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 30, 1995
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 30, 1995: 410,283
Class B Common Stock Outstanding as of December 30, 1995: 8,472,865
<PAGE>
OSHKOSH TRUCK CORPORATION
FORM 10-Q INDEX
FOR QUARTER ENDED 12/30/95
Page
PART I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets. . . . . . . . 3
Consolidated Statements of Income. . . . . 4
Consolidated Statement of
Shareholders' Equity . . . . . . . . . . . 5
Condensed Consolidated Statements of
Cash Flows . . . . . . . . . . . . . . . . 6
Notes to Consolidated Financial Statements. 7,8
Item 2. Management's Discussion and Analysis of
Results of Operations and Financial
Condition. . . . . . . . . . . . . . . . . 9,10,11
PART II. Other Information. . . . . . . . . . . . . 12
Signatures. . . . . . . . . . . . . . . . . . . . . . . . 12
<PAGE>
OSHKOSH TRUCK CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
12/30/95 09/30/95
ASSETS (unaudited)
Current assets:
Cash and cash equivalents $ 29,539 $ 29,716
Receivables, net of allowance
for doubtful accounts 41,719 57,374
Inventories (Note 2) 52,199 45,781
Prepaid expenses 4,238 4,363
Deferred and refundable income taxes 4,516 4,681
Net current assets of discontinued
operations (Note 5) 17 3,273
-------- -------
Total current assets 132,228 145,188
Deferred charges 2,871 2,978
Deferred income taxes 2,389 2,389
Other assets 12,846 10,437
Property, plant & equipment, at cost:
Land 5,876 5,522
Buildings 30,416 30,118
Machinery & equipment 66,653 68,630
-------- -------
102,945 104,270
Less accumulated depreciation (64,279) (64,346)
-------- -------
Net property, plant & equipment 38,666 39,924
-------- -------
Total assets $189,000 $200,916
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 19,128 $ 28,266
Payroll-related obligations 4,624 5,526
Accrued warranty 2,183 3,084
Income taxes 429 -
Other current liabilities 16,148 16,535
-------- -------
Total current liabilities 42,512 53,411
Postretirement benefit obligations 9,050 8,839
Other long-term liabilities 5,127 5,026
Net long-term liabilities of discontinued
operations (Note 5) 113 227
Shareholders' equity:
Preferred stock, par value $.01 per share,
2,000,000 shares authorized, none issued - -
Common stock, par value $.01 per share:
Class A, 1,000,000 shares authorized,
410,283 and 427,262 shares issued at
12/30/95 and 9/30/95, respectively 4 4
Class B, 18,000,000 shares authorized,
8,947,882 and 8,930,903 shares issued
at 12/30/95 and 9/30/95, respectively 89 89
Paid-in capital 16,643 16,533
Retained earnings 122,165 121,697
-------- -------
138,901 138,323
Cost of Class B common stock
in treasury; 475,017 shares at
12/30/95 and 353,617 shares at
9/30/95 (5,196) (3,403)
Pension liability adjustment (1,507) (1,507)
-------- -------
Total shareholders' equity 132,198 133,413
-------- -------
Total liabilities and shareholders'
equity $189,000 $200,916
======== ========
<PAGE>
OSHKOSH TRUCK CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited, in thousands, except per share amounts)
Three Months Ended
12/30/95 12/31/94
Continuing operations:
Net shipments $ 80,533 $ 95,417
Cost of goods sold 69,081 83,078
-------- --------
Gross profit 11,452 12,339
Operating expenses:
Selling, general & administrative 7,965 6,969
Engineering, research & development 1,327 1,503
-------- --------
Total operating expenses 9,292 8,472
Income from operations 2,160 3,867
Other income (expense):
Interest expense (37) (50)
Interest income 482 246
Miscellaneous, net (48) 1
-------- --------
397 197
-------- --------
Income from continuing operations
before income taxes 2,557 4,064
Provision for income taxes 985 1,565
-------- --------
Income from continuing operations 1,572 2,499
Discontinued operations (Note 5):
Loss from discontinued operations
net of income tax benefit - (988)
-------- --------
Net income $ 1,572 $ 1,511
======== ========
Earnings per common share:
Income from continuing operations $ 0.18 $ 0.29
Discontinued operations - (0.12)
-------- --------
Net income $ 0.18 $ 0.17
======== ========
Cash dividends per common share:
Class A $0.10875 $0.10875
Class B $0.12500 $0.12500
<PAGE>
<TABLE>
OSHKOSH TRUCK CORPORATION
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
THREE MONTHS ENDED DECEMBER 30, 1995
(Unaudited, in thousands, except per share amounts)
<CAPTION>
Pension
Paid-in Retained Treasury Liability
Common Stock Capital Earnings Stock Adjustment Total
<S> <C> <C> <C> <C> <C> <C>
Balance at 9/30/95 $93 $16,533 $121,697 $(3,403) $(1,507) $133,413
Net income 1,572 1,572
Cash dividends:
Class A common
($.10875 per share) (43) (43)
Class B common
($.12500 per share) (1,061) (1,061)
Purchase of treasury stock (1,844) (1,844)
Exercise of stock options 8 51 59
Incentive compensation awards 102 102
____ _______ ________ _______ _______ ________
Balance at 12/30/95 $93 $16,643 $122,165 $(5,196) $(1,507) $132,198
=== ======= ======== ======== ======== ========
</TABLE>
<PAGE>
OSHKOSH TRUCK CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
Three Months Ended
12/30/95 12/31/94
Operating activities:
Net income $ 1,572 $ 2,499
Adjustments to reconcile net income
to net cash provided by
operating activities:
Depreciation and amortization 1,925 2,023
Deferred income taxes - (1,155)
Loss on disposal of property,
plant and equipment 53 12
Changes in operating assets and
liabilities (836) (980)
------- -------
Total adjustments 1,142 (100)
------- -------
Net cash provided by operating activities 2,714 2,399
------- -------
Investing activities:
Additions to property, plant &
equipment (2,420) (961)
Proceeds from sale of property,
plant and equipment 1,956 3
Increase in other assets (2,665) (384)
------- -------
Net cash used by investing activities (3,129) (1,342)
------- -------
Net cash from discontinued operations 3,142 2,518
Financing activities:
Net payments on lines of credit - (33)
Purchase of treasury stock and proceeds
from exercise of stock options, net (1,785) 29
Dividends paid (1,119) (1,081)
------- -------
Net cash used by financing activities (2,904) (1,085)
------- -------
Increase (decrease) in cash and cash equivalents (177) 2,490
Cash and cash equivalents at beginning of period 29,716 15,836
------- -------
Cash and cash equivalents at end of period $29,539 $18,326
======= =======
Supplementary disclosures:
Cash paid for interest:
Continuing operations $ 36 $ 63
Discontinued operations $ - $ 244
Cash paid (refunded) for income taxes $ 360 $ (714)
<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 30, 1995 and September 30, 1995, the
results of operations for the three month periods ended December 30, 1995
and December 31, 1994, and cash flows for the three month periods ended
December 30, 1995 and December 31, 1994.
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 1995 annual report to shareholders.
NOTE 2 INVENTORIES
Inventories consist of the following:
12/30/95 09/30/95
Finished products $ 6,342 $ 3,368
Products in process 21,577 15,132
Raw materials 32,107 35,106
------- -------
Inventories at FIFO cost 60,026 53,606
Less:
Progress payments on U.S.
Government contracts 674 852
Allowance for reduction to
LIFO cost 7,153 6,973
------- -------
$52,199 $45,781
======= =======
Title to all inventories related to U.S. Government contracts which
provide for progress payments vests in the government to the extent of
unliquidated progress payments.
NOTE 3 INCOME PER COMMON SHARE
Income per common share is computed by dividing net income by the weighted
average number of shares outstanding. Average number of shares
outstanding was 8,932,732 and 8,709,148, respectively, for the three month
periods ended December 30,1995 and December 31, 1994. Stock options,
warrants and stock issuable under incentive compensation awards were not
dilutive in any of the periods reported.
NOTE 4 RECLASSIFICATIONS
Certain reclassifications have been made to the 1995 condensed
consolidated financial statements to conform to the 1996 presentation.
NOTE 5 DISCONTINUED OPERATIONS
On June 2, 1995, Freightliner Corporation acquired certain assets of the
company's motor home, bus and van chassis business. The consideration
included cash of $23,815 and the assumption by Freightliner of certain
liabilities. The assets sold to Freightliner consisted of inventories,
property, plant and equipment and the company's ownership interest in a
Mexican chassis manufacturer. The liabilities assumed by Freightliner
included warranty obligations related to previously produced chassis and
the industrial revenue bonds that were secured by the underlying real
estate.
The disposition of the chassis business has been accounted for as a
discontinued operation and accordingly, prior periods' financial
statements have been restated to reflect the chassis business as a
discontinued operation for all periods presented. Revenues of the chassis
business for the three months ended December 31, 1994 were $16,891.
Net assets or liabilities of the discontinued operation have been
segregated in the consolidated balance sheets. Details of such amounts
were as follows:
12/30/95 12/31/94
Receivables $ 1,299 $ 3,871
Inventories 497 1,421
Accounts payable and
payroll-related obligations (257) (326)
Accrued liabilities (1,000) (1,100)
Other, net (522) (593)
------- -------
Net current assets of
discontinued operations $ 17 $ 3,273
======= =======
Receivable from joint
venture in Mexico $ 2,922 $ 3,165
Accrued warranty (2,439) (2,694)
Other, net (596) (698)
------- -------
Net long-term liabilities of
discontinued operations $ (113) $ (227)
======= =======
The company has allocated interest on the debt which was assumed by
Freightliner to discontinued operations. Interest expense included in
discontinued operations totaled $253 for the three months ended December
31, 1994.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
Results of Operations
For the Three Months Ended December 1995
Compared to Three Months Ended December 1994
Net income for the first quarter of the 1996 fiscal year was $1.6 million,
or $.18 per share. This compares to net income of $1.5 million, or $.17
per share, for the first quarter of fiscal 1995. Net income in the first
quarter of the 1995 fiscal year was reduced by a loss of $1.0 million
related to discontinued operations for the company's U.S. and Mexico
chassis businesses sold to Freightliner Corporation in June 1995. Net
shipments for the first quarter of fiscal 1996 were $80.5 million,
compared to $95.4 million a year ago.
Defense shipments totaled $57.8 million, 5.5% less than the $61.1 million
in the first quarter of fiscal 1995. Commercial shipments were $22.7
million in the first quarter of the 1996 fiscal year compared to $34.3
million a year earlier. Van trailer shipments declined by $8.1 million
year-over-year as the trailer industry slowed down late in the 1995 fiscal
year. Virtually all of the company's revenues are derived from customer
orders prior to commencing production.
Gross profits were $11.5 million, or 14.2% of shipments in the first
quarter of the 1996 fiscal year compared to $12.3 million, or 12.9% of
shipments during the first quarter of the 1995 fiscal year. The improved
margins are consistent for defense and commercial shipments and are due to
continued productivity improvements and material cost control.
Operating expenses totaled $9.3 million in the current quarter compared to
$8.5 million in the first quarter of the 1995 fiscal year, and compared to
an average of $9.7 million per quarter during the 1995 fiscal year. The
1996 fiscal quarter includes $0.4 million in costs related to development,
marketing and other administrative activities related to products destined
for distribution through the company's alliance partner, Freightliner
Corporation.
Interest income and other, net improved to $0.4 million in the 1996 fiscal
year first quarter compared to $0.2 million a year earlier attributable to
the company's higher investable cash position in the 1996 year.
Liquidity and Capital Resources
Working capital was $89.7 million at December 30, 1995, compared to $91.8
million at September 30, 1995. During the quarter, receivables decreased
by $15.7 million to $41.7 million at December 30, 1995, in line with lower
shipments. Inventories increased by $6.4 million to $52.2 million in line
with higher shipment volumes expected to occur in the second fiscal
quarter, and accounts payable decreased by $9.1 million as a result of the
company's normal operations shutdown during the holidays.
The company's cash and cash equivalent position was $29.5 million at
December 30, 1995. Operations generated cash of $2.7 million, and
collection of receivables related to the chassis sale generated an
additional $3.1 million of cash. Capital additions and increases in other
assets during the quarter totaled $5.1 million, and relate primarily to
entry into the rear discharge concrete mixer business. This was offset by
$2.0 million of cash received from the sale of property, plant and
equipment, which relates primarily to the sale of the company jet.
Dividends and stock repurchases totaled $2.9 million resulting in an
overall decrease in cash and cash equivalents of $0.2 million in
comparison to September 30, 1995.
The company believes its internally generated cash flow, supplemented by
progress payments when applicable, and the existing credit facilities will
be adequate to meet working capital and other operating and capital
requirements of the company in the foreseeable future.
Backlog
The backlog as of December 30, 1995 was $337 million compared to $350
million at September 30, 1995. Major United States Department of Defense
trucks backlog consists of Palletized Load System (PLS) vehicles, Heavy
Expanded Mobility Tactical Trucks (HEMTT), including the start of a HEMTT
rebuild program, and Logistics Vehicle System (LVS) trucks.
Dividend
The Board of Directors declared a quarterly dividend of $.10875 per share
for Class A common stock and $.125 per share for Class B common stock.
These dividends, unchanged from the previous rate, will be payable
February 12, 1996, to shareholders of record as of February 5, 1996.
Stock Buyback
In July 1995, the company's board of directors authorized repurchase of up
to 1,000,000 shares of Class B common stock. As of January 29, 1996, the
company has purchased 215,900 shares under this program at a cost of $3.1
million, or $14.23 per share.
Alliance
Implementation of the Strategic Alliance with Freightliner Corporation
continued in the first quarter. The company signed a Distribution
Agreement with Freightliner Corporation on December 13, 1995, under which
seven models of Oshkosh construction, refuse and other heavy duty trucks
will be sold through Freightliner dealers. Sales activity has already
begun and it is anticipated that delivery will begin by the third quarter
of the current fiscal year. Significant incremental volumes are not
expected to be achieved during the 1996 fiscal year. The company expects
to spend up to $1.0 million in the current fiscal year related to new
product and market development related to products to be distributed
through Freightliner dealers, and other associated administrative
activities.
Freightliner Corporation was recently awarded a $49.5 million defense
contract for 269 U.S. Army M916 and M917 series of trucks. Options for
additional vehicles over the next five years could bring total production
to 1,000 trucks. The company is currently working with Freightliner to
novate the U.S. Army M916 and M917 contract to Oshkosh, production of
which is anticipated to begin in Oshkosh in the fourth quarter of the 1996
fiscal year.
Forward Looking Information
The company believes that full year revenues will be comparable to the
1995 fiscal year, even though the first quarter is lower. Delays in the
production schedule for the defense business or the failure of commercial
sales to reach the company's expectations would have an adverse effect on
fiscal 1996 revenues. Results of continuing operations for the remainder
of fiscal 1996 should continue to show improvements over the first quarter
results, assuming projected full year revenues are attained.
The company expects sales to the U.S. Government in fiscal 1996 to
approximate the fiscal 1995 level. The PLS contract will remain in
production through November 1996, and additional funding is expected.
Additional defense orders could increase the current rate of production or
extend the period of production. The company remains optimistic about its
defense business prospects and its ability to sustain a reasonable level
of business into the future. Insufficient defense budget funding by the
U.S. Congress or the failure of the U.S. Government to seek to purchase
the company's products in the future at the level the company now
anticipates would have an adverse effect on future defense business.
The company is dependent on its shipments of defense products to the U.S.
Government as evidenced by shipments of 60% and 73% of total shipments
during fiscal 1995 and 1994, respectively. Substantial decreases in the
company's level of defense business from the current level could have an
adverse effect on the company's profitability. The expected effect of any
decline in defense shipments on operations is that profitability could be
negatively impacted if the company were not to take corresponding measures
to decrease operating expenses. The impact of a decline in defense
shipments on the liquidity of the company would be to improve liquidity
due to the reduction of working capital previously required in support of
this business.
<PAGE>
OSHKOSH TRUCK CORPORATION
PART II - OTHER INFORMATION
FORM 10-Q
December 30, 1995
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 30, 1995.
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 13, 1996 /s/ R. Eugene Goodson
R. Eugene Goodson
Chairman and Chief Executive Officer
DATE: February 13, 1996 /s/ Peter F. Mueller
Peter F. Mueller
Corporate Controller
<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 FINANCIAL STATEMENTS OF OSHKOSH TRUCK CORPORATION AS OF AND FOR THE
QUARTER ENDED DECEMBER 30, 1995 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-28-1996
<PERIOD-START> OCT-01-1995
<PERIOD-END> DEC-30-1995
<CASH> 29,539
<SECURITIES> 0
<RECEIVABLES> 42,231
<ALLOWANCES> 512
<INVENTORY> 52,199
<CURRENT-ASSETS> 132,228
<PP&E> 102,945
<DEPRECIATION> 64,279
<TOTAL-ASSETS> 189,000
<CURRENT-LIABILITIES> 42,512
<BONDS> 0
0
0
<COMMON> 93
<OTHER-SE> 132,105
<TOTAL-LIABILITY-AND-EQUITY> 189,000
<SALES> 80,533
<TOTAL-REVENUES> 80,533
<CGS> 69,081
<TOTAL-COSTS> 69,081
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 41
<INTEREST-EXPENSE> 37
<INCOME-PRETAX> 2,557
<INCOME-TAX> 985
<INCOME-CONTINUING> 1,572
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,572
<EPS-PRIMARY> 0.18
<EPS-DILUTED> 0.18
</TABLE>
