First quarter sales down for JLG
By Lindsey Anderson26 January 2017
For the first quarter of fiscal 2017, JLG net sales decreased -7.7% to $489.2 million from $529.8 million last year. Aerial work platform sales decreased -3.43% from $242 million to $237.7 million. However, the hardest hit segment came from the decrease of telehandler sales; that segment saw a -16.54% decline from $111.8 million to $93.3 million.
JLG said the overall decline in sales was primarily due to lower sales volumes in North America and Europe.
The company’s operating income increased 19.2% to $24.4 million, or 5% of sales, in the first quarter of fiscal 2017 compared to $20.4 million, or 3.9 percent of sales, in the first quarter of fiscal 2016. The timing of new product development spending and favorable product mix more than offset the impact of lower sales.
“Today, as part of simplification activities in support of the Company’s MOVE strategy, we are also announcing plans to rationalize operations in our access equipment segment by consolidating our manufacturing footprint in Europe and the United States,” said Wilson Jones, president and chief executive officer of Oshkosh Corporation. “In addition, we are streamlining telehandler offerings to a reduced range in Europe to simplify our portfolio. These are difficult actions, but we believe they are necessary to position our company for long-term success. Once fully implemented, we expect these actions to generate $20 million to $25 million of annual pre-tax savings. We expect pre-tax implementation costs of $45 million to $50 million, including $10 million of non-cash charges, the majority of which we expect to recognize in fiscal 2017.”
JLG also announced today it is closing its Orville, OH manufacturing plant, Maasmechelen, Belgium manufacturing and Pre-Delivery Inspection facility, and its engineering center in Bruntingthorpe, UK. The closures will affect up to 525 employees. For more on that, see the linked story.
For JLG’s parent company, Oshkosh, consolidated net sales in the first quarter of fiscal 2017 were $1.21 billion, a -3.2% decrease. Decreases in sales from JLG and defense segments were offset in part by higher sales in the fire and emergency segment.
Consolidated operating income in the first quarter of fiscal 2017 was $36.2 million, or 3% of sales, compared to $30.3 million, or 2.4% of sales, in the prior year first quarter. The increase in operating income was primarily the result of improved performance in the access equipment, defense and fire and emergency segments, offset in part by the impact of lower sales volume and lower commercial segment performance.
“We are pleased to report fiscal first quarter results that exceeded both the prior year and our expectations,” Jones said. “This is a great way to kick off 2017, the year of our 100th anniversary at Oshkosh Corporation. Company-wide, our teams executed well. In particular, we experienced better than anticipated performance from our access equipment and defense segments.”