23.02.2006

JLG up 47% in first half

JLG has released its second quarter and first half results, which show revenues of $972 million for the six months to the end of January 2006, an increase of 47 percent on 2004/5. Net income for the period was $53 million compared to a loss of $1.2 million last year.

Gross margins for the first half climbed from a very poor 12.2 percent last year to 19.6% this year,

Aerial lift sales represented the largest increase in revenues rising by 62 percent from $296 million to $478.6 million for the six months. Telehandler sales jumped by over 50 percent from $212 million to $319 million.

Geographically Europe posted the largest percentage gains with sales increasing by 55 percent to $146 million for the period; sales in North America jumped a massive $226 million to $721.2 million an increase of 46 percent. The rest of the world also posted strong gains with sales rising by 47 percent to $105 million.

"Our revenues reached a new record for the quarter and, more importantly, our earnings improved dramatically compared to last year," stated Bill Lasky, chairman, president and chief executive officer.

"The continued strength in demand for our products is reflected in our order board which reached $1billion at the end of the quarter, a 20% increase from $849 million last quarter and over three times the $290 million level of last year. Our previous pricing actions and cost reduction activity have substantially caught up with the increases in commodities, especially steel, experienced last year. We continue to monitor pressure on product costs and work to offset the impact but remain prepared to increase pricing further if conditions warrant.

"The sale of the New Philadelphia plant, when netted against the announced reopening of our Bedford, PA and Orrville, OH facilities, and combined with the capacity investments we are making for the Caterpillar alliance and additional JLG products, will enable us to support significantly higher volume in essentially the same manufacturing footprint beginning in the fourth quarter of this fiscal year."

Outlook for second half

"The continuing strong demand for our products reinforces our belief that 2006 will be another good year for JLG," said Jim Woodward, executive vice president and chief financial officer.

"Supply chain performance improvement and our own manufacturing capacity expansion will position us to better meet customer demand and optimize capacity utilization. We now expect to spend approximately $40 million in fiscal 2006 on capital additions including capacity expansion and the Caterpillar alliance. Despite the impact of the $48 million sales volume reduction in our second half associated with the sale of the Gradall excavator product line, we project our full year revenue growth will be at the upper end of our previously announced range 20 to 25 percent over fiscal 2005. Excluding the one-time pre-tax gain on the excavator transaction of approximately $13.1 million, we now expect earnings per share to be in a range from $2.35 to $2.45, up from our previous guidance of $2.15 to $2.25."


Vertikal Comment

As expected a strong set of first half numbers from JLG after two years in which the company posted surprisingly poor first half results followed by two fantastic quarters. If JLG can maintain its habit of a much stronger second half, then it will exceed even its upgraded forecasts.

Look for revenues approaching 2.2 billion for the year which ends on July 30th. With profits to match.

The impact of the CAT agreement will contribute too much before August, once it does though it will be very interesting to see the effect on JLG's position, it may well make JLG the largest telehandler manufacturer worldwide by 2007? watch out Manitou and JCB.