23.09.2005

JLG Revenues up 45% earnings up 115%

JLG has announced fiscal 2005 revenues of $1.74 billion, a rise of 45 percent on 2004.

Domestic USA sales were up 42 percent while international revenues were up by 57 percent. Net income after tax for the full year increased by 45 percent to $57.2 million or 3.3 percent of revenues.

The fourth quarter saw record revenues of $570 million, an increase of 34 percent compared to last year, with net income coming in at $35.7 million a rise of 130 percent or 6.3 percent of revenues.

The company’s order book at the end of July tripled from that of 2004 to $631million, roughly four months worth of business.

Cash flow predictably increased substantially, rising to $142 million from $14.7million in 2004. During the second half JLG redeemed or repurchased $76.25 million worth of debt in the form of senior notes due in 2008 and 2012.

Looking at segmental breakdowns:

Total equipment sales for the full year were $1,461 million a rise of 50 percent.

After sales services rose by 27 percent to $260 million while finance revenues dropped back by 20 percent to 13 million.

Equipment rentals rose marginally to $9.3 million.

Aerial lift whole goods sales rose by 56 percent to $888 million, this is double the sales of 2003. Telehandler revenues grew by 43 percent to $512 million, while sales of Gradall excavators were up by barely 14 percent, to $61 million

Geographical breakdowns show that while the US market increased by 42 percent sales to Europe were up by 48 percent to $264 million. Revenues from other markets climbed by almost 75 percent to $160 million,

"Reflecting strong customer demand in a robust market, our revenue grew significantly in each and every quarter of fiscal 2005. And, despite record quarterly shipments, our order book still increased to $631 million at year end, more than three times the $198 million at the end of 2004," said Bill Lasky, Chairman of the Board, President and Chief Executive Officer.

"Operating efficiencies were enhanced by significant improvements in component availability from our supply chain. While the price of steel and other commodity inputs to our products remain high, with the exception of energy prices, they have stabilized, and as a result of our pricing actions and design and process improvements we have recovered much of the increased costs. With the most recent increase in our surcharges, announced in May, going forward into fiscal year 2006 we expect to substantially recover these higher raw material costs."

Outlook for 2006.

JLG is forecasting an increase in revenues for 2006 in the region of 15 to 20 percent hinting at total revenues for the year of over two billion dollars. Net earnings are expected to double to over $100 million.

Assuming that no further shocks to the global economy the company is bullish for the next two to three years.

"We delivered great results for fiscal 2005 in the face of sky-high raw material costs and significant supply chain challenges, and we are focused on building upon this success in the coming year," stated Jim Woodward, Executive Vice President and Chief Financial Officer.

"Commercial and non-residential construction and solid economic activity, the primary drivers of equipment demand, continue to be strong. Fleet age, rental rates and utilization of our type of equipment continue to drive demand as rental companies maintain their strong pace of equipment refreshment and expansion. While the macro-economic impacts of this season's hurricanes are not yet known, we expect the short-term results to be similar to last year where equipment demand rose as a result of the clean-up and reconstruction activities following the Florida hurricanes.

"In fiscal year 2006, we will be investing in several key initiatives including an aggressive expansion of our Service operations, development of the next generation military telehandlers, as well as other product development programs targeting specific market segments. We will also continue our expansion of channels to market with the Commercial Solutions Group.

We have begun the negotiation process with State and local authorities concerning the potential re-opening of our Bedford, Pennsylvania facility, at the Sunnyside Road location, to accommodate the manufacturing and engineering operations for this new group as well as to increase our capacity. Many of these strategic investments will not show a corresponding short-term return in fiscal 2006 but are consistent with our five-year strategic plan to improve our quality of earnings.

"Absent any major economic shocks, we anticipate stronger demand in fiscal 2006 with global sales projected to increase by 15 to 20 percent. The stabilization of steel and component costs combined with our customer pricing actions will greatly improve the quality of our earnings.