OSK - Earnings call transcript Q1 2019

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Operator

Greetings, and welcome to the Oshkosh Corporation Reports Fiscal 2019 First Quarter Results Conference Call. At this time, all participants are in 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, Pat Davidson, Senior Vice President of Investor Relations for Oshkosh Corporation. Mr. you, Thank Davidson.

begin. You may

Pat Davidson

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

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

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

Wilson Jones

start way $X.XX year Good revenues, adjusted earnings increase A adjusted where operating share. performance achieved XXXX per in great the and Pat. another year great share, prior over of following to quarter. We're a income a XXXX per announce in pleased everyone. to with we quarter adjusted highs morning, Thanks, XX.X% earnings near-term strong

our the Our metrics. team stock demand Feedback some of and positive supported remains our of drives expectations is sentiment the results businesses for for upbeat, culture company customer Healthy outlook reflected favorable an delivered improving regarding solid and contrast energizing the across an by and end-market continued is impressive in and the quarter members. XXXX, all four predicted that market across outlook economy. customers strong team increased the backlogs that segments demand. from in engaging to and their our headlines customer direction motivating This our

all results segments. in led revenue strong this of quarter margins Access & income gains Equipment segments. and More operating in operating and double-digit income broadly, by we Our Fire higher delivered were our our Emergency four

a result of to start $X.XX. are As begin more segment. to expectations off, business to it I'll for of segments. XXXX typically for the Equipment our expectations XXXX Access discussion start detail in range to a I Please year for section. with improved slide adjusted segment, we in turn our his Dave to discuss raising Equipment Access per share do, and positive earnings $X each our will outlook of the a in four our as our

by North in sales more regions, hard XX% led than higher Access of sales telehandler America. up Our achieve growth all worked the Equipment very in team revenue with in to quarter

as billion us into segment This firm first for believe highest in quarter billion of than of the we the billion, this did of demand of strong to we year However, ever orders first year has the XXXX bookings, recall, puts time, than surpass for first If equipment. continued quarter that $X.X higher you which did $XXX not year access the the exceed than that throughout quarter last $X.X you and more we on XXXX for last we expect more move for reported million quarter we orders $X.X reminded footing a at quarter second reflecting year. figure second backlog the

rental positive We evidenced access continue to the equipment volumes the benefit and around most and sales the conditions market robust equipment supporting America in the from used quarter. follow America forecast have and the construction in rates, and healthy, in that activity the North globe XXXX. market North Utilization strong are for regions seeing broadly as in by rental orders all views we rates, on we remained

our we faced ramped overcome as and the made the build challenges world's have best great they strive equipment. XXXX production has to in staffing-related team We we access as progress

has the workforce call. maintained our business gains stabilized last has and on discussed we productivity the Our

standards We Many of products continue is December experiencing already from new XXXX. combat products States. our starting the of effective ready confident for are built new periodic some the still of our ANSI and our to when suppliers the unplanned and all December will work units disruptions of of are that be new challenges. be effective. standards those standards updated publication we'll with in United platforms are for the The brought in we will compliant ANSI recently standard aerial new

standards, to the ANSI Tier the X as nearly recall to reaction standards Tier of expect or to be transition those market don't impactful as X cost emission For we you the was. new the who engine

for we hear dollar has aerial the commercialized started become John proud to XXXX ignited Grove spirit years he a since in the innovative team Finally, started a as the segment. XXXX. in received examples order a new innovation number next XX number five they billion see to Defense right whole of when takes associated that and platform Please L. large early exciting and on first and sites JLG and defense through will slide innovate that rates we continued over JLG are fighting our very out foot the back celebrating products X,XXX really This has to discussion backlog introduction the off year of industry JLTV the team production years. of and one couple and global more to you kits. work safety JLTVs launch to be order improved on the culture services and multi-billion grown a of a The JLG $X.X The of industry. when turn for has job the

had U.S. Our this add has Rate in will the Previously some to mode we the Initial It until early Low in summer. address as vehicles. a JLTV spring out content the Program sometime request rate or has LRIP been production our been Office that LRIP phase. to full we Production update move Joint from Military's later first stay expected to pushed to but design bit to that the quarter, JLTV in the or

program. coming of the in finalized them materially and production the expect moves members multiple view The international opening new eventually defense a our not changes impact We can as segments. modifications the Tennessee. both productivity be to in team remains of minor negative facility months decision employ labor market with to don't serve Jefferson segments. and impact facility these and execution the recent of example orders but the access and being Oshkosh to approximately on these most for some as a expect will enhance facility team we be to do City, fabrication equipment full opportunities could timing strong and XXX program. the long-term out There fabrications This Tennessee interest rate international international Defense supply opens to to continues up

we government federal few questions shutdown. regarding had Finally, a the recent

our any issues any experienced do significant not for anticipate and have defense not We programs.

delivered Let's last class case turn to the several six emergency sales with years, the products quarter as emergency the margin efforts. fire aerials year-over-year they been the to has new team continue This in & fire Fire slide and another popular very & to discuss have the be growth proven for of Ascendant simplification of segment. department.

tax stride apparatus fire to found domestic the have people at a headwinds budgets consuming need remains continued in the fire market grew continued aging solid industry larger pace receipts municipal There municipal seems portion its that from addressed. is costs, be but view XXXX. to have and fleets to healthy and apparatus be a of grow to as Our

third-party in segment. unit in over building a when is be blocks about execution has continues market we'll now initiatives a year seven mixers vehicle much we that different place been market business the housing are a place The Multiple on even year to XXXX. doubt their refuse construction averages. note about interest commercial not for support about there mature. no the we started favorable already, slightly the structure collection for results continues that in Please and off outlook, successful market strong turn market commercial time segments, at and talk that higher for cautious XXXX market. seeing We earlier and attractive. below new long-term as market but put remains better levels but are concrete volumes rates for forecasting in from our last quarter initiatives. benefits simplification rising Like of The the to impacting slide expect we're projections is is Their a talked their and to

of Another factor suppliers it impact problems for issue this to we don't to a expect are year, lead the but times delivering material on availability. do for experiencing extended and full chassis it the chassis have We Chassis be time. segment some is chassis expect QX.

at they minimize this innovative to sum the of on functionality and so with the of well we the closely up McNeilus These more with opportunities World safety. leader they to trade working in mixers of as McNeilus concrete leadership position this Last with additional are operators leading to give greater improved functionality the it that to for in show we strengthen end we in enhancing flex that and continue data greater customer the segment. We category have controls. higher is delivering, Las control, quality are could productivity business. confident be week these controls tools and a To suppliers offer. tend in Concrete impact support introduced new additional Vegas loads these our as satisfaction the

drive detail. segment is discuss grown financials that to up team it to outlook XXXX. for support our We business That greater for for that Dave have continued our for our a wraps four to has and over hungry one in improvement, this I'm stronger turn outlook XXXX it going positive that segments. to

Dave Sagehorn

recognition JLTV Equipment segment We're eight. the segment. to the Please start year Thanks, a slide increases pleased cost digit material North everyone. move compared higher less segment higher of was a was Access were the the customers Equipment the Consolidated X.X% Access mix the year immaterial reversal. quarter. related contributed more sales by impact sales include telehandler expected increase items non-steel continues were recognition recognition Emergency & full quarter offset XXX favorable $XX or and debt were income the by to to the of company the the all year. emergency sales standard. compared X% Fire segment million earnings the impact rental also continued this to year. X.X% main higher $X.X Defense's year standard to or basis from million into the prior Higher team XXX business decline. for of and prior significantly prior volume in compared application the favorably the due approximate margin earnings expect call. sales adjusted quarter sales of application to American Fire due product from some prior segment completing of we as margin of pricing Equipment as program year. earnings respectively operating prior contrast of cover production increase noted Consolidated year. and led quarter a income favorable impacted package new partially and from compared the prior recognition applying prior experienced the our this standard. quarter was to of down lower income We the prior operating compared the Emergency of increased growth sales new up basis the of of the international to million reflecting driver up impact lower by XXX the unit included new to revenue the remaining mix positive $XX to the standard added turn We've rates were basis volume $XX new that cost sales third-party amount the sales an a recognition was income and the Higher standard although Access Operating the standard in was year million, & up versus approximate these quarters increased operating last income and margins approximate on a grew year. million operating segment segments to year million points where increase & higher last sales higher $XX.X mix a less in XX.X% be M-ATV positive the the operating increased percent sales Commercial Wilson, negative than compensation Fire four prior the this income was revenue body. the benefits operating new the compared revenue and margin Partially improved operating segment slide XX.X% the XX% production lower the new revenue This good no X% due for revenue level. units our $X.X income sell year, XXXX. applying Commercial segment's and Defense this material this to billion, an $X.X the to actually million. post-retirement good significantly detailing Corporate standard. Price quarter impact sales ramp reflecting the of and the prior adjusted also results. mid-single in margin. as And XXXX Defense of year, application an The new chassis a prior that the by to application earnings by slipped revenue and of in $XX.X higher for sales to XXXX reserve production expenses to significantly than to the to first costs sales slightly Favorable bad operating new were along points net for million earnings and income the or on versus quarter, to XX.X% the to were million the was the grew conditions expenses reflected operating Results of operating million announce inflation implying as Adjusted to sales the $XXX.X up sales favorable both $X.XX from now contributor per of share-based year morning, adjusted income three quarter more $X.XX income was applying in liabilities. $X of to dollars, largest income income impact year. In year. the this sales. year, standard. warranty that income decrease lower points contributed favorable expected than operating than share per impact doubled quarter in to lower of to the a and offsetting was operating Defense new over Higher nearly X.X%. from segment prior share lower with prior compared fourth the year benefit $X we quarter a operating

$XXX target. million by in of per months. for in last fiscal segment as result positive Please repurchased the increasing segments outlook. turn from completed as of slide range standard XXXX. expectations almost of shares the share the We're remain share the and for these recognition a as a benefited year the result Expectations to pleased nearly improved or our expectations updated application year. a $XXX the full XX repurchase expectations Access review last for to segment. for adoption for as XXXX earnings our talked also new call. start our for quarter quarter of X.X quarter, estimate XX of million be our year to share that year first about a repurchases the million reflect The We original half Last updated of reminder our Access wider-than-normal we Equipment unchanged expectations other our and this the A well Equipment at the beginning for revenue $X.XX

segment's increase positive XX.XX% points experienced income margin the range new range to rental of segment the and sales XX.XX%. narrowed income both outlook continued low an to from new raised estimate the high on volume The on The the quarter, million the XX estimate JLG and represents This of reflects billion end strong customers. new estimate in this the order operating sales hear range $XXX operating $X margin quarter, to and is increase from end. of the ranges. range $X.X $XXX and As end the for basis from we high-end. we has this company The points XX the the exited its is previous low range and an million basis of billion,

on million as we estimate follows: income adjusted an sales end. changes, to expectations the estimate low per As share, end. range $X.XX earnings to billion of high $XXX end of $XX on these estimate and increase of share is $X.XX operating a increasing on million, high an share are $X new And new and consolidated million the low $XXX per is -- the per the $X.XX result $XX range increase our followed range million $X.XX end of to $X.XX on the the the new billion;

to prior Our modestly unchanged. and that to earnings second on share higher free tax outlook, expect including capital expenses, year we were few adjusted compared last several cash don't sales slightly other this drivers flat and repeat higher quarter the expectations we expenditures, second count rate, earnings comments quarter. to expect remain year's quarter A corporate to There flow the year. positive

for impact the to back some results adjusted to we going XXXX's you prior be closing our chassis for remarks. there be turn adjusted that quarters than results. some in Overall, per over expectations to availability mentioned, XX% year XX% share however are I'm this quarter higher issue it raising Wilson expect will year; earnings year. also lumpiness likely full Commercial the to compared Wilson to We segment second our to

Wilson Jones

that to strategic Thanks it start smart get to proud priorities will very and XXXX am to of stakeholders. and drive and Dave. to to strong our full XXXX confident continue We continue announced over working a I'm Q&A the drive started. to value Pat for we're we going team our turn execute on to I hard strong back shareholders. just for our for and results value all I'll year

Pat Davidson

begin Instructions] [Operator Wilson. of the this let's Operator please question-and-answer Thanks call. period

Operator

RBC. line with of comes [Operator Instructions] the Please Our from you. Thank Weber question. your first proceed Seth with question

Seth Weber

guys it looks year the coming year are on sort to the you're the margins good quarter, -- full like off suggesting target. be balance the kind strong of Question to morning. to -- access or know of first going down year-over-year margin, you your high-end for Hey of flattish of hit that flat flat your

question. wondering margins of why So moving Thanks. had away kind you manufacturing you're better, of that and better I'm year? getting if some First cost from last price wouldn't the challenges be

Dave Sagehorn

couple on One, recognized fully, one, we recall that specifically of last profits -- things off of so deferral a item. several one-time quarter favorable paid was Seth, did there; you of was second the customer year we a they and have us that if in we of adjustments. a kind

in last We year. quarter also had reversal a second bad the debt

So combined million year-over-year. probably worth $XX drag million $XX to of those are

is year a year for remainder as mix mix profile work the the we a see different standpoint, telehandlers component. thing than margin you that the look little a of know of other for the are heavier The outlook the to and believe little platform going that we from of we now aerial as remainder at the

Seth Weber

you increases cost? I material cost talk But, mean, feel just inflation you is you on the better things cost higher are you that cost like price Do this price covering the I higher surcharges? – getting in like that? materials here. you're your freight where I with would about can Are point at Okay. the mean, think

Dave Sagehorn

Sure.

than So the recently, But going a and would. quarter. ended through is some And cost we we look items But start there first way we'll better our six about that, and down a – think lag up we of and to rolled plate, in seen we still steel steel be just actually of probably believe as neutral sheet when statement quarter better items it see like the steel buy. we so of entered – ended through the related ended we actually at at some five we to non-steel start come couple than effect and come cost. It and we between timing plate right XX% up We've between second we the higher thought secondly, is up specifically That's stubbornly then plate down use QX a that where than do on we to month before at a little we looked it fiscal we cost to see high. come coil through or to remained largely a was neutral, one QX we little thought related hot more we're the was it's overall, about flow XXXX. we has sheet price lag into to everyone. sheet we as that to it's beginning where steel income net a that

is the in if in we neutral sheet standpoint benefit see continues its overall might So But to from benefit at a year. still, say and later this our view the I levels some segment. see stay would price some we cost at, if do

Seth Weber

if think Okay. the with follow-up you’re I Thanks. up on just year-to-year. with a exiting access about first revenue then X% And quarter – I question could backlog

X% of I balance to about the think your for for growth forecasting You're to range. year the get the of end only access high

just I'm those together? two to So Thanks. trying numbers tie

Wilson Jones

teams a most really, be want working up let issue. the total we our market coming with into done to we good how ever well price our the tough our going are the ownership jump know with the cautious pleased main knew concern bit I'll closely we were that. we've the and as and We being understand were the that flattish reason introduced started those shared When to importance Yeah. they've were know are model then that that, we that and customers the into the helping these the real. But in on of year the we and costs negotiations. supporting and with year out of little about rental cost I work price year is them market our significant possibly going Seth, you access cost increases

So weren't expecting that to be – we that successful, but that we we we're to to today back months. $X.X slowdown are starting going was the team today, pleased quarter very call are have Obviously seasonal has where down the one previous billion we the to done utilization advanced will order a really are. where as go nice job. through But where the know, winter the you

XX at our minus thermometer here Just it's in here today. looked Oshkosh

we going from going to I'm you what work So able what But forward to is as improve construction forecast forward. the customers our adjust ARA the show the half. for and know That's you're we'll, as as to today. in going our we're see now this expectation what have to AWPs we're Obviously, the rented the in of previous is years. today But spring that we looking to know, season. lot be there's start be to guessing always we our possibly where seeing not prepare is area upcoming back customers for what

Seth Weber

just revenue the is seems kind just for it like like access that. outlook appreciate conservatism I it in there Well, of guide, seems the backlog the and be could No, given all. some Okay.

Wilson Jones

there you're into negotiations market we going other half a then yet, that come hope as there. that still are haven't may conservatism the hope's with back have strategy, Seth, be opportunity the planning some on. the but customers Again, that There's the there. of we right, those not And year. progress And for we is some

Dave Sagehorn

lot, Seth. a Thanks

Seth Weber

Thanks, warm. guys. Stay

Wilson Jones

Thanks.

Operator

next SunTrust. Our with with your of Charley question. Brady from question the line comes Please proceed

Charley Brady

Good Hey, guys. morning, Thanks. guys.

out commentary the the production. of positive DoD? margin the for get about changes Is defense any margin impact incorporate from impact the rate on push the design kind there having you -- to you're to full on Just

Wilson Jones

impact. margin no there's Charley, No,

Dave Sagehorn

We'll with the that we'll what with DoD is, that will contract for negotiate all So that they the Charley, paid what for government what We'll don't work want finalize we'll get but is currently, to vehicles content have be mod. added. add. content do on we'll a that pricing the that. That retrofit

Charley Brady

when Or Okay. is, planning just wasn't in changes DoD for guess I'm what were original expectation from margin in is about I the kind your JLTV? saying you anticipated? this come were talking is the new But these what that's something that of

Wilson Jones

would marines. is say, our where design, vehicles soldiers and customer production you testing kind is for to this in dialing the a I success Charley, tweaking with a best perform the have really it the of initial low-rate really and

normal And so it's this is we to add retrofit in types then we content point, program And opportunities to good, also. a Dave's make these of have adjustment. and

Charley Brady

you as think impact quarter Thanks. here out beyond just pushes that Commercial? a do Thanks. And chassis can what the could impact? Okay. be on the a the on that follow-up And – second you maybe quantify little bit more

Dave Sagehorn

we do specifically do We the the telling based largely product full that of it's quarter. up mid-single-digit little low impact bit now, on Based expect results. in it's what the later But line. the to year. probably on year significantly will make not part concentrated disruption, impact of of a chassis in some is to million-dollar be Charley, OEM on expect to quarter but know And on the and what there it we refuse team one with the us,

Charley Brady

Great. Thank you.

Dave Sagehorn

Thanks, Charley.

Operator

from next your Citi. question. with question of Tim proceed line the Thein Please comes with Our

Tim Thein

with the cold morning. complaining weren't the Packer and you sitting the bet And good I about table at Wilson fan weather this Thank you morning.

Wilson Jones

Tim. got has it, do Somebody to

Tim Thein

Yeah.

on the implied for Here access. we go. Hey, your go incrementals on Dave the to back, -- just comments

estimated million. the to last – I were the behind think earlier up -- think of the mentioned year And you you. some largely your challenges like staffing-related back you the costs ramp to are $XX be that

headwind zero, should go that that is maybe to largely we So in reverses that XXXX? doesn't it but -- assume

Wilson Jones

to But -- those So was related restructuring and of general, us. because we to actually we overall call we non-GAAP, those be of expect program. do it some to largely the out behind last some those not in to those did year, expect Tim, we moved

continuation mentioned as to supplier declined. have think to the magnitude some the as remainder we're -- go continued that year see of remarks, of see continue a and we in as we well. do although we going bit But disruptions, of the prepared those has through the We of to see little frequency

Tim Thein

increase just Okay. flow something unchanged guidance the it it working million operating then capital call etcetera despite cash -- What's -- just is rounding the or the And what's or on that free is there that? offsetting against profits. $XX weighing to

Wilson Jones

around as assumptions timing exit the year. working we just capital so More

Tim Thein

Okay. lot. Understood, thanks a

Wilson Jones

Tim. Thanks

Operator

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

Ann Duignan

morning. Good

First way on Defense when Defense. that government make mean the is requests changes. the engineering money really their question contractors I

you probably why future So the out, margin wouldn't the is given come engineering know be anticipate low content, end on you will could changes that that of at retrofit? it guidance where but the also

Wilson Jones

the how don't significant to to of going it a plays there we the have we're Ann, in out be changes. all this quantity while At content of this changes, content. to terms magnitude expect see of time, are

here today, it. enough blend to significantly So -- when the to it's across sit the or on look in scatter program, probably don't X going certainly you billion we as program. $X move almost But that that whole we think at margin the we'll be

Dave Sagehorn

to at they're changes add finalized the alternatives just we're our think not and point. some I yet of at this customers And government Ann, still through just looking that is on these to working

Ann Duignan

competitor large have prices price come access on of opposed about Then telehandlers -- smaller ahead that. surcharge. how pull list to your then up deliveries as do increases? there appreciate price surcharges, talk steel on forward particularly list I -- side, the could you did customers your and down plus And quickly price you'll And list any to give you was if increased of because Okay. to

of So those just up have want to prices down? might you as come or to get back a sense quickly is should how remain give surcharges, steel

Wilson Jones

was pull It's the don't We believe forward just pull forward. Ann. there a

back telehandler last our remember we were If you consolidating QX lines. year, in

availability we products. Though in quarter -- needed more of believe we weren't we so be. capacity, as having market was the And uptick to as our to related the little a in having well

a forward was pull doesn't there. it wise, increase price there that So appear

I'll pricing other On about surcharges, again around the and some we lag talk on Dave the effect issues have steel of materials. let the

Dave Sagehorn

plate mentioned months to And effect, flow about I and we XXXX. through see it's sheet price mentioned the it probably is it's we changes it still began as just now Ann believe Wilson down, also lag as high; to while six fiscal I steel to where remains our five alluded and the the stubbornly above when we before P&L. earlier start was with in XX%

probably talking to quarter although continue to see it of So the will we'll this our and team are elevated not it that. was. continue hold that benefit on monitor it's And do watch much and time if and to elevated still assuming fourth we're obviously, as as continues will access that's year But costs that. we some as only tell where

Ann Duignan

My to quickly question Yeah. was more back to customers? will to how you surcharges up have your around give those

Dave Sagehorn

that yet it contact anybody going I'm It regular and on in and where We It's a to team to on steel back not Ann basis don't customers discussions up is, monitors – regular end in that is they're something stay sheet sure the on know is really a depends knows with going again? if where bounce price basis. it costs where up. our the their

Wilson Jones

I Dave explaining erosion caught helping add we pricing this to that – a when would tier done our we're had There of has nice understand up where job go oil XXXX, still back and our we dial to Ann you team that. and that in XXXX been customers definite not has again had gas changes. to the to back some and just there JLG

increase place. we'll debate be enough does far low our it so in as moves understand remain this move if standpoint. steel pricing The still from price down standpoint, even the point, will customers to a enough consider down it's have needs to But believe from our not discussions. I And those at

Ann Duignan

color. you. Okay. back I'll I appreciate get queue. in Thank the

Operator

Our proceed of next with question comes line your Volkmann from Steve the Jefferies. with question. Please

Steve Volkmann

to make this sure need Hi. understood I I Great. right. guys. Good just morning,

higher just the price think this I had that but the you you them quarter correct? with all increase took associated answered orders this, in

Dave Sagehorn

correct. is That

Steve Volkmann

I regulation deal, your increase the it Great. price ANSI will Okay. terms? on nearly rough to new just sense with know big wasn't what going Wilson And but as a then the said be you that in what's be

Wilson Jones

significantly that's it's be it's go a emissions. higher lower said said load-sensing increase without safety around obviously added on tier tire Steve the of run of because $X,XXX in testing And because than Tier content. we've just scissors than there's by a it we've some you stability think and Well, going significantly flat to again, versus narrow work lower change. platform tipping what for in. the some it's that change scissor – around But varies systems was if will really

But haven't because on we ANSI a are with we customers price again, are the those in finished. update. have models, queue, complete costs still those – with have introduced will of we said the those and that discussions a still we the lot go been ones on as ones pricing up the put discussed it's has been rolling customers and the on So that it, our

Steve Volkmann

color. Emergency, appreciate good quickly forward look third be and on impact as from accounting about should quarters? any Okay. the thinking this fourth is we be Great. Fire there change I & second, – just we That's then that third it. going finally on And to

Dave Sagehorn

little a Steve. There's bit Yeah.

the slide If you impact. QX we the impact the deck we year full schedule added that then at look to the and show

much don't dollars in Fire it's the after forward. expect So that going million then we quarter. Emergency that We & second yet. probably the here will couple XXX, all think most an in probably of flow at through segment impact a of And

Steve Volkmann

you, right. guys. Thank All

Dave Sagehorn

Steve. Thanks,

Operator

your Our next the proceed question Raso Please Evercore. question. comes line with David from with of

David Raso

All you. right, thank

giveback year to the quick of the business, rest next for to get cadence million question. maybe of modeling $XX defense full the couple $XX that the that of year I apologize, million of I quarters? your accounting what's a the The total, over giveback impact missed from First the just -- change that

Dave Sagehorn

quarter. to David going weighted the be more to fourth It's heavily

in think the in some fourth little quarter. quarter, -- in third you'll mostly bit but the I see

David Raso

increase sales, largely access equipment all used guide On the sales or helpful. aerials? telehandlers that's right, there was All the that $XXX million other midpoint-to-midpoint was

Dave Sagehorn

David, but It to was exclusively weighted was it telehandlers. not more telehandlers,

David Raso

it or new was was of sales So, more-- it aerials also

Dave Sagehorn

It everything. to It was item. was one was related not specific It everything.

Patrick Davidson

out, remember and David, press aerials. that release right, got telehandlers we've break in the

So, at indication. some should least that give you

David Raso

don't guide on you But the the-- give

Dave Sagehorn

Correct.

Patrick Davidson

Thank you.

David Raso

Pat The have were will I going guidance if I the a you up increase. me Because point say up quarter telehandlers tell to in to and guessed be margin. would XXX% that aerial lower is only X%

have to some exactly, sense at So, kind you're this because you right us little differential between the now I can mix. run the being negative between not is we'd than aerials higher rate historically give but I the again what were thought divulge a that that? negative know with a mix of was like with margin thought that I teles margin -- high margins a pretty least going and the impressed

Patrick Davidson

us for there a we're and there enough that's far as go. going you is It's that difference to as tell David to

David Raso

that. appreciate I

Okay, thank you very much.

Wilson Jones

David. Thanks

Operator

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

Jamie Cook

Hi, Nice good morning. quarter.

and of if teles in And what about Sorry again that -- sort then Europe saw as geographically in sort ones? the you quarter. could that saw then talk sort lead-times helpful. rental you larger you. versus back of as U.S. the the to customers would on Can orders about sort well the be of U.S. the you Thank versus you booms of customers access talk smaller just strong

Wilson Jones

regions customers purchase geographically had was when the also. our bit most; do and up America; which agreements. customers Latin The with it the IRCs order see. we activity the side and in were the a is mix in up that nice little up annual Rim America I obviously in but some were around good would up heavier kind NRCs of Europe would say too was a we say up, we Australia the and was were on to of I broad normal of globe we But Pac all North Jamie; mix

So, we we're quarter good had we've working to started pricing rental pleased dialing today, just with where discussions our this has to the team back with, customers. made, when were that we've progress our and discipline the that are been where with we we the

in quarter a not productive been and and globe America, I our just with it North think shows discussions for orders. it's very but around the customers

with pleased we're that. So,

Second question?

Jamie Cook

So -- sorry.

So, the customers cetera? wouldn't that think customers about quarter how fourth lines because could was wondering -- about one reason extended generally the different through? that year? in any they stronger et the I having is orders pull on concerns orders believe Are that the be remainder you're weaker about just product to my to based of Thanks. normal any get for how cadence seasonality the And the of do then conversations starting there Is across question there of reason seasonally is other are? lead-times are with why lead-times, worried we which

Wilson Jones

as XX on our they're receiving Well, you'd five out marketplace that in the the about they're accepted which expect lead been XX-day within booms rest times, large is months with telehandler to scissors, about a very order of window The to is some we've models. our today. all six

standpoint. delivery So a basically other from a in good we're than spot telehandlers,

as out hearing for next ARA customers winter this navigate troubling, not through what far looking and time forward certainly we're is we're half to going anything show coming As but our the customer mean obviously back and month to that's construction. at of the the that's saying, year spring what the as

So but call for next QX us to and that going early it's are be where what you. the to know QX we'll better be today, in call we for model just or to sit able

Jamie Cook

the color. I appreciate Okay. Thank you.

Operator

from comes Bank. Dillard question with next Our your proceed Chad of question. Please with line the Deutsche

Chad Dillard

Good guys. Hi. morning,

Wilson Jones

Good morning.

Chad Dillard

So you just a guidance. the question on for

maybe you conservatism? you kind of $X.XX Any would you in Could So it rev $X.XX. but explain some incremental be the beat by year Are that by raised X%, color just the about weakness super differential? half? seeing about this ex rec second helpful. full on Is

Dave Sagehorn

didn't best a is quantitative I Well, to me QX. guess provide Chad we place start to for our guide the

collective versus Street's think view. I is beat the So

we at were coming came orders where how know, looked the in. You access, we in for

else raised as and of for here. in. access of would just pleased in bottoms-up looked it it well out we're natural the was the said, And at quarter a we on range Wilson year orders is – at We that just the how mix. to was the As quarter came adjusting orders it those say evolution We kind the with the for the going saw what it tightened delivery looked remainder the play at I and of margin. We how in as we business. a how approach in the looked

Chad Dillard

increase your growth? That's line top you are just access prior helpful. growth then price incremental you us on realization the guidance versus X% walk about through And implies of the versus how of volume Can flat. this seeing just from much better guidance

Dave Sagehorn

you're pricing with. Volume of pricing play what high is And I certainly out would the would increase to think the underlying that. line is the price But that Well, I that imply aware is overall does a major certainly to component look overall that. up came when we volume at surcharges on top end a a little. and we say component

Chad Dillard

much. Great. very you Thank

Operator

question comes proceed the Dobre next Baird. your with Please Mig from of with Our question. line

Mig Dobre

works XXXX? of that Yes. pricing Good XXXX. were is consistent your fiscal your I'm the to than on how November in horse orders are I clear morning, placing dead orders to this guys. QX beat Wilson sorry in Or customers from the pricing year? in XXXX to fiscal terms sure Are want make just say and priced December rest that XXXX that in QX or placed differently your fiscal of of this of the the XXXX January

Dave Sagehorn

delivery. I'll Dave Pricing based around that. its take of timing all is Mig,

after access then surcharge we're associated have And segment specifically March and had last of to… anything talking So would as here. relates year the it

Wilson Jones

Any that orders backlog. wasn't in

Dave Sagehorn

think as yes. deliveries announced January increase that Any it X effective the September for relates And I on to timeframe. price order, permanent that in then was was

January October, orders at in all any be December placed was it starting the pricing. So January or delivery same would whether X for November,

Mig Dobre

portion Jerr-Dan, on that with other also of this selling. kind you some little really What's you bit want Can maybe ask segment. talk a in I I the you. year component outlook? got and to going embedded a that That's Then you've it. know quite in quarter. of elements there the good about is your Growth question other helpful. there in all Thank Equipment been have of this you're a Access got has about Got business, what's the some there? full you've things aftermarket, especially

Dave Sagehorn

that really we very area growth. success there. and But the demand wouldn't biggest we're like conditions for a that. don't towing recovery strong big of year-over-year. that was job been necessarily where And lot. I team good a the probably weather saw probably are weather that's experiencing the say equipment. this story Jerr-Dan biggest a done But But the is certainly for That's us. conducive We driver highlight a to continued the has Mig mover

Pat Davidson

aftermarket. used in said. as used And equipment customers So from Used of market equipment as is there equipment, got you right? our Dave Jerr-Dan strong. Mig, heard I some well think is you've

Mig Dobre

if does Can Jerr-Dan. this truck of Class can humor in terms X would business compare on you normally I'm wondering And what one you orders? say see Right. this with rather cycle with for And how in more maybe size business we us?

Dave Sagehorn

the It's Class the the a less than equipment cycle it correlation for see as see we -- demand towing X it to strong what we XX% and relates don't the revenue. -- overall between market. And of for segment

Class for and as probably you vehicles of a of demand passenger and today X certainly are there that's If highway bigger than the look equipment. are driver more at there on towing vehicles recovery

Mig Dobre

you, Thank Understood. Appreciate guys. it.

Dave Sagehorn

Thanks, Mig.

Pat Davidson

Thanks.

Operator

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

Jerry Revich

telehandler your about Yes, hi, wondering, I'm good talk you if morning, quarter. everyone. Nice could business.

much had XX% seasonality telehandlers should XQ. think for folks is cadence And fiscal gained and fiscal do for well? be that think normal business or this we So it last your versus cycle-over-cycle? you how as how wondering year record has is like sounds constraints, share And so the market I'm about with thinking then I sales for production be XQ up could sales telehandlers you year

Dave Sagehorn

lost telehandlers you back or in recall the America some in there dial line. that you -- impact the just share of and We year, production last Jerry, product process North that probably did terms going year. output if to levels moving last of of through in production were we

from market to we've rebound a information, I to recovery had I is seeing And terms standpoint. production getting probably in back haven't you're their back normalized some very what year of but assume market from in think up cadence this a nice teams share seen speed share terms standpoint. I a more that levels of would the

the out stronger generally the lines. quarter As than to we're a this quarter by segments different any that -- terms I or expect any is in sequentially, for cadence be don't know, don't it year. we break expecting the as the typically quantitatively sequentially what to quarters. And of you second first of product relates it the But

Jerry Revich

strong any one-offs And and shipping up? factory But that up growth production would folks this you quarter? just -- of year-over-year or were any that really in saw, of XQ up of to obviously in how shape we demand there see effectively that catch Dave terms characterize just and just to as move quarter you terms XQ the following we'll the trying catching understand really I'm benefited were the

Dave Sagehorn

cadence ago No. That we as -- year. improved throughout we were impacted. That really was the a year went and the

XX catch customers to and wouldn't X them units. our up So get their wait to for us months

we really shipping first So quarter, were yes. to in demand the

Jerry Revich

tough balance & little optimistic folks over Emergency you? talk has bit. share up the in you to on How You process the market year? Fire have the the really flattish for in about, And you well been? just a you. Can of if Are quoting mentioned expected side be prospects for the Thank environment. gains are a you performing you share Okay. folks you

Wilson Jones

compliment story is dealer The we Yes & is Fire there. Emergency channel. a Jerry, appreciate team with focused the very I close working and their think story your and good

industry And with marketplace. close We distribution fire partner in together. They far. best pricing the by the channel they have very the in the work discipline

good to to I'd ownership total then market do grow Ascendant it certainly to we're the we're we of say have market there we plans and on we some that say low in So focus and that model aerial grow. are that's the prospects when what And competitors share profitable make profitably. to around And grow driving price-type going sure that the cost really delivered going share. there that we've the continue is and

Again spec of of write some that what that value patented products product. through the lot we it's that that patent they there. a opportunities protected the So see for we intellectual have and the of property wants customer that's we and pay

Jerry Revich

it. Thank you. Appreciate

Wilson Jones

Thanks Jerry.

Operator

question. America next Please with Lynch. Our Merrill of of comes the question line from Bank proceed with Gilardi Ross your

Ross Gilardi

morning. Thanks Thanks me good for in. letting

Wilson Jones

Hey Ross.

Ross Gilardi

Dave, Just flow. on cash had I a – question the

looked the The and AWP is quarter first weak. something loaded. the fairly full back-end -- that segment? I Is tied seems in Defense year that to therefore or build so inventory mean

Dave Sagehorn

the The patent actually biggest -- actually little slowdown the -- called thing a of versus as driver that yesterday for it government and expected. one larger Defense. payment little well. out in unexpected that the more primes was And that saw customer us was, was our cadence a than we from U.S. And a biggest saw of we in defense

biggest we multiple through and be second quarters something it third seems experiencing. that's the that are to that Hopefully was rectified here. driver. So companies gets the head as But

Ross Gilardi

actually going case the is why Do you that or what's there? have color like on any on

Dave Sagehorn

is to have we understand What they're any referring to invoices than color of volume don't I process. more increased that. And

Wilson Jones

Again, they're essential.

were… they So

Ross Gilardi

very more change like And cash cash out there cash your when any think I'm out fiscal asking just your materially strong views you're XXXX you and year. free year cash Is on flow a not this obviously where that reason mean, years. but would it think about in expecting directional in conversion I from conversion. for just guys XXXX guidance, XXXX? in more the flow to is

Dave Sagehorn

Yes.

of and That -- over But would conversion believe the capital our of our call, and driven cash some by call would what do year-to-year cycle is, Ross we in larger swings lumpiness in to So in working our we international historically in continue -- these typical XXX%. should for be, be get see view involved going and to future, a that we when -- that's programs. course us. would I some seen likely largely the some we tends have should it, from not drive

Ross Gilardi

income the of kind profit $X.XX to just guide, Got ask a expense item your mean -- for the seems But of last numbers? rate other interest a about over if reason a into balance than of housekeeping it I the to to from thing. Or year up interest And is what's $X.XX big so EPS $X.XX. imply you. operating is for? more or go your higher there that some line I of the by affiliates? thing expense of baked top want you, Okay. And

Dave Sagehorn

the so. to numbers When model think together $X.XX. we don't We come we put the or up the ran internally,

Pat maybe can… So

Pat Davidson

Take that offline.

Dave Sagehorn

and you be …take that with out figure driving offline that might what difference.

Ross Gilardi

follow there. you. up Thank great. Okay, I'll

Dave Sagehorn

Thanks, Ross.

Operator

with next comes Our line with question Elliott Stifel. proceed question. Stanley the from your Please of

Stanley Elliott

minor Thanks defense me about morning, of the fitting product to quick Good Of units, the in. mission expansion of terms in this seeing just on units kits, anything guys. scope referring you more you're terms the in past? for in of are more X,XXX A question or the is business. additional talked scope, were Or modifications? the we've for like, what of

Dave Sagehorn

referenced? when you we about changes are say Stanley, kits, you that content the talking

Stanley Elliott

-- I something on on some modifications is Rate in guess guess of Yes. you that's Well, adjustments get my before terms the the thought kits said you Full Production? content probably and to that the more I

Wilson Jones

remarks, about units kits. we talked associated with the prepared X,XXX In the

Dave Sagehorn

Yes.

Wilson Jones

change, our the the come orders. retrofitting with the the come content to really so, here doing been But kits associated current have be it'll government some make in content. will They normal about Where they the specification, with with no cadence. that in will been change, that we've then and customer. additional if that new That's been is units Stanley, delivered to talked the adjustments content changes what have we

Stanley Elliott

concrete vehicles. numbers back you're switching seasonal there of the then on business trying of could? what a is little up? we'd more that more think mentioned Or expect some you And Just pick a I on is reflective cautiousness? of approach Perfect. basis we'd seeing gears, if to and bit placement get to that that had color expect Do kind the year-over-year you a the cautious

Dave Sagehorn

lower because little sales Actually package a quarter when Stanley. sell up The a of volume was that, And along reminder package with units. body. down our unit were on the dollars in bit we chassis third-party is a a just

in quarter more we a of body-only So mix saw just the sales...

Wilson Jones

supply chassis. Customer

Dave Sagehorn

a conclude that supply lead us mixer market. negative we from chassis that a standpoint, is really actually a see to a cautious is I said, from we think differently. positive in And standpoint anything general overall as Customer from line would top the and in a But standpoint cadence quarter margin continue but we don't to concrete saw thing. anything sales

Stanley Elliott

time much the Perfect. and warm. Thank for you stay very

Dave Sagehorn

Thanks.

Operator

you. Thank

question Please Morgan with of Our with from final comes the line Courtney Yakavonis proceed question. Stanley. your

Dillon Cumming

would volatility? price positive call segment. Is of a suggest in in kind terms Maybe access despite Hey, see And anything guys on the Dillon ground still all Courtney. maybe there oil better the out you guys. Good on more indexed morning. more This gas holding to notable exposure your of that piece Cumming the for on side. order and your actually what that on guys you're oil bit to real limited telehandlers and Understand of flipping is but you just seeing bit back markets those is quick. are book a

Wilson Jones

count rig Yeah, is up.

up to I think now. it's X,XXX approximately

dial down around you we were May to If XXX. back

So as far as it's gas, oil positive. and

oil in it's gas said of a is important, significant but our product. have and that the driver We past not

a you might telehandler on rig narrower So, normal see one one and platform.

So driver, that do into we metric play a watch because a big own does it's not but outlook. it our it's customer’s

Dillon Cumming

both might maybe there, or and Okay. high sales the we labor seeing plans manufacturing in maybe shifts flexibility the you guidance much that you of you think of sticking some capacity supply if kind That's chain terms out how above have access just extra range. end and and if of kind side do to? I at margin in much even up slack putting end seeing kind are maybe manufacturing And you helpful. segment Got think capacity in you on your have How it. then the of

Wilson Jones

last capacity. our up. the are early but last end to year capacity we speed three, brought on through two team Dillon have XXX Well, getting members shifts in we some up ramp we this year. What's Most run the running plants was up have of helped and increase capacity our that year to

increased capacity for too. us obviously that's So

skilled Another both labor market Tennessee add It's a labor that's and and was labor up a recently. opening in good City, add fab market Jefferson and with going facility capacity. That's a support to to access well going defense. that's

an asked we're closely with to that around question ramping So are them ramp. supplier always issue the not us. that for for And labor. helped labor supplier. suppliers tight capacity you The is access teams is dispersed concern the And the there's a market The when for there up to and quality our them working like us just very key country. with skilled supplier

already bit a of bigger is Tennessee there. of some will little out our spread And labor in reason I of same anticipate some Another things there we the actually doing suppliers be them some available have. and would

key obviously just is you to and suppliers we've your ramp-up as around do got a can certainly with make sure you ramp-up strategy So that.

Dillon Cumming

Okay. guys. Great. Appreciate the time

Wilson Jones

Thank you.

Operator

you. Thank

now turn comments. of for over to We I management like back session. the have closing the the to floor reached end would question-and-answer

Wilson Jones

operator. day. joining speaking on Corporation We Have appreciate look the too next in you today. a Thank or to great our all at a Oshkosh Thanks your us for and with forward interest conference call. earnings you,

Operator

teleconference. and this conclude does Ladies gentlemen, today's

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

Oshkosh (OSK) 30 Jan 192019 Q1 Earnings call transcript