24.09.2004

JLG Achieve record results

As predicted by Vertikal.Net earlier this year, JLG has sailed past the billion dollar revenue mark and is well on the way towards its two billion dollar five year target.

Sales for the full fiscal year which ended on July 31 were $1.2 billion, an increase of 59 percent compared to 2003.The Omniquip acquisition contributed $250 million to this years revenues, meaning that revenues on a like for like basis were just under a billion at $944 million an increase on last year of 26 percent.

Sales for 2004 are broken down as follows:

Aerial lifts $562 million up 31 percent on 2003 – 47% of the total
Telehandlers $359 million up by over 300 percent – 30% of total
Parts/reconditioning $197 million up 50 percent – 16% of total
Excavators (Gradall) $53 million up 10 percent – 4% of total
Finance $15 million down 20 percent - 1.3%
Rentals $ nine million up 25 percent – 0.8%

With this years results JLG has moved closer to its aim of reducing aerial lifts to around 50 percent of total sales, Vertikal estimate that JLG gains approximately 62 percent of its revenues from aerials and associated services. (New aerial sales, plus share of parts and reconditioning, finance and rental)

The Geographical split was as follows:

North America $924 million up 69 percent, representing 77 percent of total sales (72% in 2003)
Europe $178 million up 23 percent, representing 15 percent of total sales (19% in 2003)
Rest of the world $92 million up 53 percent, representing 8 percent of total sales (8% in 2003)

The results show two factors at play, the strong increase in the North American aerial lift market in 2004 but also the fact that the Omniquip acquisition was almost entirely North American revenue. JLG are now far and away the market leader in the North American telehandler market yet as of today are hardly visible on the radar screen in Europe. Outside of the USA and Europe, Australia posted a 90 percent increase in sales rising by almost $6 million.

Profitability:

Gross margins before integration costs were 19.7 percent compared to 17.9 percent for 2003 an improvement of 10 percent.

Operating income, again before integration costs, was $92 million or 7.7 percent compared to $36 million and 4.8 percent last year. An improvement of 250 percent.

Net income for 2004 was 26.3 million or 2.2 percent of sales, this compares to 12 million or 1.6 percent of sales for 2003. an improvement of 220 percent.

Debtor days improved substantially dropping from 103 days last year to a respectable 78 this year. Most likely due to the lower percentage of sales coming from Europe where payment terms tend to be significantly higher.

Inventory turns also improved dramatically to 5.8 from 3.4 in 2003.

Outlook:

Looking forward JLG are planning a 10 to 25 percent increase in sales in 2005, largely coming form North America. CEO Bill Lasky stated that "with a €200 million backlog the challenge will not be orders but steel and component challenges". This fairly wide ranging forecast will take JLG revenues up to between $1.3 and $1.5 billion.

Last week JLG instituted a three percent price increase on all new orders. The main benefit of this will be seen in the second fiscal quarter. The company anticipate taking up to a $20 million hit in unrecovered steel price increases in the first quarter.

The company also stated that it has no plans to add any "bricks & Mortar" capacity increases in 2005 or 2006.