Oshkosh Corporation (OSK) Earnings Call Transcript & Summary

Thank you, Mr. Chevedden. Operator, please mute the sponsor's line. We do have 2 questions that have been submitted regarding the official business of the meeting. The first question is, how much did the company pay auditors in 2020 and 2019? I would refer the audience to Page 24 of the proxy statement, which outlines the fees paid to the auditor. Specifically, in 2019, the auditors were paid $3,573,000. In fiscal year '20, the auditors were paid $4,033,000. The second question relates to the CEO pay in fiscal year 2019 and fiscal year 2020. I would refer the audience to Page 46 of the proxy statement, where they can find the 2020 summary compensation table, which includes compensation for the named executive officers. Specifically, in fiscal year 2020, Wilson Jones, the Chief Executive Officer, was paid $8,106,122. In fiscal year 2019, compensation was $10,258,166. This completes the items to be voted on at today's meeting. The polls for voting are now closed. I will next proceed with the vote and provide a report on the results. Steve and I received proxies authorizing us to vote shares on the items of business for today's meeting, and we have voted these shares accordingly. Based on a preliminary tabulation from the inspector of elections, I can report as follows as to the items of business at today's meetings. Shareholders have elected all 10 director nominees. Shareholders have ratified the appointment of Deloitte & Touche as the company's independent auditors for fiscal year 2021. Shareholders have approved, on an advisory basis, our named executive officer compensation. And shareholders have rejected the shareholder proposal. The final tally of votes, certified by the inspector of elections, will be included with the minutes of this meeting and made publicly available with the SEC in the next few days.

Thank you for that report, Ignacio. As there are no further business to come before this meeting, I declare the meeting adjourned. I'd like to thank all our shareholders for your continued confidence and support. But before I turn it over to management for a brief update, this is going to be Wilson Jones' last shareholder meeting as Chief Executive Officer and Director. And I'd like to take a moment to personally recognize and express our appreciation to Wilson on behalf of our Board and our shareholders. As we announced in November, Mr. Jones is retiring from the company in April. Wilson has served as CEO since January of 2016, and has served as an executive with the company for over 15 years. He's been instrumental in shaping the people-first culture and values of the company, along with the growth and operational excellence the company has seen during his tenure. Additionally, Mr. Jones is focused on the future of the company and has worked closely with the Board to identify and prepare the company's next CEO, John Pfeifer. So Wilson, we wish you and your family the very best in retirement, and we're grateful for all you've done for our company. And we're delighted to see the smooth transition that is well underway between Wilson and John. And John, you have some big shoes to fill, but we know you're up to it. And we look forward to your election as CEO, as planned, on April 2, 2021. Now, Ignacio has a brief important announcement.

Thank you, Steve. Wilson Jones and John Pfeifer will now report on the company's activities and provide other information regarding the company's operations. Today's presentation is being webcast. An audio replay will be available on our website for approximately 12 months. The remarks that follow, including the videos shown at this meeting, include statements that we believe to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act. These forward-looking statements are subject to the risks -- to risks that could cause actual results to be materially different. Those risks include, among others, matters that we've described in our annual report on Form 10-K, filed with the SEC on November 18, 2020; our quarterly report on Form 10-Q for the first quarter of fiscal year 2021, filed on January 27, 2021; and other filings we make with the SEC. We disclaim any obligation to update these forward-looking statements, which may not be updated until our next quarterly earnings press release, if at all. References in the remarks to a quarter or a year are to our fiscal quarter or fiscal year, unless stated otherwise.

Thank you, Ignacio. Now, please welcome Wilson Jones, Chief Executive Officer and Director of Oshkosh Corporation. Wilson?

Thank you, Steve. I appreciate your kind words. I've certainly enjoyed working with you and our Board of Directors. Oshkosh Corporation is fortunate to have this great group of professional directors to help navigate this big global industrial. I want to personally thank all of you and let you know I have appreciated all your support and guidance during my tenure. To our shareholders, I've enjoyed the engaging dialogue that I've had with many of you over the years and want to thank you for your continued interest in the Oshkosh Corporation. To our people, I want all 14,000-plus teamers to know it's been an honor to work with you these past 16 years. Working together, we've built a strong foundation that's positioned the company well for the future. And I'm certainly going to enjoy watching your continued success. I'll continue working closely with John and the team to ensure a smooth transition over the next couple of months. And I'm confident that the company is in good hands with John Pfeifer leading the way, backed by a very strong leadership team and a seasoned Board of Directors. John, I'll pass the mic to you for our business update.

Thank you, Wilson. And I'd like to thank everybody for attending our 2021 Annual Shareholders Meeting. I'm going to just make a few brief remarks. But before I begin my discussion, I'd also like to thank Wilson for all he's done for this company. Under his leadership, Oshkosh Corporation has become the remarkable company that it is today. The culture he established and the values that he instilled will continue to be the foundation of our company's success. I also want to say that I appreciate the trust that has been put in me to lead this company, and I am humbled and honored to serve as the next CEO of Oshkosh Corporation. I'm constantly inspired by the talent our team possesses, the values we live each and every day, and our commitment. It's an unwavering commitment to delivering on our purpose. And we do have a powerful purpose at Oshkosh Corporation. That purpose is to make a difference in people's lives. It's our why, and it's a deep why, and we take it very, very seriously. Whether it's the lives of our team members, our customers and end users, our community members or others who have put their trust in Oshkosh Corporation, everything that we do is designed to make somebody's life better. And our purpose is grounded in our values. There are 4 core values that we hold very dearly. Number one is that we put people first. We respect the impact that we have on each other, on the people we serve in the communities around the world. Number two, we persevere. We're a team that doesn't give up. We've demonstrated this over 100 years ago, and this is still a very much part of who we are today. Our ability to effectively manage through the pandemic is just another example of our perseverance. Number three, we do the right thing, always. We work ethically. We respect our environment. And number four, we are better together. That means that we value diversity: diversity of thought, diversity of experience, diversity of gender, diversity of ethnicity that create an inclusive environment. These values have guided us through some of the most challenging times in our history, including the pandemic that we're going through right now, and will continue to guide our future actions. We are a recognized leader in making a difference. We are guided by our ethical culture and our dedication to doing the right thing. One testament of our ethics is that we were named one of the most ethical companies by Ethisphere Institute for the fifth consecutive year. Our team members have embraced our people-first culture and have witnessed the positive impact this strong culture has on our engagement and, ultimately, that leads to business results. We continue to build a diverse and inclusive workplace. Over 2 years ago, Wilson Jones signed the CEO action for diversity and inclusion. This is the largest CEO-driven business commitment to advance diversity and inclusion in the workplace, and we're committed to doing just that at Oshkosh Corporation. We have increased education opportunities for team members to learn, grow and develop diverse and inclusive skills. We've invested in the CEO Action for Diversity & Inclusion Social Justice Fellowship. One of our team members is one of the 250 fellows to work full-time on advancing social justice through public policy. And we are focused on attracting and retaining diverse talent. For example, we have over 1,000 veterans, reservists and natural guard members we proudly call our team members and have -- we have been named a Military Friendly Employer by Victory for a third consecutive year. We're a customer-focused company. Our people-first culture and core values have paved the way to deliver market-leading products to our customers. We're committed to exceeding the needs of our customers, designing and delivering products and services that provide safety, reliability and exceptional performance to those who do some of the most dangerous and important jobs in the world. In 2020, we received the Magnus Hendrickson award for our innovative progress in vehicle dynamics. We work hard to deliver for our shareholders. We've made capital allocation a pillar of our strategy, and we have a great track record of returning cash to shareholders through share repurchases and a consistently growing dividend. And finally, our efforts in sustainability have earned us a place on the Dow Jones Sustainability World Index and won a Barron's Top 100 Most Sustainable Companies. We are making a difference. We often call ourselves a different integrated global industrial, and we are just that. What that means is that we're not a holding company. We actually get a lot of leverage and a lot of benefit by being in a variety of markets. And we're able to leverage our expertise and our capabilities across that variety of end markets. I'm referring to things like research and development, strategic sourcing and megatrend technologies that transcend individual markets. These advantages provide a great opportunity to bolster our market leadership. Our focus on making a difference for those who rely on us was evident in our fiscal year 2020. And I'm extremely proud of the hard work and disciplined execution our Oshkosh team members demonstrated as we manage through the pandemic. The underlying strength we derive from our people-first culture was, and it continues to be, a key enabler to our success as we navigate through these challenging times. We often talk about how we're better together, and we certainly have exhibited this, and it shows in our results. In 2020, we delivered sales of nearly $6.9 billion and adjusted earnings per share of $4.94. And our consolidated backlog is up over 10% versus the prior year as we have controlled what we can control, and we've responded very quickly to challenges that are outside of our control. Given the conditions that were present in our markets in the United States and around the world, we believe that this represents solid performance. The duration and the impact of the pandemic on the economy remain uncertain. But the resiliency of Oshkosh team members has been impressive as we've responded to a variety of challenges, including changing customer demand, new working protocols and supply chain disruptions, amongst others. We believe our value and strengths as a different integrated global industrial are even more pronounced versus our competitors in times like these. Our success can be attributed to our leading business unit brands, each with a history of advancing the industries that they serve. Our brands leverage innovation, they leverage supply chain, they leverage procurement, and they leverage operational efficiency across our connected portfolio. We have 3 primary pillars that guide our growth plans going forward. First, we innovate. We innovate by combining advanced technology and operational strength to empower and protect the everyday hero. That includes leveraging strengths with disruptive technologies. We continue to create breakthroughs to revolutionize the way people work and the way people move. In fact, our focus on disruptive technologies continues to make us a leader in product innovation. And we are certainly well down the road of electrification, autonomy and active safety, intelligent products, digital manufacturing and advanced analytics. Second, we serve. We serve and support those who rely on us with a relentless focus throughout the product life cycle. We have hundreds of thousands of units in the installed base being used right now as we speak. It is our intention to continuously enhance total cost of ownership for our customers by ensuring equipment operates efficiently from the cradle to the grave. And finally, we advance. We strive to advance our company into new adjacent categories to better serve the everyday hero and also into new geographies. This guides both our organic and our inorganic growth initiatives. As you know, we work hard to deliver for our shareholders. Oshkosh is a company that generates strong free cash flow even in the face of the pandemic. We have made capital allocation a pillar of our strategy, and have a great track record of returning cash to shareholders through share repurchases and a consistently growing dividend. From 2017 to 2020, we returned over $930 million in dividends and share repurchases. That's nearly 80% of our free cash flow during that period of time. Our performance in the first quarter of this year continued to demonstrate the perseverance and disciplined execution of our team. In the first quarter, we delivered sales of nearly $1.6 billion and adjusted earnings per share of $1.13, both of which exceeded our expectations. It bears repeating, our people have done an exceptional job of adapting to changing situations where flexibility and resiliency have kept us moving in the right direction. We announced our intent to acquire Pratt Miller, which closed on January 19. We're confident that they will be a great fit with our company. While revenue was softer than prior year in our access equipment and commercial segments, this was consistent with our expectations. And as expected, we continue to see improvement in our access equipment segment and are more confident in a second half recovery, although, I have to say, the precise timing and the magnitude of that recovery remains uncertain. Our overall outlook is bolstered by the excellent visibility we have with our defense and fire & emergency segments, both of which have backlogs that extend well into the future. We're well positioned for success, and we have a positive long-term outlook. Thank you for participating in our 2021 Annual Shareholders' Meeting. If you have any questions, please reach out to Pat Davidson or Jeff Watt through the contact information that's displayed on the screen. We appreciate your interest in the Oshkosh Corporation. And today, we'll leave you with a video showing how we've continued to make a difference and persevere in the face of the pandemic. [Presentation]

Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.