Oshkosh Truck Reports Third Quarter EPS up 23.5%; Raises Full-Year Outlook to $4.30 and Announces Fiscal 2006 EPS Expected Range of $4.80 to $5.00

Business Wire, August 2, 2005

OSHKOSH, Wis. -- Oshkosh Truck Corporation (NYSE:OSK), a leading manufacturer of specialty trucks and truck bodies, today reported that for the quarter ended June 30, 2005, earnings per share increased 23.5 percent to $1.05 per share, on sales of $818.9 million and net income of $38.7 million. The results included a $4.3 million ($3.0 million after-tax), or $0.08 per share, charge for workforce reductions at the Company's European refuse business. This compares with earnings per share of $0.85 on sales of $599.8 million and net income of $30.6 million for last year's third quarter. These results exceeded Oshkosh's most recent sales and earnings estimates for the third quarter of fiscal 2005 of $794.0 million and $1.03 per share, respectively. Oshkosh also increased its sales and earnings per share estimates for the full year ending September 30, 2005 to $2.96 billion and $4.30 per share, respectively. All per share amounts included in this release are reported on a pre-split basis with respect to a two-for-one split of the Company's common stock as separately announced today.

Sales increased 36.5 percent in the third quarter. Operating income increased 28.1 percent to $63.0 million, or 7.7 percent of sales, compared to $49.2 million, or 8.2 percent of sales, in the prior year's third quarter. Operating results for the quarters ended June 30, 2005 and 2004 included charges for workforce reductions and life-to-date adjustments to the margins on the Medium Tactical Vehicle Replacement ("MTVR") base contract in each period as described below.

Commenting on the results, Robert G. Bohn, Oshkosh chairman, president and chief executive officer, said, "I am pleased with the exceptional financial performance provided by our defense and fire and emergency businesses, which contributed to record third quarter earnings. Defense parts and truck revenue growth were significant factors in our quarterly performance, and the outlook for future business remains positive. And, our fire and emergency business increased both revenues and earnings sharply from both acquisitions and significant organic growth.

"In our commercial business, we are aggressively pursuing improvement and anticipate this will yield positive results for this segment beginning in fiscal 2006. Commercial results are being positively influenced by "lean" initiatives. In the U.S., this has yielded record deliveries, improved lead times for our customers, and inventory reductions, each of which are underlying indicators of performance improvement. To restore profitability to our European refuse business, we regret that these initiatives will mean a reduction of the workforce in The Netherlands. In addition, steel costs have stabilized, which should be a factor in recovering margins.

"Oshkosh Truck is focused on growth, as we ramp up defense remanufacturing, expand our fire apparatus manufacturing capacity, and target better results in our commercial segment. In addition, we believe our markets continue to exhibit the fundamentals necessary for future growth, and we today announce our earnings per share estimated range for fiscal 2006 of $4.80 to $5.00, up 11.6 percent to 16.3 percent from our current full year fiscal 2005 estimates."

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

Fire and emergency--Fire and emergency segment sales increased 56.2 percent, to $222.7 million for the quarter compared to the prior year. Operating income was up 75.4 percent to $23.1 million, or 10.4 percent of sales, compared to prior year operating income of $13.2 million, or 9.2 percent of sales. The JerrDan and BAI acquisitions contributed sales of $42.0 million and operating income of $4.1 million during the quarter. Sales and operating income from other businesses in this segment grew 26.7 percent and 44.0 percent, respectively, for the quarter. The higher sales level for these businesses reflected strong order flow for fire apparatus and substantially higher airport product sales. Operating income margins for the businesses increased due to a substantially improved sales mix of custom pumpers, aerials and airport products.

Defense--Defense segment sales increased 47.1 percent to $281.0 million for the quarter compared to the prior year's third quarter due to a near doubling of parts and service sales as a result of the conflict in Iraq and substantially higher truck sales. Operating income in the third quarter was up 35.4 percent, to $46.0 million, or 16.4 percent of sales, compared to prior year operating income of $33.9 million, or 17.8 percent of sales. Third quarter earnings were favorably impacted by the increase in relatively higher-margin parts and service sales and higher truck sales which were offset in part by substantially higher new product development spending. Third quarter earnings reflected a $2.1 million life-to-date adjustment to operating income to increase margins on the Company's MTVR base contract from 9.9 percent to 10.1 percent. The Company had reported a life-to-date adjustment to MTVR base contract margins during the third quarter of fiscal 2004 of $7.1 million to raise its margins to a 7.1 percent rate at that time.