Townhall.com, Where Your Opinion Counts
Talk Radio:   Bill Bennett   Mike Gallagher   Dennis Prager   Michael Medved   Hugh Hewitt   
BREAKING NEWS  LeftArrow - Townhall.com : Conservative, Political, Republican   RightArrow - Townhall.com : Conservative, Political, Republican  
Columns, funnies & more in your inbox!
Login | What's Hot
  • Check the boxes and send us your email address to receveive your free newsletter
  • Your daily must-read of conservative columns, cartoons and news. Coulter, Sowell, Krauthammer and more.
  • Townhall.com’s weekly inside scoop on what’s happening behind the scenes in the world of politics. When news breaks, we report.
  • Signup to receive the latest daily Townhall cartoons
Wednesday, November 04, 2009
Rich Smith :: Townhall.com Columnist
Oshkosh Waves Wand, Says "Debt, Begone!"
by Rich Smith
Forward Print Share Single Page
Vote on It:
Average Vote:
[+] Text [-]
 
 
Poll
Will the Dems' health care Christmas Present to America be an improvement or detriment to our health care system?


Military trucker Oshkosh (NYSE: OSK) continued to stay one step ahead of the competition this week. While rival Pentagon contractors like General Dynamics (NYSE: GD) and Lockheed Martin (NYSE: LMT) were still busy reporting "third" quarter earnings, Oshkosh up and closed out its fiscal year with a four-quarter flush -- the whole proverbial shootin' match. So how'd it do?

 

Take a wild guess ... then guess again
Seeing the stock rise more than 10% yesterday, you'd probably think Oshkosh produced strong numbers -- but the that couldn't be farther from the truth: 

All right, I'll bite. So where's the good news?
Not on the income statement, that's for sure. But good news there is -- you just need to look on the balance sheet and cash flow statement to find it.

First and most obviously, we saw Oshkosh slice $736 million from its debt load last year. Partly, this came at the expense of Citigroup -style dilution-- an August share issuancethat provided nearly half the cash needed for debt reduction. But Oshkosh also generated more than $850 million in free cash flow -- nearly tripling its 2008 cash haul. That's bona fide good news, because ...

Where we at?
Debt remains the major monkey on Oshkosh's back. Between its recapitalizing share issuance and new cash flows from military contracts, Oshkosh exits its fiscal year with a stronger balance sheet than that with which it entered. Cash levels stand at a robust $530 million (up from $88 million.) Long-term debt levels have dropped from $2.7 billion to "only" $2 billion.

But all this still leaves Oshkosh much more heavily leveraged than civilian comparable Terex (NYSE: TEX). In military trucks, Oshkosh looks better positioned than Navistar (NYSE: NAV) to ride out the downturn -- but it's at a significant disadvantage to U.K. rival BAE Systems .

Foolish takeaway
Green shoots notwithstanding, we're not out of this rough patch yet -- a bad time to be weighed down with debt. Oshkosh tells us it anticipates "low demand at our construction-related businesses" in 2010, and will lean heavily on "strong demand for defense vehicles and armor kits." Let's hope those contracts keep coming, so Oshkosh can keep the debt going (away).

Now you know where Oshkosh is at today. Find out where it's coming from:  

Hear Oshkosh Roar! Oshkosh B'Gone? And the Winner Is ... Oshkosh! (By Gosh!)  

This article was originally published as Oshkosh Waves Wand, Says "Debt, Begone!"on Fool.com

Copyright © 2009 The Motley Fool, LLC. All rights reserved.
Share:
Forward Print Single Page
Vote on It:
Average Vote:
 
About The Author

Rich Smith is a business writer with the Motley Fool.

Be the first to read Rich Smith's column. Sign up today and receive Townhall.com delivered each morning to your inbox.

©Creators Syndicate

Join The Debate!

Post Your Comment
(0 comments so Far)
View in ascending order     View in descending order
Sign Up to Post Your CommentsSign Up to Post Your Comments
If you are already registered, click here to login. Otherwise, please take a few seconds to register with Townhall.com. Once you sign up, you’ll be able to post your comments immediately, use the action center, get podcasts, and more!
Note: Fields marked with a red asterisk (*) are required.
Salutation:
First Name:
*
Last Name:
*
Email:
*
Nickname:
*
Note: Nick name will be shown when you post comments.
Address 1:
*
Address 2:
City:
 *
State:
 *
Zip:
 *
Phone:
       
Your daily must-read of conservative columns, cartoons and news. Coulter, Sowell, Krauthammer and more.
(Bi-Weekly) We highlight the best opportunities from our partners for surveys, action items and more.