Oshkosh Truck Awarded Contract Valued at up to $740.2 Million For Next-Generation U.S. Marine Corps Heavy-Payload Truck Fleet
OSHKOSH, Wis. (June 1, 2006) – Oshkosh Truck Corporation (NYSE:OSK) announced today that the U.S. Marine Corps has awarded the company a production contract for the new Logistics Vehicle System Replacement (LVSR) truck and associated manuals, vehicle kits, test support and training. The firm-fixed-price, indefinite-delivery / indefinite-quantity contract has an estimated value of $740.2 million based on a production quantity of 1,592 units. The Corps can purchase a maximum quantity of 1,900 cargo, wrecker and fifth-wheel LVSR variants over the next six years under this contract.
Primarily used for transporting supplies such as ammunition, fuel, water, and heavy equipment, the LVSR will replace the original Oshkosh® Logistics Vehicle System (LVS) trucks, which have been in the Marine Corps’ fleet since 1985. The LVSR is a technologically advanced, highly mobile, heavy-payload truck that carries 33,000 lbs. off-road.
“For more than 20 years, the original Oshkosh LVS vehicles have served the Marine Corps well during training missions as well as during combat operations in Afghanistan and Iraq,” said Robert G. Bohn, Oshkosh’s chairman, president and chief executive officer. “We have moved the performance capabilities of the LVS fleet a generational step forward. We're proud to have met the Marine Corps’ stringent requirements to produce the next generation of heavy-payload logistics vehicles with one of the world’s most technologically advanced logistics platforms.”
Expanding on the proven reliability and functionality of the current Marine Corps heavy-payload fleet, the LVSR fleet incorporates new technology and features that increase the truck's capabilities and can reduce life-cycle costs.
• Improved survivability — Factory installed armor integrated into the vehicle's design enhances crew safety. The LVSR is also ready to accept additional add-on armor. Mounting points and hardware come factory-installed, reducing the time required to increase armor capability prior to deployments. • Improved mobility — The LVSR suspension incorporates Oshkosh's TAK-4® independent suspension system, as well as its proprietary mechanical rear-steer technology for improved mobility and off-road capability. • In-cab vehicle diagnostics — Oshkosh's Command Zone™ advanced electronics system comes standard on all LVSR vehicles. It will allow the driver to monitor critical systems such as engine, transmission, brakes, central tire inflation and other electrical components. • Increased performance — A 600 hp engine and advanced suspension drive the LVSR to speeds of 65 mph on-highway and 40 mph in cross-country mode, with a 33,000 lbs. payload. • Simplified maintenance — The LVSR has been designed to use a single lubricant instead of separate lubes for the engine oil, transfer case, hydraulics and transmission so maintenance is simplified.
The LVSR complements the Oshkosh Medium Tactical Vehicle Replacement (MTVR) used by the U.S. Marine Corps for off-road transport of supplies and equipment. The two vehicles — LVSR and MTVR — share a comprehensive logistics network, common parts and similar maintenance training, which provide the Marine Corps with opportunities to streamline vehicle service and support.
“We stand by our vehicles from the time they leave the assembly line to wherever their mission might take them — and back,” said Bohn. “Oshkosh Truck’s comprehensive logistics and service network is unmatched in the industry. We are committed to providing our customers with vehicles designed with maintenance and long-term support in mind.”
About Oshkosh Truck Corporation
Oshkosh Truck Corporation is a leading designer, manufacturer and marketer of a broad range of specialty commercial, fire and emergency and military trucks and truck bodies. Oshkosh’s products are valued worldwide by fire and emergency units, defense forces, municipal and airport support services, and concrete placement and refuse businesses where high quality, superior performance, rugged reliability and long-term value are paramount.
For more information about Oshkosh Truck Corporation, log onto the company web site at www.oshkoshtruckcorporation.com.
Forward-Looking Statements
This press release contains 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, 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, are forward-looking statements. When used in this press release, 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, that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These factors include the Company’s ability to continue the turnaround of its Geesink Norba Group business, the cyclical nature of the Company’s commercial and fire and emergency markets, risks related to reductions in government expenditures, the uncertainty of government contracts, the availability of defense truck carcasses for remanufacturing, the challenges of identifying acquisition candidates and integrating acquired businesses, risks associated with the implementation of an enterprise resource planning system at McNeilus®; the success of the RevolutionÒ composite concrete mixer drum, the availability of commercial chassis and certain chassis components including engines, and risks associated with international operations and sales, including foreign currency fluctuations. In addition, the Company’s expectations for fiscal 2006 and fiscal 2007 are based in part on certain assumptions made by the Company, including without limitation those relating to the Company’s ability to continue the turnaround of the business of the Geesink Norba Group sufficiently to support its current valuation resulting in no non-cash impairment charge for Geesink Norba Group goodwill; the Company’s ability to sustain flat operating income in the commercial segment and to raise operating income in its fire and emergency segment in fiscal 2007 despite anticipated lower industry demand resulting from changes to diesel engine emissions standards effective January 1, 2007; the Company’s estimates for the level of concrete placement activity, housing starts and mortgage rates; the performance of the U.S. and European economies generally; the Company’s expectations as to timing of receipt of sales orders and payments and execution and funding of defense contracts; the Company’s ability to achieve cost reductions and operating efficiencies, in particular at McNeilus and the Geesink Norba Group; the anticipated level of production and margins associated with the Family of Heavy Tactical Vehicles contract, the Indefinite Demand/Indefinite Quantity truck remanufacturing contract, the MTVR follow-on contract and international defense truck contracts; the expected level of U.S. Department of Defense procurement of replacement parts and services and funding thereof; the Company’s estimates for capital expenditures of municipalities for fire and emergency and refuse products, of airports for aircraft rescue and snow removal products and of large commercial waste haulers generally and with the Company; federal funding levels for U.S. Department of Homeland Security and spending by governmental entities on homeland security apparatus; the availability of chassis components including engines and commercial chassis generally; the Company’s planned spending on product development and bid and proposal activities with respect to defense truck procurement competitions and the outcome of such competitions; the expected level of commercial “package” body and purchased chassis sales compared to “body only” sales; the Company’s ability to integrate acquired businesses and achieve expected synergies; the Company’s ability to close the Iowa Mold Tooling acquisition; the Company’s estimates of the impact of changing fuel prices and credit availability on capital spending of towing operators; anticipated levels of capital expenditures; the Company’s estimates for costs relating to litigation, acquisition investigation, product warranty, insurance, stock options and restricted stock awards, personnel and raw materials; the Company’s ability to negotiate expiring union contracts on a satisfactory basis; the Company’s estimates for debt levels, interest rates, working capital needs and effective tax rates; and that the Company does not complete any further acquisitions other than AK Specialty Vehicles and Iowa Mold Tooling. Additional information concerning these and other factors is contained in the Company’s filings with the Securities and Exchange Commission, including the Form 8-K filed today.
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