Oshkosh Corporation (NYSE:OSK) Q3 2023 Earnings Call Transcript

Mike Pack: Sure. Just in general, this is consistent with what we’ve said that last several quarters that not going to be a lot of change in the core underlying business. We’ll start ramping up at the back half of the year, next year, but you can imagine that’s going to be – there will be lower quantities. We’ll continue to ramp up through 2025. So I would say – I would think about Defense next year not necessarily notable incremental volume, it’s really when we get to 2025 and beyond that we’re going to see more meaningful benefits of that ramp. There is some gives and takes supports with JLTV but we do expect some good, solid profitable growth as we get into 2025.

John Pfeifer: Yes. And Tami, it’s John. I just want to point out that the Defense business, the headline as Mike just talked about is we ramp JLTV down in 2024, we ramp up the postal vehicle starting next year into 2025 and get the full production by 2026. But within the Defense business there is a lot of really good programs in our Defense business. And we talked about new programs that we’re bidding for that are advanced technology programs like the robotic combat vehicle. So we’re going to go through a period of a couple of years to get the Defense business margins on a trajectory that we all expect. But there is some really good business on the base business, about a $1 billion of really healthy base business in there that sometimes gets overlooked.

Operator: Our next question comes from line of Mircea Dobre with Baird. Please proceed with your question.

Mircea Dobre: Yes. Thank you. Thanks for taking the question. Good morning. I am curious if we can talk a little bit more about AeroTech, just looking at the backlog that you disclosed there, and it’s frankly, quite a bit higher than what the former owner JBT reported last. So maybe you can give us some context in terms of where you are seeing demand there, is it on fixed equipment, is it mobile equipment? And I am also kind of curious from an integration standpoint, what have you learned in the first few months of ownership?

Mike Pack: Sure. I’ll start with that and then we can – and certainly John can add in. Just from a comparability standpoint, we’re reporting backlog essentially in the same manner. So it’s based on firm orders, so that’s not a – that’s not a difference of view of what represents backlog. So we are seeing strong orders and it’s really across the board and it’s tied to a lot of the tailwinds that we’ve talked about and why the business has excited us regarding just airport growth in general.

John Pfeifer: Yes. And Mircea talking about the integration of it, first of all, go back to why we acquired Aerotech. We acquired Aerotech because it’s a business that we’ve already been in the airport markets, JLG is in the airport markets, our vehicles are in the airport markets. So we’ve always looked at this as a near adjacency almost, right – almost even not even adjacency, like right in the middle of our sweet spot. It’s all purpose-built equipment where you have the opportunity to continuously apply technology in the form of autonomous technology, intelligence products technology, electrification to continue to drive productivity improvement for customers. So it’s kind of right in the middle of our sweet spot.

That is – so the biggest thing that we have learned, which is very positive, is culture and people can make or break any acquisition. If you get the culture right and the fit and the people, right, then things go really, really well. And this is a fantastic cultural fit for us. In terms of the values of the company, how the people on both sides have embraced the acquisition the AeroTech people, the Oshkosh people, that’s a really important part of a successful acquisition, and that is going extremely well. And we’re really pleased and look to a very, very strong long-term future for this business.