OSK - Earnings call transcript Q3 2019

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Operator

Greetings, and welcome to Oshkosh Corporation Reports Fiscal 2019 Third Quarter Results. [Operator Instructions] As a reminder this conference is being recorded.

It is now my pleasure to introduce your host, Patrick Davidson, Senior Vice President of Investor Relations for Oshkosh Corporation. Thank you. Mr. begin. may you Davidson,

Patrick Davidson

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

different statements include, follow, filings filed forward-looking your risks SEC or with the answers to of to that from Form X-K Act. morning that implied Private with be questions, matters Securities remarks Litigation expressed SEC. described the we cause forward-looking could including our make to the such be subject have other within statements and are Reform others, we among meaning statements this Our results forward-looking by those actual in These that contain materially believe risks we the to These statements. that

are on to references statements, a this next be fiscal updated call quarterly stated We a update until to these otherwise. disclaim All year, which unless to any or our at quarter if earnings obligation forward-looking may year a all. not or conference fiscal quarter call,

Financial Officer. Sagehorn, President Our presenters Chief Vice Executive Executive include President and Officer; Chief and Dave Jones, Wilson today and

it Please I'll over turn to Wilson. turn and X, to Slide you,

Wilson Jones

morning, Good everyone. Thank you, Pat.

to our Oshkosh Before new we logo. out point started, want get I

advancement we're to strong operating on We've strong of from revenue proud by that XX% slides members the which these with Oshkosh to to of to today. this, it Corporation. and and growth adjusted the team the Oshkosh earnings-per-share and quarter announce the strength, results shareholders XX% execution commitment pleased current logo now the of You're update growth our prior our that success on I'm customers, third to our Along reflects website. that by nearly available a more to of XX%, come made seeing us growth allowed adjusted income members, team report compared results overall highlighted and expect year.

Strategy It's the initiatives have MOVE clear and our to forward. continue culture, contributed going our and that people-first do to of benefits will so success simplification

And for they stability about production mixed solid. our stable but signals. remained Looking our previous outlooks customers businesses segments below capital more defense outlook and thinking levels. is still emergency provide construction for businesses, driver our in for expenditures broadly, is a to down, and staying construction, to is and long-term non-residential are see economy are outlook. understand we for close fire our continued we outlook how consolidated Strong to are to XXXX. although their The backlogs and and PMI have to & has economic a important positive some us, residential industrial growing, U.S. continued business more We've which

XXXX margin are to $X.XX result range a Dave earnings we outlook and discuss raising As $X.XX. share strong will adjusted a of XXXX of detail. improved our per our to in for execution expectations, updated more our expectations

start for the Please begin access business off, with each I segment. of a discussion equipment turn to do, X Slide I'll typically our as to segments.

team by quarterly and delivered quarter strong equipment Asia Pacific. in led with growth access Our North this America record results sales

enhancements, both increased equipment. now, and Pacific pace. while the a has market demonstrated this requirements increased adoption, demand for continued driven grow about Asia talking access been to productivity has Product equipment double-digit by at a we've As robust driven for safety

this in quarter. operational in stabilization we as supply further about efficiency. quarter, as well improvements improvements ongoing this talked We area chain Last saw

to Our as us partners enabled and the this position quarter order of to strong we production smoother equipment on-time see mostly some operationally final and We in expedited we Europe. the flow. the into remained segment and deliveries, year. in resulting head the during a order supply access moderation morning strong. region These segment the reporting Asia freight the improvements did U.S. in the put stronger this in rate increase quarter, chain deliver continued their The less in Pacific results are

volume remain order could of businesses, several Europe market fleets foreseeing increased flooding. be generally growing We XXXX. believe last the outlook in with and U.S. weather the record be the at years, their regions We're record may U.S. and the but customers and replacement we in a not their not near global in in many believe formal America Europe the Overall, we role believe rainfall these purchases levels. XXXX, upbeat equipment customers modestly played markets experienced in aggressive this rental a about as equipment as for North in their company and our quarter our access After equipment today, believe demand down we the term. over in XXXX access providing

X Slide a segment. discussion for the of defense to turn Please

army next fielded program remains late units during the phase the for initial we our to the expected, the that but This months. Configuration and from it receive are announced positive. phase continues defense Our production into defense JLTV, primary the with busy very the production. program. users feedback and the and testing low-rate was programs great the team our team was the to FHTV production changes of of JLTV the marine FMTV. few be extremely developed when in The phased record: is received moving news full-rate team still over next team the as X will being some into army of with from move quarter gratifying JLTVs

on next FMTV program, the successor are AX the quarter. continued the current much They AX. and over are up program the to tactical ramping down that are program The more The the on how brands deliver program winding FMTV AX be compared is current their during two current Work will consistently will wheeled JLTV capable FMTV to impressed that working we FMTV years, vehicles. offerings. superior the also

We expect production FMTVs build the XXXX new to of deliver quantities XXXX. through and from

budget decade of the lengthy resolution last until so, last have taken to most no the was be continued a week. signed likely agreement has budget time year different on amount and have federal law. U.S. very this contentious deliberations government been announced the as two or been a Over year was deal looking in And

resolution encouraged will a still translate that budget a the finalized backlog solid extensive for to amounts XXXX We enacted, be agreement does for the due not place. this in by is the position agreement we are already have in in DoD a XX and by continued If included budget. we the to September

deliveries. to modestly to to year-to-date, multiple Slide to up their behind discuss quarter: financial vehicles strong increases is international quarter execution and delivered firefighting in sales administrative be simplification emergency the deliveries and the the team The the strong. in down faced another fire including the China with appeared with & executed international Orders board, to strong turn their Store Egypt. sales fire similar remained activities. our of segment. year fire and up & quarter in by earlier across emergency segment they International trucks Let's the us. as were X Sales backlog Pierce domestic results. prior were airport record were in in The and quarter, the to continuing is strategy, experienced rescue bottlenecks but both

thank believe important we network of continues Most remain We you market know view fleet in XXXX. as have like our be to success. industry have invest their ages to expect We in in them emergency be this expected dealers to And of in with continue I'd our up the & elevated. strongest long-term continue the fire slightly take are modest growth, our the truck fire and moment to they an truck a to to North seen America positive part quarter. dealer businesses. fire

apparatus add Over we've facilities, market. dozen confidence the fire either constructing service a their in or the new Pierce months, businesses, begin their the reflecting XX in to brand past dealers seen

talk second factory X, to team weather commercial partial during commercial and a to segment. our Please turn Damaged to continued about repairs are to due are quarter from soon. making Slide progress. good where permanent been they not equipment from extreme but the roof a replaced, we'll They back in were structure has recover will this begin at to the a they The quarter. collapse production standpoint,

this averages. Backlog of highs. in simplification segment or they collection The quarter backlog pricing best the vehicles refuse and remained product year, on focused and and for Orders their commercial all-time lines remain longer-term last their strategies. align IMT team lower that line than is segments in but markets near above to this with were

group newly new the In of meaningful only showcase on deliver upcoming S-series we performance concrete was of areas in We Controls this our will customers previously model. of June, upgrades are industry-leading will S-series discharge our which the hosted launch for excited rear front and the include available Oshkosh updated the select discharge system, FLEX mixers. The critical version mixer. market to redesigned

has positive. Initial very customer been feedback

We detail. design up calendar begin wraps with later production discuss to are year. and turn new greater are to this it That going to XXXX scheduled financials to outlook running and over for demos to I'm business it in of segments. for our our the Dave beginning orders take

Dave Sagehorn

quarter. Overall, delivered XXX prior Thanks, standard the million by sales net approximately Consolidated ASC strong up for XX% third to Wilson, the the again year. all segments. new sales billion, X. were year, sales $XX The and quarter good turn morning, with $X.XX impacted results everyone. prior over increase this Please compared positively in to a Slide recognition team the

or than the was and We've and Slide adjusted third the or updated XX.X% income standard operating & year. fire equipment at of Consolidated of the $XXX.X on points XXX of and in million margin $XXX.X of margin the for of decline emergency chart lower sales operating rev defense basis margin in income more XXX rec sales again prior expected presentation. an offset income increases commercial. access included to million in Operating quarter X compared XX.X%

income the been the income million $XXX would third and Excluding impact year have of and quarter ASC operating of operating XX.X%. in XXX, this margin

The largest of the Similar to significantly price lag the equipment were the earnings mix the program new drivers cost Improved of as higher at income sales also biggest JLTVs the contributed price volumes standard defense recent Due benefit changes lower manufacturing accounting to in positive switch to steel segment and ramp up. the the to continued from and driver steel did access lower recognition to the last that not higher quarter through quarter, of results performance statement, under volume. access in a results. prices. were of X revenue of timing the flowing better impact the equipment the

the in introduced margins noted As year XXX. half the the second we expected on lower income quarter-to-quarter we call, by to volatility due of last ASC the operating largely

impact Excluding the the X.X%. margin of have ASC quarter operating would defense in XXX, been

year We margin expectations be a encourage emergency continue XX.X% focus full and this operating high to quarter. year the quarterly results of income to for individual percentage record segment for & in single-digit full on an margins expect margin this the investors in Fire to was instead of segment.

to the year from quarter, and price higher benefited Compared improved results sales prior cost.

income XXX, in operating XX.X%. segment would Excluding the the impact of been have ASC this margin

We by team. be of emergency the fire very to continue & performance the encouraged

results $X million operating quarter. collapse and roof impacted the were approximately production year associated inefficiencies to Commercial second lost compared with prior the by partial in the negatively of

lost higher happened, results more X%. R&D margin segment would negatively a campaign to operating and and this In operating roof income production addition, year inefficiencies collapse than partial current the not impacted were spending. related in been Had by the have warranty

XX.X% approximately pre-tax full the $XX impact adjusted believe We $X.XX of share the will compared to share the of per per million quarter in a for year, basis. year prior a be roof the partial on $X.XX continue to earnings Earnings collapse were increase.

fire equipment largest of results emergency higher the EPS. were & operating the Higher segment and access driver

million. result Oshkosh repurchased The third of shares bringing the We as the per to share $XX repurchases benefited XX of $X.XX our in by year-to-date quarter repurchases share last months. also $XXX quarter, million in a completed

share increase our and remain million, this quarter, to shares repurchases the a repurchase year. announced in approved the resolution of $XXX the $XX for available target previously fiscal number track to Board to of During of million complete on we

for Please XX turn to expectations of a Slide updated our review for XXXX.

our earnings from adjusted $X.XX. recent expectations previous $X.XX to our $X.XX share to versus range raising billion, sales the now approximately are full our Consolidated of estimate a range We range. of are include $X.XX our following. range to the previous most year expected be high to of estimate end Changes $X.X per

to the to million. $XXX expected million million now million estimate range is compared $XXX previous $XXX be income to operating to Consolidated $XXX of

compared operating The the operational also to of in the XX% previous to XX sales operating the high XX.XX%, to previous increasing of We reflects estimate are We're a quarter. adjusting a range the access range. point the expectation estimate billion, this $X.XX increase range segment's end range. performance basis of increase approximately equipment continued margin to expectation the expectation in strong fourth margin

We're & The approximately sales from and continued sales expected higher of XX.XX%. their result emergency of million to a largely is estimate by XX% increasing $XX sales increasing is to timing fire margin expectation to by expectation increased operating a The performance. sales. international margin improved higher billion, and the $X.XX XX.X% expectation operating range expected driven operational of

by basis tax estimated We XX.X%. are increasing XX to points rate the

unchanged capital to free remain by down including And adjusting last finally, quarter. expenditures $XX.X other we million. and are assumption All flow, count assumptions, from cash share the $XXX,XXX

fourth income year. and With per compared sales, these prior higher changes, reflect share operating results the implied quarter earnings to expected

turn comments. to some I'll it Wilson now over for back closing

Wilson Jones

going Thanks, the stay value best strong to stakeholders. a to customers another MOVE ensure the aligned execution. and overall result position to ability of to the in year conditions. market We're close strong our to team's also stay pleased the raise Strategy our drive expectations We'll to Dave. We're execute continue with as we're all for quarter to announce for our to

the I'll turn over it Pat back Q&A to to get started.

Patrick Davidson

with line question. Operator, Instructions] [Operator Stanley Stifel. Instructions] first with of your the [Operator question from this comes Please Wilson. Elliott proceed begin the Thanks, Our call. period question-and-answer please of

Stanley Elliott

little then there that the disciplined Dave. you Wilson, around you've for little off, that of we're the follow-on rental a provided, Wilson as tea more you I'm more think more expand kind leaves that Congratulations. framework your time. do morning comments XXXX. assuming access mean that pretty side within on them in channel? a here starting to I APAC could leaves And Good Or is Thank bit what something expectations the strong. you is to in on the adoption going is customer maybe that, seeing the a the maybe cautious? the into remain

Wilson Jones

very we answer look quick I'll year-over-year. Pacific continues that is to one promising Stanley. Asia as we're double-digit one Yes, that mentioned, as -- rolling,

I see think we leading of signs to, company our products. there with again, growth, positive rental more more adoption

aggressive to our is, we know customer saying I expectation, there would to Asia Pacific. weren't customers as of times the we in some due going with From are their of weather, some exciting So a we're what equipment their share why into don't able to orders get CapEx, believe be were affected they service.

And either pretty Stanley, the couple orders if more market. in the importantly, at significant last or that the maybe some in look you But delayed this of stalled fleet years, so of expansion quarter.

those of I and little bit so getting a there's service. And think -- a taking all that breath into machines

are of it's not policy some seen. look others I you there, trade we've residential that and uncertainties, to add lead think some just in the there, showing the out changes the you few macroeconomic some construction, when motion are expansion of think then going some that near to there aggressive at I indicators downward

Stanley, I'll keep also and market a it's say say ever mind have been at in we that, this level before. is to

work And a through yet, but are so It's to we be business we the little as commentary, not healthy we're a quarter, it's heard rental moderate many neighborhood. if as this this bit, but believe probably a still you've the a it if case does good. conditions calling companies' little and is next moderates going market. And good it too bit,

'XX, need do business in the see their for be that good replacement believe we we 'XX. and some in will So

was 'XX to 'XX go year if bigger recession, of back the bigger, will of XXXX, you started when but be expansion. that's We with 'XX expansion coming replacement, peak. and was out kind think the significant previous then

add the you upcoming cycle. should in that be machines into both If XXXX, replacement

more but probably a So we some be help significant 'XX, believe that's 'XX. going for in to little us to opportunity

Stanley Elliott

How big and improvements then How the higher a is a structural simplification that's past the switching this is were price over business, couple at much then gears had been far seem much years. emergency refill fire fantastic transformation the baseline. the products? cost? But Perfect. would the more would of thus restructuring mix & And be of And have just changes that new to seen has it a impact. we suggest these that that operating and are to

Wilson Jones

hasn't it's fire thanks what Well, I team emergency than and That distribution and And good this, disciplined the say great to that's Johnson too, platform Structure our Stanley. greater they credit have question talk where for today and to team, years story. go. be about about is it. that a think his let And simplification, pretty Market business five conditions trucks, to X,XXX different determine good Great ago We'd with was call, business. to settled like a playbook it market now in of that to pricing, really I used & X,XXX. team. channel. real Jim asking

their well. the they really, And playbook works that have

You're seeing Dave Look at on been not quarter their we roof it commercial. Same kick margin. that collapse, Had would had at have in going the mentioned a JLG. for at thing commercial. X%

nice it's that. So get & credit our story, team the see really good for to and emergency fire

Stanley Elliott

Appreciate you. it. thank Perfect

Operator

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

Jamie Cook

Hi good everyone margins aerial quarter sure impressed quarter. morning. I'm Nice is. was in as I else the the by

to margin? my decline, guess, of a flat think we there So say, year decremental about sales cost channel just the let's for assuming Wilson, to producing are comfort And opportunities retail level or you operating sort of some question, the the in modest growth, margins is inventories could then still do just your you of and you demand well? that with comment Or how inventory the I your relative as next improvements where assuming, versus are we've market given structure improve seen second on just business?

Wilson Jones

for margins. is increases thanks, in and the shows and pleased has obviously done. contagion know that. most that Sure. We material erosion the the we're gas Aerial it with appreciate margins, Good their execution with compliment. And some the what there, emissions, over with in had JLG do Jamie, and recently oil you internal and What steel. with years we external pricing

peak we're those are margins. headwinds still to some to get that the those previous calling So back back of

there's and that you The JLG Strategy. our initiatives optimizing would on capital that cost run MOVE internal team our tell opportunities of a still lot

So things of done and with some fire emergency, have do we going believe the the & business they've like enhancement structural that forward, in opportunities. they much margin

there. Obviously, initiatives, but It we where those forward. this see don't point at we on on dip rest we've will to work are. got to the to that not market big does, We'll market continue change depend on we're move or a the in which execute going and big what

So we're we've With improve got say. cycle, we those to our would the to opportunities think very to I margins comfortable. regard continue over inventory,

properly I current today the it, comfortable. of are place think a It's inventory. on believe their always where, and say, guard where would in they and the I pace. Obviously, inventory myself team a very with fits market you Dave called are good structure. We terms it but it JLG your watch is

Jamie Cook

ask Okay a someone thanks. I'll let question. else

Wilson Jones

Thanks.

Operator

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

Steve Volkmann

I'm I to other despite guess what margin flat a etc. what think bit in we In more, is they're in is could improvement, a we about to XXXX? Hey a on and slightly could. team or little process lower slightly in And trying doing access guys.I'm how here line margin Jamie even much a improved kind tag of good have revenue words, drill little just of going morning the with Analyst if

Dave Sagehorn

good It's Steve, Dave. morning.

the we of really on-time is continuing on challenges. assimilate a think in the chain you getting third access we less deliveries, in And a of members much in quarter supply terms have and were I new to was it. what year-over-year team last position where a I this reflection to a We're year, we freight, is touched So ramping were year saw lot out Wilson up, think expedited production this. what line. less disruptions of chain We them see that better supply of saw

-- think to improve next into the And flat where If So margins. you efficiencies think I'm segment. are improve improve that we those give next today challenged and to to is we're already I environment line, you've 'XX standpoint. we margins we strive going for look you I do from going not there. from can looks year, top about team as year this about ways think look got their here to to incrementally to I efficiencies, in think a like, what certainly at like we're improve but what operations, not going to

downside, be. place is an a be in And environment standpoint down up we strive last -- time do we would overall in always than were what year, on of the next whatever little from about a we a talk we we if are level, margin end that given a better to we were and at this bit execution

So we're guidance 'XX we'll give strive, out to yet. today you not continue to here for but full

Wilson Jones

think we're what segments. across add would Steve, say, couple all from, is much are of operationally to our that, we four ago, today stronger a of where years I I

nice be to we'll to in control. we of the can will a accountability. driving of building continue we're good question, working issue position around. to these are the available But the things. your end-to-end And that the in top mix handle be job With concept. things teams that are that's an team this doing simplification handle we'll operationally businesses, We putting market platform into a to It's us regards

they certainly we've then to That us. operationally. we of our going too. continued with what really will to all think this available and performance is to But there. X like the things I you're that the market be position play and are can all we see into determine going where what's just got good control, segments And So to

Steve Volkmann

sort XXXX, & from of access segments mean in into my what other made -- customers hearing should And Wilson, you so in follow-up, decent fire your I'll since just some are I I emergency, qualitative have comments some it leave defense much don't relative as you've know. not commercial you probably probably and pretty the Any go about kind for into there. of the around segments in maybe other three And visibility, XXXX? thoughts locked in, we

Wilson Jones

really say big component have and great And an a about question important component & the about market a I of lot we our fire Steve, look, Yes, good talk -- business. great, access today, positive But outlook, performance. lot that's because really not when side. obviously, us It's you a integrated municipal a emergency, you look And growing different look we you at to and but global our being portfolio hear should. margin backlog, if we strong a at talk on then their really industrial.

You an of high that the bode Same in commercial well backlog municipal there for look basically collection A our for lot all-time vehicles, into spending at should defense. the refuse segment. us future.

with international opportunities. domestically, runway only there, defense JLTV, the You now but see not a

the through on We with these of But outlook in have here. questions spot. a think of got balance into really the we three because around positive good work we're the other So we've we some to 'XX. long-term we're segments, know access

Operator

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

Mig Dobre

weak to mix congrats margins to very, gentlemen looks your relatively very on segment. on Good morning and be me in access what good

So done to trying there. clarify some just on things Wilson. well your I'm based comments,

down customer you're your potentially about in right, XXXX, fiscal down versus And that seeing equipment orders your 'XX. year-to-date, being demand were about talking access XX%. So orders the we're look market, I maybe at right, these your if

triangulate orders what revenues, as outlook be than little I weaker 'XX So I'm actually market your in your trying been you're a right, to because understand kind 'XX. they've bit own it, in imply of to expecting would for potentially

at for maybe us you what business? can So would level your help understand mean a high that

Wilson Jones

Dave in I'll and this path, jump down me. Well, go with can Mig,

made think, think 'XX comment When with I about we're is we're I today, available backlog, concern to the at have about sharing we you not backlog. a you obviously, calling the that information you'd what look but our us.

our outlier in last years. look where you quarter backlog, in If are would year, large XX this out today with from those be at we the a this orders X amount backlog all there, take largest

So in we have access. a healthy backlog

little I quarter, with I'd shared last how talked think the I what bit patterns order a changing. about you is also were

We big and did that's forward seeing. like into here what see these the didn't coming orders expect focus to we're near future, in year we last

are order going go think the I back. to patterns

couple ago, most If with same quarter. our you customers in capacity remember would the a and delivery product available, sometimes of years of a take order

So going bit I think that's of a what's on here. little

their as as 'XX. be year. replacement place good there a I not come in environment, in good next rental into business significant listen fundamentals, discussions again, detailed up so to get good a do comments, after And information I more we to expect probably fall we know think their we're our if going with you companies with to year, call the is some and needed 'XX. But next

used probably bit a orders. security -- little a with of false got it's big forward So backlog sense we've and all to those here

that is, conversation was with trend kind the it does tough or what If up that And history, causes of built really comps. see you chart, an to anomaly. look this it you yields can

Mig Dobre

the your volumes forward? as At does where and what expect actually Right. program production restructuring be a your 'XX, done. create they're managing should I'm fiscal down revenue I'm for accurate earlier order going point this record, than just production kind is, more I I fair right, time us for to headwind. thinking some being of And down Is recognition misspoke in now you're we it that that? about And is that XX%, wondering orders current given volumes am into describing that. the here, sort are And dynamic of if

Wilson Jones

Well.

are, it's cyclical conversations adjust You're on for probably where in We thinking production a this long Right We've now, time. and been little more time. severe real are, weekly, our we Mig. with we than we businesses. a know

to as nimble, be we production we levels and We manage those have so go.

And backlog current with spot. a our good there, we're in

at have this order this first and quarter But this plays we're seeing into standpoint. quarter from point. panic we the how see not button Now to an out that

and don't stage, Now that at always you this play scenarios. see near future. do probably plan in plan least scenarios, going know But us into different at deeper we that that's we enough well the we come to

Operator

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

Jerry Revich

could JLTV what now? what if at be of now. shipping be are we're the you magnitude X compared many interest us could about to the anticipated for timing How talk how an wondering you from looking update sitting and give the And here big foreign product? program countries if years Can I'm could domestically? we're orders international of the level JLTV

Wilson Jones

Yes, Jerry.

far really We letter case of units. FMS got Slovenia total for XX spiced today, are now with a we that government as agreement our in has haven't total or as with JLTVs. Where dollars

test. Those we done with about. countries but in is we that on units. the now order We've about working that both with, I just in talked are the that. out and haven't and We've in trials potential of past, Lithuania They that the some we've they X,XXX FMS others south U.K. have, think up talk called success we talked can the expect talked timing case. units, X a past about the in several had of we've of X

to it's cases time, and going call hard I etc. going orders, dates, think exactly FMS you to take can international kind through the you're of especially know when orders the some get delivery

we'll have these where know built into Don't So some expect are some Middle add able It very positive our we 'XX. too. heavy or international there them of customers is got into 'XX. to continue to see on now the we've JLTV for be be 'XX East may in and in But we would some come that that are the today, about delivered JLTV the if early to stand I orders the get 'XX. -- front. going I interest we in shown And should opportunities still that

Dave Sagehorn

Jerry, program several I just U.S. the our add. increase to to is production I'd JLTV years a know well. continue is question next to of international, domestically, but about as your that reminder going continues for the just Defense over that ramp Department as

Jerry Revich

the 'XX of us ballpark growth we really for location comments That's looking to a about clear. location in in dealer we're the terms opportunity share Can emergency, however then want magnitude for network you percentage versus & your 'XX fire Sure. of just the you standpoint? just frame for that And count. interesting that that understand growing versus in from 'XX can 'XX, so or

Wilson Jones

Well.

not emergency distribution put is on total think I'm of emergency a and to they you, sort ownership gets fire part And it think, our focus target on but for cost if you that, about it channel sale. the of & really & of you model. Jerry, If share fire a big going after business, segment

third that And around the to service. you of think are more So XX tells if footprint a the again, opportunities and service so U.S. I think trucks. them fire the second, or be and selling to their dealers them one-third fourth that usually expanding, and significant to you give about is more leads going

Jerry Revich

We'll put terms the you, on share but in target for of.

Wilson Jones

I job. figured you would. your That's

Jerry Revich

it. you. Thank Appreciate

Wilson Jones

Thanks.

Operator

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

Seth Weber

margin. defense to I wanted ask Hey guys the good about Hey morning.

still or is think this implied X.X% is fourth first to well quarter get and here the of which I of something year below the like where of for kind year. your of were to half margin kind midpoint running last you a guide, the so then the

or there should on defense kind kind margin? from quarter how to fourth still that's issue going there we are And run is rate? costs to that's So of here weigh about mix the of ramp-up issues weighing or think transitory XXXX-ish continue something some

Dave Sagehorn

Seth, it's Dave.

to year beat that So at defense. to look margin investors for continue here the I'm encourage drum going would full the to we guide

talked the we that. you're our the a introduced standard recognition we're of one a -- only not with to were hand. we In we're better magnified for quantities why of is, lot is orders has relates allowed the of we've production the the contract standard accounting not quarter really off our thrilled seeing costs program recall, gets as revenue As And old that in It's volatility into project of recognition margin now, new have of you the over But a quarters the timing to standard under recognition defense results. out actually non-truck largely opinion, another. may for about defense. under just what adoption few to revenue it accounting given from that new

JLTV, contract the overall example, for So was for vehicles. about the XX,XXX

from only We project quarter. smaller have can quarter orders that for variability to those on over XX,XXX. hand a which We drives costs quantity,

want kind the year, margin. expect here, emphasize, I'm So on really droning we -- and single-digit of but to full high

as unchanged. expect fourth quarter high that standard. than third it recognition third we being margin income lower lower segment the surprising did the I fourth the comfortable third And as for and we to saying outlook than new we're margins under quarter our operating outlook being We view think relates future or business is Our this revenue a this single-digit in to see lower quarter. business. that see not years, for fourth still It's

Seth Weber

Wilson, access if access whack customer looks And of do just I down, you're mix perspective guiding think of margin there tailwinds nationals? maybe anything IRCs of you're maybe kind the think that though access this that to kind forward. could decline next be is seeing you bigger it the margin fourth possible another flat the little you from it gets a go to or kind to margin revenue customer is Or great. the trying just I going then even outlook, -- year? of said in the the take for seeing the continue you're mix not year-over-year I like on through going at kind to the really I versus And steel yet. -- just the more think better there which Is year that And price mean, maybe guess is a nationals quarter

Dave Sagehorn

one. this take I'll Seth,

have there's rental mix fiscal seen But actually, we're nationals. 'XX 'XX. fiscal are of than for traditional on -- the from for a And still number a early relates reasons independent seeing higher it's customers mix, out -- 'XX. finishing is of probably throughout customer fiscal that. it versus of rental our companies their largely what largely focused got We've a As all

XXXX engaged Our heavily months. the with get them in access at about coming team will

probably saw it's So going we premature versus to in in predict 'XX is to what what 'XX. like mix the look customer

Seth Weber

-- and but more a -- to Then fourth steel, in then the that Okay. that Or does of help XXXX issue? is you quarter? start just

Dave Sagehorn

of whole on We from the emphasis want incrementally pricing topic should that, that. little see of quarter just improved there steel to cost positive impact and I price a referenced But -- quarter. or we've cost I third improved. the is bit the guess on versus And on the in

we If at had that increases are experienced. quarter, barely you overall, third segments cost we covering our look the -- we in the are non-defense

of steel inflation of down. So through. there continue gone there we've there's about price that steel to absorb. out Yes, to expect been absorbed, also lot out out mills a that We hearing some come do has we're putting increases. see But

sticks. the We'll But get see have if up. they're back it to price to trying

the XX% federal bit all go U.S. potentially a got little requiring That's of as impetus prices an higher You've infrastructure to executive content on be projects. probably to steel forward. order we going steel

have to the and us next environment fiscal we're watch how So of of while to that bit really last really fiscal we've in that environment we to going think steel market see is quarter continue 'XX. impact little other a QX we to in cost going over think number the months, the two think see we what material or benefit in seen from I to over

Wilson Jones

think are moving some with costs. The in got you've another I standards to too, piece the anci draw going there costs anci there Seth.

the to and during we're pricing all talking be the So side the that talk going assuring on be in them then for all up with first next our where crawled discussions. year. announcing And really price then customers of this will obviously, information normal fall with we'll

Seth Weber

appreciate it. Okay guys I you. Thank

Operator

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

Courtney Yakavonis

Hi. Thanks for the question.

bit and up steel. the discussion pricing follow to wanted Just a on little

you're the surcharge off. roll I to think you guys had previously expecting that talked about having

seen have time expected does that's off that of you given how for the and that the about secondly, talking in in So And case roll that now? pricing it telehandlers? talked given any some soon then about? in moderation is the both And not AWP, right telehandlers backlog is we AWP mix to just versus when strength some pressures apply the that XXXX, to that you're the

Dave Sagehorn

we'll certainly go I'll start he's Wilson just of our if off, our with the annual course welcome. But fall Courtney, through to the pricing through and chime here. discussions wants in, customers

follow we process same the always So do. we

land last placed we our As pricing right that on a for for factors mentioned consideration we will as of take the guide into focus to question, 'XX on a where attention there But certainly that. of lot be with we number there's that just determine the and is. place

our of well. with a lot discussions involve, obviously, customers will That as

of think terms and to 'XX, the little a In heavier third a fourth compared bit I bit as we're mix, we quarter again quarter. look fourth of see quarter, mix little heavier than in saw telehandler of we going the telehandler at mix the to also

the we quarter, telehandler a we're quarter. mix saw the few a little up in see bit versus think AWP but Third tick we in what quarters, to little back actually bit we'd fourth reversion seen heavier last going to

Courtney Yakavonis

to So say be are AWP sales still be to your up? that down, is that the fair telehandlers fourth it's given implied it would quarter, and in predominantly in

Dave Sagehorn

in different, makes at you see that it we And that general know. haven't something but I let sense. we'll think looked I way, if

Wilson Jones

simply. Yes. I mix believe that's the

Courtney Yakavonis

divergence that the more do product then why And this between seeing you generally, just categories? we're think X

Wilson Jones

if the decision the go that X. year, Courtney, jumped, About with us, our business. XXX ordering consolidate you time did And were X mentioned. people. forward we're made to for on We we all to the to bringing facilities, in that, we've Well, new jumped last we've telehandler back consolidated market

rebound. been to catch definitely up you're new is this year what last we good some a So business we've is story in telehandler able back our lost year. and momentum that with And seeing

received construction and SkyTrak well Our popular brands the are industry. and in JLG very telehandlers

And business and so there's rebound a back of original little that's position. you're getting and share what that our seeing, to

Courtney Yakavonis

Thanks.

Wilson Jones

Thanks.

Operator

Instructions]. [Operator

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

Kevin Marek

loaded? for evenly Chad. on orders more to a just had quick or on I in the back-end quarter access question see it you Was Kevin spread start is throughout weaken? This when did

Wilson Jones

haven't what seen of of pattern, would kind We any ordinary say I the Kevin. out order

the would it's call really think an kind of been just I even that ordinary. I of out would moderating say, of pace. more I Nothing at,

Kevin Marek

guys. Thanks it. was That perfect. Okay

Operator

KeyBanc Barger Please next proceed of question your the line from comes Our Markets. Capital Steve question. with with

Steve Barger

the same cash sheet free You're visibility, talking a be good flow flattening or time, may balance rolling you At lot have of about really capacity. a AWP bit.

this on conversations time M&A at you spending point? So are more

Wilson Jones

we've want that talked That's list. allocation with something we always on we capital be I would keep balanced say, strategy. probably Steve, our to the in the past, it

is similar list that Conversations ago. think I year a it to would seen you continuing. would be are have what

where been XX core But do, today, from are our strategic know a along valuation that ourselves better good sheet was if as we we're obviously, balance buy. You your standpoint the years a to at there it's shape to in best we came in with look Company. a take our probably that as fit something this, we least was my with point, look. at And value is going proposition, that the

we word So Dave That's the a certainly that be opportunistic. lot. there opportunities to uses have

we about, is We today. nothing at. a to make that talk and want move be the would moves, look not say to it I things you just about There are something sure buy a is opportunistic to certain imminent we we make that something. But we're are right to vigilant but studying, take

Steve Barger

deal is Just that there yourself to or you for comfort size kind think about? limit zone of a philosophically,

Wilson Jones

that of look we fun. think said Steve, in through the had we've with I today at we're what nothing it there at for and that JLG, us, where is you'll was leverage through probably But Remember not transformational. to back a looking we've past, Thank us transformational goodness see worked the lot was transformational. Well, don't work and JLG. anything pretty

Steve Barger

can at one at levels next you capacity here, few proactively you you're running With how to done to how adjust production this utilization, you about us on the peak many one. just revenue AWP quick have relative thinking ships you're And kind more and tell Okay. anything are point where quarters? of

Wilson Jones

compared the we when cycles prior deliver We work to can results mentioned it, some -- to always better Dave and do ups sure have we in market. we that downs make internally

to And we're so if JLG. shifts. running plants we tell constantly us you to I their ramp production up of Most capacity available we've needed are got rates. today, can at adjusting two

lot you'd see company, look around our a you of If two-shift operations.

have And opportunities some I where outsource today, from We In good some we markets case But a capacity that all tell And segments performance. in on to are some focused But there were shifts. have outsource jump we would opportunities. all been comfortable all, further, showing X running are operations we're fab could then in from on in you we're we've a a even couple work. working really of really capacity standpoint. also standpoint. as with operational and place their four a been have commented, I efficiencies, it's to

Operator

Jones of we session. turn have Wilson the Ladies question-and-answer end the reached the And for call to back would remarks. gentlemen, and closing I like to

Wilson Jones

back Thank you, joining operator, us thank team's performance. am all with enough at for and look pleased today. the three this you how I last and I quarters, say can't I

we the good Have Again, execution to interest you appreciate externally. they conference good with both or next team in speaking well disciplined seeing the look at a with earnings your on day, call. our and everyone. Corporation internally and the forward things manage Oshkosh You're a very control

Operator

This concludes today's conference.

this your you time your disconnect at Thank may You for lines participation.

Oshkosh (OSK) 2 Aug 192019 Q3 Earnings call transcript