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, 1996
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 January 28, 1997: 407,116
Class B Common Stock Outstanding as of January 28, 1997: 8,238,077
<PAGE>
OSHKOSH TRUCK CORPORATION
FORM 10-Q INDEX
FOR THE QUARTER ENDED DECEMBER 31, 1996
Page
PART I. Financial Information
Item 1. Financial Statements
Condensed Consolidated Statements of Income . . . . . . 3
Condensed Consolidated Balance Sheets . . . . . . . . . 4
Condensed Consolidated Statement of
Shareholders' Equity . . . . . . . . . . . . . . . 5
Condensed Consolidated Statements of
Cash Flows . . . . . . . . . . . . . . . . . . . . . . 6
Notes to Condensed Consolidated
Financial Statements . . . . . . . . . . . . . . . . . 7
Item 2. Management's Discussion and Analysis of
Consolidated Financial Condition and
Results of Operations . . . . . . . . . . . . . . . . 9
PART II. Other Information . . . . . . . . . . . . . . . . . . . 12
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
<PAGE>
PART I. FINANCIAL INFORMATION
OSHKOSH TRUCK CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended
Dec. 31, Dec. 30,
1996 1995
(In thousands, except
per share amounts)
Net sales $150,320 $ 80,383
Cost of sales 131,459 69,779
-------- --------
Gross income 18,861 10,604
Operating expenses:
Selling, general and administrative 9,303 7,090
Engineering, research and development 1,993 1,327
Amortization of goodwill and other
intangibles 1,132 --
-------- --------
Total operating expenses 12,428 8,417
-------- --------
Income from operations 6,433 2,187
Other income (expense):
Interest expense (3,558) (64)
Interest income 206 482
Miscellaneous, net (9) (48)
-------- --------
(3,361) 370
-------- --------
Income before income taxes 3,072 2,557
Provision for income taxes 1,448 985
-------- --------
Net income $ 1,624 $ 1,572
======== ========
Earnings per common share $ 0.19 $ 0.18
======== ========
Cash dividends per common share:
Class A $0.10875 $0.10875
Class B $0.12500 $0.12500
The accompanying notes are an integral part of these condensed
consolidated financial statements.
<PAGE>
OSHKOSH TRUCK CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
Dec. 31, Sept. 30,
1996 1996
ASSETS (In thousands)
Current assets:
Cash and cash equivalents $ 4,845 $ 127
Receivables, net 55,652 76,624
Inventories 94,797 106,289
Prepaid expenses 3,214 3,619
Refundable income taxes 3,744 6,483
Deferred income taxes 7,055 7,055
-------- --------
Total current assets 169,307 200,197
Deferred charges 2,953 2,645
Other long-term assets 7,724 7,834
Property, plant, and equipment:
Land 7,062 7,131
Buildings 40,268 40,421
Machinery and equipment 78,557 77,485
-------- --------
125,887 125,037
Less accumulated depreciation (68,945) (67,002)
-------- --------
Net property, plant, and equipment 56,942 58,035
Goodwill and other intangible assets, net 165,318 166,450
-------- --------
Total assets $402,244 $435,161
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 37,684 $ 49,178
Customer advances 27,035 27,793
Payroll-related obligations 9,722 12,843
Accrued warranty 9,520 8,942
Other current liabilities 18,301 18,972
Current maturities of long-term debt 5,000 15,000
-------- --------
Total current liabilities 107,262 132,728
Long-term debt 135,000 142,882
Postretirement benefit obligations 9,648 9,517
Other long-term liabilities 4,266 4,424
Deferred income taxes 23,831 24,008
Shareholders' equity:
Common stock:
Class A 4 4
Class B 89 89
Paid-in capital 16,074 16,059
Retained earnings 114,796 114,246
-------- --------
130,963 130,398
Cost of Class B common stock
in treasury (8,726) (8,796)
-------- --------
Total shareholders' equity 122,237 121,602
-------- --------
Total liabilities and shareholders'
equity $402,244 $435,161
======== ========
The accompanying notes are an integral part of these condensed
consolidated financial statements.
<PAGE>
OSHKOSH TRUCK CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
THREE MONTHS ENDED DECEMBER 31, 1996
(Unaudited)
Common Paid-in Retained Treasury
Stock Capital Earnings Stock Total
(In thousands)
Balance at
September 30, 1996 $93 $16,059 $114,246 $(8,796) $121,602
Net income -- -- 1,624 -- 1,624
Cash dividends:
Class A common stock -- -- (44) -- (44)
Class B common stock -- -- (1,030) -- (1,030)
Exercise of stock options -- 15 -- 70 85
---- ------- -------- ------- --------
Balance at
December 31, 1996 $93 $16,074 $114,796 $(8,726) $122,237
===== ======= ======== ======= ========
The accompanying notes are an integral part of these condensed
consolidated financial statements.
<PAGE>
OSHKOSH TRUCK CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
Dec. 31, Dec. 30,
1996 1995
(In thousands)
Operating activities:
Net income $ 1,624 $ 1,572
Depreciation and amortization 3,556 1,925
Deferred income taxes (177) --
Loss on disposal of property,
plant, and equipment 6 53
Changes in operating assets and
liabilities 20,133 (424)
------- ------
Net cash provided from operations 25,142 3,126
Investing activities:
Acquisitions of businesses, net of cash
acquired -- (3,912)
Additions to property, plant, and
equipment (1,342) (1,070)
Proceeds from sale of property,
plant, and equipment 289 1,956
Increase in other long-term assets (174) (515)
------- ------
Net cash used for investing activities (1,227) (3,541)
Net cash provided from (used for) discontinued
operations (326) 3,142
Financing activities:
Net repayments of long-term debt (17,882) --
Purchase of treasury stock and proceeds
from exercise of stock options, net 85 (1,785)
Dividends paid (1,074) (1,119)
------- ------
Net cash used for financing activities (18,871) (2,904)
------- ------
Increase (decrease) in cash and cash equivalents 4,718 (177)
Cash and cash equivalents at beginning of period 127 29,716
------- ------
Cash and cash equivalents at end of period $ 4,845 $29,539
======= ======
Supplementary disclosures:
Cash paid for interest $ 3,451 $ 92
Cash paid (refunded) for income taxes (1,115) 360
The accompanying notes are an integral part of these condensed
consolidated financial statements.
<PAGE>
OSHKOSH TRUCK CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. BASIS OF PRESENTATION
The condensed 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 condensed consolidated financial statements. Certain
reclassifications have been made to the 1996 condensed consolidated
financial statements to conform to the 1997 presentation.
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 1996 annual report to shareholders.
2. INVENTORIES
Inventories consist of the following:
Dec. 31, Sept. 30,
1996 1996
(In thousands)
Finished products $ 9,858 $ 15,208
Partially finished products 40,288 51,533
Raw materials 58,647 47,580
-------- --------
Inventories at FIFO cost 108,793 114,321
Less:
Progress payments on U.S.
Government contracts (5,663) --
Excess of FIFO cost over
LIFO cost (8,333) (8,032)
-------- --------
$ 94,797 $106,289
======== ========
Title to all inventories related to government contracts which provide for
progress payments vests in the government to the extent of unliquidated
progress payments.
3. EARNINGS PER SHARE
Earnings per share is computed by dividing net income by the weighted
average number of shares outstanding. The average number of shares
outstanding was 8,645,106 and 8,932,732, respectively, for the three month
periods ended December 31, 1996 and December 30, 1995. Stock options,
warrants and stock issuable under incentive compensation awards were not
dilutive in any of the periods presented.
4. STOCK BUY BACK
In July 1995, the company's board of directors authorized the repurchase
of up to 1,000,000 shares of Class B common stock. There were no stock
repurchases during the three months ended December 31, 1996. As of
December 31, 1996, the company has repurchased 461,535 shares under this
program at a total cost of $6.6 million.
5. LONG-TERM DEBT
At December 31, 1996, $5.3 million of letters of credit reduced available
capacity under the company's revolving credit facility to $44.7 million.
6. CONTINGENCIES
The company is engaged in litigation against Super Steel Products
Corporation (SSPC), the company's former supplier of mixer systems for
front discharge concrete mixer trucks under a long-term supply contract.
SSPC sued the company in state court claiming the company breached the
contract. The company counterclaimed for repudiation of contract. On
July 26, 1996, a jury returned a verdict for SSPC awarding damages
totaling approximately $4.5 million. On October 10, 1996, the state court
judge overturned the verdict against the company, granted judgment for the
company on its counterclaim, and ordered a new trial for damages on the
company's counterclaim. Both SSPC and the company have appealed the state
court judge's decision. The Wisconsin Court of Appeals has agreed to hear
the case.
Pierce has guaranteed certain customers' obligations under deferred
payment contracts and lease purchase agreements totaling $6.2 million at
December 31, 1996. Pierce and the company also are contingently liable
under bid and performance bonds totaling approximately $83 million at
December 31, 1996.
Oshkosh Truck Corporation
Management's Discussion and Analysis of
Consolidated Financial Condition and Results of Operations
Results of Operations
First Quarter 1997 Compared to 1996
Oshkosh Truck Corporation (the company) reported net income of $1.6
million, or $0.19 per share, on sales of $150.3 million for the first
quarter of fiscal 1997, compared to net income of $1.6 million, or $0.18
per share, on sales of $80.4 million for the first quarter of fiscal 1996.
Sales of both commercial and defense products increased in the first
quarter of fiscal 1997 compared to the first quarter of fiscal 1996.
Commercial sales in the first quarter of fiscal 1997 increased $60.5
million or 265.9% from the first quarter of fiscal 1996 to $83.2 million
principally due to sales of fire trucks and other fire apparatus as a
result of the acquisition of Pierce Manufacturing Inc. (Pierce) on
September 18, 1996, and increased sales of refuse vehicles. Sales of
defense products totaled $67.1 million in the first quarter of fiscal
1997, an increase of $9.4 million or 16.4% as compared to the first
quarter of fiscal 1996. The increase in defense sales principally results
from sales of Heavy Expanded Mobility Tactical Trucks (HEMTTs) to a
foreign government.
Gross income in the first quarter of fiscal 1997 totaled $18.9 million or
12.5% of sales compared to $10.6 million or 13.2% of sales in the first
quarter of fiscal 1996. The increase in gross income in the first quarter
of fiscal 1997 was due to increased volume as a result of the acquisition
of Pierce. Fiscal 1997 first quarter margins were adversely affected by
increased warranty and other costs related to refuse vehicle sales.
Operating expenses totaled $12.4 million or 8.3% of sales in the first
quarter of fiscal 1997 compared to $8.4 million or 10.5% of sales in the
first quarter of fiscal 1996. The increase in operating expenses in the
first quarter of fiscal 1997 relates principally to the operating expenses
of Pierce and amortization of goodwill and other intangibles associated
with the acquisition of Pierce. The ratio of operating expenses to sales
declined in the first quarter of fiscal 1997 compared to 1996 due to
operating efficiencies resulting from the combination of Pierce and the
company.
Interest expense increased to $3.6 million in the first quarter of fiscal
1997 compared to $0.1 million in the first quarter of fiscal 1996 due to
borrowings to finance the acquisition of Pierce.
The effective income tax rate for combined federal and state income taxes
for the first quarter of fiscal 1997 was 47.1% compared to 38.5% for the
first quarter of fiscal 1996. The effective income tax rate for the first
quarter of fiscal 1997 was adversely affected by non-deductible goodwill
of $0.6 million.
Financial Condition
First Quarter 1997
During the first quarter of fiscal 1997, cash increased $4.7 million.
Cash provided from operations of $25.1 million exceeded cash requirements
for the repayment of long-term debt of $17.9 million, capital additions of
$1.3 million, and dividends of $1.1 million.
First Quarter 1996
During the first quarter of fiscal 1996, cash decreased $0.2 million. The
acquisition of Friesz Manufacturing Company for $3.9 million, capital
additions of $1.1 million, stock repurchases of $1.8 million, and
dividends of $1.1 million, were funded principally from cash provided from
operations of $3.1 million, $2.0 million of cash received from the sale of
property, plant, and equipment, and cash provided from discontinued
operations of $3.1 million.
Liquidity and Capital Resources
The company's principal uses of cash for the next several years will be
interest and principal payments on long-term debt, capital expenditures
and potential acquisitions.
At December 31, 1996, $5.3 million of letters of credit reduced available
capacity under the company's revolving credit facility to $44.7 million.
The company believes its internally generated cash flow, supplemented by
progress payments when applicable, and borrowings available under the
existing bank credit agreement will be adequate to meet working capital
and other operating and capital requirements of the company in the
foreseeable future.
Backlog
The company's backlog as of December 31, 1996 was $398 million, compared
to $337 million at December 30, 1995. The backlog at December 31, 1996
includes $225 million with respect to U.S. Government contracts, $122
million related to Pierce, and the remainder relates to other commercial
products. Virtually all the company's revenues are derived from customer
orders prior to commencing production.
Stock Buyback
In July 1995, the company's board of directors authorized the repurchase
of up to 1,000,000 shares of Class B common stock. There were no stock
repurchases in the first quarter of fiscal 1997. As of January 28, 1997,
the company has repurchased 461,535 shares under this program at a cost of
$6.6 million.
<PAGE>
OSHKOSH TRUCK CORPORATION
PART II. OTHER INFORMATION
FORM 10-Q
December 31, 1996
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8-K
On October 2, 1996, the company filed a Current Report on Form 8-K
dated September 18, 1996, reporting the company's acquisition of all
of the issued and outstanding stock of Pierce Manufacturing Inc.
(Pierce). On November 27, 1996, the company filed an amendment to
the Current Report on Form 8-K/A which added the Pro Forma Financial
Statements as a result of the company's acquisition of Pierce.
<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 11, 1997 /s/ R. Eugene Goodson
R. Eugene Goodson
Chairman and Chief
Executive Officer
(Principal Executive Officer)
DATE: February 11, 1997 /s/ Charles L. Szews
Charles L. Szews
Vice President and
Chief Financial Officer
(Principal Financial and
Accounting Officer)
<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
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF OSHKOSH TRUCK CORPORATION
AS OF AND FOR THE PERIOD ENDED DECEMBER 31, 1996 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-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 4,845
<SECURITIES> 0
<RECEIVABLES> 56,763
<ALLOWANCES> 1,111
<INVENTORY> 94,797
<CURRENT-ASSETS> 169,307
<PP&E> 125,887
<DEPRECIATION> 68,945
<TOTAL-ASSETS> 402,244
<CURRENT-LIABILITIES> 107,262
<BONDS> 135,000
0
0
<COMMON> 93
<OTHER-SE> 122,144
<TOTAL-LIABILITY-AND-EQUITY> 402,244
<SALES> 150,320
<TOTAL-REVENUES> 150,320
<CGS> 131,459
<TOTAL-COSTS> 131,459
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 45
<INTEREST-EXPENSE> 3,558
<INCOME-PRETAX> 3,072
<INCOME-TAX> 1,448
<INCOME-CONTINUING> 1,624
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,624
<EPS-PRIMARY> .19
<EPS-DILUTED> .19
</TABLE>
