Oshkosh Corporation Fourth Quarter 2024 January 30, 2025 This presentation contains 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, 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 obje ...

Financial Performance - For the quarter ended December 2024, Oshkosh reported revenue of $2.62 billion, an increase of 6.4% year-over-year, and EPS of $2.58, compared to $2.56 in the same quarter last year [1] - The reported revenue exceeded the Zacks Consensus Estimate of $2.43 billion by 8.16%, while the EPS surpassed the consensus estimate of $2.18 by 18.35% [1] Key Metrics - Net sales in the Vocational segment totaled $880.60 million, exceeding the four-analyst average estimate of $814.67 million, representing a year-over-year change of +19.8% [4] - Net sales in the Access segment reached $1.16 billion, slightly above the estimated $1.09 billion, with a year-over-year change of +0.6% [4] - Net sales in the Defense segment were $559.10 million, surpassing the average estimate of $487.70 million, but reflecting a year-over-year decline of -4.7% [4] - Adjusted Access segment operating income was $151.60 million, exceeding the average estimate of $141.91 million [4] - Adjusted Vocational segment operating income was $122.90 million, above the estimated $107.36 million [4] Stock Performance - Shares of Oshkosh have returned +0.6% over the past month, compared to the Zacks S&P 500 composite's +1.2% change [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

Core Viewpoint - Oshkosh (OSK) reported quarterly earnings of $2.58 per share, exceeding the Zacks Consensus Estimate of $2.18 per share, and showing a slight increase from $2.56 per share a year ago [1][2] Financial Performance - The company achieved revenues of $2.62 billion for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 8.16%, compared to $2.47 billion in the same quarter last year [3] - Over the last four quarters, Oshkosh has consistently exceeded consensus EPS and revenue estimates [2][3] Stock Performance and Outlook - Oshkosh shares have increased by approximately 0.6% since the beginning of the year, while the S&P 500 has gained 2.7% [4] - The current consensus EPS estimate for the upcoming quarter is $2.15 on revenues of $2.43 billion, and for the current fiscal year, it is $10.36 on revenues of $10.23 billion [8] Industry Context - The Automotive - Original Equipment industry, to which Oshkosh belongs, is currently ranked in the bottom 34% of over 250 Zacks industries, indicating potential challenges ahead [9] - The performance of Oshkosh's stock may be influenced by the overall outlook for the industry [9]

Group 1 - The market has oversold Oshkosh (NYSE: OSK) due to an overreaction to recent news, particularly concerning the risk of a failed USPS deal [3] - There is a potential for an upwards correction in Oshkosh's stock price as investors may have overestimated the risks associated with the USPS contract [3] - The focus is on identifying undervalued and growing companies, especially those in the early stages of development, which aligns with the investment strategy [3]

Core Insights - Oshkosh Corporation (OSK) reported adjusted earnings of $2.93 per share for Q3 2024, exceeding the Zacks Consensus Estimate of $2.87, but down from $3.04 in the same period last year [1] - Consolidated net sales increased by 9% year over year to $2.74 billion, surpassing the Zacks Consensus Estimate of $2.63 billion [1] Segmental Performance - **Access Segment**: Net sales rose 3.4% year over year to $1.36 billion, exceeding the Zacks Consensus Estimate of $1.29 billion, driven by improved sales volume in North America. Operating income fell 9.6% to $207.9 million, accounting for 15.2% of sales, but still surpassed the Zacks Consensus Estimate of $196 million [2] - **Defense Segment**: Net revenues increased 13.9% year over year to $540.4 million, surpassing the Zacks Consensus Estimate of $504 million, due to higher sales volume of aftermarket parts and tactical vehicles. Operating income fell 43.1% year over year to $11.2 million, but exceeded the Zacks Consensus Estimate of $4.43 million [3] - **Vocational Segment**: Net sales rose 17.6% year over year to $814.2 million, driven by AeroTech's acquisition and improved pricing. However, it missed the Zacks Consensus Estimate of $825 million. Operating income surged 89.7% to $99.6 million, accounting for 12.2% of sales, but fell short of the Zacks Consensus Estimate of $106 million [4] Financial Overview - As of September 30, 2024, Oshkosh had cash and cash equivalents of $160.9 million, up from $125.4 million as of December 31, 2023. Long-term debt increased to $602.3 million from $597.5 million [5] - The company declared a quarterly cash dividend of 46 cents per share, payable on November 29, 2024, to shareholders of record as of November 15, 2024 [5] Guidance Revision - Oshkosh revised its full-year 2024 sales expectation to approximately $10.6 billion, down from the previous estimate of $10.7 billion. Adjusted earnings per share are now expected to be $11.35, reduced from the prior guidance of $11.75 [6] Market Position - Oshkosh currently holds a Zacks Rank 3 (Hold). Comparatively, Toyota Motor Corporation, Standard Motor Products, and BYD Company Limited are better-ranked stocks in the auto space, each holding a Zacks Rank 1 (Strong Buy) [7]

Financial Data and Key Metrics Changes - The company reported consolidated sales of $2.74 billion for Q3 2024, an increase of $232 million or 9% year-over-year [21] - Adjusted operating income increased by $6.2 million to $283 million, representing 10.3% of sales [21] - Adjusted EPS was $2.93, down from $3.04 in the prior year [22] - The full-year adjusted EPS outlook was revised to approximately $11.35, down from $11.75 [7][22] Business Line Data and Key Metrics Changes - The Access segment experienced year-over-year sales growth, but faced pressure from slowing nonresidential construction and higher interest rates [10] - The Vocational segment achieved strong revenue growth of 17.6% with an adjusted operating margin of 13.7% [13] - The Defense segment saw a 14% increase in sales due to NGDV production and higher tactical vehicle deliveries [18] Market Data and Key Metrics Changes - The Access market is experiencing softer conditions, particularly in North America, but the company maintains a healthy backlog of over $2 billion [31] - The vocational market remains strong with significant orders, including a notable order from Republic Services for electric vehicles [14] - The defense market is expected to improve with new fixed-price contracts that are better aligned with current input costs [34] Company Strategy and Development Direction - The company is focused on increasing production capacity in its vocational segment and leveraging technology advancements [13][40] - The acquisition of AUSA is expected to enhance the company's presence in adjacent markets and support growth [12] - The company aims to ramp up production of the next-generation delivery vehicles (NGDV) throughout 2025, which is anticipated to drive future revenue growth [52] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the softer market conditions in the access segment but expressed confidence in long-term growth drivers [48] - The company expects to continue delivering solid margins despite potential market softness in 2025 [50] - Management remains optimistic about the defense segment's recovery and the impact of new contracts on margins [34] Other Important Information - The company received approval for its greenhouse gas emission reduction targets, reflecting its commitment to sustainability [9] - The company is reducing its capital expenditure target by $25 million to $275 million and free cash flow estimate by the same amount to $350 million [25] Q&A Session Summary Question: Regarding the lower sales outlook due to access market conditions - Management clarified that while there are pushouts and cancellations, the backlog remains healthy at over $2 billion, indicating a stable market [31] Question: On pricing dynamics in the vocational segment - Management indicated strong double-digit price increases in the backlog, which will positively impact future earnings [32] Question: Update on defense margin targets - Management expects a step forward in margins in 2025 and a larger improvement in 2026 due to new contracts [34] Question: Access equipment market dynamics - Management noted that the market is normalizing after a period of strong demand, with some softness expected in private construction [48] Question: Capacity expansion in the vocational segment - Management confirmed ongoing capacity increases in existing facilities to meet strong demand [40] Question: Supply chain readiness for electric vehicle offerings - Management expressed confidence in the supply chain's ability to support ramp-up in electric vehicle production [83]

Core Insights - Oshkosh reported revenue of $2.74 billion for the quarter ended September 2024, reflecting a 9.2% increase year-over-year, with EPS at $2.93 compared to $3.04 in the same quarter last year [1] - The revenue exceeded the Zacks Consensus Estimate of $2.63 billion by 4.26%, and EPS also surpassed the consensus estimate of $2.87 by 2.09% [1] Financial Performance Metrics - Net Sales- Access- Total reached $1.36 billion, exceeding the average estimate of $1.28 billion by four analysts, marking a 3.4% year-over-year increase [3] - Net Sales- Access- Aerial work platforms were reported at $631.70 million, below the average estimate of $657.15 million, representing a 3.5% decline year-over-year [3] - Net Sales- Access- Telehandlers achieved $445 million, surpassing the estimated $410.89 million, with a 13% increase compared to the previous year [3] - Net Sales- Access- Other totaled $286.60 million, exceeding the average estimate of $279.48 million, reflecting a 6.1% year-over-year increase [3] - Net Sales- Vocational- Total was $814.20 million, slightly below the estimate of $825.03 million, but showed a significant 17.6% increase year-over-year [3] - Net Sales- Defense reached $540.40 million, surpassing the average estimate of $504.17 million, with an 8.1% year-over-year increase [3] - Adjusted Access segment operating income (non-GAAP) was reported at $211.40 million, slightly above the average estimate of $207.79 million [3] - Adjusted Corporate operating expenses (non-GAAP) were -$51.70 million, compared to the average estimate of -$48 million [3] Stock Performance - Oshkosh shares have returned +9.5% over the past month, outperforming the Zacks S&P 500 composite's +1.8% change [4]

Company Performance - Oshkosh reported quarterly earnings of $2.93 per share, exceeding the Zacks Consensus Estimate of $2.87 per share, but down from $3.04 per share a year ago [1] - The earnings surprise for this quarter was 2.09%, and the company had a previous quarter surprise of 11.33% with actual earnings of $3.34 per share against an expectation of $3 per share [2] - Revenues for the quarter ended September 2024 were $2.74 billion, surpassing the Zacks Consensus Estimate by 4.26%, compared to $2.51 billion in the same quarter last year [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $2.13 on revenues of $2.43 billion, and for the current fiscal year, it is $11.33 on revenues of $10.45 billion [8] - The estimate revisions trend for Oshkosh has been unfavorable, resulting in a Zacks Rank 5 (Strong Sell) for the stock, indicating expected underperformance in the near future [7] Industry Context - The Automotive - Original Equipment industry, to which Oshkosh belongs, is currently ranked in the bottom 24% of over 250 Zacks industries, suggesting potential challenges ahead [9] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact investor sentiment [6]

Group 1 - Oshkosh (NYSE: OSK) is an American manufacturer of heavy equipment, primarily targeting municipal and military customers [1] - The company has a strong backlog due to a significant contract win from the USPS (US Postal Service), despite losing the JLTV (Joint Light Tactical Vehicle) contract [1] Group 2 - The article highlights the experience and background of Benjamin Halliburton, the founder of Building Benjamins and Tradition Investment Management, emphasizing his successful investment career and accolades [1]

Core Insights - Oshkosh reported Q2 2024 adjusted earnings of $3.34 per share, exceeding the Zacks Consensus Estimate of $3, and up from $2.69 in the previous year [2] - Consolidated net sales increased by 18% year over year to $2.85 billion, surpassing the Zacks Consensus Estimate of $2.77 billion [2] Segment Performance - **Access Segment**: Net sales rose 5.9% year over year to $1.41 billion, exceeding the Zacks Consensus Estimate of $1.39 billion. Operating income increased by 16.4% to $246.5 million, accounting for 17.5% of sales, surpassing the estimate of $200 million [3] - **Defense Segment**: Net revenues increased by 20.2% year over year to $598.7 million, exceeding the Zacks Consensus Estimate of $555 million. However, the segment incurred an operating loss of $39.9 million, contrasting with the expected operating income of $5.59 million due to intangible asset impairments [4] - **Vocational Segment**: Net sales climbed 43.5% year over year to $843.1 million, surpassing the Zacks Consensus Estimate of $811 million. Operating income surged 76% to $106.5 million, accounting for 12.6% of sales, exceeding the estimate of $88 million [5] Financial Overview - As of June 30, 2024, Oshkosh had cash and cash equivalents of $141.4 million, up from $125.4 million as of December 31, 2023. Long-term debt increased slightly to $599.1 million from $597.5 million [6] - The company declared a quarterly cash dividend of 46 cents per share, payable on August 30, 2024, to shareholders of record as of August 16, 2024 [6] Revised Guidance - Oshkosh anticipates full-year 2024 sales to be around $10.7 billion and adjusted earnings per share to be $11.75, up from the previous guidance of $11.25 [7] Market Sentiment - There has been an upward trend in estimates revision for Oshkosh, with a current VGM Score of C, indicating a subpar Growth Score of D and a Momentum Score of D, but a strong Value Score of B [8] - The stock has a Zacks Rank 3 (Hold), suggesting an expectation of in-line return in the coming months [9] Industry Context - Oshkosh operates within the Zacks Automotive - Original Equipment industry, where another player, Gentex, has seen a 1.9% gain over the past month. Gentex reported revenues of $572.93 million, reflecting a year-over-year decline of 1.8% [10]