Pat Davidson - IR Charlie Szews - CEO Wilson Jones - President, COO Dave Sagehorn - Executive VP, CFO.

Jamie Cook - Credit Suisse Pete Skibitski - Drexel Hamilton Stephen Volkmann - Jefferies Eli Lustgarten - Longbow Securities Mig Dobre - Robert W.

Baird Ross Gilardi - Bank of America Ted Grace - Susquehanna Walter Liptak - Global Hunter Jerry Revich - Goldman Sachs Charley Brady - BMO Capital Markets Seth Weber - RBC Capital Markets Mike Todman - JPMorgan Chase & Company Steve Barger - KeyBanc Capital Markets.

Greetings, and welcome to the Oshkosh Corporation First Quarter and Fiscal 2015 Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow up formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

It’s now my pleasure to introduce your host Pat Davidson, Vice President of Investor Relations for Oshkosh Corporation. Thank you, Mr. Davidson, you may begin..

Thanks, Kevin. Good morning, everybody, and thanks for joining us. Earlier today, we published our first quarter 2015 results. A copy of the release is available on our website at oshkoshcorporation.com.

Today's call is also being webcast and is accompanied by a slide presentation, which includes a reconciliation of non-GAAP to GAAP financial measures that we will use during this call and is also available on our website. The audio replay and slide presentation will be available on our website for approximately 12 months.

Please refer now to Slide 2 of that presentation. Our remarks that follow, including answers to your questions, includes statements that we believe to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act.

These forward-looking statements are subject to risks that could cause actual results to be materially different from those expressed or implied by such forward-looking statements. These risks include, among others, matters that we have described in our Form 8-K, filed with the SEC this morning, and other filings we make with the SEC.

We disclaim any obligation to update these forward-looking statements, which may not be updated until our next quarterly conference call, if at all. All references on this call to a quarter or a year are to our fiscal quarter or fiscal year, unless otherwise stated.

Our presenters today include Charlie Szews, Chief Executive Officer; Wilson Jones, President and Chief Operating Officer; and Dave Sagehorn, Executive Vice President and Chief Financial Officer. Please turn to Slide 3. And I'll turn it over to you, Charlie..

Thank you, Pat, and good morning. Over the last few weeks, we’ve watched the stock market anguish over changes in oil prices and foreign currency exchange rates and generally selloff industrials, meanwhile Oshkosh just had an outstanding month of orders for non-Defense segment in December.

Our non-Defense markets are strong and continue to recover and we remain poised to have another good year in 2015. We’re pleased to announce first quarter adjusted earnings per share of $0.41. These results significantly exceeded our expectations; in fact every segment exceeded our expectations.

Largely driven by strong operations execution and to a lesser extent the timing of MOVE related spending. We believe these better-than-expected results reflect the continued success of our MOVE strategy which is the foundation for our positive outlook.

Of course, solid orders in the first quarter and substantially higher backlogs at quarter end than a year ago in all non-Defense segments also contribute to that positive outlook. Recent rental company surveys in the U.S.

do acknowledge that the energy exploration sector is slowing down as a result of lower oil price; however the majority of rental company surveys are still projecting that their businesses will be better in 2015 than 2014. We believe there is pent up demand for housing, for infrastructure and for other construction in the U.S.

as evidenced by both macro data and analysts surveys. We expect that lower fuel and other energy cost will make it easier for companies and individuals to decide to move ahead with these projects. Porting activity is picking up seasonally in concrete mixers.

And more large municipalities are beginning to talk about fleet replacement for both fire and refuse collection vehicles. Bottom line is we believe there will be more winners and losers with lower oil prices to sustain our slowly improving Defense -- non-Defense markets. You will also hear Wilson talk about other positive trends in these businesses.

However we repurchased nearly 2 million shares of Oshkosh’s Corporation common stock in the first quarter as we continue to believe this provides an excellent return on investment. We also paid our first quarterly cash dividend since the 13% increase we announced last quarter.

We are maintaining our full year outlook for 2015 based on our strong first quarter performance and our expectations over the next three quarters. Where it not for some foreign currency related earnings headwinds we expect to face due to the recent significant strengthening of the U.S. dollar, we would have been raising full year expectations.

Please turn to Slide 4 for discussion of our Defense business. Our Defense team remains focused on successfully executing on our programs of record working hard to deliver solid execution in the period of continued declining sales. Simultaneously we continue to pursue new business.

As many of you are aware the production RFP for the Joint Light Tactical Vehicle program was issued on December 12th. This program will replace the large portion of the U.S. Military’s Humvee fleet. In the next few weeks, we expect to turn in our proposal for the eight year multibillion dollar contract.

Our team has worked really hard and developed an extraordinary vehicle and we hope the government sees it the same way we do. Based on the programs scheduled and our understanding of the process, we believe that a final decision on the initial production contract winner will be announced in late summer of this year.

We look forward to submitting our proposal on February 10th and to the announcement of the winter. Please recognize that we must tight-lipped about the program until any investments final offer period is over, which could be month away.

While we have not announced any new contracts for the international sale of M-ATVs, we remain optimistic about these opportunities and are making progress. As a reminder, we believe we have opportunities to sell thousands of these advanced vehicles over the next few years.

Additionally, we believe a decision will be communicated by this June on the winner of the Canadian MSVS program. If we’re successful with this Canadian opportunity, we expect we would deliver the trucks in 2017 and 2018. Finally, the fiscal year '15 U.S. Defense Budget was finalized in December, which is a positive development.

The budget included about $150 million in additional funding for our FHTV and FMTV programs than we have previously expected, which will benefit our 2016 results. I’ll turn it over to Wilson now to discuss our non-Defense segments. Please turn to Slide 5..

Thanks Charlie and good morning everyone. We’re pleased with the solid start to the year in our Access Equipment segment. As expected, we experienced a strong telehanders mix in the quarter in advance of Tier 4 engine emission standards changes.

We expect this mix will continue in the second quarter before we see a reversion to heavier weighting of aerial work platforms in the second half of the year. Our outlook for this market remains positive in large part because we’re seeing strong demand continue in North America. Charlie mentioned it and I’ll elaborate further.

Orders in this segment were up 46% in the quarter and backlog was up 69% at the end of the quarter. We’ve spoken before about the changing dynamics of customer order patterns in this market.

And while we don’t expect to see 46% growth in orders every quarter, we do believe the timing of orders experienced in the first quarter especially in the last two weeks of the quarter when oil prices were on a free-fall reflect the strong conviction by our customers in their business outlook.

Hence you can imagine us including Charlie and myself, have talked to a lot of Access Equipment customers recently and I can tell you they’re positive about their outlook for 2015. We heard investor concerns about the negative impacts which low oil prices may have on exploration and production.

Our direct exposure to energy in the Access Equipment market is not significant. We don’t have precise information because the vast majority of our sales are to rental companies not the end user. But we believe our Access Equipment segment exposure to energy is small in line with what the rental companies are generally saying.

Looking outside North America, we continue to expect to see higher volumes in Europe this year as owners deal with aged fleet. Moving around to rest of the world, we see opportunities and challenges.

We expect that Australia will grow off a lower base and that the Pacific Rim will also move higher as production adoption continues to grow in many of the developing countries in the region. We continue to expect Latin America to be down based on ongoing weakness in Brazil, but several countries in the region should still experience higher sales.

Finally, I want to make sure that we point out the impact that MOVE and our Oshkosh Operating System have had on the segment.

The new products launch CONEXPO in 2014 and the large number of new product that you will see at the Rental Show in New Oreland in February are a direct results of the discipline and rigor employed as we execute our MOVE strategy.

Equally impactful has been the success of our MOVE strategy in improving our cost structure, leading us to achieve breakthrough results. We expect to extend these results into 2015 and beyond as we leverage the strong foundation we’ve built in 2014 and earlier. Please turn to Slide 6 for some comments on our Fire & Emergency segment.

We are pleased with the progress we’ve made in this segment. Last quarter we told you that we were going to reduce our build rate so we can better manage the changes we were introducing to this business. We expected the slower product rate to be accompanied by an operating loss this quarter.

Due to the strong efforts by the Fire & Emergency team we’re able to record a small operating profit in the quarter instead of the expected loss. These results are evidence of the teams’ progress and we will work hard to build on that progress in the second quarter.

Turning to the North American fire market, we expect modest growth in 2015 as a result of improved municipal budgets and federal spending that is also stabilized albeit at low levels. We believe the stronger rate that we experienced in the first quarter supports our view.

Some of this demand has been driven by customer excitements surrounding our recently launched Enforcer and Saber chassis. They were both conceived with customer needs in mind and design for ease the manufacturing in our factories. We look forward to a long string of successes with these products.

We also believe that continued aging of fire truck fleets will be a contributor to demand in 2015 and beyond. We discussed this on our last quarterly conference call and we believe that replacement demand is starting to show up in the marketplace and in our order book.

We’re also experiencing solid performance internationally, over the past year or so we’ve gain traction in Europe and continued our success in other airport rescue firefighting markets around the world specifically we’ve booked some solid orders in Asia, Australia and Latin America during the quarter. Let’s turn to our Commercial segment.

Please turn to Slide 7. We’ve made a lot of progress in the Commercial segment during 2014 and expect that 2015 will be another good year. There is excitement across the business about continued improvement in previously soft markets.

In particular the concrete mixer market has experienced strong double digit growth in each of the past two year despite choppy residential construction activity. We believe there continues to be significant pent up demand for new housing. Housing starts over the past year have been more concentrated on multitenant dwellings.

With lower gas prices consumer should be able to afford monthly house payment leading to more signal family dwelling construction. We believe there still will be awhile before the housing market returns to more normal levels, but the consensus is for housing starts in the U.S. to be comfortably over 1 million for both 2015 and 2016.

Refuge collection of vehicle market shows some improvement closing out the year up about 3% from last year, on a double digit growth it is a welcome sign when we looked at the soft performance in this market over the last few years. Some of that softness was driven by certainly customers aging their fleets.

We have seen an uptick in aftermarket parts and service as fleet operators keep older trucks on the road, but those units will luckily need to be replaced and represent opportunities for the commercial segment. Last quarter we talked about our split-bin and automated side loader RCV unit.

We are seeing clear increases in customer demand for these innovative offerings launched as part of our MOVE value innovation initiative and expect that their impact on our performance will continue to grow.

You can see these units in actions on our Web site and you will have an opportunity to touch them up close at the Waste Expo show later this year. I’ll turn it over Dave now to walk us through on our financial results. Please turn to Slide 8..

Thanks, Wilson, and good morning, everyone. As Charlie mentioned, our first quarter results exceed our expectations with every segment contributing to the better than expected performance. In addition orders and backlogs were up in each to the non-Defense segment.

Consolidated net sales for the first quarter were $1.35 billion, an 11.6% decrease from the first quarter of 2014. Sales declined to 44.1% in the Defense segment and 15.6% in the Fire & Emergency segment, both of which were expected more than offset sales increases of 7.2% in the Access Equipment segment, and 9.1% in the Commercial segment.

Access equipment segment sales benefitted from higher telehandler volume and were up in all regions expect Latin America in line with our expectations. The higher Commercial segment sales reflect higher RCV sales along with higher aftermarket parts and service sales.

Consolidated adjusted operating income for the first quarter was $62.3 million or 4.6% of sales compared to operating income of $96.5 million or 6.3% of sales in the first quarter of 2014.

Lower operating income in the Defense segment largely as a result of the 44% decline in sales was the largely contributor to the lower adjusted operating income compared to the prior year quarter.

Access equipment segment operating income was also lower than in the prior year quarter with the reduction driven by a shift to a heavier mix of lower margin telehandlers in advanced of the Tier 4 engine emission standards change in the U.S., higher R&D and other operating expenses in support of ongoing MOVE initiatives and the positive benefit in the prior year quarter from finalizing pricing on U.S.

military contract. We’re pleased that both Defense and Fire & Emergency segment reported positive operating income in the quarter compared to the small operating losses that we had expected them to report.

Adjusted operating income in the quarter excludes $3.4 million of income in the Defense segment from/and other postretirement benefit curtailment gain related to our previously announce workforce reduction. Additional information related to segment first quarter financial performance can be found in the appendix to this morning's slide deck.

And adjusted earnings per share for the quarter was $0.41, compared to earnings per share of $0.63 in the first quarter of 2014. The 35% decline compared favorably to our previous expectations.

Earnings in the quarter benefited by $0.03 per share compare to the prior year quarter from a lower share account as a result of our share repurchases over the past year. Overall, we are pleased with our first quarter performance and believe we are on track to achieve our full year earnings per share objective.

Please turn to Slide 9 for an update of our fiscal 2015 outlook. We’re pleased to reaffirm our full year financial outlook. Our adjusted earnings per share estimate range of $4 to $4.25 represented 10% to 17% improvement from 2014 adjusted earnings per share. This is despite the significant continued sales and earnings decline in the defense segment.

The foreign currency headwinds of approximately $0.15 per share that we now expect to face as a result of the recent significant strengthening of the U.S dollar. Below the line we continue to assume that we will call our 8.5% senior notes from they become callable in March of this year and refinance them at a lower interest rate.

In conjunction with these intended transactions yesterday we increase the size of our credit agreement revolver by $250 million. We increased the revolver to provide liquidity to fund the call of the senior notes in the event that the high yield market would not be conducive to issuing new debt at the time we call the existing senior notes.

We also continue to assume that capital expenditure in 2015 will approximate $150 million that free cash flow will be approximately $200 million and full year average diluted shares will be $80 million.

We expect to generate all of the free cash flow in the second half of the year largely as a result of seasonality factors and the timing of capital expenditure. Turning to our second quarter outlook we expect to see adjusted earnings per share in the range of the second quarter 2014 adjusted earnings per share.

With improved results in all of the non-defense segments and the impact of lower share account being offset by significantly lower defense earnings due to lower sales including the impact of an estimated six months break in production of the Family of Heavy Tactical Vehicles program related to the timing of signing a contract extension for this legacy program.

We also expect to continue heaver mix of telehandler sales in the second quarter in the Access Equipment segment, before shifting towards a heavier mix of variable platforms later in the fiscal year. I’ll turn it back over to Charlie for some closing comments..

Thanks Dave, we are pleased with our solid start to 2015 and expect that we will have strong full year results. We are confident in our ability to execute in these marketing conditions. Let me leave you with one final update.

We have been planning to hold our Analyst Day in September 2015, but we are not moving them back to accommodate a new expected timing of the JLTV award decision along within an expected protest period. We haven’t finalize the date yet but we think we’ll likely be sometime in February 2016, perhaps earlier if there was not a protest.

We think this timing we’ll allow us to be able to provide investors the most robust and comprehensive update and our outlook for Oshkosh Corporation. That concludes our formal comments we are happy to answer your question I’ll turn it back over to Pat to get the Q&A start up..

Thanks Charlie. [Operator Instruction] Kevin lets began the question and answer period of this call..

[Operator Instructions] Our first question today is coming from Jamie Cook from Credit Suisse. Please proceed with your question..

I guess a couple of questions one obviously the order is for aerials in the first quarter were very strong.

Can you just talk about what you’re seeing in January, whether those trends continued? And then I guess my second question within aerial on the profitability side for access, should we assume margins down year over year again because of the higher telehandler mix? And then under that scenario what surety gives you confidence that we get to 15% for the full year just because the heavy mix of Teles versus Aerials for the year? Thanks.

.

Hey Jamie good morning I’ll jump in here and I’m sure Charlie and Dave can add some color too. From a standpoint of January, obviously we don’t talk a lot about the current quarter. I’ll tell you the positive outlook continues; obviously you saw what the first quarter look like lot of good activity out there in the marketplace.

I don’t know if you’ve seen Oshkosh just published a list of projects they’re working on energy related. So we see Q2 being active, as I’ve said earlier we don’t expect 46% to order growth every quarter. But we did certainly enjoy that in the first quarter.

But I can tell you activity is high you’re seeing the surveys that we’re seeing, lot of positive outlook there with the rental companies. In terms of the total year in margins we forecasted this to be a front half telehandler business, second half more aerial business so in line with our estimate for the year we believe we’re in good shape..

And just to follow on to that Jamie a little bit, I think in terms your question regarding the second quarter I think we’ll see margins approximately flattish year-over-year in the second quarter with higher volume offset by the heavier weighting of telehandlers in the second quarter again, as remember last year we did have heavier weighting of AWPs because they were dealing with the Tier 4 emission changes that were effective beginning of last year.

And then just another item on the full year or as we look at the back half of the year we’ve talked previous quarters about the cadence of R&D expense that in ’14 it ramped up every quarter. And in this fiscal year we expect to see a ramp down as we go through the year. So that should provide a tailwind for us from a margin standpoint..

Thank you. Our next question today is coming from Pete Skibitski from Drexel Hamilton. Please proceed with your question..

Guys on the aerials revenue declined in the quarter.

Did that surprise you did you kind of push aside maybe volumes there to deal with the telehandlers? And I just wonder to what degree the AWPs participated in the huge backlog growth, so as to maybe you have previous visibility on them delivered in the second half of the year?.

Pete if we look at the specific product lines in the first quarter it’s largely around what we saw last year with aerial work platforms again heading into the beginning of the calendar year. We did see a stronger mix of AWPs because they were dealing with the Tier 4 emissions change.

This year we’re seeing telehandlers facing that Tier 4 emission changes. So that’s what’s really driving the product mix.

And again as we said, we really started seeing the telehandler mix pickup in the fourth fiscal quarter we expect that it’s going to continue into the second quarter before we see we believe a reversion to a heavier weighting of aerial work platforms later in the fiscal year..

And our backlog of orders does support that reversion back to the mean of aerial work platform orders and telehandler orders all rising through the year on a consistent percentage by the end of the year..

And just want to follow up on the vertical integration plan, the FX plan that you guys have underway and I think that’s kind of associated with the receivables bills that you’ve had.

Could you just add some color as to how far along you are in that vertical integration plan, and I know built receivables to more readily benefit from sales opportunities.

Can you talk to all that?.

I think you’re probably meant inventories rising. We’ve raised our inventories really in all segments and the reason for that really was that we overworked our play last year I mean it was just too many long weekends of stress so we’ve tried to level production up during the year starting a little bit earlier.

Our vertical integration plans are on schedule. And again it’s just one part of our whole strategy continue to lift our margins like we have projected again in each segment -- non-defense segments for 2015..

Is there a time when you will finalize that integration?.

You mean the vertical integration strategy?.

Right..

It’s something we’re going to probably look at forever because it’s always an opportunity where we tend to be generally vertically integrated as a company some of those businesses that we bought over the years weren’t as vertically integrated as Oshkosh and so that’s just one of the I guess tools that we use in our toolkit to raise our margins..

Big part of our whole strategy..

Thank you. Our next question today is coming from Stephen Volkmann from Jefferies. Please proceed with your question..

I wanted to drill down if we could for a second into margins in Defense and Fire & Emergency, I think they’re both better than what you had initially thought as we went into the first quarter here, which is great.

But I am trying to figure out sort of how that happened and what changed vis-à-vis, I guess what surprised you? And probably more directly is there anything sort of that you view as short term in there since you didn’t raised the forecast for those margins going forward?.

I’ll start with Defense in the first quarter. I think that couple of things really drove the outperformance there. One, you recall last summer we did some reconfigurations in our facilities here at Oshkosh as we were adjusting to the upcoming demand cadence from our government customer.

And that did result in a number of changes at least from a workforce standpoint in terms of how they went about assembling product, the flow of product through our facilities. And we had assumed that we would be continuing to adjust to that new production layout through the first quarter.

And what we really saw was the team stepped up performed exceptionally well especially on like the FHTV product line in terms of adjusting to that new layout and the efficiencies on that product line were much better than we had anticipated.

Second items would be a little bit higher aftermarket sales along with better mix of aftermarket products that helped contribute to the beat in the Defense segment. On Fire & Emergency I think we saw a number of factors there and not one that really stood out above the others.

We did make a little more progress; there was fasters progress than we thought. The operational site of the house sales ended up being a little bit there, our overhead spending was better so it’s just a combination of a lot of things in Fire & Emergency.

In regards to the outlook for those two segments for the year, I guess I would say it’s still early in the year. We continue to strive and push all of our segments to deliver a continued improved performance throughout the year and we’ll how it goes and provide you an update on our next earnings call..

Okay and then just a quick follow-up, I think last quarter we had talked about how this foreign sale -- I think it was for a M-ATV that you expected to get at some point in the first half year was kind of baked into your 2015 guidance, can you just update us on where we stand with that?.

We’re still expecting or planning to sign the contract here and deliver M-ATVs and some other vehicles in our fourth quarter..

Okay and if you don’t get that by what time would we start to worry about that?.

We have some flexibility here so right now we feel very good about our outlook, let’s just say that..

Our next question today is coming from Eli Lustgarten from Longbow Securities. Please proceed with your question..

I guess one biggest surprise you know you’re down one-thirds instead two-thirds, which is sort of expected with the profitability in Defense that we just talked about.

And with the forecast of slightly above breakeven in the first quarter results, the implication is do you expect to lose money in one or two quarters in the next couple, can you give us some idea about the cadence, I suspect that would be higher areas of some production that you probably expect to this quarter, lose some money even second and third quarter?.

Correct Eli, we have been talking about break in production for our family of heavy tactical vehicles contract that actually already commenced in the months of January that will go on for a few months and that will lead to probable losses in the segment in the second and perhaps the third quarter as well.

And then we’ll have a good quarter and that’s what we’re projecting for the fourth quarter to be slightly positive for the year. So that is our outlook that is what is causing the overall company results in the second quarter to be consistent with prior year. If not for that, I mean we’d be having a really good quarter in the second quarter.

Our other segments are performing really well..

And as a follow-up, I mean don’t have any qualm and I think we all happy to see access in the mix of what have you.

One of the concerns, the data shows up is at the strength of access market and that equipment were in the 10 states that were really energy producing there was this [indiscernible] of demand to energy related space and while it’s not the direct effect it could be an indirect effect, were you seeing that particularly in this country that there was a bias towards the end of the states or were demand for your business pretty well spread out across the country?.

I would say its spread out -- again as I mentioned earlier we’re just start seeing a lot of our business in the energy sector, it’s very insignificant at this stage.

We watch it closely we’re not going to put our heads in the sand on the issue, but again widespread opportunities for us in North America right now, so not really depended on those 10 states. We did look through that data; we talked to our customers about it.

As you can imagine there is a lot of discussion going on right now around this and we’re certainly comfortable with our forecast going forward..

Thank you. Our next question today is coming from Mig Dobre of Robert W. Baird. Please proceed with your question..

Good morning, gentlemen, another quick question on access, can you comment at all on the competitive environment? I know that last year we’ve seen maybe a bit of pick up in price related competition, I wondered if that has continued through the quarter?.

Mig, I would say it’s fairly stable compared to last year. We’ve got a few pockets around the world where we’ve seen some low pricing, but for the most part I would compared it to last year..

All right then maybe little more color to on the really nice pick up in Fire orders, it’s understood that was related to some new product introduction can you give more color there?.

Sure, Mig, a lot of good things going on in Fire. They’re coming up from a low base, but when you look today we’re seeing more fleet replacements.

Last few years big cities really weren’t replacing fleet and when we talk fleet replacement in Fire we’re talking a city would buy 7 to 10 fire trucks a year on a seven-year contract and specifically we were this successful in Jacksonville Florida, Phoenix, Arizona and Los Angeles California. So it’s nice to see that activity picking up.

And then we’ve have seen a pick up on the federal side. Again coming up from a low base we’ve had some nice orders come in from the Airforce, Navy and Bureau of Land Management..

Well then if that’s the case why should why be expecting this segment to frankly do a little bit better than the way you’re guiding. .

Well its early Mig in -- like Dave pointed out we’re working through some operational issues. We very pleased with team’s performance in Q1; they did outperform where we thought they’d be. If you look at the revenue levels that they were at in previous years when we’ve been at that revenue we’ve lost earning.

So that tells you the optimizing cost focus there is, is gaining attraction. But we’re early and so we certainly evaluate that at the end of this next quarter. But if bookings continue then obviously that’s something that we’ll looking closer at, but right now we just felt like its little early.

They still have plenty of room to grow and go from an operational standpoint. But we are pleased with way the market is picking out so..

Our next question is from Ross Gilardi from Bank of America. Please proceed with your question..

Just a couple of questions, Charlie I’m just wondering if you can talk a little bit more about your inventories equally. Some of the build was intentional but they are up 35% year on year with a 12% sales decline.

So can you be a little more specific on what’s happening, how of that is intentional, what’s the risk that you’ve got to cut production in second half of the year if the demand outlook for AWP softens?.

Ross, all of the inventory build was intentional. It’s all outside of the defense business. Actually -- solved mostly outside of the defense business. And the overall sales are down in defense, that’s where it’s down.

Our other segments were projecting increasing sales in fiscal 2015 and I guess what I would say is that we’re gone miss estimates, it’s unlikely be it to do the volume. .

Okay thanks and then can you give a little more color on what you’re baking in for your full year outlook for Access internationally and you made some comments by the different regions.

But are you expecting positive growth in Europe still and in how negative of a number are you forecast -- are you baking in for Brazil?.

Alright so if you look at around the world we’ve been seeing 5% to 8% growth in sales for this segment overall higher in Europe, higher in Middle East, higher in [indiscernible], Australia maybe consistent with that overall number North America consistent with that overall number and down in Latin America and that’s largely focused in up Brazil.

So it’s a tough environment in Brazil right now. But overall we’re going to have a good year, sales outlook looks good. Despite all of the -- everyone else maybe be having a different view, we’re -- its look good..

Got you, thanks a lot..

Our next question today is coming from Ted Grace from Susquehanna. Please proceed with your question. .

Hey guys congratulations on the quarter. I was hopping just to touch on FX, I know you mentioned there will be headwind, I was wondering if you can just maybe frame out what the impact of FX was on sales, profits and orders in the first quarter.

And then just help calibrate it for what that headwind on sales and/or profits looks like if it would have been consolidated for the full year. .

Ted in the first quarter FX we didn’t see a lot of movement till later in the quarter. So it was fairly small impact I’d say on the top line you’re probably talking $10 million or less and as the operating income level maybe a million or so.

As we go to look forward depending on what rate assumptions you use, I think on a consolidated basis we’re probably in combined Qs two through four somewhere in the probably $50 million to $75 million range overall..

That will be sales corrects?.

Yes sales I am sorry..

And it’s not so much a volume issue it is the impact on translation of other currency to the U.S dollar..

Yes absolutely on translation and then just from the standpoint of profit impact and assuming that scenario and hedging and other kind of dynamics.

How would you frame, how we should think about the impact on margin?.

From an EPS standpoint I think overall what I mentioned in the prepared remarks is we’re looking at what we believe is about $0.15 per share headwind in the quarters two to four from currency..

Okay I apologize if I miss that..

That’s alright..

And then the second thing I was hoping that to ask you is, maybe just talk about more from orders perspective what you saw from the national rental companies versus the independent rental companies.

Just to give us a characterization pattern to sides market are kind of looking out in 2015?.

Both on looks wrong in the first quarter. .

We’re continuing to see the independence come back and be a positive contributor. And we’ve seen that for quarter after quarter now for going on a while that’s a well-established trend and as Wilson had mentioned before we’re hearing very positive things from lot of our rental customers..

Given that the backlog is up sharply as it was at end of December it’s clear that orders were strong across our full portfolio..

Absolutely and that’s ultimately what I am trying to get at is, just to understand from what our perspective, what that growth may have looked like at IRC versus that RCV levels?.

Again there was -- we saw the IRCs comprise a little bit higher percentage than they were in the fourth quarter, meaningful improvement year-over-year in terms of their contribution. So it was strong across the Board..

Thank you. Our next question today is coming from Walter Liptak from Global Hunter. Please proceed with your question..

My questions have basically been asked. But I wondered if you could talk a little bit more about what studies you’ve done on your energy exposure? I hear you saying that it’s low; can you give us a percent? And then in terms of the energy sector, can you break it out up, mid, downstream and just hoping for a little bit more color..

From a specific standpoint I would tell you that we’ve been all over this, working with our rental customers. You’ve heard I am sure last week united rentals talk about the analysis that they have been through. I can tell you that lot of rental companies are going through similar analysis and we’re right there with them.

We talked about coming out of recession how much closer we’re working with our customers from a forecast and sales and inventory operations planning process. That has certainly continued during this time a concern over oil and gas.

And to be honest Walter it’s just not there for us, we keep looking and studying this and it’s not very significant for us right now.

And where there is a few pockets where there are some projects that are going to go forward we’re seeing upside in construction, chemical, manufacturing, plenty of other areas to more than compensate for the small amount of exposure we have with oil and gas. So, we will continue to study it.

It’s a big part of our weekly sales and inventory operations planning process, the JLG sales team is staying very close to our customers. And our customers want that relationship. So, we’ll continue to monitor. But this really just -- it's insignificant for us to even talk about at this point Walter..

So Walter, just repeat a couple of things. We see that there are more winners than losers for our customer base from lower oil. And secondly, if we miss it’s unlikely due to the buying..

Okay, thanks for the extra color..

Thank you. And next question today is coming from Jerry Revich from Goldman Sachs. Please proceed with your question..

Can you gentlemen talk about Fire & Emergency, looks like you made some solid progress this quarter can you just give us a feel of the operating metrics on how the turnaround strategy, maybe touch on cycle times or any other operating metrics that could help us better understand the momentum that you have in that turnaround?.

Jerry it’s the normal operational metrics that you would see when you walk through our plans at the standup boards. We’ve really focused on labor efficiencies there.

When we go through the change in the market that I think we’ve discussed in the past where with the market being smaller most fire truck makers have gone after trucks that were different specifications than they used to building. So, we did some of that.

And what we’ve been working through is basically a new process to deal with that new market characteristic. And so lot of process work there and going on inside the plants to better handle this increased complexity. And that’s what you’re seeing in Q1 is we’re doing a handle now on that complexity.

Our throughput is increasing; our open work orders are decreasing, part shortage et cetera. because we’re getting a cadence now with the new process. But again normal metrics it’s the same thing as you’ve been watching the throughput as the trucks per day going through the lines and into test.

We pull it down to really micro managing in truck when you look at the volumes that they have..

So what we said that was we’re going to take the production rate down and bring it back up. We’ve brought it back up to the targeted level and now our challenge is, given our orders in backlog is that we probably need to take our production rates up again..

And then for the concrete mix truck business, can you just talk about whether you saw better order growth in the quarter in concrete mix or in the refuse vehicles and I can see you call out concrete mix as a volume driver in the quarter.

Can you just help us understand that how you think the cadence of that business shapes out this year?.

Jerry I think as we look at the first quarter orders were close to last year what we saw, but I think as Charlie mentioned we’re seeing a lot of coating activity as we kick off the beginning of the calendar year here and it’s something that we saw last year as well.

I think lot of these customers have calendar year ends and they get their budgets refreshed at the beginning of the year and they get a little more active..

Now orders were flattish but again our backlog was up at the end of December quite nicely. So it just meant that customers ordered a little bit earlier so late back in August and September they’re already ordering. So again our outlook for fiscal 2015 for concrete mixers looks pretty solid..

Thank you. Our next question is coming from Charley Brady from BMO Capital Markets. Please proceed with your question..

Just a quick one for you, it’s on raw material cost and kind of what do you’re seeing with iron ore pricing that’s going to flow into steel.

Relative to kind of what you have been budgeting in your forecast, are you seeing I guess material benefit on the margin side for raw material cost or is it just nonevent at this point?.

We do see some benefits on the cost side that will helps us as the year goes on and maybe offset some of the foreign currency risk that we’re facing..

Is your current guidance embedding increasing raw material cost through the year currently?.

Charley largely what we’re hearing from our supply chain group is, we shouldn’t expect a lot of movement through the remainder of the fiscal year and it’s largely how we’ve built -- what we’ve built our forecast around. But there will be some of the bigger component manufacturers are going to be seeking some cost increase and that sort of thing.

And so we’ve got some cost increasing, some decreasing because obviously we’re continue to always look at opportunities in that vein. But overall to our initial outlook for us for to the year versus now, it’s probably a little bit more positive in terms of better cost profile..

Thank you. And next question today is coming from Seth Weber from RBC Capital Markets. Please proceed with your question..

I just want to revisit the access margin guidance again, I just wanted to confirm, I mean by my math it looks like you’re sort of targeting an incremental margin in the back half of the year something like 50% for that category, is that what you’re thinking and if so can you maybe help us get there by quantifying some of these new developing costs and operating costs that you’ve absorbed in the second half of the last year?.

Seth, I don’t have the numbers at the fingertips for the second half of the year, but what we’ve talked about for some time here as we do expect significantly better product mix compared to second half of last year, but with due to more aerial work platforms in the ramp up, we’re started seeing late last fiscal year from a telehandler standpoint.

I think in terms of some of the cadence around R&D spend that can swing in a given quarter year-over-year anywhere from 5 million to 10 million. So that certainly will contribute as well and I don’t have all the specific front of me..

But Seth, I guess you’re right. Incremental margins are going to be nice in the second half of year.

So for 10.8% upper income margins of the first quarter were flattish margin and the second again because of a higher telehandler mix certainly in the last half of the year we’re about 15% in terms of our projection for operating income margin in the second half of the year.

So it is in a strong period, those are going to be two higher volume quarters. There is going to be more of a boom mix relative to telehandlers that’s going to benefit us.

And then there is all of those O-initiatives that are coming to bear that really help us when the volumes pick up, so we’re expecting really solid margins in the second half of the year..

Okay that’s helpful and then just kind of a nitpicky question, but your guidance for share count for year is about 80 million you’re sitting there at the end of the first quarter, I mean does that suggest -- should we assume that you’re not going to be buying back stock for the rest of the year or is that just some conservatism?.

That does in terms of how the model was built that they’re -- assume that there were not any additional significant share repurchases. I think what we’ll do, Seth in -- if you look at what we’ve done since we started the share repurchase program, we largely used access cash.

We’ve also talked about our plan to fund future share repurchases through free cash flow along with the fact that we plan to lever up for share repurchases, so we will use cash through the first half of the fiscal year here and then expect to generate cash in the second half of the year, so we’ll take a look at it at that point in time..

Thank you. And next question is coming from Ann Duignan from JPMorgan Chase & Company. Please proceed with your question..

Hi, good morning, this is Mike Todman on for Ann. I wanted to ask about the telehandlers business, if you could talk about some of the end-user demand looking past the Tier 4, where you’re seeing strength, where you’re seeing [indiscernible]? If you can shed some color there that would be great..

It’s primarily construction housing, housing continues to become non-res, we’re seeing a little uptick there, but primarily in the construction area..

Okay thank you.

Any color about Ag or about oil and gas?.

In the U.S. telehandlers not used all that much in Ag. In Europe they certainly are So it’s a much bigger factor. Our telehandler business is skewed heavily toward North America. So it’s really construction..

Our next question today is coming from Steve Barger from KeyBanc Capital Markets. Please proceed with your question..

Charlie you said a couple of times if you were to miss the forecast it wouldn’t be on volume.

So where are the sensitivities that you’re most concern about? Is it mix in excess or is it efficiency in commercial or defense?.

We have a positive outlook for the year certainly we’re going to drive to performed better, being from time what we did in the first quarter, Steve. But it’s earlier in the year right and we do know we’re facing some foreign currency in headwinds in the second half of the year.

So overall though demand is there, so per that will be some other part of our estimates..

Right and Dave I think you gave a number for the potential top line in fact from FX.

But did you say what the embedded level is in your model?.

We’ve got a number of currencies that we have exposure to, is that what you’re talking to?.

Yes exactly..

What rates we’re assuming?.

Yes..

So that assumes a euro somewhere in the call it 113 range of the top of my head, British pound somewhere on the 150, then we got a couple other currencies that I can’t tell you up my head that we have exposure to Australian dollar, Canadian dollar and the Brazil Riel..

Okay thank you for that..

The biggest one is in the Euro in terms of revolver..

And last question I hear you that your energy exposures is insignificant, but just to ask the question more directly. Is there any hesitation or difference in tone at all from the rental customers in Texas, Oklahoma and North Dakota and or the energy producing states versus non, or are they just saying that about their outlook. .

I was travelling in those states in the month of December when allover oil prices were coming down. And I’ll tell you that they weren’t worried, they were feeling very confident that businesses were going to be up next year regardless of where the oil prices were going.

Many of these projects are just long term project, they have to continue they’re not going to stop mid-stream, some of the projects are actually to export our cheaper energy around the world. And they are just seeing other normal sort of construction projects going on.

Texas today is much more diverse than just energy, 34 years ago when we were getting into business -- I was getting into business that was much more tied to energy. Today here we got hi-tech, you got software you got everything else going on there too. So you shouldn’t just assume these states are only growing because of [indiscernible]..

Got it, thanks for your time..

We reach the end of our question and answer session. Let’s turn the floor back over to management for any further closing comments..

Okay. Let’s wrap up. Thanks for spending time with us. We do have a positive outlook for the full year and we’re here to serve our shareholder, we’re on the move, we look forward to delivering strong results for the rest of 2015. Have a great day, everyone..

Thank you. This does conclude today’s teleconference. You may disconnect your lines at this time, and have a wonderful day. We thank you for your participation today..