OSHKOSH CORP Q3 FY2024 earnings call

• Revenue growth of 9% and adjusted operating margin of 10.3% in third quarter. - United States Postal Service began placing next-generation delivery vehicles in service. - Completed acquisition of AUSA in early September. - Vocational segment achieved strong revenue growth and high demand with growing backlog. - Defense segment saw sales increase due to NGDV production and contract extensions.

Access: Third quarter sales growth year-over-year, but facing softer North American market conditions in near term; expecting resilient margins. Vocational: Third quarter revenue growth of 17.6%, adjusted operating margin 13.7%, demand strong with growing backlog. Defense: Sales up 14% due to NGDV production, higher tactical wheeled vehicle deliveries and aftermarket parts sales. Revenue contribution: Access estimated ~$5.1B, Vocational ~$3.25B, Defense ~$2.15B

• Reduced full year 2024 adjusted EPS outlook to ~$11.35 per share from prior ~$11.75. - Access sales estimated ~$5.1B with adjusted operating margin 16%; Vocational sales ~$3.25B with adjusted operating margin 13.25%; Defense sales ~$2.15B with adjusted operating margin 2.25%. - Reduced CapEx target by $25M to $275M and free cash flow estimate by $25M to $350M.

• Softer market conditions in access equipment. - Potential supply chain challenges. - Fluctuations in input costs affecting margins.

Q: Regarding lower sales outlook in access, color on revenue decline and bridge to 2025 outlook.

A: Backlog has healthy levels but some pushouts and cancellations; backlog still over $2B.

Q: In vocational, degree of incremental price upside in backlog and P&L flow.

A: Strong double-digit price increases in backlog will read through over next few years.

Q: On defense margin path to 9%-10% targets.

A: Step forward in 2025 and bigger in 2026 with new contracts.

Q: On access decremental margins in weaker demand.

A: Incremental margin strong full year, but quarter-to-quarter nuances exist.

Q: On vocational capacity raising.

A: Focus on existing facilities and potential additional facilities.

Q: On AeroTech post-acquisition surprises.

A: Strong synergies in technology and commercial aspects.

Q: On access market bifurcating by customers.

A: Market normalizing with private nonres construction pressure but long-term drivers intact.

Q: On NGDV ramp-up.

A: Deliveries up, ramping up production prudently.

Q: On free cash flow and access pricing.

A: Big items like working capital and acceptance process impact cash flow; pricing depends on market negotiations.

Q: On vocational order trajectory.

A: Backlog growing, market dynamics strong with some lumpiness.

Q: On access product mix shift.

A: Telehandlers strong but mix evolution early.

Q: On Access next year cost management.

A: Work on resilience, aftermarket, and cost reduction initiatives.

Q: On Volterra proprietary chassis and market trend.

A: Chassis gives competitive advantage, market strong for both side-loaders and front loaders.

Q: On access price realization and 2025 outlook.

A: Challenging year-over-year comp but price cost positive, early in 2025 negotiations.

Q: On Volterra supply chain and uptake.

A: Regimented approach with supply chain, long-term play for electrification.

Q: On fire pricing and input cost impact.

A: Pricing locked in