30.07.2009

JLG down 65%

JLG has released its nine month results which show revenues of $829 million, a fall of 65 percent compared to the same period last year. It also reported an operating loss of $1.06 billion, which includes an almost $900 million asset write-down last quarter, the underlying loss was around $167 million.

A sliver of positive news came form the company’s order book which was nudged up from 98.5 million last quarter to $125.2 million at the end of this one. Although the backlog does now include military orders. This time last year it stood at $574 million.

Other positive news includes the recall of between 550 and 650 JLG production workers at McConnelsburg to build cabs for an M-ATV All Terrain millitary vehicle for the US Army, part of a 2,244 unit contract with an option for 3,000 more.
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The Oshkosh M-ATV destined for Afghanistan

The third quarter to the end of June saw revenues fall 77 percent to
$211.2 million, with an operating loss of $71 million, compared to a profit for the same period last year of $125 million.

JLG said sales reflected substantially lower global demand arising from recessionary economies and tight credit markets, equipment sales for the North American, European, African and Middle Eastern regions each declined about 85 percent compared with the third quarter of fiscal 2008.

JLG’S parent, Oshkosh saw revenues decline over 25 percent to $3.81 billion, the company also recorded a pre tax loss of $1.2 billion compared to a profit of $224 million last year.

Robert G. Bohn, chief executive said: “Our defense and fire & emergency segments delivered strong results for the quarter, while our access equipment and commercial segments continued to experience extraordinarily weak demand as construction activity in most areas of the world remains soft. Sales of aerial work platforms, telehandlers and concrete placement products were all down 75 percent or more, contributing to the loss from continuing operations for the quarter.”

“Oshkosh continues to aggressively focus on cost reductions, operational improvements and leaning out our factories. We expect to emerge from this recession as a stronger, more nimble and more competitive company,” added Bohn.

Vertikal Comment

While these results from JLG are of a similar nature to those of its main competitors, JLG appears to have suffered a little more than Genie and Skyjack in terms of revenue and profit declines.

It is different from its main competitors in that Telescopic Handlers represent a larger portion of its revenues than the others, particularly in North America, while mid to larger booms and scissors probably represent a larger percentage of its aerial lift sales.

After its acquisition by Oshkosh and the appointment of Craig Paylor as president in 2007, the company managed to rapidly shed its reputation for arrogance and was gaining market share as the recession began to bite.

Inevitably as with most of its rivals, staff morale has been hit hard by the speed and severity of the downturn, along with all the necessary restructuring and cut backsm together with uncertainty of the duration of the downturn.

It now needs to regain the highly positive spirit it was showing 12 months or so ago. The market will begin to pick up in the not too distant future and it needs to be alert to the fact that one or two competitors appear to have regained some of their pre-slump spirit and are beginning to move out of the starting blocks already.