Oshkosh will be "opportunistic" when it comes to acquiring other businesses, according to the company's new chief operating officer.
"We'll be opportunistic with [mergers and acquisitions]. We don't expect to be making transformational deals," John Pfeifer said today during a presentation at Baird's 2019 Global Industrial Conference in Chicago. "I would say if you think about M&A for Oshkosh, it's more in line with bolt-ons or expansions into niche markets where we may not be competing today."
Pfeifer took on the COO role in April. He said today the company sees "significant capability to grow our business globally; we like the trends that we see around the world."
On the defense side, "we're in a place domestically where defense is a really good, solid, stable foundation for Oshkosh," Pfeifer said, adding that since the Joint Light Tactical Vehicle program entered into full-rate production earlier this year, "we can now start to supply it to NATO allies and other countries, and that'll be material growth for us."
As for the business prospects for heavy and medium tactical vehicles, "we actually expect a little bit of moderation in those, that's part of the guide for fiscal [year] '20, but yet we still believe they're going be key components to this segment going forward," according to Pfeifer.
"We've got more visibility today domestically in defense than we've had in a number of years and not only this year but last year as well," he said. "If you think about the JLTV program, we can deliver through 2024 on the existing contract; the [Family of Medium Tactical Vehicles], we can deliver into 2026 under the existing contract; [Family of Heavy Tactical Vehicles] program, we can deliver into the next several years and that's likely to be extended, we believe."
Oshkosh said last week its defense group recorded $570 million in sales in its most recent quarter, up almost 23% from the same three-month period a year earlier.
The company attributed the increase to the "continued ramp up of JLTV sales to the U.S. government."