16.11.2005

JLG revenues up 56 percent

JLG has recorded revenues of $478 million for the quarter ended October 30, 2005, an increase of 56 percent on the same period last year.

Sales increased 49 percent in the U.S.A and 81 percent internationally. European revenues rose by 70 percent to $63 million, while the in the rest of the world they almost doubled to just over $60 million.

The Company reported net income of $27.9 million compared with a net loss of $8.7 million in the same quarter in 2004...

Largest product group remains Aerial lifts, sales of which expanded by 95 percent, to $244 million, while telehandler revenues rose by 32 percent to $158 million.

Product support revenues climbed by just under 25 percent to $61 million.


"Our revenues reached a new record for the quarter, reflecting the continuing strength of demand for access products," stated Bill Lasky, chairman, president and chief executive officer. "We're building products at a record pace, and component deliveries from suppliers have improved dramatically.

Our order board at quarter end increased to $849 million from $631 million last quarter, and is up substantially from $200 million last year.

Costs associated with raw materials, particularly steel, are being managed as our pricing actions and ongoing cost reduction activities are taking effect, resulting in a return to a more normalized operating income. Despite recent reductions in the price of oil, the cost of freight and petroleum-based components are increasing, so an additional price increase of perhaps a couple of percentage points will be considered at the beginning of calendar year 2006.

"As announced on October 27, 2005, we are particularly pleased with the new alliance with Caterpillar Inc. to supply Cat-branded telehandlers. We are honored to have earned their confidence and endorsement of our manufacturing capabilities to produce high quality telehandlers reflective of the Cat brand. Our reputation for product innovation, quality, and after-sales service and support, coupled with Caterpillar's global brand distribution expertise and component capabilities will offer Cat dealers around the world a broad product line to meet their customers' needs."

Cash flow from operations fell to $29.5 million compared to $35.6 million last year, and net debt decreased by $250 million from the comparable period last year.

"Our first quarter operating income improved significantly to $50.4 million, or 10.5 percent of revenues, compared to an operating loss of $8.3 million, or negative 2.7 percent of revenues", Said Jim Woodward, executive vice president and chief financial officer. "This improvement represents an incremental operating margin of 34 percent reflecting realization of our previous pricing actions, cost reduction efforts, a favorable adjustment in inbound freight costs and a very favorable sales mix".

"We remain optimistic for the year. As we have previously stated, demand for our products is strong and the ability of our supply chain and facilities has been the limiting factor in our ability to take full advantage of this positive environment.

Since our last update, we have been able to increase production schedules for selected models where capacity was still available, and divert planned additions to our rental fleet to sales.

In addition, the investments for the recently announced Caterpillar alliance will provide additional capacity for JLG telehandlers beginning in the fourth quarter of fiscal 2006. As a result, we now project revenue growth in the 20 to 25 percent range for fiscal 2006 over 2005, up from our previous guidance of 15 to 20 percent growth.

Vertikal Comment

The first quarter is too early to tell exactly how the full year might pan out, but the year to date results at JLG are striking. In the past two years JLG has typically reported negative profit numbers in the first quarter, which are then offset by increasingly strong second, third and fourth quarters.

Starting the year off with such a positive quarter, bodes well for 2006, revenues are set to sail past $2 billion, turning in significant profit improvements.

With the CAT deal beginning to kick in during the fourth quarter and the company confident to consider further price increases in spite of steadying raw material inflation, JLG is on a major roll.