OSK - Earnings call transcript Q4 2020

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Greetings, and welcome to the Oshkosh Corporation Reports Fiscal 2020 Fourth Quarter and Full Year Results. [Operator Instructions].

As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Pat Davidson, Senior VP of Investor Relations for Oshkosh Corporation. Thank you, Mr. begin. may you Davidson,

Patrick Davidson

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

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

Pack, Chief and X Wilson. and Chief and Wilson John you, Executive include Officer. Pfeifer, I'll Please Mike President today Slide Operating and Vice Officer; it turn to to Financial Chief presenters over President turn Jones, Officer; Executive Our

Wilson Jones

members commitment us hard we continue before about continue on people-first COVID-XX execution morning, allowed team customers' period challenges the Oshkosh difficult to Good bears as brought to everyone. face strong of and Proud in I adversity. demand, We've significant a our it availability year, and many repeating, and disciplined work customer our proud results dedicated by been that this to others. to it to XX,XXX delivery our past continue driver strong of of A talked hard team to stepped uncertain but Oshkosh the shout-out very key their our interruptions, work through meeting for members Pat. the has this including our culture be big issues needs. have the our Thanks, headwinds of culture overcome supplier and worked during all members team suppliers and up workforce pandemic.

as highlights a it other John over from calls quarterly call a the As is different quarterly little review fourth full the to our and results year and both reminder, always our quarter I'll before turning Mike.

responding uncertain. equipment quickly per quarter quarter, revenues This segment, markets more decremental John recovery into the go in XX%. quarter North we prior consolidated outside important our the margins the delivered access of access grow fourth can our income to sales where fire during remain Europe and margins equipment, over the of on timing were the controlled In adjusted control our performance, control. emergency decremental largest to segments, nearly of soft segments in earnings down America year delivered XX%. while our and we achieving able remains but I challenges adjusted like specifics XX% the and will operating we've what defense, For while is regarding said $X.X and of commercial share & adjusted $X.XX. billion third were nearly adjusted Much we of we as

stabilizing. approaching close over the We'll pre-pandemic encouraged metrics customers purchase are utilization attention our rental by as with well next market to is months. annual engaging is that be discussions as and paying in the few data We levels industry believe

and of we This proportions, the reflects the of announcing of and There's were XXXX discussion confidence our Finally, pandemic XX% our our are dividend annual longer-term X cash and share. able is to proud for the memorable per a that the in global to results full I'm and disruptions history the years Please increase recent no consecutive we seventh has most people the significant have created year. doubt of been one increase quarterly in business Slide has turn to efforts deliver. $X.XX that to as model outlook. a our

decline our access operating $X.X overcame nearly X.X% impressive an a For to equipment full example, margin. sales segment deliver adjusted billion year-over-year year

consecutive delivered X percentages Our operating segment the end emergency fire to of margin quarters record adjusted & year.

global posted the operating defense on commercial segment program high full a And executed year ramp-up of JLTV margin income pandemic. Our a our the X.X%. decade-plus adjusted successfully host of brought of by headwinds despite

the represent performance the and demonstrate fourth a quarter. of the different We All the global high a in in as with pandemic accomplishments note strengths of solid significant midst on integrated ended these industrial. our year

companies. emissions responsibility from talk but We usage, along team with many ESG. During regarding ESG our to of the differentiate areas I our permanent engagement member cost gas call teams temporary about don't in his in impact Mike that executed and out greenhouse talk work earnings with want corporate efforts will are and how XXXX typically some these believe doing our the about we reductions. been year, metrics also structure And on and great will performance, section. focus among our we on energy company-wide reduce Oshkosh a cost actions have combination safety of other to calls, a help

for they agencies commitment these recognition and track and evaluate value measures, we We important our performance long-term from company continue that excellence, to to sustainability. underscore earn believe nonfinancial and further

our value X future. and opportunities turn pass sheet to Before I and will the wanted use balance to and to John, John. that grow we over balance it Slide highlight to sheet shareholder strong, I'll liquidity to I believe Please our turn over it to remain we have in

John Pfeifer

Thanks, highest of our focused maintaining COVID-XX Wilson our the several the have we Across good that I'd record in of and an and of the been Wilson, the of of including update some that. track headquarters, spread currently mentioned everybody. doing in spread we've on virus, team our since morning, and members are safety the the and rates region located company, facilities, Wisconsin is nation. the the like good of provide preventing pandemic, experiencing a to in

exceed recent as maintain meet we ever creating However, guidelines. and as supplier is important -- workforce strong CDC availability it's the challenges. that procedures that resurgence or important some It's delivery safety

challenging Of our of I'm stay are many team us pandemic experiencing our But and effective. like this as and is Wilson, focused to course, members ability fatigue. proud of

with segment access while still delivering strong closely our decremental We've during equipment. off our significant equipment adjusted impressive kick managing and operating business margins been access a margins. time adjusted Let's sales declines discussions overall double-digit of

been and we've industry delivered our fact, these able an the performance a team downturn. performance appreciate members In new set to have efforts benchmark We financial for during during times.

weather business. quarter ramp in and low rental innovation from resulted investment. invest were Our quarter leader recovers. results emphasize primarily Through the a weeks. significant, keep has company when the ability cost releases business responsible as and operate of lower the available production the believe utilization, JLG our look continuing balancing for carefully Europe. business It's industry, taken our We is spending a equipment, XX%, XX% future to that reduction to as equipment by facilities facilities in as we reductions storm. We've we for the of important access to North customers the which we're our remain this by this demand with for reduced the the product in first result confident quarter, continuing on outlook forward fourth in market have positive to the and we continued the and America our innovation production lower lower We're in operating actions considering cost approximately for U.S. both is to schedules. CapEx up to leading long-term therefore We we'll nearly Sales the permanent the are approach. down temporary

We share our remainder make the and conditions customers evolve plans. as for will of decisions XXXX their

demand our be meet workforce market are the returns. engaged to We able to keeping when

America to the staying North range America in latest line close market, figure key with the access data, to are communication remains uncertain. ability but suppliers and with confident when our that they we aging recovery ramp the of for according for specific know in are to as aerials We fleets well that up future we is The average We the are this our in age are elevated market in timing recovery XX-month demand. North the also for equipment the the believe comes bottom back. the bodes

we year, the of sales. half lower first the For expect year-over-year

before and gain in the half our next We rental clarity more with the are company to early our customers, year earnings expect our on call. discussions second we of

as defense just growth discussed Finally, Please continues for to turn Slide an we double-digit to the economy recover, quarter, foreseeable and segment. we sales X discuss China's believe in the offers future. for opportunity which region I'll last our

in quarter been challenges, results U.S. effect and pandemic earlier which have we by year the a issues experience performed as mentioned that government and these late is to more segment defense Our the our I XX%. having people with teams quarter but grew well production. on in earlier operations continued schedule ability this customer the notable to fourth has and revenues our intensively in our experienced more the solid month, dealing than delivered availability workforce Despite for

program large backlog and led successful of JLTV part ramp-up of strong a Our way segment. the throughout as in foundation year our the the the provides

Belgian Defense The than with vehicle. Our expected success are receive best world's at NATO team from demonstrates the of XXX valued in further an million light JLTVs wheeled more protected ally for tactical our we having the with was contract October. the happy EUR XXX order to Ministry

It required Resolution, incumbent be the to but XXXX, performance JLTV in to to begin become norm. We CR competed a I the We competitor announce more characteristics product. XX and to we over the JLTV expect enacted or the of recently fund expect last it and the CRs used the that shipping to the order, rare orders government XX want an and win have superior international vehicles comment believe cost spending, XXXX. against this years, on we demonstrates to in Continuing to CR.

present funded remain CR under does record for of programs not so issue the it an Our XXXX.

Slide discussion fire an emergency adjusted the quarterly fourth Fire turn & X emergency a XX.X% in of income delivered for for operating record of the & segment. to all-time Let's quarter.

for framework Our at The a have run as that with philosophy brought through team restrictions provides of F&E been has and simplification high along level. the F&E on customer which they operational of travel challenges, other state-of-the-art adopted team's supplier business navigated ago, at several innovation, COVID-XX. were the phenomenal many product nothing such performance to short its issues, by years

commercial options We with a billion emergency year said, are the technologies, market. quarters. RF fleets, X challenge that market-leading of to nearly truck exiting in the our long-term about constrain by despite with and Please the underpin Aged turn Fire more of in we hear COVID-XX. negative record System municipal may and fire order future trucks That for And of strong we'll segment. in in the is $X.X the Awareness Fotokite and talk supported units. commercial fire alternative for backlog, lineup new demand & Situational such about outlook powertrain as favorable with a impacts budgets Slide near to availability the invest new F&E technologies, our tight ready you'll our high-quality, combined of a year continue custom term.

strong to year-over-year adjusted and Our earnings the commercial has by quarter improvement margins despite the despite caused headwinds segment revenues. drive The throughout pandemic. in higher fourth the delivered team year continued lower

to impacts our Front put pleased improvements. win schedule, new highest demand simplification restructuring management Our a the given restrictions I'm full a last when as reduced many Discharge report new sustained lot more that to according concrete decade. production commercial several to the of impressive, construction successful is This over progressing COVID margin anticipate temporarily simplifies next is prime disciplined we transition a operating from of areas posted focused months. a Canada call, efforts of S-Series margin earlier discharge to the mixer was and Minnesota which the businesses market adjusted rear Mixer, transfer is from income country us believe a from announced Ontario, recent position cost as and team helping We its for the than particularly in factory we waste halted shelter-in-place this in us year our our driving and success and Much in drive well X.X stems in the the year. team as to completion of approach. collection at Concrete with On ramp-up customers. business plans excitement will the

this Before plans reduce I fleets. to customers a options with for mention greenhouse Early market our segment, and they emissions I electrification gas the numerous to commitment as by electric as the there in way U.S. leave of fourth our quarter, some their in announcements companies. plan want provide RCVs were to

comment have the to in be we partnering operational business we XXXX. I'd of dedication be proud fourth results. to solutions second to of at conditions. for discuss efforts about mindset They for Idaho with OEM X very results are it to to positive quarter Oshkosh. businesses This additional and are from over working to like at the are used turn We on see and is I'm RCVs units on our wraps business chassis to particularly our comments across the and see it a business close a it hard and to our some none and current segments. electric working culture summer This deliver and team electrification all to going commercial. Mike driving in RCV up their as true task been Boise, in improvements, with can we our

Michael Pack

quarter. impacted the XX% billion, lower equipment Strong demand, and negatively decremental quarter. decrease. the customer to segment net access the deliver quarter the were Slide were basis XX% driver at decrease a COVID-XX. primary equipment A John, to everyone. Thanks, sales allowed down sales of adjusted morning, $X.X year XX.X% Please on in as primarily prior equipment from decremental access Consolidated adjusted in turn fourth us by sales a the was of Access result consolidated good margins for X. and margins XX% execution

spending adjusted construction & our during sales compared the absorption to purchases proposal benefited lower and by operating year prior quarter improved associated and softness the share result quarter absorption, $XXX.X segment current manufacturing volume, quarter as the adjusted income and months. EPS on in a of fourth cumulative improved declined fourth offset quarter customers sales in the engineering dynamics for and cautious income XX in quarter. share sales quarter. adjusted price XXXX. increased Adjusted in operating $XXX.X per cost for light in or or in with material higher offset activity. year remain John share due volume. of As the of X.X% million fourth adjusted current temporary by Access uncertainty a equipment operating spending commercial as to per of year nonresidential quarter and the quarter, the mentioned, of pandemic the lower X% in segment segment in surrounding lower emergency was income quarter $X.XX operating of volume. by in to of Fire increased equipment of benefit sales part COVID-XX Consolidated reduction income contract completed in was And as mix segment response and and Fourth the result offset part to product $X.XX operating costs, offset favorable result the Defense part results lower favorable sales unfavorable $X.XX by from increased improved the of prior repurchases adverse shutdowns and partially in earnings mix pandemic compared income COVID-XX-related a by cost sales planned less adjustments actions. product higher million

in declines flow customer a solid cash we pressure visibility XXXX. is drive XX Please Finally, emergency for provide equipment a on Conversely, during accomplishment million. of in on in turn year defense pandemic our discussion Slide drive which year fire to capital. to segments. a to and segments $XXX full working backlogs where XXXX. the in we The uncertainty generated flow demand, demand put strong saw & free This the cadence during cash rapid COVID-XX quarter has strong continued access free into and customer good of commercial well our both

rates workforce mentioned impact significant for labor and production customers provide in and production X by occurs John creating a efficiency segment. fire these not at for our spikes & inspections where the into in XXXX quantitative to segments chain also in account, for earlier, emergency pandemic, supply infection is segments. situation The expectations the truck portion issues, availability fire particularly likely a final we're & of as including ongoing in emergency this and to of and the causing factors is time. COVID-XX these the Taking uncertainty are Wisconsin, recent defense risks However, position

for equipment, customer for XXXX. of split which million. between our by in other pretax per and to better spending. travel project are actions the production In X-week third, in The reductions customers access actively demand of and to year-over-year to XXXX, the we are commercial for compared key clarity but pandemic engaged better quarter align XXXX during compensation; cost approximately in the half for and areas: requirements XXXX. our the second, softer XXXX incentive reduced discretionary we equipment equipment and call requirements. Demand customer expect X We of XXXX, the segments salary the the further the of reductions uncertain decisive access expect requirements were implemented our have $XXX first implementing but first, production access understand United first of do and gain the the At discussions we trajectory insight quarter remains earnings evenly second half second XXXX into with we shutdowns States the in as first with month quarter we year, in to furloughs;

reductions we run them in temporary As our expect nature, rate return discussed, to to previously expense and XXXX. we largely were in these cost

the commercial million actions and equipment earnings call during totaling permanent last in complete. Additionally, cost million once segments reduction our access $XX to we discussed $XX

million. $XX which cost for actions expect totaling by reduced XXXX, We we permanent these approximately corporate will million operating XXXX segment benefit additional Recently, expenses. $XX reductions implemented and

expect to XXXX, million benefit $XX in XXXX to that in growing a a we $XX total temporary margins reductions by of $XX the So will cost headwind XXXX. of million to from cost million to XXXX. in be permanent of reductions costs drove Return

will continuing our with ongoing manner a are uncertainty and to our the we disciplined to However, business in manage respond playbooks.

and approximately of cash consisting balance Our approximately remains line of of million. $XXX $X.X strong of revolving with million liquidity credit sheet available under of $XXX approximately our billion, availability

capital modest expect million in $XXX expenditures to increase We a approximately in XXXX.

not provide are to for financial we expectations that, it the While we providing year. With expect turn quantitative over some closing today, later them to Wilson I'll in comments. back now

Wilson Jones

the a in just Thanks, and in with a and global great are per believe of $X into in strong cash we sheet we year completed nearly balance position moving the delivered Mike. which position. we midst adjusted earnings We of share our pandemic, XXXX

& costs. fire XXXX, and emergency defense aggressive and visibility to provide lower early the during actions backlogs Our into we pandemic well took our

deliver get earnings threat the over is over I'm and our back of us, Our on strong, strength performance disruptions team Oshkosh as long and production members effectively a have kept who by people and of it began. resilience pandemic we can't to group We Q&A to the started. will culture but at let turn reassured Oshkosh and still outstanding leaders the chain Pat up supply positive and with and I'll the solid is since term. an have and managed the sales we believe path

Patrick Davidson

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

Operator

Instructions]. [Operator

The Nicole Bank. DeBlase, first Deutsche question from is

Nicole DeBlase

coming through That maybe and turn are we about second color. with So the potential do structural we to the we down temporary with to in the throughout easy? year? half that. temporary actions trying think follow-up to Is first really have a where year? maybe back how think cadence cost, mean helpful Just But half? situation half have Because revenues second start just positive the that that guess on I cost in cost of that a the if until those that so then the respect the was Does discussion. don't starting

Michael Pack

Mike. this Nicole, is

that. through you walk I'll So

is that discretionary the in are I really prepared bucket, temporary So Those it about last X/X X million. is costs of is you X/X Really, remarks, items. more That $XXX buckets type compensation-related of spend your which talked the in total, items. about it those come have back.

the did discretionary the higher in that, -- fourth that. our Indeed, third bucket, fourth bit in we be expected items We the in quarter quarter. that see would a

in we weighing -- of be So I some coming -- those away at that cadence sort But the with second in of see of largely, quarter. benefit of those quarter, on in a XX% we bucket fourth guess X/X early could $XXX the year. back our that beginning the our million us. in About about from from -- was in started year so our third right -- perspective. will the the We was that the the of will still benefit be third XX% pandemic benefiting had benefit leaving it about costs just the fiscal quarter. also

a bit that's cadence a of $XXX So of the million.

QX. we is last as about compare headwinds few to for mentioned year. when down absorption available the North you in remarks of production going us prepared have We QX, access a that That's the an headwind America. we at to look create shutting for do weeks in half Just

that temporary QX well, be price the reductions pretty sizable access as our backlog at call a so had in year again, permanent million. price-protected cadence with in of back is and and as the last benefit a QX. look well, we about earnings you headwind net But $XX headwind If to the will on

John Pfeifer

this is And John.

the to Just bit color more a temporary little on permanent.

coming how back, to well, for sure to we in back. and So believe wouldn't we to convert is, future. more take why costs reductions permanent ask, expect is happen and all what ready with you the take the we we're want to market that the foreseeable the cost out? that And we have out come cost simple we market make permanent we to much answer balance temporary And might

Nicole DeBlase

next understand color. your a the particularly on helpful visibility lot traditionally of access. in totally lack you of year a follow-up, Okay, business And year, more defense for businesses is then outlook. visibility my little have it. next where a do That's But bit got really the

could for you XXXX, possible? defense So characterize maybe in expectations if

Michael Pack

Yes. you strong That view. the With backlog. a gives defense, see you

gives the the in 'XX pretty there. customer going beyond, for Now deliverable is year. some you give but line idea years, that Go the backlog you future top idea and you next requirements an of of would the of good to ahead. That's and be -- opportunity that can a it what opportunity give

Wilson Jones

always I'm around just about Mike. to billion. going $X say, talked We've run rate in of defense, Nicole,

mean, And so I we're that. public about

point, rate. So one of it's the a is easier -- one it time, this from but billion nothing's an standpoint, a during at see easy, $X to your yes, run that's right, least visibility to that

Michael Pack

What through bit a with the workforce availability business that with becomes we're the that uncertain just cadence challenges supplier we're is just of managing managing through. COVID, if in that and

Operator

have Baird. from Mig question We a Dobre, Robert W.

Mircea Dobre

back that cost. to Hopefully, your pre essentially that that X/X comment you're cost-cutting on QX question, rate early Are my compensation-related I looking as resets saying all as of guess 'XX? fiscal you in I'm healthy here clarify to the is Wisconsin. run

Michael Pack

correct, That's Mig.

Mircea Dobre

Okay.

maybe definition, almost that as can control spend discretionary the and So year the can tweak you progresses? by you

Michael Pack

that's we've the that going -- managed. started the benefit particularly quarter well. that's signaled cut that though, lesser economic as quarter. point that's area so we anticipating up, did last it been want more and the in activity we in of that there's to some were certainly we Again, on than third to important be had -- managing that in there things was new been quarter, call. We through area is, And picking And X -- as development, it's we we're fourth product to the don't Certainly, that bucket an in third pandemic, an continued this. that that to focus continue watch spending. of third that's fourth we're in the And Certainly, could bucket. what in the certainly saw have as with spend was

Wilson Jones

a we pull still seeing to we can I followed new in that about in performance. just there's we be And have for backlog. we is our And positive -- don't way -- positives defense our lot for always again, cautiously playbook, think a years. you're Mig, with I for talks a we But we've recovery. you've that & optimistic we on business we manage and would certainly I other a optimistic us obviously, if to But add we cautiously playbook. get that, the that have believe know along good our And levers of the we're realistic lot benchmark then work recovery, think set a through. us that that going because and with are. Mike emergency fire backlog, Refuse but base for

in We're all then that, and on NPD, still business. we're investing adding So development, in increasing product the new 'XX. actually

know You balance sheet. our

when come. So think it very we're cautiously the recovery optimistic but we're positive and really we're well for positioned does

Mircea Dobre

would agree. I And Absolutely.

specifically of excellent. my of to of I thinking the access are balance been equipment what your has follow-up see about How you still, call over robust. next, through inventory pretty inventory. looking to fiscal performance is say, sheet, in here. just guess think do question curious has Inventory do the it, quarters? couple I 'XX sort progress would kind kind I of with going and working need forward? And we specifically capital I'm

Michael Pack

will Thanks, inventory year. the that somewhat. of not We're be the with all may Mig. is merge Yes. to over an On is up requirements continuing so continue inventory, course gate, thing out That balance that year-over-year. production is X think that up there. assumption and I customer the to access Access of definitely

be it I when some stock, keep say to lines in is -- safety The other of big invest safety through our a navigated is running. trucks regards, piece stock And in to conscious to And made we've this stuff is, decisions pandemic with the lines think this is our we've used it's helpful in that. of been keep as lot that's going our I to of our imminently running. production

So is of meaningful a component that certainly the increase.

good So right inventory feel perspective we where we're from sitting now. an

Mircea Dobre

come down give terms you for expectation this at in for sort line I'm will a any of fiscal 'XX time. us a though, point item? Can it sense, in of presuming

Michael Pack

Yes. of be I the will our by I -- the expectation of over the say. It we're decline. it should mean, would to year the year, course -- continue overall, end

continue get into with there quarter as we'd come be stuff see -- the But the quarters, that inventory so we course the of timing and you expect or aspects. some orders could obviously, down. timing shifts over third year, So to and in fourth on whether to

Operator

We a Gilardi, of America. from Bank question have Ross

Ross Gilardi

and for just for all first half, I talk about if wondering expectations given movement on costs, your as decremental through half? you a to you more you could et try cetera. -- I access going in bit little can and actually some mean, -- as these and that I the first margin particularly mean, just inventory sustain decremental to the was of overall XX% into a eat in puts XX% shutdowns takes the the particularly company, you

Michael Pack

talked strive, the to and we've responsible decremental term. mid-XXs margins, that Sure. longer we as we deliver over target about, Certainly,

a, we things backlog Nicole when had well price not are again driving when We that. going of that's the a some headwinds you are to look access. first lower couple have with in We that that's in there quarter, mentioned at had the particular, And absorption, the that's from asked not as benefit that a benefited some last that that meaningful as year -- recurring. I question. price-protected We impact production

the the of do a of the particularly year. we And to a certainly that those as did in we are what to volume applies the company also in early say half couple expect but access. be year, is, So down first headwinds just

our decremental we're what remain responsible I'd at this going to say a deliver So margins focus, point. very strong that's strive and to Again, margins.

Ross Gilardi

tone tone is [Indiscernible] with X of more does adjustment. warm if in are on that for feel going year. as all? pickup in into still absolutely But being this shifting talking tight CapEx the just guys possible a these just it be frugal H&E shifting next year-end as to your about certainly is conversations next up some is as at starts year? Wilson. just very all. Or at the the the and CapEx like wondering marginally it you, I'd of larger very rental being for customers, like understand seemed they're the And is took careful? year, I'm

John Pfeifer

serving. you we're in that's rental This seeing for we little -- a telematics our data trimming a regular is fleets positive most of we both little all early of have and pretty on basis, very stayed in that on them. negotiations because just the terms see that is utilization John. the they're hearing what part, stages been the has We're seeing bit really size. up good has of that of sign. depending that I'll in that That's And fleets, come defleeting customers, what the utilization try independents big on and back our talk up. there's But sign. annual a so our to with we're and some a also we're good that to companies a color the The segment come national also the give

stabilization, enough that where think I pandemic, continuing is see is with be some we're start in to we of positive released. of what which uncertainty creating all signs we've CapEx this seeing to going start terms when been dealing

and XX replaced, I of management that the exactly that's in prudent question that age X we And U.S. demand. an terms to if, quarter amount continue what we X not believe be know of what of And the a that's to it's are they to in that's question happen. would also the going be the catalyst the They're we doing going is first boom of market that something quarters the will is to they think year that a to really of of which carefully of the average doing year. And just it should a fleets. as aging a now be need half guidance. can't back But to expect is fleets. down one we there's going to in right pin and fleet months. be the we're to see probably reasons the weak, we'll signs little We bit not quarter-by-quarter, the of in positive some see start providing monitoring

Wilson Jones

is getting Obviously, conversations the a worries is color Ross, our John, would around, first a wave, them the I bit is it's good news spot I monitoring -- about what of very on, been going big a COVID I've good that aging. that we closely. are think again, there's step. it's that's their be think and little most the if stabilizing. customers But is only age fleet to that agree I The second And market we're add, that's concerned

matter And learning agree now, what a I when. year fiscal the in It's it's so And not we're for right with would be said. John of if, that, of that back us. half this

Operator

from Weber, RBC. is question Seth Next

Brendan Shea

the just about out quarter, in sort competitors competitive competitive on lower demand, access. maybe kind drive in Or Seth. for there Brendan the giving change how concessions is to anything Was This like of the landscape to of given up? of normal market ask any shaped for landscape share? the pricing I'd the

John Pfeifer

Thanks the is question. John. This for

careful year. front, very price/cost pricing the equation in we the we've a very how on positive pricing. and So maintained our manage We're disciplined for

market We stay are leader the and we'll disciplined.

a throughout had not this problem have as We staying significant we've downturn. gone disciplined

think that, very positive a we So thing. that's

that selling of is strong any balance a talked We forced good got a we the Mike -- course, We're sheet. have not about we position. that. inventory kind Of in all inventory. current

expect to way So the we to this same in forward. going continue manage

Wilson Jones

been. thing think on we there America, It think been some North irrational only always front. internationally. there been always have has competitive the the it's I is a environment. add in irrational has but If international -- And would seen some more it's I really behavior, I pricing

Brendan Shea

there? you additional more budgets? could give Okay. F&E. those noted hearing And anything term constrain on then Is for short Any budgets that you're tight might what at color you municipal there

John Pfeifer

I'll it. you little a So give on color

a has really led backlog. got really F&E, year has strong backlog. for XXXX F&E that all, strong to was which record of an First all-time order

really in good for also bodes there. the has now future while about market. we aging the little market, been the There's position an F&E our fleet well of So a which certainly feel for and

biggest happen a municipal stressed more to course. has little receipts municipal things, problem and hospitality, municipal stress with in property a significant we're been going There than cost tax, there to not valuation what's budgets bit Now and are property are budgets. a probably driver spending? that seeing think We little of budgets, the state tax the marketplace. There's

put watching municipal feel be the that [indiscernible] Maybe. when about we're a But that budgets. a nice our market fire we will have something are & aged strong little when against on equipment some term, on remember, municipalities. that fleets think is market. emergency this position of priority not It potential they they their the for to pressure -- It's trim We squeeze spending. like bit I forced that. to cut they for Could long -- XXXX? the great in So and

give you So that. that's a I'll on color

Operator

question Raso, is from The David Evercore. next

David Raso

calendar here next can it bit in year the sequential so a from quantify as months Just the get want customers we think X are the would XX% that's really conversations for first case, how of down for access follow-up of type to proceed help half we down a better little normal your access. trends they the half the their the And of for to the If Should having. first roughly being the be feel XX%. 'XX? you're sales of year,

While giving to year? could there's at a I but June an the you again, June no looking full easy know quarter a comp. up quarters, into has year-over-year could change out that they a feel least the very lot doubt, allow framework year variability, are like of And it and the September

half you're the full to of So out of up year again, and first second what year? trying decline that just in back the that Can half set be the for pull level hole we hearing. to

Michael Pack

-- the start will outlook. and I'll John about we'll Mike. is ongoing this David, just then talk

both year-over-year remarks do to QX and right from to exact had ago, year -- QX. our -- think saw first that mentioned, down column, at and minutes now, stabilizing. we of in in his the again, percentage to, that this would saw changes now half prepared we right point [indiscernible] see point. we expect the we we in be I I markets We some Wilson as the stabilization

We range it stabilization be a there's to there. expect some And that's expect down. I in -- but scenarios think and we of

to So customers. continuing close we're the and to manage [indiscernible] stay

In John on end, that. it towards terms the the turn back I'll cadence of to over

John Pfeifer

moderate X back going going David, half to been continue -- next last we come can that enough is guidance quarters. X to from can the quarters, will Yes. certainly moderate on see guidance, in term. it's When be continue that, supplies give close the of the point think of really confidence to to had a but possible. more we of a possibility. And will year-over-year mean back case the we we provide to year-over-year it's will terms where get And see you where It's give that, I I wish level full clear attention you I will X what it's within we're the we decline, the the where say best to give the realm can happen. -- things realm to see if it quarterly growth? from on term, paying quarter of -- where where you possibility that. we that year within we because outlook it the scenario I we're near the could to Can near

Wilson Jones

Yes.

is think those I -- I doing, We're [indiscernible] at to infrastructure of think that momentum projects our half initial infrastructure sure are look We are, up the is in out give But pent-up, confidence that projects construction. think lot going I'm just very you some to think some And might add have a confidence there creates the if conversations going too, bill, need infrastructure cheering an for David, bill. a available, a even projects that An what it's in little it the are think, had, in bit more comments, I there. watching our on to year, impact of those little the creates trending you total ABI, I've not -- is back projects are bit. related though to Dodge there's be spending. closely. I I momentum, and everyone that people the

big there, that seasonally, should customers we And are, question. construction of [indiscernible] for also way be will the certainly our there are a most we opportunities spring I So when lot that. know out then of be [indiscernible] passive they're

John Pfeifer

we so Yes. number see Yes. from jump. of is still that's we've go kind need nice from Index XX Architectural where Recently, it great not so a Billing to the A seen trends jump. positive XX a here. to XX

David Raso

set an I kind a bill, kind a trying it mix Is it's of just say, market, middling pretty of is just year a get the demand replacement And top greatest we mix when bill, because the fleet, the a butter make bigger sure see replacement think big greatest just age just when you I'm of serving scissors? to you comes to Is let's comfortably. can if bit next to little don't see growth we what sense assume get bread on line, speak of obviously with infrastructure a where XX-footer? it But it we to the easier level bit if replacement? the do booms? to on and a the a the get we

John Pfeifer

are market. terms aged line so product the go we talk -- line But in by line about Well, the [indiscernible] or David. in product side I the by Booms is product of we fleet is certainly, you, positive future. I'll needed the most dynamics primary And Replacement is won't booms that tell when near that's the talk side. age. in about in

Operator

from Courtney Stanley. question a Yakavonis, Morgan have We

Courtney Yakavonis

inventory on access. levels in follow-up A on conversation the

a mentioned slightly better your versus can access might year-over-year. But kind us of much the you can more were trough in sense think you we up get how XXXX inventory gauge underproduce? help are of last where of they just levels you I kind so

Michael Pack

don't break down we I necessarily guess access.

are Our a year-over-year we in decline very demand. had rapid obviously, certainly, and up inventory levels

we're have if you to presence obviously, than and -- -- international and China So on. we a looked greater we so have

think probably on overall, it's But last perspective, somewhat So that from puts upward inventory. I an general inventory again, up year. some from pressure

that it's it. current items we're good We're The inventory comfortable is at. fore in where think selling is we're position that with the with inventory. I selling not

of management our optionality continued well. we have we're with comfortable the year and our into in production further schedules QX, So getting as

but the year of course the manage to over it, is comfortable So to we're to our going inventory going down. that come we're continue

John Pfeifer

even I'd that the current inventory, access, need that rebounds it is market when meet is reasons know that in it And Courtney, to the there not We some inventory happens. by have only of it's primary we the And Yes. intent. say there. inventory we that one as that's

Courtney Yakavonis

trends utilization of think from you. telematics to seeing I terms down single you're improved utilization from you give monthly digits. your is data Can in what that they previously, -- you Got the and you a sense think maybe of just -- And mentioned I were sequential where high said us had that performance?

John Pfeifer

Yes.

it year, that look last of business, Our utilization our so utilization want at so see is there for think terms -- because was telematics seasonality that terms utilization it what's was to we in that of year-over-year so where we year where the in the versus now data, ago. is it and very in adjusted means a to We seasonality. close

markets you Now you are other would different in say segments. right? in have but that that gas end certain others, from end oil you and So that say wouldn't

make utilization And it's part, most our continuing they're say, us still CapEx we the tell we improvement data. we're the and that, make big to And is everyone the that this see to I stabilized that's causes middle customers think that in pandemic. nice is sure it really the dark what because think stabilize seeing that really in cloud I sustained got "Hey, they For moves." is to before to that want rental of

Courtney Yakavonis

just to a billion mentioned Got you. defense run you sales $X year. run tend And that then appreciating lastly, that rate of

of to the the years? that kind headlines of make help I buying means JLTVs of of what could you think Army there were sense just a be big couple contracted. of more Can how that for currently next planning us than and couple that sort was

Wilson Jones

Yes.

things happening with nice JLTV. really Some

got got Benelux a we order of that a That's XXX the from been not have we Belgium, million we order million, an that's region units, that because for took order. about incumbent, $XXX was big strong. first from -- historically Specifically, and all, away it we where $XXX region,

U.S. be There a this that XXXX countries is it's was that more units is from orders believe there'll J&A, to and in With and a a a performance new they to we'll be to -- approved tell you cost we they So with from -- about that that to us justification showcase it's standpoint, the which and over units. just And process really international benchmark. initially when being call XX,XXX come that. added X,XXX a the sign, does they what regard contracted happen. Army, approval a happy

our Army, that brings now strong a for contract that's Marines you, U.S. indicator the was surprise, continuing to we necessarily units, just So around it's many and happen. that That world. our certainly a tell -- I'll and that is positive program strong, but allies a that, would the this and the of JLTV program XX,XXX expecting were not

Operator

question Felix Raymond Boeschen, We have James. a from

Felix Boeschen

relatively bit maybe just the comment I demand on I'm international in China curious markets flush segment access if think still was out of curious U.S., talked for about We've mentioned a and could the the you you if flesh China more. more how the out that world just you bit and can rise. Europe/the about with But cases rest a strong. you're maybe thinking COVID your

Michael Pack

Yes.

was X% So of went -- China continuing It COVID-induced but in and come quickest our it size. We is downturn now out grow into is also first of to its the the to -- of it. revenue it this first. terms over rapidly. And

be increase market in terms long-term market really continue a growth The bit are is our we it's the tough, to our rates where a us. the in to even of their pretty healthy, and terms be continue going for are of it, in customers call where market I'd markets willingness to behind so China CapEx. very, European U.S. utilization And expect and to

Europe to few quarters some expect. going we yet, pressure be for to So under is continue a

Operator

Revich, question Sachs. We have Goldman from a Jerry

Jerry Revich

you last can momentum fire don't expand decline you to expand stock, trough order you sales just also, see folks. you about in talk capital on wondering So emergency? and But we if cycle, book. the your comments market that in have this if the share the lower on about mind? talk And on for you peak XX% the you downturn, could that Can the I'm over differences in was

John Pfeifer

give some Yes. there. you Jerry, I'll color

example. F&E. and, therapies product, we've we F&E. is we stronger the our we bit in be that ever So downturn, could to units a better it able estate-based acknowledge our in was X to company The macroeconomic Recession. property estate some the little than simplification, operate but that to collapse tax too the real some not at a there downturn different it see, in puts happens It downturns about peak for and where impact talked still position into is in a We've market forced that Great down vaccine. from, It's this totally cost and trough, terms we've you're to a real a what XXXX, move able view. the innovation company issue. of us really I'll a municipality of spending downturn better and in to at mid-X,XXXs last good I collapse to the we're believe because point, XX% had in than problem. without and estate-based size. history you had a referring pandemic got the was The down last the if the feel really in not history to through are point, we're have low in our dealers come market X,XXXs, of the think low come with say, back we like at It's the annual believe the going of business the continuing now ever a of be to pandemic, issue. to much -- position. downturn This it's it's which we'll that we into And X,XXX our It's put real the pressure,

Jerry Revich

you and whole? your standpoint. really a good wondering But expand you're company you that post confidence operating segment, the margins not you strong on the have made year-over-year you as 'XX. exiting then for guidance momentum Obviously, outlined what's a commercial to from have continue the I'm with margin And comp giving that year Okay. level the folks of headwinds restructurings can even some incentive as the for strides

John Pfeifer

Yes.

place, the just disruption ability I decline So quarters. of through team a The very rapid whole say that as There's in F&E phenomenal has team is of in all couple blocks continuing speak, expect most building -- for great done they the no different. the to job about we margin managing I'll RCVs in this margin the their will headway mean, no as in I another. company. we with that expansion really The and to journey. And access continue. team can't a last any job, defense surprise, manage COVID commercial simplification the that, mixers X doing focus terms on on the They're this They've a workforce. continuing JLTV their in site and in put to been expansion team launch say this, probably

we So with going commercial business. right the our in feel like we're direction

Michael Pack

year. the I to we're yet going business, ends through I'd think, going where that very with And direction whichever that we've in next up top incrementals we're margin think think ends expect determine commercial not the what actions going. taken solid -- to that's able have their up is on thing for or that decrementals, Certainly, to I Jerry, and I year, the big make a call for that's really lines.

Operator

[Operator Instructions].

Chad from question a have Dillard, We Bernstein.

Catherine Gallagher

Yes. I'm asking Chad's on question a behalf.

a & of to year ago? about you emergency the could compared are seeing talk in you quoting activities level So fire

Wilson Jones

indication record will provide. say think that so just had I I I activity we an XXXX, the all-time Well, of in quoting order best can that's that year

Now fourth quarter. in the a came bit little down orders

So that's...

Michael Pack

expected. As

Wilson Jones

prior Yes, order the not massive quarter. a unexpected. rate We had in

say, order -- the a should had in or QX, I -- we massive quarter. coming it's So our

little F&E to down So that today. QX there's we in our But bit thought It QX. abnormality a bit. don't always that's little light thought think I we comes and would any in it in come down happening a it quoting would be

pretty healthy. is business looking Our

Michael Pack

Yes.

Catherine Gallagher

right? million that Great. Or headwind about, you addition temporary the that And the is the were is is coming of to already... of on follow-up in $XX back, cost sort the talking

Michael Pack

million, $XX it through I'll is that the important because point. Yes, an quickly walk

actions comes cost $XXX of grow XXXX. benefited back up, run permanent in of $XX we pick -- What do we've in actions benefit XXXX. by taken Those a permanent is million into XXXX. our to that $XX So $XXX actions expense million though, we temporary million million by those rate and

Operator

a question Ann have We JPMorgan. from Duignan,

Ann Duignan

I been questions what walk on know lower other in about of lot But there? segments through now. by the and can of what access, you're just but my you discussion a half have the contemplating your us sales of spent Most X, year-over-year, different we've time segments? answered

Michael Pack

the of right facing think segment and opportunity backlog defense, the to down it for breaking not you we're again, idea Obviously, we're an either. pandemic. The by is Ann, I & challenge with year. we give have, just fire now with in emergency the the

some come be facing was the and to restrictions, And to And are segment, segments. of emergency do an challenges fire when first that for a headwind Wisconsin emergency defense in the availability here the we you We if look and & the workforce in shelter-in-place started pandemic fire level had of have we concern the part to could fire That's some trucks. tougher process. it pick important early in customers that, up in that year. &

that between that clarity quarters. back provide being able could I some us So more bit because of see from think that's around little holding movement volume we what's a really on to

John Pfeifer

backlogs how and in they're Yes. of It's you terms really, emergency, look It's ability door. if going & mean, really I impact an much us question the defense is to get COVID really out thing. a our operational fire of at healthy. for the product to

Ann Duignan

so Yes. deeper. asked will it's I looking strength visibility And And curious total -- the was the because now. that that's the not just great down little right at first to dig a wanted I appreciate I half, the is comment why versus question that sales be not of I backlog

or those orders of vehicles? I orders the going significant customers that you share testing. to a won follow-up, Have X in have market electric somebody have amount that you trucks you a electric noted recent announced Just on in months. vehicles prepared mean, commercial, been huge X for with weren't as because has to lost you X the

Wilson Jones

I'm up, question. a brought great So glad you that

lost not have ground. We

We look of lost on electrification. have ourselves not market at as being out share We front electrification. because

of units units, look sale market the you We enormous And in electrification. actually be for happening those first some collection Boise industry. have the the of when work refuse they'll in actual on amount at an an their you're you RCV the -- before talking some never companies talking the orders, in huge in orders these about about history. companies of in have are When talk that made point about some at future,

Some their before history. of them made have truck never a even in

think, or So can they we whether not is do question. actually But on the the a question it, as to I out valid are electrification. forefront in

Operator

There questions over for further the time. turn floor I'd Jones this to are Wilson to comments. closing at no back like

Wilson Jones

to in us want thank everyone the today. hanging I for apologize I technical difficulties. for with Well, there

in New outage think a it was I on major going up Jersey.

safe healthy stay for through I you virtual Thank on I look call. to again, you these Take to everyone. So conference us. certainly next hanging on and encourage you. a want care, with you to as we with thank earnings our times. We all speaking work forward or there challenging

Operator

concludes teleconference. This today's

may your for at You participation. you your disconnect lines and time, this thank

Oshkosh (OSK) 29 Oct 202020 Q4 Earnings call transcript