Oshkosh Corporation (Holding Company)Common Stock

Greetings, and welcome to the Oshkosh Corporation Fiscal 2020 First Quarter Results Conference Call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Pat Davidson, Senior Vice President of Investor Relations for Oshkosh Corporation. Thank you, sir. You may begin.

Good morning, and thanks for joining us. Earlier today, we published our first quarter 2020 results. A copy of the release is available on our website at OshkoshCorp.com. Today's call is being webcast and is accompanied by a slide presentation, which includes a reconciliation of GAAP to non-GAAP financial measures that we will use during this call and is also available on our website. The audio replay and slide presentation will be available on our website for approximately 12 months. Please refer now to slide two of that presentation. Our remarks that follow, including answers to your questions, contain statements that we believe to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act. These forward-looking statements are subject to risks that could cause actual results to be materially different from those expressed or implied by such forward-looking statements. These risks include, among others, matters that we have described in our Form 8K filed with the SEC this morning and other filings we make with the SEC. We disclaim any obligation to update these forward-looking statements, which may not be updated until our next quarterly earnings conference call, if at all. All references on this call to a quarter or year are to our fiscal quarter or fiscal year unless stated otherwise. Our presenters today include Wilson Jones, President and Chief Executive Officer, John Pfeiffer, Executive Vice President and Chief Operating Officer, and Dave Sagehorn, Executive Vice President and Chief Financial Officer. Please turn to slide three and I'll turn it over to you, Wilson.

Thank you, Pat. Good morning, everyone. I want to start by welcoming Mike Pack, who will soon be joining our executive leadership team. As you're aware, Dave Sagehorn, our long-standing CFO, and my partner on earnings calls and investor meetings, will be retiring this spring. We're fortunate to have somebody Mike's caliber stepping into this important position. Mike has been with Oshkosh since 2006, and for the last eight years has been the Vice President of Finance of our fire and emergency segment, where he's been a major contributor to the success and record operating income margins that that segment has achieved. We all look forward to Mike assuming the bigger leadership role in the coming months. I'll share some comments on my friend Dave later in this call. We are pleased to announce a solid first quarter and a good start to the year as we kick off 2020. First quarter earnings per share of $1.10 was in line with our expectations and supportive of our full year outlook, but down compared to last year's first quarter. Our team members were focused on executing and delivering on our commitments. In light of tough comps in the defense segment, and expected moderation of demand in our access equipment segment. I'm proud of the efforts of all Oshkosh team members and our People First culture in helping deliver these results. It's still early in the year, but there are a number of positive items that give us confidence in reaffirming our full-year earnings per share estimate range of $7.30 to $8.10 that Dave will talk about in more detail in a few minutes. Some of those items include the first quarter results that were in line with our expectations, as I noted. This provides a stable start to the year. Our access equipment team successfully concluded negotiations with most of their key rental company customers. John will talk more about that. Three of our segments had backlog levels of at least $1 billion as we exited the quarter, providing good visibility into the upcoming quarters. And finally, We've seen signs of stabilization in macroeconomic data, and it appears that many economists are lowering their odds of a recession happening in the U.S. in 2020. These examples illustrate why we consider Oshkosh to be a different, integrated global industrial. All in, we're pleased with how the year has started and continue to believe that 2020 will be another good year for the Oshkosh Corporation. Please turn to slide four to begin a discussion for each of our business segments. I'll start it off with defense. Our defense segment highlights for the quarter are led by the continued ramp-up of JLTV production, as we deliver these high-tech, next-generation defense vehicles to our U.S. government customer. We are on track to produce 4,000 to 4,500 JLTVs in 2020, as both the U.S. Army and Marine Corps continue to integrate these units into their forces. During the quarter, we received a JLTV order for just over $800 million that included a small number of units for the country of Montenegro. This is important because it represents the first order we've received for international JLTVs. There are a number of other potential JLTV international orders in various stages of progress that we expect will be finalized in the coming quarters. It's a very exciting time for the JLTV team, and they are working hard to successfully execute this important program. Government testing continues on the FMTV A2 program, and we are pleased with the improvements that the vehicle is demonstrating. We are still producing the current A1P2 version and expect to do so into 2021 before we begin the transition to the next generation version, the A2. In December, President Trump signed the fiscal 2020 budget, which included favorable funding for Oshkosh defense programs. Both the FMTV and FHTV programs were funded at higher levels than the original FY20 President's budget request. These additional funds, approximately $66 million and 100 million, respectively, will benefit our defense business primarily in 2021 and beyond. Let's turn to slide five, and I'll pass it to John to discuss our non-defense segments.