn't decent of the the look year, they remainder if the both percentages. grew -- because

aerial remainder platforms. We the the to work growth telehandlers of than see year going in stronger in expect for we're

Seth Weber

I on it think business, wasn't the defense some had international it just a big then if ask number. -- M-ATV, you don't was but can know I I And

parts high the So there first in higher tweaked business Was contributed to the quarter? was there strength. anything really else margin here something that that the or margin

Dave Sagehorn

quarter. on What than last was deliver the to XXX in more M-ATVs there call was the we said

those So delivered. all were

the The execution other thing just I remarks, would we the out the the, mentioned call of overall is better segment. in we out prepared saw as that

well. focus and John So team. some the their kudos through quarter on continue of that to efficiency we in saw Bryant's They improving as to operational come

Operator

line comes Our SunTrust Brady with Charlie Humphrey. from of Robinson question next the

Charlie Brady

I'm than Europe? over is fundamentally you currency how Europe be. helping be terms ’XX? kind access on bode again of remainder that of competitively it was maybe of little wondering, yet in bit market or here. thought you is the thought stronger was there a going to you does in just is and Hey, you maybe talked, was for fiscal it going talk the just to just than it stronger You Can it

Wilson Jones

Yeah.

wouldn't other I market just say there's I anything would think around America up Europe and the to. is increasing Charlie gives North are confidence much than some. and us structural more outlook, like strength levels market outlook. growing is picking stabilized and Europe positive say a I

Charlie Brady

it be, commercial, it or as RCVs outlook a on function like it and what of I or are else follow-up giving through you mixers there is in saw whether for that quarter sounds just just quarter a higher though maybe a pattern sound I comment was think come might than confidence. your to RCVs ago and here they thinking are, As the Is the something stronger -- you that’s tied it what's what you into the order not, that?

Dave Sagehorn

was Charlie, take to to the really range. adjustment the we made sales the estimate previous high of the end

the normalized we out are to the their would was, really in guess put that activity it I customers. by is I and and teams what it range even in pre-recession quarter we say confidence we not more So say back was a still that hearing driven that's saw from our mixer in levels. would have where initially the I

a team bit terms in I to what sentiment the customer quarter. the they overall, telling that little but just first say, better So on of would anybody don't as in things from were, want one, experienced kid is I us,

Operator

the from [Operator comes next Lynch. [indiscernible] with Instructions] line of question Our Merrill Bank America of

Ross Gilardi

of. which comments, I have addressed the guys You opening might this in missed some

access you in are apologize advance pricing. I on did, So but saying you so if what

or you the your or looking But You were what it, of is incrementals pricing? for what the it to happened Did the get year, at you beginning get soft were still to were price first with in looking trying quarter. further? ratcheted your to that hadn't for were support the you for is there what for determined indicate even though you have increased cost pricing year, the even you competitive seem be pressures and presumably assumptions up

Wilson Jones

announced NRCs effective for assumptions may I'll with some quarter for and the year. -- the and went Dave discussions increase off X. you know, we difficult. discussions, through price as Ross, the commentary What Pricing January IRCs our good a based start and have and pricing on are always

it’s forecast. we you're of but get what did good trying we You sophistication pleased okay of like to they reflected really They have exactly that our markets, mark understand and financial some level that is costs. of in up good. our done to obviously material tough that's that we're mission customers get, think understand we've we things and One is know the thing don't always years, that. a couple work They

forward. pricing table So good there's and going understanding going there around think on I the on discussions a good our

we where are you're on feel totally pleased okay. So, do never with like we pricing, you but did

Dave Sagehorn

to delivery price maybe clarify, Ross, effective terms X. in January wasn’t increases the our of starting fiscal first just quarter, And until

benefit knew the first from we weren’t we in price So fiscal increase to the going quarter.

Ross Gilardi

guidance I is this almost question, your up ways, XXX you've for simple up $X backlog real touched And you’ve many million. in billion revenue access and taken you’re your mean

up the is is disconnect you've what like two of Because, revenue already you what said, quarters be So to covered. revenue close got more deals there? like substantially asking? Would I’m

Wilson Jones

their that although Yeah. don't much -- we’d love large was is to Good that business. Again, have the in quarters and question. said market What expect order our largely the we've we confident the rest believe more timing of We quarter year. a customers are that, with the we through today the don't intake issue. like

with planning along more what a we doing has at And good than going cycle we're change They’re their a business replacement time. the patterns, so in seeing order are now annual is out one there little purchase agreements quarter some believe started. around

is more the we again, that quarter we have we're not that, we timing of but the issue. one like thing hope a that quarter really we're I'll wrong So order next that's quarter on that. honest, look and be at intake expecting another

and we improve call at would again be things really available, there's we in that So more address and goal Obviously, the May that. June created us our point. about tell and to that's the orders guidance that what's continue on if always a lot this market would talk

Operator

line W. Our next Mircea the Baird. comes of from question Robert Dobre with

Mircea Dobre

just tax comments the -- FDII perspective, progress foreign sales? to with might with some a the curious production maybe defense just on And excluding anything you would US quickly, related your for to from incentive JLTVs international that Very apply or there. FDII defense sales, else this, I'm have

Wilson Jones

would answer normally today. but to I'm going tax I Okay. the defer question, that

On went standpoint, through couple different from a the a contract international with opportunities my remarks in sales, we we from -- progress good there. defense we've seeing a of gate. are I mentioned standpoint, another good prepared

feel the that but international our what going we in about we’ve like, the side, see materializing, definitive international So we at in we're but nothing interest Mircea are those about time, than is, JLTV, scope. M-ATVs more this talked be it's in to currently much just

Our for FHTVs, too. FMTVs, those needs our there's internationally

sustainment, so services, term in term then more we for even in with that and long international the JLTV. our opportunities very couple positive So so short about the remain with opportunities still

Dave Sagehorn

defense FDII Mircea, full will tax that's saying, I of it not is on but FDII understanding income related FDII you your or to from sales. certainly job, very sources our at the selling, what my around from lot preface income. question, foreign tangible. income about generated it's my beginning on A intangible impact time intangible if by we're is And more of think

Operator

with comes question. final the Humphrey. from Brady with Robinson Our Please your Charlie of line question SunTrust proceed

Charlie Brady

get in X. you Just you access QX Can on pricing, what the had you material cost you let's quantify a you neutral you quick get. starting one, back assume, expect material and with impact the pricing. cost Are on -- the material to January in headwind are

Wilson Jones

year-over-year the in Charlie. at So look QX impact we

year see. incrementals you and material we're for the we of pricing standpoint. about And be, saw material decline the forward, related If escalation we the than a cost from that of largely they additional normally then neutral where might half to we think believe more what looking to cost with expect was remainder the

Charlie Brady

your in decline baked potential in the cost, of you costs, a And talked correct? just that to not necessarily in terms in clarify, second guidance steel about the an increase steel you’ve half,

Wilson Jones

decline baked say, large are a a there's but factoring in, not would I lot either. not we in

Operator

are this time. any There closing remarks. back questions turn I Mr. call further would to to for like at over the no Jones

Wilson Jones

all Thank the for you, and in thanks Oshkosh interest your to Corporation. operator

value. customer forward exceeding Have you with good strong investor Thanks road speaking Oshkosh, your in shareholder on we’re expectations day, We doing to look everyone. time. a remain the Our conference. an for focused and on delivering team will

Operator

Thank today’s you. This concludes teleconference.

day. You may lines have and this wonderful your your at for you a time. disconnect participation Thank

Oshkosh (OSK) 25 Jan 182018 Q1 Earnings call transcript