UNITED STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13
or 15(d) of
the Securities Exchange Act of 1934
_________________
| |
Date
of Report
(Date of earliest
event reported): May 3, 2005 |
Oshkosh Truck Corporation
|
| (Exact name of registrant as specified in its charter) |
Wisconsin
|
1-31371
|
39-0520270
|
| (State or other |
(Commission File |
(IRS Employer |
| jurisdiction of |
Number) |
Identification No.) |
| incorporation) |
P.O. Box 2566, Oshkosh, Wisconsin 54903
|
| (Address of principal executive offices, including zip code) |
(920) 235-9151
|
| (Registrant's telephone number, including area code) |
Check the appropriate box below if
the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the
registrant under any of the following provisions:
| [_] |
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| [_] |
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| [_] |
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b)) |
| [_] |
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c)) |
Item 2.02. Results
of Operations and Financial Condition.
On
May 3, 2005, Oshkosh Truck Corporation (the “Company”) issued a press release
(the “Press Release”) announcing its earnings for the second quarter ended March
31, 2005 and its revised outlook for fiscal 2005. A copy of such press release is
furnished as Exhibit 99.1 and is incorporated by reference herein.
On
May 3, 2005, the Company held a conference call in connection with the Company’s
announcement of its earnings for the second quarter ended March 31, 2005, its revised
outlook for fiscal 2005 and its preliminary fiscal 2006 outlook. A copy of the script (the
“Script”) for such conference call is furnished as Exhibit 99.2 and is
incorporated by reference herein. An audio replay of such conference call and the related
question and answer session will be available for at least twelve months on the
Company’s web site at www.oshkoshtruckcorporation.com.
The
information, including without limitation all forward-looking statements, contained in the
Press Release, the Script and related slide presentation on the Company’s web site
(the “Slide Presentation”) or provided in the conference call and related
question and answer session speaks only as of May 3, 2005. The Company has adopted a
policy that if the Company makes a determination that it expects the Company’s
earnings per share for future periods for which projections are contained in the Press
Release, the Script and the Slide Presentation or provided in the conference call and
related question and answer session to be lower than those projections, then the Company
will publicly disseminate that fact. The Company’s policy also provides that if the
Company makes a determination that it expects the Company’s earnings per share for
future periods to be at or above the projections contained in the Press Release, the
Script and the Slide Presentation or provided in the conference call and related question
and answer session, then the Company does not intend to publicly disseminate that fact.
Except as set forth above, the Company assumes no obligation, and disclaims any
obligation, to update information contained in the Press Release, the Script and the Slide
Presentation or provided in the conference call and related question and answer session.
Investors should be aware that the Company may not update such information until the
Company’s next quarterly conference call, if at all.
The
Press Release, the Script and the Slide Presentation contain, and representatives of the
Company made, during the conference call and the related question and answer session,
statements that the Company believes to be “forward-looking statements” within
the meaning of the Private Securities Litigation Reform Act of 1995. All statements other
than statements of historical fact included in the Press Release, the Script and the Slide
Presentation or made during the conference call and related question and answer session,
including, without limitation, statements regarding the Company’s future financial
position, business strategy, targets, projected sales, costs, earnings, capital
expenditures, debt levels and cash flows, and plans and objectives of management for
future operations, are forward-looking statements. In addition, forward-looking statements
generally can be identified by the use of forward-looking terminology such as
“may,” “will,” “expect,” “intend,”
“estimates,” “anticipate,” “believe,” “should” or
“plans,” or the negative thereof or variations thereon or similar terminology.
The Company cannot provide any assurance that such expectations will prove to have been
correct. Important factors that could cause actual results to differ materially from the
Company’s expectations include, without limitation, the following:
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Accuracy
of Assumptions. The expectations reflected in the forward-looking statements, in
particular those with respect to projected sales, costs, earnings, capital expenditures,
debt levels and cash flows, are based in part on certain assumptions made by the Company,
some of which are referred to in, or as part of, the forward-looking statements. Such
assumptions include, without limitation, the Company’s ability to turn around the
business of the Geesink Norba Group sufficiently to support its current valuation
resulting in no non-cash impairment charge for Geesink Norba Group goodwill; the sale of
approximately 1,000 Revolution® composite concrete mixer drums in the U.S. in fiscal
2005 at favorable pricing and costs; the Company’s estimates for concrete placement
activity, housing starts and mortgage rates; the performance of the U.S. and the European
economies generally; the Company’s expectations as to timing of receipt of sales
orders and payments and execution and funding of defense contracts; the Company’s
ability to achieve cost reductions and operating efficiencies, in particular at McNeilus
Companies, Inc. and the Geesink Norba Group; the anticipated level of production and
margins associated with the base Medium Tactical Vehicle Replacement (“MTVR”)
contract and MTVR-related contracts, international defense truck contracts, the Family of
Heavy Tactical Vehicles contract and the Indefinite Demand/Indefinite Quantity contract;
the expected level of U.S. Department of Defense procurement of replacement parts and
services and remanufacturing of trucks and funding thereof; the Company’s targets for
Geesink Norba Group sales and operating income or losses; the Company’s estimates for
capital expenditures of municipalities for fire and emergency and refuse products, of
airports for rescue and snow removal products and of large commercial waste haulers
generally and with the Company; federal funding levels for Department of Homeland Security
and spending by governmental entities on homeland security apparatus; the level of
concrete placement and domestic refuse sales demand in advance of a diesel engine
emissions standards change effective January 1, 2007; the Company’s estimates for the
impact of steel and component cost increases and its ability to avoid such cost increases
based on its supply contracts or recover rising steel and component costs with increases
in prices of its products; the availability of chassis components and commercial chassis
generally; the Company’s planned spending on product development and bid and proposal
activities with respect to defense truck procurement competitions and the outcome of such
competitions; the Company’s ability to integrate acquired businesses and achieve
expected synergies; the expected level of commercial “package” body and chassis
sales compared to “body only” sales; the Company’s estimates of the impact
of changing fuel prices and credit availability on capital spending of towing operators;
the Company’s ability to sustain market share gains by its fire and emergency and
refuse products businesses; anticipated levels of capital expenditures, especially with
respect to the rollout of the Revolution® composite concrete mixer drum; the
Company’s estimates for costs relating to litigation, product warranty, insurance and
other raw materials; and the Company’s estimates for personnel costs, interest rates,
working capital needs and effective tax rates. The Company cannot provide any assurance
that the assumptions referred to in the forward-looking statements or otherwise are
accurate or will prove to have been correct. Any assumptions that are inaccurate or do not
prove to be correct could have a material adverse effect on the Company’s ability to
achieve the results that the forward-looking statements contemplate.
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Geesink
Norba Group Turnaround. The Geesink Norba Group has been operating at a loss for the
last four quarters due to the weak European economy, declines in selling prices in its
markets, operational inefficiencies and increased material, labor and warranty costs
related to the launch of a new Gesink-branded rear loader. Although the Company has taken
steps to turn around the business of the Geesink Norba Group, including reducing work
force, installing new executive leadership, implementing lean manufacturing practices and
introducing new products, the Company cannot provide any assurance such activities will be
successful. In addition, the Company may incur costs to implement any such turnaround
beyond its current expectations for such costs. If the Company is unable to turn around
the business of the Geesink Norba Group, then the Company may be required to record a
non-cash impairment charge for Geesink Norba Group goodwill, and there could be other
material adverse effects on the net sales, financial condition, profitability and/or cash
flows of the Company.
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Cyclical
Markets. A decline in overall customer demand in the Company’s cyclical
commercial or fire and emergency markets could have a material adverse effect on the
Company’s operating performance. The ready-mix concrete market that the Company
serves is highly cyclical and impacted by the strength of the economy generally, by
prevailing mortgage and other interest rates, by the number of housing starts and by other
factors that may have an effect on the level of concrete placement activity, either
regionally or nationally. Although the concrete placement industry has recovered from a
downturn compared to historical levels and customers of the Company such as municipalities
and large waste haulers have increased their expenditures for fire and emergency and
refuse equipment, if these improvements do not continue or if these markets face
downturns, then there could be a material adverse effect on the net sales, financial
condition, profitability and/or cash flows of the Company. In addition, the weak European
economy, among other things, has continued to have a material adverse effect on refuse
sales by the Geesink Norba Group. Furthermore, the recent surge in the Company’s
defense business is due in significant part to demand for defense trucks, replacement
parts and services and truck remanufacturing arising from the conflict in Iraq. Events
such as this are unplanned, and the Company cannot predict how long this conflict will
last or the demand for its products that will arise out of such an event. Accordingly, the
Company cannot provide any assurance that the increased defense business as a result of
this conflict will continue.
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Government
Contracts. The Company is dependent on U.S. and foreign government contracts for a
substantial portion of its business. That business is subject to the following risks,
among others, that could have a material adverse effect on the Company’s operating
performance:
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• |
The
Company’s business is susceptible to changes in the U.S. defense budget, which may
reduce revenues that the Company expects from its defense business. |
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The
U.S. government may not appropriate funding that the Company expects for its U.S.
government contracts, which may prevent the Company from realizing revenues under current
contracts. |
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Most
of the Company’s government contracts are fixed-price contracts, and the Company’s
actual costs may exceed its projected costs, which could result in lower profits or net
losses under these contracts. |
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• |
The
Company is required to spend significant sums on product development and testing, bid and
proposal activities and pre-contract engineering, tooling and design activities in
competitions to have the opportunity to be awarded these contracts. |
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Competitions
for the award of defense truck contracts are intense, and the Company cannot provide any
assurance that it will be successful in the defense truck procurement competitions in
which it participates. |
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Certain
of the Company’s government contracts could be suspended or terminated and all such
contracts expire in the future and may not be replaced, which could reduce expected
revenues from these contracts. |
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The
Company’s government contracts are subject to audit, which could result in
adjustments of the Company’s costs and prices under these contracts. |
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The
Company’s defense truck contracts are large in size and require significant
personnel and production resources, and when such contracts end, the Company must make
adjustments to personnel and production resources. |
-4-
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Completion
and Financing of Acquisitions. A substantial portion of the Company’s growth in
the past eight years has come through acquisitions, and the Company’s growth strategy
is based in part upon acquisitions. The Company may not be able to identify suitable
acquisition candidates or complete future acquisitions, which could adversely affect the
Company’s future growth. The Company’s credit facility also contains restrictive
covenants that may limit the Company’s ability to take advantage of business
opportunities, including acquisitions. The Company may not be able to integrate or operate
profitably its recent acquisitions of JerrDan Corporation, BAI Brescia Antincendi
International S.r.l and BAI Tecnica S.r.l. (collectively, “BAI”), Concrete
Equipment Company, Inc. (CON-E-CO) and London Machinery Inc. (“London”) or
businesses the Company acquires in the future. Any acquisitions could be dilutive to the
Company’s earnings per share. The Company’s level of indebtedness may increase
in the future if the Company finances acquisitions with debt, which would cause the
Company to incur additional interest expense and could increase the Company’s
vulnerability to general adverse economic and industry conditions and limit the
Company’s ability to obtain additional financing. If the Company issues shares of its
stock as currency in any future acquisitions or as a source of funds to finance
acquisitions, then the Company’s earnings per share may be diluted as a result of the
issuance of such stock.
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Rising
Steel and Component Costs. The Company uses thousands of tons of steel annually and
steel cost increases have had a significant impact on production costs for the
Company’s trucks and truck bodies. During fiscal 2004 and the first six months of
fiscal 2005, costs increased sharply for steel and component parts containing steel.
Although steel cost increases started to level off in the second quarter of fiscal 2005,
the Company could face further steel cost increases later in fiscal 2005. The ultimate
duration and severity of these conditions is not presently estimable, but these conditions
are likely to continue throughout fiscal 2005 and perhaps into fiscal 2006. Without
limitation, these conditions could impact the Company in the following ways:
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In
the commercial and fire and emergency businesses, the Company announced selling price
increases during fiscal 2004 and fiscal 2005 to offset increases in steel and component
costs and may further increase prices in fiscal 2005. However, any such new product
prices apply only to new orders, and the Company does not anticipate being able to
recover all cost increases from customers due to the amount of orders in the Company’s
backlog prior to the effective dates of new selling prices for the Company’s
products and because competitive conditions have limited, and may limit in the future,
price increases in some market sectors. In addition, steel and component costs could
continue to rise faster than expected, and the Company’s product price increases may
not be realized in full or in part. |
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In
the defense business, the Company is generally limited in its ability to raise prices in
response to rising steel and component costs as the Company largely does business under
firm, fixed-price contracts. The Company attempts to limit its risk by obtaining firm
pricing from suppliers at contract award. However, if these suppliers, including steel
mills, do not honor their contracts, then the Company could face margin pressure in its
defense business. |
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Revolution®
Composite Concrete Mixer Drum. The Company has made and will continue to make
significant investments in technology and manufacturing facilities relating to the
Revolution® composite concrete mixer drum product, and the Company anticipates that
this product will contribute to growth in revenues and earnings of the Company’s
commercial segment. However, the Company cannot provide any assurance that such growth
will result. Without limitation:
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The
Revolution® drum is a new product in the concrete placement market that uses new
technology, and the Company cannot provide any assurance that the concrete placement
market will broadly accept this product or that the Company will be able to sell this
product at targeted prices. |
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Even
if market demand for the Revolution® drum meets the Company’s expectations, the
Company may not be able to sustain high volume production of this product at projected
costs and on projected delivery schedules, which could result in lower profits or net
losses relating to this product. |
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The
Company’s plans include taking additional actions and making additional investments
to introduce different versions of the Revolution® drum and to introduce the product
in markets outside the United States, and there will be additional risks associated with
these efforts. |
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The
Company cannot provide any assurance that competitors will not offer products in the
future that compete with the Revolution® drum, which would impact the Company’s
ability to sell this product at targeted prices. |
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Because
the Revolution® drum is a new product, the Company has experienced and may continue
to experience higher costs for warranty and other product related claims. |
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International
Business. For the fiscal year ended September 30, 2004, approximately 16.7% of the
Company’s net sales were attributable to products sold outside of the United States,
and expanding international sales, including through acquisitions such as the recent
acquisitions of BAI and London, is a part of the Company’s growth strategy.
International operations and sales are subject to various risks, including political,
religious and economic instability, local labor market conditions, the imposition of
foreign tariffs and other trade barriers, the impact of foreign government regulations and
the effects of income and withholding taxes, governmental expropriation and differences in
business practices. The Company may incur increased costs and experience delays or
disruptions in product deliveries and payments in connection with international
manufacturing and sales that could cause loss of revenues and earnings. Unfavorable
changes in the political, regulatory and business climate could have a material adverse
effect on the Company’s net sales, financial condition, profitability and/or cash
flows.
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Foreign
Currency Fluctuations. The results of operations and financial condition of the
Company’s subsidiaries that conduct operations in foreign countries are reported in
the relevant foreign currencies and then translated into U.S. dollars at the applicable
exchange rates for inclusion in the Company’s consolidated financial statements,
which are stated in U.S. dollars. In addition, the Company has certain firm orders in
backlog that are denominated in U.K. Pounds Sterling and certain agreements with
subcontractors denominated in U.K. Pounds Sterling and Euros, which will subject the
Company to foreign currency transaction risk to the extent they are not hedged. The
exchange rates between many of these currencies and the U.S. dollar have fluctuated
significantly in recent years and may fluctuate significantly in the future. Such
fluctuations, in particular those with respect to the Euro and the U.K. Pound Sterling,
may have a material effect on the Company’s net sales, financial condition,
profitability and/or cash flows and may significantly affect the comparability of the
Company’s results between financial periods.
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Interruptions
in the Supply of Parts, Components and Chassis. The Company has and may in the future
experience significant disruption or termination of the supply of some of the
Company’s parts, materials, components and final assemblies that the Company obtains
from sole source suppliers or subcontractors or incur a significant increase in the cost
of these parts, materials, components or final assemblies. Certain chassis component and
commercial chassis suppliers have been unable to meet scheduled delivery dates to the
Company because of a sharp rise in demand for Class 8 trucks. While availability of these
items has not adversely impacted the Company to date, such availability could become an
issue over the next eighteen months. Such disruptions, terminations or cost increases
could delay sales of the Company’s trucks and truck bodies and could result in a
material adverse effect on the Company’s net sales, financial condition,
profitability and/or cash flows.
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Competition. The
Company operates in highly competitive industries. Several of the Company’s
competitors have greater financial, marketing, manufacturing and
distribution resources than the Company and the Company is facing
competitive pricing from new entrants in certain markets. The Company’s
products may not continue to compete successfully with the products of
competitors, and the Company may not be able to retain or increase its
customer base or to improve or maintain its profit margins on sales to its
customers, all of which could adversely affect the Company’s net
sales, financial condition, profitability and/or cash flows.
|
Additional information concerning
factors that could cause actual results to differ materially from those in the
forward-looking statements is contained from time to time in the Company’s filings
with the Securities and Exchange Commission.
Item 8.01. Other Events.
Prior
to May 3, 2005, the Company had two classes of common stock outstanding: Common Stock and
Class A Common Stock. Holders of Common Stock were entitled to elect 25% of the
Company’s Board of Directors (rounded to the nearest whole number of directors), but
were not entitled to vote on any other corporate matters, except as required by law.
Holders of Class A Common Stock were entitled to elect the Company’s remaining
directors and were entitled to vote on all other matters presented to shareholders for
vote. Shares of Common Stock were also entitled to receive 115% of the dividend paid on
each share of Class A Common Stock. J. Peter Mosling, Jr. and Stephen P. Mosling, both
directors of the Company, respectively beneficially owned 359,438 and 362,676 shares of
Class A Common Stock representing approximately 44.7% and 45.1% of the outstanding shares
of the Class A Common Stock as of May 2, 2005.
On
May 3, 2005, J. Peter Mosling, Jr. and Stephen P. Mosling converted all of their shares of
Class A Common Stock to Common Stock effective on such date. As a result of such
conversions and pursuant to the Company’s Restated Articles of Incorporation
(“Restated Articles”), all outstanding shares of Class A Common Stock were
converted to shares of Common Stock effective on such date, leaving the Company with a
single class of outstanding stock, Common Stock. Holders of Common Stock are now entitled
to elect all members of the Company’s Board of Directors and are entitled to vote on
all other matters presented to shareholders for vote. Immediately following such
conversions, there were 36,361,963 outstanding shares of Common Stock, and to the
knowledge of the management of the Company, no person or group of persons held a majority
or controlling interest in the voting securities of the Company. In compliance with the
Restated Articles, the Company will restate the Restated Articles to reflect the
elimination of the two-class capital structure.
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Item 9.01. Financial
Statements and Exhibits.
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(c) |
Exhibits.
The following exhibits are being furnished herewith: |
| |
(99.1) |
Oshkosh
Truck Corporation Press Release dated May 3, 2005. |
| |
(99.2) |
Script
for conference call held May 3, 2005. |
-8-
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned hereunto duly authorized.
|
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|
OSHKOSH TRUCK CORPORATION |
|
Date: May 3, 2005 |
By: /s/ Charles L. Szews |
|
Charles L. Szews |
|
Executive Vice President and
Chief Financial Officer |
-9-
OSHKOSH TRUCK
CORPORATION
Exhibit Index to
Current Report on Form 8-K
Dated May 3, 2005
Exhibit
Number
| (99.1) |
Oshkosh
Truck Corporation Press Release dated May 3, 2005. |
| (99.2) |
Script
for conference call held May 3, 2005. |
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