(Source: Business Wire)Oshkosh Corporation (NYSE: OSK), a leading manufacturer of specialty vehicles and vehicle bodies, today reported fiscal 2009 fourth quarter net sales of $1.49 billion and income from continuing operations of $52.4 million, or $0.63 per share, compared with net sales of $1.85 billion and income from continuing operations of $62.4 million, or $0.84 per share, in the prior year's fourth quarter. Results from continuing operations for the fourth quarter of fiscal 2009 included a tax benefit of $0.18 per share related to tax strategies in connection with investments in the Company's foreign subsidiaries and LIFO inventory benefits2 of $0.18 per share. All results exclude the operations of Geesink Group B.V., Geesink Norba Limited and Norba A. B. (collectively, the Geesink Norba Group), which have been reclassified to discontinued operations due to the Company's sale of these businesses on July 1, 2009.

Excluding non-cash intangible asset impairment charges3, for the fiscal year ended September 30, 2009, the Company reported income from continuing operations of $3.8 million, or $0.05 per share, on sales of $5.30 billion compared with income from continuing operations for fiscal 2008 of $287.5 million, or $3.84 per share, on sales of $6.94 billion. Including impairment charges, the Company recorded a loss from continuing operations of $1.17 billion, or $15.33 per share, for fiscal 2009. The lower results were due to a decrease in sales at the Company's access equipment and commercial segments due to the global recession and credit crisis, offset in part by strong demand for defense vehicles and armor kits.

"Our positive results for the quarter were led by strength in our defense business," said Robert G. Bohn, Oshkosh Corporation chairman and chief executive officer. "In addition to our strong legacy medium- and heavy-payload tactical wheeled vehicle programs, we have been aggressively ramping up our factories to achieve our December 2009 production target of 1,000 M-ATVs per month to support our warfighters in Afghanistan. Dedicated employees from our defense and access equipment segments have been working tirelessly with our suppliers and our customer to deliver these vehicles as quickly as possible, as we know they greatly improve the protection and mobility of our American men and women in the military who are sacrificing to help the people of Afghanistan and to make the world a safer place.

"At this time next year, we expect to be serving our men and women in the U.S. Army by delivering FMTVs to our soldiers. Although the losing bidders have protested the Army's source selection decision, we believe that the source selection was performed fairly and objectively. We expect that U.S. taxpayers will receive improved value and that U.S. soldiers will benefit from Oshkosh's expertise as a producer of high quality, high performance tactical wheeled vehicles.

"We significantly enhanced our balance sheet with debt reduction of $736 million during the year, supported by our successful equity offering in August 2009 and strong cash flows from operations. We enter fiscal 2010 with a strong focus on lean implementation, operations improvement and cash generation that we expect to lead to further debt reduction," added Bohn.

Bohn further commented, "We expect to be solidly profitable in fiscal 2010, led by significant revenue growth in our defense business, which should more than offset anticipated low demand at our construction-related businesses. And, we continue to make investments to position the Company to perform well when the global economy rebounds."

The Company reported that consolidated net sales in the fourth quarter of fiscal 2009 decreased 19.8 percent compared with the prior year's fourth quarter. Significantly higher defense segment sales were not sufficient to overcome a decrease in sales in the Company's other segments.

Operating income from continuing operations decreased 10.8 percent to $118.1 million, or 7.9 percent of sales, for the fourth quarter of fiscal 2009 compared with operating income from continuing operations of $132.4 million, or 7.1 percent of sales, in the prior year fourth quarter. Significantly improved performance in the defense segment as a result of higher unit volume, improved manufacturing efficiencies and consolidated LIFO inventory benefits of approximately $24 million were not sufficient to offset the effects of substantially lower volume in the Company's other segments.

Factors affecting fourth quarter results for the Company's business segments included:

Defense -- Defense segment sales increased 54.6 percent to $855.4 million for the fourth quarter of fiscal 2009 compared with the prior year fourth quarter. The increase was due to an increase in sales of new and remanufactured Family of Heavy Tactical Vehicles (FHTV), the start of MRAP-All Terrain Vehicle (M-ATV) production and higher parts & service sales, offset in part by lower medium-payload tactical vehicle sales. Defense parts & service sales during the fourth quarter of fiscal 2009 benefited from the sale of TAK-4® independent suspension systems for Mine Resistant Ambush Protected (MRAP) vehicles. M-ATV sales were approximately $100 million in the fourth quarter of fiscal 2009.

Operating income in the fourth quarter more than doubled to $161.7 million, or 18.9 percent of sales, compared with prior year fourth quarter operating income of $75.1 million, or 13.6 percent of sales. The increase in operating income as a percent of sales reflected a combination of substantially improved manufacturing efficiencies, a LIFO inventory benefit of $12.0 million and lower material costs.

Access Equipment -- Access equipment segment sales decreased 58.2 percent to $310.5 million for the fourth quarter of fiscal 2009 compared with the prior year quarter. Sales reflected substantially lower global demand arising from recessionary economies and tight credit markets. Fourth quarter fiscal 2009 sales included $87 million of intercompany M-ATV-related sales to the defense segment. Sales of new access equipment in North American and European, African and Middle Eastern regions each declined about 80 percent compared with the prior year quarter.

The access equipment segment incurred an operating loss of $45.8 million, or 14.7 percent of sales, for the fourth quarter of fiscal 2009 compared with operating income of $50.2 million, or 6.8 percent of sales, in the prior year quarter. The decrease in operating results was primarily due to lower sales volume and related underabsorption of fixed costs and product rationalization costs, offset in part by lower operating expenses as a result of cost reduction initiatives. Operating results also benefitted from the recognition of intercompany M-ATV sales at mid-single digit margins.

Fire & Emergency -- Fire & emergency segment sales for the fourth quarter of fiscal 2009 decreased 16.7 percent to $305.2 million compared with the prior year quarter. The sales decrease reflected lower sales at the Company's European fire apparatus and mobile medical businesses as a result of large multiple-unit sales deliveries in the fourth quarter of fiscal 2008 and weaker sales of towing & recovery equipment in the fourth quarter of fiscal 2009. The towing & recovery business continues to be impacted by low levels of consumer spending and limitations on available financing for its customers as a result of the tight credit markets.

Operating income decreased 4.7 percent in the fourth quarter of fiscal 2009 to $31.7 million, or 10.4 percent of sales, compared with the prior year quarter operating income of $33.2 million, or 9.1 percent of sales. The increase in operating income as a percent of sales during the fourth quarter was primarily the result of improved product mix and LIFO inventory benefits of $3.7 million.

Commercial -- Commercial segment sales decreased 40.4 percent to $130.4 million in the fourth quarter of fiscal 2009 compared with the prior year quarter. The sales decrease was largely due to a 69 percent decline in sales of concrete placement products as a result of lower construction activity in North America and a 31 percent decrease in domestic refuse collection vehicle sales. The prior year's fourth quarter refuse collection vehicle sales were unusually high.

Operating income increased 13.5 percent in the fourth quarter to $3.8 million, or 2.9 percent of sales, compared with operating income of $3.4 million, or 1.5 percent of sales, in the prior year quarter. The increase in operating income primarily reflected LIFO inventory benefits of $8.5 million and lower operating expenses as a result of cost reduction initiatives, offset in large part by the effect of the further decline in sales in the fourth quarter of fiscal 2009.

Corporate and other -- Corporate operating expenses and inter-segment profit elimination increased $3.8 million to $33.3 million for the fourth quarter of fiscal 2009 compared with the prior year quarter. The increase was the result of higher intersegment profit eliminations related to M-ATV production, higher stock-based compensation expense and the reinstatement of previous compensation levels.

Interest expense net of interest income increased $13.5 million to $61.1 million in the fourth quarter of fiscal 2009 compared with the prior year quarter largely as a result of higher interest rates associated with the March 2009 amendment of the Company's credit agreement. The amendment increased the spread on LIBOR loans to 600 basis points compared with 175 basis points in the fourth quarter of fiscal 2008. The Company completed a common stock offering early in the fourth quarter which resulted in $358 million of net proceeds, and when combined with cash flow generation, resulted in total debt reduction of $412.8 million during the fourth quarter of fiscal 2009.

During the fourth quarter, the Company entered into an agreement for performance-based payments on the M-ATV program. This resulted in a significant cash payment to the Company near the end of the fiscal year which contributed to cash on hand of $530.4 million at September 30, 2009. Much of the cash at September 30, 2009 was paid to suppliers starting in October as production of M-ATVs ramped up.

The Company recorded a tax provision in the fourth quarter of $8.0 million on pre-tax income from continuing operations of $61.2 million, resulting in an effective tax rate of 13.1 percent. The current year rate was positively impacted by a $15.0 million tax benefit related to investments in the Company's foreign subsidiaries, offset in part by the reversal of a portion of a European tax incentive and foreign net operating losses, which were not benefitted.

Full-Year Results

Excluding non-cash intangible asset impairment charges, the Company reported income from continuing operations of $3.8 million, or $0.05 per share, for fiscal 2009 on sales of $5.30 billion compared with income from continuing operations of $287.5 million, or $3.84 per share, for fiscal 2008 on sales of $6.94 billion. Including impairment charges, the Company recorded a loss from continuing operations of $1.17 billion, or $15.33 per share, for fiscal 2009. The lower results were due to significantly lower sales at the Company's access equipment and commercial segments due to the global recession and credit crisis, offset in part by strong demand for defense vehicles, armor kits and TAK-4 independent suspensions.

Excluding impairment charges, operating income from continuing operations decreased 66.3 percent to $207.8 million, or 3.9 percent of sales, in fiscal 2009 compared with $616.0 million, or 8.9 percent of sales, in fiscal 2008. An operating loss in the access equipment segment more than offset higher operating income in the defense and fire & emergency segments and lower corporate expenses. Including impairment charges, the Company recorded an operating loss from continuing operations of $992.0 million for fiscal 2009.

Discontinued Operations

On April 30, 2009, the Company entered into an agreement to sell its ownership in the Geesink Norba Group. The Geesink Norba Group, the Company's European refuse collection vehicle manufacturer, was included in the Company's commercial operating segment. The historical results of operations of these businesses have been presented as discontinued operations, net of tax, in the Condensed Consolidated Statements of Operations for all periods.

The transaction closed on July 1, 2009. Although the selling price was nominal, the Company reported a non-cash pre-tax gain of approximately $34 million on the sale of these businesses in the fourth quarter of fiscal 2009 as a result of the reversal of cumulative translation adjustments from equity into earnings.