Oshkosh Truck Corp. reported that first quarter net income increased 4.7
percent to $8.6 million, including the effects of accounting changes, on sales of $361 million for the quarter ended December 31, 2001.
This compares with net income of $8.2 million on sales of $283 million for last year's first quarter.
The sales increase was due largely to full rate production of medium payload trucks being supplied to the U.S. Marines under a Medium Tactical Vehicle Replacement contract and to the acquisition of the Geesink Norba Group in the fourth quarter of fiscal 2001. Operating income was flat at $17.8 million, or 4.9 percent of sales, compared to $17.8 million, or 6.3 percent of sales, in the prior year's first quarter. The company said operating income was negatively impacted by reductions in higher-margin concrete placement product sales, substantially higher sales of lower margin MTVR trucks and significant bid and proposal spending in the defense segment.
Chairman, President and CEO Robert Bohn said the results reflect continued softness in the concrete placement business, and weakness in the European economy, which is beginning to impact the refuse collection market and sales of the Geesink Norba Group. “Our defense business is strengthening, spurred by increased U.S. Department of Defense spending to support the war on terrorism,” he added. Additionally, the company signed its first contract with the U.K. Ministry of Defense to produce tank transporters and trailers and commenced work on two follow-on competitions to produce wheeled tankers and cargo support vehicles for them.
Fire and emergency segment sales increased 2.3 percent, to $95.9 million, for the quarter. Operating income was up 5.4 percent, to $7.8 million, or 8.1 percent of sales, compared to prior year income of $7.4 million, or 7.8 percent of sales.
Defense sales increased 67.1 percent, to $136.6 million, for the quarter, largely as a result of planned full-rate production of MTVR vehicles. Operating income declined 5.9 percent, to $8 million, or 5.9 percent of sales, compared to prior year operating income of $8.5 million, or 10.5 percent of sales. Strong parts sales caused defense operating income to exceed previous estimates by about $2.5 million. Margins declined in the quarter because margins under the MTVR contract are significantly lower than for the remainder of the defense segment, and due to significant bid and proposal spending.
Commercial sales increased 20.9 percent, to $129.4 million, for the quarter. Excluding the impact of the Geesink Norba Group acquisition, sales would have declined by 6.4 percent for the quarter. A 25 percent decline in concrete placement sales for the quarter due to the U.S. economic recession was partially offset by a 25.8 percent increase in domestic refuse product sales, principally to a large, national waste hauler under a multi-year arrangement. Operating income increased 18.2 percent to $7.3 million, or 5.6 percent of sales.