Oshkosh Corporation (Holding Company)Common Stock

Good morning. This is the operator. We apologize for our technical delay, and we hope that you have endured the wait. Please accept our apologies. We'll begin the conference now. Greetings and welcome to the Oshkosh Corporation Report's fiscal 2020 fourth quarter and full year results. At this time, all participants are in 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 VP of Investor Relations for Oshkosh Corporation. Thank you, Mr. Davidson. You may begin.

Good morning, and thanks for joining us. Earlier today, we published our fourth quarter and full year 2020 results. 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, so 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 8-K 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 a fiscal quarter or fiscal year, unless otherwise stated. Our presenters today include Wilson Jones, Chief Executive Officer, John Pfeiffer, President and Chief Operating Officer, and Mike Pack, Executive Vice President and Chief Financial Officer. This is slide three, and I'll turn it over to you, Wilson.

Thank you, Pat. Good morning, everyone. I continue to be very proud of the hard work and disciplined execution of Oshkosh team members as we continue to work through the challenges brought on by the COVID-19 pandemic. We've talked about it before, but it bears repeating. Our People First culture has been a key driver for our strong results in the face of adversity. Proud Oshkosh team members and their commitment to our strong culture allowed us to overcome significant headwinds this past year, including uncertain customer demand, supplier delivery interruptions, workforce availability issues, and many others. A big shout out to all 15,000 of our team members and our dedicated suppliers that have worked hard and stepped up during this difficult period to continue meeting our customers' needs. As a reminder, Our fourth quarter call is always a little different from our other quarterly calls as I'll review both the quarterly highlights and the full year results before turning it over to John and Mike. For the fourth quarter, we delivered sales of nearly $1.8 billion and adjusted earnings per share of $1.30. Much like I said regarding our third quarter performance, we've controlled what we can control while responding quickly to challenges outside of our control. This is important as we were able to grow adjusted operating income in our defense, fire and emergency, and commercial segments over the prior year, while achieving consolidated adjusted decremental margins of 19%. And in our largest segment, access equipment, we delivered 23% adjusted decremental margins during a quarter where revenues were down nearly 40%. John will go into more specifics on the segments, but the access equipment markets in North America and Europe remain soft, and the timing of recovery remains uncertain. We are encouraged by utilization data that is approaching pre-pandemic levels and believe the market is stabilizing. We'll be paying close attention to rental industry metrics, as well as engaging in annual purchase discussions with our customers over the next few months. Finally, we are announcing a 10% increase to our quarterly cash dividend to $0.33 per share. This is our seventh consecutive annual increase and reflects the confidence we have in our business model and the longer-term outlook. Please turn to slide four for a discussion of the full year. There is no doubt that 2020 has been one of the most memorable years in recent history, as the global pandemic has created disruptions of significant proportions And I'm proud of the efforts and results that our people were able to deliver. For example, our access equipment segment overcame a nearly $1.6 billion year-over-year sales decline to deliver an impressive 8.5% full-year adjusted operating margin. Our fire and emergency segment delivered two consecutive quarters of record adjusted operating margin percentages to end the year. Our commercial segment posted a decade-plus high full-year adjusted operating income margin of 7.5%. And defense successfully executed our ramp-up of the GLTV program despite a host of headwinds brought on by the global pandemic. All of these represent significant accomplishments in the midst of the pandemic and demonstrate our strengths as a different integrated global industrial. We ended the year on a high note with solid performance in the fourth quarter. During the year, we executed a combination of company-wide temporary and permanent cost reductions, and Mike will talk about how these actions will impact our cost structure in 2021 in his section. I also want to call out some of the great work our teams have been doing regarding corporate responsibility with a focus on ESG. We don't typically talk about ESG metrics on earnings calls, but our efforts to reduce greenhouse gas emissions and energy usage along with our team member engagement and safety performance are among many areas that we believe help differentiate Oshkosh from other companies. We continue to earn recognition from agencies that track and evaluate company performance for these important non-financial measures, and we believe they further underscore our commitment to excellence, long-term value, and sustainability. Before I turn it over to John, I wanted to highlight that our balance sheet and liquidity remain strong. We believe we will have opportunities to use our balance sheet to grow shareholder value in the future. Please turn to slide five, and I'll pass it over to John.