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 31, 1994
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 31, 1994: 449,370
Class B Common Stock Outstanding as of December 31, 1994: 8,261,928
<PAGE>
OSHKOSH TRUCK CORPORATION
FORM 10-Q INDEX
FOR QUARTER ENDED 12/31/94
Page
PART I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheet . . . . . . . . 3
Consolidated Statement of Operations . . . 4
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
<PAGE>
OSHKOSH TRUCK CORPORATION
CONSOLIDATED BALANCE SHEET
(In thousands except share and per share amounts)
12/31/94 9/30/94
ASSETS (unaudited)
Current assets:
Cash and cash equivalents $ 18,326 $ 15,836
Receivables (Note 6) 50,971 65,926
Inventories (Note 2) 59,512 54,909
Prepaid expenses 4,363 6,334
Refundable income taxes - 801
Deferred income taxes 9,311 8,156
-------- --------
Total current assets 142,483 151,962
Deferred charges 3,008 2,884
Deferred income taxes 626 626
Other assets (Note 6) 17,543 10,887
Property, plant, & equipment, at cost:
Land and improvements 7,954 7,944
Buildings 34,579 34,364
Machinery and equipment 72,271 71,389
-------- --------
114,804 113,697
Less accumulated depreciation 65,102 63,196
-------- --------
Net property, plant and equipment 49,702 50,501
-------- --------
Total assets $213,362 $216,860
======== ========
LIABILITIES AND
SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 32,869 $ 37,973
Federal excise taxes 2,764 1,550
Payroll-related obligations 4,789 6,484
Accrued warranty 6,198 6,788
Income taxes 2,282 -
Other liabilities 18,128 17,157
-------- --------
Total current liabilities 67,030 69,952
Long-term debt (Note 3) 8,704 8,737
Postretirement benefit obligations 8,337 8,159
Other long-term liabilities 8,070 8,454
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 7,666 7,623
Retained earnings 117,320 116,890
-------- --------
125,076 124,603
Less: Cost of Class B common stock
in treasury; 296,867 and 300,367
shares at 12/31/94 and 9/30/94,
respectively 2,562 2,591
Pension liability adjustment 454 454
Cumulative translation adjustment 839 -
-------- --------
Total shareholders' equity 121,221 121,558
-------- --------
Total liabilities and shareholders'
equity $213,362 $216,860
======== ========
See notes to consolidated financial statements
<PAGE>
OSHKOSH TRUCK CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited/in thousands except per share amounts)
Three months ended
12/31/94 12/25/93
Net shipments $112,308 $162,325
Cost of goods sold 97,496 143,115
-------- --------
Gross profit 14,812 19,210
Operating expenses:
Selling, general & administrative 9,517 10,890
Engineering, research & development 2,088 2,368
-------- --------
Total operating expenses 11,605 13,258
Income from operations 3,207 5,952
Other income (expense):
Interest expense (303) (450)
Interest income 249 198
Miscellaneous, net (428) (23)
-------- --------
(482) (275)
-------- --------
Income before income taxes 2,725 5,677
Provision for income taxes 1,214 2,214
-------- --------
Net income $ 1,511 $ 3,463
======== ========
Net income per common share $0.17 $0.40
===== ======
Cash dividends per common share:
Class A $0.10875 $0.10875
Class B $0.12500 $0.12500
<PAGE>
OSHKOSH TRUCK CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited/In thousands)
Three months ended
12/31/94 12/25/93
Operating activities:
Net income $ 1,511 $ 3,463
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 2,225 2,318
Deferred income taxes (1,155) -
Changes in operating assets and
liabilities 2,130 31,782
------- -------
Total adjustments 3,200 34,100
------- -------
Net cash provided by operating activities 4,711 37,563
------- -------
Investing activities:
Additions to property, plant &
equipment (1,180) (1,317)
(Increase) decrease in other assets 44 (444)
------- -------
Net cash used by investing activities (1,136) (1,761)
------- -------
Financing activities:
Net payments on lines of credit (33) (34,776)
Sale of common stock from treasury 29 12
Dividends paid (1,081) (1,079)
------- -------
Net cash used by financing activities (1,085) (35,843)
------- -------
Increase (decrease) in cash and
cash equivalents 2,490 (41)
Cash and cash equivalents at
beginning of period 15,836 592
------- -------
Cash and cash equivalents at
end of period $18,326 $ 551
======= =======
Supplementary disclosures:
Cash paid for interest $ 307 $ 518
Cash paid (refunded) for income taxes $ (714) $ 1,685
See notes to consolidated financial statements
<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 31, 1994 and September 30, 1994, the
results of operations for the three month periods ended December 31, 1994
and December 25, 1993, and cash flows for the three month periods ended
December 31, 1994 and December 25, 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 consolidated financial statements and notes thereto
included in the company's 1994 annual report to shareholders.
NOTE 2 INVENTORIES
Inventories consist of the following:
12/31/94 9/30/94
Finished products $10,173 $12,618
Products in process 11,655 9,572
Raw material 44,021 38,931
------- -------
65,849 61,121
Less: allowance for reduction to
LIFO cost 6,337 6,212
------- -------
$59,512 $54,909
======= =======
NOTE 3 LONG-TERM DEBT
Long-term debt consists of the following:
12/31/94 9/30/94
Industrial Revenue Bonds $ 8,700 $ 8,700
Other 4 37
------- -------
$ 8,704 $ 8,737
======= =======
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 8,709,148 and 8,688,121, respectively, for the three month
periods ended December 31, 1994 and December 25, 1993. Stock options were
not dilutive in either period.
NOTE 5 RECLASSIFICATIONS
Certain reclassifications have been made to the 1994 fiscal year
consolidated financial statements to conform to the 1995 fiscal year
presentation.
NOTE 6 CUMULATIVE TRANSLATION ADJUSTMENT
The company reclassified its $7,800,000 short-term note receivable due
from its 45% owned joint venture in Mexico, previously reported as
"receivables", into "other assets" as advances and investment in the joint
venture. This non-cash transaction is not reflected in the consolidated
statement of cash flows for the three month period ended December 31,
1994. As a result of the devaluation of the peso the company recorded as
a component of shareholder's equity at December 31, 1994 a cumulative
translation adjustment for its portion of the joint venture's transaction
losses, as settlement is not planned or anticipated in the foreseeable
future.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
__________________________________________________________________
Results of Operations
For the Three Months Ended December 1994
Compared to the Three Months Ended December 1993
Net shipments for the three months ended December 31, 1994 were
$112.3 million, a decrease of $50.0 million, or 30.8% from shipments of
$162.3 million during the first quarter of the 1994 fiscal year.
The company had net income of $1.5 million, or $.17 per share
during the first quarter of the 1995 fiscal year compared to net income
of $3.5 million, or $.40 per share in the first quarter of the 1994
fiscal year.
The decline in net shipments and net income is due to reduced unit
shipments of defense products in the current quarter as compared to a
year earlier. Shipments under the Palletized Load System (PLS) contract
declined in the 1995 fiscal quarter reflecting a decrease in the
production rate of PLS trucks, partially offset by increased production
of PLS flatracks. During the first quarter of the 1994 fiscal year the
company had shipments under the Heavy Equipment Transporter (HET)
contract. The HET contract was substantially completed at September 30,
1994.
Net shipments of commercial products were $56.5 million in the
first quarter of the 1995 fiscal year in comparison to $57.5 million in
the first quarter of the 1994 fiscal year.
Gross profits for the three month period ended December 31, 1994
were $14.8 million, or 13.2% of shipments compared to $19.2 million, or
11.8% of shipments during the first quarter of the 1994 fiscal year, as
the defense volume decrease was partially offset by improved margins
across all lines of business through improved efficiency and cost
reductions.
Operating expenses totaled $11.6 million in the 1995 fiscal year
first quarter, a decline from $13.3 million during the 1994 fiscal year
first quarter, and is reflective of the company's actions during the
1994 fiscal year to reduce continuing head count and overall expenditure
levels in line with anticipated lower defense production volumes. As a
percent of sales operating expenses were 10.3% and 8.2% in the 1995 and
1994 fiscal periods, respectively.
Interest expense, net of interest income and other, totaled $0.5
million in the 1995 fiscal year first quarter compared to $0.3 million
in the 1994 fiscal year first quarter, as reduced interest expense was
more than offset by losses incurred in the company's equity of the
operating results of its joint ventures in Mexico.
The effective income tax rate was 44.6% in the 1995 fiscal year
first quarter compared to 39.0% in the 1994 fiscal year first quarter,
due to non-tax deductible status of losses incurred by the company's
joint ventures in Mexico.
Liquidity and Capital Resources
Working capital was reduced to $75.5 million at December 31, 1994
in comparison to $82.0 million at September 30, 1994. This reduction is
due to the company's reclassification of $7.8 million in short-term
receivables from its joint venture in Mexico to long-term investment.
The company generated favorable cash flow from operations in the
current quarter of $4.7 million which funded dividend payments of $1.1
million, investments in plant, property and equipments of $1.1 million,
and a $2.5 million increase in cash and cash equivalents to $18.3
million at December 31, 1994.
The company believes its internally generated cash flow,
supplemented by progress payments when applicable, and existing credit
facilities will be adequate to meet the working capital and other
operating and capital requirements in the foreseeable future.
Forward Looking Information
In January 1995 the company will begin production under a Heavy
Expanded Mobility Tactical Truck (HEMTT) contract award for 300 vehicles
valued at $61 million, and will complete HEMTT production in September
1995. The company had produced HEMTTs continuously from 1982 through
April 1993 and in total has delivered over 14,000 of these eight wheel
drive, 10 ton capacity trucks. In spite of the HEMTT production the
decline in defense shipments will continue with expected future
shipments in line with the current quarter.
The company is dependent on its shipments of defense products to
the U.S. Government as evidenced by shipments of 62% and 66% of total
shipments during fiscal years 1994 and 1993, respectively. Substantial
decreases in the company's level of defense business from the previous
yearly levels could have an adverse effect on the company's
profitability. The company is anticipating a lower level of sales to
the U.S. Government in fiscal 1995 due to the completion of the HET
contract in September 1994. The PLS contract will remain in production
through August 1996. Additional orders of other vehicles could increase
the rate of production or extend the period of production. The company
is optimistic about its defense business prospects, and its ability to
sustain a reasonable level of business into the future. The expected
effect of the decline in defense shipments on operations is that
profitability could be negatively impacted if the company does not take
measures to decrease operating expenses. The impact a of decline in
defense shipments on the liquidity of the company will be to improve
liquidity due to the reduction of working capital previously required
for this business. It would be inappropriate to extrapolate the
shipment or net income level for the full 1995 fiscal year based on an
annualization of the first quarter, as the company's commercial products
shipments are typically at their lowest level in the first quarter of
the fiscal year.
Inflation
The company believes that the risks of inflation are minimized by
the nature of its businesses. All revenue 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 inflationary cost increases in prices.
Backlog
The company's backlog at December 31, 1994 was $498 million,
compared to $512 million at September 30, 1994. The change in backlog
represents delivery of products on long-term contracts net of additional
funding received. Backlog on U.S. Government contracts comprises $414
million of the current backlog with the remainder being commercial.
Environmental
The company continues to engage in environmental monitoring
activities that include both investigation and remediation. The company
does not anticipate that costs relating to environmental activities will
have a material adverse impact on the company's results of operations or
financial condition.
<PAGE>
OSHKOSH TRUCK CORPORATION
PART II - OTHER INFORMATION
FORM 10-Q
DECEMBER 31, 1994
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8-K
The company was not required to file a report on Form 8-K during the
quarter ended December 31, 1994.
<PAGE>
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: February 14, 1995 /s/ R. Eugene Goodson
R. Eugene Goodson
Chairman and Chief Executive Officer
DATE: February 14, 1995 /s/ Fred S. Schulte
Fred S. Schulte
Vice President, Chief Financial
Officer and Treasurer
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED CONDENSED FINANCIAL STATEMENTS OF OSHKOSH TRUCK CORPORATION
AS OF AND FOR THE QUARTER ENDED DECEMBER 31, 1994 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-START> OCT-01-1994
<PERIOD-END> DEC-31-1994
<CASH> 18,326
<SECURITIES> 0
<RECEIVABLES> 51,608
<ALLOWANCES> 637
<INVENTORY> 59,512
<CURRENT-ASSETS> 142,483
<PP&E> 114,804
<DEPRECIATION> 65,102
<TOTAL-ASSETS> 213,362
<CURRENT-LIABILITIES> 67,030
<BONDS> 8,704
<COMMON> 90
0
0
<OTHER-SE> 121,131
<TOTAL-LIABILITY-AND-EQUITY> 213,362
<SALES> 112,308
<TOTAL-REVENUES> 112,308
<CGS> 97,496
<TOTAL-COSTS> 97,496
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 103
<INTEREST-EXPENSE> 303
<INCOME-PRETAX> 2,725
<INCOME-TAX> 1,214
<INCOME-CONTINUING> 1,511
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,511
<EPS-PRIMARY> 0.17
<EPS-DILUTED> 0.17
</TABLE>
