Oshkosh Corporation

Cautionary Statement About Forward-Looking Statements

This Management’s Discussion and Analysis of Financial Condition and Results of Operations and other sections of this Quarterly Report on Form 10-Q contain statements that the Company believes to be “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact included in this Quarterly Report on Form 10-Q, including, without limitation, statements regarding the Company’s future financial position, business strategy, targets, projected sales, costs, earnings, capital expenditures, debt levels and cash flows, and plans and objectives of management for future operations, including those under the caption “Overview,” are forward-looking statements. When used in this Quarterly Report on Form 10-Q, words such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “should,” “project” or “plan” or the negative thereof or variations thereon or similar terminology are generally intended to identify forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties, assumptions and other factors, some of which are beyond the Company’s control, which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These factors include the cyclical nature of the Company’s access equipment, fire apparatus, refuse and recycling collection and air transportation equipment markets, which are particularly impacted by the strength of U.S. and European economies and construction outlooks; the Company’s estimates of access equipment demand which, among other factors, is influenced by historical customer buying patterns and rental company fleet replacement strategies; the Company's ability to predict the level and timing of orders and costs on the U.S. Postal Service contract; risks that trade wars and related tariffs could further reduce demand for or competitiveness of the Company’s products or cause inefficiencies in the Company's supply chain; the Company’s ability to increase prices to raise margins or to offset higher input costs; the Company's ability to achieve its projected material and manufacturing efficiency savings; the Company's ability to accurately predict future input costs associated with U.S. Department of Defense contracts; the Company’s ability to attract and retain production labor in a timely manner; the Company's ability to increase production rates in its municipal fire apparatus and delivery businesses; the strength of the U.S. dollar and its impact on Company exports, translation of foreign sales and the cost of purchased materials; the impact of severe weather, war, natural disasters or pandemics that may affect the Company, its suppliers or its customers; budget uncertainty for the U.S. federal government, including risks of future budget cuts, the impact of continuing resolution funding mechanisms or a prolonged federal government shutdown; the impact of any U.S. Department of Defense solicitation for competition for future contracts to produce military vehicles; risks related to the collectability of receivables, particularly for those businesses with exposure to construction markets; the cost of any warranty campaigns related to the Company’s products; risks associated with international operations and sales, including compliance with the Foreign Corrupt Practices Act; the Company’s ability to comply with complex laws and regulations applicable to U.S. government contractors; cybersecurity risks and costs of defending against, mitigating and responding to data security threats and breaches impacting the Company; the Company’s ability to successfully identify, complete and integrate acquisitions and to realize the anticipated benefits associated with the same; and risks related to the Company’s ability to successfully execute on its strategic road map and meet its long-term financial goals. Additional information concerning these and other factors that could cause actual results to differ materially from those in the forward-looking statements is contained from time to time in the Company’s SEC filings, including, but not limited to, those described in the Company’s most recent Annual Report on Form 10-K and Item 1A. of Part II of this Quarterly Report on Form 10-Q.

All forward-looking statements, including those under the caption “Overview,” speak only as of the date the Company files this Quarterly Report on Form 10-Q with the SEC. The Company assumes no obligation, and disclaims any obligation, to update information contained in this Quarterly Report on Form 10-Q. Investors should be aware that the Company may not update such information until the Company’s next quarterly earnings conference call, if at all.

All references herein to earnings per share refer to earnings per share assuming dilution.

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General

Major products manufactured and marketed by each of the Company’s segments are as follows:

Access — aerial work platforms and telehandlers used in a wide variety of construction, industrial, agricultural, vegetation management and maintenance applications to position workers and materials at elevated heights. Access customers include equipment rental companies, construction contractors and home improvement centers. The Access segment also manufactures carriers and wreckers sold to towing companies.

Vocational — custom and commercial firefighting vehicles and equipment sold to municipal fire departments; aviation ground support products, gate equipment and airport services sold to commercial airlines, airports, air-freight carriers, ground handling customers and the military; aircraft rescue and firefighting (ARFF) vehicles sold to airports and the U.S. military; refuse and recycling collection vehicles sold to commercial and municipal waste haulers; field service vehicles and truck-mounted cranes sold to mining, construction and equipment rental companies; simulators, mobile command vehicles and other emergency vehicles sold to fire departments and other governmental units; and front-discharge concrete mixers sold to ready-mix companies.

Transport — tactical vehicles, trailers and parts sold to the U.S. military and to other militaries around the world and delivery vehicles for the United States Postal Service (USPS).

Overview

Consolidated sales in the first quarter of 2026 of $2.32 billion were relatively flat compared to the first quarter of 2025 as improved pricing, favorable currency impacts and the impact of cumulative catch-up adjustments in the Transport segment were offset by lower sales volume. Consolidated operating income decreased to $82 million, or 3.5% of sales, compared to $175 million, or 7.6% of sales, in the first quarter of 2025. The decrease in consolidated operating income was primarily a result of unfavorable sales mix, higher manufacturing overhead costs and lower sales volume. The lower operating income led to earnings per share of $0.68 in the first quarter of 2026 compared to $1.72 in the first quarter of 2025. First quarter results fell short of the Company's expectations primarily as a result of lower sales in the Vocational segment and higher consolidated manufacturing costs. Municipal fire apparatus shipments were below the Company's expectations in the first quarter of 2026, primarily due to production throughput, compounded by weather- and travel-related disruptions.

In February 2026, the U.S. Supreme Court ruled that the International Emergency Economic Powers Act (IEEPA) did not authorize the President to impose tariffs. In April 2026, U.S. Customs and Border Protection (CBP) implemented a process for claiming certain IEEPA tariff refunds. Based on the establishment of this refund process prior to the issuance of the Company's financial statements, the Company concluded that recovery of certain previously incurred IEEPA tariffs was probable under the loss recovery model. Accordingly, the Company recorded a receivable of $19.7 million as of March 31, 2026 for expected recoveries of certain IEEPA tariffs, of which $13.5 million was recognized in operating income in the first quarter of 2026.

In March 2026, the Company refinanced its revolving credit facility. The new five-year credit agreement for this facility has similar terms to the previous facility, with a capacity of $1.6 billion and a slightly lower interest rate.

The Company continued to repurchase shares of its Common Stock, repurchasing 303,592 shares during the first quarter of 2026 for approximately $47 million. Share repurchases during the previous twelve months benefited earnings per share during the first quarter of 2026 by $0.02 compared to the first quarter of 2025.

The Company continues to expect its 2026 earnings per share to be in the range of $10.90 on sales of approximately $11.0 billion. The earnings per share estimate includes after-tax charges of $0.60 per share related to amortization of intangible assets. Excluding amortization of intangible assets, the Company's 2026 adjusted earnings per share estimate is in the range of $11.50. The Company believes it is facing conditions that are more challenging and dynamic than it anticipated when it issued its 2026 guidance, and expects approximately 30 percent of its 2026 earnings in the first half of the year. The Company believes that the second half of 2026 will be stronger as a result of improved price-cost dynamics in the Access segment, higher fire apparatus and Next Generation Delivery Vehicle (NGDV) production, the expectation of an additional NGDV order and continued execution on new contracts with better pricing in the Transport segment.

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The Company is not updating or reaffirming its 2026 expectations by segment, as the Company continues to manage its businesses in an evolving economic landscape. In the Access segment, the Company experienced promising order activity in the first quarter of 2026, which may result in a modestly greater contribution from the segment in 2026, whereas, in the Vocational segment, while growth and operating income margins are still expected to be robust, particularly for municipal fire apparatus, the Company's first quarter delivery shortfalls and delays in facility construction timing are likely to modestly reduce the contribution from the Vocational segment in 2026. The Company estimates that tariff impacts in 2026 will largely be in-line with its previous expectations, as the expected recovery of IEEPA tariffs is expected to be offset by other tariff impacts such as the expansion of Section 232 tariffs.

RESULTS OF OPERATIONS

CONSOLIDATED RESULTS

The following table presents consolidated results (in millions):

First Quarter 2026 Compared to 2025

Consolidated net sales increased primarily due to improved pricing ($36 million), favorable currency impacts ($18 million) and the impact of cumulative catch-up adjustments on contracts in the Transport segment ($10 million), offset by lower sales volume ($59 million).

The decrease in consolidated gross margin was primarily due to unfavorable sales mix (210 basis points), higher material costs (140 basis points) largely related to higher tariff costs and higher manufacturing overhead costs (140 basis points), offset in part by improved pricing (110 basis points).

The increase in selling, general and administrative expenses was primarily the result of higher employee compensation ($9 million), offset in part by a favorable resolution of a sales and use tax audit in Wisconsin ($3 million).

The decrease in consolidated operating income was primarily due to unfavorable sales mix ($47 million), higher material costs ($33 million) largely related to higher tariff costs, higher manufacturing overhead costs ($33 million) and the impact of lower gross margin associated with lower sales volume ($16 million), offset in part by improved pricing ($36 million).

The following table presents consolidated non-operating changes (in millions):

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First Quarter 2026 Compared to 2025

Miscellaneous, net primarily relates to gains and losses on investments, foreign currency transaction gains and losses and non-service costs of the Company’s pension plans. Results for the first three months of 2026 included losses related to investments of $3 million and income related to the non-service portion of the Company's pension plans of $2 million.

The effective tax rate in the first quarter of 2026 included net discrete tax benefits of $3 million, largely related to excess tax deductions on share-based compensation. The effective tax rate in the first quarter of 2025 included net discrete tax expense of $1 million, largely related to interest on uncertain tax positions.

SEGMENT RESULTS

Access

The following table presents the Access segment results (in millions):

First Quarter 2026 Compared to 2025

Access segment net sales decreased primarily due to lower sales volume ($34 million), offset in part by favorable currency ($18 million).

The decrease in gross margin in the Access segment was primarily due to adverse sales mix (270 basis points) and higher material costs (250 basis points) largely related to higher tariff costs.

The decrease in operating income in the Access segment was primarily due to adverse sales mix ($26 million), higher material costs ($23 million) largely related to higher tariff costs and the impact of lower gross margin associated with lower sales volume ($10 million).

Vocational