Business Overview
Oshkosh Corporation's roots can be traced back to 1917 when it was founded as the Wisconsin-Michigan Tractor Company. Initially focusing on tractor manufacturing, the company underwent several transformations over the years, including a name change to Oshkosh Truck Corporation and later to Oshkosh Corporation in 2008. This evolution reflects the company's journey from a small tractor manufacturer to a diversified industrial powerhouse with leading market positions across multiple segments.
Throughout its century-long history, Oshkosh has demonstrated remarkable resilience and adaptability. The company faced significant challenges during the early 1980s industry recession, which necessitated a restructuring and a renewed focus on developing innovative products. This period of adversity ultimately strengthened Oshkosh's resolve and set the stage for future growth. Similarly, the company successfully navigated the 2008-2009 financial crisis, which severely impacted demand in many of its end markets, by maintaining its commitment to engineering excellence and operational efficiency.
Oshkosh's growth trajectory has been marked by strategic acquisitions and product innovations. A major milestone in the company's history was the acquisition of JLG Industries in 2006, a leading global manufacturer of aerial work platforms and telehandlers. This move significantly expanded Oshkosh's product portfolio and global reach. Another key development was the launch of the revolutionary Oshkosh HEMTT (Heavy Expanded Mobility Tactical Truck) for the U.S. military in 1983, which solidified the company's position in the defense sector.
Today, Oshkosh Corporation operates in over 20 countries and has earned a reputation for high-quality, durable products and exceptional customer service. The company's success is built on its innovative technologies, flexible manufacturing capabilities, and diversified business model, which have allowed it to maintain leadership positions in access equipment, fire & emergency vehicles, defense vehicles, and commercial equipment.
Financial Strength and Resilience
Oshkosh's financial performance has been a testament to its operational excellence and strategic acumen. In the fiscal year 2024, the company reported consolidated net sales of $10.76 billion, representing an impressive 11.4% increase from the previous year. This top-line growth was driven by solid performance across all three of Oshkosh's reportable segments: Access, Vocational, and Defense.
The company's adjusted earnings per share (EPS) for fiscal 2024 stood at $11.74, up from $9.08 in the prior year. This robust earnings growth can be attributed to the company's ability to effectively manage costs, leverage its global supply chain, and implement strategic pricing initiatives to offset the impact of inflationary pressures.
Financials
Oshkosh's financial position remains strong, with a healthy balance sheet and a well-managed capital structure. As of December 31, 2024, the company had $204.9 million in cash and cash equivalents and $961.8 million in total debt, resulting in a net debt position of $756.9 million. The company's disciplined approach to capital allocation has enabled it to maintain a well-balanced mix of investments in organic growth, strategic acquisitions, and shareholder returns through dividends and share repurchases.
For the fiscal year 2024, Oshkosh reported revenue of $10.73 billion and net income of $681.4 million. The company generated operating cash flow of $550.1 million and free cash flow of $269.1 million. In the most recent quarter (Q4 2024), revenue stood at $2.62 billion, with net income of $153.1 million. Year-over-year revenue growth for the quarter was 6.3%.
Approximately 14% of 2024 net sales were attributable to products sold outside of the United States, with about 40% of those exports being from the U.S. The majority of export sales in 2024 were denominated in U.S. dollars.
Liquidity
Oshkosh Corporation maintains a robust liquidity position, ensuring financial flexibility and stability. The company's strong cash flow generation capabilities, combined with its available credit facilities, provide ample resources to fund operations, invest in growth initiatives, and navigate potential market uncertainties.
As of the latest reporting period, Oshkosh's debt-to-equity ratio was 0.188, indicating a conservative capital structure. The company had $204.9 million in cash and cash equivalents and access to $1.16 billion under its Revolving Credit Facility. The current ratio stood at 1.516, while the quick ratio was 0.757, both indicating a healthy short-term liquidity position.
Segment Performances
Access Segment: The Access segment, which includes the JLG and Jerr-Dan brands, is a global leader in the design and manufacture of aerial work platforms and telehandlers. In 2024, the Access segment generated $5.16 billion in net sales, representing 48% of Oshkosh's consolidated net sales. The segment's operating income was $805.4 million, or 15.6% of sales. Despite facing some near-term headwinds in the non-residential construction market, the segment's resilient margins and long-term growth prospects remain favorable, driven by the company's strong order backlog and investments in innovative technologies.
Vocational Segment: The Vocational segment, encompassing the Pierce, Maxi-Metal, AeroTech, Oshkosh Airport Products, McNeilus, IMT, Frontline, and Oshkosh S-Series brands, has been a consistent performer for Oshkosh. In fiscal 2024, the segment delivered strong revenue growth of nearly 20% year-over-year, supported by robust demand for its municipal fire apparatus, refuse and recycling collection vehicles, and airport ground support equipment. The segment generated $3.31 billion in net sales, representing 31% of Oshkosh's consolidated net sales. The segment's operating income was $397.1 million, or 12.0% of sales. The segment's adjusted operating income margin of 14% in the fourth quarter of 2024 underscores its ability to effectively manage pricing and cost dynamics.
Defense Segment: The Defense segment, which produces tactical wheeled vehicles and supply parts and services for the U.S. military and other global militaries, has faced some headwinds in recent years due to the dynamics of its legacy fixed-price contracts. In 2024, the Defense segment generated $2.16 billion in net sales, representing 20% of Oshkosh's consolidated net sales. The segment's operating income was $51.4 million, or 2.4% of sales. However, the company is optimistic about the segment's future prospects, with the expected ramp-up of the Next Generation Delivery Vehicle (NGDV) program for the U.S. Postal Service and the anticipated contract extensions for its Family of Medium Tactical Vehicles (FMTV) and Family of Heavy Tactical Vehicles (FHTV) programs.
Navigating Challenges and Embracing Opportunities
Oshkosh's leadership team has demonstrated its ability to navigate through various industry challenges, including supply chain disruptions, inflationary pressures, and geopolitical uncertainties. The company has proactively implemented measures to mitigate these risks, such as diversifying its global supply chain, leveraging its pricing power, and maintaining strong relationships with its customers and suppliers.
Furthermore, Oshkosh has been at the forefront of technological innovation, investing heavily in areas such as electrification, autonomy, and connectivity. The company's showcase at the CES trade show in January 2025 highlighted its cutting-edge products and solutions, including the all-electric Volterra refuse and recycling collection vehicles, the autonomous HARR-E refuse collection robot, and the ClearSky Smart Fleet platform for enhanced job site productivity.
These advancements position Oshkosh to capitalize on the growing demand for sustainable and technologically advanced solutions in its target markets, reinforcing its role as a leader in the industrial technology landscape. In 2024, the company invested $169.1 million in research and development to develop new products and technologies that enhance vehicle and equipment performance, reduce manufacturing costs, and strengthen customer relationships.
Outlook and Conclusion
For the fiscal year 2025, Oshkosh has provided a balanced and realistic outlook, reflecting its commitment to prudent management and long-term value creation. The company expects consolidated sales of approximately $10.6 billion and adjusted earnings per share of around $11, with the Vocational and Defense segments expected to be the primary drivers of growth.
Specifically, Oshkosh anticipates the Access segment to have sales of approximately $4.4 billion with an adjusted operating margin of about 13%. The Vocational segment is expected to have sales of approximately $3.8 billion with an adjusted operating margin of approximately 15%. The Defense segment is projected to have sales of approximately $2.3 billion with an adjusted operating margin of approximately 4%.
For the first quarter of 2025, Oshkosh expects adjusted EPS to be approximately $2, which is anticipated to be the lowest of the year, reflecting the impact of industry dynamics in Access and the progressive ramp-up in NGDV production in Defense.
The company plans to invest about $250 million in capital expenditures and expects free cash flow in the range of $300 million to $400 million in fiscal year 2025.
Oshkosh's proven track record, diversified business model, and innovative capabilities have earned it a reputation as a reliable and respected partner for its customers. As the company continues to execute its "Innovate, Serve, Advance" growth strategy, investors can look forward to the sustained success and value creation that Oshkosh has consistently delivered over the years.