OSHKOSH CORPORATION Item 2.02 Results of Operations and Financial Condition.
On
On
The information, including, without limitation, all forward-looking statements,
contained in the News Release and related slide presentation on the Company's
website (the "Slide Presentation") or provided in the conference call and
related question and answer session speaks only as of
The News Release and the Slide Presentation contain, and representatives of the
Company may make 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 News Release
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, plans
and objectives of management for future operations, and compliance with credit
agreement covenants 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," "estimate," "anticipate," "believe,"
"should," "project" or "plan," 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, those set forth under the caption "Risk Factors" below.
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
In this Current Report on Form 8-K, "we," "us" or "our" refers to
RISK FACTORS
The COVID-19 pandemic could further materially adversely affect our business, workforce, supply chain, results of operation, financial condition and/or cash flows.
COVID-19, a novel strain of coronavirus, was identified in late 2019 in
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• The COVID-19 pandemic has reduced demand for access equipment and concrete
mixers, and some customers have begun to push out and cancel orders. The
COVID-19 pandemic could also have the effect of reducing demand for our
other products. In addition, travel restrictions related to the COVID-19
pandemic have prevented customers in our fire & emergency segment from
inspecting and accepting vehicles. Furthermore, our customers may experience
financial hardships during the COVID-19 pandemic that could result in lower
demand for our products and/or default on financial and other commitments to
us.
• We operate a global supply chain that has been, and could in the future
continue to be, disrupted by the COVID-19 pandemic, resulting in delays or
inefficiencies in production in all of our segments. Some of our suppliers
have limited their production or shut down due to "shelter-in-place"
requirements. While we have generally been successful in mitigating these
supply chain challenges to date, it is possible that a part or component
shortage could limit our production.
• Government or regulatory responses to the COVID-19 pandemic have negatively
impacted, and are likely to continue to negatively impact, our business.
Mandatory lockdowns or other restrictions on operations in some countries
may disrupt our ability to manufacture or distribute our products in some of
these markets. For example, our factory in China was part of the shutdown
that the Chinese government mandated in February 2020 to stop the spread of
COVID-19. Governments may continue to impose travel restrictions and close
borders, impose prolonged quarantines and further restrict business
activity, which could impact our ability to support our operations and
customers and the ability of our employees to get to their workplaces to
produce products and services, limit the ability of our suppliers to provide
us with products, or hamper our products from moving through the supply
chain.
• The COVID-19 pandemic adversely affects our workforce and business as a
result of impacts associated with required, preventive and precautionary
measures that we, other businesses, our communities and governments are
taking. These impacts include our requiring certain employees to work from
home, limiting the number of employees attending meetings, reducing the
number of people in our sites at any one time, reducing employee travel and
adopting other employee safety measures. These measures may also impact our
ability to meet production demands or requests depending on employee
attendance or ability to continue to work. Restrictions on, as well as the
health of, our workforce could limit our ability to support our business.
• We have instituted temporary plant shutdowns in our access equipment segment
to match production with customer demand and supply chain constraints and
implemented salary reductions, furloughs and other cost reduction actions
across our company. However, the impacts of the COVID-19 pandemic may limit
our ability to reduce our overall operating costs as we are incurring
increased costs relating to our enhanced sanitization procedures and our
efforts to mitigate the impact of the COVID-19 pandemic through
social-distancing measures we have enacted at our facilities.
• The impact of the COVID-19 pandemic on global economies could reduce our
ability to execute our business strategy. Disruptions or uncertainties
related to the COVID-19 pandemic could result in delays or modifications to
our strategic plans and initiatives.
• The COVID-19 pandemic has led to disruption and volatility in the global
capital markets, which depending on future developments could impact our
capital resources and liquidity in the future. Although the balance sheet
remains strong, we have been focused on preserving capital resources given
the uncertain duration of the pandemic. To maintain strong liquidity, the
Company has paused its share repurchase program and implemented other cost
reduction actions, such as salary reductions, furloughs and deferring
non-critical projects.
The impacts that we list above and other impacts of the COVID-19 pandemic are likely to also have the effect of heightening many of the other risks that we describe in this Current Report on Form 8-K. The ultimate impact of the COVID-19 pandemic, including the extent of its impact on our business, results of operations, financial condition and/or cash flow, is dependent, among other things, on the duration and severity of the pandemic, the effect of actions taken by government authorities and other third parties in response to the pandemic and the impact of the pandemic on global economies, each of which is uncertain, rapidly changing and difficult to predict. We cannot at this time predict the overall
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impact of the COVID-19 pandemic on us, but it could have a material adverse impact on our business, workforce, supply chain, results of operations, financial condition and/or cash flows.
Our markets are highly cyclical. Declines in these markets could have a material adverse effect on our operating performance.
The access equipment market is highly cyclical and impacted (i) by the strength
of economies in general and customers' perceptions concerning the timing of
economic cycles, (ii) by residential and non-residential construction spending,
(iii) by the ability of rental companies to obtain third-party financing to
purchase revenue generating assets, (iv) by capital expenditures of rental
companies in general, including the rate at which they replace aged rental
equipment, which is impacted in part by historical purchase levels, (v) by the
timing of regulatory standard changes, and (vi) by other factors, including oil
and gas related activity. Entering fiscal 2020, we expected lower access
equipment sales in
Lower
Our dependency on contracts with
We are dependent on
• Our business is susceptible to changes in the
changes may reduce revenues that we expect from our defense business,
especially in light of federal budget pressures, lower levels of U.S. ground
troops deployed in foreign conflicts, sequestration and the level of defense
funding that will be allocated to the DoD's tactical wheeled vehicle
strategy generally.
• The
for our U.S. government contracts, which may prevent us from realizing
revenues under current contracts or receiving additional orders that we
anticipate we will receive. The DoD could also seek to reprogram certain
funds originally planned for the purchase of vehicles we manufacture under
the current defense budget allocations. The U.S. Army has identified its top
modernization and readiness priorities, which could result in the customer
re-programming funds away from the Company's Joint Light Tactical Vehicle
(JLTV) program to support these initiatives.
• The funding of
congressional budget authorization and appropriation process. In years when
the
its fiscal year, government operations are typically funded pursuant to a
"continuing resolution," which allows federal government agencies to operate
at spending levels approved in the previous budget cycle but does not
authorize new spending initiatives. When the
a continuing resolution, delays can
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