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Oshkosh Corp – ‘424B4’ on 11/22/99

On: Monday, 11/22/99 · Accession #: 950124-99-6230 · File #: 333-87149

  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

11/22/99  Oshkosh Corp                      424B4                  1:287K                                   Bowne - Bde

Prospectus — Rule 424(b)(4)
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 424B4       Prospectus                                            97    464K

Document Table of Contents

Page	(sequential)	\|	(alphabetic)	Top
			Alternative Formats (Word, et al.) Business Capitalization Common Stock Conversion Description of Capital Stock Experts Financing activities Forward-Looking Statements Index to Financial Statements Investing activities Legal Matters Management and Board of Directors Management's Discussion and Analysis of Consolidated Financial Condition and Results of Operations Notes to Consolidated Financial Statements Notice to Canadian Residents Offering, The Price Range of Common Stock and Dividends Products and Markets Prospectus Summary Report of Ernst & Young LLP, Independent Auditors Resale Restrictions Risk Factors Selected Consolidated Financial Data The Offering Underwriting Use of proceeds Where You Can Find More Information
1	1st Page - Filing Submission
3	Forward-Looking Statements
5	Prospectus Summary
8	The Offering
11	Risk Factors
14	Use of proceeds
15	Price Range of Common Stock and Dividends
16	Capitalization
17	Selected Consolidated Financial Data
19	Management's Discussion and Analysis of Consolidated Financial Condition and Results of Operations
30	Business
35	Products and Markets
48	Management and Board of Directors
50	Description of Capital Stock
"	Common Stock
"	Conversion
54	Underwriting
56	Notice to Canadian Residents
"	Resale Restrictions
57	Where You Can Find More Information
58	Legal Matters
"	Experts
59	Index to Financial Statements
60	Report of Ernst & Young LLP, Independent Auditors
64	Investing activities
"	Financing activities
65	Notes to Consolidated Financial Statements

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FILED PURSUANT TO RULE 424(B)(4)
REGISTRATION NO. 333-87149
REGISTRATION NO. 333-91307
3,300,000 Shares

[OSHKOSH LOGO]
OSHKOSH TRUCK CORPORATION
Common Stock
------------------

We are selling 3,300,000 shares of our common stock. We have two classes of
common equity: our common stock being offered by this prospectus and our class A
common stock. The holders of our common stock are entitled to elect 25% of the
members of our Board of Directors, but are not otherwise entitled to vote except
as provided by law. Each holder of a share of our common stock will receive a
dividend equal to 115% of the dividend we pay on each share of our class A
common stock, and our common stock has prior rights to some liquidation
proceeds.

The underwriters have an option to purchase a maximum of 495,000 additional
shares to cover over-allotments of shares.

Our common stock is traded on the Nasdaq National Market under the symbol
"OTRKB". On November 18, 1999, the last reported sale price of our common stock
was $26.125 per share.

INVESTING IN OUR COMMON STOCK INVOLVES RISKS. SEE "RISK FACTORS" ON PAGE 9.

[Download Table]

UNDERWRITING PROCEEDS TO
PRICE TO DISCOUNTS AND OSHKOSH TRUCK
PUBLIC COMMISSIONS CORPORATION
-------- ------------- -------------

Per Share............................ $26.00 $1.30 $24.70
Total................................ $85,800,000 $4,290,000 $81,510,000

Delivery of the shares of our common stock will be made on or about
November 24, 1999.

Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.

CREDIT SUISSE FIRST BOSTON
GOLDMAN, SACHS & CO.
TUCKER ANTHONY CLEARY GULL
ROBERT W. BAIRD & CO.
INCORPORATED

The date of this prospectus is November 18, 1999

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[INSIDE FRONT COVER]

[Download Table]

[Picture of Oshkosh S-Series Front- [Picture of McNeilus Rear Loader]
Discharge Concrete Mixer]

[Oshkosh Truck Corporation Logo]

[Pierce Manufacturing Inc. Logo] [McNeilus Companies, Inc. Logo]

Quality. Service. Results.

[Picture of Pierce Quantum [Picture of Oshkosh Palletized
Pumper with Aerial ladder] Load System]

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TABLE OF CONTENTS

[Download Table]

PAGE
----

FORWARD-LOOKING STATEMENTS.............. 1
PROSPECTUS SUMMARY...................... 3
RISK FACTORS............................ 9
USE OF PROCEEDS......................... 12
PRICE RANGE OF COMMON STOCK AND
DIVIDENDS............................. 13
CAPITALIZATION.......................... 14
SELECTED CONSOLIDATED FINANCIAL DATA.... 15
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
CONSOLIDATED FINANCIAL CONDITION AND
RESULTS OF OPERATIONS................. 17

[Download Table]

PAGE
----

BUSINESS................................ 28
MANAGEMENT AND BOARD OF DIRECTORS....... 46
DESCRIPTION OF CAPITAL STOCK............ 48
UNDERWRITING............................ 52
NOTICE TO CANADIAN RESIDENTS............ 54
WHERE YOU CAN FIND MORE INFORMATION..... 55
LEGAL MATTERS........................... 56
EXPERTS................................. 56
INDEX TO FINANCIAL STATEMENTS........... F-1

-------------------------

YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR TO
WHICH WE HAVE REFERRED YOU. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
INFORMATION THAT IS DIFFERENT. THIS DOCUMENT MAY ONLY BE USED WHERE IT IS LEGAL
TO SELL THESE SECURITIES. THE INFORMATION IN THIS DOCUMENT MAY ONLY BE ACCURATE
ON THE DATE OF THE DOCUMENT.

In this document, "Oshkosh," "we," "us" and "our" refer to Oshkosh Truck
Corporation and its subsidiaries, including McNeilus Companies, Inc.
("McNeilus") and its subsidiaries and Pierce Manufacturing Inc. ("Pierce") and
its subsidiaries.

The "Oshkosh," "McNeilus" and "Pierce" trademarks and related logos are
registered trademarks of ours. All other product and service names referenced in
this document are the trademarks or registered trademarks of their respective
owners.

All information in this document has been adjusted to reflect the
three-for-two split of our common stock effected on August 19, 1999 in the form
of a 50% stock dividend, and assumes no exercise of the underwriters'
over-allotment option.

FORWARD-LOOKING STATEMENTS

This prospectus and the documents incorporated by reference contain
statements that we believe are "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995. All statements other
than statements of historical fact, including statements regarding our future
financial position, business strategy, budgets, projected costs and plans and
objectives of management for future operations, are forward-looking statements.
When used in this prospectus, words such as "may," "will," "expect," "intend,"
"estimate," "anticipate," "believe," "should," "plan" or "continue" and similar
expressions are generally intended to identify forward-looking statements. These
forward-looking statements are not guarantees of future performance and are
subject to risks, uncertainties and other factors, some of which are beyond our
control, that could cause actual results to differ materially from those
expressed or implied by those forward-looking statements. These factors include
those described in "Risk Factors" and elsewhere in this prospectus and the
documents incorporated by reference.

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PROSPECTUS SUMMARY

This summary highlights information contained elsewhere in this prospectus.
This summary is not complete and does not contain all of the information that
you should consider before investing in our common stock. You should carefully
read the entire prospectus, including the documents incorporated by reference
into this prospectus.

OSHKOSH TRUCK CORPORATION

OVERVIEW

We are a leading designer, manufacturer and marketer of a broad range of
specialty commercial, fire and emergency, and military trucks and truck bodies
under the "Oshkosh," "McNeilus" and "Pierce" trademarks. In 1996, we began a
strategic initiative to shed underperforming assets and to diversify our
business by making selective acquisitions in attractive specialty segments of
the commercial truck and truck body markets to complement our defense truck
business. The result of this initiative was an increase in sales from $413
million in fiscal 1996 to $903 million in fiscal 1998, with earnings from
continuing operations increasing from a loss of $0.02 per share for fiscal 1996
to earnings of $1.27 per share for fiscal 1998. We continue to actively pursue
acquisition opportunities that fit our strategic plans. For the twelve month
period ended June 30, 1999, we achieved sales of $1.1 billion and earnings from
continuing operations of $2.01 per share. During the same period, we derived 51%
of our consolidated revenues from commercial products, 30% from fire and
emergency products and 19% from defense products.

We have experienced strong growth in each of our specialty commercial and
fire and emergency truck and truck body markets through our acquisitions of
Pierce, a leading manufacturer of fire trucks, in 1996 and McNeilus, a leading
manufacturer of concrete mixers and refuse bodies, in 1998. After both of these
acquisitions, we introduced new strategies to significantly increase their
sales, and we used our expertise in purchasing and manufacturing to reduce their
costs. Our specialty commercial and fire and emergency truck and truck body
backlog was $326 million as of June 30, 1999, an increase of 25% from the prior
year.

We are the leading manufacturer of severe-duty heavy tactical trucks for
the U.S. Department of Defense. In December 1998, the Department of Defense
awarded us the Medium Tactical Truck Replacement ("MTTR") contract for the U.S.
Marine Corps., from which we expect to generate total sales of $1.2 billion from
fiscal 2000 through fiscal 2005, assuming the Department of Defense exercises
all the options under the contract as currently anticipated. We expect sales
under this contract of about $26 million in fiscal 2000, increasing to peak
sales of about $300 million in fiscal 2002. This contract represents our first
production contract for medium tactical trucks for the U.S. military.

COMPETITIVE STRENGTHS

We believe we possess the following competitive strengths:

Strong Market Positions. We have developed leading market positions and
brand recognition in each of our core businesses, which we attribute to our
reputation for quality products, advanced engineering, innovation, vehicle
performance, reliability and customer service.
3

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Extensive Distribution Capabilities. With the addition of the commercial
and municipal distribution capabilities of McNeilus and Pierce, we have
established a strong domestic and international distribution system that is
tailored to meet the unique needs of customers for specialty trucks and truck
bodies. In addition to our exclusive network of dealers and representatives, we
employ over 100 sales and service representatives.

Flexible and Efficient Manufacturing Capabilities. We believe we have
competitive advantages over larger truck manufacturers in our specialty truck
markets due to our flexible manufacturing and custom fabrication capabilities.
In addition, we believe we have competitive advantages over smaller truck and
truck body manufacturers, which comprise the majority of the competition in our
markets, due to our relatively higher volumes that permit the use of automated
assembly lines and provide purchasing power opportunities across product lines.

Diversified Product Offering and Customer Base. Our broad product offerings
and target markets serve to diversify our revenues, mitigate the impact of
economic cycles and provide multiple platforms for both internal growth and
acquisitions. For each of our target markets, we have developed or acquired a
broad product line in order to become a single-source provider to our customers.

Strong Management Team. Our present management team has successfully
executed a strategic repositioning of our business while significantly improving
our financial and operating performance. With each of our recent acquisitions,
we assimilated the management and culture of the acquired company, introduced
new strategies to significantly increase their sales and used our expertise in
purchasing and manufacturing to reduce their costs.

Quality Products and Customer Service. We have developed strong brand
recognition based on our demonstrated ability to meet the stringent product
quality, performance and reliability requirements of our customers and the
specialty truck markets we serve. We also strive to achieve high quality
customer service through our extensive service and parts support program, which
is available to domestic customers 365 days a year in all product lines
throughout our distribution systems.

BUSINESS STRATEGY

We are focused on increasing our sales, profitability and cash flow by
capitalizing on our competitive strengths and pursuing a comprehensive,
integrated business strategy.

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Pursuing Strategic Acquisitions. Our present management team has
successfully negotiated and integrated three acquisitions since September 1996
that have significantly increased our sales and earnings. We intend to
selectively pursue additional strategic acquisitions, both domestically and
internationally, in order to enhance our product offerings and expand our
international presence in specialized truck markets. We will focus our
acquisition strategy on specialty truck and truck body markets that are growing,
with fragmented or vulnerable competition, and where we can enhance our strong
market positions and achieve significant acquisition synergies.

Expanding Distribution Domestically and Internationally. We plan to add new
distribution and service capabilities for the municipal segment of the refuse
truck body market and for targeted geographic areas in the domestic fire
apparatus market. We are developing strategies to increase international sales
through the introduction of McNeilus' refuse truck bodies, rear-discharge
concrete mixers and portable concrete batch plants to international markets, by
offering Pierce's new Contender line of low-cost commercial and custom fire
trucks to international markets and by introducing our new medium tactical
military truck to approved foreign armies. International sales increased 67% to
$75.9 million for the twelve months ended June 30, 1999 compared to the $45.5
million achieved in fiscal 1998.

RECENT DEVELOPMENTS

The following information for the fiscal year ended September 30, 1999 has
been derived from our preliminary unaudited results of operations, which results
are included in the Form 8-K we filed with the SEC on October 25, 1999 which is
incorporated by reference in this prospectus. Our net income increased 106.6% to
$31.1 million, or $2.39 per share, on net sales of $1,165 million for the fiscal
year ended September 30, 1999 compared to net income of $15.1 million, or $1.18
per share, on net sales of $903 million for the fiscal year ended September 30,
1998. Our operating income increased 56.4% to $76.2 million, or 6.5% of sales,
for the fiscal year ended September 30, 1999 compared to $48.7 million, or 5.4%
of sales, in the prior year. Our backlog increased $109.1 million, or 29%
compared to the prior year, to $486.5 million at September 30, 1999.

In September 1999, we made scheduled and early term debt repayments of $3.2
million and $15.8 million, respectively. In October 1999, our Board of Directors
declared a quarterly dividend of $0.07500 per share of class A common stock and
$0.08625 per share of our common stock, which dividend was an increase of 3.5%
compared to prior quarters and will be payable to shareholders of record as of
November 8, 1999.
5

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THE OFFERING

Common stock offered............ 3,300,000 shares

Common stock to be outstanding
after the offering............ 15,704,170 shares

Total common stock and class A
common stock to be outstanding
after the offering............ 16,130,155 shares

Use of proceeds................. We intend to use the net proceeds of the
offering to repay indebtedness.

Nasdaq National Market symbol... OTRKB

These share numbers are based on shares outstanding on September 30, 1999.
Each share of our class A common stock is convertible into one share of our
common stock at any time at the holder's option and automatically upon the
occurrence of specified events described under "Description of Capital
Stock -- Common Stock -- Conversion." The share amounts set forth in the table
above exclude 1,288,630 shares of our common stock reserved for issuance
pursuant to our employee benefit plans, under which options to purchase
1,076,555 shares of our common stock were outstanding as of September 30, 1999.

-------------------------

We began business in 1917 as one of the early pioneers of four-wheel drive
technology. Our business was incorporated as a Wisconsin corporation in 1930.
Our principal executive offices are located at 2307 Oregon Street, Oshkosh,
Wisconsin 54903-2566, and our telephone number is (920) 235-9151.

Internet users can obtain information about Oshkosh Truck and its products
at http://www.oshkoshtruck.com. However, the information contained at that site
is not incorporated into this document.
6

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SUMMARY CONSOLIDATED FINANCIAL DATA

The financial data included below as of and for the fiscal years ended
September 30, 1996, 1997 and 1998 have been derived from our consolidated
financial statements, which have been audited by Ernst & Young LLP, independent
auditors. The financial data included below as of and for the nine months ended
June 30, 1998 and 1999 have been derived from our unaudited condensed
consolidated financial statements and, in our opinion, reflect all adjustments,
consisting only of normal and recurring adjustments, necessary for a fair
presentation. The results of operations below are not necessarily indicative of
the results of operations for any future period. You should read the following
information in conjunction with "Management's Discussion and Analysis of
Consolidated Financial Condition and Results of Operations" and our consolidated
financial statements and the related notes included elsewhere in this
prospectus.

[Enlarge/Download Table]

NINE MONTHS
FISCAL YEAR ENDED ENDED
SEPTEMBER 30, JUNE 30,
---------------------------------- ---------------------
1996(1) 1997 1998(2) 1998 1999
--------- -------- --------- --------- --------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

INCOME STATEMENT DATA:
Net sales..................... $ 413,455 $683,234 $ 902,792 $ 659,741 $851,048
Gross income.................. 28,775 80,997 126,036 87,111 124,920
Operating income (loss)....... (3,601) 28,785 48,720 33,887 53,198
Income (loss) from continuing
operations.................. (241) 10,006 16,253 11,301 21,006
Loss from discontinued
operations, net(3).......... (2,859) -- -- -- --
Extraordinary charge for early
retirement of debt, net..... -- -- (1,185) (1,185) --
Net income (loss)............. (3,100) 10,006 15,068 10,116 21,006
Earnings (loss) per share from
continuing operations
assuming dilution........... (0.02) 0.78 1.27 0.88 1.62
Dividends per share on common
stock....................... 0.33 0.33 0.33 0.25 0.25
OTHER FINANCIAL DATA:
EBITDA(4)..................... $ 5,191 $ 42,637 $ 66,550 $ 46,427 $ 69,317
EBITDA margin %(4)............ 1.3% 6.2% 7.4% 7.0% 8.1%
Depreciation and
amortization................ $ 8,798 $ 14,070 $ 18,698 $ 12,995 $ 17,018
Capital expenditures.......... 5,355 6,263 8,555 6,270 6,900
Net cash provided by (used
in):
Continuing operating
activities............. (16,237) 65,782 79,941 78,982 1,069
Discontinued operating
activities............. 4,743 (1,658) (1,093) (872) --
Investing activities..... (166,231) (7,400) (228,617) (226,136) (11,198)
Financing activities..... 148,136 (33,632) 130,172 149,464 11,948
BALANCE SHEET DATA:
Cash and cash equivalents..... $ 127 $ 23,219 $ 3,622 $ 24,657 $ 5,441
Working capital(5)............ 67,469 50,113 41,137 59,199 44,171
Total assets.................. 435,161 420,394 685,039 690,175 794,063
Long-term debt, including
current maturities.......... 157,882 135,000 280,804 298,922 294,856
Shareholders' equity.......... 121,602 120,900 131,296 128,721 151,143

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-------------------------
(1) On September 18, 1996, we acquired for cash all of the issued and
outstanding stock of Pierce, a leading manufacturer and marketer of fire
trucks and other fire apparatus, for $156.9 million, including acquisition
costs and net of cash acquired. We accounted for this acquisition using the
purchase method of accounting, and accordingly, the income statement data
includes the operating results of Pierce since the date of acquisition.

(2) On February 26, 1998, we acquired for cash all of the issued and outstanding
stock of McNeilus, a leading manufacturer and marketer of rear-discharge
concrete mixers, refuse truck bodies and portable concrete batch plants, and
entered into related non-compete and ancillary agreements for $217.6
million, including acquisition costs and net of cash acquired. We accounted
for this acquisition using the purchase method of accounting, and
accordingly, the income statement data includes the operating results of
McNeilus since the date of acquisition.

(3) On June 2, 1995, we sold assets associated with our motor home, bus and van
chassis business. The consideration included cash of $23.8 million and the
assumption by the buyer of some liabilities. We accounted for the
disposition of the chassis business in fiscal 1995 as a discontinued
operation. During the year ended September 30, 1996, we incurred after tax
charges of $1.6 million arising from the write-off of receivables and other
obligations related to our former chassis joint venture in Mexico and we
recognized additional warranty and other related costs of $1.3 million with
respect to our former U.S. chassis business.

(4) EBITDA means operating income (loss) plus depreciation and amortization. For
purposes of calculating EBITDA, depreciation and amortization has been
adjusted to exclude amortization of debt issuance costs of $0.2 million in
the fiscal year ended September 30, 1997, $0.9 million in the fiscal year
ended September 30, 1998, $0.5 million for the nine months ended June 30,
1998 and $0.9 million for the nine months ended June 30, 1999. EBITDA and
related information is presented as additional information because we
believe it to be a useful indicator of our operating performance given our
substantial non-cash depreciation and amortization expenses. It is not,
however, intended as an alternative measure to net income, earnings per
share or cash flow from operations, as determined in accordance with
generally accepted accounting principles. Other companies in our industry
may present EBITDA differently than we do. EBITDA margin percentage is
calculated by dividing EBITDA by net sales.

(5) Working capital represents total current assets less total current
liabilities. Working capital includes net current liabilities related to
discontinued operations of $2.0 million at September 30, 1996, $1.5 million
at September 30, 1997 and $0.6 million at September 30, 1998. Working
capital includes net current liabilities related to discontinued operations
of $0.8 million at June 30, 1998 and $0.2 million at June 30, 1999.

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RISK FACTORS

You should carefully consider the risk factors set forth below before
making an investment decision. This prospectus includes forward-looking
statements. Although we believe that the plans, intentions and expectations
reflected in the forward-looking statements are reasonable, we can give no
assurance that the plans, intentions or expectations will be achieved. Important
factors that could cause our actual results to differ materially from those
included in or suggested by any forward-looking statements are set forth below
and elsewhere in this prospectus. All forward-looking statements attributable to
us or persons acting on our behalf are expressly qualified in their entirety by
the following risk factors. See "Forward-Looking Statements" for additional
information regarding forward-looking statements.

SOME OF OUR MARKETS ARE CYCLICAL AND A DECLINE IN THESE MARKETS COULD HAVE A
MATERIAL ADVERSE EFFECT ON OUR OPERATING PERFORMANCE.

A decline in overall customer demand in our cyclical commercial or fire and
emergency markets could have a material adverse effect on our financial
condition, profitability and cash flows. The ready-mix concrete market we serve
is highly cyclical and, in large part, impacted by the strength of the economy
generally, by prevailing interest rates and by other factors which may have an
effect on the level of construction activity, either regionally or nationally.
The U.S. construction industry has generally been expanding in recent years, but
has experienced significant downturns in the past. These downturns have
materially adversely affected the net sales, profitability and cash flow of
suppliers to the construction industry, including us, and it is likely that the
industry will experience similar downturns at some point in the future. An
economic recession similarly may adversely affect the waste management industry
and may reduce expenditures for fire and emergency equipment.

WE ARE DEPENDENT ON U.S. GOVERNMENT CONTRACTS FOR A SUBSTANTIAL PORTION OF OUR
BUSINESS. THAT BUSINESS IS SUBJECT TO THE FOLLOWING RISKS THAT COULD HAVE A
MATERIAL ADVERSE EFFECT ON OUR OPERATING PERFORMANCE:

Our business is susceptible to changes in the U.S. defense budget, which
may reduce revenues expected from our defense business.

The U.S. defense budget has declined significantly in recent years,
resulting in a slowing of new program starts, program delays and program
cancellations. The reduction in these budgets has caused many government
contractors, including us, to experience declining net sales, reduced operating
margins and, in some cases, net losses. U.S. defense budgets may decline again
in the future, which may reduce revenues expected from our defense business.
Sales under contracts with the Department of Defense, including sales to foreign
governments through the Department of Defense and under subcontracts that
identified the Department of Defense as the ultimate purchaser, represented $249
million of our net sales for the fiscal year ended September 30, 1998, down from
$425 million in fiscal 1994. We expect fiscal 1999 sales to the Department of
Defense to decrease by $25 million from fiscal 1998 levels, before increasing in
fiscal 2000 through 2002 as a result of our MTTR contract to build medium
tactical trucks for the U.S. Marine Corps.

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The U.S. government may not appropriate expected funding for our U.S.
government contracts, which may prevent us from realizing revenues under
current contracts.

Congress usually appropriates funds for a given program on an annual basis
even though contract performance may take more than one year. Consequently, at
the outset of a major program, the contract is usually partially funded, and
additional monies are normally committed to the contract by the procuring agency
only as appropriations are made by Congress for future government fiscal years.
If Congress fails to appropriate expected funding for our programs, then we may
have lower revenues under our current U.S. government contracts than we expect,
which could have a material adverse effect on our financial condition,
profitability and cash flows.

Most of our U.S. government contracts are fixed-price contracts and our
actual costs may exceed our projected costs, which could result in lower
profits or net losses under these contracts.

Substantially all of our net sales to the Department of Defense for the
fiscal year ended September 30, 1998 and for the nine months ended June 30, 1999
were derived from fixed-price contracts. Although we regularly fix a substantial
portion of the supply costs of our contracts over the life of the contract,
there is a risk that if our bid is submitted and a contract is subsequently
awarded to us, our actual costs may exceed the projected costs, which were the
basis for our bid for the fixed-price contract. To the extent that actual costs
exceed those projected costs for existing contracts or that we inaccurately
project costs on any new contracts, we may experience lower profits or net
losses as a result of these contracts, which could have a material adverse
effect on our financial condition, profitability and cash flows.

Our U.S. government contracts expire in the near future and may not be
replaced, which could reduce expected revenues from these contracts.

Some of our existing contracts with the Department of Defense involving a
number of our heavy tactical truck products expire in fiscal years 2000 and
2001. Although we believe those contracts will be extended or renewed, or
replaced with new contracts with the Department of Defense, those contracts
could expire or be cancelled and not be replaced with new contracts. We are
currently competing for an additional Department of Defense contract for medium
tactical trucks. Our failure to obtain new contracts or to extend or replace
those expiring in fiscal years 2000 and 2001 would reduce our expected revenues
from these contracts, which could have a material adverse effect on our
financial condition, profitability and cash flows.

Our U.S. government contracts could be suspended or terminated which could
prevent us from realizing expected revenues under these contracts.

Approximately 28% of our net sales in fiscal 1998 and 18% of our net sales
in the nine months ended June 30, 1999 were made to the U.S. government under
long-term contracts and programs in the defense truck and fire and emergency
markets. As a result, suspension or termination of these contracts could prevent
us from realizing revenues under these contracts, which could in turn have a
material adverse effect on our financial condition, profitability and cash
flows. Companies engaged in supplying defense-related and other equipment and
services to U.S. government agencies are subject to specialized government
business risks. These risks include the ability of the U.S. government to
unilaterally

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suspend its contractors from receiving new contracts in the event of violations
of some laws or regulations. Although we have not faced any of these
suspensions, we have been involved in governmental investigations of various
matters in the past. We could face a suspension in the future as a result of
governmental investigations. The U.S. government also has the right to terminate
contracts either for its convenience or upon the default of the contractor.

Our U.S. government contracts are subject to audit, which could result in
adjustments of our costs and prices under these contracts.

Some costs and expenses are not allowable charges under the U.S. government
contracts. As a U.S. government contractor, we are subject to financial audits
and other reviews by the U.S. government of performance under, and the
accounting and general practices relating to, our U.S. government contracts, and
like most large government contractors, we are audited and reviewed on a
continual basis. Costs and prices under our U.S. government contracts may be
adjusted based upon the results of these audits and reviews. We have been
required to pay adjustments to the government in the past.

A SUBSTANTIAL PORTION OF OUR GROWTH IN THE PAST THREE YEARS HAS COME THROUGH
ACQUISITIONS AND WE MAY NOT BE ABLE TO IDENTIFY, COMPLETE AND INTEGRATE FUTURE
ACQUISITIONS, WHICH COULD ADVERSELY AFFECT OUR FUTURE GROWTH.

Our growth strategy is based in part upon acquisitions and we may not be
able to identify suitable acquisition candidates, obtain financing for future
acquisitions or complete future acquisitions. If any future acquisitions are
completed, we may not be able to integrate the acquired businesses or operate
them profitably. Additionally, the diversion of management attention, as well as
any other difficulties which may be encountered in the continuing integration
processes, could have a material adverse impact on our financial condition,
profitability and cash flows.

AN INTERRUPTION IN THE SUPPLY OF SOME OF OUR PARTS, MATERIALS, COMPONENTS AND
FINAL ASSEMBLIES WE OBTAIN FROM SOLE SOURCE SUPPLIERS OR SUBCONTRACTORS COULD
DELAY SALES OF OUR TRUCKS AND TRUCK BODIES.

We require specific types of engines, transmissions, pumps, cylinders and
other parts for the manufacture of our products. We obtain some of these items
from limited or single source suppliers with whom we do not have long-term
guaranteed supply agreements. We may in the future experience significant
disruption or termination of the supply of these parts, materials or components
or incur a significant increase in the cost of these parts, materials or
components, which could delay sales of our trucks and truck bodies and could
result in a material adverse effect on our financial condition, profitability
and cash flows. For some of our defense and fire and emergency contracts, we
subcontract the manufacture of trailers, flatracks, plows and blowers and the
final assembly of our trucks. We have experienced problems with suppliers and
subcontractors from time to time and have incurred additional costs and expenses
related to these problems.

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IF OUR DEBT LEVEL INCREASES AS A RESULT OF FUTURE ACQUISITIONS, COVENANTS IN OUR
DEBT AGREEMENTS MAY LIMIT OUR ABILITY TO BORROW ADDITIONAL FUNDS AND MAKE SOME
KINDS OF PAYMENTS.

Our level of indebtedness may increase in the future, particularly if we
finance future acquisitions with debt. The agreements governing our subordinated
debt and bank debt contain restrictive covenants that, among other things,
restrict, but do not prohibit, our and our subsidiaries' ability to incur
additional indebtedness, pay dividends or make other restricted payments,
consummate asset sales, merge or consolidate with any other person, sell all of
our assets or prepay our indebtedness. These restrictions could, particularly in
connection with any increase in our level of indebtedness, increase our
vulnerability to general adverse economic and industry conditions and limit our
ability to obtain additional financing to fund future working capital, capital
expenditures and other general corporate requirements, or to fund future
acquisitions. In addition, the agreement governing our bank debt requires us to
maintain specified financial ratios and to satisfy financial condition tests.

TWO OF OUR DIRECTORS OWN A MAJORITY OF OUR CLASS A COMMON STOCK AND THEREFORE
HAVE VOTING CONTROL OF THE COMPANY.

We have two classes of common equity: our common stock being offered by
this prospectus and our class A common stock. The holders of our common stock
are entitled to elect 25% of our Board of Directors, but are not otherwise
entitled to vote except as required by law. Our class A common stock has the
right to elect 75% of our Board of Directors and to vote on any other matter
brought to a vote of our shareholders. Therefore, effective control of our Board
of Directors and operations is vested in the holders of our class A common
stock, which is closely held. As of September 30, 1999, on a pro forma basis
that includes the issuance of our common stock in the offering, two of our
directors, J. Peter Mosling, Jr. and Stephen P. Mosling, beneficially own
approximately 7.8% of our outstanding capital stock, but effectively control 75%
of our Board of Directors because they beneficially own approximately 84.8% of
our class A common stock.

USE OF PROCEEDS

The net proceeds to us from the sale of the 3,300,000 shares of common
stock offered by us will be approximately $81.1 million, based on the public
offering price of $26.00 per share, after deducting the underwriting discounts
and commissions and estimated offering expenses payable by us.

We intend to use a portion of the net proceeds to repay a total of $30.0
million of outstanding indebtedness under Term Loans B and C of our senior
credit facility, with $15.0 million applied to each loan. Term Loan B matures on
March 31, 2005 and Term Loan C matures on March 31, 2006. Term Loans B and C had
outstanding principal balances of $34.5 million each at September 30, 1999. We
intend to use the remainder of the net proceeds to repay indebtedness under Term
Loan A of our senior credit facility, which matures on March 31, 2004, and had
an outstanding principal balance of $84.0 million at September 30, 1999. The
weighted-average interest rates on borrowings outstanding at September 30, 1999
were 6.87% on Term Loan A, 7.64% on Term Loan B and 7.89% on Term Loan C.

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PRICE RANGE OF COMMON STOCK AND DIVIDENDS

Our common stock is traded on the Nasdaq National Market under the symbol
"OTRKB." The following table sets forth high and low closing sale prices of our
common stock as reported by the Nasdaq National Market.

[Download Table]

HIGH LOW
------ ------

FISCAL 1998
First Quarter........................... $14.17 $ 9.92
Second Quarter.......................... 13.33 11.58
Third Quarter........................... 17.42 12.67
Fourth Quarter.......................... 18.83 12.33
FISCAL 1999
First Quarter........................... $23.33 $14.50
Second Quarter.......................... 25.50 20.83
Third Quarter........................... 33.58 19.33
Fourth Quarter.......................... 38.50 22.75
FISCAL 2000
First Quarter (through November 18,
1999)................................ 32.00 24.88

On November 18, 1999, the last reported sale price for our common stock on
the Nasdaq National Market was $26.125. There is no established public trading
market for our class A common stock.

In fiscal 1997 and 1998, we paid quarterly cash dividends of $0.0833 per
share of our common stock and $0.0725 per share of our class A common stock. We
paid total cash dividends of $0.2500 per share of our common stock and $0.2175
per share of our class A common stock through the nine months ended June 30,
1999.

We intend to declare and pay dividends on a regular basis. However, the
payment of future dividends is at the discretion of our Board of Directors and
will depend upon, among other things, future earnings, capital requirements, our
general financial condition, general business conditions and other factors. When
we pay dividends, we pay a dividend on each share of our common stock equal to
115% of the amount paid on each share of our class A common stock. The
agreements governing our subordinated debt and bank debt restrict our ability to
pay dividends on our common stock and class A common stock. For fiscal 2000, the
terms of our senior credit facility generally limit the aggregate amount of all
dividends we may pay on our common equity during that period to an amount equal
to $5 million plus 5% of our consolidated net income.

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CAPITALIZATION

The following table sets forth our consolidated capitalization as of
September 30, 1999 on an actual basis, and as adjusted to give effect to our
sale of 3,300,000 shares of common stock at the public offering price of $26.00
per share, after deducting the underwriting discounts and commissions and
estimated offering expenses. You should read this table in conjunction with our
consolidated financial statements and the related notes included elsewhere in
this prospectus.

[Download Table]

SEPTEMBER 30, 1999
----------------------
AS
ACTUAL ADJUSTED
--------- ---------
(DOLLARS IN THOUSANDS)

Cash and cash equivalents.................................. $ 5,137 $ 5,137
======== ========
Long-term debt, including current maturities............... $260,548 $179,463
Shareholders' equity:
Preferred stock, $.01 par value; 2,000,000 shares
authorized; none issued and outstanding............... -- --
Class A common stock, $.01 par value; 1,000,000 shares
authorized; 425,985 shares issued(1).................. 4 4
Common stock, $.01 par value; 18,000,000 shares
authorized; 13,611,044 shares issued; 16,911,044
shares issued as adjusted(2).......................... 136 169
Paid-in capital.......................................... 15,997 97,049
Retained earnings(3)..................................... 157,810 157,292
Common stock in treasury, at cost, 1,206,874 shares...... (11,067) (11,067)
-------- --------
Total shareholders' equity............................ 162,880 243,447
-------- --------
Total capitalization................................ $423,428 $422,910
======== ========

-------------------------
(1) Each share of our class A common stock is convertible into one share of our
common stock at any time at the holder's option and automatically upon the
occurrence of specified events described under "Description of Capital
Stock -- Common Stock -- Conversion."

(2) Excludes 1,288,630 shares of our common stock reserved for issuance pursuant
to our employee benefit plans, under which options to purchase 1,076,555
shares of our common stock were outstanding as of September 30, 1999, at a
weighted-average exercise price of $15.47 per share.

(3) Reflects write-off of deferred financing costs of $518, net of income tax
benefit of $318 due to early repayment of debt from proceeds of the
offering.

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SELECTED CONSOLIDATED FINANCIAL DATA

The financial data included below as of and for the fiscal years ended
September 30, 1994, 1995, 1996, 1997 and 1998 have been derived from our
consolidated financial statements, which have been audited by Ernst & Young LLP,
independent auditors. The financial data included below as of and for the nine
months ended June 30, 1998 and 1999 have been derived from our unaudited
condensed consolidated financial statements and, in our opinion, reflect all
adjustments, consisting only of normal and recurring adjustments, necessary for
a fair presentation. The results of operations below are not necessarily
indicative of the results of operations for any future period. You should read
the following information in conjunction with "Management's Discussion and
Analysis of Consolidated Financial Condition and Results of Operations" and our
consolidated financial statements and the related notes included elsewhere in
this prospectus.

[Enlarge/Download Table]

NINE MONTHS
FISCAL YEAR ENDED ENDED
SEPTEMBER 30, JUNE 30,
------------------------------------------------------ --------------------
1994 1995 1996(1) 1997 1998(2) 1998 1999
-------- -------- --------- -------- --------- --------- --------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

INCOME STATEMENT DATA:
Net sales......................................... $581,275 $438,557 $ 413,455 $683,234 $ 902,792 $ 659,741 $851,048
Cost of sales..................................... 519,801 390,022 384,680 602,237 776,756 572,630 726,128
-------- -------- --------- -------- --------- --------- --------
Gross income................................ 61,474 48,535 28,775 80,997 126,036 87,111 124,920
Operating expenses:
Selling, general and administrative............. 38,404 29,242 32,205 47,742 69,001 47,665 63,322
Amortization of goodwill and other
intangibles................................... -- -- 171 4,470 8,315 5,559 8,400
-------- -------- --------- -------- --------- --------- --------
Total operating expenses.................... 38,404 29,242 32,376 52,212 77,316 53,224 71,722
-------- -------- --------- -------- --------- --------- --------
Operating income (loss)........................... 23,070 19,293 (3,601) 28,785 48,720 33,887 53,198
Interest expense.................................. (1,080) (679) (929) (12,722) (21,490) (14,273) (19,839)
Interest income................................... 249 774 1,040 717 1,326 544 614
Miscellaneous, net................................ (137) (466) 1,508 (278) 92 (344) 564
-------- -------- --------- -------- --------- --------- --------
Income (loss) from continuing operations before
income taxes, equity in earnings of
unconsolidated partnership and extraordinary
item............................................ 22,102 18,922 (1,982) 16,502 28,648 19,814 34,537
Provision (credit) for income taxes............... 8,544 7,285 (1,741) 6,496 12,655 8,378 14,700
-------- -------- --------- -------- --------- --------- --------
13,558 11,637 (241) 10,006 15,993 11,436 19,837
Equity in earnings (loss) of unconsolidated
partnership, net of income taxes................ -- -- -- -- 260 (135) 1,169
-------- -------- --------- -------- --------- --------- --------
Income (loss) from continuing operations.......... 13,558 11,637 (241) 10,006 16,253 11,301 21,006
Loss from discontinued operations, net(3)......... (504) (2,421) (2,859) -- -- -- --
Extraordinary charge for early retirement of debt,
net............................................. -- -- -- -- (1,185) (1,185) --
-------- -------- --------- -------- --------- --------- --------
Net income (loss)................................. $ 13,054 $ 9,216 $ (3,100) $ 10,006 $ 15,068 $ 10,116 $ 21,006
======== ======== ========= ======== ========= ========= ========
Earnings (loss) per share:
Continuing operations........................... $1.04 $0.88 $(0.02) $0.78 $1.29 $0.89 $1.65
Net income (loss)............................... 1.00 0.69 (0.23) 0.78 1.20 0.80 1.65
Earnings (loss) per share assuming dilution:
Continuing operations........................... $1.04 $0.87 $(0.02) $0.78 $1.27 $0.88 $1.62
Net income (loss)............................... 1.00 0.69 (0.23) 0.78 1.18 0.79 1.62
Dividends per share:
Class A common stock............................ $0.290 $0.290 $0.290 $0.290 $0.290 $0.2175 $0.2175
Common stock.................................... 0.333 0.333 0.333 0.333 0.333 0.2500 0.2500
OTHER FINANCIAL DATA:
EBITDA(4)......................................... $ 32,348 $ 27,702 $ 5,191 $ 42,637 $ 66,550 $ 46,427 $ 69,317
EBITDA margin %(4)................................ 5.6% 6.3% 1.3% 6.2% 7.4% 7.0% 8.1%
Depreciation and amortization..................... $ 9,278 $ 8,409 $ 8,798 $ 14,070 $ 18,698 $ 12,995 $ 17,018
Capital expenditures.............................. 5,178 5,347 5,355 6,263 8,555 6,270 6,900
Net cash provided by (used in):
Continuing operating activities................. 67,423 6,166 (16,237) 65,782 79,941 78,982 1,069
Discontinued operating activities............... (2,851) 10,482 4,743 (1,658) (1,093) (872) --
Investing activities............................ (6,136) (6,170) (166,231) (7,400) (228,617) (226,136) (11,198)
Financing activities............................ (43,192) 3,402 148,136 (33,632) 130,172 149,464 11,948
BALANCE SHEET DATA:
Cash and cash equivalents......................... $ 15,836 $ 29,716 $ 127 $ 23,219 $ 3,622 $ 24,657 $ 5,441
Working capital(5)................................ 82,010 91,777 67,469 50,113 41,137 59,199 44,171
Total assets...................................... 198,678 200,916 435,161 420,394 685,039 690,175 794,063
Long-term debt, including current maturities...... 610 -- 157,882 135,000 280,804 298,922 294,856
Shareholders' equity.............................. 121,558 133,413 121,602 120,900 131,296 128,721 151,143

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(3) On June 2, 1995, we sold assets associated with our motor home, bus and van
chassis business. The consideration included cash of $23.8 million and the
assumption by the buyer of some liabilities. We accounted for the
disposition of the chassis business as a discontinued operation and
accordingly, the income statement data for 1994 and 1995 reflects the
chassis business as a discontinued operation. During the year ended
September 30, 1996, we incurred after-tax charges of $1.6 million arising
from the write-off of receivables and other obligations related to our
former chassis joint venture in Mexico and we recognized additional warranty
and other related costs of $1.3 million with respect to our former U.S.
chassis business.

(5) Working capital represents total current assets less total current
liabilities. Working capital includes net current assets (liabilities)
related to discontinued operations of $15.9 million at September 30, 1994,
$3.3 million at September 30, 1995, ($2.0) million at September 30, 1996,
($1.5) million at September 30, 1997 and ($0.6) million at September 30,
1998. Working capital includes net current (liabilities) related to
discontinued operations of ($0.8) million at June 30, 1998 and ($0.2)
million at June 30, 1999.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
CONSOLIDATED FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following contains forward-looking statements. These statements are
subject to risks, uncertainties and other factors that could cause actual
results to differ materially from those described in or suggested by any such
statement. See "Forward-Looking Statements."

OVERVIEW

We are a leading designer, manufacturer and marketer of a wide range of
specialty trucks and truck bodies including concrete mixers, refuse bodies, fire
and emergency vehicles and defense trucks. Under the "McNeilus" and "Oshkosh"
brand names, we manufacture rear- and front-discharge concrete mixers and a wide
range of automated rear, front, side and top loading refuse truck bodies. Under
the "Pierce" brand name, we are among the leading domestic manufacturers of fire
apparatus assembled on both custom and commercial chassis. We manufacture
aircraft rescue and firefighting and airport snow removal vehicles under the
"Oshkosh" brand name. We also manufacture defense trucks under the "Oshkosh"
brand name and are the leading manufacturer of severe-duty heavy tactical trucks
for the Department of Defense.

Our net sales are principally determined on the basis of lowest qualified
bid in our fire and emergency and defense truck markets. In order to qualify to
bid in these markets, the bidder must demonstrate superior quality, vehicle
performance, reliability and innovative technologies. In the refuse truck body
and concrete mixer markets, our net sales are affected by product pricing,
innovation, quality, distribution, service and product performance. In each of
our business segments, we strive to be the market leader in new product
development, product quality and reliability, and to build distribution
capabilities that are tailored to the unique needs of our customers.

The principal elements of our cost of sales are commercial chassis,
components and raw materials, labor, manufacturing overhead, engineering and
warranty costs. Nearly all our refuse truck bodies and rear-discharge concrete
mixers and some of our custom fire bodies are mounted on commercially available
truck chassis purchased from large truck manufacturers. While most customers
provide these chassis to us for mounting our truck bodies, for approximately
39.3% of our commercial net sales and 13.6% of our fire and emergency sales in
the nine months ended June 30, 1999, we bought the truck chassis and sold it to
our customers along with our truck body. Principal components included in our
trucks and truck bodies include cabs, engines, transmissions, axles, independent
suspension systems, cylinders and transfer cases. We fabricate and assemble most
of our own cabs, transfer cases and independent suspension systems and purchase
the other components from a variety of truck component manufacturers. Principal
raw materials include sheet and bar stock steel and aluminum. We strive to
negotiate firm fixed price contracts for 70% to 80% of the components and raw
materials for the full production of our large defense contracts. For the
balance of our components and raw materials, we strive to negotiate annual
pricing that is below published pricing indices. We establish annual labor
productivity improvement goals for all of our products and for some products we
also establish material cost reduction goals. In addition, costs of sales are
affected by the efficiency of production methods and manufacturing capacity
utilization.

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Our operating expenses are comprised principally of labor and distribution
costs associated with our direct distribution systems. Information systems,
finance, legal and general management costs also represent significant
components of our operating expenses.

ACQUISITION HISTORY

Since 1996, we have selectively pursued strategic acquisitions in order to
enhance our product offerings and diversify our business. We have focused our
acquisition strategy in specialty truck and truck body markets that are growing
and where we can develop strong market positions and achieve acquisition
synergies. Identified below is information with respect to these acquisitions,
all of which have been accounted for using the purchase method of accounting and
have been included in our results of operations from the date of acquisition.

On September 18, 1996, we acquired for cash all of the issued and
outstanding capital stock of Pierce, a leading manufacturer and marketer of fire
trucks and other fire apparatus for $156.9 million, including acquisition costs
and net of cash acquired. The acquisition was financed from borrowings under a
subsequently retired bank credit facility.

On December 19, 1997, Pierce acquired certain inventory, machinery and
equipment, and intangible assets of Nova Quintech, a division of Nova Bus
Corporation, for $3.6 million. Nova Quintech was engaged in the manufacture and
sale of aerial devices for fire trucks.

On February 26, 1998, we acquired for cash all of the issued and
outstanding capital stock of McNeilus and entered into related non-compete and
ancillary agreements for $217.6 million, including acquisition costs and net of
cash acquired. McNeilus is a leading manufacturer and marketer of rear-discharge
concrete mixers and portable concrete batch plants for the construction industry
and refuse truck bodies for the waste services industry in the United States.
The acquisition was financed from borrowings under a senior credit facility and
the issuance of senior subordinated notes.

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RESULTS OF OPERATIONS

The following table sets forth selected items from our Consolidated
Statements of Income as a percentage of net sales, for the periods indicated:

[Enlarge/Download Table]

NINE MONTHS
FISCAL YEAR ENDED ENDED
SEPTEMBER 30, JUNE 30,
--------------------------- ----------------
1996 1997 1998 1998 1999
----- ----- ----- ----- -----

Net sales................................. 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of sales............................. 93.0 88.1 86.0 86.8 85.3
----- ----- ----- ----- -----
Gross income......................... 7.0 11.9 14.0 13.2 14.7
Operating expenses:
Selling, general and
administrative..................... 7.9 7.0 7.7 7.2 7.4
Amortization of goodwill and other
intangibles........................ -- 0.7 0.9 0.9 1.0
----- ----- ----- ----- -----
Total operating expenses............. 7.9 7.7 8.6 8.1 8.4
----- ----- ----- ----- -----
Operating income (loss)................... (0.9) 4.2 5.4 5.1 6.3
Interest expense.......................... (0.2) (1.8) (2.4) (2.1) (2.3)
Interest income........................... 0.3 0.1 0.1 -- 0.1
Miscellaneous, net........................ 0.4 -- -- -- --
Income tax (provision) credit............. 0.4 (1.0) (1.4) (1.3) (1.7)
Equity in earnings of unconsolidated
partnership, net........................ -- -- -- -- 0.1
----- ----- ----- ----- -----
Income (loss) from continuing
operations.............................. -- 1.5 1.7 1.7 2.5
Discontinued operations................... (0.7) -- -- -- --
Extraordinary charge...................... -- -- -- (0.2) --
----- ----- ----- ----- -----
Net income (loss)......................... (0.7)% 1.5% 1.7% 1.5% 2.5%
===== ===== ===== ===== =====

Nine Months Ended June 30, 1999 Compared to Nine Months Ended June 30, 1998

We reported net income of $21.0 million, or $1.62 per share, on net sales
of $851.0 million for the first nine months of fiscal 1999, compared to net
income of $10.1 million, or $0.79 per share, on net sales of $659.7 million for
the first nine months of fiscal 1998.

Sales of commercial and fire and emergency products increased in the first
nine months of fiscal 1999 compared to the first nine months of fiscal 1998
while sales of defense products decreased. Commercial and fire and emergency
sales for the first nine months of fiscal 1999 increased $236.2 million, or
50.0%, from the first nine months of fiscal 1998 to $708.6 million. An increase
of $208.3 million in sales of construction and refuse vehicles and a $27.9
million increase in sales of fire and emergency apparatus accounted for the
increase. The increase in fiscal 1999 sales resulted primarily from the
inclusion of McNeilus for a full nine months in fiscal 1999 compared to only
four months in fiscal 1998. Construction vehicle sales benefited in the
nine-month period of fiscal 1999 from strong construction end markets and the
introduction of a new cab and mixer package for Oshkosh's front-discharge
concrete mixer. We believe that commercial waste haulers accelerated the
replacement of refuse packers in their fleets in 1998 and 1999 and that we have
increased our penetration with both commercial and municipal accounts. Sales of
fire and emergency vehicles rose 13.0% due to strong market demand and an
improved product mix. Sales of defense products totaled $147.0 million for the
first nine

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months of fiscal 1999, a decrease of $40.7 million, or 21.7%, compared to the
first nine months of fiscal 1998. Defense sales declined due to the trend in
lower heavy military truck spending in the federal budget and the completion of
the ISO-Compatible Palletized Flatrack contract in July 1998, which had been
subcontracted to Steeltech Manufacturing, Inc. We expect defense sales in the
fourth quarter of fiscal 1999 to increase approximately $10.0 million over the
fourth quarter of fiscal 1998. Vehicle sales under the MTTR contract awarded to
us in December 1998 will not begin until fiscal 2000.

Gross income in the first nine months of fiscal 1999 totaled $124.9
million, or 14.7% of net sales, compared to $87.1 million, or 13.2% of net
sales, in the first nine months of fiscal 1998. McNeilus contributed $58.1
million of gross income for the first nine months of fiscal 1999 compared to
$26.8 million for the first nine months of fiscal 1998. Fiscal 1998 results
included only four months of McNeilus operations.

Our operating income margin was six percent for the first nine months of
fiscal 1999 compared to five percent for the first nine months of fiscal 1998.
Operating expenses increased $18.5 million to $71.7 million, or 8.4% of net
sales, in the first nine months of fiscal 1999 compared to $53.2 million, or
8.1% of net sales, in the first nine months of fiscal 1998. Operating expenses
for the first nine months of fiscal 1999 included a $3.8 million non-recurring
charge for litigation, or 0.4% of net sales, and a $2.9 million increase in
amortization of goodwill and other intangibles, or 0.3% of net sales. The
remainder of the dollar increase largely reflects the operating expenses of
McNeilus, which we owned for an additional five months in fiscal 1999.

Interest expense increased to $19.8 million in the first nine months of
fiscal 1999 compared to $14.3 million in the first nine months of fiscal 1998.
The increase in interest expense was due to additional borrowings to finance the
acquisition of McNeilus, net of debt repayment.

The effective tax rate for combined federal and state income taxes for the
first nine months of fiscal 1999 was 42.6% compared to 42.3% for the first nine
months of fiscal 1998. The effective income tax rate for the first nine months
of fiscal 1999 was impacted by non-deductible goodwill amortization of $4.2
million. The effective income tax rate for the first nine months of fiscal 1998
was impacted by non-deductible goodwill amortization of $2.8 million and by the
reversal of $0.5 million of income tax provisions recognized in earlier periods.

Equity in earnings of an unconsolidated lease financing partnership
increased to $1.2 million for the first nine months of fiscal 1999 compared to a
loss of $0.1 million for the first nine months of fiscal 1998. The first nine
months of fiscal 1998 included a $0.9 million after-tax charge due to the early
adoption of a new accounting standard related to start-up activities of the
partnership. Also, results for the first nine months of fiscal 1998 included
only four months of operations of the partnership following its formation on
February 26, 1998.

The extraordinary charge of $1.2 million in the first nine months of fiscal
1998 was due to the early retirement of debt incurred in connection with the
acquisition of McNeilus.

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Fiscal Year Ended September 30, 1998 Compared to Fiscal Year Ended
September 30, 1997

We reported net income of $15.1 million, or $1.18 per share, on net sales
of $902.8 million for the year ended September 30, 1998, compared to net income
of $10.0 million, or $0.78 per share, on net sales of $683.2 million for the
year ended September 30, 1997. This represented earnings growth of 51% for the
fiscal year ended September 30, 1998. Acquisitions, product innovations and
expanding market share contributed to sales growth of 32% while cost reduction
initiatives drove earnings higher. Fiscal 1998 results include seven months of
sales and earnings of McNeilus, a leading manufacturer and marketer of
rear-discharge concrete mixers and portable concrete batch plants for the
construction industry and refuse truck bodies for the waste services industry in
the United States, which was acquired on February 26, 1998. Fiscal 1998 results
were adversely affected by after-tax charges of $5.6 million, including $1.2
million related to early repayment of debt, $3.5 million related to impairment
losses with respect to our Florida manufacturing facilities and our Summit
Performance Systems, Inc. brand rear-discharge mixer system technology
intangible asset and $0.9 million of organization start-up costs incurred in
connection with establishing a lease financing partnership. See Note 13 to Notes
to Consolidated Financial Statements. These charges were partially offset by a
$2.1 million after-tax gain on the sale of an interest in a Mexican bus
manufacturer.

Sales of commercial and fire and emergency products in fiscal 1998 were
$653.8 million, an increase of $259.2 million, or 65.7%, from fiscal 1997,
largely as a result of the inclusion of McNeilus sales of $240.0 million since
the date of its acquisition and a $25.6 million increase in sales of Pierce.
Commercial and fire and emergency export sales increased $13.9 million to $34.6
million in fiscal 1998 compared to fiscal 1997, primarily as a result of
increases in exports of fire apparatus by Pierce following the introduction of
Pierce products to Oshkosh's international dealer network. Sales of defense
products totaled $249.0 million in fiscal 1998, a decrease of $39.6 million, or
13.7%, compared to fiscal 1997. The decrease in defense sales was primarily due
to a decline in heavy tactical truck procurement by the U.S. Department of
Defense. Fiscal 1998 defense sales included $32.0 million of ISO-Compatible
Palletized Flatracks that were produced by Steeltech compared to $41.4 million
of these sales in fiscal 1997. This contract was completed in July 1998. Defense
export sales decreased to $0.5 million in fiscal 1998 compared to $16.6 million
in fiscal 1997. Fiscal 1997 defense export sales included $13.0 million from a
sale of Heavy Expanded Mobility Tactical Truck vehicles to Taiwan. We expect
that our defense-related sales will decline by approximately $20.0 to $30.0
million in fiscal 1999.

Gross income in fiscal 1998 totaled $126.0 million, or 14.0% of net sales,
compared to $81.0 million, or 11.9% of net sales, in fiscal 1997. The increase
in gross income and gross margins in fiscal 1998 was principally due to
inclusion of McNeilus operating results since the date of its acquisition.

Our operating income margin was five percent in fiscal 1998 compared to
four percent in fiscal 1997. Over the next three years, we are targeting
improvements to enable us to achieve operating income margins approaching seven
percent. Operating expenses totaled $77.3 million, or 8.6% of net sales, in
fiscal 1998 compared to $52.2 million, or 7.7% of net sales in fiscal 1997. The
increase principally reflects the expenses of McNeilus since the date of its
acquisition. Operating expenses also were adversely impacted by net pre-tax
charges of $2.4 million involving the impairment of our Florida manufacturing
facility ($3.9 million) and the impairment of our Summit brand mixer system
technology

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intangible asset ($1.9 million), which were partially offset by the gain on sale
of our interest in a Mexican bus manufacturer ($3.4 million).

Interest expense increased to $21.5 million in fiscal 1998 compared to
$12.7 million in fiscal 1997 as a result of financing the McNeilus acquisition.

The provision for income taxes in fiscal 1998 was $12.7 million, or 44.2%
of pre-tax income, compared to $6.5 million, or 39.4% of pre-tax income, in
fiscal 1997. The effective income tax rate in fiscal 1998 was adversely affected
by non-deductible goodwill of $4.2 million related to the acquisitions of Pierce
in September 1996 and McNeilus in February 1998. The effective income tax rate
in fiscal 1997 was adversely impacted by non-deductible goodwill of $2.6 million
related to the acquisition of Pierce in September 1996 and benefited from the
reversal of $0.9 million of prior years' provisions for income taxes.

Equity in earnings of an unconsolidated lease financing partnership of $0.3
million in fiscal 1998 represents our after-tax share of income of the lease
financing partnership. These results include our share of the write-off of
organization costs ($1.5 million pre-tax, $0.9 million after-tax) incurred by
the partnership in fiscal 1998. See Note 12 to Notes to Consolidated Financial
Statements.

The $1.2 million after-tax extraordinary charge recorded in fiscal 1998
represents the write-off of deferred financing costs for that portion of debt
prepaid during the year.

Fiscal Year Ended September 30, 1997 Compared to Fiscal Year Ended September 30,
1996

We reported net income of $10.0 million, or $0.78 per share, on net sales
of $683.2 million for the year ended September 30, 1997, compared to a net loss
of $3.1 million, or $0.23 per share, on net sales of $413.5 million for the year
ended September 30, 1996. The fiscal 1997 results include a full year of sales
and earnings of Pierce, a leading manufacturer and marketer of fire trucks and
other fire apparatus in the U.S., which was acquired on September 18, 1996. The
fiscal 1996 results were adversely affected by after-tax charges of $11.3
million, including $3.2 million related to the ISO-Compatible Palletized
Flatrack subcontract to Steeltech, $3.5 million associated with our Mexican bus
affiliates, and warranty and other related costs of $4.6 million. In fiscal
1996, we also recognized after-tax benefits of $2.0 million on the reversal of
income tax provisions and related accrued interest.

Sales of commercial, fire and emergency and defense products increased in
fiscal 1997 compared to fiscal 1996. Commercial and fire and emergency sales in
fiscal 1997 were $394.6 million, an increase of $232.6 million, or 143.6% from
1996, principally due to inclusion of a full year of Pierce sales in fiscal
1997. Commercial and fire and emergency export sales totaled $20.7 million in
fiscal 1997 and $20.4 million in fiscal 1996. Sales of defense products totaled
$288.6 million in fiscal 1997, an increase of $37.2 million, or 14.8%, compared
to fiscal 1996. The increase in defense sales was primarily due to an increase
in ISO-Compatible Palletized Flatrack sales that were produced by Steeltech,
which increased from $8.7 million in fiscal 1996 to $41.4 million in fiscal
1997. Defense export sales also increased to $16.6 million in fiscal 1997
compared to $2.1 million in fiscal 1996.

Gross income in fiscal 1997 totaled $81.0 million, or 11.9% of net sales,
compared to $28.8 million, or 7.0% of net sales, in fiscal 1996. The increase in
gross income in fiscal

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1997 was principally due to increased sales volume as a result of the
acquisition of Pierce. In addition, fiscal 1996 gross income was reduced by
pre-tax charges of $5.1 million related to production delays and cost overruns
associated with the ISO-Compatible Palletized Flatrack subcontract to Steeltech
and increased warranty and other related costs of $5.5 million (pre-tax).

Operating expenses totaled $52.2 million, or 7.7% of net sales, in fiscal
1997 compared to $32.4 million, or 7.9% of net sales, in fiscal 1996. The
increase in operating expenses in fiscal 1997 related principally to the
operating expenses of Pierce and amortization of goodwill and other intangible
assets associated with the acquisition of Pierce. We recognized pre-tax charges
of $3.2 million in fiscal 1996 to write off our investment in Steeltech and to
write off our remaining investments and advances associated with our Mexican bus
affiliates due to prolonged weakness in the Mexican economy and continuing high
losses and high leverage reported by the Mexican affiliates.

Interest expense increased to $12.7 million in fiscal 1997 compared to $0.9
million in fiscal 1996 as a result of the financing for the Pierce acquisition.

Miscellaneous expense was $0.3 million in fiscal 1997 compared to
miscellaneous income of $1.5 million in fiscal 1996. The miscellaneous income in
fiscal 1996 arose primarily from the reversal of accrued interest related to
income taxes.

The provision for income taxes in fiscal 1997 was $6.5 million, or 39.4% of
pre-tax income, compared to a credit for income taxes of $1.7 million in fiscal
1996. Fiscal 1997 benefited from the reversal of $0.9 million of prior years'
provisions for income taxes and fiscal 1996 benefited from $1.0 million of these
reversals. In addition, the effective income tax rate in fiscal 1997 was
adversely affected by non-deductible goodwill of $2.6 million arising from the
Pierce acquisition.

The $2.9 million after-tax loss from discontinued operations ($4.7 million
pre-tax) in fiscal 1996 resulted from the write-off of receivables of $2.6
million (pre-tax) related to our Mexican bus affiliates and from a $2.1 million
pre-tax charge for additional warranty and other related costs with respect to
our former U.S. chassis business which was sold in June 1995.

FINANCIAL CONDITION

Nine Months Ended June 30, 1999

During the first nine months of fiscal 1999, cash increased by $1.8
million. Equipment and software purchases of $6.9 million, dividends of $3.2
million, increases in long-term assets of $4.4 million generally related to the
Pierce enterprise resource planning system installed in fiscal 1999 and
additional equity investments in our leasing partnership of $1.0 million were
funded by cash from operations of $1.1 million, a $14.3 million increase in
borrowings under our revolving credit facility and $1.1 million of proceeds from
the exercise of common stock options under our Incentive Stock Plan.

Fiscal Year Ended September 30, 1998

During fiscal 1998, cash decreased by $19.6 million to $3.6 million at
September 30, 1998. Cash available at the beginning of the year of $23.2
million, $11.1 million of cash equivalents acquired from McNeilus and not used
to reduce the McNeilus acquisition indebtedness, and cash provided from
operations of $79.9 million were used primarily to

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fund $78.0 million of debt repayments (including $25.0 million prior to the
acquisition of McNeilus), a $16.3 million reduction of our revolving credit
facility, the acquisition of Nova Quintech for $3.6 million, property, plant and
equipment additions of $8.6 million and dividends of $4.2 million. We borrowed
$347.3 million in February 1998, including $225.0 million under a multi-tranche
senior credit facility, $100.0 million of senior subordinated notes and $22.3
million under a new $100.0 million revolving credit facility. We used borrowings
to refinance outstanding indebtedness of $110.0 million under our previous
credit facility and to pay $8.6 million of debt issuance costs. We also used
borrowings to close the McNeilus transaction for $249.5 million consideration
plus $6.0 million in acquisition costs less cash acquired of $37.9 million,
$11.1 million of which was temporarily invested at the acquisition date.

Fiscal Year Ended September 30, 1997

During fiscal 1997, cash increased $23.1 million. Cash provided from
operating activities of $65.8 million was used primarily to fund $6.3 million of
property, plant and equipment additions, $1.7 million of payments related to
discontinued operations, $22.9 million of long-term debt and revolving credit
payments, $6.5 million of purchases of our common stock and common stock
warrants, net of stock option exercise proceeds, and $4.2 million of dividends.

LIQUIDITY AND CAPITAL RESOURCES

We had approximately $70.4 million of unused availability under the terms
of our revolving credit facility as of June 30, 1999. Our primary cash
requirements include working capital, interest and principal payments on
indebtedness, capital expenditures, dividends and, potentially, future
acquisitions. The primary sources of cash are expected to be cash flow from
operations and borrowings under our senior credit facility. Based upon current
and anticipated future operations, we believe capital resources will be adequate
to meet future working capital, debt service and other capital requirements for
fiscal years 1999 and 2000, including the effects of the MTTR contract. There
can be no assurance, however, that our business will generate cash flow that,
together with the other sources of capital, will enable us to meet those
requirements.

Our cash flow from operations has fluctuated, and will likely continue to
fluctuate, significantly from quarter to quarter due to changes in working
capital arising principally from seasonal fluctuations in sales. The MTTR
contract will likely entail increases in our working capital needs as it will
require working capital to produce vehicles or other equipment for shipment.

Our senior credit facility and senior subordinated notes contain various
restrictions and covenants on us that could potentially limit our ability to
respond to market conditions, to provide for unanticipated capital investments,
to raise additional debt or equity capital or to take advantage of business
opportunities. See Note 4 to Notes to Consolidated Financial Statements.

Our senior credit facility accrues interest at variable rates. We presently
have no plans to enter into interest rate swap arrangements to limit our
exposure to future increases in interest rates.

Our capital expenditures for fiscal years 1999 through 2001 are expected to
be approximately $15 to $17 million annually.

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YEAR 2000

General. We commenced a corporate-wide Year 2000 project in 1997 to address
issues with respect to the ability of computer programs and embedded computer
chips to distinguish between the years 1900 and 2000. The Year 2000 project is
on schedule in all material respects. We believe that all of our principal
enterprise resource planning systems and other significant information systems
are Year 2000 ready.

Year 2000 Project. Our Year 2000 project addresses four principal areas:
infrastructure and applications software; company-produced trucks and equipment;
process controls and instrumentation; and third-party suppliers and customers.
The project phases common to each area include:

- development of an inventory of Year 2000 risks;

- assignment of priorities to identified risks;

- assessment of Year 2000 compliance and impact of noncompliance;

- tests to determine whether any upgrade or replacement is required;

- upgrade or replacement of items that are determined not to be Year 2000
compliant if the impact of noncompliance is material; and

- design and implementation of contingency and business continuation plans
for each organization and facility.

At August 31, 1999, the initial four phases for each of the four areas of
the Year 2000 project and remediation of all principal enterprise resource
planning systems are believed to have been completed. Material items are those
believed by us to have a risk involving the safety of individuals, or that may
cause damage to property or affect revenues and expenses.

Infrastructure and Applications Software. As we address our infrastructure
and applications software, we test and then upgrade or replace the affected
hardware and systems software, as necessary. We maintain two enterprise resource
planning computer systems at our Oshkosh operations and one system each at our
Pierce and McNeilus operations. In May 1999, we consolidated our Florida
computer operations into Oshkosh's computer operations. We installed an upgraded
release of software, which is certified by the software vendor as being Year
2000 ready, to our enterprise resource planning system for truck operations in
Oshkosh in July 1998. Programming to upgrade the remaining Oshkosh enterprise
resource planning system for our parts operations was completed in December
1998. In April 1999, Pierce completed the replacement of all of its hardware and
business systems with a new, enterprise resource planning system and related
hardware, which are certified by the vendors as being Year 2000 ready. McNeilus
installed upgraded releases to its enterprise resource planning systems in
August and September 1998 and August 1999. Validation testing at McNeilus to
assure that the August 1999 upgrades are Year 2000 ready was completed in
October 1999.

We believe other infrastructure and applications software, including
engineering systems, pose lesser risks in the event of Year 2000 noncompliance
due to a wider range of less disruptive commercial options available to cure
noncompliance. We have upgraded or replaced all such significant non-compliant
systems.

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Company-Produced Trucks and Equipment. We have communicated with suppliers
that are critical to the manufacture of our products to verify whether computer
chips embedded in our trucks and equipment are Year 2000 ready, and have issued
service bulletins to customers with respect to the findings. We have not
identified any material issues with respect to computer chips embedded into our
products. Nevertheless, there can be no assurance at this time that our
investigation was complete or that material warranty and product liability
issues will not develop with respect to this matter. To the extent that our
suppliers experience Year 2000 problems and we are unable to source alternate
suppliers, changes to our products may be necessary to avoid warranty and
liability, both as to products already in use, and as to products to be shipped
in the future.

Process Controls and Instrumentation. To our knowledge, all of our process
controls and instrumentation have been upgraded to be Year 2000 ready, if
necessary. It is possible that our testing and investigation of our process
controls and instrumentation was incomplete given the magnitude of this task,
but we believe that all material equipment and systems will function properly in
the year 2000.

External Parties. We have surveyed critical parts and all chassis suppliers
to assess the Year 2000 readiness of their products and business systems. Our
largest suppliers are large public companies and, as such, generally have
significant projects completed or underway similar to our Year 2000 project.
However, we cannot give any assurance that these suppliers or our smaller
suppliers will not have Year 2000 issues with their processes or business
systems that ultimately could have a material effect on us in spite of those
projects. Where suppliers are deemed to pose significant risk to us, we are
developing alternate suppliers or contingency plans.

We do not maintain significant computer interfaces with our customers,
except with the Department of Defense, where invoices and remittances are sent
by electronic data interchange. The Department of Defense is an extremely large
organization. Some departments within the Department of Defense that interface
with us have communicated that they were Year 2000 compliant as of March 31,
1999. However, the Department of Defense has not provided us with any assurances
that all of its systems will be Year 2000 compliant, or whether Department of
Defense computer interfaces with other U.S. government entities will be Year
2000 ready. Should the Department of Defense encounter Year 2000 difficulties,
our financial condition, profitability and cash flows could be materially
adversely affected. Additionally, our other customers could lose business or
otherwise encounter Year 2000 issues that could ultimately affect our financial
condition, profitability and cash flows.

Costs. Based on our activities to date and considering known items, we do
not expect the total cost associated with required hardware equipment and
software modifications to become Year 2000 ready to be material to our financial
position. The total estimated capital costs of the Year 2000 project, which
would have been incurred regardless of Year 2000 issues and which have the
incidental consequence of Year 2000 readiness, are $8.8 million. Period expenses
of the Year 2000 project are $0.9 million. As of June 30, 1999, we had expended
$8.5 million of these capital costs and $0.6 million of these period expenses.
Approximately $7.9 million of the estimated capital costs relate to the
replacement of all the hardware and business systems at Pierce, which was
completed in April 1999. To date, none of our other information systems projects
have been delayed due to the Year 2000 project.

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Risks. Under the Year 2000 project, as in any project of this magnitude and
scope, the risk of underestimating the tasks and difficulties to be encountered,
or in obtaining necessary personnel, exist. Risk also exists in that the failure
to correct a material Year 2000 problem could result in an interruption in, or a
failure of, normal business activities or operations. Those failures could
materially and adversely affect our financial condition, profitability and cash
flows. Due to the general uncertainty of the Year 2000 problem, resulting in
part from the uncertainty of the Year 2000 readiness of third-party suppliers
and customers, we are unable to determine at this time whether the consequences
of Year 2000 failures will have a material impact on our financial condition,
profitability and cash flows. The Year 2000 project is expected to significantly
reduce our level of uncertainty about the Year 2000 problem and, in particular,
about the Year 2000 compliance and readiness of our material third-party
suppliers and customers. We believe that, with the installation of new or
upgraded enterprise resource planning systems and completion of the Year 2000
project as scheduled, the possibility of significant interruptions of normal
operations should be reduced. In fact, many of our business systems, including
sales order, materials planning and purchasing systems, have been properly
processing year 2000 transactions for several months. We are in the process of
establishing contingency plans in the event that any unexpected issues arise
when the Year 2000 arrives. We completed contingency planning for material risks
in October 1999.

NEW ACCOUNTING STANDARDS

The Financial Accounting Standards Board ("FASB") issued Statement of
Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative
Instruments and Hedging Activities," which was amended by SFAS No. 137.
Provisions of these standards are required to be adopted in years beginning
after June 15, 2000. Because of our minimal use of derivatives, we do not
anticipate that the adoption of the new statement will have a significant effect
on our financial condition, profitability and cash flows.

In June 1997, the FASB also issued SFAS No. 131, "Disclosures about
Segments of an Enterprise and Related Information." SFAS No. 131 establishes the
standards for the manner in which public enterprises are required to report
financial and descriptive information about their operating segments. In
addition, this statement requires the annual disclosure of information
concerning revenues derived from the enterprise's products or services,
countries in which it earns revenue or holds assets, and major customers. The
statement is effective for fiscal years beginning after December 15, 1997. We
expect to adopt this statement in the fourth quarter of fiscal 1999. The
adoption of SFAS No. 131 will not affect our financial condition, profitability
or cash flows, but will affect the disclosure of our segment information.

In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive
Income." SFAS No. 130 establishes the standards for reporting and displaying
comprehensive income and its components, which are revenues, expenses, gains and
losses, as part of a full set of financial statements. We adopted SFAS No. 130
on October 1, 1998. Comprehensive income has been included in our Consolidated
Statement of Shareholders' Equity for the nine months ended June 30, 1999 and
prior period amounts have been reclassified to conform to SFAS No. 130
requirements. Since this statement applies only to the presentation of
comprehensive income, it does not have any impact on our financial condition,
profitability or cash flows.

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BUSINESS

OVERVIEW

We are a leading designer, manufacturer and marketer of a broad range of
specialty commercial, fire and emergency, and military trucks and truck bodies
under the "Oshkosh," "McNeilus" and "Pierce" trademarks. We began business in
1917 and were among the early pioneers of four-wheel drive technology. In 1981,
we were awarded the first Heavy Expanded Mobility Tactical Truck contract for
the U.S. Department of Defense and quickly developed into their leading supplier
of severe-duty heavy tactical trucks. In 1996, we began a strategic initiative
to diversify our business by making selective acquisitions in attractive
specialty segments of the commercial truck and truck body markets to complement
our defense truck business. The result of this initiative was an increase in
sales from $413 million in fiscal 1996 to $903 million in fiscal 1998, with
earnings from continuing operations increasing from a loss of $.02 per share for
fiscal 1996 to earnings of $1.27 per share for fiscal 1998.

As part of our strategy, we have completed the following acquisitions:

- Pierce, a leading manufacturer and marketer of fire trucks and other fire
apparatus in the United States, in September 1996;

- Nova Quintech, a manufacturer of aerial devices for fire trucks, in
December 1997; and

- McNeilus, a leading manufacturer and marketer of commercial specialty
truck bodies, including rear-discharge concrete mixers and portable
concrete batch plants for the construction industry and refuse truck
bodies for the waste services industry, in February 1998.

After the acquisitions of Pierce and McNeilus, we introduced new strategies
to significantly increase their sales and we used our expertise in purchasing
and manufacturing to reduce their costs. Our specialty commercial and fire and
emergency truck and truck body backlog was $326 million as of June 30, 1999, an
increase of 25% from the prior year. We continue to actively pursue acquisition
opportunities that fit our strategic plans. For the twelve month period ended
June 30, 1999, we achieved sales of $1.1 billion and earnings from continuing
operations of $2.01 per share. During the same period, we derived 51% of our
consolidated revenues from commercial products, 30% from fire and emergency
products and 19% from defense products.

We believe we have developed a reputation for excellent product quality,
performance and reliability in each of the markets in which we participate. We
have strong brand recognition in our markets and have demonstrated our design
and engineering capabilities through the introduction of several highly
engineered proprietary components that increase our products' operating
performance. We have developed comprehensive product portfolios for each of our
markets in an effort to become a single-source supplier for our customers. Our
commercial product lines include refuse truck bodies, rear- and front-discharge
concrete mixers and portable concrete batch plants. Our fire and emergency
vehicles include pumpers, aerial and ladder trucks, tankers, heavy-duty rescue
vehicles, wildland rough terrain response vehicles, aircraft rescue and
firefighting vehicles and airport snow removal vehicles. We are the leading
manufacturer of severe-duty heavy tactical trucks for the U.S. Department of
Defense, which perform a variety of demanding tasks such as hauling tanks,
missile systems, ammunition, fuel and cargo for combat and combat support

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units. In December 1998, the Department of Defense awarded us the MTTR contract
for the U.S. Marine Corps., from which we expect to generate total sales of $1.2
billion from fiscal 2000 through fiscal 2005, assuming the Department of Defense
exercises all the options under the contract as currently anticipated. We expect
sales under this contract of about $26 million in fiscal 2000, increasing to
peak sales of about $300 million in fiscal 2002. This contract represents our
first production contract for medium tactical trucks for the U.S. military.

COMPETITIVE STRENGTHS

We believe we possess the following competitive strengths:

Flexible and Efficient Manufacturing Capabilities. We believe we have
competitive advantages over larger truck manufacturers in our specialty truck
markets due to our flexible manufacturing and custom fabrication capabilities.
Over the past seven years, we have significantly increased manufacturing
efficiencies. In addition, we believe we have competitive advantages over
smaller truck and truck body manufacturers, which comprise the majority of the
competition in our markets, due to our relatively higher volumes that permit the
use of moving assembly lines and provide purchasing power opportunities across
product lines.

Quality Products and Customer Service. We have developed strong brand
recognition based on our demonstrated commitment to meet the stringent product
quality, performance and reliability requirements of our customers and the
specialty truck markets we serve. We also strive to achieve high quality
customer service through our extensive service and parts support program, which
is available to domestic customers 365 days a year in all product lines
throughout our distribution systems.

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Proprietary Components. We have developed a number of proprietary,
severe-duty components that we believe provide us with a competitive advantage
by increasing our vehicles' durability, operating efficiency and effectiveness.
Our ability to integrate many of these components across various product lines
also reduces our costs to manufacture products compared to manufacturers who
assemble purchased components. These proprietary components include front drive
and steer axles, transfer cases, cabs, the ALL-STEER electronic all-wheel
steering system, independent suspension, the Sky-Arm articulating aerial ladder,
the Hercules compressed air foam systems, the Command Zone multiplexing
technology and the McNeilus Auto Reach Arm, an automated side-loading refuse
body. See "-- Products and Markets" for further discussion of these products and
technologies.

BUSINESS STRATEGY

We are focused on increasing our sales, profitability and cash flow by
capitalizing on our competitive strengths and pursuing a comprehensive,
integrated business strategy.

Focusing on Specialized Truck Markets. We plan to continue to focus on
those specialized truck and truck body markets where we have or can develop
strong market positions and where we can realize synergies in purchasing,
manufacturing, technology and distribution to increase sales and profitability.
We believe the higher sales volumes associated with our market leadership will
allow us to continue to enhance productivity in manufacturing operations, fund
innovative product development and invest in further expansion. In addition to
our strategies to increase market share and profitability, each of our
specialized truck and truck body markets is exhibiting opportunities for further
market growth.

Pursuing Strategic Acquisitions. Our present management team has
successfully negotiated and integrated three acquisitions since September 1996
that have significantly increased our sales and earnings. We intend to
selectively pursue additional strategic acquisitions, both domestically and
internationally, in order to enhance our product offerings and expand our
international presence in specialized truck markets. We will focus our
acquisition strategy on specialty truck and truck body markets that are growing
and where we can enhance our strong market positions and achieve significant
acquisition synergies.

Expanding Distribution Domestically and Internationally. We plan to add new
distribution and service capabilities for the municipal segment of the refuse
truck body market and for targeted geographic areas in the domestic fire
apparatus market. For example, in fiscal 1999, we added two refuse service
facilities and one fire apparatus service facility and began providing refuse
service at three existing mixer distribution facilities to attract additional
municipal sales. We plan to open additional service facilities in fiscal 2000.
We are developing strategies to increase international sales. We are actively
recruiting new representatives and dealers in targeted international commercial
markets to expand the international sales of McNeilus' refuse truck bodies and
rear-discharge concrete mixers. In the summer of 1999, we began offering our new
Contender line of custom and commercial fire trucks to Pierce's extensive
international dealer network. This line of fire trucks is more appropriately
priced for international sales than Pierce's historically premium-priced product
line. In fiscal 2000, we plan to begin marketing our new medium tactical
military truck to approved foreign armies when the U.S. Department of Defense
concludes testing of the initial production units. Because there have been
limited sales of

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medium tactical trucks to foreign armies over the last ten years under the U.S.
Foreign Military Sales Program and because our truck has significant off-road
capability at an attractive price, we believe that the international market for
this truck will be significant. International sales increased 67% to $75.9
million for the twelve months ended June 30, 1999 compared to $45.5 million
achieved in fiscal 1998. While the percentage of revenue generated from
international sales for the twelve months ended June 30, 1999 was approximately
seven percent, our objective is to increase international sales to ten percent
of total revenue by the end of fiscal 2001.

Introducing New Products. We have increased our emphasis on new product
development in recent years, and seek to expand sales by leading our core
markets in the introduction of new or improved products, either through internal
development or strategic acquisition. For example, in December 1997, we
purchased the aerial fire apparatus product line of Nova Quintech. This
acquisition broadened Pierce's aerial product line and provided Pierce with
three new products in fiscal 1998. In addition, Pierce introduced seven other
new products in fiscal 1998 and 1997, including the Dash 2000 and Lance 2000
chassis with Pierce's proprietary Command Zone multiplexing technology and a new
Hercules compressed air foam system. In January 1999, Pierce introduced its
Contender series of limited option fire apparatus produced at our Bradenton,
Florida facility and mounted on a commercially available or custom chassis, to
compete in price segments Pierce did not previously serve. In the commercial
market, we introduced a substantially upgraded front-discharge concrete mixer in
fiscal 1999 to combine a new cab engineered and produced by Oshkosh and a new
mixer package produced in part by McNeilus. For refuse customers, McNeilus
introduced a new lightweight front-end loader in August 1999 targeted for the
large West Coast market where McNeilus did not have a suitable product offering.
In the defense market, we recently received our first medium tactical truck
contract with the award of the MTTR contract and we continue to expand our heavy
tactical truck offerings.

Reducing Costs While Maintaining Quality. We actively benchmark our
competitors' costs and best industry practices, and continuously seek to
implement process improvements to improve profitability and increase cash flow.
With each of our acquisitions, we have established cost reduction targets. At
Pierce, we exceeded our two-year cost reduction target of $6.5 million as a
result of consolidating facilities, reengineering the manufacturing process and
leveraging increased purchasing power. We are planning for additional cost
savings at Pierce in fiscal 2000. Similarly, we are taking advantage of our
greater purchasing power and manufacturing capabilities in connection with our
February 1998 acquisition of McNeilus, for which we established a $5 to $7
million two-year cost reduction target. In the first sixteen months following
the McNeilus acquisition, we realized approximately $7 million of cost
reductions, and we believe that we ultimately could save another $3 million. For
our historic product lines, we also establish annual labor productivity
improvement targets, and for many product lines, we establish materials cost
reduction targets. In July 1999, we announced plans for McNeilus to invest more
than $8.3 million to expand its Dodge Center, Minnesota manufacturing facility.
The primary purpose of the expansion is to construct two moving assembly lines
with robotic welders to significantly reduce the manufacturing costs of refuse
bodies. The expansion will also double the paint and refuse body manufacturing
capacity of this facility.

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INDUSTRY TRENDS AND OUTLOOK

Refuse Trucks and Bodies. We believe that domestic commercial waste haulers
significantly increased their new truck purchases during fiscal 1998 and 1999 as
McNeilus refuse body unit sales increased 40% during fiscal 1998 and 38% in the
nine months ended June 30, 1999. Although general economic conditions can have
an impact on our customers' expenditures for new refuse equipment, we believe
that the relatively old age of commercial and municipal fleets and industry
trends involving the consolidation of commercial waste haulers and the
privatization of municipal fleets create opportunities for continued strong
refuse body sales for McNeilus in fiscal 2000. McNeilus has the manufacturing
capacity and a direct distribution network to capitalize on these trends. At
June 30, 1999, McNeilus' refuse body backlog in units was up 26% compared to
June 30, 1998.

Concrete Mixers. This market is cyclical and is impacted by the strength of
the economy generally, by prevailing interest rates and other factors that may
have an effect on the level of construction activity. In our opinion, the
favorable economic, interest rate and construction environments present in
October 1999 are expected to generally support strong construction spending and
thus, strong demand for our mixers in fiscal 2000. As of June 30, 1999, our
backlog in units of front-discharge concrete mixers was up 84% and our backlog
in units of rear-discharge concrete mixers was up 157% compared to June 30,
1998. The federal Transportation Equity Act for the 21(st) Century, enacted in
May 1998, represented a 40% increase in funding for transportation
infrastructure from the predecessor act. The funds from this Act are just
beginning to be authorized for spending in the second half of 1999. Much of the
increased highway and bridge construction that is expected to occur as a result
of the Act's passage will involve concrete, which is expected to create
additional demand for rear- and front-discharge concrete mixers and portable
concrete batch plants, such as those manufactured under the McNeilus and Oshkosh
brand names.

Fire and Emergency Trucks. We expect demand for new fire apparatus in the
United States to continue to grow in fiscal 2000 due to population growth and
acceleration of replacement of obsolete fire trucks with new trucks with
state-of-the-art components to utilize new fire suppression technologies, such
as compressed air foam systems, and improved rescue and safety features. Pierce,
which accounts for a substantial majority of our sales in fire and emergency
markets, has increased its sales at a compound annual growth rate of 11% per
year since 1980, including growth of 19% in fiscal 1997, 11% in fiscal 1998, and
by 12% in the nine months ended June 30, 1999. In addition to continued growth
among our traditional customers, in 1997 we implemented programs to market
Pierce's products more aggressively to larger urban fire departments and in 1999
introduced the new Contender product line geared toward cost-conscious domestic
and international customers, each of which previously were not target customers
for Pierce. We believe that the importance of fire and emergency products in
meeting municipalities' safety concerns will have a stabilizing effect on fire
truck sales in the event of future downturns in economic activity. We believe
that during downturns in economic activity in the 1980's that unit sales of fire
trucks declined by 1-2% annually, but that during downturns in the 1990's that
unit sales increased 1-2% annually.

Defense Trucks. While Department of Defense budgets have been declining in
recent years, we believe there is a growing sentiment in the U.S. Congress to
begin to increase defense spending, particularly for expenditures that maintain
defense readiness levels, such as heavy tactical trucks. In addition, the
Department of Defense commenced two medium

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tactical truck competitions in recent years, a segment of the defense truck
market we had not previously served. We were awarded an initial production
contract under the MTTR program in December 1998, which will benefit our sales
in fiscal years 2000 through 2005. We are also competing vigorously to become a
second source or sole supplier for the $15.6 billion Family of Medium Tactical
Vehicles program for the U.S. Army, which is expected to extend through the year
2020. Our contracts with the Department of Defense are generally for a specified
range of truck volumes at fixed prices, which allows us to predict and plan our
long-term production and delivery schedule for vehicles.

PRODUCTS AND MARKETS

Commercial Markets. We believe we are a leading domestic manufacturer of
refuse truck bodies for the waste services industry and of rear- and
front-discharge concrete mixers and portable concrete batch plants for the
construction industry. Through McNeilus, we manufacture a wide range of
automated rear, front, side and top loading refuse truck bodies, which we mount
on commercial chassis. With more than half of all mixers in the field bearing
the McNeilus nameplate, McNeilus is the U.S. market share leader in
rear-discharge concrete mixers. McNeilus sells its refuse vehicles primarily to
commercial waste management companies, but it is building a presence with
municipal customers such as the cities of Los Angeles and Philadelphia and in
international markets such as England. In the nine months ended June 30, 1999,
we increased our sales to municipal customers to 6% of total refuse body sales
from 3% in the twelve months ended June 30, 1998. We believe our refuse vehicles
have a reputation for efficient, cost-effective, dependable, low maintenance
operation that supports our continued expansion into municipal and international
markets. We sell rear- and front-discharge concrete mixers and portable concrete
batch plants to construction companies throughout the United States and
internationally. We believe we are one of the only domestic concrete mixer
manufacturers that markets both rear- and front-discharge concrete mixers and
portable concrete batch plants. Our mixers and batch plants are marketed on the
basis of their quality, dependability, efficiency, low maintenance and
cost-effectiveness.

Through Oshkosh/McNeilus Financial Services Partnership, an affiliated
partnership, we offer four- to seven-year tax advantaged lease financing to our
mixer and portable concrete batch plant customers and to our commercial waste
hauler customers in the United States. We offer competitive lease financing
rates and the ease of one-stop shopping for our customers' equipment and
financing. Our new lease origination volume increased by $19.7 million, or 64%,
during the nine months ended June 30, 1999 compared to the same period in 1998.

Fire and Emergency Markets. Through Pierce, we are the leading domestic
manufacturer of fire apparatus assembled on a custom chassis, which is designed
and manufactured by Pierce to meet the special needs of firefighters. Pierce
also manufactures fire apparatus assembled on a commercially available chassis,
which is produced for multiple end-customer applications. Pierce primarily
serves domestic governmental markets, but also sells fire apparatus to airports,
universities and large industrial companies, and in international markets.
Pierce's history of innovation and research and development in consultation with
firefighters has resulted in a broad product line that features a wide range of
innovative, high-quality custom and commercial firefighting equipment with
advanced fire suppression capabilities. Pierce's engineering expertise also
allows it to design its vehicles to meet stringent government regulations for
safety and effectiveness.

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We are among the leaders in the sale of aircraft rescue and firefighting
vehicles to domestic and international airports. These highly specialized
vehicles are required to be in-service at most airports worldwide to support
commercial airlines in the event of an emergency. Many of the largest airports
in the world, including LaGuardia International Airport, O'Hare International
Airport and Los Angeles International Airport in the United States and airports
in the People's Republic of China and Montreal and Toronto, Canada, are served
by our aircraft rescue and firefighting vehicles. We believe the reliability of
our aircraft rescue and firefighting vehicles contributes to our strong market
position.

We remain the leader in airport snow removal in the United States. Our
specially designed airport snow removal vehicles can cast up to 4,000 tons of
snow per hour and are used by some of the largest airports in the United States,
including Denver International Airport, LaGuardia International Airport,
Minneapolis-St. Paul International Airport and O'Hare International Airport. We
believe the reliability of our high performance snow removal vehicles and the
speed with which they clear airport runways contributes to our leading market
position. In fiscal 1999, we introduced a downsized all-wheel drive snow removal
vehicle for municipal markets to take advantage of our strong brand name and
meet the needs of heavy snow regions of the United States.

Through an independent third party finance company, we offer two- to
ten-year municipal lease financing programs to our fire and emergency customers
in the United States. We offer competitive lease financing rates, creative and
flexible finance programs and the ease of one-stop shopping for our customers'
equipment and financing.

Defense Truck Market. We have sold products to the Department of Defense
for over 70 years and are the leading manufacturer of severe-duty heavy tactical
trucks for the Department of Defense. Our proprietary military all-wheel drive
product line includes the Heavy Expanded Mobility Tactical Truck ("HEMTT"), the
Heavy Equipment Transporter ("HET"), the Palletized Load System ("PLS") and the
Logistic Vehicle System ("LVS"). We also export our severe-duty heavy tactical
trucks to approved foreign customers.

We have developed a strong relationship with the Department of Defense over
the years that has resulted in us operating under "family contracts" with the
Department of Defense for the HEMTT, HET, PLS and LVS and for Department of
Defense vehicle parts. "Family contracts" is the term given to contracts that
group similar models together to simplify the acquisition process. Under the
vehicle family contracts, the Department of Defense orders a specified range of
volume of either HET and PLS trucks or HEMTT and LVS trucks at fixed prices,
which allows us to predict and plan our long-term production and delivery
schedules for vehicles. Our current family contracts expire in fiscal years 2000
and 2001.

With the award of the MTTR contract, we have now become a major
manufacturer of medium tactical trucks for the U.S. Marine Corps. The goal of
the U.S. Marine Corps is to upgrade the current configuration to carry a much
greater payload with substantially increased cross-country mobility. These
trucks are equipped with our patented independent suspension and transfer cases,
and central tire inflation to enhance off-road performance. This program is
currently expected to include the production of 5,666 trucks with options for up
to 2,502 additional trucks. The total value of this contract could reach $1.2
billion, including the options, or $850 million, exclusive of options, over the
fiscal years 2000 through 2005. Testing of the initial ten trucks begins in
December 1999. In early 2000,

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production is scheduled to be one truck per day, ultimately increasing to eight
trucks per day in August 2001.

The U.S. Army has commenced a competition to add a second supplier to build
Family of Medium Tactical Vehicles. We received a $1.9 million contract in
October 1998 to compete with one other truck manufacturer to qualify as a second
source to produce three trucks for testing by the Department of Defense under
Phase I of its second source supplier qualification plan. The winner of the
competition would be awarded an initial Phase II production contract for
approximately 500 to 1,000 vehicles. Upon completion of this production contract
and the current supplier's present contract, the U.S. Army would conduct a
competition between these two manufacturers with the low bidder receiving 60%
and the high bidder receiving 40% of the production of approximately 50,000
Family of Medium Tactical Vehicles remaining to be produced in the program under
Phase III contracts. In August 1999, the Appropriations Committees of the U.S.
Congress commenced deliberations to consider the cancellation of the U.S. Army's
second source supplier qualification plan in favor of a direct competition
between the current supplier, our company, and another defense truck
manufacturer. The winner of the competition would receive 100% of the production
under the Family of Medium Tactical Vehicles program commencing in 2003,
following the completion of the current supplier's present contract. While the
size of either of these potential contract alternatives is substantial, we
cannot give any assurance that the Department of Defense will proceed with
either of these two competition alternatives or that federal budgets will
provide future funding for the Family of Medium Tactical Vehicles program.

Our objective is to continue to diversify into other areas of the U.S.
defense truck market by expanding applications, uses and body styles of our
current heavy and medium tactical truck lines and by competing for the next
generation of light tactical trucks, which is expected to be opened for
competition early in the next decade. As we enter the medium tactical truck and
seek to enter the light tactical truck areas of the defense market, we believe
that we have multiple competitive advantages, including:

- Proprietary components. Our patented independent suspension and transfer
cases enhance our trucks' off-road performance. In addition, because
these are two of the highest cost components in a truck, we have a
competitive cost-advantage from in-house manufacturing of these two truck
components.

- Past performance. We have been building trucks for the Department of
Defense for 70 years. We believe that our past success in delivering
reliable, high quality trucks on time, within budget and meeting
specifications, is a competitive advantage in future defense truck
procurement programs. We understand the special contract procedures in
use by the Department of Defense and have developed substantial expertise
in contract management and accounting.

- Flexible manufacturing. Our ability to produce a variety of truck models
on the same moving assembly line permits us to avoid facilitation costs
on most new contracts and maintain competitive manufacturing
efficiencies.

- Logistics. We have gained significant experience in the development of
operators' manuals and training and in the delivery of parts and services
worldwide in accordance with the Department of Defense's expectations,
which differ materially from commercial practices.

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- Truck engineering and testing. Department of Defense truck contract
competitions require significant defense truck engineering expertise to
ensure that a company's truck excels under demanding testing conditions.
We have a team of 48 engineers and draftsmen to support current business
and truck contract competitions. These personnel have significant
expertise designing new trucks, using sophisticated computer aided tools,
supporting grueling testing programs at Department of Defense test sites
and submitting detailed, comprehensive, successful contract proposals.

MARKETING, SALES AND DISTRIBUTION

We believe we differentiate ourselves from many of our larger competitors
by tailoring our distribution to meet the needs of our specialized truck markets
and from our smaller competitors with our national and global sales and service
capabilities. Distribution personnel use demonstration trucks to show customers
how to use our trucks and truck bodies properly. In addition, our flexible
distribution is focused on meeting customers on their terms, whether at a job
site, an evening public meeting or a municipality's offices, compared to the
showroom sales approach of the typical dealers of large truck manufacturers. We
back all products by same-day parts shipment, and our service technicians are
available in person or by telephone to domestic customers 365 days a year. We
believe that our dedication to keeping our trucks in-service in demanding
conditions worldwide has contributed to customer loyalty.

We provide our salespeople, representatives and distributors with product
and sales training on the operation and specifications of our products. Our
engineers, along with our product managers, develop operating manuals and
provide field support at truck delivery for some markets.

Dealers and representatives, where used, enter into agreements with us that
allow for termination by either party generally upon 90 days' notice. Dealers
and representatives are not permitted to market and sell competitive products.

Commercial Markets. We operate fifteen distribution centers with 95
in-house sales and service representatives in the United States to sell and
service our refuse truck bodies, rear- and front-discharge concrete mixers and
concrete batch plants. We also use one independent distributor for
front-discharge concrete mixers. Eleven of our distribution centers provide
sales, service and parts distribution to customers in their geographic regions.
Four of the distribution centers also have paint facilities and provide
significant additional paint and mounting services during peak demand periods.
Two of the centers also manufacture concrete mixer replacement barrels. We
believe that this network represents one of the largest refuse truck body and
concrete mixer distribution networks in the United States. In fiscal 2000, we
plan on adding one additional distribution center and to begin manufacturing
concrete mixer replacement barrels at a third center.

We believe that our direct distribution to customers is a competitive
advantage in commercial markets, particularly in the waste services industry
where our principal competitors distribute through dealers and to a lesser
extent in the ready-mix concrete industry, where several competitors in part use
dealers. In addition to the avoidance of dealer commissions, we believe that
direct distribution permits a more focused sales force in refuse body markets
where the dealers frequently offer a very broad product line, and accordingly,
the time they devote to refuse body sales activities is limited.

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With respect to our commercial market distribution efforts, we have begun
to:

- Apply Oshkosh's and Pierce's sales and marketing expertise in municipal
markets to increase sales of McNeilus refuse truck bodies to municipal
customers. Prior to our acquisition of McNeilus, virtually all McNeilus
refuse truck body sales were to commercial customers. While we believe
that commercial customers represent a majority of the refuse truck body
market, many municipalities purchase their own refuse trucks. We believe
that we are positioned to create an effective municipal distribution
system in the refuse truck body market by leveraging our existing
municipal distribution capabilities and by opening service centers in
major metropolitan markets. We opened two centers in fiscal 1999.
Following its acquisition and new focus in municipal markets, McNeilus
has been awarded new business for the City of Los Angeles and has
targeted other major metropolitan areas.

- Offer McNeilus refuse truck bodies, rear-discharge concrete mixers and
ready-mix batch plants to Oshkosh's international representatives and
dealers for sales and service worldwide. McNeilus' international sales
have historically been limited because McNeilus has focused on the
domestic market. However, we believe that refuse body exports are a
significant percentage of some competitors' sales and represent a
meaningful opportunity for us. We are training our international Oshkosh
and Pierce representatives and dealers to sell and service the McNeilus
product line and have commenced sales of McNeilus products through these
representatives and dealers in the first sixteen months following the
acquisition. We have also been actively recruiting new refuse and
rear-discharge concrete mixer representatives and dealers worldwide.

Fire and Emergency Market. We believe that the geographical breadth, size
and quality of our fire apparatus sales and service organization are competitive
advantages in a market characterized by a few large manufacturers and numerous
small, regional competitors. Pierce's fire apparatus are sold through 37
indirect sales and service organizations with more than 240 sales
representatives nationwide, which combine broad geographical reach with
frequency of contact with fire departments and municipal government officials.
These sales and service organizations are supported by 65 product and marketing
support professionals and contract administrators at Pierce. We believe that
frequency of contact and local presence are important to cultivate major, and
typically infrequent, purchases involving the city or town council and fire
department, purchasing, finance and mayoral offices, among others, that may
participate in a fire truck bid and selection. After the sale, Pierce's
nationwide local parts and service capability is available to help
municipalities maintain peak readiness for this vital municipal service.

Pierce primarily focused its sales efforts in rural and small suburban
domestic markets prior to its acquisition by us. Due to our expertise and
long-standing relationships in numerous large urban markets, we have extended
Pierce's sales focus into several key metropolitan areas. As a result of this
focus, Pierce has been awarded new business since we acquired Pierce in the
cities of Los Angeles, California; Richmond, Virginia; Tampa and Miami, Florida;
and Honolulu, Hawaii; among other major cities, and continues to target other
urban markets.

Prior to its acquisition by us, Pierce had targeted premium-priced markets
where it could use its innovative technology, quality and advanced customization
capabilities. In January 1999, Pierce also began targeting price sensitive
domestic and international

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markets through the introduction of its Contender series of lower-priced
commercial and custom pumpers. These limited-option vehicles are being produced
in our Bradenton, Florida facility for lower cost delivery to international
customers.

Pierce substantially strengthened its competitive position overseas in
fiscal 1998 and 1999. Pierce's worldwide distribution network was expanded from
one to 25 international representatives and dealers. This network has delivered
several new orders in fiscal 1998 and 1999 from government agencies and private
companies in Egypt, the Philippines, Latin America and South Africa, among other
countries.

We have invested in the development of sales tools for our representatives
that we believe create a competitive advantage in the sale of fire apparatus.
For example, Pierce's Pride 2000 PC-based sales tool can be used by its sales
representatives to develop the detail specifications, price the base truck and
options and draw the configured truck on the customer's premises. The quote, if
accepted, is transmitted directly into Pierce's sales order systems.

Our aircraft rescue and firefighting vehicles are marketed through a
combination of three direct sales representatives domestically and 53
representatives and dealers in international markets. In addition, we maintain
23 full-time sales and service representative and dealer organizations which
have over 100 sales people focused on the sale of snow removal vehicles,
principally to airports, but also to municipalities, counties and other
governmental entities.

Defense Market. Substantially all domestic defense products are sold
directly to principal branches of the Department of Defense. We maintain a
liaison office in Washington, D.C. to represent our interests with the Pentagon,
Congress and offices of the Executive Branch. We also sell and service defense
products to foreign governments directly through four international sales
offices, through dealers, consultants and representatives, and through the U.S.
Foreign Military Sales program. The Department of Defense has begun to rely on
industry for support and sustainability of its vehicles which has opened up new
opportunities for maintenance, service and contract support to the U.S. Army and
U.S. Marine Corps.

We maintain a marketing staff of four individuals that regularly meets with
all branches of the Armed Services, Reserves and National Guard and with
representatives of key military bases to determine their vehicle requirements
and identify specialty truck variants and apparatus required to fulfill their
missions.

In addition to marketing our current truck offerings and competing for new
contracts in the medium- and light-duty segments, we actively work with the
Armed Services to develop new applications for our vehicles and expand our
services.

MANUFACTURING

We manufacture trucks and truck bodies at eleven manufacturing facilities.
We encourage employee involvement to improve production processes and product
quality. In order to reduce production costs, we maintain a continuing emphasis
on the development of proprietary components, self-sufficiency in fabrication,
just-in-time inventory management, improvement in production flows,
interchangeability and simplification of components among product lines,
creation of jigs and fixtures to ensure repeatability of quality processes,
utilization of robotics, and performance measurement to assure progress toward

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cost reduction targets. We also employ a team of industrial engineers that
travel to all plants to study and streamline work flows.

We have continually upgraded our manufacturing capabilities by adopting
best practices across our manufacturing facilities, relocating manufacturing
activities to the most efficient facility, investing in further fixturing and
robotics, re-engineering manufacturing processes and adopting lean manufacturing
management practices across all facilities.

We are drawing upon our recent experience with the Pierce acquisition in
integrating the McNeilus manufacturing facilities. Within the first year
following the Pierce acquisition, we consolidated three Pierce manufacturing
facilities down to two while increasing Pierce's capacity by improving product
flow. In addition, among other things, we reduced the number of operating shifts
at the Pierce paint plant from three to one to substantially reduce utility
costs, implemented indexing of production lines and relocated chassis frame
build-up activities to Oshkosh to improve production efficiencies, and
eliminated storage rooms to relocate inventory to point of use thereby
eliminating duplicate material handling. Likewise, at McNeilus, we have
installed seven additional robots and re-arranged weld and mount activities. In
the summer of 1999, we began construction of a 100,000 square foot, $8.3 million
expansion at our Dodge Center, Minnesota facility, which expands our paint
capacity and doubles our refuse body manufacturing capacity. The primary purpose
of the expansion is to construct two moving assembly lines with robotic welders
to significantly reduce the manufacturing costs of refuse bodies.

In 1994, we began a program to educate and train all employees at our
Oshkosh facilities in quality principles and to seek ISO 9001 certification to
improve our competitiveness in our global markets. ISO 9001 is a set of
internationally accepted quality requirements established by the International
Organization for Standardization, which indicates that a company has established
and follows a rigorous set of requirements aimed at achieving customer
satisfaction by preventing nonconformity in design, development, production,
installation and servicing of products. Employees at all levels of our company
are encouraged to understand customer and supplier requirements, measure
performance, develop systems and procedures to prevent nonconformance with
requirements and produce continuous improvement in all work processes. Oshkosh
achieved ISO 9001 certification in 1995, and Pierce achieved ISO 9001
certification in March 1998. We are evaluating whether to pursue ISO 9001
certification for McNeilus. Although we do not consider this certification
essential for McNeilus' domestic markets, we may conclude it is valuable in
marketing to some international customers.

ENGINEERING, RESEARCH AND DEVELOPMENT

Our extensive engineering, research and development capabilities have been
key drivers of our marketplace success. We maintain three facilities for new
product development and testing with a staff of 51 engineers and technicians who
are responsible for improving existing products and development and testing of
new trucks, truck bodies and components. We prepare annual new product
development and improvement plans for each of our markets and measure progress
against those plans each month.

Virtually all of our sales of fire and emergency vehicles require some
custom engineering to meet the customer's specifications and changing industry
standards. Engineering is also a critical factor in defense truck markets due to
the severe operating conditions under which our trucks are used, new customer
requirements and stringent

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government documentation requirements. In the commercial markets, product
innovation is highly important to meet customers' changing requirements.
Accordingly, we maintain a permanent staff of over 300 engineers and engineering
technicians, and we regularly outsource significant engineering activities in
connection with major Department of Defense bids and proposals.

We incurred engineering, research and development expenditures of $6.3
million in fiscal 1996, $7.8 million in fiscal 1997 and $9.7 million in fiscal
1998, portions of which were recoverable from customers, principally the U.S.
government.

COMPETITION

We operate in highly competitive industries. We compete in the fire
apparatus and defense truck markets principally on the basis of lowest qualified
bid. To submit a qualified bid, the bidder must demonstrate that the fire
apparatus or defense truck meets stringent specifications and, for most defense
truck contracts, passes extensive testing. In addition, decreases in the
Department of Defense budget have resulted in a reduction in the number and size
of contracts, which has intensified the competition for remaining available
contracts. We and our competitors continually undertake substantial marketing,
technical and legislative actions in order to maintain existing levels of
defense business. In the refuse truck body and concrete mixer markets, we also
face intense competition on the basis of price, innovation, quality, service and
product performance. As we seek to expand our sales of refuse truck bodies to
municipal customers, we believe the principal basis of competition for that
business will be lowest qualified bid.

In all of our markets, competitors include smaller, specialized
manufacturers as well as large, mass producers. We believe that, in our
specialized truck markets, we have been able to effectively compete against
large mass producers because of our product quality, flexible manufacturing and
specialized distribution systems. We believe that our competitive cost
structure, engineering expertise, product quality and global distribution
systems have enabled us to compete effectively with other smaller, specialized
manufacturers.

Principal competitors of McNeilus in the refuse truck body market include
The Heil Company (a subsidiary of Dover Corporation), Leach Company and McClain
E-Z Pack, Inc. Principal competitors of McNeilus and Oshkosh in concrete mixer
markets include Advance Mixer, Inc., London Machinery, Inc., Rexworks, Inc. and
T.L. Smith Machine Co., Inc. Pierce's principal competitors in the fire
apparatus market include Emergency One, Inc. (a subsidiary of Federal Signal
Corporation), Kovatch Mobile Equipment Corp. and numerous small, regional
manufacturers. Oshkosh's principal competitor in the airport snow removal market
is Stewart & Stevenson Services, Inc. Oshkosh's principal competitor for
aircraft rescue and firefighting sales is Emergency One, Inc. Oshkosh's
principal competitors for Department of Defense contracts include AM General
Corporation and Stewart & Stevenson Services, Inc.

Several of our competitors have greater financial, marketing, manufacturing
and distribution resources than us. There can be no assurance that our products
will continue to compete successfully with the products of competitors or that
we will be able to retain our customer base or to improve or maintain our profit
margins on sales to our customers, all of which could adversely affect our
financial condition, profitability and cash flows.

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CUSTOMERS AND BACKLOG

Sales to the Department of Defense comprised approximately 28% of our net
sales for fiscal 1998 and 18% of our net sales for the nine months ended June
30, 1999. No other single customer accounted for more than 2% of our net sales
for these periods. A substantial majority of our net sales are derived from
customer orders prior to commencing production.

Our backlog at June 30, 1999 was $500 million compared to $421 million at
June 30, 1998. The backlog at June 30, 1999 includes $174 million with respect
to U.S. government contracts, including $45 million for the funded portion of
the MTTR contract, $200 million with respect to fire and emergency apparatus and
$126 million with respect to commercial products. Approximately 49% of our
backlog will not be filled in fiscal 1999.

Reported backlog excludes purchase options and announced orders for which
definitive contracts have not been executed. Additionally, backlog excludes
unfunded portions of Department of Defense long-term family contracts. Backlog
information and comparisons thereof as of different dates may not be accurate
indicators of future sales or the ratio of our future sales to the Department of
Defense versus our sales to other customers.

GOVERNMENT CONTRACTS

Approximately 28% of our net sales for fiscal 1998 and 18% of our net sales
for the nine months ended June 30, 1999 were made to the U.S. government under
long-term contracts and programs, substantially all of which were in the defense
truck market. Assuming all options to purchase vehicles are exercised under the
MTTR contract, MTTR sales would increase from $26 million in fiscal 2000 to a
peak of approximately $300 million in fiscal 2002 and 2003 and would aggregate
up to $1.2 billion over the fiscal years 2000-2005. Accordingly, a significant
portion of our sales are subject to risks specific to doing business with the
U.S. government, including changes in government policies and requirements that
may reflect rapidly changing military and political developments and the
availability of funds.

Our sales into defense truck markets are substantially dependent upon
periodic awards of new contracts, the purchase of base vehicle quantities and
the exercise of options under existing contracts. Our existing contracts with
the Department of Defense may be terminated at any time for the convenience of
the government. Upon such a termination, we would generally be entitled to
reimbursement of our incurred costs and, in general, to payment of a reasonable
profit for work actually performed.

Under firm fixed-price contracts with the government, the price paid to us
is generally not subject to adjustment to reflect our actual costs, except costs
incurred as a result of contract changes ordered by the government. We generally
attempt to negotiate with the government the amount of increased compensation to
which we are entitled for government-ordered changes that result in higher
costs. If we are unable to negotiate a satisfactory agreement to provide
increased compensation, then we may file an appeal with the Armed Services Board
of Contract Appeals or the U.S. Claims Court. We have none of these appeals
pending. We seek to mitigate our risks with respect to our fixed price contracts
by executing firm fixed price contracts with qualified suppliers for the
duration of our contracts.

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SUPPLIERS

We are highly dependent on our suppliers and subcontractors in order to
meet our commitments to our customers, and many major components and assembled
units, such as engines, transmissions, flatracks and trailers, are procured or
subcontracted on a sole-source basis with a number of domestic and foreign
companies. Through our reliance on this supply network for such purchases, we
are able to avoid many of the preproduction and fixed costs associated with the
manufacture of those components and assembled units. We maintain an extensive
qualification, on-site inspection and assistance and performance measurement
system to control risks associated with our reliance on suppliers. We
occasionally experience problems with supplier and subcontractor performance and
must identify alternate sources of supply and/or address related warranty and
delivery claims from customers.

While we purchase many costly components such as engines, transmissions and
axles, we manufacture some proprietary components that are deemed material to
our business. These components include front drive and steer axles, transfer
cases, cabs, the ALL-STEER electronic all-wheel steering system, independent
suspension, the Sky-Arm articulating aerial ladder, the McNeilus Auto Reach Arm,
the Hercules compressed air foam systems, the Command Zone proprietary
multiplexing system, body structures and many smaller parts which add uniqueness
and value to our products. Some of these proprietary components are marketed to
other manufacturers. Our internal production of these components provides a
significant competitive advantage and also serves to reduce the manufacturing
costs of our products.

INTELLECTUAL PROPERTY

Patents and licenses are important in the operation of our business, as one
of our key objectives is developing proprietary components in order to provide
our customers with advanced technological solutions at attractive prices. We
hold in excess of 80 active domestic and 50 foreign patents. We believe patents
for all-wheel steer and independent suspension systems, which have remaining
lives of 9 to 14 years, provide us with a competitive advantage in the fire and
emergency markets. The independent suspension system was also added to the U.S.
Marine Corps portion of the MTTR program, which, in our opinion, provided a
performance and cost advantage in our successful competition for the Phase II
production contract. While other proprietary components provide us a competitive
advantage, we believe that none of our other patents individually are
significant to the business.

We hold trademarks for "Oshkosh," "McNeilus" and "Pierce." We consider
these trademarks to be important to the future success of our business.

EMPLOYEES

As of June 30, 1999, we had approximately 3,900 employees, of which
approximately 1,400 were employees of Oshkosh, 1,100 were employees of McNeilus
and 1,400 were employees of Pierce. Production workers totaling approximately
800 employees at our Oshkosh facilities are represented by the United Auto
Workers union. Our five-year contract with the United Auto Workers union extends
through September 30, 2001. We believe our relationship with employees is good.

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PROPERTIES

We believe our equipment and buildings are modern, well-maintained and
provide adequate capacity for our present and anticipated needs. As of June 30,
1999, we operated in eleven manufacturing facilities and owned another facility
that was not in use. The location, size and focus of our facilities is provided
in the table below.

[Download Table]

APPROXIMATE
SQUARE FOOTAGE
----------------- PRINCIPAL
LOCATION (# OF FACILITIES) OWNED LEASED PRODUCTS MANUFACTURED
-------------------------- ------- ------ ------------------------------

Oshkosh, Wisconsin(3)......... 688,000 Defense Trucks;
Front-Discharge Mixers; Snow
Removal Vehicles; Aircraft
Rescue and Firefighting
Vehicles
Appleton, Wisconsin(2)........ 589,000 19,000 Fire Apparatus
Dodge Center, Minnesota(1).... 612,000 Rear-Discharge Mixers; Refuse
Truck Bodies; Portable
Concrete Batch Plants
Bradenton, Florida(1)......... 287,000 Fire Apparatus; Defense Trucks
and Truck Bodies
Riceville, Iowa(1)............ 108,000 Components for Rear-Discharge
Mixers and Refuse Truck Bodies
Kensett, Iowa(1).............. 65,000 Not currently in use
McIntire, Iowa(1)............. 28,000 Components for Rear-Discharge
Mixers and Refuse Truck Bodies
Weyauwega, Wisconsin(1)....... 28,000 Refurbished Fire Apparatus
Ontario, California(1)........ 23,000 Refurbished Fire Apparatus

Our manufacturing facilities generally operate five days per week on one or
two shifts, except for one-week shutdowns in July and December. We believe our
manufacturing capacity could be significantly increased with limited capital
spending by working an additional shift at each facility.

In addition to sales and service activities at our manufacturing
facilities, we maintain fifteen sales and service centers in the United States.
We own such facilities in Colton, California; Commerce City, Colorado; Villa
Rica, Georgia; Lithia Springs, Georgia; Hutchins, Texas; Morgantown,
Pennsylvania; Gahanna, Ohio; Dodge Center, Minnesota; Bradenton, Florida; and
Oshkosh, Wisconsin. We lease such facilities in Milpitas, California; Tacoma,
Washington; Salt Lake City, Utah; Aurora, Illinois; and East Granby,
Connecticut. These facilities range in size from approximately 3,000 square feet
to approximately 46,000 square feet and are used primarily for sales and service
of concrete mixers and refuse bodies.

Our facilities are pledged as collateral under the terms of our senior
credit facility.

LEGAL PROCEEDINGS

We were engaged in litigation against Super Steel Products Corporation, our
former supplier of mixer systems for front-discharge concrete mixer trucks under
a long-term supply contract. Super Steel sued us in state court claiming we
breached the contract. We counterclaimed for repudiation of contract. On July
26, 1996, a jury returned a verdict for Super Steel awarding damages totaling
$4.5 million. On October 10, 1996, the state court
43

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judge overturned the verdict against us, granted judgment for us on our
counterclaim, and ordered a new trial for damages on our counterclaim. Both
parties appealed the state court judge's decision. On December 8, 1998, the
Wisconsin Court of Appeals ordered a state court judge to reinstate the jury
verdict against us awarding damages totaling approximately $4.5 million plus
interest to Super Steel. On April 6, 1999, our petition for review of this
decision by the Wisconsin Supreme Court was denied. On April 12, 1999, we
petitioned the state court judge to act on our previous motion for a retrial.
The petition was denied on June 18, 1999 and the state court directed that
judgment be entered. In lieu of further appeals, we paid $5.75 million on July
27, 1999 in final settlement of the matter. We had recorded a liability for the
full amount of the final settlement at June 30, 1999.

In addition, patent infringement cases are brought against us from time to
time, and some cases are presently pending. Although we believe that our
products do not infringe upon a valid claim of any patent and that we have
meritorious defenses to each presently pending lawsuit, we cannot predict the
outcomes of any of these lawsuits.

ENVIRONMENTAL MATTERS

We are subject to federal, state and local environmental laws and
regulations that impose limitations on the discharge of pollutants into the
environment and establish standards for the treatment, storage and disposal of
toxic and hazardous wastes. As part of our routine business operations, we
dispose of and recycle or reclaim industrial waste materials, chemicals and
solvents at third party disposal and recycling facilities that are licensed by
appropriate governmental agencies. In some instances, these facilities have been
and may be designated by the United States Environmental Protection Agency or a
state environmental agency for remediation. Under Comprehensive Environmental
Response, Compensation, and Liability Act (the "Superfund" law) and similar
state laws, each potentially responsible party that contributed hazardous
substances may be jointly and severally liable for the costs associated with
cleaning up the site. Typically, potentially responsible parties negotiate a
resolution with the Environmental Protection Agency and/or the state
environmental agencies. Potentially responsible parties also negotiate with each
other regarding allocation of the cleanup cost.

As to one such Superfund site, Pierce is one of 414 potentially responsible
parties participating in the costs of addressing the site and has been assigned
an allocation share of approximately 0.04%. Currently a remedial
investigation/feasibility study is being completed, and as such, an estimate for
the total cost of the remediation of this site has not been made to date.
However, based on estimates and the assigned allocations, we believe our
liability at the site will not be material and our share is adequately covered
through reserves established by us at June 30, 1999. Our actual liability could
vary based on results of the study, the resources of other potentially
responsible parties and our final share of liability.

As to another Superfund site, Pierce and Oshkosh are two of approximately
1,450 customers of one of the potentially responsible parties that has received
notification as a potentially responsible party. No further evidence concerning
the site, its environmental issues or any other information has been furnished
to us. We believe that it will be a de minimis level potentially responsible
party, if any liability is established, so that any liability will not be
material. Our actual liability could vary based upon subsequently available
information.

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We are addressing a regional trichloroethylene groundwater plume on the
south side of Oshkosh, Wisconsin. We believe there may be multiple sources in
the area. Trichloroethylene was detected at our North Plant facility with recent
testing showing the highest concentrations in a monitoring well located on the
upgradient property line. Because the investigation process is still ongoing, it
is not possible for us to estimate our long-term total liability associated with
this issue at this time. Also, as part of the regional trichloroethylene
groundwater investigation, we conducted a groundwater investigation of a former
landfill located on our property. The landfill, acquired by us in 1972, is
approximately 2.0 acres in size and is believed to have been used for the
disposal of household waste. Based on the investigation, we do not believe the
landfill is one of the sources of the trichloroethylene contamination. Based
upon current knowledge, we believe our liability associated with the
trichloroethylene issue will not be material and is adequately covered through
reserves established by us at June 30, 1999. However, this may change as
investigations proceed by us, other unrelated property owners, and government
entities.

We are subject to other environmental matters and legal proceedings and
claims, including patent, antitrust and state dealership regulation compliance
proceedings. Although the final results of all such claims cannot be predicted
with certainty, we believe that the ultimate resolution of all claims, after
taking into account the liabilities accrued with respect to such claims, will
not have a material adverse effect on our financial condition, profitability or
cash flows. Actual results could vary, among other things, due to the
uncertainties involved in litigation.

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MANAGEMENT AND BOARD OF DIRECTORS

The following table sets forth information as of August 31, 1999 concerning
our executive officers and Directors. All of our officers serve terms of one
year and until their successors are elected and qualified. Each of our Directors
are elected each year to serve for a term of one year and until his or her
successor is elected and qualified.

[Download Table]

NAME AGE TITLE
---- --- ----------------------------------------

Robert G. Bohn.................. 46 President, Chief Executive Officer and
Director
Timothy M. Dempsey.............. 59 Executive Vice President, General
Counsel and Secretary
Paul C. Hollowell............... 58 Executive Vice President and President,
Defense Business
Charles L. Szews................ 42 Executive Vice President and Chief
Financial Officer
Matthew J. Zolnowski............ 46 Executive Vice President, Corporate
Administration
Dan J. Lanzdorf................. 51 Executive Vice President and President,
McNeilus Companies, Inc.
John W. Randjelovic............. 54 Executive Vice President and President,
Pierce Manufacturing Inc.
J. William Andersen............. 61 Director
Daniel T. Carroll............... 73 Director and Chairman of the Board of
Directors
Gen. Frederick M. Franks, 62 Director
Jr. ..........................
Michael W. Grebe................ 58 Director
Kathleen J. Hempel.............. 48 Director
J. Peter Mosling, Jr. .......... 55 Director
Stephen P. Mosling.............. 52 Director
Richard G. Sim.................. 55 Director

Robert G. Bohn. Mr. Bohn joined us in 1992 as Vice President-Operations. He
was appointed President and Chief Operating Officer in 1994. He was appointed
President and Chief Executive Officer in October 1997. Prior to joining us, Mr.
Bohn was Director-European Operations for Johnson Controls, Inc., Milwaukee,
Wisconsin, which manufactures, among other things, automotive products. He
worked for Johnson Controls from 1984 until 1992. He was elected a Director in
June 1995. Mr. Bohn is also a director of Graco Inc.

Timothy M. Dempsey. Mr. Dempsey joined us in October 1995 as Vice
President, General Counsel and Secretary. Mr. Dempsey has been and continues to
be a partner in the law firm of Dempsey, Magnusen, Williamson and Lampe in
Oshkosh, Wisconsin.

Paul C. Hollowell. Mr. Hollowell joined us in April 1989 as Vice
President-Defense Products and assumed his present position in February 1994.

Charles L. Szews. Mr. Szews joined us in March 1996 as Vice President and
Chief Financial Officer and assumed his present position in October 1997. Mr.
Szews was previously employed by Fort Howard Corporation, a manufacturer of
tissue products, from June 1988 until March 1996 in various positions, including
Vice President and Controller from September 1994 until March 1996.

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Matthew J. Zolnowski. Mr. Zolnowski joined us as Vice President-Human
Resources in January 1992 and assumed his present position in September 1998.

Dan J. Lanzdorf. Mr. Lanzdorf joined us in 1973 as a design engineer and
has served in various assignments including Chief Engineer -- Defense, Director
of Defense Engineering, Director of the Defense Business unit, and Vice
President of Manufacturing prior to assuming his current position in September
1998.

John W. Randjelovic. Mr. Randjelovic joined us in October 1992 as Vice
President and General Manager in charge of the Bradenton, Florida Division. In
September 1996, he was appointed Vice President of Manufacturing, Purchasing,
and Materials for Pierce and assumed his present position in October 1997.

J. William Andersen. Mr. Andersen has served as a Director since 1976 and
had been the Executive Director of Development, University of Wisconsin-Oshkosh
from 1980 through his retirement in 1994.

Daniel T. Carroll. Mr. Carroll has served as Director since 1991. In
October 1997, he was elected Chairman of our Board of Directors. He is Chairman
of The Carroll Group, a management consulting firm located in Avon, Colorado.
Mr. Carroll is also a director of Wolverine World Wide, Incorporated; Comshare,
Inc.; Aon Corp.; A.M. Castle & Company; American Woodmark Corporation; and
Woodhead Industries, Inc.

Gen. Frederick M. Franks, Jr. Gen. Franks has served as a Director since
1997. He was the Commander of the U.S. Army Training and Doctrine Command from
1991 to 1994 and commanded the U.S. Army VII Corps during Operation Desert
Storm. He retired from the Army in 1994.

Michael W. Grebe. Mr. Grebe has served as a Director since 1990. He has
been a partner in the law firm of Foley & Lardner in Milwaukee since 1977. We
retained Mr. Grebe's firm for legal services in fiscal 1999 and will similarly
do so in fiscal 2000.

Kathleen J. Hempel. Ms. Hempel has served as a Director since 1997. She was
Vice Chairman and Chief Financial Officer of Fort Howard Corporation, Green Bay,
Wisconsin, a manufacturer of tissue products, from 1992 until its merger into
Fort James Corporation in 1997. She is a director of A. O. Smith Corporation and
Whirlpool Corporation.

J. Peter Mosling, Jr. Mr. Mosling has served as a Director since 1976,
having joined us in 1969. He has served in various senior executive capacities
since joining us through his retirement in 1994.

Stephen P. Mosling. Mr. Mosling has served as a Director since 1976, having
joined us in 1971. He had served in various senior executive capacities since
joining us through his retirement in 1994.

Richard G. Sim. Mr. Sim has served as a Director since 1997. He is
Chairman, President and Chief Executive Officer of Applied Power, Inc., Butler,
Wisconsin, which manufactures hydraulic and electrical tools and supplies,
engineered components and electrical enclosure systems. He is a member of its
Board of Directors. He also is a director of Ipsco, Inc.

Stephen P. Mosling and J. Peter Mosling, Jr. are brothers. Other than as
noted, none of our Directors or executive officers has any family relationship
with any other Director or executive officer.

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DESCRIPTION OF CAPITAL STOCK

Our Restated Articles of Incorporation provide that we have authority to
issue 18,000,000 shares of common stock, 1,000,000 shares of class A common
stock, and 2,000,000 shares of preferred stock. As of September 30, 1999, we had
12,404,170 shares of common stock issued and outstanding, 425,985 shares of
class A common stock issued and outstanding and no shares of preferred stock
issued and outstanding. We will have 15,704,170 shares of common stock
outstanding after the offering. All of the outstanding shares are fully paid and
nonassessable, and the shares of common stock being sold by us will, upon
completion of the offering, be fully paid and nonassessable, except in each case
for statutory liability under Section 180.0622(2)(b) of the Wisconsin Business
Corporation Law for unpaid employee wages.

The following summary of some provisions of our common stock and preferred
stock is not complete. You should refer to our Restated Articles of
Incorporation, which are incorporated by reference as an exhibit to the
registration statement of which this prospectus is a part, and applicable law
for more information.

COMMON STOCK

Dividends. We must pay dividends on both our class A common stock and our
common stock at any time that we pay dividends on either. Whenever we pay any
dividends, other than dividends of our stock, on our stock, each share of common
stock is entitled to receive 115% of the dividend paid on each share of our
class A common stock, rounded up or down to the nearest $0.0025.

Voting Rights. Holders of our common stock have the right to elect or
remove as a class 25% of our entire Board of Directors, rounded to the nearest
whole number of Directors, but not less than one. Holders of our common stock
are not entitled to vote on any other corporate matters, except as may be
required by law in connection with some significant actions such as mergers and
amendments to our Restated Articles of Incorporation, and are entitled to one
vote per share on all matters upon which they are entitled to vote. Holders of
our class A common stock are entitled to elect the remaining Directors, subject
to any rights granted to any series of preferred stock, and are entitled to one
vote per share for the election of Directors and on all other matters presented
to the shareholders for vote.

Liquidation Rights. Upon our liquidation, dissolution or winding up, and
after distribution of any amounts due to holders of our preferred stock, holders
of our common stock are entitled to receive $5.00 per share before any payment
or distribution to holders of class A common stock. Thereafter, holders of class
A common stock are entitled to receive $5.00 per share before any further
payment or distribution to holders of our common stock. The $5.00 amounts will
be adjusted for stock splits, stock dividends or similar events involving shares
of our stock. Thereafter, holders of our class A common stock and common stock
share on a pro-rata basis in all payments or distributions upon our liquidation,
dissolution or winding up.

Conversion. Each share of our class A common stock is convertible into one
share of our common stock at any time at the holder's option. We have a stock
restriction agreement with Stephen P. Mosling and J. Peter Mosling, Jr., who own
the majority of our class A common stock, that provides that, upon the death or
the incapacity of both of them, they or their legal representatives and trustees
will act to eliminate our class A

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common stock, so that we will have only one class of issued and outstanding
common equity. Also, if Messrs. Mosling together own less than 150,000 shares of
class A common stock for any reason, all then outstanding shares of our class A
common stock will be converted into shares of our common stock. From and after
that time, the existing differences between the rights of our class A common
stock relative to those of our common stock, with respect to dividends, rights
upon our liquidation and voting rights will be eliminated, and all shares of our
common stock will generally have the same rights with respect to voting,
dividends and upon liquidation.

Other Terms. We generally do not have authority to issue new shares of our
class A common stock without approval of our shareholders. None of our
shareholders have preemptive or other rights to subscribe for additional shares.
No class of common stock is subject to redemption. Section 180.1150 of the
Wisconsin Business Corporation Law is inapplicable to us until Messrs. Mosling
together own less than 150,000 shares of our class A common stock. Section
180.1150 provides that the voting power of shares of Wisconsin corporations such
as us held by any person or persons acting as a group in excess of 20% of the
voting power in the election of directors is limited to 10% of the full voting
power of those shares. This restriction does not apply to shares acquired
directly from us or in specified transactions or shares for which full voting
power has been restored pursuant to a vote of shareholders. Messrs. Mosling have
full voting power with respect to their shares of our class A common stock.

Transfer Agent. The transfer agent for our common stock is Firstar Bank, N.
A., Milwaukee, Wisconsin.

PREFERRED STOCK

Our Restated Articles of Incorporation authorize our Board of Directors to
issue our preferred stock in series and to fix the variations in the powers,
preferences, rights, qualifications, limitations or restrictions of any series
with respect to the rate and nature of dividends, the price and terms and
conditions on which shares may be redeemed, the amount payable in the event of
our voluntary or involuntary liquidation, any sinking fund provisions for
redemption or repurchase of shares, the terms and conditions for conversion into
any other class or series of our stock and voting rights.

In connection with the issuance of the rights described below, our Board of
Directors has authorized a series of our preferred stock designated as series A
junior participating preferred stock. Shares of our series A junior
participating preferred stock purchasable upon the exercise of the rights will
not be redeemable. Each share of our series A junior participating preferred
stock will be entitled to a minimum preferential quarterly dividend payment of
$1.00 per share but will be entitled to an aggregate dividend of 150 times the
dividend we declare per share of our common stock. In the event of our
liquidation, the holders of the shares of our series A junior participating
preferred stock will be entitled to a minimum aggregate payment of $100 per
share but will be entitled to an aggregate payment of 150 times the payment we
make per share of our common stock. Each share of our series A junior
participating preferred stock will have 150 votes, voting together with our
common stock. Finally, in the event of any merger, consolidation or other
transaction in which shares of our common stock are exchanged, each share of our
series A junior participating preferred stock will be entitled to receive 150
times the amount received per share of our common stock. These rights are
protected by customary antidilution

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provisions. There are no shares of our series A junior participating preferred
stock currently outstanding.

The issuance of any series of our preferred stock, including the series A
junior participating preferred stock, may have an adverse effect on the rights
of holders of our common stock, and could decrease the amount of earnings and
assets available for distribution to holders of our common stock. In addition,
any issuance of our preferred stock could have the effect of delaying, deferring
or preventing a change in control.

PREFERRED SHARE PURCHASE RIGHTS

We have entered into a Rights Agreement dated as of February 1, 1999, with
Firstar Bank, N. A., pursuant to which each outstanding share of our common
stock, including the shares being sold by us in the offering, has attached
two-thirds of a right to purchase shares of our series A junior participating
preferred stock and each outstanding share of our class A common stock has
attached 40/69 of a right. Each share of our common stock subsequently issued by
us prior to the expiration of the Rights Agreement will likewise have attached
two-thirds of a right and each share of our class A common stock subsequently
issued will have attached 40/69 of a right. Under circumstances described below,
the rights will entitle the holder thereof to purchase additional shares of our
common stock. In this prospectus, unless the context otherwise requires, all
references to our common stock include the accompanying rights.

Currently, the rights are not exercisable and trade with our common stock
and class A common stock. If the rights become exercisable, each right, unless
held by a person or group which beneficially owns more than 15% of our
outstanding common stock and class A common stock in the aggregate, will
initially entitle the holder to purchase one one-hundredth of a share of our
series A junior participating preferred stock at a purchase price of $145,
subject to adjustment. The rights will only become exercisable if a person or
group has acquired, or announced an intention to acquire, 15% or more of our
outstanding common stock and class A common stock in the aggregate. Under some
circumstances, including the existence of a 15% acquiring party, each holder of
a right, other than the acquiring party, will be entitled to purchase at the
right's then-current exercise price, shares of our common stock having a market
value of two times the exercise price. If another corporation acquires us after
a party acquires 15% or more of our common stock, each holder of a right will be
entitled to receive the acquiring corporation's common shares having a market
value of two times the exercise price. The rights may be redeemed at a price of
$.01 until a party acquires 15% or more of our common stock, and after that time
may be exchanged for one share of our common stock per right until a party
acquires 50% or more of our common stock. The rights initially will expire on
February 1, 2009. Under the Rights Agreement, our Board of Directors may reduce
the thresholds applicable to the rights from 15% to not less than 10%. The
rights do not have voting or dividend rights and, until they become exercisable,
have no dilutive effect on our earnings.

STATUTORY PROVISIONS

Sections 180.1140 to 180.1144 of the Wisconsin Business Corporation Law
contain some limitations and special voting provisions applicable to specified
business combinations involving Wisconsin corporations such as us and a
significant shareholder, unless the board of directors of the corporation
approves the business combination or the shareholder's acquisition of shares
before these shares are acquired. Similarly, Sections 180.1130 to

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180.1133 of the Wisconsin Business Corporation Law contain special voting
provisions applicable to some business combinations, unless specified minimum
price and procedural requirements are met. Following commencement of a takeover
offer, Section 180.1134 of the Wisconsin Business Corporation Law imposes
special voting requirements on share repurchases effected at a premium to the
market and on asset sales by the corporation, unless, as it relates to the
potential sale of assets, the corporation has at least three independent
directors and a majority of the independent directors vote not to have the
provision apply to the corporation.

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UNDERWRITING

Under the terms and subject to the conditions contained in an underwriting
agreement dated November 18, 1999, we have agreed to sell to the underwriters
named below, for whom Credit Suisse First Boston Corporation, Goldman, Sachs &
Co., Tucker Anthony Incorporated and Robert W. Baird & Co. Incorporated are
acting as representatives, the following respective numbers of shares of our
common stock:

[Download Table]

NUMBER
UNDERWRITER OF SHARES
----------- ---------

Credit Suisse First Boston Corporation...................... 1,180,000
Goldman, Sachs & Co. ....................................... 1,180,000
Tucker Anthony Incorporated................................. 295,000
Robert W. Baird & Co. Incorporated.......................... 295,000
E*Offering Corp............................................. 50,000
First Union Securities, Inc................................. 50,000
Invemed Associates LLC...................................... 50,000
Ragen MacKenzie Incorporated................................ 50,000
Robotti & Company, Incorporated............................. 50,000
Charles Schwab & Co., Inc................................... 50,000
U.S. Bancorp Piper Jaffray Inc.............................. 50,000
---------
Total.................................................. 3,300,000
=========

The underwriting agreement provides that the underwriters are obligated to
purchase all the shares of our common stock in the offering if any are
purchased, other than those shares covered by the over-allotment option
described below. The underwriting agreement also provides that if an underwriter
defaults, the purchase commitments of non-defaulting underwriters may be
increased or the offering of our common stock may be terminated.

We have granted to the underwriters a 30-day option to purchase on a
pro-rata basis up to 495,000 additional shares from us at the initial public
offering price less the underwriting discounts and commissions. The option may
be exercised only to cover any over-allotments of our common stock.

The underwriters propose to offer the shares of our common stock initially
at the public offering price on the cover page of this prospectus and to selling
group members at that price less a concession of $0.78 per share. The
underwriters and selling group members may allow a discount of $0.10 per share
on sales to other broker/dealers. After the initial public offering, the public
offering price and concession and discount to broker/dealers may be changed by
the representatives.

The following table summarizes the compensation and estimated expenses we
will pay.

[Enlarge/Download Table]

PER SHARE TOTAL
-------------------------------- --------------------------------
WITHOUT WITH WITHOUT WITH
OVER-ALLOTMENT OVER-ALLOTMENT OVER-ALLOTMENT OVER-ALLOTMENT
-------------- -------------- -------------- --------------

Underwriting discounts
and commissions paid by
us....................... $1.30 $1.30 $4,290,000 $4,933,500
Expenses payable by us... $0.13 $0.11 $ 425,000 $ 425,000

We, our directors and our executive officers have agreed that we will not
offer, sell, contract to sell, announce our intention to sell, pledge or
otherwise dispose of, directly or

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indirectly, or file with the Securities and Exchange Commission a registration
statement under the Securities Act of 1933 relating to, any additional shares of
our common stock or securities convertible into or exchangeable or exercisable
for any of our common stock without the prior written consent of Credit Suisse
First Boston Corporation for a period of 120 days after the date of this
prospectus, except that these restrictions will not apply to our ability to
grant employee or director stock options under the terms of plans in effect on
the date of this prospectus or to the issuances of our common stock upon any
exercise of these options. In addition, some of our directors may make a gift or
donation of shares of our common stock, provided that the donee agrees to take
these shares subject to the terms of these restrictions.

We have agreed to indemnify the underwriters against liabilities under the
Securities Act or contribute to payments which the underwriters may be required
to make in that respect.

Credit Suisse First Boston Corporation has provided advisory and investment
banking services to us in the past, for which we have paid customary
compensation.

The representatives may engage in over-allotment, stabilizing transactions,
syndicate covering transactions, penalty bids and "passive" market making in
accordance with Regulation M under the Securities Exchange Act of 1934.

- Over-allotment involves syndicate sales in excess of the offering size,
which creates a syndicate short position.

- Stabilizing transactions permit bids to purchase the underlying security
so long as the stabilizing bids do not exceed a specified maximum.

- Syndicate covering transactions involve purchases of our common stock in
the open market after the distribution has been completed in order to
cover syndicate short positions.

- Penalty bids permit the representatives to reclaim a selling concession
from a syndicate member when the common stock originally sold by that
syndicate member is purchased in a stabilizing transaction or a syndicate
covering transaction to cover syndicate short positions.

- In "passive" market making, market makers in our common stock who are
underwriters or prospective underwriters may, subject to certain
limitations, make bids for or purchases of our common stock until the
time, if any, at which a stabilizing bid is made.

These stabilizing transactions, syndicate covering transactions and penalty bids
may cause the price of our common stock to be higher than it would otherwise be
in the absence of these transactions. These transactions may be effected on the
Nasdaq National Market or otherwise and, if commenced, may be discontinued at
any time.

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NOTICE TO CANADIAN RESIDENTS

RESALE RESTRICTIONS

The distribution of our common stock in Canada is being made only on a
private placement basis exempt from the requirement that we prepare and file a
prospectus with the securities regulatory authorities in each province where
trades of our common stock are effected. Accordingly, any resale of our common
stock in Canada must be made in accordance with applicable securities laws which
will vary depending on the relevant jurisdiction, and which may require resales
to be made in accordance with available statutory exemptions or pursuant to a
discretionary exemption granted by the applicable Canadian securities regulatory
authority. Purchasers are advised to seek legal advice prior to any resale of
our common stock.

REPRESENTATIONS OF PURCHASERS

Each purchaser of our common stock in Canada who receives a purchase
confirmation will be deemed to represent to us and the dealer from whom that
purchase confirmation is received that (1) the purchaser is entitled under
applicable provincial securities laws to purchase that common stock without the
benefit of a prospectus qualified under those securities laws, (2) where
required by law, the purchaser is purchasing as principal and not as agent and
(3) the purchaser has reviewed the text above under "Resale Restrictions".

RIGHTS OF ACTION (ONTARIO PURCHASERS)

The securities being offered are those of a foreign issuer and Ontario
purchasers will not receive the contractual right of action prescribed by
Ontario securities laws. As a result, Ontario purchasers must rely on other
remedies that may be available, including common law rights of action for
damages or rescission or rights of action under the civil liability provisions
of the U.S. Federal securities laws.

ENFORCEMENT OF LEGAL RIGHTS

All of the issuer's directors and officers as well as the experts named
herein may be located outside of Canada and, as a result, it may not be possible
for Canadian purchasers to effect service of process within Canada upon the
issuer or those persons. All or a substantial portion of the assets of the
issuer and those persons may be located outside of Canada and, as a result, it
may not be possible to satisfy a judgment against the issuer or those persons in
Canada or to enforce a judgment obtained in Canadian courts against the issuer
or those persons outside of Canada.

NOTICE TO BRITISH COLUMBIA RESIDENTS

A purchaser of common stock to whom the Securities Act (British Columbia)
applies is advised that the purchaser is required to file with the British
Columbia Securities Commission a report within ten days of the sale of any
common stock acquired by that purchaser pursuant to the offering. That report
must be in the form attached to British Columbia Securities Commission Blanket
Order BOR #95/17, a copy of which may be obtained from us. Only one such report
must be filed in respect of common stock acquired on the same date and under the
same prospectus exemption.

TAXATION AND ELIGIBILITY FOR INVESTMENT

Canadian purchasers of our common stock should consult their own legal and
tax advisors with respect to the tax consequences of an investment in our common
stock in their particular circumstances and with respect to the eligibility of
our common stock for investment by the purchaser under relevant Canadian
legislation.

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WHERE YOU CAN FIND MORE INFORMATION

We file annual, quarterly and current reports, proxy statements and other
information with the Securities and Exchange Commission. You may read and copy
any reports, statements or other information on file at the Commission's public
reference rooms in Washington D.C., New York, New York, and Chicago, Illinois.
Please call the Commission at 1-800-SEC-0330 for further information on the
public reference rooms. Our Commission filings are also available to the public
on the Commission's Internet site at "http://www.sec.gov".

We have filed a registration statement on Form S-3 under the Securities Act
of 1933 with respect to our common stock. This prospectus, which forms a part of
the registration statement, does not contain all of the information included in
the registration statement. Some information is omitted and you should refer to
the registration statement and its exhibits.

The Commission allows us to "incorporate by reference" the information we
file with them, which means we can disclose important information to you by
referring to those documents. The information incorporated by reference is an
important part of this prospectus. The most recent information that we file with
the Commission automatically updates and supersedes any older information. We
incorporate by reference the following documents we have filed or may file with
the Commission pursuant to Sections 13, 14 and 15(d) of the Securities Exchange
Act until we terminate the offering:

- Our Annual Report on Form 10-K for the fiscal year ended September 30,
1998, as amended by our Form 10-K/A filed February 12, 1999;

- Our Quarterly Reports on Form 10-Q for the quarters ended December 31,
1998 (as amended by our Form 10-Q/A filed February 16, 1999), March 31,
1999 and June 30, 1999;

- Our Proxy Statement for our 1999 Annual Meeting of Shareholders dated
December 23, 1998;

- Our Current Reports on Form 8-K dated February 26, 1998, October 25, 1999
and November 2, 1999;

- The description of our common stock contained in our Registration
Statement on Form 8-A dated September 25, 1985, and any amendment or
report updating that description;

- The description of the preferred share purchase rights contained in our
Registration Statement on Form 8-A dated February 1, 1999, and any
amendment or report updating that description; and

- All documents filed by us pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Securities Exchange Act of 1934 until we terminate the offering.

You may request a copy of any of these documents at no cost, by writing or
telephoning us at the following: Timothy M. Dempsey, Oshkosh Truck Corporation,
P.O. Box 2566, Oshkosh, Wisconsin 54903-2566, telephone number (920) 235-9151.

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LEGAL MATTERS

The validity of the shares of our common stock offered hereby will be
passed upon for us by Foley & Lardner, Milwaukee, Wisconsin. Michael W. Grebe, a
partner in the firm of Foley & Lardner, is a Director. Some legal matters in
connection with the offering will be passed upon for the underwriters by Mayer,
Brown & Platt, Chicago, Illinois.

EXPERTS

Ernst & Young LLP, independent auditors, have audited our consolidated
financial statements at September 30, 1997 and 1998, and for each of the three
years in the period ended September 30, 1998, as set forth in their report
appearing in this prospectus and registration statement. Ernst & Young LLP
audited the financial statement schedule incorporated by reference from our
Annual Report on Form 10-K for the year ended September 30, 1998. We have
included our financial statements in the prospectus and elsewhere in the
registration statement and incorporated our financial statement schedule in
reliance on Ernst & Young LLP's report, given on their authority as experts in
accounting and auditing.

Larson, Allen, Weishair and Co., LLP, independent auditors, have audited
the financial statements of McNeilus as set forth in their report incorporated
by reference in this prospectus and registration statement from our Current
Report on Form 8-K dated February 26, 1998. We have incorporated by reference
the financial statements of McNeilus in the prospectus and registration
statement in reliance on Larson, Allen, Weishair and Co.'s report, given on
their authority as experts in accounting and auditing.

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INDEX TO FINANCIAL STATEMENTS

[Download Table]

PAGE
----

Report of Ernst & Young LLP, Independent Auditors........... F-2
Consolidated Statements of Income (Loss) for each of the
three fiscal years in the period ended September 30, 1998,
and for the nine month periods ended June 30, 1998 and
1999 (unaudited).......................................... F-3
Consolidated Balance Sheets as of September 30, 1997 and
1998, and as of June 30, 1999 (unaudited)................. F-4
Consolidated Statements of Shareholders' Equity for each of
the three fiscal years in the period ended September 30,
1998, and for the nine month period ended June 30, 1999
(unaudited)............................................... F-5
Consolidated Statements of Cash flows for each of the three
fiscal years in the period ended September 30, 1998, and
for the nine month periods ended June 30, 1998 and 1999
(unaudited)............................................... F-6
Notes to Consolidated Financial Statements.................. F-7

F-1

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REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

Board of Directors
Oshkosh Truck Corporation

We have audited the accompanying consolidated balance sheets of Oshkosh
Truck Corporation (the Company) as of September 30, 1997 and 1998, and the
related consolidated statements of income (loss), shareholders' equity and cash
flows for each of the three years in the period ended September 30, 1998. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of the Company at
September 30, 1997 and 1998, and the consolidated results of its operations and
its cash flows for each of the three years in the period ended September 30,
1998, in conformity with generally accepted accounting principles.

ERNST & YOUNG LLP

Milwaukee, Wisconsin
October 30, 1998, except for
Notes 1, 8, 11 and 15, as to which
the dates are July 23, 1999,
February 1, 1999, July 27, 1999
and February 1, 1999, respectively

F-2

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OSHKOSH TRUCK CORPORATION

CONSOLIDATED STATEMENTS OF INCOME (LOSS)

[Enlarge/Download Table]

FISCAL YEAR ENDED NINE MONTHS ENDED
SEPTEMBER 30, JUNE 30,
------------------------------ -------------------
1996 1997 1998 1998 1999
-------- -------- -------- -------- --------
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

Continuing operations:
Net sales........................... $413,455 $683,234 $902,792 $659,741 $851,048
Cost of sales....................... 384,680 602,237 776,756 572,630 726,128
-------- -------- -------- -------- --------
Gross income................... 28,775 80,997 126,036 87,111 124,920
Operating expenses:
Selling, general and
administrative................... 32,205 47,742 69,001 47,665 63,322
Amortization of goodwill and other
intangibles...................... 171 4,470 8,315 5,559 8,400
-------- -------- -------- -------- --------
Total operating expenses....... 32,376 52,212 77,316 53,224 71,722
-------- -------- -------- -------- --------
Operating income (loss)............... (3,601) 28,785 48,720 33,887 53,198
Other income (expense):
Interest expense.................... (929) (12,722) (21,490) (14,273) (19,839)
Interest income..................... 1,040 717 1,326 544 614
Miscellaneous, net.................. 1,508 (278) 92 (344) 564
-------- -------- -------- -------- --------
1,619 (12,283) (20,072) (14,073) (18,661)
-------- -------- -------- -------- --------
Income (loss) from continuing
operations before income taxes,
equity in earnings of unconsolidated
partnership and extraordinary
item................................ (1,982) 16,502 28,648 19,814 34,537
Provision (credit) for income taxes... (1,741) 6,496 12,655 8,378 14,700
-------- -------- -------- -------- --------
(241) 10,006 15,993 11,436 19,837
Equity in earnings (loss) of
unconsolidated partnership, net of
income taxes (credits) of $167,
($85) and $747...................... -- -- 260 (135) 1,169
-------- -------- -------- -------- --------
Income (loss) from continuing
operations.......................... (241) 10,006 16,253 11,301 21,006
Discontinued operations -- loss on
disposal of operations, net of
income tax benefit of $1,827........ (2,859) -- -- -- --
Extraordinary charge for early
retirement of debt, net of income
tax benefit of $757 and $757........ -- -- (1,185) (1,185) --
-------- -------- -------- -------- --------
Net income (loss)..................... $ (3,100) $ 10,006 $ 15,068 $ 10,116 $ 21,006
======== ======== ======== ======== ========
Earnings (loss) per share:
Continuing operations............... $(0.02) $0.78 $ 1.29 $ 0.89 $1.65
Discontinued operations............. (0.21) -- -- -- --
Extraordinary item.................. -- -- (0.09) (0.09) --
-------- -------- -------- -------- --------
Net income (loss)................... $(0.23) $0.78 $ 1.20 $ 0.80 $1.65
======== ======== ======== ======== ========
Earnings (loss) per share assuming
dilution:
Continuing operations............... $(0.02) $0.78 $ 1.27 $ 0.88 $1.62
Discontinued operations............. (0.21) -- -- -- --
Extraordinary item.................. -- -- (0.09) (0.09) --
-------- -------- -------- -------- --------
Net income (loss)................... $(0.23) $0.78 $ 1.18 $ 0.79 $1.62
======== ======== ======== ======== ========

See accompanying notes.

F-3

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OSHKOSH TRUCK CORPORATION

CONSOLIDATED BALANCE SHEETS

[Enlarge/Download Table]

SEPTEMBER 30, SEPTEMBER 30, JUNE 30,
1997 1998 1999
------------- ------------- --------
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AND
PER SHARE AMOUNTS)

ASSETS
CURRENT ASSETS:
Cash and cash equivalents....................... $ 23,219 $ 3,622 $ 5,441
Receivables, net................................ 81,235 80,982 107,220
Inventories..................................... 76,497 149,191 218,319
Prepaid expenses................................ 3,405 3,768 3,836
Deferred income taxes........................... 9,479 12,281 20,659
-------- -------- --------
Total current assets..................... 193,835 249,844 355,475
Deferred charges.................................. 1,067 342 1,835
Investment in unconsolidated partnership.......... -- 13,496 16,643
Other long-term assets............................ 6,660 13,856 15,015
Property, plant and equipment:
Land............................................ 7,172 7,574 7,889
Buildings....................................... 42,220 64,566 65,159
Machinery and equipment......................... 78,270 84,643 89,499
-------- -------- --------
127,662 156,783 162,547
Less accumulated depreciation................... (72,174) (75,947) (81,923)
-------- -------- --------
Net property, plant and equipment.......... 55,488 80,836 80,624
Goodwill and other intangible assets, net......... 163,344 326,665 324,471
-------- -------- --------
Total assets............................. $420,394 $685,039 $794,063
======== ======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable................................ $ 48,220 $ 65,171 $ 80,814
Floor plan notes payable........................ -- 11,645 35,971
Customer advances............................... 30,124 44,915 64,084
Payroll-related obligations..................... 15,157 24,124 24,688
Accrued warranty................................ 12,320 15,887 16,091
Other current liabilities....................... 22,901 43,498 61,493
Current maturities of long-term debt............ 15,000 3,467 28,163
-------- -------- --------
Total current liabilities................ 143,722 208,707 311,304
Long-term debt.................................... 120,000 277,337 266,693
Postretirement benefit obligations................ 10,147 10,935 11,560
Deferred income taxes............................. 22,452 47,832 43,677
Other long-term liabilities....................... 3,173 8,932 9,686
Shareholders' equity:
Preferred Stock, $.01 par value; authorized --
2,000,000 shares; none issued and
outstanding................................... -- -- --
Class A Common Stock, $.01 par value;
authorized -- 1,000,000 shares;
issued -- 610,317 in 1997; 445,332 in 1998;
and 426,575 at June 30, 1999.................. 6 4 4
Common Stock, $.01 par value;
authorized -- 18,000,000 shares;
issued -- 13,426,930 in 1997; 13,591,916 in
1998; and 13,610,673 at June 30, 1999......... 134 136 136
Paid-in capital................................. 13,544 14,665 15,576
Retained earnings............................... 120,085 130,959 148,791
-------- -------- --------
133,769 145,764 164,507
Common Stock in treasury, at cost: 1,576,209 in
1997; 1,406,496 in 1998; and 1,259,000 at June
30, 1999...................................... (12,869) (12,664) (11,560)
Minimum pension liability adjustment............ -- (1,804) (1,804)
-------- -------- --------
Total shareholders' equity............... 120,900 131,296 151,143
-------- -------- --------
Total liabilities and shareholders'
equity................................. $420,394 $685,039 $794,063
======== ======== ========

See accompanying notes.

F-4

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OSHKOSH TRUCK CORPORATION

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

[Enlarge/Download Table]

ACCUMULATED
COST OF OTHER
COMMON COMPREHENSIVE
COMMON PAID-IN RETAINED STOCK IN INCOME
STOCK CAPITAL EARNINGS TREASURY (LOSS) TOTAL
------ ------- -------- -------- ------------- --------
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

Balance at September 30, 1995 as previously
reported.................................... $ 93 $16,533 $121,697 $ (3,403) $(1,507) $133,413
Three-for-two stock split effective August
19, 1999.................................. 47 (47) -- -- -- --
---- ------- -------- -------- ------- --------
Balance at September 30, 1995............... 140 16,486 121,697 (3,403) (1,507) 133,413
Comprehensive income:
Net loss.................................. -- -- (3,100) -- -- (3,100)
Minimum pension liability adjustment...... -- -- -- --...... 1,507 1,507
--------
Comprehensive loss........................ -- -- -- -- -- (1,593)
Cash dividends:
Class A Common Stock ($0.290 per share)... -- -- (177) -- -- (177)
Common Stock ($0.333 per share)........... -- -- (4,174) -- -- (4,174)
Purchase of Common Stock for treasury....... -- -- -- (5,618) -- (5,618)
Exercise of stock options................... -- 43 -- 225 -- 268
Termination of incentive compensation
awards.................................... -- (517) -- -- -- (517)
---- ------- -------- -------- ------- --------
Balance at September 30, 1996............... 140 16,012 114,246 (8,796) -- 121,602
Comprehensive income:
Net income................................ -- -- 10,006 -- --........ 10,006
--------
Comprehensive income...................... -- -- -- -- -- 10,006
Cash dividends:
Class A Common Stock ($0.290 per share)... -- -- (177) -- -- (177)
Common Stock ($0.333 per share)........... -- -- (3,990) -- -- (3,990)
Purchase of Common Stock for treasury....... -- -- -- (4,246) -- (4,246)
Purchase of 1,875,000 stock warrants........ -- (2,504) -- -- -- (2,504)
Exercise of stock options................... -- 36 -- 173 --........ 209
---- ------- -------- -------- ------- --------
Balance at September 30, 1997............... 140 13,544 120,085 (12,869) -- 120,900
Comprehensive income:
Net income................................ -- -- 15,068 -- -- 15,068
Minimum pension liability adjustment...... -- -- -- --...... (1,804) (1,804)
--------
Comprehensive income...................... -- -- -- -- -- 13,264
Cash dividends:
Class A Common Stock ($0.290 per share)... -- -- (153) -- -- (153)
Common Stock ($0.333 per share)........... -- -- (4,041) -- -- (4,041)
Exercise of stock options................... -- 255 -- (217) -- 38
Tax effect of stock options exercised....... -- 468 -- -- -- 468
Issuance of Common Stock under incentive
compensation plan......................... -- 398 -- 422 --........ 820
---- ------- -------- -------- ------- --------
Balance at September 30, 1998............... 140 14,665 130,959 (12,664) (1,804) 131,296
Comprehensive income:
Net income (unaudited).................... -- -- 21,006 -- -- 21,006
--------
Comprehensive income (unaudited).......... -- -- -- -- -- 21,006
Cash dividends:
Class A Common Stock ($0.2175 per share)
(unaudited)............................. -- -- (93) -- -- (93)
Common Stock ($0.2500 per share)
(unaudited)............................. -- -- (3,081) -- -- (3,081)
Exercise of stock options (unaudited)....... -- (45) -- 1,104 -- 1,059
Tax effect of stock options exercised
(unaudited)............................... -- 956 -- -- --........ 956
---- ------- -------- -------- ------- --------
Balance at June 30, 1999 (unaudited)........ $140 $15,576 $148,791 $(11,560) $(1,804) $151,143
==== ======= ======== ======== ======= ========

See accompanying notes.

F-5

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OSHKOSH TRUCK CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

[Enlarge/Download Table]

FISCAL YEAR ENDED NINE MONTHS ENDED
SEPTEMBER 30, JUNE 30,
-------------------------------- --------------------
1996 1997 1998 1998 1999
--------- -------- --------- --------- --------
(UNAUDITED)
(IN THOUSANDS)

OPERATING ACTIVITIES:
Income (loss) from continuing operations............ $ (241) $ 10,006 $ 16,253 $ 11,301 $ 21,006
Provision for impairment of assets.................. -- -- 5,800 -- --
Depreciation and amortization....................... 8,798 14,070 18,698 12,995 17,018
Write-off (gain from sale) of investments........... 4,125 200 (3,375) -- --
Deferred income taxes............................... (1,381) (3,980) 26 2,590 (8,906)
Equity in earnings of unconsolidated partnership.... -- -- (427) 220 (1,916)
(Gain) loss on disposal of property, plant and
equipment......................................... 77 (43) 122 49 (31)
Changes in operating assets and liabilities:
Receivables, net.................................. (10,648) (4,611) 20,900 25,026 (26,238)
Inventories....................................... (25,071) 29,792 9,958 24,236 (69,128)
Prepaid expenses.................................. 469 214 (260) 381 (68)
Deferred charges.................................. 333 1,578 725 677 (1,493)
Accounts payable.................................. 13,314 (958) 956 (2,862) 15,643
Floor plan notes payable.......................... -- -- (11,377) (13,949) 24,326
Customer advances................................. 930 2,331 10,718 16,393 19,169
Payroll-related obligations....................... 213 2,314 3,480 7,074 464
Accrued warranty.................................. 2,094 3,378 (1,883) 883 (796)
Other current liabilities......................... (9,914) 10,893 6,750 (9,624) 10,651
Other long-term liabilities....................... 665 598 2,877 3,592 1,368
--------- -------- --------- --------- --------
Net cash provided from (used for) operating
activities.................................... (16,237) 65,782 79,941 78,982 1,069

INVESTING ACTIVITIES:
Acquisitions of businesses, net of cash acquired.... (160,838) -- (221,144) (217,954) --
Additions to property, plant and equipment.......... (5,355) (6,263) (8,555) (6,270) (6,900)
Proceeds from sale of investments................... -- -- 3,375 -- --
Proceeds from sale of property, plant and
equipment......................................... 2,086 395 1,524 320 58
Increase in other long-term assets.................. (2,124) (1,532) (3,817) (2,232) (4,356)
--------- -------- --------- --------- --------
Net cash used for investing activities.......... (166,231) (7,400) (228,617) (226,136) (11,198)
NET CASH PROVIDED FROM (USED FOR) DISCONTINUED
OPERATIONS........................................ 4,743 (1,658) (1,093) (872) --

FINANCING ACTIVITIES:
Net borrowings (repayments) under revolving credit
facility.......................................... 7,882 (7,882) 6,000 -- 14,300
Proceeds from issuance of long-term debt............ 150,000 -- 325,000 325,000 --
Repayment of long-term debt......................... -- (15,000) (188,049) (163,931) (248)
Debt issuance costs................................. -- -- (8,641) (8,507) --
Purchase of Common Stock, Common Stock warrants and
proceeds from exercise of stock options, net...... (5,350) (6,541) 38 31 1,059
Dividends paid...................................... (4,396) (4,209) (4,176) (3,129) (3,163)
--------- -------- --------- --------- --------
Net cash provided from (used for) financing
activities.................................... 148,136 (33,632) 130,172 149,464 11,948
--------- -------- --------- --------- --------
Increase (decrease) in cash and cash equivalents.... (29,589) 23,092 (19,597) 1,438 1,819
Cash and cash equivalents at beginning of period.... 29,716 127 23,219 23,219 3,622
--------- -------- --------- --------- --------
Cash and cash equivalents at end of period.......... $ 127 $ 23,219 $ 3,622 $ 24,657 $ 5,441
========= ======== ========= ========= ========

SUPPLEMENTAL DISCLOSURES:
Cash paid for interest............................ $ 538 $ 12,974 $ 17,240 $ 7,633 $ 16,887
Cash paid for income taxes........................ 3,116 2,998 11,097 7,162 20,342

See accompanying notes.

F-6

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OSHKOSH TRUCK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1998 AND JUNE 30, 1999 (UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

OPERATIONS -- Oshkosh Truck Corporation and its wholly-owned subsidiaries
(the "Company" or "Oshkosh") is a leading manufacturer of a wide variety of
heavy duty specialized trucks and truck bodies predominately for the U.S.
market. The Company sells its products into three principal markets -- fire and
emergency, defense, and other commercial truck markets. The Company's fire and
emergency business is principally conducted through its wholly-owned subsidiary,
Pierce Manufacturing Inc. ("Pierce"). The Company's commercial truck business is
principally conducted through its wholly-owned subsidiary, McNeilus Companies,
Inc. ("McNeilus"). The defense business and certain fire and emergency and
commercial truck businesses are conducted through the operations of the parent
company. McNeilus is one of two general partners in Oshkosh/McNeilus Financial
Services Partnership ("OMFSP") which provides lease financing to the Company's
customers. Each of the two general partners have identical participating and
protective rights and responsibilities, and accordingly, the Company accounts
for its equity interest in OMFSP of 68% at September 30, 1998 and 63% at June
30, 1999, under the equity method.

PRINCIPLES OF CONSOLIDATION AND PRESENTATION -- The consolidated financial
statements include the accounts of Oshkosh Truck Corporation and all its
wholly-owned subsidiaries and are prepared in conformity with U.S. generally
accepted accounting principles. The preparation of financial statements in
conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
All significant intercompany accounts and transactions have been eliminated.

CASH AND CASH EQUIVALENTS -- The Company considers all highly liquid
investments with a maturity of three months or less when purchased to be cash
equivalents. Cash equivalents, consisting principally of overnight investments
in money-market accounts and commercial paper, totaled $23,022, $785 and $714 at
September 30, 1997 and 1998 and June 30, 1999 respectively. The cost of these
securities, which are considered "available for sale" for financial reporting
purposes, approximates fair value at September 30, 1997 and 1998 and June 30,
1999.

INVENTORIES -- The Company values its inventories at the lower of cost,
computed principally on the last-in, first-out (LIFO) method, or market.

PROPERTY, PLANT AND EQUIPMENT -- Property, plant and equipment are recorded
at cost. Depreciation is provided over the estimated useful lives of the
respective assets using accelerated and straight-line methods. The estimated
useful lives range from 10 to 40 years for buildings and improvements and from 4
to 25 years for machinery and equipment.

DEFERRED CHARGES -- Deferred charges include certain engineering and
technical support costs incurred in connection with multi-year government
contracts. These costs are

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OSHKOSH TRUCK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

charged to cost of sales when the related project is billable to the government,
or are amortized to cost of sales as base units are delivered under the related
contracts.

OTHER LONG-TERM ASSETS -- Other long-term assets include capitalized
software and related costs which are amortized on a straight-line method over a
three- to ten-year period, deferred financing costs which are amortized using
the interest method over the term of the debt, prepaid funding of pension costs
and certain investments.

GOODWILL AND OTHER INTANGIBLE ASSETS -- The cost of goodwill and other
intangible assets is amortized on a straight-line basis over the estimated
periods benefited ranging from 5 to 40 years.

IMPAIRMENT OF LONG-LIVED ASSETS -- Property, plant and equipment, other
long-term assets and goodwill and other intangible assets are reviewed for
impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. If the sum of the expected undiscounted
cash flows is less than the carrying value of the related asset or group of
assets, a loss is recognized for the difference between the fair value and
carrying value of the asset or group of assets. Such analyses necessarily
involve significant judgment. See Note 13.

CUSTOMER ADVANCES -- Customer advances principally represent amounts
received in advance of the completion of fire and emergency and commercial
vehicles. Most of these advances bear interest at variable rates based on
short-term borrowing rates.

REVENUE RECOGNITION -- Sales under fixed-price defense contracts are
recorded as units are accepted by the government. Change orders are not invoiced
until agreed upon by the government. Recognition of profit on change orders and
on contracts that do not involve fixed prices is based upon estimates, which may
be revised during the terms of the contracts. Sales to fire and emergency and
commercial customers are recorded when the goods or services are billable at
time of shipment or delivery of the trucks.

RESEARCH AND DEVELOPMENT -- Research and development costs are charged to
expense as incurred and amounted to approximately $6,304, $7,847 and $9,681 for
continuing operations during fiscal 1996, 1997 and 1998, respectively.

WARRANTY -- Provisions for estimated warranty and other related costs are
recorded at the time of sale and are periodically adjusted to reflect actual
experience. Amounts expensed in fiscal 1996, 1997, and 1998 were $7,741, $9,658
and $9,403, respectively.

INCOME TAXES -- Deferred income taxes are provided to recognize temporary
differences between the financial reporting basis and the income tax basis of
the Company's assets and liabilities using currently enacted tax rates and laws.

FAIR VALUES -- The carrying amounts of receivables, accounts payable and
long-term debt approximated fair value as of September 30, 1997 and 1998 and
June 30, 1999.

CONCENTRATION OF CREDIT RISK -- Financial instruments which potentially
subject the Company to significant concentrations of credit risk consist
principally of cash equivalents, trade accounts receivable and leases receivable
of OMFSP.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The Company maintains cash and cash equivalents, investments, and certain
other financial instruments with various major financial institutions. The
Company performs periodic evaluations of the relative credit standing of these
financial institutions and limits the amount of credit exposure with any
institution.

Concentration of credit risk with respect to trade accounts and leases
receivable is limited due to the large number of customers and their dispersion
across many geographic areas. However, a significant amount of trade receivables
are with the U.S. Government, with companies in the ready-mix concrete industry
and with several large waste haulers in the United States. The Company does not
currently foresee a credit risk associated with these receivables.

ENVIRONMENTAL REMEDIATION COSTS -- Statement of Position ("SOP") 96-1,
"Environmental Remediation Liabilities," became effective for the Company in
fiscal 1997. In accordance with SOP 96-1, the Company accrues for losses
associated with environmental remediation obligations when such losses are
probable and reasonably estimable. Costs of future expenditures for
environmental remediation obligations are not discounted to their present value.
Recoveries of environmental remediation costs from other parties are recorded as
assets when their receipt is deemed probable. The accruals are adjusted as
further information develops or circumstances change.

EARNINGS (LOSS) PER SHARE -- Statement of Financial Accounting Standards
("SFAS") No. 128, "Earnings per Share," became effective for the Company in
fiscal 1998. SFAS No. 128 replaced the calculation of primary and fully diluted
earnings per share with basic and diluted earnings per share. Unlike primary
earnings per share, basic earnings per share excludes any dilutive effects of
options, warrants and convertible securities. Earnings per share amounts for all
periods have been presented and, where appropriate, restated to conform to SFAS
No. 128 requirements.

The following table sets forth the computation of basic and diluted
weighted average shares used in the per share calculations:

[Enlarge/Download Table]

NINE MONTHS ENDED
FISCAL YEAR ENDED SEPTEMBER 30, JUNE 30,
-------------------------------------- ------------------------
1996 1997 1998 1998 1999
---------- ---------- ---------- ---------- ----------
(UNAUDITED)

Denominator for basic
earnings per
share............... 13,242,336 12,753,249 12,597,598 12,586,650 12,699,587
Effect of dilutive
options, warrants
and incentive
compensation
awards.............. -- 65,874 161,901 145,458 300,174
---------- ---------- ---------- ---------- ----------
Denominator for
dilutive earnings
per share........... 13,242,336 12,819,123 12,759,499 12,732,108 12,999,761
========== ========== ========== ========== ==========

NEW ACCOUNTING STANDARDS -- In June 1998, the Financial Accounting
Standards Board issued SFAS No. 133, "Accounting for Derivative Instruments and
Hedging Activities," which was amended by SFAS No. 137. Provisions of these
standards are

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OSHKOSH TRUCK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

required to be adopted in years beginning after June 15, 2000. Because of the
Company's minimal use of derivatives, management does not anticipate that the
adoption of the new Statement will have a significant effect on the results of
operations or on the financial position of the Company.

In June 1997, the Financial Accounting Standards Board issued SFAS No. 131,
"Disclosures about Segments of an Enterprise and Related Information." SFAS No.
131 establishes the standards for the manner in which public enterprises are
required to report financial and descriptive information about their operating
segments. The statement defines operating segments as components of an
enterprise for which separate financial information is available and evaluated
regularly as a means for assessing segment performance and allocating resources
to segments. A measure of profit or loss, total assets and other related
information are required to be disclosed for each operating segment. In
addition, this statement requires the annual disclosure of information
concerning revenues derived from the enterprise's products or services,
countries in which it earns revenue or holds assets, and major customers. The
statement is effective for fiscal years beginning after December 15, 1997. The
Company will adopt SFAS No. 131 during the three month period ending September
30, 1999. The adoption of SFAS No. 131 will not affect the Company's results of
operations, financial position or cash flows, but will affect the disclosure of
segment information.

In June 1997, the Financial Accounting Standards Board issued SFAS No. 130,
"Reporting Comprehensive Income." SFAS No. 130 establishes the standards for
reporting and displaying comprehensive income and its components (revenues,
expenses, gains, and losses) as part of a full set of financial statements. This
statement requires that all elements of comprehensive income be reported in a
financial statement that is displayed with the same prominence as other
financial statements. The statement is effective for fiscal years beginning
after December 15, 1997. The Company adopted SFAS No. 130 during the three month
period ended December 31, 1998. The adoption of SFAS No. 130 had no impact on
the Company's net earnings. Comprehensive income has been included in the
Company's Consolidated Statement of Shareholders' Equity and prior period
amounts have been reclassified to conform to SFAS No. 130 requirements.

RECLASSIFICATIONS -- Engineering and research and development expense has
been reclassified to conform with the current period presentation.

BASIS OF PRESENTATION OF UNAUDITED FINANCIAL STATEMENTS -- The accompanying
unaudited consolidated financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information.
In the opinion of management, all adjustments (consisting only of normal
recurring accruals) considered necessary for a fair presentation have been
included.

COMMON STOCK SPLIT -- On July 23, 1999, the Board of Directors of the
Company authorized a three-for-two split of the Company's common stock in the
form of a 50% stock dividend. The stock split was effected on August 19, 1999 to
shareholders of record at the close of business on August 5, 1999. All
references in the Consolidated Financial Statements and the Notes to
Consolidated Financial Statements to number of shares, per share amounts, stock
option data and market prices of the Company's stock have been restated to
reflect the stock split. In addition, an amount equal to the par value of the

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OSHKOSH TRUCK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

shares distributed to effect the stock split has been transferred from
paid-in-capital to common stock.

2. BALANCE SHEET INFORMATION

[Download Table]

SEPTEMBER 30,
------------------ JUNE 30,
RECEIVABLES 1997 1998 1999
----------- ------- ------- -----------
(UNAUDITED)

U.S. Government:
Amounts billed................................. $34,399 $22,197 $ 26,755
Amounts unbilled............................... 1,782 -- 587
------- ------- --------
36,181 22,197 27,342
Commercial customers............................. 45,603 58,776 79,952
Other............................................ 1,421 2,077 2,087
------- ------- --------
83,205 83,050 109,381
Less allowance for doubtful accounts............. (1,970) (2,068) (2,161)
------- ------- --------
$81,235 $80,982 $107,220
======= ======= ========

The unbilled amounts represent estimated claims for government-ordered
changes which will be invoiced upon completion of negotiations and price
adjustment provisions which will be invoiced when they are agreed upon by the
government.

[Download Table]

SEPTEMBER 30,
------------------- JUNE 30,
INVENTORIES 1997 1998 1999
----------- ------- -------- -----------
(UNAUDITED)

Finished products............................... $ 6,430 $ 27,916 $ 58,493
Partially finished products..................... 36,661 52,700 80,075
Raw materials................................... 44,455 77,675 92,701
------- -------- --------
Inventories at FIFO cost........................ 87,546 158,291 231,269
Less: Progress payments on U.S. government
contracts..................................... (2,988) -- (1,694)
Excess of FIFO cost over LIFO cost........ (8,061) (9,100) (11,256)
------- -------- --------
$76,497 $149,191 $218,319
======= ======== ========

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Title to all inventories related to government contracts, which provide for
progress payments, vests with the government to the extent of unliquidated
progress payments.

[Enlarge/Download Table]

GOODWILL AND OTHER INTANGIBLE ASSETS SEPTEMBER 30,
---------------------------------------------------- -------------------- JUNE 30,
USEFUL LIVES 1997 1998 1999
------------ -------- -------- -----------
(UNAUDITED)

Goodwill............................ 40 Years $103,887 $212,746 $218,614
Distribution network................ 40 Years 53,000 63,800 63,800
Non-compete agreements.............. 15 Years -- 38,000 38,000
Other............................... 5-40 Years 11,098 24,860 25,198
-------- -------- --------
167,985 339,406 345,612
Less accumulated amortization....................... (4,641) (12,741) (21,141)
-------- -------- --------
$163,344 $326,665 $324,471
======== ======== ========

The Company engaged third party business valuation appraisers to determine
the fair value of the distribution network in connection with its acquisition of
Pierce (see Note 3). The Company believes Pierce maintains the largest North
American fire apparatus distribution network and has exclusive contracts with
each distributor related to the fire apparatus product offerings manufactured by
Pierce. To establish the useful lives of the distribution network, a historical
turnover analysis was performed.

On February 26, 1998, concurrent with the Company's acquisition of McNeilus
(see Note 3), the Company and BA Leasing & Capital Corporation ("BALCAP") formed
OMFSP, a general partnership, for the purpose of offering lease financing to
customers of the Company. Each partner contributed existing lease assets (and in
the case of the Company, related notes payable to third party lenders which were
secured by such leases) to capitalize the partnership. Leases and related notes
payable contributed by the Company were originally acquired in connection with
the McNeilus acquisition.

OMFSP manages the contributed assets and liabilities and engages in new
vendor lease business providing financing to customers of the Company. The
partners finance purchases of trucks to be leased to user-customers by investing
equity in an amount equal to approximately 11.0% to 14.0% of the cost of the
trucks. Banks and other financial institutions lend to OMFSP the remaining
percentage, with recourse solely to OMFSP, secured by a pledge of the
user-lessees. Each partner funds one-half of the equity needed to finance the
new truck purchases, and each partner is allocated its proportionate share of
OMFSP cash flow and taxable income. Indebtedness of OMFSP is secured by the
underlying leases and assets of, and is with recourse to, OMFSP. However, such
indebtedness is non-recourse to the Company.

Summarized financial information of OMFSP as of September 30, 1998 (its
fiscal year end) and June 30, 1999 and for the periods February 26, 1998 (the
date OMFSP was

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

formed) to June 30, 1998 and September 30, 1998 and the nine month period ended
June 30, 1999, is as follows:

[Download Table]

SEPTEMBER 30, 1998 JUNE 30, 1999
------------------ -------------
(UNAUDITED)

Cash and cash equivalents........................ $ 4,584 $ 5,731
Investment in sales type leases, net............. 123,473 137,901
Other............................................ 267 407
-------- --------
$128,324 $144,039
======== ========
Notes payable.................................... $105,473 $111,527
Other liabilities................................ 2,944 6,274
Partners' equity................................. 19,907 26,238
-------- --------
$128,324 $144,039
======== ========

[Enlarge/Download Table]

PERIOD FROM PERIOD FROM NINE MONTHS
FEBRUARY 26, 1998 TO FEBRUARY 26, 1998 TO ENDED
SEPTEMBER 30, 1998 JUNE 30, 1998 JUNE 30, 1999
-------------------- -------------------- -------------

Interest income................ $6,605 $3,741 $8,636
Net interest income............ 1,622 950 2,654
Revenues in excess of (less
than) expenses............... 644 (102) 2,942

Excess of revenues over expenses for the periods February 26, 1998 to June
30, 1998 and September 30, 1998 includes a $1,466 nonrecurring, non-cash charge
to write off start-up expenses incurred in fiscal 1998 to establish OMFSP (see
Note 12).

3. ACQUISITIONS

On February 26, 1998, the Company acquired for cash all of the issued and
outstanding capital stock of McNeilus and entered into related non-compete and
ancillary agreements for $217,581, including acquisition costs and net of cash
acquired. McNeilus is a leading manufacturer and marketer of rear-discharge
concrete mixers for the construction industry and refuse truck bodies for the
waste services industry in the United States. The acquisition was financed from
borrowings under a Senior Credit Facility and the issuance of Senior
Subordinated Notes (see Note 4).

The acquisition was accounted for using the purchase method of accounting
and, accordingly, the operating results of McNeilus are included in the
Company's consolidated statements of income since the date of acquisition. The
purchase price, including acquisition costs, was allocated based on the
estimated fair values of the assets acquired and liabilities assumed at the date
of the acquisition and was subsequently adjusted during fiscal 1999.
Approximately $60,985 of the purchase price was allocated to intangible assets,
including non-competition agreements. The excess of the purchase price over the
estimated fair value of net assets acquired amounted to $114,727, which has been
accounted for as goodwill.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Pro forma unaudited consolidated operating results of the Company, assuming
McNeilus had been acquired as of October 1, 1996 and 1997, are summarized below:

[Download Table]

FISCAL YEAR ENDED
SEPTEMBER 30,
---------------------- NINE MONTHS ENDED
1997 1998 JUNE 30, 1998
-------- ---------- -----------------

Net sales............................... $998,031 $1,040,986 $797,935
Income before extraordinary item........ 14,954 18,590 13,752
Net income.............................. 14,954 17,405 12,567
Earnings per share:
Before extraordinary item............. 1.17 1.47 1.09
Net income............................ 1.17 1.38 1.00
Earnings per share assuming dilution:
Before extraordinary item............. 1.17 1.46 1.08
Net income............................ 1.17 1.36 0.99

These pro forma results have been prepared for informational purposes only
and include certain adjustments to depreciation expense related to acquired
plant and equipment, amortization expense arising from goodwill and other
intangible assets, interest expense on acquisition debt, elimination of certain
non-recurring expenses directly attributable to the transaction (including
elimination of the write-off of the Company's share of start-up expenses), and
the estimated related income tax effects of all such adjustments. Anticipated
efficiencies from the consolidation of certain manufacturing activities between
the Company and McNeilus and anticipated lower material costs related to the
consolidation of purchasing between the Company and McNeilus have been excluded
from the amounts included in the pro forma operating results. These pro forma
results do not purport to be indicative of the results of operations which would
have resulted had the combination been in effect as of October 1, 1996 and 1997
or of the future results of operations of the consolidated entities.

On December 19, 1997, the Company acquired certain inventory, machinery and
equipment, and intangible assets of Nova Quintech, a division of Nova Bus
Corporation ("Nova Quintech") using available cash for $3,563. Nova Quintech was
engaged in the manufacture and sale of aerial devices for fire trucks.
Approximately $1,849 of the purchase price has been allocated to intangible
assets, principally aerial device designs and technology. The Nova Quintech
products have been integrated into Pierce's product line and are being
manufactured at Pierce. The acquisition was accounted for using the purchase
method of accounting, and accordingly, the operating results of Nova Quintech
are included in the Company's statement of income since the date of the
acquisition. Had the acquisition occurred as of October 1, 1996 or 1997, there
would have been no material pro forma effect on net sales, net income, or
earnings per share in fiscal 1997 or 1998.

On September 18, 1996, the Company acquired for cash all of the issued and
outstanding stock of Pierce, a leading manufacturer and marketer of fire trucks
and other fire apparatus in the U.S. The acquisition price of $156,926,
including acquisition costs and net of cash acquired, was financed from
borrowings under a subsequently retired bank credit facility. The acquisition
was accounted for using the purchase method of accounting, and accordingly, the
operating results of Pierce are included in the Company's consolidated

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OSHKOSH TRUCK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

statements of income since the date of acquisition. The purchase price,
including acquisition costs, was allocated based on the estimated fair values of
the assets acquired and liabilities assumed at the date of the acquisition and
was subsequently adjusted during fiscal 1997. Approximately $62,000 of the
purchase price was allocated to the distribution network and other intangible
assets. The excess of the purchase price over the estimated fair value of net
assets acquired amounted to $103,887, which has been accounted for as goodwill.

On November 9, 1995, the Company, through its wholly-owned subsidiary,
Summit Performance Systems, Inc. ("Summit"), acquired the land, buildings,
machinery and equipment, and technology of Friesz Manufacturing Company
("Friesz") using available cash for $3,912. Friesz was engaged in the
manufacture and sale of concrete mixer systems and related aftermarket
replacements parts. Approximately $2,150 of the purchase price was allocated to
intangible assets, principally designs and related technology (see Note 13). The
acquisition was accounted for using the purchase method of accounting, and
accordingly, the operating results of Friesz are included in the Company's
consolidated statements of income (loss) since the date of acquisition.

4. LONG-TERM DEBT

On February 26, 1998, the Company entered into the Senior Credit Facility
and issued $100,000 of 8 3/4% Senior Subordinated Notes due March 1, 2008 to
finance the acquisition of McNeilus (see Note 3) and to refinance a previous
credit facility. The Senior Credit Facility consists of a six year $100,000
revolving credit facility ("Revolving Credit Facility") and three term loan
facilities ("Term Loan A," "Term Loan B," and "Term Loan C," collectively, the
"Term Loan Facility"). Term Loan A was for $100,000 and matures on March 31,
2004. Term Loans B and C each were for $62,500 and mature on March 31, 2005 and
March 31, 2006, respectively.

Term Loan A required principal payments of $5,000 in fiscal 1998, and
required principal payments of $11,000 in fiscal 1999, $13,500 in fiscal 2000,
$15,000 in fiscal 2001, $19,500 in fiscal 2002 and $24,000 in fiscal 2003, with
the remaining outstanding principal amount of $12,000 due in fiscal 2004. Term
Loans B and C each require principal payments of $200 per quarter through March
31, 2004 (for Term Loan B) and through March 31, 2005 (for Term Loan C). Any
remaining outstanding principal balances on Term Loans B and C are due in
quarterly installments through March 31, 2005 and March 31, 2006, respectively.
From February 26, 1998 through September 30, 1998, the Company has paid from
available cash $53,000 on the Term Loan Facility. All prepayments are first
applied to the next twelve months mandatory principal payments and then on a pro
rata basis to the principal payments due over the remainder of the loans. The
outstanding balances as of September 30, 1998 and June 30, 1999 on Term Loan A,
Term Loan B and Term Loan C are $87,000, $42,500, and $42,500, respectively,
after prepayments.

At September 30, 1998, borrowings of $6,000 and outstanding letters of
credit of $12,146 reduced available capacity under the Company's Revolving
Credit Facility to $81,854. At June 30, 1999, borrowings of $20,300 and $9,298
of outstanding letters of credit reduced available capacity under the Revolving
Credit Facility to $70,402.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Interest rates on borrowings under the Revolving Credit and Term Loan
Facilities are variable and are equal to the "Base Rate" (which is equal to the
higher of a bank's reference rate and the federal funds rate plus 0.5%) or the
"IBOR Rate" (which is a bank's inter-bank offered rate for U.S. dollars in
off-shore markets) plus a margin of 0.50%, 0.50%, 1.00% and 1.25% for Base Rate
loans and a margin of 1.75%, 1.75%, 2.25% and 2.50% for IBOR Rate loans under
the Revolving Credit Facility, Term Loan A, Term Loan B, and Term Loan C,
respectively, as of September 30, 1998. The margins are subject to adjustment,
up or down, based on whether certain financial criteria are met. The weighted
average interest rates on borrowings outstanding at September 30, 1998 were
7.417% on the Revolving Credit Facility and 7.435%, 7.923% and 8.173% for Term
Loans A, B and C, respectively.

The Company is charged a 0.30% annual fee with respect to any unused
balance under its Revolving Credit Facility, and a 1.75% annual fee with respect
to any letters of credit issued under the Revolving Credit Facility. These fees
are subject to adjustment if certain financial criteria are met.

Substantially all the tangible and intangible assets of the Company and its
subsidiaries (including the stock of certain subsidiaries) are pledged as
collateral under the Senior Credit Facility. Among other restrictions, the
Senior Credit Facility: (1) limits payments of dividends, purchases of the
Company's stock, and capital expenditures; (2) requires that certain financial
ratios be maintained at prescribed levels; (3) restricts the ability of the
Company to make additional borrowings, or to consolidate, merge or otherwise
fundamentally change the ownership of the Company; (4) requires mandatory
prepayments to the extent of "excess cash flows"; and (5) limits investments,
dispositions of assets and guarantees of indebtedness. The Company believes that
such limitations should not impair its future operating activities.

The Senior Subordinated Notes were issued pursuant to an Indenture dated
February 26, 1998 (the "Indenture"), between the Company, the Subsidiary
Guarantors (as defined below) and Firstar Trust Company, as trustee. The
Indenture contains customary affirmative and negative covenants. The Senior
Subordinated Notes are due March 1, 2008 and can be redeemed by the Company for
a premium after March 1, 2003. However, the Company may redeem up to $35,000 of
the Senior Subordinated Notes at any time prior to March 1, 2001, at a
redemption price of 108.75% of the principal amount redeemed, with net cash
proceeds of any public offerings of Common Stock, provided that such redemption
occurs within 45 days of the date of the closing of such public offering. In
addition to the Company, certain of the Company's subsidiaries, fully,
unconditionally, jointly and severally guarantee the Company's obligations under
the Senior Subordinated Notes.

McNeilus has unsecured notes payable to several of its former shareholders
aggregating $2,804 at September 30, 1998. Interest rates on these notes range
from 5.7% to 8.0% with annual principal and interest payments ranging from $20
to $155 with maturities through October 2033.

The aggregate annual maturities of long-term debt for the five years
succeeding September 30, 1998, are as follows: 1999 -- $3,472; 2000 -- $14,621;
2001 -- $16,099; 2002 -- $20,602; and 2003 -- $25,088.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

5. INCOME TAXES

[Download Table]

FISCAL YEAR ENDED SEPTEMBER 30,
-------------------------------
1996 1997 1998
------- ------- -------

INCOME TAX PROVISION (CREDIT)
Current:
Federal......................................... $ 2,988 $ 8,236 $10,555
State........................................... 368 1,866 2,162
------- ------- -------
Total current................................ 3,356 10,102 12,717
Deferred:
Federal......................................... (4,630) (3,271) (53)
State........................................... (467) (335) (9)
------- ------- -------
Total deferred............................... (5,097) (3,606) (62)
------- ------- -------
$(1,741) $ 6,496 $12,655
======= ======= =======

[Enlarge/Download Table]

FISCAL YEAR ENDED SEPTEMBER 30,
--------------------------------
1996 1997 1998
------ ----- -----

EFFECTIVE RATE RECONCILIATION
U.S. federal tax rate............................... (34.0)% 35.0% 35.0%
State income taxes, net............................. (5.0) 6.0 4.9
Reduction of prior years' excess tax provisions..... (50.5) (5.5) --
Foreign sales corporation........................... (5.2) (1.5) (1.5)
Goodwill amortization............................... -- 5.4 5.1
Other, net.......................................... 6.9 -- 0.7
----- ---- ----
(87.8)% 39.4% 44.2%
===== ==== ====

[Download Table]

SEPTEMBER 30,
--------------------
1997 1998
-------- --------

DEFERRED TAX ASSETS AND LIABILITIES
Deferred tax assets:
Other current liabilities................................ $ 5,277 $ 6,284
Accrued warranty......................................... 4,439 8,625
Postretirement benefit obligations....................... 3,916 4,219
Payroll-related obligations.............................. 1,846 3,177
Investments.............................................. 1,887 406
Other.................................................... 729 949
-------- --------
Total deferred tax assets............................. 18,094 23,660
Deferred tax liabilities:
Intangible assets........................................ 23,402 31,498
Investment in unconsolidated partnership................. -- 16,496
Property, plant and equipment............................ 4,175 7,288
Inventories.............................................. 2,341 3,038
Deferred charges......................................... 1,091 850
Other.................................................... 58 41
-------- --------
Total deferred tax liabilities........................ 31,067 59,211
-------- --------
Net deferred tax liability............................ $(12,973) $(35,551)
======== ========

The Company has not recorded a valuation allowance with respect to any
deferred tax assets.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

6. EMPLOYEE BENEFIT PLANS

The Company has defined benefit pension plans covering substantially all
employees, except McNeilus employees. The plans provide benefits based on
compensation, years of service and date of birth. The Company's policy is to
fund the plans in amounts which comply with contribution limits imposed by law.

Components of net periodic pension cost for these plans for fiscal 1996,
1997 and 1998, including costs of discontinued operations for 1996 which are not
significant, but excluding Pierce pension costs for 1996 due to the proximity of
its acquisition to the Company's fiscal year end, are as follows:

[Enlarge/Download Table]

FISCAL YEAR ENDED SEPTEMBER 30,
--------------------------------
1996 1997 1998
-------- -------- --------

Service cost -- benefits earned during year......... $ 1,149 $ 1,387 $ 1,744
Interest cost on projected benefit obligations...... 1,979 2,439 2,751
Actual return on plan assets........................ (3,347) (8,789) 1,647
Net amortization and deferral....................... 1,232 6,123 (4,575)
------- ------- -------
Net periodic pension cost........................... $ 1,013 $ 1,160 $ 1,567
======= ======= =======

The following table summarizes the funded status of the pension plans and
the amounts recognized in the Company's consolidated balance sheets at September
30, 1997 and 1998:

[Enlarge/Download Table]

1997 1998
-------------------- --------------------------------------------
ASSETS EXCEED ASSETS EXCEED ACCUMULATED BENEFITS
ACCUMULATED BENEFITS ACCUMULATED BENEFITS EXCEED ASSETS
-------------------- -------------------- --------------------

Actuarial present value of
benefit obligations:
Vested.................. $29,334 $17,355 $16,953
Nonvested............... 694 318 1,515
------- ------- -------
Accumulated benefit
obligations................ 30,028 17,673 18,468
Adjustment for projected
benefit obligations........ 4,759 5,719 --
------- ------- -------
Projected benefit
obligations................ 34,787 23,392 18,468
Plan assets at fair value.... 39,556 21,907 15,862
------- ------- -------
Plan assets in excess of
(less than) projected
benefit obligations........ 4,769 (1,485) (2,606)
Unrecognized net transition
asset...................... (594) (173) (354)
Unrecognized net (gain)
loss....................... (1,538) 2,729 3,311
Unrecognized prior service
cost....................... 1,229 36 1,878
Adjustment required to
recognize minimum pension
liability.................. -- -- (4,835)
------- ------- -------
Prepaid pension asset
(accrued liability)........ $ 3,866 $ 1,107 $(2,606)
======= ======= =======

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Generally accepted accounting principles require the recognition of a
minimum pension liability for each defined benefit plan for which the
accumulated benefit obligation exceeds plan assets ($2,606 at September 30,
1998) and recognition of an intangible asset to the extent of unrecognized past
service cost ($1,878 at September 30, 1998). These amounts are included in other
long-term liabilities and intangible assets, respectively, at September 30,
1998. An adjustment of $1,804 has been recorded as a reduction of shareholders'
equity in fiscal 1998 to recognize the minimum liability of $4,835, net of both
the intangible asset recorded of $1,878 and the related income tax benefit of
$1,153.

The plans' assets consist of investments in commingled equity and fixed
income funds and individually managed equity portfolios. Actuarial assumptions
are as follows:

[Download Table]

SEPTEMBER 30,
--------------------
1996 1997 1998
---- ---- ----

Discount rate............................................... 7.75% 7.25% 7.25%
Rate of increase in compensation............................ 4.50 4.50 4.50
Expected long-term rate of return on plan assets............ 9.25 9.25 9.25

The Company provides health benefits to certain of its retirees and their
eligible spouses. Approximately 35% of the Company's employees become eligible
for these benefits if they reach normal retirement age while working for the
Company.

The following table summarizes the status of the postretirement benefit
plan and the amounts recognized in the Company's consolidated balance sheets for
the periods indicated:

[Download Table]

SEPTEMBER 30,
------------------
1997 1998
------- -------

Postretirement benefit obligations:
Retirees.................................................. $ 2,828 $ 3,055
Fully eligible active participants........................ 522 563
Other active participants................................. 5,647 6,453
------- -------
8,997 10,071
Unrecognized net gain....................................... 1,150 864
------- -------
Postretirement benefit obligations.......................... $10,147 $10,935
======= =======

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Net periodic postretirement benefit cost for fiscal 1996, 1997 and 1998,
including discontinued operations for 1996 which are not significant, includes
the following components:

[Download Table]

FISCAL YEAR ENDED
SEPTEMBER 30,
----------------------
1996 1997 1998
---- ---- ------

Service cost.............................................. $353 $366 $ 397
Interest cost on the accumulated postretirement benefit
obligation.............................................. 580 613 676
Amortization of unrecognized net gain..................... -- (32) (13)
---- ---- ------
Net periodic postretirement benefit cost.................. $933 $947 $1,060
==== ==== ======

Net change in postretirement benefit obligations includes the following:

[Download Table]

FISCAL YEAR ENDED
SEPTEMBER 30,
------------------
1997 1998
------- -------

Balance at beginning of year................................ $ 9,517 $10,147
Benefits paid............................................... (317) (272)
Net periodic postretirement benefit cost.................... 947 1,060
------- -------
Balance at end of year...................................... $10,147 $10,935
======= =======

The assumed health care cost trend rate used in measuring the accumulated
postretirement benefit obligation was 9.8% in fiscal 1998, declining to 6.5% in
fiscal 2006. The weighted average discount rate used in determining the
postretirement benefit obligation was 7.75% and 7.25% in fiscal 1997 and 1998,
respectively. If the health care cost trend rate was increased by 1%, the
postretirement benefit obligation at September 30, 1998 would increase by $896
and net periodic postretirement benefit cost for fiscal 1998 would increase by
$120.

The Company has defined contribution 401(k) plans covering substantially
all employees. The plans allow employees to defer 2% to 19% of their income on a
pre-tax basis. Each employee who elects to participate is eligible to receive
Company matching contributions. Amounts expensed for Company matching
contributions were $401, $825 and $1,345 in fiscal 1996, 1997 and 1998,
respectively.

7. SHAREHOLDERS' EQUITY

On May 2, 1997, the Company and Freightliner Corporation ("Freightliner")
formally terminated a strategic alliance formed on June 2, 1995. The Company
repurchased from Freightliner 525,000 shares of its Common Stock and 1,875,000
warrants for the purchase of additional shares of Common Stock for a total of
$6,750.

The Company has a stock restriction agreement with two shareholders owning
the majority of the Company's Class A Common Stock. The agreement is intended to
allow for an orderly transition of Class A Common Stock into Common Stock. The
agreement provides that at the time of death or incapacity of the survivor of
them, the two

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

shareholders will exchange all of their Class A Common Stock for Common Stock.
At that time, or at such earlier time as there are no more than 225,000 shares
of Class A Common Stock issued and outstanding, the Company's Articles of
Incorporation provide for a mandatory conversion of all Class A Common Stock
into Common Stock.

Each share of Class A Common Stock is convertible into Common Stock on a
one-for-one basis. As of September 30, 1998, 445,332 shares of Common Stock are
reserved for the conversion of Class A Common Stock. In July 1995, the Company
authorized the buyback of up to 1,500,000 shares of the Company's Common Stock.
As of September 30, 1997 and 1998, the Company had purchased 692,302 shares of
its Common Stock at an aggregate cost of $6,551.

Dividends are required to be paid on both the Class A Common Stock and
Common Stock at any time that dividends are paid on either. Each share of Common
Stock is entitled to receive 115% of any dividend paid on each share of Class A
Common Stock, rounded up or down to the nearest $0.0025 per share.

Holders of the Common Stock have the right to elect or remove as a class
25% of the entire Board of Directors of the Company rounded to the nearest whole
number of directors, but not less than one. Holders of Common Stock are not
entitled to vote on any other Company matters, except as may be required by law
in connection with certain significant actions such as certain mergers and
amendments to the Company's Articles of Incorporation, and are entitled to one
vote per share on all matters upon which they are entitled to vote. Holders of
Class A Common Stock are entitled to elect the remaining directors (subject to
any rights granted to any series of Preferred Stock) and are entitled to one
vote per share for the election of directors and on all matters presented to the
shareholders for vote.

The Common Stock shareholders are entitled to receive a liquidation
preference of $5.00 per share before any payment or distribution to holders of
the Class A Common Stock. Thereafter, holders of the Class A Common Stock are
entitled to receive $5.00 per share before any further payment or distribution
to holders of the Common Stock. Thereafter, holders of the Class A Common Stock
and Common Stock share on a pro rata basis in all payments or distributions upon
liquidation, dissolution or winding up of the Company.

8. STOCK OPTION PLAN

The Company has reserved 1,488,252 shares of Common Stock at September 30,
1998 to provide for the exercise of outstanding stock options and the issuance
of Common Stock under incentive compensation awards. Under the 1990 Incentive
Stock Plan for the Key Employees (the "Plan"), officers, other key employees and
directors may be granted options to purchase up to an aggregate of 1,875,000
shares of the Company's Common Stock at not less than the fair market value of
such shares on the date of grant. Participants may also be awarded grants of
restricted stock under the Plan. The Plan (as amended on February 1, 1999)
expires on September 21, 2008. Options become exercisable ratably on the first,
second, and third anniversary of the date of grant. Options

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

to purchase shares expire not later than ten years and one month after the grant
of the option.

The following table summarizes the transactions of the Plan for the
three-year period ended September 30, 1998.

[Download Table]

NUMBER OF WEIGHTED-AVERAGE
OPTIONS EXERCISE PRICE
--------- ----------------

Unexercised options outstanding September 30,
1995.............................................. 715,602 $ 7.31
Options granted................................... 21,750 9.79
Options exercised................................. (36,772) 6.48
Options forfeited................................. (9,377) 8.39
---------
Unexercised options outstanding September 30,
1996.............................................. 691,203 7.41
Options granted................................... 7,500 8.00
Options exercised................................. (30,496) 6.89
Options forfeited................................. (11,355) 8.65
---------
Unexercised options outstanding September 30,
1997.............................................. 656,852 7.43
Options granted................................... 621,000 13.57
Options exercised................................. (208,800) 7.00
Options forfeited................................. (1,500) 9.25
---------
Unexercised options outstanding September 30,
1998.............................................. 1,067,552 $11.08
========= ======
Price range $5.25 -- $7.50 (weighted-average
contractual life of 5.3 years).................... 281,926 $ 6.55
Price range $8.00 -- $11.17 (weighted-average
contractual life of 7.8 years).................... 322,125 10.29
Price range $12.75 -- $15.75 (weighted-average
contractual life of 9.8 years).................... 463,500 14.38
Exercisable options at September 30, 1998........... 434,804 7.58
Shares available for grant at September 30, 1998.... 420,700

SFAS No. 123, "Accounting for Stock-Based Compensation," became effective
for the Company in fiscal 1997. As allowed by SFAS No. 123, the Company has
elected to continue to follow Accounting Principles Board Opinion ("APB") No.
25, "Accounting for Stock Issued to Employees," in accounting for the Plan.
Under APB No. 25, the Company does not recognize compensation expense on the
issuance of its stock options because the option terms are fixed and the
exercise price equals the market price of the underlying stock on the grant
date.

As required by SFAS No. 123, the Company has determined the pro forma
information as if the Company had accounted for stock options granted since
September 30, 1995 under the fair value method of SFAS No. 123. The
Black-Scholes option pricing model was used with the following weighted-average
assumptions: risk-free interest rates of 5.39% and 6.38% in 1996, 6.27% in 1997
and 5.87%, 5.44% and 4.62% in 1998; dividend yield of 3.60% and 3.28% in 1996,
4.17% in 1997 and 2.99%, 2.61% and 2.12% in 1998; expected common stock market
price volatility factor of .305 in 1996 and 1997 and .308 in 1998; and a
weighted-average expected life of the options of six years. The weighted-average
fair value of options granted in 1996, 1997 and 1998 was $2.72,

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$2.05 and $4.07 per share, respectively. The pro forma effect of these options
on net earnings and earnings per share was not material. These pro forma
calculations only include the effects of 1996, 1997 and 1998 grants. As such,
the impacts are not necessarily indicative of the effects on reported net income
of future years.

9. OPERATING LEASES AND RELATED-PARTY TRANSACTIONS

Total rental expense for plant and equipment charged to continuing
operations under noncancelable operating leases was $797, $886 and $1,114 in
fiscal 1996, 1997 and 1998, respectively. Minimum rental payments due under
operating leases for subsequent fiscal years are: 1999 -- $842; 2000 -- $382;
2001 -- $281; 2002 -- $206; and 2003 -- $137.

Included in rental expense are charges of $128, $128 and $128 in fiscal
1996, 1997 and 1998, respectively, relating to a building lease between the
Company and certain shareholders. In September 1998, the Company purchased the
building which had been leased from such shareholders for $773. The Company's
new product development operations are conducted in the building. The purchase
price was based on the average of two independent appraisals.

10. DISCONTINUED OPERATIONS

On June 2, 1995, Freightliner acquired certain assets of the Company's
motor home, bus and van chassis business. The consideration included cash of
$23,815 and the assumption by Freightliner of certain liabilities. The assets
sold to Freightliner consisted of inventories, property, plant and equipment and
an option to buy the Company's joint venture ownership interest in a Mexican
chassis manufacturer, which option has subsequently expired. The liabilities
assumed by Freightliner included certain warranty obligations related to
previously produced chassis in excess of certain specified amounts for which the
Company retained liability and industrial revenue bonds that were secured by the
underlying real estate. The disposition of the chassis business has been
accounted for as a discontinued operation.

In fiscal 1996, the Company incurred charges totaling $2,623 arising from
the write-off of receivables and other obligations related to the Company's
former joint venture in Mexico. In addition, in fiscal 1996, the Company
recognized additional warranty and other related costs totaling $2,063 with
respect to the Company's former U.S. chassis business.

11. CONTINGENCIES, SIGNIFICANT ESTIMATES AND CONCENTRATIONS

The Company was engaged in litigation against Super Steel Products
Corporation ("SSPC"), the Company's former supplier of mixer systems for
front-discharge concrete mixer trucks under a long-term supply contract. SSPC
sued the Company in state court claiming that the Company breached the contract.
The Company counterclaimed for repudiation of contract. On July 26, 1996, a jury
returned a verdict for SSPC awarding damages totaling $4,485. On October 10,
1996, the state court judge overturned the verdict against the Company, granted
judgment for the Company on its counterclaim, and ordered a new trial for
damages on the Company's counterclaim. Both SSPC and the Company appealed the
state court judge's decision. On December 8, 1998, the Wisconsin Court of

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Appeals ordered a state court judge to reinstate the jury verdict against the
Company awarding damages totaling $4,485 plus interest to SSPC. On April 6,
1999, the Company's petition for review of this decision by the Wisconsin
Supreme Court was denied. On April 12, 1999, the Company petitioned the state
court judge to act on the Company's previous motion for a retrial. This petition
was denied on June 18, 1999 and the state court judge directed that judgment be
entered. In lieu of further appeals, the Company paid $5.75 million on July 27,
1999 in final settlement of the matter. The Company had recorded a liability for
the full amount of the final settlement as of June 30, 1999.

The Company was engaged in the arbitration of certain disputes between the
Oshkosh Florida Division and O.V. Containers, Inc., ("OV") which arose out of
the performance of a contract to deliver 690 skeletal container chassis. The
Company contested warranty and other claims made against it, and reached a
settlement in June 1998, which included payment by the Company of $1,000 to OV.

As part of its routine business operations, the Company disposes of and
recycles or reclaims certain industrial waste materials, chemicals and solvents
at third party disposal and recycling facilities, which are licensed by
appropriate governmental agencies. In some instances, these facilities have been
and may be designated by the United States Environmental Protection Agency
("EPA") or a state environmental agency for remediation. Under the Comprehensive
Environmental Response, Compensation, and Liability Act (the "Superfund" law)
and similar state laws, each potentially responsible party ("PRP") that
contributed hazardous substances may be jointly and severally liable for the
costs associated with cleaning up the site. Typically, PRPs negotiate a
resolution with the EPA and/or the state environmental agencies. PRPs also
negotiate with each other regarding allocation of the cleanup cost.

As to one such Superfund site, Pierce is one of 414 PRPs participating in
the costs of addressing the site and has been assigned an allocation share of
approximately 0.04%. Currently a remedial investigation/ feasibility study is
being completed, and as such, an estimate for the total cost of the remediation
of this site has not been made to date. However, based on estimates and the
assigned allocations, the Company believes its liability at the site will not be
material and its share is adequately covered through reserves established by the
Company at September 30, 1998. Actual liability could vary based on results of
the study, the resources of other PRPs, and the Company's final share of
liability.

The Company is addressing a regional trichloroethylene ("TCE") groundwater
plume on the south side of Oshkosh, Wisconsin. The Company believes there may be
multiple sources in the area. TCE was detected at the Company's North Plant
facility with recent testing showing the highest concentrations in a monitoring
well located on the upgradient property line. Because the investigation process
is still ongoing, it is not possible for the Company to estimate its long-term
total liability associated with this issue at this time. Also, as part of the
regional TCE groundwater investigation, the Company conducted a groundwater
investigation of a former landfill located on Company property. The landfill,
acquired by the Company in 1972, is approximately 2.0 acres in size and is
believed to have been used for the disposal of household waste. Based on the
investigation, the Company does not believe the landfill is one of the sources
of the TCE contamination.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Based upon current knowledge, the Company believes its liability associated with
the TCE issue will not be material and is adequately covered through reserves
established by the Company at September 30, 1998. However, this may change as
investigations proceed by the Company, other unrelated property owners, and the
government.

The Company is subject to other environmental matters and legal proceedings
and claims, including patent, antitrust, product liability and state dealership
regulation compliance proceedings, that arise in the ordinary course of
business. Although the final results of all such matters and claims cannot be
predicted with certainty, management believes that the ultimate resolution of
all such matters and claims, after taking into account the liabilities accrued
with respect to such matters and claims, will not have a material adverse effect
on the Company's financial condition or results of operations. Actual results
could vary, among other things, due to the uncertainties involved in litigation.

The Company has guaranteed certain customers' obligations under deferred
payment contracts and lease purchase agreements totaling approximately $1,000 at
September 30, 1998 and June 30, 1999. The Company is also contingently liable
under bid, performance and specialty bonds totaling approximately $86,885 and
$107,815 and open standby letters of credit issued by the Company's bank in
favor of third parties totaling $12,146 and $9,298 at September 30, 1998 and
June 30, 1999, respectively.

Provisions for estimated warranty and other related costs are recorded at
the time of sale and are periodically adjusted to reflect actual experience. As
of September 30, 1997 and 1998, the Company has accrued $12,320 and $15,887 for
warranty claims. Certain warranty and other related claims involve matters of
dispute that ultimately are resolved by negotiation, arbitration or litigation.
Infrequently, a material warranty issue can arise which is beyond the scope of
the Company's historical experience. During fiscal 1996, 1997 and 1998, the
Company recorded warranty and other related costs for matters beyond the
Company's historical experience totaling $5,602, $3,770 and $3,200,
respectively, with respect to continuing operations and $2,063 with respect to
discontinued operations in fiscal 1996 (see Note 10). The additional charges in
fiscal 1996, 1997 and 1998 with regard to continuing operations principally
related to a dispute involving the Company's former trailer manufacturing
operations with OV, which was settled in fiscal 1998, and secondarily to repair
certain matters related to refuse and front-discharge chassis. The additional
warranty charges with respect to discontinued operations in fiscal 1996 resulted
from the underestimation of the warranty liabilities retained by the Company
upon the sale of the Company's former chassis business. It is reasonably
possible that additional warranty and other related claims could arise from
disputes or other matters beyond the scope of the Company's historical
experience.

The Company subcontracted production under an $85,000 ISO-Compatible
Palletized Flatracks ("IPF") contract for the U.S. Army to Steeltech
Manufacturing, Inc. ("Steeltech"), a minority-owned firm, pursuant to Department
of Defense regulations under the IPF contract. Due to financial difficulties
encountered by Steeltech, the Company advanced working capital requirements to
Steeltech in fiscal 1995 and 1996. As a result of delays in the start-up of
full-scale production under the IPF contract, the Company wrote off certain of
its advances and an investment in Steeltech totaling $3,300

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in fiscal 1996. Such charges were determined based on the amount of advances
that were deemed to be unrealizable based on a projection of Steeltech's cash
flows through completion of the IPF contract. Steeltech's IPF production was
completed in July 1998. In fiscal 1996, the Company also wrote off an investment
of $900 in a joint venture, which leases equipment to Steeltech and accrued
$1,084 for the potential satisfaction of a guarantee of 50% of the outstanding
indebtedness of the joint venture. Such charges were based on a projection of
Steeltech's cash flows, which indicated that Steeltech could not sustain its
lease payments to the joint venture, and because the Company believed that there
was not a market for the sale of the leased equipment. Given the completion of
the IPF contract, the Company is attempting to dispose of its investment in the
joint venture and simultaneously satisfy in cash the remainder of its guarantee.
The Company believes that it is adequately reserved at September 30, 1998, for
any matters relating to the disposition of such investment and guarantee.

The Company derives a significant portion of its revenue from the U.S.
Department of Defense, as follows:

[Download Table]

FISCAL YEAR ENDED SEPTEMBER 30,
--------------------------------
1996 1997 1998
-------- -------- --------

Defense:
U.S. Department of Defense..................... $249,413 $272,042 $248,577
Export......................................... 2,059 16,584 452
-------- -------- --------
251,472 288,626 249,029
Commercial:
Domestic....................................... 141,540 373,946 619,170
Export......................................... 20,443 20,662 34,593
-------- -------- --------
161,983 394,608 653,763
-------- -------- --------
Net sales........................................ $413,455 $683,234 $902,792
======== ======== ========

U.S. Department of Defense sales include $58,855, $17,723 and $10,437, in
fiscal 1996, 1997 and 1998, respectively, for products sold internationally
under the Foreign Military Sales ("FMS") Program.

Inherent in doing business with the U.S. Department of Defense are certain
risks, including technological changes and changes in levels of defense
spending. All U.S. Department of Defense contracts contain a provision that they
may be terminated at any time at the convenience of the government. In such an
event, the Company is entitled to recover allowable costs plus a reasonable
profit earned to the date of termination.

Various actions or claims have been asserted or may be asserted in the
future by the government against the Company. A potential action by the
government against the Company in connection with a grand jury investigation was
commenced in 1989. In 1996, the government discontinued this investigation
without any action against the Company or its employees. A subsequent, related
civil investigation was dismissed in fiscal 1998.

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12. UNAUDITED QUARTERLY RESULTS

[Enlarge/Download Table]

FISCAL 1997 FISCAL 1998
----------------------------------------------------- -------------------------
1ST 2ND 3RD 4TH 1ST 2ND
QUARTER QUARTER QUARTER QUARTER QUARTER QUARTER
------- ------- ------- ------- ------- -------

Net sales............. $150,320 $170,465 $176,596 $185,853 $151,801 $217,836
Gross income.......... 17,590 21,115 19,686 22,606 19,998 27,534
Income from continuing
operations.......... 1,624 2,474 2,792 3,116 3,140 3,161
Extraordinary item.... -- -- -- -- -- (735)
Net income............ 1,624 2,474 2,792 3,116 3,140 2,426
Earnings per share:
Continuing
operations........ $.13 $.19 $.22 $.25 $.25 $ .25
Extraordinary
item.............. -- -- -- -- -- (.06)
Net income.......... .13 .19 .22 .25 .25 .19
Earnings per share
assuming dilution:
Continuing
operations...... .13 .19 .22 .25 .25 .25
Extraordinary
item............ -- -- -- -- -- (.06)
Net income........ .13 .19 .22 .25 .25 .19
Dividends per share:
Class A Common
Stock............. $0.07250 $0.07250 $0.07250 $0.07250 $0.07250 $0.07250
Common Stock........ 0.08333 0.08333 0.08333 0.08333 0.08333 0.08333

FISCAL 1998
-------------------------
3RD 4TH
QUARTER QUARTER
------- -------

Net sales............. $290,104 $243,051
Gross income.......... 39,579 38,925
Income from continuing
operations.......... 5,000 4,952
Extraordinary item.... (450) --
Net income............ 4,550 4,952
Earnings per share:
Continuing
operations........ $ .39 $.39
Extraordinary
item.............. (.03) --
Net income.......... .36 .39
Earnings per share
assuming dilution:
Continuing
operations...... .38 .39
Extraordinary
item............ (.03) --
Net income........ .35 .39
Dividends per share:
Class A Common
Stock............. $0.07250 $0.07250
Common Stock........ 0.08333 0.08333

For the fourth quarter of fiscal 1998, continuing operations includes, on a
pre-tax basis, a $3,865 non-cash charge related to an impairment loss for the
Company's Florida manufacturing facilities, a $1,935 non-cash charge related to
an impairment loss on the Company's Summit brand mixer system technology
intangible asset, and a $3,375 cash gain from the sale of an interest in a
Mexican bus manufacturer (see Note 13).

In April 1998, the AICPA issued SOP No. 98-5, "Reporting on the Costs of
Start-up Activities." Prior to fiscal 1998, the Company had not capitalized any
costs covered by SOP 98-5. In February 1998, OMFSP, which the Company accounts
for using the equity method, incurred and capitalized approximately $1,466 of
costs ($895 net of income taxes) related to the organization of the partnership.
In the fourth quarter of fiscal 1998, OMFSP elected to adopt early the
provisions of SOP 98-5 which require that adoption be as of the beginning of the
year. As a result, the Company has restated the previously reported results for
the second quarter of fiscal 1998 to write off its share of the costs previously
capitalized by the partnership. The charge has been included in the consolidated
statements of income under the caption "Equity in earnings of unconsolidated
partnership, net of income taxes."

13. IMPAIRMENT LOSSES AND GAIN ON SALE OF AFFILIATE

Following the acquisition of McNeilus and after conducting an internal
study to determine how to integrate the concrete mixer businesses of the Company
and McNeilus, the Company revised its plans regarding the use of the Company's
Florida manufacturing facility and of the previously acquired concrete mixer
technology of Friesz (see Note 3). The Florida manufacturing facility was
originally acquired in connection with the Company's acquisition of assets and
the business of a manufacturer of truck trailers in

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

fiscal 1991. In 1996, the Company exited the manufacture of truck trailers but
retained the Florida facility to manufacture products for the U.S. military and
the Company's Summit brand of rear-discharge cement mixers. During the fourth
quarter of fiscal 1998, following the completion of the internal study,
management determined that all of the Company's U.S. requirements for
rear-discharge concrete mixers would be sourced through the McNeilus
manufacturing facilities due to the quality of the McNeilus brand and the
efficient manufacturing processes at its facilities. In the fourth quarter of
fiscal 1998, the Company further decided to begin to consolidate all its U.S.
defense-related manufacturing in its Oshkosh, Wisconsin facility due to
available capacity in Oshkosh and the ability to improve management of defense
programs from this facility. As a result, management determined that Oshkosh's
Florida facility and the Summit intangible asset may be impaired. Management
estimated the projected undiscounted future cash flows from the Florida facility
and the Friesz mixer technology and determined that such cash flows were less
than the carrying value of the assets. Accordingly, pre-tax impairment losses of
$3,865 and $1,935, respectively, were recognized in fiscal 1998 and are included
in selling, general and administrative expense. The fair value of the Florida
facility was based on a third party appraisal. The fair value of the mixer
intangible asset was based on the absence of future cash flows.

During fiscal 1996, the Company wrote off (as a charge to selling, general
and administrative expense) its $3,025 equity investment in a Mexican bus
manufacturer due to prolonged weakness in the Mexican economy and continuing
high losses and high leverage reported by the Mexican affiliate. Also, in fiscal
1996, the Company wrote off a $200 equity investment in Steeltech and a $900
investment in a joint venture which leases equipment to Steeltech (see Note 11).
In September 1998, the Company sold its 5.0% ownership interest in the Mexican
bus manufacturer and recorded a pre-tax gain of $3,375. This gain has been
recorded as a reduction of selling, general and administrative expense in fiscal
1998.

14. SUBSIDIARY GUARANTORS

The following tables present condensed consolidating financial information
for fiscal 1998 and as of June 30, 1999 and for the nine months then ended for:
(a) the Company; (b) on a combined basis, the guarantors of the Senior
Subordinated Notes, which include all of the wholly-owned subsidiaries of the
Company ("Subsidiary Guarantors") other than McNeilus Financial Services, Inc.,
Oshkosh/McNeilus Financial Services, Inc., and Nation's Casualty Insurance,
Inc., which are the only non-guarantor subsidiaries of the Company
("Non-Guarantor Subsidiaries"); and (c) on a combined basis, the Non-Guarantor
Subsidiaries. Condensed consolidating financial information has not been
presented for any period prior to February 26, 1998 because no Non-Guarantor
Subsidiaries existed prior to the issuance of the Senior Subordinated Notes as
of that date. Separate financial statements of the Subsidiary Guarantors are not
presented because the guarantors are jointly, severally, and unconditionally
liable under the guarantees, and the Company believes separate financial
statements and other disclosures regarding the Subsidiary Guarantors are not
material to investors.

The Company is comprised of Wisconsin and Florida manufacturing operations
and certain corporate management, information services and finance functions.
Borrowings and

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

related interest expense under the Senior Credit Facility and the Senior
Subordinated Notes are charged to the Company. The Company has allocated a
portion of this interest expense to certain Subsidiary Guarantors through a
formal lending arrangement. There are presently no management fee arrangements
between the Company and its Non-Guarantor Subsidiaries.

CONDENSED CONSOLIDATING STATEMENT OF INCOME
YEAR ENDED SEPTEMBER 30, 1998

[Enlarge/Download Table]

SUBSIDIARY NON-GUARANTOR
COMPANY GUARANTORS SUBSIDIARIES ELIMINATIONS CONSOLIDATED
-------- ---------- ------------- ------------ ------------
(IN THOUSANDS)

Net sales......................... $393,720 $509,072 $ -- $ -- $902,792
Cost of sales..................... 350,139 426,617 -- -- 776,756
-------- -------- ----- -------- --------
Gross income...................... 43,581 82,455 -- -- 126,036
Operating expenses:
Selling, general and
administrative............... 37,861 31,117 23 -- 69,001
Amortization of goodwill and
other intangibles............ -- 8,315 -- -- 8,315
-------- -------- ----- -------- --------
Total operating expenses.......... 37,861 39,432 23 -- 77,316
-------- -------- ----- -------- --------
Operating income (loss)........... 5,720 43,023 (23) -- 48,720
Other income (expense):
Interest expense................ (16,878) (7,195) (180) 2,763 (21,490)
Interest income................. 418 3,248 423 (2,763) 1,326
Miscellaneous, net.............. (96) 18 170 -- 92
-------- -------- ----- -------- --------
(16,556) (3,929) 413 -- (20,072)
-------- -------- ----- -------- --------
Income (loss) from operations
before income taxes, equity in
earnings of subsidiaries and
unconsolidated partnership and
extraordinary item.............. (10,836) 39,094 390 -- 28,648
Provision (credit) for income
taxes........................... (4,075) 16,578 152 -- 12,655
-------- -------- ----- -------- --------
(6,761) 22,516 238 -- 15,993
Equity in earnings of subsidiaries
and unconsolidated partnership,
net of income taxes............. 23,014 -- 260 (23,014) 260
-------- -------- ----- -------- --------
Income (loss) from continuing
operations...................... 16,253 22,516 498 (23,014) 16,253
Extraordinary charge for early
retirement of debt, net of
income tax benefit.............. (1,185) -- -- -- (1,185)
-------- -------- ----- -------- --------
Net income........................ $ 15,068 $ 22,516 $ 498 $(23,014) $ 15,068
======== ======== ===== ======== ========

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

CONDENSED CONSOLIDATING BALANCE SHEET
SEPTEMBER 30, 1998

[Enlarge/Download Table]

SUBSIDIARY NON-GUARANTOR
COMPANY GUARANTORS SUBSIDIARIES ELIMINATIONS CONSOLIDATED
------- ---------- ------------- ------------ ------------
(IN THOUSANDS)

ASSETS
Current assets:
Cash and cash equivalents....... $ 1,065 $ 979 $ 1,578 $ -- $ 3,622
Receivables, net................ 41,009 39,863 110 -- 80,982
Inventories..................... 47,191 102,000 -- -- 149,191
Prepaid expenses and other...... 9,059 5,099 1,891 -- 16,049
-------- -------- ------- --------- --------
Total current assets.... 98,324 147,941 3,579 -- 249,844
Investment in and advances to:
Subsidiaries.................... 363,189 (4,585) -- (358,604) --
Unconsolidated partnership...... -- -- 13,496 -- 13,496
Other long-term assets............ 9,276 4,960 (38) -- 14,198
Net property, plant and
equipment....................... 23,789 57,047 -- -- 80,836
Goodwill and other intangible
assets, net..................... 1,108 325,557 -- -- 326,665
-------- -------- ------- --------- --------
Total assets............ $495,686 $530,920 $17,037 $(358,604) $685,039
======== ======== ======= ========= ========
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities:
Accounts payable................ $ 30,843 $ 34,294 $ 34 $ -- $ 65,171
Floor plan notes payable........ -- 11,645 -- -- 11,645
Customer advances............... 1,689 43,226 -- -- 44,915
Payroll-related obligations..... 8,749 15,348 27 -- 24,124
Accrued warranty................ 5,689 10,198 -- -- 15,887
Other current liabilities....... 23,710 15,037 4,751 -- 43,498
Current maturities of long-term
debt......................... 3,216 251 -- -- 3,467
-------- -------- ------- --------- --------
Total current
liabilities.......... 73,896 129,999 4,812 -- 208,707
Long-term debt.................... 274,784 2,553 -- -- 277,337
Deferred income taxes............. (2,394) 33,416 16,810 -- 47,832
Other long-term liabilities....... 18,104 1,763 -- -- 19,867
Investment by and advances from
(to) parent..................... -- 363,189 (4,585) (358,604) --
Shareholders' equity.............. 131,296 -- -- -- 131,296
-------- -------- ------- --------- --------
Total liabilities and
shareholders'
equity............... $495,686 $530,920 $17,037 $(358,604) $685,039
======== ======== ======= ========= ========

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
YEAR ENDED SEPTEMBER 30, 1998

[Enlarge/Download Table]

SUBSIDIARY NON-GUARANTOR
COMPANY GUARANTORS SUBSIDIARIES ELIMINATIONS CONSOLIDATED
--------- ---------- ------------- ------------ ------------
(IN THOUSANDS)

OPERATING ACTIVITIES:
Income (loss) from continuing
operations.................. $ 16,253 $ 22,516 $ 498 $(23,014) $ 16,253
Non-cash adjustments........... 9,707 14,293 (3,156) -- 20,844
Changes in operating assets and
liabilities................. 40,800 4,532 (2,488) -- 42,844
--------- -------- ------- -------- ---------
Net cash provided from (used
for) operating activities... 66,760 41,341 (5,146) (23,014) 79,941
INVESTING ACTIVITIES:
Acquisitions of businesses, net
of cash acquired............ (217,581) (3,563) -- -- (221,144)
Investments in and advances to
subsidiaries................ (2,045) (28,180) 7,211 23,014 --
Additions to property, plant
and equipment............... (2,584) (5,971) -- -- (8,555)
Other.......................... 4,177 (2,608) (487) -- 1,082
--------- -------- ------- -------- ---------
Net cash provided from (used
for) investing activities... (218,033) (40,322) 6,724 23,014 (228,617)
NET CASH USED FOR DISCONTINUED
OPERATIONS..................... (1,093) -- -- -- (1,093)
FINANCING ACTIVITIES:
Net borrowings under revolving
credit facility............. 6,000 -- -- -- 6,000
Proceeds from issuance of long-
term debt................... 325,000 -- -- -- 325,000
Repayment of long term debt.... (188,000) (49) -- -- (188,049)
Debt issuance costs............ (8,641) -- -- -- (8,641)
Dividends paid................. (4,176) -- -- -- (4,176)
Other.......................... 38 -- -- -- 38
--------- -------- ------- -------- ---------
Net cash provided from (used
for) financing activities... 130,221 (49) -- -- 130,172
--------- -------- ------- -------- ---------
Increase (decrease) in cash and
cash equivalents............... (22,145) 970 1,578 -- (19,597)
Cash and cash equivalents at
beginning of period............ 23,210 9 -- -- 23,219
--------- -------- ------- -------- ---------
Cash and cash equivalents at end
of period...................... $ 1,065 $ 979 $ 1,578 --$........ $ 3,622
========= ======== ======= ======== =========

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

CONDENSED CONSOLIDATING STATEMENT OF INCOME
NINE MONTHS ENDED JUNE 30, 1998
(UNAUDITED)

[Enlarge/Download Table]

SUBSIDIARY NON-GUARANTOR
COMPANY GUARANTORS SUBSIDIARIES ELIMINATIONS CONSOLIDATED
-------- ---------- ------------- ------------ ------------
(IN THOUSANDS)

Net sales....................... $305,537 $354,204 $ -- $ -- $659,741
Cost of sales................... 274,524 298,106 -- -- 572,630
-------- -------- ----- -------- --------
Gross income.................... 31,013 56,098 -- -- 87,111
Operating expenses:
Selling, general and
administrative............. 27,266 20,147 252 -- 47,665
Amortization of goodwill and
other intangibles.......... -- 5,559 -- -- 5,559
-------- -------- ----- -------- --------
Total operating expenses........ 27,266 25,706 252 -- 53,224
-------- -------- ----- -------- --------
Operating income (loss)......... 3,747 30,392 (252) -- 33,887
Other income (expense):
Interest expense.............. (9,117) (5,156) -- -- (14,273)
Interest income............... 274 270 -- -- 544
Miscellaneous, net............ (292) (416) 364 -- (344)
-------- -------- ----- -------- --------
(9,135) (5,302) 364 -- (14,073)
-------- -------- ----- -------- --------
Income (loss) from operations
before income taxes, and
equity in earnings of
subsidiaries and
unconsolidated partnership and
extraordinary item............ (5,388) 25,090 112 -- 19,814
Provision (credit) for income
taxes......................... (2,243) 10,584 37 -- 8,378
-------- -------- ----- -------- --------
(3,145) 14,506 75 -- 11,436
Equity in earnings of
subsidiaries and
unconsolidated partnership,
net of income taxes........... 14,446 -- (135) (14,446) (135)
-------- -------- ----- -------- --------
Income from operations.......... 11,301 14,506 (60) (14,446) 11,301
Extraordinary charge for early
retirement of debt, net of
income tax benefit............ (1,185) -- -- -- (1,185)
-------- -------- ----- -------- --------
Net income...................... $ 10,116 $ 14,506 $ (60) $(14,446) $ 10,116
======== ======== ===== ======== ========

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

CONDENSED CONSOLIDATING STATEMENT OF INCOME
NINE MONTHS ENDED JUNE 30, 1999
(UNAUDITED)

[Enlarge/Download Table]

SUBSIDIARY NON-GUARANTOR
COMPANY GUARANTORS SUBSIDIARIES ELIMINATIONS CONSOLIDATED
-------- ---------- ------------- ------------ ------------
(IN THOUSANDS)

Net sales......................... $295,341 $559,294 $ -- $ (3,587) $851,048
Cost of sales..................... 259,360 470,355 -- (3,587) 726,128
-------- -------- ------ -------- --------
Gross income...................... 35,981 88,939 -- -- 124,920
Operating expenses:
Selling, general and
administrative............... 30,155 32,919 248 -- 63,322
Amortization of goodwill and
other intangibles............ -- 8,400 -- -- 8,400
-------- -------- ------ -------- --------
Total operating expenses.......... 30,155 41,319 248 -- 71,722
-------- -------- ------ -------- --------
Operating income (loss)........... 5,826 47,620 (248) -- 53,198
Other income (expense):
Interest expense................ (18,493) (6,071) -- 4,725 (19,839)
Interest income................. 245 5,047 47 (4,725) 614
Miscellaneous, net.............. 130 130 304 -- 564
-------- -------- ------ -------- --------
(18,118) (894) 351 -- (18,661)
-------- -------- ------ -------- --------
Income (loss) from operations
before income taxes, and equity
in earnings of subsidiaries and
unconsolidated partnership...... (12,292) 46,726 103 -- 34,537
Provision (credit) for income
taxes........................... (4,671) 19,332 39 -- 14,700
-------- -------- ------ -------- --------
(7,621) 27,394 64 -- 19,837
Equity in earnings of subsidiaries
and unconsolidated partnership,
net of income taxes............. 28,627 -- 1,169 (28,627) 1,169
-------- -------- ------ -------- --------
Net income........................ $ 21,006 $ 27,394 $1,233 $(28,627) $ 21,006
======== ======== ====== ======== ========

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

CONDENSED CONSOLIDATING BALANCE SHEET
JUNE 30, 1999
(UNAUDITED)

[Enlarge/Download Table]

SUBSIDIARY NON-GUARANTOR
COMPANY GUARANTORS SUBSIDIARIES ELIMINATIONS CONSOLIDATED
-------- ---------- ------------- ------------ ------------
(IN THOUSANDS)

ASSETS
CURRENT ASSETS:
Cash and cash equivalents...... $ 4,110 $ 904 $ 427 $ -- $ 5,441
Receivables, net............... 52,216 54,938 66 -- 107,220
Inventories.................... 60,048 158,271 -- -- 218,319
Prepaid expenses and other..... 3,174 662 -- -- 3,836
Deferred income taxes.......... 9,164 7,007 4,488 -- 20,659
-------- -------- ------- --------- --------
Total current assets... 128,712 221,782 4,981 -- 355,475
Investment in and advances to:
Subsidiaries................... 382,141 (2,943) -- (379,198) --
Unconsolidated partnership..... -- -- 16,643 -- 16,643
Other long-term assets........... 9,977 6,825 48 -- 16,850
Net property, plant and
equipment...................... 23,252 57,372 -- -- 80,624
Goodwill and other intangible
assets, net.................... 1,108 323,363 -- -- 324,471
-------- -------- ------- --------- --------
Total assets........... $545,190 $606,399 $21,672 $(379,198) $794,063
======== ======== ======= ========= ========
LIABILITIES AND
SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable............... $ 35,643 $ 45,139 $ 32 $ -- $ 80,814
Floor plan notes payable....... -- 35,971 -- -- 35,971
Customer advances.............. 1,155 62,929 -- -- 64,084
Payroll-related obligations.... 10,459 14,205 24 -- 24,688
Accrued warranty............... 6,366 9,725 -- -- 16,091
Other current liabilities...... 32,424 18,148 10,921 -- 61,493
Current maturities of long-term
debt and revolving credit
facility.................... 27,912 251 -- -- 28,163
-------- -------- ------- --------- --------
Total current
liabilities......... 113,959 186,368 10,977 -- 311,304
Long-term debt................... 264,388 2,305 -- -- 266,693
Deferred income taxes............ (4,017) 34,056 13,638 -- 43,677
Other long-term liabilities...... 19,717 1,529 -- -- 21,246
Investments by and advances from
(to) parent.................... -- 382,141 (2,943) (379,198) --
Shareholders' equity............. 151,143 -- -- -- 151,143
-------- -------- ------- --------- --------
Total liabilities and
shareholders'
equity.............. $545,190 $606,399 $21,672 $(379,198) $794,063
======== ======== ======= ========= ========

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
NINE MONTHS ENDED JUNE 30, 1998
(UNAUDITED)

[Enlarge/Download Table]

SUBSIDIARY NON-GUARANTOR
COMPANY GUARANTORS SUBSIDIARIES ELIMINATIONS CONSOLIDATED
------- ---------- ------------- ------------ ------------
(IN THOUSANDS)

OPERATING ACTIVITIES:
Income (loss) from
operations.................. $ 11,301 $14,506 $ (60) $(14,446) $ 11,301
Non-cash adjustments........... 7,042 8,552 260 -- 15,854
Changes in operating assets and
liabilities................. 32,445 21,010 (1,628) --........ 51,827
--------- ------- ------- -------- ---------
Net cash provided from (used for)
operating activities........... 50,788 44,068 (1,428) (14,446) 78,982
INVESTING ACTIVITIES:
Acquisition of businesses, net
of cash acquired............ (225,524) (3,535) 11,105 -- (217,954)
Investments in and advances to
subsidiaries................ 20,715 (32,702) (2,459) 14,446 --
Additions to property, plant
and equipment............... (1,488) (4,782) -- -- (6,270)
Other.......................... 386 (2,274) (24) -- (1,912)
--------- ------- ------- -------- ---------
Net cash provided from (used for)
investing activities........... (205,911) (43,293) 8,622 14,446 (226,136)
NET CASH USED FOR DISCONTINUED
OPERATIONS..................... (872) -- -- -- (872)
FINANCING ACTIVITIES:
Proceeds from issuance of long-
term debt................... 325,000 -- -- -- 325,000
Repayments of long-term debt... (164,000) 69 -- -- (163,931)
Debt issuance costs............ (8,507) -- -- -- (8,507)
Dividends paid................. (3,129) -- -- -- (3,129)
Other.......................... 31 -- -- -- 31
--------- ------- ------- -------- ---------
Net cash provided from financing
activities..................... 149,395 69 -- -- 149,464
--------- ------- ------- -------- ---------
Increase (decrease) in cash and
cash equivalents............... (6,600) 844 7,194 -- 1,438
Cash and cash equivalents at
beginning of period............ 23,210 9 -- -- 23,219
--------- ------- ------- -------- ---------
Cash and cash equivalents at end
of period...................... $ 16,610 $ 853 $ 7,194 $ -- $ 24,657
========= ======= ======= ======== =========

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
NINE MONTHS ENDED JUNE 30, 1999
(UNAUDITED)

[Enlarge/Download Table]

SUBSIDIARY NON-GUARANTOR
COMPANY GUARANTORS SUBSIDIARIES ELIMINATIONS CONSOLIDATED
------- ---------- ------------- ------------ ------------
(IN THOUSANDS)

OPERATING ACTIVITIES:
Income from operations............. $21,006 $ 27,394 $ 1,233 $(28,627) $ 21,006
Non-cash adjustments............... (806) 11,614 (4,643) -- 6,165
Changes in operating assets and
liabilities...................... (7,508) (17,003) (1,591) -- (26,102)
------- -------- ------- -------- --------
Net cash provided from (used
for) operating activities... 12,692 22,005 (5,001) (28,627) 1,069
INVESTING ACTIVITIES:
Investments in and advances to
subsidiaries..................... (18,952) (14,842) 5,167 28,627 --
Additions to property, plant and
equipment........................ (2,589) (4,311) -- -- (6,900)
Other.............................. (302) (2,679) (1,317) -- (4,298)
------- -------- ------- -------- --------
Net cash provided from (used
for) investing activities... (21,843) (21,832) 3,850 28,627 (11,198)
FINANCING ACTIVITIES:
Net payments under revolving credit
facility......................... 14,300 -- -- -- 14,300
Repayments of long-term debt....... -- (248) -- -- (248)
Dividends paid..................... (3,163) -- -- -- (3,163)
Other.............................. 1,059 -- -- -- 1,059
------- -------- ------- -------- --------
Net cash provided from (used
for) financing activities... 12,196 (248) -- -- 11,948
------- -------- ------- -------- --------
Increase (decrease) in cash and
cash equivalents................. 3,045 (75) (1,151) -- 1,819
Cash and cash equivalents at
beginning of period.............. 1,065 979 1,578 -- 3,622
------- -------- ------- -------- --------
Cash and cash equivalents at end of
period........................... $4,110 $ 904 $ 427 $ -- $ 5,441
======= ======== ======= ======== ========

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

15. SUBSEQUENT EVENT

On February 1, 1999, the Board of Directors of the Company adopted a
shareholder rights plan and declared a rights dividend of two-thirds of one
Preferred Share Purchase Right ("Right") for each share of Common Stock and
40/69 of one Right for each share of Class A Common Stock outstanding on
February 8, 1999, and provided that two-thirds of one Right and 40/69 of one
Right would be issued with each share of Common Stock and Class A Common Stock,
respectively, thereafter issued. The Rights are exercisable only if a person or
group acquires 15% or more of the Common Stock and Class A Common Stock or
announces a tender offer for 15% or more of the Common Stock and Class A Common
Stock. Each Right entitles the holder thereof to purchase from the Company one
one-hundredth share of the Company's Series A Junior Participating Preferred
Stock at an initial exercise price of $145 per one one-hundredth of a share
(subject to adjustment), or, upon the occurrence of certain events, Common Stock
or common stock of an acquiring company having a market value equivalent to two
times the exercise price. Subject to certain conditions, the Rights are
redeemable by the Board of Directors for $.01 per Right and are exchangeable for
shares of Common Stock. The Board of Directors is also authorized to reduce the
15% thresholds referred to above to not less than 10%. The Rights have no voting
power and initially expire on February 1, 2009.

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Dates Referenced Herein and Documents Incorporated by Reference

		Referenced-On Page
This ‘424B4’ Filing	Date	First	Last	Other Filings

	2/1/09	52	95
	9/21/08	79
	3/1/08	73	74
	3/31/06	14	73	10-Q, 4
	3/31/05	14	73	10-Q
	3/31/04	14	73	10-Q
	3/1/03	74
	9/30/01	44		10-K
	3/1/01	74
	6/15/00	29	68
	11/24/99	1
Filed on:	11/22/99
	11/18/99	1	54
	11/8/99	7		8-K
	11/2/99	57		8-K
	10/25/99	7	57	8-K
	9/30/99	7	68	10-K
	8/31/99	27	48
	8/19/99	3	68
	8/5/99	68
	7/27/99	46	82
	7/23/99	60	68
	6/30/99	5	94	10-Q
	6/18/99	46	82
	4/12/99	46	82
	4/6/99	46	82
	3/31/99	28	57	10-Q
	2/16/99	57		10-Q/A, SC 13G
	2/12/99	57		10-K/A, 10-Q
	2/8/99	95
	2/1/99	52	95	8-K, DEF 14A
	12/31/98	57	68	10-Q, 10-Q/A
	12/23/98	57
	12/8/98	46	81
	10/30/98	60
	10/1/98	29
	9/30/98	7	89	10-K, 10-K/A
	6/30/98	9	93	10-Q
	2/26/98	10	86	8-K
	12/19/97	20	72
	12/15/97	29	68
	10/1/97	72
	9/30/97	9	83	10-K405, 10-K405/A
	5/2/97	78
	10/10/96	45	81
	10/1/96	72
	9/30/96	9	80	10-K405
	9/18/96	10	72	8-K, 8-K/A
	7/26/96	45	81
	11/9/95	73
	9/30/95	17	80	10-K405
	6/2/95	10	81	8-K
	9/30/94	17	18	10-K
				List all Filings

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Filing Submission 0000950124-99-006230 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)

Oshkosh Corp – ‘424B4’ on 11/22/99

On: Monday, 11/22/99 · Accession #: 950124-99-6230 · File #: 333-87149

Prospectus — Rule 424(b)(4)Filing Table of Contents

Document Table of Contents

Dates Referenced Herein and Documents Incorporated by Reference

Prospectus — Rule 424(b)(4)
Filing Table of Contents