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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

Commission File Number  1-31371

Registrant's telephone number, including area code:  (920) 235-9151

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes       X               No            

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

Yes       X               No            

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

Class A Common Stock Outstanding as of April 23, 2004:   810,700

Common Stock Outstanding as of April 23, 2004:   34,438,912

OSHKOSH TRUCK CORPORATION
FORM 10-Q INDEX
FOR THE QUARTER ENDED MARCH 31, 2004

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PART I. ITEM 1. FINANCIAL INFORMATION
OSHKOSH TRUCK CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

The accompanying notes are an integral part of these condensed consolidated financial statements.

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OSHKOSH TRUCK CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)

The accompanying notes are an integral part of these condensed consolidated financial statements.

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OSHKOSH TRUCK CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY
SIX MONTHS ENDED MARCH 31, 2004
(Unaudited)

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OSHKOSH TRUCK CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

The accompanying notes are an integral part of these condensed consolidated financial statements.

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OSHKOSH TRUCK CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2004
(In thousands, except share and per share amounts)
(Unaudited)

1.   BASIS OF PRESENTATION

The condensed consolidated financial statements included herein have been prepared by Oshkosh Truck Corporation (the “Company”) without audit. However, the foregoing financial statements contain all adjustments (which include normal recurring adjustments except as disclosed herein) that are, in the opinion of Company management, necessary to present fairly the condensed consolidated financial statements. Operating results for the periods presented may not be indicative of the annual results.

In the six month period ended March 31, 2004, the Company recorded a cumulative catch-up adjustment to increase the life-to-date margin recognized on its multi-year Medium Tactical Vehicle Replacement (“MTVR”) production contract which is accounted for under the “percentage-of-completion” method. The adjustment was recorded during the Company’s first fiscal quarter and resulted from a settlement during the period of a warranty reimbursement with a supplier and positive cost performance under the contract due to increased overall defense segment production volume. The cumulative life-to-date adjustment increased the margin percentage recognized on the contract from 5.5% to 6.3%. The cumulative life-to-date adjustment increased operating income for the six months ended March 31, 2004 by $6.5 million, net income by $4.1 million and earnings per share by $0.12, including $6.2 million, $3.9 million and $0.11, respectively, relating to revenues recorded in prior periods. The Company had recognized a margin percentage of 4.3% on this contract in the three and six month periods ended March 31, 2003. The Company recognized a margin percentage of 6.3% on the contract during the three-month period ended March 31, 2004.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended September 30, 2003.

2.   NEW ACCOUNTING STANDARDS

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In December 2003, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 132 (revised 2003), “Employers’ Disclosures about Pensions and Other Post-retirement Benefits, an amendment of FASB Statements No. 87, 88 and 106” (collectively “SFAS No. 132(R)”). SFAS No. 132(R) incorporates all of the disclosure requirements of SFAS No. 132 “Employers Disclosures about Pensions and Other Post-retirement Benefits” and increases annual disclosure requirements to include more details about pension plan assets, benefit obligations, cash flows, benefit costs and related information. The Company will be required to adopt the new annual disclosure requirements effective September 30, 2004.

SFAS No. 132(R) also amends Accounting Principles Board (“APB”) Opinion No. 28, “Interim Financial Reporting” to require interim-period disclosure of the components of net periodic benefit cost and, if significantly different from previously disclosed amounts, the amounts of contributions and projected contributions to fund pension plans and other post-retirement benefit plans. The Company has adopted the interim-period disclosure requirements of SFAS No. 132(R) effective March 31, 2004. Because SFAS No. 132(R) pertains only to disclosure provisions, the Company’s adoption of SFAS No. 132(R) will not have an impact on the Company’s financial condition, results of operations or cash flows.

In January 2003, the FASB issued Financial Interpretation No. 46, “Consolidation of Variable Interest Entities,” which was revised December 2003 (“FIN 46(R)”). FIN 46(R) requires that companies consolidate a variable interest entity if it is subject to a majority of the risk of loss from the variable interest entity’s activities, or is entitled to receive a majority of the entity’s residual returns, or both. The provisions of FIN 46(R) currently are required to be applied no later than the first reporting period ending after March 15, 2004 for variable interest entities in which the Company holds a variable interest that it acquired on or before January 31, 2003. Companies that acquired a variable interest after January 31, 2003, continue to apply the provisions of FIN 46 or apply FIN 46(R) beginning December 31, 2003. Companies that hold a variable interest in a special purpose entity, as defined, are required to apply either FIN 46 or FIN 46(R) no later than the end of the first reporting period that ends after December 15, 2003. The Company has no special purpose entities, nor has it acquired a variable interest in an entity where the Company is the primary beneficiary since January 31, 2003. Adoption of FIN 46(R) did not have an impact on the Company’s financial condition, results of operations or cash flows because the Company believes it has no variable interest entities.

In January 2004, the FASB issued FASB Staff Position (“FSP”) No. 106-1, “Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003.” FSP No. 106-1 permits the sponsor of a postretirement health care plan that provides a prescription drug benefit to make a one-time election to defer accounting for the effects of the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (“the Act”) and requires certain disclosures pending further consideration of the underlying accounting issues.

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In December 2003, the Act was signed into law. The Act introduces a prescription drug benefit under Medicare as well as a federal subsidy to sponsors of retiree health care benefit plans that provide a benefit that is at least actuarially equivalent to Medicare Part D. FASB Statement No. 106, “Employers’ Accounting for Postretirement Benefits Other Than Pensions,” (“FAS No. 106”), provides that presently enacted changes in the law that take effect in future periods and that will affect the future level of benefit coverage are required to be considered in the current-period measurements for benefits expected to be provided in those future periods. The Act also introduced two new features to Medicare that need to be considered in determining current-period measurements. These features are 1) a subsidy to a plan sponsor based on 28 percent of an individual beneficiary’s annual prescription drug costs between certain amounts (“the subsidy”) and 2) the opportunity for a retiree to obtain a prescription drug benefit under Medicare. Plan sponsors’ eligibility for the subsidy depends upon, among other things, whether the plan’s prescription drug benefit is at least actuarially equivalent to the Medicare Part D benefit and on how many Medicare-eligible retired plan participants choose not to enroll in the voluntary Part D plan. Further, specific regulations necessary to implement the Act have not yet been issued by the appropriate administrative agency.

Because of these and other questions that exist relative to the Act, there is general uncertainty as to both the timing and the type of accounting recognition to be given the subsidy. Questions include whether the subsidy should be accounted for as a reduction of the accumulated pension benefit obligation (“APBO”) and net periodic postretirement benefit cost, or whether the subsidy represents a payment to the plan sponsor which does not represent a direct reduction of postretirement benefit costs.

Because the Company does not have (a) sufficiently reliable information available on which to measure the effects of the Act, or (b) sufficient guidance to ensure that the Company’s accounting for the effects of the Act is consistent with generally accepted accounting principles, the Company has elected to defer recognizing the effects of the Act in the accounting for its plans under FAS No. 106 and in providing disclosures related to the plan required by FAS No. 132(R) until authoritative guidance on the accounting for the federal subsidy is issued or until certain other events occur as provided for under FSP No. 106-1.

Because of the election to follow deferral provisions of FSP No. 106-1, the Company’s financial statements or accompanying notes for periods following enactment of the Act do not give effect to the financial impact of the Act, including any changes in the measurement of the APBO or net periodic postretirement benefit cost. Specific authoritative guidance on the accounting for the federal subsidy is pending and the guidance, when issued, could require the Company to change previously reported information. Although not expected to be material, at this time the Company cannot provide a reasonable estimate of the impact of the Act on its financial condition, results of operations or cash flows.

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3.   COMPREHENSIVE INCOME

Total comprehensive income is as follows:

4.   EARNINGS PER SHARE

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

For fiscal 2004, options granted on February 3, 2004 to purchase 48,600 shares of Common Stock at $59.490 per share and for fiscal 2003, options granted on February 4, 2003 to purchase 54,000 shares of Common Stock at $31.235 per share were outstanding, but were not included in the computation of diluted earnings per share because the exercise price of the options was greater than the average market price of the Common Stock, and therefore, the effect would have been anti-dilutive.

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5.   INVENTORIES

Inventories consist of the following:

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

6.   INVESTMENT IN UNCONSOLIDATED AFFILIATES

The Company’s investment in unconsolidated affiliates consists primarily of an interest in Oshkosh/McNelius Financial Services Partnership (“OMFSP”). The Company and an unaffiliated third party are general partners in OMFSP. OMFSP was formed in 1998 when each partner contributed existing lease assets (and in the case of the Company, related notes payable to third party lenders that were secured by such leases) to capitalize the partnership. OMFSP manages the contributed assets and liabilities and engages in new vendor lease business providing financing, primarily to customers of the Company. OMFSP purchases trucks, truck bodies and concrete batch plants from the Company, the Company’s affiliates and, occasionally, unrelated third parties for lease to user-lessees. Company sales to OMFSP were $20.6 million and $21.9 million for the six months ended March 31, 2004 and 2003, respectively. Banks and other third party financial institutions lend to OMFSP a portion of the purchase price, with recourse solely to OMFSP, secured by a pledge of lease payments due from the user-lessees. Each partner funds one-half of the approximate 8.0% equity portion of the cost of new equipment purchases. Customers typically provide a 2.0% down payment. Each partner is allocated its proportionate share of OMFSP’s cash flow and taxable income in accordance with the partnership agreement. Indebtedness of OMFSP is secured by the underlying leases and assets of, and is recourse to, OMFSP. However, all such OMFSP indebtedness is non-recourse to the Company and its partner. Each of the two general partners has identical voting, participating and protective rights and responsibilities, and each general partner materially participates in the activities of OMFSP. For these and other reasons, the Company has determined that OMFSP is a voting interest entity for purposes of FIN 46(R). Accordingly, the Company accounts for its equity interest in OMFSP under the equity method.

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Included in investments in unconsolidated affiliates in the Company’s Condensed Consolidated Balance Sheet at March 31, 2004 is the Company’s investment in OMFSP of $22.3 million, which represents the Company’s maximum exposure to loss as a result of the Company’s ownership interest in OMFSP. This exposure is a non-cash exposure. Further, the Company has recorded deferred income tax liabilities related to its investment in OMFSP of $23.5 million at March 31, 2004 that are included in long-term deferred income tax liabilities in the Company’s Condensed Consolidated Balance Sheet. Should the Company’s investment in OMFSP be liquidated for any reason, this deferred income tax liability would reverse and result in an increase in current income taxes payable by the Company.

Summarized financial information of OMFSP is as follows:

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7.   PURCHASED INTANGIBLE ASSETS AND GOODWILL

The following tables present details of the Company’s purchased intangible assets:

Amortization expense recorded for the six months ended March 31, 2004 and 2003 was $3.3 million and $3.2 million, respectively. The estimated future amortization expense of purchased intangible assets as of March 31, 2004 is as follows (in thousands):

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The following table presents the changes in goodwill during the six months ended March 31, 2004:

8.   FINANCIAL INSTRUMENTS

Historically, the Company has used forward foreign exchange contracts to reduce the exchange rate risk of specific foreign currency transactions. These contracts require the exchange of a foreign currency for U.S. dollars at a fixed rate at a future date.

To protect against a reduction in value of certain forecasted foreign currency cash receipts from export sales from April 2004 through December 2006 that will be denominated in British Sterling and to protect against increases in costs of purchases of certain components from April 2004 through October 2006 that are payable in British Sterling or euros, all in connection with the Company’s contract to provide certain tactical military truck systems to the United Kingdom Ministry of Defence, the Company has instituted a foreign currency cash flow hedging program. The Company has hedged a significant portion of its estimated foreign currency cash flows in connection with this contract.

At March 31, 2004, outstanding foreign exchange forward contracts totaled $291.4 million in notional amounts, including $214.1 million in contracts to sell British Sterling, $1.5 million in contracts to purchase British Sterling and $75.8 million in contracts to purchase euros. Net unrealized losses (net of related tax effect of $8.2 million) on outstanding foreign exchange forward contracts at March 31, 2004 totaled $14.0 million and have been included in accumulated other comprehensive income.

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As of March 31, 2004, the Company expects to reclassify $0.7 million of net gains on derivative instruments from accumulated other comprehensive income to earnings during the next twelve months due to actual export sales and sales of product whose underlying costs contain purchases denominated in foreign currencies. Actual gains or losses on derivative instruments reclassified into earnings in the six month periods ended March 31, 2004 and 2003 were immaterial.

9.   LONG-TERM DEBT

The Company has a $170.0 million revolving credit facility with $68.9 million in borrowings outstanding at March 31, 2004. The weighted average interest rate on bank borrowings outstanding at March 31, 2004 was 2.78%. The revolving credit facility may be increased up to an aggregate maximum outstanding amount of $245.0 million at the Company’s discretion, unless the Company is in default under the senior credit facility.

At March 31, 2004, outstanding borrowings and $25.0 million of outstanding letters of credit reduced immediately available capacity under the revolving credit facility to $76.1 million.

Substantially all the domestic tangible and intangible assets of the Company and its subsidiaries (including the stock of certain subsidiaries) are pledged as collateral under the revolving credit facility. The revolving credit facility includes customary affirmative and negative covenants.

The Company’s wholly-owned subsidiary in the Netherlands, Geesink Group B.V. and certain of its wholly-owned affiliates have a euro 2.5 million bank credit facility (the “facility”) in place at March 31, 2004 in conjunction with its cross-border cash pooling arrangement. The facility provides for borrowings of up to euro 1.5 million and guarantees of up to euro 1.0 million. The facility accrues interest at a floating rate (3.75% at March 31, 2004) and contains certain financial covenants relating to the entities that are party to the agreement. There were no borrowings outstanding under the facility at March 31, 2004.

Certain of the Company’s domestic subsidiaries have outstanding debt to third parties totaling $0.9 million as of March 31, 2004.

10.   STOCK-BASED EMPLOYEE COMPENSATION PLANS

At March 31, 2004, the Company had two stock-based employee compensation plans, one of which is described more fully in Note 10 to the Notes to Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended September 30, 2003. Effective February 3, 2004, Class A Common Shareholders approved the 2004 Incentive Stock and Awards Plan which reserves 2,200,000 shares of Common Stock for grants under the plan. The Company accounts for these stock-based plans under the recognition and measurement principles of APB Opinion No. 25, “Accounting for Stock Issued to Employees,” and related Interpretations. Except for restricted stock awards granted in September 2002, no stock-based employee compensation cost was reflected in previously reported results for any period, as all options granted under this plan had an exercise price equal to the market value of the underlying Common Stock on the measurement date.

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The following table illustrates the effect on net income and earnings per share if the Company had applied the fair value recognition provisions of SFAS No. 123, “Accounting for Stock-Based Compensation,” to stock-based employee compensation:

11.   COMMITMENTS AND CONTINGENCIES

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 these sites. 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.

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As to one such Superfund site, the Company’s Pierce Manufacturing Inc. (“Pierce”)subsidiary is one of 393 PRPs participating in the costs of addressing the site and has been assigned an allocation share of approximately 0.04%. At March 31, 2004, a report of the remedial investigation/feasibility study was 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 March 31, 2004. Actual liability could vary based on results of the study, the resources of other PRPs, and the Company’s final share of liability.

In March 2003, the Company and Pierce were each named as one of 52 PRPs participating in the cost of addressing a Superfund site in Milwaukee, Wisconsin. In October 2003, the Company and Pierce, along with 47 other PRPs, entered into buyout agreements with the two PRPs who sent the largest volume of waste to the site. Settlement payments made by the Company and Pierce were insignificant in amount and were based on the amounts and types of waste each company sent to the site. The buyout agreements protect the Company and Pierce from any additional costs associated with the EPA’s requirement for the removal of certain buildings, waste drums, underground storage tanks and contaminated soil at the site. The buyout agreements do not cover any future costs that may be necessary to address groundwater contamination and remediation, if required. The Company believes that any potential remaining liability with respect to this site will not be material and that it is adequately covered through reserves established by the Company.

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 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. 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. However, this may change as investigations proceed by the Company, other unrelated property owners and the government.

In connection with the acquisition of the Geesink Norba Group, the Company identified potential soil and groundwater contamination impacts from solvents and metals at one of its manufacturing sites. The Company is conducting a study to identify the source of the contamination. Based on current estimates, the Company believes its liability at this site will not be material and any responsibility of the Company is adequately covered through reserves established by the Company.

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At March 31, 2004 and September 30, 2003, the reserve for environmental matters was $5.5 million and $5.3 million, respectively.

The Company has guaranteed certain customers’ obligations under deferred payment contracts and lease purchase agreements. The Company’s guarantee is limited to $1.0 million per year during the period in which customer obligations are outstanding. The Company is also contingently liable under bid, performance and specialty bonds totaling approximately $147.0 million and open standby letters of credit issued by the Company’s bank in favor of third parties totaling approximately $25.0 million at March 31, 2004.

Product and general liability claims arise against the Company from time to time in the ordinary course of business. The Company is generally self-insured for future claims up to $1.0 million per claim. Accordingly, a reserve is maintained for the estimated costs of such claims. At March 31, 2004 and September 30, 2003, the reserve for product and general liability claims was $17.7 million and $18.0 million, respectively, based on available information. There is inherent uncertainty as to the eventual resolution of unsettled claims. Management, however, believes that any losses in excess of established reserves will not have a material effect on the Company’s financial condition, results of operations or cash flows.

The Company is subject to other environmental matters and legal proceedings and claims, including patent, antitrust, employment, 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, results of operations or cash flows. Actual results could vary, among other things, due to the uncertainties involved in litigation.

12.   WARRANTY AND GUARANTEE ARRANGEMENTS

The Company’s products generally carry explicit warranties that extend from six months to five years, based on terms that are generally accepted in the marketplace. Selected components (such as engines, transmissions, tires, etc.) included in the Company’s end products may include manufacturers’ warranties. These manufacturers’ warranties are generally passed on to the end customer of the Company’s products, and the customer would generally deal directly with the component manufacturer.

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The Company’s policy is to record a provision for the expected cost of warranty-related claims at the time of the sale, and periodically adjust the provision to reflect actual experience. The amount of warranty liability accrued reflects management’s best estimate of the expected future cost of honoring Company obligations under the warranty plans. Historically, the cost of fulfilling the Company’s warranty obligations has principally involved replacement parts, labor and sometimes travel for any field retrofit campaigns. The Company’s estimates are based on historical experience, the extent of pre-production testing, the number of units involved and the extent of features/components included in product models. Also, each quarter, the Company reviews actual warranty claims experience to determine if there are systemic defects that would require a field campaign.

Changes in the Company’s warranty liability were as follows (in thousands):

In the fire and emergency segment, the Company provides guarantees of lease payments by customer-lessees to a third-party lessor of equipment purchased from the Company. The guarantee is limited to $1.0 million per year in total and is supported by the residual value of the related equipment. The Company’s actual losses under these guarantees over the last ten years have been negligible. In accordance with Financial Interpretation No. 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others,” no liabilities for pre-January 1, 2003 guarantees have been recorded. For all such guarantees issued after January 1, 2003, the Company has recorded the fair value of the guarantee as a liability and a reduction of the initial revenue recognized on the sale of equipment. Amounts recorded since January 1, 2003 were not significant.

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13.   PENSION DISCLOSURES

Components of net periodic pension benefit cost were as follows (in thousands):

The Company made a $6.9 million contribution to its pension plans in March 2004 and another $6.7 million contribution in April 2004. No additional contributions are expected to be made in fiscal 2004.

Components of net periodic other post-employment benefit costs were as follows (in thousands):

The Company made contributions to fund benefit payments of $0.2 million and $0.3 million for the three and six month periods ended March 31, 2004 under its other post-employment benefit plans. The Company estimates additional contributions of approximately $0.3 million will be made under these other post-employment plans prior to the end of fiscal 2004.

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14.   BUSINESS SEGMENT INFORMATION

Net sales by geographic region based on product shipment destination were as follows:

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Item 2. Oshkosh Truck Corporation
Management’s Discussion and Analysis of
Consolidated Financial Condition and Results of Operations

FORWARD-LOOKING STATEMENTS

This Management’s Discussion and Analysis of Consolidated Financial Condition and Results of Operations and other sections of this Form 10-Q contain statements that Oshkosh Truck Corporation (the “Company” or “Oshkosh”) believes to be “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact included in this report, including, without limitation, statements regarding the Company’s future financial position, business strategy, targets, projected sales, costs, earnings, capital spending and debt levels, and plans and objectives of management for future operations, including those under the captions, “Executive Overview” and “Fiscal 2004 Outlook,” are forward-looking statements. When used in this Form 10-Q, words such as “may,” “will,” “expect,” “intend,” “estimates,” “anticipate,” “believe,” “should” or “plans” or the negative thereof or variations thereon or similar terminology are generally intended to identify forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties, assumptions and other factors, some of which are beyond the Company’s control, that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These factors include the success of the launch of the Revolution™ composite concrete mixer drum, the outcome of defense truck procurement competitions, the cyclical nature of the Company’s commercial and fire and emergency markets, risks related to reductions in government expenditures, the uncertainty of government contracts, the challenges of identifying acquisition candidates and integrating acquired businesses, rapidly rising steel prices and the Company’s ability to avoid such price increases based on its supply contracts or to recover such price increases with increases in selling prices of its products, risks associated with international operations and sales, including foreign currency fluctuations, disruptions in the supply of parts or components from sole source suppliers and subcontractors and competition. Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained from time to time in the Company’s SEC filings, including, but not limited to, the Company’s Current Report on Form 8-K filed with the SEC on April 27, 2004.

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All forward-looking statements, including those under the captions “Executive Overview” and “Fiscal 2004 Outlook,” speak only as of the date the Company files this Quarterly Report on Form 10-Q with the SEC. The Company has adopted a policy that if the Company makes a determination that it expects the Company’s earnings per share for future periods for which projections are contained in this Quarterly Report on Form 10-Q to be lower than those projections, then the Company will publicly disseminate that fact. The Company’s policy also provides that if the Company makes a determination that it expects earnings per share for future periods to be at or above the projections contained in this Quarterly Report on Form 10-Q, then the Company does not intend to publicly disseminate that fact. Except as set forth above, the Company assumes no obligation, and disclaims any obligation, to update information contained in this Quarterly Report on Form 10-Q. Investors should be aware that the Company may not update such information until the Company’s next quarterly conference call, if at all.

General

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

Commercial – concrete mixer systems, refuse truck bodies, mobile and stationary refuse compactors and waste transfer stations, portable concrete batch plants and truck components sold to ready-mix companies and commercial and municipal waste haulers in the U.S., Europe and other international markets.

Fire and emergency – commercial and custom fire trucks, aircraft rescue and firefighting trucks, snow removal trucks, ambulances and other emergency vehicles primarily sold to fire departments, airports and other governmental units in the U.S. and abroad.

Defense – heavy- and medium-payload tactical trucks and supply parts sold to the U.S. military and to other militaries around the world.

Executive Overview

The Company has reported substantially higher operating results in the three months ended March 31, 2004 and the first six months of fiscal 2004 and expects to report substantially higher operating results for its full fiscal year 2004, as follows:

⁽¹⁾   Company estimates as of April 27, 2004

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The improved results in the first half of fiscal 2004 have been driven by the Company’s defense segment, which has benefited from new international defense truck business, higher sales of heavy-payload trucks to the U.S. Department of Defense (“DoD”), an approximate doubling in parts sales due to requirements arising from conflicts in Iraq and Afghanistan, and a cumulative catch-up adjustment that added $6.2 million of operating income related to revenues recorded in prior periods from an increase in the estimated margins from 5.5% to 6.3% on the Company’s multi-year Medium Tactical Vehicle Replacement (“MTVR”) contract, which is recorded utilizing the percentage-of-completion accounting method. These factors have caused the Company’s defense sales and operating income to surge 28.4% and 268.7%, respectively, during the first half of fiscal 2004. The Company expects its defense parts business to remain substantially higher than prior year levels during the second half of fiscal 2004 due to a high defense parts backlog at March 31, 2004 and continuing U.S. armed forces operational requirements in Iraq and Afghanistan. The Company expects that its defense truck sales will decline in the second half of fiscal 2004 due to lower international and lower MTVR sales in the second half of fiscal 2004 as the Company completed its multi-year U.K. Heavy Equipment Transporter contract in the second quarter and as MTVR unit volume continues to decline in advance of the MTVR contract’s expiration in fiscal 2005. For the full fiscal year, the Company expects its defense sales to grow approximately 11.1% and its defense operating income to grow 45.6%.

The Company’s other business segments have underperformed prior year levels in the first half of fiscal 2004, but the Company believes that these businesses will begin to recover in the second half of fiscal 2004 as order rates and backlogs have been improving in these segments following two years of industry weakness.

In the Company’s fire and emergency segment, sales were up 1.6% in the first half of fiscal 2004, but operating income declined 6.3%. Due to six to nine month lead times for custom fire apparatus, shipments in the first half of fiscal 2004 largely related to orders received in fiscal 2003. During fiscal 2003, industry order rates declined over 10%, which the Company believes caused pricing to be competitive for the lower volume of available business, and industry orders were particularly weak for higher-margin custom pumpers and aerials. Since the Company’s orders increased slightly in fiscal 2003, the Company believes that its weak performance in the first half of fiscal 2004 significantly outpaced the industry and permitted the Company to gain market share. The Company’s orders have increased over the last nine months compared to prior year levels, which leads the Company to believe that fire apparatus market conditions are improving. Consequently, the Company expects to report improved sales and earnings in this segment in the second half of fiscal 2004 as these recent orders are shipped. The Company estimates flat operating income in this segment for the full year fiscal 2004.

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The Company’s commercial segment has realized significantly higher orders in all product lines except European refuse products in the first half of fiscal 2004 leading to a 14.8% increase in commercial segment sales during this period. The Company’s operating income during this period, however, declined 12.7%. The reasons for the decline are outlined in detail under Results of Operations and include manufacturing inefficiencies, competitive pricing conditions as a result of new market entrants in rear-and front-discharge concrete mixers and high start-up costs on new product launches. At March 31, 2004, the Company’s backlog in its commercial segment was up 64.0% as industry order volumes have rebounded from a two-year downturn. Entering the second half of fiscal 2004 with this strong backlog leads the Company to believe that its commercial segment will perform much better in the second half of fiscal 2004, and the Company expects its operating income to grow approximately 18.2% in this segment for the full year fiscal 2004.

Over the last year, the Company’s cash flow has been strong due to earnings growth, permitting the Company to significantly reduce its average borrowings in fiscal 2004 compared to fiscal 2003. This has led to a net decrease in net interest expense of $4.4 million in fiscal 2004, further contributing to the Company’s strong earnings growth during the first half of fiscal 2004. By September 30, 2004, the Company is estimating that it will have repaid all outstanding bank debt, assuming no acquisitions. The Company believes its strong cash flow has also contributed to a significant increase in the Company’s borrowing capacity to support the Company’s acquisition strategy.

Based on the strength of the Company’s defense business and the Company’s expectations that its fire and emergency and commercial segments will recover in the second half of fiscal 2004, the Company announced on April 27, 2004 that it had increased its estimate of fiscal 2004 earnings per share assuming dilution from $2.80 per share as previously estimated on January 22, 2004 to $2.90 per share.

Please refer to Fiscal 2004 Outlook for a detailed discussion of the Company’s sales, operating income, net income, earnings per share and debt estimates for fiscal 2004.

The Company’s defense business has grown so quickly in fiscal 2004, including a near doubling in defense parts sales compared to fiscal 2003, that between known funding and an assumed $40 million decline in parts business, sales for fiscal 2005 could fall $100 million short of fiscal 2004 levels and could cause the Company’s defense operating income to decline about 25% in fiscal 2005. A planned federal supplemental funding bill may offer some relief in January or February 2005. Additional Iraqi Reset funds may yet become available for fiscal 2005 to meet the requirements of the conflict in Iraq and the Company’s defense parts business may not decline in fiscal 2005. Additionally, the Company continues to pursue small additional international defense truck contracts for fiscal 2005. The Company does expect its fire and emergency and commercial segments to strengthen further in fiscal 2005, but the Company estimates that such strengthening may be insufficient alone to offset the entire decline in defense business, especially in light of rising steel prices. The Company has been actively pursuing acquisitions and is hopeful to be able to announce, and possibly complete, one or more acquisitions before fiscal year end. In that event, the Company believes that it can achieve earnings per share assuming dilution of $3.00 to $3.50 per share in fiscal 2005, but that the high end of the range is only possible if the Company can complete one or two larger acquisitions and if economic conditions continue to improve. Without acquisitions, the Company currently estimates its fiscal 2005 earnings per share assuming dilution will approximate $3.00 — $3.30.

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Over the last several months, pricing has risen sharply for steel and component parts containing steel, and the availability of steel has been limited, especially for small consumers of steel, including certain of the Company’s suppliers. The ultimate duration and severity of the steel pricing and availability issue for major steel consumers like the Company is not presently estimable. The Company uses thousands of tons of steel annually and some industry experts have estimated the increase in steel pricing over the last year at more than 90%. Based on long-term agreements with suppliers, the Company has been able to avoid some of the impact, but not all the Company’s suppliers have been able to honor their contracts with the Company. To mitigate these increases, the Company announced 3% — 4% price increases in all of its commercial and fire and emergency business units to offset these commodity cost increases from the steel industry. The new prices apply to all new orders, but the Company does not anticipate being able to recover all the steel cost increases from customers due to the significant amount of orders in the Company’s backlog prior to the Company announcing product selling price increases. If steel prices continue to rise sharply, then the Company expects to announce further price increases later this year. Due to the nature of its defense business, which is generally based on firm, fixed-price contracts, the Company is generally limited in its ability to raise prices in response to rising steel prices. However, the Company generally has firm pricing from its suppliers to its defense business at the time of contract award. If these suppliers, including steel mills, do not honor such existing contracts, then the Company may face margin pressure in its defense business.

The Company estimates that the impact of higher steel prices on second quarter earnings was quite modest at about $0.01 per share, but the Company estimates the impact to grow sharply, to $0.11 per share, in the second half of fiscal 2004. This impact is factored into the Company’s new $2.90 earnings per share assuming dilution estimate for fiscal 2004. If these steel pricing conditions continue and the Company is unable to raise its product prices to keep pace with rising steel prices, this condition could reduce earnings over $0.20 per share in fiscal 2005.

The Company is involved in an intense competition for a U.K. Ministry of Defence (“U.K. MoD”) contract for support vehicles valued at over $2.0 billion over a seven-year period beginning in fiscal 2007. The award of this business was recently delayed from April 2004 until the summer of 2004. While this potential new business would not involve sales until fiscal 2007, the Company believes that this potential new business, if awarded to the Company, would have an important impact on the Company’s defense business in coming years by adding what the Company believes could be a stable, long-term sales and earnings stream. The Company believes that it has offered an attractive proposal to the U.K. MoD, but given the intense competition, the Company is unable to predict the outcome of the competition.

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Results of Operations

Analysis of Consolidated Net Sales

The following table presents net sales by business segment (in thousands):

Second Quarter Fiscal 2004 Compared to 2003

Consolidated net sales increased 14.3% to $518.2 million for the second quarter of fiscal 2004 compared to the second quarter of fiscal 2003. Net sales increases were recorded in the defense and commercial segments while sales in the fire and emergency segment declined.

Net commercial sales increased 19.4% to $217.8 million for the second quarter of fiscal 2004 compared to the second quarter of fiscal 2003. Concrete placement product sales were up 20.6% in 2004 compared to 2003, largely due to increased unit sales volume as industry order levels are improving following a two-year downturn. Refuse product sales were up 18.0% compared to 2003. U.S. refuse product sales increased 22.2% for the quarter, primarily due to higher unit sales, especially to large, U.S. commercial waste-haulers. European refuse product sales were up 13.6% in U.S. dollars, compared to 2003, but down 2.3% in local currency due to weak European refuse markets.

Fire and emergency segment net sales decreased 4.2% to $135.6 million for the second quarter of fiscal 2004 compared to the second quarter of fiscal 2003, principally due to lower airport product sales.

Defense segment net sales increased 28.8% to $168.1 million for the second quarter of fiscal 2004 compared to the second quarter of fiscal 2003. Increased sales of heavy-payload trucks to the DoD and to international customers, and a more than doubling of parts sales resulting from the conflicts in Iraq and Afghanistan, more than offset lower MTVR contract sales. MTVR sales decreased $32.2 million during the second quarter, as the Company expected, as the production rate under this five-year contract declined in advance of contract expiration in fiscal 2005.

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First Six Months of Fiscal 2004 Compared to 2003

Consolidated net sales increased 15.0% to $1,011.4 million for the six months ended March 31, 2004 compared to the six months ended March 31, 2003. Net sales increases were recorded in all segments.

Commercial segment net sales increased 14.8% to $400.8 million for the six months ended March 31, 2004 compared to the same period in the prior year. Concrete placement sales were up 10.5% primarily due to higher unit sales volumes as industry order levels began to improve following a two-year downturn. Domestic refuse sales were 19.4% higher due to increased shipments to large, U.S. commercial waste haulers. European refuse sales increased 20.6% in U.S. dollars due to favorable foreign currency translation gains, but were up only 2.8% in local currency as lower unit volumes were offset by increased “package” sales of a refuse packer and commercial chassis.

Fire and emergency segment net sales increased 1.6% to $258.5 million for the six months ended March 31, 2004 compared to the first six months of fiscal 2003. Sales were relatively flat between periods due to the weakening of the order rate in fiscal 2003 resulting from municipal budget constraints. In this segment, due to long lead times, orders generally ship six to nine months after receipt.

Defense segment net sales increased 28.4% to $358.5 million for the six months ended March 31, 2004 compared to the same period in the prior year due to increased sales of heavy-payload trucks to international customers and the DoD and a doubling in parts sales which more than offset a $64.7 million decrease in MTVR sales as the production rate under this five-year contract declined, as the Company anticipated, in advance of contract expiration in fiscal 2005.

Analysis of Consolidated Operating Income

The following table presents operating income by business segment (in thousands):