OSHKOSH CORP

Previous wording

This Management’s Discussion and Analysis of Financial Condition and Results of Operations and other sections of this Quarterly Report on Form 10-Q contain statements that the Company believes to be “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact included in this Quarterly Report on Form 10-Q, including, without limitation, statements regarding the Company’s future financial position, business strategy, targets, projected sales, costs, earnings, capital expenditures, debt levels and cash flows, and plans and objectives of management for future operations, including those under the caption “Overview,” are forward-looking statements. When used in this Quarterly Report on Form 10-Q, words such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “should,” “project” or “plan” or the negative thereof or variations thereon or similar terminology are generally intended to identify forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties, assumptions and other factors, some of which are beyond the Company’s control, which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These factors include the cyclical nature of the Company’s access equipment, fire apparatus, refuse and recycling collection and air transportation equipment markets, which are particularly impacted by the strength of U.S. and European economies and construction outlooks; the Company’s estimates of access equipment demand which, among other factors, is influenced by historical customer buying patterns and rental company fleet replacement strategies; the Company's ability to predict the level and timing of orders and costs on the U.S. Postal Service contract; risks that trade wars and related tariffs could further reduce demand for or competitiveness of the Company’s products or cause inefficiencies in the Company's supply chain; the Company’s ability to increase prices to raise margins or to offset higher input costs; the Company's ability to achieve its projected material and manufacturing efficiency savings; the Company's ability to accurately predict future input costs associated with U.S. Department of Defense contracts; the Company’s ability to attract and retain production labor in a timely manner; the Company's ability to increase production rates in its municipal fire apparatus and delivery businesses; the strength of the U.S. dollar and its impact on Company exports, translation of foreign sales and the cost of purchased materials; the impact of severe weather, war, natural disasters or pandemics that may affect the Company, its suppliers or its customers; budget uncertainty for the U.S. federal government, including risks of future budget cuts, the impact of continuing resolution funding mechanism…

Excerpt shortened here; the source contains the full paragraph.

Current wording

This Management’s Discussion and Analysis of Financial Condition and Results of Operations and other sections of this Quarterly Report on Form 10-Q contain statements that the Company believes to be “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact included in this Quarterly Report on Form 10-Q, including, without limitation, statements regarding the Company’s future financial position, business strategy, targets, projected sales, costs, earnings, capital expenditures, debt levels and cash flows, and plans and objectives of management for future operations, including those under the caption “Overview,” are forward-looking statements. When used in this Quarterly Report on Form 10-Q, words such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “should,” “project” or “plan” or the negative thereof or variations thereon or similar terminology are generally intended to identify forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties, assumptions and other factors, some of which are beyond the Company’s control, which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These factors include the cyclical nature of the Company’s access equipment, fire apparatus, refuse and recycling collection and air transportation equipment markets, which are particularly impacted by the strength of U.S. and European economies and construction outlooks; the Company’s estimates of access equipment demand which, among other factors, is influenced by historical customer buying patterns and rental company fleet replacement strategies; the Company's ability to predict the level and timing of orders and costs on the U.S. Postal Service contract; the Company's ability to increase production rates in its municipal fire apparatus and delivery businesses; risks that trade wars and related tariffs could further reduce demand for or competitiveness of the Company’s products or cause inefficiencies in the Company's supply chain; the Company’s ability to increase prices to raise margins or to offset higher input costs; the Company's ability to achieve its projected material and manufacturing efficiency savings; the Company's ability to accurately predict future input costs associated with U.S. Department of Defense contracts; the Company’s ability to attract and retain production labor in a timely manner; the strength of the U.S. dollar and its impact on Company exports, translation of foreign sales and the cost of purchased materials; the impact of severe weather, war, natural disasters or pandemics that may affect the Company, its suppliers or its customers; budget uncertainty for the U.S. federal government, including risks of future budget cuts, the impact of continuing resolution funding mechanism…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

Transport — tactical vehicles, trailers and parts sold to the U.S. military and to other militaries around the world and delivery vehicles for the United States Postal Service (USPS).

Current wording

Transport — tactical vehicles, trailers and parts sold to the U.S. military and to other militaries around the world and the Next Generation Delivery Vehicle (NGDV) for the United States Postal Service (USPS).

Previous wording

The Company continued to repurchase shares of its Common Stock, repurchasing 303,592 shares during the first quarter of 2026 for approximately $47 million. Share repurchases during the previous twelve months benefited earnings per share during the first quarter of 2026 by $0.02 compared to the first quarter of 2025.

Current wording

The Company continued to repurchase shares of its Common Stock, repurchasing 667,158 shares during the second quarter of 2026 for $92 million, bringing share repurchases for the first six months of 2026 to $139 million. Share repurchases during the previous twelve months benefited earnings per share during the second quarter of 2026 by $0.09 compared to the second quarter of 2025.

Previous wording

The decrease in consolidated gross margin was primarily due to unfavorable sales mix (210 basis points), higher material costs (140 basis points) largely related to higher tariff costs and higher manufacturing overhead costs (140 basis points), offset in part by improved pricing (110 basis points).

Current wording

The decrease in consolidated gross margin was primarily due to unfavorable sales mix (200 basis points), higher material costs (170 basis points), primarily related to higher tariff costs, and higher manufacturing overhead costs (80 basis points), offset in part by improved pricing (170 basis points).

Previous wording

The increase in selling, general and administrative expenses was primarily the result of higher employee compensation ($9 million), offset in part by a favorable resolution of a sales and use tax audit in Wisconsin ($3 million).

Current wording

The increase in consolidated selling, general and administrative expenses was primarily the result of higher employee compensation ($7 million) and increased legal and professional fees ($4 million).

Previous wording

Miscellaneous, net primarily relates to gains and losses on investments, foreign currency transaction gains and losses and non-service costs of the Company’s pension plans. Results for the first three months of 2026 included losses related to investments of $3 million and income related to the non-service portion of the Company's pension plans of $2 million.

Current wording

Miscellaneous, net primarily relates to gains and losses on investments, foreign currency transaction gains and losses and non-service costs of the Company’s pension plans. Results for the first six months of 2026 included foreign currency transaction gains of $1 million and a $4 million loss on investments. Results for the first six months of 2025 included a $4 million gain on an investment and foreign currency transaction losses of $1 million.

Previous wording

The decrease in gross margin in the Transport segment was primarily due to higher manufacturing overhead costs (160 basis points), adverse sales mix (130 basis points) and higher material costs (30 basis points) largely related to higher tariff costs, offset in part by lower unfavorable cumulative catch-up adjustments (310 basis points).

Current wording

The decrease in gross margin in the Access segment was primarily due to adverse sales mix (240 basis points) and higher material costs (230 basis points), primarily related to higher tariff costs, offset in part by improved pricing (70 basis points).

Previous wording

Vocational segment net sales decreased due to lower sales volume ($73 million), offset in part by improved pricing ($30 million). Refuse and recycling vehicle sales volume decreased $55 million due to soft market conditions and municipal fire apparatus sales volume decreased $25 million due to the timing of deliveries, which were impacted by weather- and travel-related disruptions.

Current wording

Vocational segment net sales decreased due to lower sales volume ($49 million), primarily related to lower refuse and recycling vehicle shipments due to continued soft market conditions, offset in part by improved pricing ($42 million).

Previous wording

The decrease in gross margin in the Vocational segment was primarily attributable to higher manufacturing overhead costs (280 basis points), adverse sales mix (120 basis points) and higher material costs (110 basis points), offset in part by improved pricing (260 basis points).

Current wording

The decrease in gross margin in the Vocational segment was primarily attributable to higher manufacturing overhead (260 basis points), higher material costs (180 basis points) and adverse sales mix (140 basis points), offset in part by improved pricing (290 basis points) and lower incentive compensation accruals (40 basis points).

Previous wording

The decrease in consolidated operating income was primarily due to unfavorable sales mix ($47 million), higher material costs ($33 million) largely related to higher tariff costs, higher manufacturing overhead costs ($33 million) and the impact of lower gross margin associated with lower sales volume ($16 million), offset in part by improved pricing ($36 million).

Current wording

The decrease in operating income in the Vocational segment was primarily a result of higher manufacturing overhead ($44 million), the impact of lower gross margin associated with lower sales volume ($37 million), higher material costs ($33 million) and adverse sales mix ($26 million), offset in part by improved pricing ($75 million) and lower incentive compensation accruals ($14 million).

Previous wording

Transport segment net sales increased due to higher NGDV sales volume ($163 million) and the impact of cumulative catch-up adjustments ($10 million), offset in part by lower Joint Light Tactical Vehicle sales volume to the Department of Defense ($81 million), lower Family of Heavy Tactical Vehicles sales volume ($24 million) and lower aftermarket sales volume ($22 million).

Current wording

Transport segment net sales increased due to higher NGDV sales volume ($133 million) offset in part by lower Defense sales volume ($99 million).

Previous wording

The increase in operating income in the Transport segment was primarily due to lower unfavorable cumulative catch-up adjustments ($16 million) and the impact of higher gross margin associated with higher sales volume ($5 million), offset in part by higher manufacturing overhead costs ($9 million) and adverse sales mix ($6 million).

Current wording

The increase in operating income in the Transport segment was primarily a result of lower unfavorable cumulative catch-up adjustments on contracts (17 million), the impact of the NGDV aftermarket rights performance obligation ($17 million) and the impact of higher gross margin associated with higher sales volume ($11 million), offset in part by adverse sales mix ($27 million), increased warranty expenses ($7 million) and higher manufacturing overhead ($6 million).

Previous wording

Net operating costs for corporate and other decreased primarily due to improved operating results at the Company's Pratt Miller business unit ($5 million).

Current wording

Net operating costs for corporate and other decreased primarily due to the non-recurrence of an intangible asset impairment ($6 million) at the Company's Pratt Miller business unit.

Previous wording

The Company generates significant capital resources from operating activities, which is the expected primary source of funding for the Company. In addition to cash generated from operations, the Company had other sources of liquidity available at March 31, 2026, including $250.3 million of cash and cash equivalents and $1.54 billion of unused available capacity under the Revolving Credit Facility (as defined in "Liquidity"). Borrowings under the Revolving Credit Facility could, as discussed below, be limited by the financial covenants contained in the Credit Agreement (as defined in “Liquidity”). The Company was in compliance as of March 31, 2026 and expects to remain in compliance with the financial covenants contained in the Credit Agreement.

Current wording

The Company generates significant capital resources from operating activities, which is the expected primary source of funding for the Company. In addition to cash generated from operations, the Company had other sources of liquidity available at June 30, 2026, including $403.6 million of cash and cash equivalents and $1.58 billion of unused available capacity under the Revolving Credit Facility (as defined in "Liquidity"). Borrowings under the Revolving Credit Facility could, as discussed below, be limited by the financial covenants contained in the Credit Agreement (as defined in “Liquidity”). The Company was in compliance as of June 30, 2026 and expects to remain in compliance with the financial covenants contained in the Credit Agreement.

Previous wording

The Company continues to actively monitor its liquidity position and working capital needs and prioritizes capital expenditures related to capacity and strategic investments. The Company remains in a stable overall capital resources and liquidity position that the Company believes is adequate to meet its projected needs.

Current wording

The Company continues to actively monitor its liquidity position and working capital needs and prioritizes capital expenditures related to capacity and strategic investments. The Company remains in a stable capital resources and liquidity position that the Company believes is adequate to meet its projected needs.

Previous wording

The Company’s ratio of debt to total capitalization of 20.4% at March 31, 2026 remained within its targeted range.

Current wording

The Company’s ratio of debt to total capitalization of 19.6% at June 30, 2026 remained within its targeted range.

Previous wording

Consolidated days sales outstanding (defined as “Trade Receivables” at quarter end divided by “Net Sales” for the most recent quarter multiplied by 90 days) increased from 43 days at December 31, 2025 to 53 days at March 31, 2026. Days sales outstanding for segments other than the Transport segment increased from 51 days at December 31, 2025 to 60 days at March 31, 2026 primarily due to extended payment terms in the Access segment on sales during the fourth quarter of 2025. Consolidated inventory turns (defined as “Cost of Sales” on an annualized basis, divided by the average “Inventory” at the past five quarter end periods) decreased from 3.6 times at December 31, 2025 to 3.2 times at March 31, 2026 due to increases in inventory levels in the Access and Vocational segments. Consolidated days payable outstanding (defined as “Accounts Payable” at quarter end divided by material costs of sales for the most recent quarter multiplied by 90 days) decreased from 65 days at December 31, 2025 to 64 days at March 31, 2026.

Current wording

Consolidated days sales outstanding (defined as “Trade Receivables” at quarter end divided by “Net Sales” for the most recent quarter multiplied by 90 days) increased from 43 days at December 31, 2025 to 48 days at June 30, 2026. Days sales outstanding for segments other than the Transport segment increased from 51 days at December 31, 2025 to 53 days at June 30, 2026 primarily due to the timing of sales in the Vocational segment. Consolidated inventory turns (defined as “Cost of Sales” on an annualized basis, divided by the average “Inventory” at the past five quarter end periods) increased from 3.6 times at December 31, 2025 to 3.7 times at June 30, 2026. Consolidated days payable outstanding (defined as “Accounts Payable” at quarter end divided by material costs of sales for the most recent quarter multiplied by 90 days) decreased from 65 days at December 31, 2025 to 53 days at June 30, 2026 primarily due to more timely invoice processing.

Previous wording

Operating activities used cash of $161.0 million in the first three months of 2026 compared to $394.9 million during the first three months of 2025. The improvement in cash used for operating activities reflected more disciplined working capital management as the Company built inventory for the summer season, as well as higher customer advances. The Company continues to expect cash flow from operations to be between $750 million and $850 million in 2026.

Current wording

Operating activities provided cash of $213.3 million in the first six months of 2026 compared to using $305.7 million during the first six months of 2025. The improvement in operating cash flow reflected more disciplined working capital management related to lower inventory levels and higher customer advances. The Company continues to expect cash flow from operations to be between $750 million and $850 million in 2026.

Previous wording

Investing activities provided cash of $1.1 million in the first three months of 2026 compared to using $43.1 million of cash during the first three months of 2025. Through the first three months of 2026, the Company used $28.1 million for capital expenditures, a decrease of $12.2 million compared to the first three months of 2025. The Company continues to expect that it will invest $200 million on capital expenditures in 2026.

Current wording

Investing activities used cash of $42.1 million in the first six months of 2026 compared to using $99.1 million during the first six months of 2025. Through the first six months of 2026, the Company used $54.8 million for capital expenditures, a decrease of $26.1 million compared to the first six months of 2025. The Company continues to expect that it will invest $200 million on capital expenditures in 2026.

Previous wording

Financing activities used cash of $68.5 million in the first three months of 2026 compared to providing $438.1 million of cash during the first three months of 2025 primarily due to lower net borrowings. In March 2025, to provide additional liquidity, the Company entered into a credit agreement with various lenders to borrow funds under a $500 million unsecured term loan, which matures in March 2027. In the first three months of 2026, the Company repurchased 303,592 shares of its Common Stock at an aggregate cost of $47.3 million. As of March 31, 2026, the Company had approximately 7.6 million shares of Common Stock remaining under its repurchase authorization. In the first three months of 2025, the Company repurchased 287,552 shares of its Common Stock at an aggregate cost of $28.7 million.

Current wording

Financing activities used cash of $245.6 million in the first six months of 2026 compared to providing cash of $379.4 million during the first six months of 2025 primarily due to lower net borrowings and higher repurchases of common stock. In March 2025, to provide additional liquidity, the Company entered into a credit agreement with various lenders to borrow funds under a $500 million unsecured term loan. In the first six months of 2026, the Company repurchased 970,750 shares of its Common Stock at an aggregate cost of $138.9 million. As of June 30, 2026, the Company had approximately 7.0 million shares of Common Stock remaining under its repurchase authorization. In the first six months of 2025, the Company repurchased 702,307 shares of its Common Stock at an aggregate cost of $68.7 million.

Previous wording

On March 16, 2026, the Company entered into a Fourth Amended and Restated Credit Agreement with various lenders (the “Credit Agreement”). The Credit Agreement provides for an unsecured revolving credit facility (the “Revolving Credit Facility”) with a maximum aggregate availability of$1.60 billion that matures in March 2031. At March 31, 2026, borrowings under the Revolving Credit Facility of $44.0 million and specified outstanding letters of credit of $18.5 million reduced available capacity under the Revolving Credit Facility to $1.54 billion.

Current wording

On March 16, 2026, the Company entered into a Fourth Amended and Restated Credit Agreement with various lenders (the “Credit Agreement”). The Credit Agreement provides for an unsecured revolving credit facility (the “Revolving Credit Facility”) with a maximum aggregate availability of $1.60 billion that matures in March 2031. At June 30, 2026, there were no borrowings under the Revolving Credit Facility and specified outstanding letters of credit of $15.9 million reduced available capacity under the Revolving Credit Facility to $1.58 billion.

Previous wording

Sales to the U.S. government comprised approximately 22% of the Company’s net sales in the first three months of 2026. No other single customer accounted for more than 10% of the Company’s net sales for this period. A substantial majority of the Company’s net sales are derived from the fulfillment of customer orders that are received prior to commencing production.

Current wording

Sales to the U.S. government comprised approximately 21% of the Company’s net sales in the first six months of 2026. No other single customer accounted for more than 10% of the Company’s net sales for this period. A substantial majority of the Company’s net sales are derived from the fulfillment of customer orders that are received prior to commencing production.

Previous wording

The Company’s backlog at March 31, 2026 decreased 0.5% to $14.54 billion compared to $14.62 billion at March 31, 2025. Access segment backlog increased 1.9% to $1.84 billion at March 31, 2026 compared to $1.80 billion at March 31, 2025. Vocational segment backlog increased 4.5% to $6.63 billion at March 31, 2026 compared to $6.34 billion at March 31, 2025 due to higher pricing on future deliveries. Unit backlog for municipal fire apparatus as of March 31, 2026 was unchanged compared to March 31, 2025. Unit backlog for refuse and recycling collection vehicles as of March 31, 2026 was down 43.9% compared to March 31, 2025 as the Company believes customers have been cautious in the uncertain macroeconomic environment. Transport segment backlog decreased 6.9% to $5.96 billion at March 31, 2026 compared to $6.40 billion at March 31, 2025, primarily reflecting NGDV production.

Current wording

The Company’s backlog at June 30, 2026 increased 3.7% to $14.75 billion compared to $14.23 billion at June 30, 2025. Access segment backlog increased 64.7% to $1.96 billion at June 30, 2026 compared to $1.19 billion at June 30, 2025 as the Company believes it is seeing a stronger construction equipment market driven by growth in data centers and megaprojects. Vocational segment backlog increased 5.6% to $6.62 billion at June 30, 2026 compared to $6.27 billion at June 30, 2025 due to continued growth in the municipal fire apparatus backlog and robust demand for airport products. Unit backlog for municipal fire apparatus as of June 30, 2026 was up 2.8% compared to June 30, 2025. Unit backlog for refuse and recycling collection vehicles as of June 30, 2026 was down 29.5% compared to June 30, 2025, which the Company believes is due to its customers being cautious in an uncertain macroeconomic environment. Transport segment backlog decreased 9.8% to $6.05 billion at June 30, 2026 compared to $6.71 billion at June 30, 2025, primarily reflecting NGDV production.

Previous wording

Backlog represents the dollar amount of revenues that the Company anticipates from customer contracts that have been awarded and/or are in progress. Reported backlog includes the original contract amount and any contract modifications that have been agreed upon. Reported backlog excludes purchase options, orders for which definitive contracts have not been executed and any potential future contract modifications. Backlog is comprised of fixed and variable priced contracts that may be canceled, modified or otherwise changed in the future. As a result, backlog may not be indicative of future operating results. Backlog information and comparisons thereof as of different dates may not be accurate indicators of future sales. Approximately 56% of the Company’s March 31, 2026 backlog is not expected to be filled in 2026.

Current wording

Backlog represents the dollar amount of revenues that the Company anticipates from customer contracts that have been awarded and/or are in progress. Reported backlog includes the original contract amount and any contract modifications that have been agreed upon. Reported backlog excludes purchase options, orders for which definitive contracts have not been executed and any potential future contract modifications. Backlog is comprised of fixed and variable priced contracts that may be canceled, modified or otherwise changed in the future. As a result, backlog may not be indicative of future operating results. Backlog information and comparisons thereof as of different dates may not be accurate indicators of future sales. Approximately 67% of the Company’s June 30, 2026 backlog is not expected to be filled in 2026.