08.10.2003

Revenue down at JLG

The 2003 fiscal year saw a drop in JLG’s sales to US$760 million (UK£455.69 million) from $770 million (£461.69 million) reported in 2002. Despite the fall, income was up from $12.9 million (£7.73 million) to $14.2 million (£8.51 million) during the corresponding periods, while operating profit also increased from $30.7 million (£18.41 million) to $39.2 million (£23.5 million).

For the 4th quarter period of 2003, Jim Woodward, executive president at JLG, said that revenues were 3 per cent lower than in the same period of 2002, reflecting a drop in sales from $249 million (£149.30 million) to $242.2 million (£145.22 million) over the corresponding periods.

This was reflected in a $17 million (£10.19 million), or 7 per cent drop in sales of new aerial work platforms. Woodward also said that the drop was mainly attributable to Europe where sales decreased by 18 per cent, or $10.3 million (£6.18 million) compared with last year and commented that large amounts of relatively young equipment has entered the market because companies have rationalised their fleets to account for the severe economic recession in the region, thus depressing new equipment sales. An extremely conservative approach to the European rental market by finance companies has also resulted in a more credit challenged Europe for the smaller rental companies.

According to JLG’s CEO Bill Lasky: “2003 was one of the most challenging years in the company’s long history.” JLG’s full year financial results show that its aerial platform sales decreased by 9 per cent, or $54.8 million (£32.86 million) in 2003, which Woodward said was mainly due to 37 per cent decline in the company’s scissor lift sales. Hopes have been placed on the introduction of the new pro-fit scissor line to reverse this trend. The significant drop in scissor sales was, however, offset by a $32.1 million (£19.25 million) increase in telehandler sales. Total sales for Europe were down by 14 per cent, or $23 million (13.79 million) in 2003, and by $4.2 million £2.52 million) in North America. Increases were seen in Australia, the Pacific Basin and Latin America, but these represented relatively small sales.

Looking ahead, Lasky said that while there is evidence of a growth in manufacturing capacity in the US and that there are signs of improving utilisation and rental rates, specifically for telehandlers in the non-residential construction sectors, many of the more significant companies in Europe still face severe economic conditions and there is as yet, no recovery in sight.

JLG also recently entered into a programme agreement with GE Dealer Finance to provide “private label” financing to its customers. In the 2003 fiscal year, GE Dealer Finance purchased in excess of US$70 million (UK£41.87 million) of lease receivables from JLG’s wholly owned captive finance subsidiary, Access Final Solutions (AFS).

Kevin Ramsburg, AFS managing director said: “We are pleased to work closely with GE to create a one-stop shop for our customer’s equipment purchases. Customers will continue to have their usual direct interaction with JLG and will continue to be provided with a broad range of financial products. Having GE as our primary financing source should also enhance JLG’s funding stability and capacity.”