Oshkosh Truck Reports Second Quarter EPS Up 67.7%; Increases EPS Expectations to $4.25 for Fiscal 2005; Increases Dividend by 50% and Changes to Single Class of Stock

Business Wire, May 3, 2005

OSHKOSH, Wis. -- Oshkosh Truck Corporation (NYSE:OSK), a leading manufacturer of specialty trucks and truck bodies, today reported that second quarter earnings per share increased 67.7 percent to $1.04 per share, on sales of $672.4 million and net income of $38.2 million for the quarter ended March 31, 2005. This compares with earnings per share of $0.62 per share, on sales of $518.2 million and net income of $22.5 million for last year's second quarter. These results exceeded Oshkosh's most recent sales and earnings estimates of $645.0 million and $0.66 per share, respectively, for the second quarter of fiscal 2005. Oshkosh also increased its sales and earnings per share estimates for the full year ending September 30, 2005 to $2.9 billion and $4.25 per share, respectively.

Sales increased 29.7 percent in the second quarter. Operating income increased 78.5 percent to $62.6 million, or 9.3 percent of sales, compared to $35.1 million, or 6.8 percent of sales, in the prior year's second quarter.

Commenting on the results, Robert G. Bohn, chairman, president and chief executive officer, said, "Our financial performance in fiscal 2005, particularly the favorable year-over-year earnings growth, continued to gain momentum. This was a record second quarter for the Corporation, driven largely by exceptional results in our defense business along with strong operational performance and a favorable product mix in our fire and emergency business.

"Our defense business performed beyond our expectations, providing favorable performance on our Medium Tactical Vehicle Replacement (MTVR) contract and stronger than expected margins on new truck and new service contracts.

"In our commercial business, the U.S. concrete placement and refuse markets continued to show strength and provided solid revenue growth. Unfortunately, operating income continued to be negatively impacted by lower-priced backlog, but that is now largely behind us, so we believe there is the prospect of margin growth in the domestic market.

Bohn continued, "As we move through the second half of fiscal 2005, we are focused specifically on capitalizing on the positive market developments in our businesses and on continuing the operational improvements of our McNeilus and European refuse operations. We are encouraged by the progress that we are making across the Corporation. On the basis of our performance in the second quarter and our positive outlook, we have increased our fiscal 2005 earnings per share estimate from $3.85 to $4.25."

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

Fire and emergency--Fire and emergency segment sales increased 57.2 percent, to $213.2 million for the quarter compared to the prior year. Operating income was up 69.5 percent to $19.0 million, or 8.9 percent of sales, compared to prior year operating income of $11.2 million, or 8.3 percent of sales. The JerrDan and BAI acquisitions contributed sales of $42.7 million and operating income of $2.1 million during the quarter. Sales and operating income from other businesses in this segment grew 25.7 percent and 50.9 percent, respectively, for the quarter. The higher sales level for these businesses reflected strong order flow for fire apparatus during fiscal 2004 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 24.7 percent to $209.6 million for the quarter, largely due to a more than doubling of parts and service sales compared to the prior year's second quarter as a result of the conflict in Iraq, which was offset by slightly lower truck sales. Operating income in the second quarter was up 114.4 percent, to $49.4 million, or 23.6 percent of sales, compared to prior year operating income of $23.0 million, or 13.7 percent of sales. Earnings for the current quarter increased primarily due to a $14.1 million cumulative life-to-date adjustment to operating income to increase the margins on the Company's MTVR base contract from 8.5 percent to 9.9 percent. Second quarter earnings also were favorably impacted by the more than doubling of relatively higher-margin parts and service sales.

Commercial--Commercial segment sales increased 17.2 percent, to $255.3 million, for the quarter on strong order intake in U.S. markets. Operating income decreased 31.6 percent to $6.5 million, or 2.5 percent of sales, compared to $9.4 million, or 4.3 percent of sales, in the prior year quarter. The CON-E-CO and London acquisitions contributed sales of $9.0 million and operating income of $0.5 million during the quarter. Operating income margins were lower principally due to continued operating losses in the Company's European refuse business and insufficient price increases for concrete placement and domestic refuse products to recover sharply higher domestic steel costs as well as other cost increases in the quarter.