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.
In
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• The COVID-19 pandemic has significantly reduced demand for access equipment,
and some customers have canceled or pushed out orders. The COVID-19 pandemic
has also reduced demand for refuse collection vehicles and concrete mixers
and may reduce demand for other products. In addition, travel restrictions
related to the COVID-19 pandemic have prevented some customers in our Fire &
Emergency segment from inspecting and accepting vehicles on a timely basis.
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, and may in the future limit, their production or shut down due
to shelter-in-place requirements, sanitizing facilities and workforce
availability issues. While we have generally been successful in mitigating
these supply chain challenges, supplier parts shortages lowered our
production rates in the Fire & Emergency segments during the third quarter
of fiscal 2020, and it is possible that a part or component shortage could
limit our production in the future.
• 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 may disrupt our
ability to manufacture or distribute our products in some markets.
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 have, and in the
future 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.
• Although 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, 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 we believe our
balance sheet remains strong, we have been focused on preserving capital
resources given the uncertain duration of the pandemic, and in an attempt 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, there is no
certainty that measures we have taken will be effective to enable us to
maintain adequate resources and liquidity.
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
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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 impact of the COVID-19 pandemic on us, but it could continue to 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. The ready-mix concrete market that we serve is highly cyclical and impacted by the strength of the economy generally, by the number of housing starts and by other factors that may have an effect on the level of concrete placement activity, either regionally or nationally. Refuse collection vehicle markets are also cyclical and impacted by the strength of economies in general, by municipal tax receipts and by the size and timing of capital expenditures, including replacement demand, by large waste haulers. Fire & Emergency markets are cyclical later in an economic cycle and are impacted by the economy generally and by municipal tax receipts and capital expenditures.
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
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