SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
(x) Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended December 25, 1993
or
( ) Transaction Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
for the Transition period from to
Commission File Number 0-13886
Oshkosh Truck Corporation
[Exact name of registrant as specified in its charter]
Wisconsin 39-0520270
[State of other jurisdiction of [I.R.S. Employer
incorporation or organization] Identification No.]
2307 Oregon Street, P.O. Box 2566, Oshkosh, Wisconsin 54903
[Address of principal executive offices] [Zip Code]
Registrant's telephone number, including area code (414) 235-9151
None
[Former name, former address and former fiscal year,
if changed since last report]
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) or the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that
the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes X
No
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Class A Common Stock Outstanding as of December 25, 1993: 449,370
Class B Common Stock Outstanding as of December 25, 1993: 8,239,178
<PAGE>
OSHKOSH TRUCK CORPORATION
FORM 10-Q INDEX
FOR QUARTER ENDED 12/25/93
Page
PART I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheet . . . . . . . . 3
Consolidated Statement of Operations . . . 4
Condensed Consolidated Statement of
Cash Flows . . . . . . . . . . . . . . . . 5
Notes to Consolidated Financial Statements 6, 7
Item 2. Management's Discussion and Analysis of
Results of Operations and Financial
Condition. . . . . . . . . . . . . . . . 8, 9, 10
PART II. Other Information. . . . . . . . . . . . . 11
Signatures. . . . . . . . . . . . . . . . . . . . . . . . 11
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OSHKOSH TRUCK CORPORATION
CONSOLIDATED BALANCE SHEET
(In thousands except share and per share amounts)
12/25/93 9/25/93
ASSETS (unaudited)
Current assets:
Cash $ 551 $ 592
Receivables 69,350 97,429
Inventories (Note 2) 71,300 68,801
Prepaid expenses 4,969 5,672
Deferred income taxes 6,165 6,166
-------- --------
Total current assets 152,335 178,660
Deferred charges 6,188 8,128
Other assets 12,081 11,887
Property, plant, & equipment,
at cost:
Land & improvements 7,910 7,788
Buildings 33,912 33,302
Machinery & equipment 69,165 68,580
-------- --------
110,987 109,670
Less accumulated depreciation 57,314 55,246
-------- --------
Net property, plant & equipment 53,673 54,424
-------- --------
Total assets $224,277 $253,099
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 54,346 $ 52,881
Federal excise taxes 67 774
Payroll-related obligations 6,267 6,127
Accrued warranty 4,413 4,542
Income taxes 1,149 620
Other liabilities 14,162 12,749
-------- --------
Total current liabilities 80,404 77,693
Long-term debt (Note 3) 13,043 47,819
Postretirement benefit obligations 7,955 7,726
Other long-term liabilities 7,712 7,094
Deferred income taxes 763 763
Shareholders' equity:
Preferred stock, par value $.01 per
share, authorized 2,000,000 shares,
none issued - -
Common stock, par value $.01 per share:
Class A, authorized 1,000,000
shares, issued and outstanding
449,370 shares 4 4
Class B, authorized 18,000,000
shares, issued 8,558,795 shares 86 86
Additional paid-in capital 7,398 7,399
Retained earnings 110,543 108,158
-------- ---------
118,031 115,647
Less: Cost of Class B common stock
in treasury; 319,617 and 321,117
shares at 12/25/93 and 9/25/93,
respectively 2,755 2,767
Pension liability adjustment 876 876
-------- --------
Total shareholders' equity 114,400 112,004
-------- --------
Total liabilities and shareholders'
equity $224,277 $253,099
======== ========
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OSHKOSH TRUCK CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited/in thousands except per share amounts)
Three months ended
12/25/93 01/02/93
Net shipments $162,325 $144,299
Cost of goods sold 143,115 128,970
-------- --------
Gross profit 19,210 15,329
Operating expenses:
Selling, general & administrative 10,890 10,695
Engineering, research & development 2,368 2,530
-------- --------
Total operating expenses 13,258 13,225
Income from operations 5,952 2,104
Other income (expense):
Interest expense (450) (1,046)
Interest income 198 30
Miscellaneous, net (23) (13)
--------- ---------
(275) (1,029)
--------- ---------
Income before income taxes and
cumulative effect of change
in accounting principle 5,677 1,075
Provision for income taxes 2,214 407
-------- --------
Income before cumulative effect of
change in accounting principle 3,463 668
Cumulative effect of change in method
of accounting for postretirement
benefits, net of tax benefit of $2,726 - (4,088)
-------- ---------
Net income $ 3,463 $ (3,420)
======== =========
Net earnings per common share:
Before cumulative effect of
accounting change $0.40 $0.07
Cumulative effect of change in method
of accounting for postretirement
benefits, net of taxes 0.00 (0.47)
------- ---------
Net income $0.40 $(0.40)
===== =======
Cash dividends per common share:
Class A $0.10875 $0.10875
Class B $0.12500 $0.12500
<PAGE>
OSHKOSH TRUCK CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited/In thousands)
Three months ended
12/25/93 01/02/93
Operating activities:
Net income (loss) $ 3,463 $(3,420)
Adjustments to reconcile net income
to net cash provided (used) by
operating activities:
Depreciation and amortization 2,318 2,295
Deferred income taxes - (2,726)
Cumulative effect of change in
accounting principle - 6,814
Changes in operating assets and
liabilities 31,782 2,308
------- -------
Total adjustments 34,100 8,691
------- -------
Net cash provided by operating activities 37,563 5,271
------- -------
Investing activities:
Additions to property, plant &
equipment (1,317) (1,563)
Less amount capitalized under
financing leases - 450
-------- --------
Net additions to property, plant
& equipment (1,317) (1,113)
Increase in other assets (444) (1,436)
-------- --------
Net cash used by investing activities (1,761) (2,549)
-------- --------
Financing activities:
Net payments on lines of credit (34,776) (1,464)
Sales of common stock in treasury 12 -
Dividends paid (1,079) (1,079)
-------- --------
Net cash (used) by financing activities (35,843) (2,543)
-------- --------
Increase (decrease) in cash and
cash equivalents (41) 179
Cash at beginning of period 592 221
-------- -------
Cash at end of period $ 551 $ 400
======= =======
Supplementary disclosures:
Cash paid for interest $ 518 $ 953
Cash paid (refunded) for income taxes $ 1,685 $ (652)
<PAGE>
OSHKOSH TRUCK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share amounts)
NOTE 1 BASIS OF PRESENTATION
The consolidated financial statements included herein have been prepared
by the company without audit. However, the foregoing statements contain
all adjustments (consisting only of normal recurring adjustments) which
are, in the opinion of company management, necessary to present fairly the
financial position as of December 25, 1993 and September 25, 1993, the
results of operations for the three month periods ended December 25, 1993
and January 2, 1993, and cash flows for the three month periods ended
December 25, 1993 and January 2, 1993.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to the rules
and regulations of the Securities and Exchange Commission. It is
suggested that these consolidated financial statements be read in
conjunction with the financial statements and notes thereto included in
the company's 1993 annual report to shareholders.
NOTE 2 INVENTORIES
Inventories consist of the following:
12/25/93 9/25/93
Finished products $13,253 $ 8,912
Products in process 21,281 17,495
Raw material 43,521 48,900
------- -------
78,055 75,307
Less:
Allowance for reduction to
LIFO cost 6,755 6,506
------- -------
$71,300 $68,801
======= =======
NOTE 3 LONG-TERM DEBT
Long-Term Debt consists of the following:
12/25/93 9/25/93
Revolving Credit Facility $ 4,000 $38,500
Industrial Revenue Bonds 8,700 8,700
Other 343 619
------- -------
$13,043 $47,819
======= =======
NOTE 4 NET INCOME PER COMMON SHARE
Net income per common share is computed by dividing net income by the
weighted average number of shares outstanding. Average number of shares
outstanding was 8,688,121 and 8,686,881, respectively, for the three month
periods ended December 25, 1993 and January 2, 1993. Stock options are
not presently dilutive.
NOTE 5 RECLASSIFICATIONS
Certain reclassifications have been made to the 1993 condensed
consolidated financial statements to conform to the 1994 presentation.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
-------------------------------------------------------------------
Results of Operations
For the Three Months Ended December 1993
Compared to the Three Months Ended December 1992
Net shipments for the three months ended December 25, 1993, were $162.3
million, an increase of $18.0 million, or 12.5% from shipments of $144.3
million during the first quarter of the 1993 fiscal year. The company had
net income of $3.5 million, or $.40 per share during the first quarter of
the 1994 fiscal year compared to earnings from operations of $2.2 million,
or $.26 per share during the first quarter of the 1993 fiscal year.
During the first quarter of the 1993 fiscal year, the company incurred a
special charge related to the settlement of cost accounting issues of $1.6
million, net of tax. Fiscal 1993 results were restated to reflect the
change in accounting principle for the adoption of SFAS No. 106,
"Employers Accounting for Postretirement Benefits Other Than Pensions"
during the first quarter of the 1993 fiscal year. The net loss for the
first quarter of the 1993 fiscal year, after the special charge, and after
the adoption of SFAS No. 106 was $3.4 million, or $.40 per share.
Net shipments increased due to improved shipments in both defense and
commercial products compared to the same period a year ago. Defense
shipments increased by $13.0 million, or 12.9% to $143.5 million in the
first quarter of the 1994 fiscal year compared to a year earlier. This
increase comes on decreased unit volumes, but increased pricing as the
company continues production on its two major U.S. Army contracts for
Palletized Load System (PLS) and Heavy Equipment Transporter (HET)
vehicles. Production of the PLS and HET more than offset declines
resulting from completion of other contracts.
Net shipments of commercial products improved by $5.0 million to $48.8
million in the first quarter of the 1994 fiscal year in comparison to the
first quarter of the 1993 fiscal year. Virtually all of the company's
revenues are derived from firm customer orders prior to commencing
production.
Gross profits for the three month period ended December 25, 1993,
increased by $3.9 million, or 25.3% to $19.2 million in comparison to
$15.3 million in the first quarter of the 1993 fiscal year. The first
quarter of the 1993 fiscal year included a special charge of $2.5 million
($1.6 million net of tax) related to a settlement reached with the U.S.
Government on cost accounting issues from as far back as 1986. Gross
profit as a percentage of shipments was 11.8% in the current period.
Gross profit in the first quarter of the 1993 fiscal year, before
recognition of the special charge, was 12.4% of shipments. The decline is
attributable to a change in commercial product mix.
Operating expenses remain unchanged at $13.2 million in both the 1994 and
1993 fiscal periods.
Interest expense, net of interest income and other, is sharply lower,
totalling $0.3 million in the first quarter of the 1994 fiscal year,
compared to $1.0 million a year earlier. This decrease is a function of
reduced borrowings as the company's working capital needs have contracted.
The effective income tax rate for combined federal and state income taxes
in the current period was 39.0% increased due to higher statutory rates
from 37.9% in the first quarter of the 1993 fiscal year.
Liquidity and Capital Resources
Working capital was $71.9 million at December 25, 1993, substantially
decreased from $101.0 million at September 25, 1993. This decrease is a
result of a drop in receivables from unusually high levels experienced at
September 25, 1993, to more normal levels currently.
The company achieved favorable cash flow performance in the first quarter
of the 1994 fiscal year generating $37.6 million in cash provided by
operations, which funded dividend payments of $1.1 million, $34.8 million
reduction in long-term debt to $13.0 million at December 25, 1993, and
capital additions and investing activities of $1.7 million.
The company currently has an $85.0 million committed revolving credit
agreement with a group of banks. The company believes its internally
generated cash flow, supplemented by progress payments and the existing
credit facilities, will be adequate to meet the working capital and other
operating and capital requirements of the company in the foreseeable
future.
Under the current circumstances, the company believes that recent changes
in the overall level of defense spending will not necessarily have a
material impact on the company's operations since such changes do not have
an immediate or direct correlation with the company's existing contracts.
The company is substantially dependent on its shipments to the U.S.
Government and shipments of defense products as evidenced by shipments of
66% and 71% of total shipments during fiscal 1993 and 1992, respectively.
Substantial decreases in the company's volume of defense business from
current levels could have an adverse effect on the company's
profitability. The company has negotiated a modification to the PLS
contract to extend, at reduced levels, production of existing contractual
quantities through approximately August 1996, at which time additional
funding may be available to meet future government requirements, thus
providing stable long-term production. PLS production without this
modification would have concluded in August 1995. The company continues
actively working on several international sales opportunities for defense
vehicles, some of them major.
Inflation
The company believes that the risks of inflation are minimized by the
nature of its businesses. All of the revenues derived by the company from
its contracts with the U.S. Government were received under firm fixed-
price contracts. The company prices major government programs and
contracts on a current basis that takes into account cost increases
expected to occur during performance of the contract. Generally, major
suppliers receive terms from the company similar to what the company
receives under its contracts with the U.S. Government. Commercial
business is performed on the basis of pricing specific orders. Any impact
from inflation will be minimized by the company's ability to include the
inflationary cost increases in prices.
Backlog
The company's current backlog is $439 million, compared to $459 million as
of September 25, 1993. The change in backlog represents delivery of
products on long-term contracts net of additional funding received.
Backlog on U.S. Government contracts comprises $326 million of the current
backlog with the remainder being commercial. At December 25, 1993, the
company additionally had unfunded portions of base contracts, and
available options of $284 million and $628 million, respectively, related
to the PLS and HET programs.
Environmental
The Company is currently engaged in environmental activities that include
both investigation and remediation. The company acquired a business and
subsequently discovered hazardous material had been improperly disposed of
on the premises. Investigation of the matter is continuing and it has not
been determined whether any remediation will be required. The company is
relying on a contractual representation as well as state law to recover
costs from the former owner. In addition, the company is investigating
hazardous material discharges at its Wisconsin facility. Remediation, if
required, will begin after the completion of the investigation. Estimated
costs related to these activities have been made and accrued in current
operations. The company does not anticipate the costs relating to
environmental activities will have a material adverse impact on the
company's financial condition.
<PAGE>
OSHKOSH TRUCK CORPORATION
PART II - OTHER INFORMATION
FORM 10-Q
DECEMBER 25, 1993
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
None
(b) Reports on Form 8-K
The company was not required to file a report on Form 8-K during the
quarter ended December 25, 1993.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
OSHKOSH TRUCK CORPORATION
DATE: January 27, 1994 R. EUGENE GOODSON
R. Eugene Goodson
Chairman and Chief Executive Officer
DATE: January 27, 1994 FRED S. SCHULTE
Fred S. Schulte
Vice President, Chief Financial
Officer and Treasurer
