Business Context and Reporting Period
Company: Oshkosh Truck Corporation
Filing Type: Form 10-K (Annual Report)
Reporting Period: Fiscal year ended September 30, 1994
Business Overview: Oshkosh engineers, manufactures, and markets specialized trucks, chassis, trailers, and proprietary parts. The company focuses on low-to-medium volume production for niche markets, particularly defense and commercial sectors requiring high mobility in adverse conditions (e.g., snow, deserts). Defense sales represented 62% of total sales volume in fiscal 1994.
Key Financial Metrics
Note: Specific revenue, profit, and cash flow figures are incorporated by reference to the Annual Report to Shareholders and are not explicitly stated in the provided text. The following metrics are available from the filing text:
- Backlog: $512 million as of September 30, 1994 (up from $459 million in the prior year).
- Engineering, Research & Development (R&D): $8.2 million for fiscal 1994.
- Property, Plant & Equipment (Net Book Value): $50.5 million (Calculated as Total Cost $113.7 million less Accumulated Depreciation $63.2 million).
- Short-Term Borrowings: $0 outstanding as of September 30, 1994.
- Allowance for Doubtful Accounts: $531,000.
- Employees: Approximately 1,900.
Material Changes and Operational Highlights
- Defense Contracts:
- Heavy Equipment Transporter (HET): Contract funded at $281.8 million. As of September 30, 1994, 1,331 units delivered; 23 units remaining for delivery in 1995.
- Palletized Load System (PLS): Contract funded at $897 million for 2,683 trucks. 1,703 units produced as of September 30, 1994. Backlog of $386 million to be produced through August 1996.
- Commercial Markets: The company serves municipal markets with Aircraft Rescue & Fire Fighting (ARFF) vehicles, snow removal, and waste transport vehicles. It also manufactures motorized chassis for motorhomes and buses.
- Capital Expenditures: Additions to Property, Plant, and Equipment totaled $5.7 million in fiscal 1994.
- Debt Status: The company reported no short-term borrowings outstanding at year-end, a change from the $34 million average outstanding in 1992.
Outlook, Risks, and Contingencies
- Government Contract Risks: A significant portion of sales depends on U.S. Government contracts, which are subject to funding appropriations and can be terminated for convenience. Termination would result in reimbursement of costs and reasonable profit for work performed, but future purchase levels are not assured.
- Legal Proceedings: The company is subject to a grand jury investigation commenced in April 1989. No charges have been filed. The company cannot reasonably estimate potential future costs, and no provision has been recorded in financial statements.
- Competition: Competes on lowest qualified bid in defense/municipal markets and on price/innovation in non-governmental markets against both specialized manufacturers and mass producers.
- Outlook: The company maintains a funded backlog of $512 million, with potential option quantities under defense contracts adding another $255 million if exercised.
Investor Verification Checklist
- Verify the specific revenue, net income, and cash flow figures in the Annual Report to Shareholders (incorporated by reference), as these are not detailed in the 10-K text provided.
- Monitor the status of the grand jury investigation initiated in 1989 for potential future liabilities.
- Track U.S. Government budget appropriations for the HET and PLS programs to assess the security of the $512 million backlog.
- Review the union contract status with the United Auto Workers, which expires September 30, 1996.
- Confirm the exercise of contract options (potential $255 million) to understand future revenue visibility.