In March 2025, the Company entered into an unsecured term loan with various lenders to borrow $500 million. The Company used the proceeds from the term loan to reduce the borrowings outstanding under its Revolving Credit Facility (as defined in “Liquidity”). The term loan, which is fully prepayable, carries a slightly lower interest rate than the Revolving Credit Facility and matures in March 2027. The Company continued to repurchase shares of its Common Stock throughout the year, repurchasing nearly 2.3 million shares for $278 million. Share repurchases during the previous twelve months benefited earnings per share by $0.19 compared to 2024. The Company announced an increase in its quarterly dividend rate of 11.8%, to $0.57 per share, beginning in the first quarter of 2026. This was the Company's twelfth straight year of a double-digit percentage increase in its dividend rate. 2026 OUTLOOK The Company estimates consolidated sales will be approximately $11.0 billion in 2026, compared to $10.4 billion in 2025. The Company expects consolidated operating income in 2026 will be approximately $1.06 billion, resulting in diluted earnings per share of approximately $10.90. Included in the Company's expectations is amortization of intangible assets of approximately $55 million, or $0.60 per share. Excluding amortization of intangible assets, the Company expects adjusted diluted earnings per share in 2026 to be approximately $11.50. The Company's estimates assume that present levels of tariff rates continue. The Company estimates tariffs will total approximately $200 million in 2026, which is an increase of approximately $165 million from 2025. The Company expects Access segment sales will be approximately $4.2 billion in 2026, a decrease of approximately 7.0% compared to 2025 sales as non-residential construction activity is expected to be relatively consistent with 2025. The Company expects that Access segment sales in the first quarter of 2026 will be lower than the first quarter of 2025 due to its strong sales in the fourth quarter of 2025, which the Company believes were a result of strong customer purchases in advance of announced 2026 pricing actions. The Company expects operating income margin in the Access segment in 2026 will be approximately 9.7%, down from 11.2% in 2025 due to the impact of fixed costs relative to lower expected sales levels. The Company expects Vocational segment sales of approximately $4.2 billion in 2026, an increase of approximately 13.0% compared to 2025 sales reflecting expected increases in production volume from improved throughput and improvements in pricing in municipal fire apparatus as the Vocational segment delivers its backlog. The Company expects Vocational segment operating income margin in 2026 will be approximately 16.1%, compared to 14.7% in 2025. The segment's operating income margin is expected to increase in 2026 as a result of expected continued favorable price/cost dynamics and improved production throughput. The Company expects Transport segment sales will be approximately $2.5 billion in 2026, an increase of approximately 19% compared to 2025 sales. The Company's estimate reflects improved pricing under recent contracts and a progressive increase in production under the Company's Next Generation Delivery Vehicle (NGDV) contract. The Company expects Transport segment operating margin will be approximately 4.0% in 2026, compared to 3.7% in 2025, reflecting the elimination of adverse cumulative catch-up adjustments experienced in 2025 and the expected receipt of a follow-on delivery order from the USPS are expected to be offset in part by higher engineering spending and the non-recurrence in 2026 of the impact of a sale of a license of Joint Light Tactical Vehicles (JLTV)-related intellectual property to the U.S. government for $25 million. The Company's expectations contemplate a receipt of a follow-on NGDV delivery order from the USPS, which the Company expects would result in a favorable cumulative catch-up adjustment at the time the order is received. The Company estimates corporate and other costs in 2026 will be approximately $185 million. The Company estimates net interest expense will be approximately $105 million in 2026, compared to $109 million in 2025. The Company estimates the tax rate for 2026 will be approximately 24.5% and average share count will be approximately 63 million shares. The Company expects earnings per share in the first quarter of 2026 will be approximately $0.85, reflecting the impact of tariffs, expected continued softer market conditions and seasonality in access equipment markets and the Company's expectation that its strong Access segment sales in the fourth quarter of 2025 ahead of 2026 pricing actions will result in lower first quarter 2026 sales volume.
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