UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
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JLG INDUSTRIES, INC.
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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On October 15, 2006, JLG Industries, Inc., a Pennsylvania corporation (the “Company”) entered into an Agreement and Plan of Merger among the Company, Oshkosh Truck Corporation (“Oshkosh”), a Wisconsin corporation, and a newly formed subsidiary of Oshkosh, Steel Acquisition Corporation, a Pennsylvania corporation.
On November 20, 2006, the Company issued a press release announcing the Company’s financial results for the first quarter of fiscal 2007. The following is the press release, including condensed consolidated financial statements for the first quarter of fiscal 2007:
 | Contact: Michelle Hards (240) 313-1816 mlhards@jlg.com |
JLG Industries Posts Record First-Quarter Revenues and Earnings,
Net Income up 43%
McConnellsburg, PA, november 20, 2006 – JLG Industries, Inc. (NYSE: JLG) today announced that its 2007 fiscal first-quarter consolidated revenues were $539 million compared to $478 million during the same period last year. Net income for the quarter totaled $40 million, or 37 cents per share, versus $28 million, or 27 cents per share, for the fiscal first-quarter of 2006. Operating income was $62 million, or 11.5 percent of sales, compared to $50 million, or 10.5 percent, during the same period last year. Cash and cash equivalents were $308 million at October 29, 2006 compared to $231 million a year ago.
Fiscal first-quarter 2007 net income included $4.1 million ($2.6 million net of tax), or 2 cents per share, of charges related to the proposed merger with a subsidiary of Oshkosh Truck Corporation.
“For the fourth consecutive year, we have produced record first-quarter revenues despite recent consolidation in the equipment rental industry which has altered ordering patterns for some of our larger customers. Demand for our products continues to mirror the strength in non-residential construction activity as our order board grew sequentially to $845 million from $749 million at the end of July,” stated Bill Lasky, Chairman of the Board, President and Chief Executive Officer. “In addition, we are now shipping Caterpillar-branded telehandlers to Cat dealers around the world and expect this business to grow during the year as we ramp up to full production under the exclusive 20-year private label Alliance agreement.”
“Excluding the $4.1 million of charges related to the proposed merger with a subsidiary of Oshkosh Truck Corporation, our incremental operating margin was 26% reflecting the effect of our ongoing cost reduction initiatives as well as an improved sales mix,” said Jim Woodward, Executive Vice President and Chief Financial Officer. “In addition, a lower effective tax rate contributed to the increase in net income.”
Fiscal-Year 2007 Outlook
“As a result of our strengthened order board and insights into most of our major customers’ annual purchasing plans, we now expect that our fiscal 2007 revenue growth will be toward the upper end of our previously announced range of 20 to 25 percent greater than our 2006 revenue level of $2.3 billion. On that basis, we are forecasting earnings per share to be in a range from $1.82 to $1.92. This revised earnings guidance includes $4.1 million in merger-related expenses incurred during the first quarter, but does not include any other expenses that may be incurred in completing or terminating the merger. Our previous guidance of $1.72 to $1.82 did not assume any merger-related expenses.”
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JLG Industries, Inc. – page 2
This revised outlook is based upon JLG as an independent company under current management and does not reflect any post-closing management decisions or impacts of the pending transaction with Oshkosh Truck Corporation.
Special Meeting of Shareholders
JLG Industries, Inc. will hold a Special Meeting of Shareholders to consider and vote on a proposal to approve the Agreement and Plan of Merger among the company, Oshkosh Truck Corporation and its subsidiary, whereby JLG will become a wholly owned subsidiary of Oshkosh. JLG has mailed the definitive proxy statement and other related materials to its shareholders of record as of November 3, 2006 in connection with this meeting. The meeting is scheduled for December 4, 2006. Pending this meeting and the related transaction, we have not scheduled a conference call to discuss our first-quarter results.
About JLG Industries, Inc.
JLG Industries, Inc. is the world’s leading producer of access equipment (aerial work platforms and telehandlers). The Company’s diverse product portfolio encompasses leading brands such as JLG® aerial work platforms; JLG, SkyTrak®, Lull® and Gradall® telehandlers; and an array of complementary accessories that increase the versatility and efficiency of these products for end users. JLG markets its products and services through a multi-channel approach that includes a highly trained sales force and utilizes a broad range of marketing techniques, integrated supply programs and a network of distributors in the industrial, commercial, institutional and construction markets. In addition, JLG offers world-class after-sales service and support for its customers. JLG’s manufacturing facilities are located in the United States, Belgium, and France, with sales and service operations on six continents.
Forward-Looking Statements
This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not guarantees of future performance and involve a number of risks and uncertainties that could cause actual results to differ materially from those indicated by the forward-looking statements. Important factors that could cause actual results to differ materially from those suggested by the forward-looking statements include, but are not limited to, the following: (i) general economic and market conditions, including political and economic uncertainty in areas of the world where we do business; (ii) varying and seasonal levels of demand for our products and services; (iii) risks associated with acquisitions; (iv) credit risks from our financing of customer purchases; (v) risks arising from dependence on third-party suppliers; (vi) costs of raw materials and energy; and (vii) risks associated with our pending merger, as well as other risks as detailed in the Company’s SEC reports, including the report on Form 10-K for the year ended July 31, 2006.
In this release and accompanying tables, we refer to various non-GAAP measures including adjustments to reported GAAP earnings, AFS operations as if accounted for under the equity method, as well as our disclosure
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JLG Industries, Inc. – page 3
of free cash flow, EBITDA and net debt. We believe that these measures are useful to investors in analyzing the Company’s operating performance. For more information, visit www.jlg.com.
NOTE: Information contained on our website is not incorporated by reference into this press release.
###
JLG Industries, Inc. — Page 4
JLG INDUSTRIES, INC.
FINANCIAL DASHBOARD
(in thousands, except per share data and as otherwise identified)
FINANCIAL DASHBOARD
(in thousands, except per share data and as otherwise identified)
| Quarter Ended | Fiscal Year | Quarter Ended | Fiscal Year | |||||||||||||||||||||||||
| October 29, | Ended | July 31, | April 30, | January 29, | October 30, | Ended | ||||||||||||||||||||||
| 2006 | July 31, 2006 | 2006 | 2006 | 2006 | 2005 | July 31, 2005 | ||||||||||||||||||||||
REVENUES AND PROFITABILITY | ||||||||||||||||||||||||||||
| Revenues | $ | 539,310 | $ | 2,289,396 | $ | 687,632 | $ | 629,615 | $ | 494,426 | $ | 477,723 | $ | 1,735,030 | ||||||||||||||
| Gross profit margin | 21.6 | % | 19.4 | % | 19.5 | % | 18.8 | % | 19.4 | % | 19.9 | % | 16.6 | % | ||||||||||||||
| EBITDA | 75,960 | 297,930 | 88,234 | 90,952 | 59,400 | 59,344 | 154,185 | |||||||||||||||||||||
| Trailing twelve month EBITDA | 314,546 | 297,930 | 297,930 | 280,799 | 243,633 | 211,344 | 154,185 | |||||||||||||||||||||
| Trailing twelve month EBITDA margin | 13.4 | % | 13.0 | % | 13.0 | % | 12.9 | % | 11.9 | % | 11.1 | % | 8.9 | % | ||||||||||||||
| Operating income | 62,226 | 262,984 | 78,194 | 84,690 | 49,734 | 50,366 | 120,261 | |||||||||||||||||||||
| Operating profit margin | 11.5 | % | 11.5 | % | 11.4 | % | 13.5 | % | 10.1 | % | 10.5 | % | 6.9 | % | ||||||||||||||
| Net income margin | 7.4 | % | 6.5 | % | 7.0 | % | 7.3 | % | 5.5 | % | 5.8 | % | 3.3 | % | ||||||||||||||
Reported earnings per diluted share(1) | $ | 0.37 | $ | 1.40 | $ | 0.45 | $ | 0.43 | $ | 0.26 | $ | 0.27 | $ | 0.60 | ||||||||||||||
IMPACT OF SELECTED ITEMS ON:(2) | ||||||||||||||||||||||||||||
income (expense) | ||||||||||||||||||||||||||||
PRE-TAX INCOME | ||||||||||||||||||||||||||||
| Strategic Initiatives/Integration (in both Cost of sales (COS), Selling & administrative and product development (SA&PD)) | $ | — | $ | (22,019 | ) | $ | (9,848 | ) | $ | (7,951 | ) | $ | (3,375 | ) | $ | (845 | ) | $ | (6,261 | ) | ||||||||
| Merger related costs (in SA&PD) | (4,149 | ) | — | — | — | — | — | — | ||||||||||||||||||||
| Net expenses on early extinguishment of debt | — | (1,939 | ) | (492 | ) | (873 | ) | (574 | ) | — | (6,493 | ) | ||||||||||||||||
| Currency effects (in Miscellaneous-net) | 1,391 | (2,767 | ) | 21 | (2,847 | ) | (672 | ) | 731 | 5,826 | ||||||||||||||||||
| Bad debt charges (in SA&PD) | (388 | ) | (6,368 | ) | (1,289 | ) | (234 | ) | (1,336 | ) | (3,509 | ) | (6,977 | ) | ||||||||||||||
| Inventory charges (in COS) | (324 | ) | (2,074 | ) | (141 | ) | 106 | (551 | ) | (1,488 | ) | (4,423 | ) | |||||||||||||||
| Early vesting incentives (in both COS, SA&PD) | — | — | — | — | — | — | (1,658 | ) | ||||||||||||||||||||
| Other Incentive pay (in both COS, SA&PD) | (5,603 | ) | (25,938 | ) | (9,938 | ) | (6,266 | ) | (4,888 | ) | (4,846 | ) | (22,194 | ) | ||||||||||||||
Estimated net unrecovered steel cost (in COS)(3) | — | (6,005 | ) | — | — | — | (6,005 | ) | (64,753 | ) | ||||||||||||||||||
| Gain related to sale of Gradall excavator product line | — | 14,572 | — | 14,572 | — | — | — | |||||||||||||||||||||
NET INCOME | ||||||||||||||||||||||||||||
| Strategic Initiatives/Integration (in both COS and SA&PD) | — | (13,581 | ) | (6,247 | ) | (4,789 | ) | (2,146 | ) | (503 | ) | (3,846 | ) | |||||||||||||||
| Merger related costs (in SA&PD) | (2,634 | ) | — | — | — | — | — | (3,846 | ) | |||||||||||||||||||
| Net expenses on early extinguishment of debt | — | (1,196 | ) | (312 | ) | (526 | ) | (365 | ) | — | (3,988 | ) | ||||||||||||||||
| Currency effects (in Miscellaneous-net) | 883 | (1,707 | ) | 13 | (1,715 | ) | (427 | ) | 435 | 3,578 | ||||||||||||||||||
| Bad debt charges (in SA&PD) | (246 | ) | (3,928 | ) | (818 | ) | (141 | ) | (850 | ) | (2,088 | ) | (4,285 | ) | ||||||||||||||
| Inventory charges (in COS) | (206 | ) | (1,279 | ) | (89 | ) | 64 | (350 | ) | (885 | ) | (2,717 | ) | |||||||||||||||
| Early vesting incentives (in both COS, SA&PD) | — | — | — | — | — | — | (1,018 | ) | ||||||||||||||||||||
| Other Incentive pay (in both COS, SA&PD) | (3,557 | ) | (15,999 | ) | (6,304 | ) | (3,774 | ) | (3,109 | ) | (2,883 | ) | (13,632 | ) | ||||||||||||||
Estimated net unrecovered steel cost (in COS)(3) | — | (3,704 | ) | — | — | — | (3,573 | ) | (39,771 | ) | ||||||||||||||||||
| Gain related to sale of Gradall excavator product line | — | 8,988 | — | 8,777 | — | — | — | |||||||||||||||||||||
EARNINGS PER SHARE(1) | ||||||||||||||||||||||||||||
| Strategic Initiatives/Integration (in both COS and SA&PD) | — | (0.13 | ) | (0.06 | ) | (0.04 | ) | (0.02 | ) | — | (0.04 | ) | ||||||||||||||||
| Merger related costs (in SA&PD) | (0.02 | ) | — | — | — | — | — | (0.04 | ) | |||||||||||||||||||
| Net expenses on early extinguishment of debt | — | (0.01 | ) | — | — | — | — | (0.04 | ) | |||||||||||||||||||
| Currency effects (in Miscellaneous-net) | 0.01 | (0.02 | ) | — | (0.02 | ) | — | — | 0.04 | |||||||||||||||||||
| Bad debt charges (in SA&PD) | — | (0.04 | ) | (0.01 | ) | — | (0.01 | ) | (0.02 | ) | (0.04 | ) | ||||||||||||||||
| Inventory charges (in COS) | — | (0.01 | ) | — | — | — | (0.01 | ) | (0.03 | ) | ||||||||||||||||||
| Early vesting incentives (in both COS, SA&PD) | — | — | — | — | — | — | (0.01 | ) | ||||||||||||||||||||
| Other Incentive pay (in both COS, SA&PD) | (0.03 | ) | (0.15 | ) | (0.06 | ) | (0.04 | ) | (0.03 | ) | (0.03 | ) | (0.14 | ) | ||||||||||||||
Estimated net unrecovered steel cost (in COS)(3) | — | (0.03 | ) | — | — | — | (0.03 | ) | (0.42 | ) | ||||||||||||||||||
| Gain related to sale of Gradall excavator product line | — | 0.08 | — | 0.08 | — | — | — | |||||||||||||||||||||
BALANCE SHEET & LIQUIDITY MEASURES | ||||||||||||||||||||||||||||
| Cash & cash equivalents | $ | 307,947 | $ | 328,096 | $ | 328,096 | $ | 304,895 | $ | 183,344 | $ | 230,947 | $ | 223,597 | ||||||||||||||
| Trade accounts and finance receivables, net | 401,283 | 445,631 | 445,631 | 393,966 | 379,813 | 379,393 | 419,866 | |||||||||||||||||||||
| Inventories | 326,406 | 212,864 | 212,864 | 216,901 | 227,957 | 218,881 | 169,097 | |||||||||||||||||||||
| Total balance sheet debt | 231,006 | 239,581 | 239,581 | 252,047 | 273,721 | 278,877 | 289,351 | |||||||||||||||||||||
| Limited recourse debt from finance receivables monetizations | 19,350 | 23,719 | 23,719 | 28,516 | 45,318 | 55,921 | 63,658 | |||||||||||||||||||||
Net debt(4) | (96,291 | ) | (112,234 | ) | (112,234 | ) | (81,364 | ) | 45,059 | (7,991 | ) | 2,096 | ||||||||||||||||
Net debt(4) to total capitalization | — | — | — | — | 7 | % | — | — | ||||||||||||||||||||
| Maximum loss exposure under loss pool agreements related to finance receivable monetizations | 6,617 | 8,818 | 8,818 | 8,818 | 11,346 | 11,855 | 22,160 | |||||||||||||||||||||
| Equity | 717,302 | 675,432 | 675,432 | 625,736 | 566,870 | 507,140 | 478,592 | |||||||||||||||||||||
| Working capital | 650,007 | 607,460 | 607,460 | 575,593 | 523,417 | 505,787 | 489,187 | |||||||||||||||||||||
| Depreciation and amortization | 7,106 | 28,551 | 6,410 | 7,701 | 7,907 | 6,533 | 28,899 | |||||||||||||||||||||
| Capital expenditures, net of retirements | (10,756 | ) | 32,241 | 15,837 | 9,622 | 3,653 | 3,129 | 13,435 | ||||||||||||||||||||
Free cash flow(5) | (15,943 | ) | 114,330 | 30,870 | 126,423 | (53,050 | ) | 10,087 | 267,457 | |||||||||||||||||||
FINANCIAL RATIOS | ||||||||||||||||||||||||||||
| Days sales outstanding | 57.3 | 51.2 | 51.2 | 46.8 | 62.3 | 62.7 | 57.1 | |||||||||||||||||||||
| Days payables outstanding | 50.5 | 44.2 | 44.2 | 45.2 | 40.6 | 46.4 | 50.5 | |||||||||||||||||||||
| Inventory turnover (annualized) | 7.2 | 7.6 | 7.6 | 7.5 | 7.6 | 7.8 | 7.6 | |||||||||||||||||||||
| (1) | On March 27, 2006, we distributed a two-for-one stock split of our then outstanding common stock. All share and per share data included in this Financial Dashboard and the accompanying consolidated condensed financial statements have been restated to reflect the stock split. | |
| (2) | Net of the quarter and annual effective tax rates. EPS is calculated by dividing the net income (loss) amounts by the respective diluted shares for each period. Individual quarterly net income (loss) per diluted share may not equal the fiscal year EPS due to changes in the number of common shares outstanding during the year. Repositioning charges are reported in COS. | |
| (3) | Net unrecovered steel cost is an estimate based upon a baseline average of steel prices per ton for various types of steel in fiscal 2004 compared to the impact of steel prices incurred for various types of steel. These estimates include assumptions regarding the steel content of and sources of our products and their components. The steel price increases are netted against steel surcharges invoiced to our customers. | |
| (4) | Net debt reflects total balance sheet debt plus off-balance sheet financing, less cash and limited recourse debt from finance receivables monetizations. | |
| (5) | Free cash flow is defined as cash flow from operating activities, investing activities, payment of dividends, exercise of stock options, and the effect of exchange rate changes on cash less changes in accounts receivable securitization, limited recourse debt from finance receivables monetizations and off-balance sheet debt. |
JLG Industries, Inc. — Page 5
JLG INDUSTRIES, INC.
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(in thousands, except per share data)
(Quarterly data is unaudited)
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(in thousands, except per share data)
(Quarterly data is unaudited)
| Quarter Ended | Fiscal Year | Quarter Ended | Fiscal Year | |||||||||||||||||||||||||
| October 29, | Ended | July 31, | April 30, | January 29, | October 30, | Ended | ||||||||||||||||||||||
| 2006 | July 31, 2006 | 2006 | 2006 | 2006 | 2005 | July 31, 2005 | ||||||||||||||||||||||
| Revenues | ||||||||||||||||||||||||||||
| Net sales | $ | 534,391 | $ | 2,268,322 | $ | 682,789 | $ | 624,686 | $ | 488,411 | $ | 472,436 | $ | 1,713,782 | ||||||||||||||
| Financial products | 2,288 | 11,093 | 2,647 | 2,216 | 3,256 | 2,974 | 11,915 | |||||||||||||||||||||
| Rentals | 2,631 | 9,981 | 2,196 | 2,713 | 2,759 | 2,313 | 9,333 | |||||||||||||||||||||
| 539,310 | 2,289,396 | 687,632 | 629,615 | 494,426 | 477,723 | 1,735,030 | ||||||||||||||||||||||
| Cost of sales | 422,558 | 1,846,371 | 553,394 | 511,552 | 398,566 | 382,859 | 1,447,785 | |||||||||||||||||||||
| Gross profit | 116,752 | 443,025 | 134,238 | 118,063 | 95,860 | 94,864 | 287,245 | |||||||||||||||||||||
Gross profit margin | 21.6 | % | 19.4 | % | 19.5 | % | 18.8 | % | 19.4 | % | 19.9 | % | 16.6 | % | ||||||||||||||
| Selling and administrative expenses | 42,721 | 164,362 | 45,975 | 41,025 | 39,301 | 38,061 | 142,383 | |||||||||||||||||||||
Selling & administrative % | 7.9 | % | 7.2 | % | 6.7 | % | 6.5 | % | 7.9 | % | 8.0 | % | 8.2 | % | ||||||||||||||
| Product development expenses | 7,656 | 30,251 | 10,069 | 6,920 | 6,825 | 6,437 | 24,601 | |||||||||||||||||||||
Product development % | 1.4 | % | 1.3 | % | 1.5 | % | 1.1 | % | 1.4 | % | 1.3 | % | 1.4 | % | ||||||||||||||
| Merger related costs | 4,149 | — | — | — | — | — | — | |||||||||||||||||||||
| Gain related to sale of Gradall excavator product line | — | (14,572 | ) | — | (14,572 | ) | — | — | — | |||||||||||||||||||
| Income from operations | 62,226 | 262,984 | 78,194 | 84,690 | 49,734 | 50,366 | 120,261 | |||||||||||||||||||||
Operating profit margin | 11.5 | % | 11.5 | % | 11.4 | % | 13.5 | % | 10.1 | % | 10.5 | % | 6.9 | % | ||||||||||||||
| Other income (deductions): | ||||||||||||||||||||||||||||
| Interest expense (net of interest income) | (1,403 | ) | (17,710 | ) | (2,526 | ) | (4,030 | ) | (6,688 | ) | (4,466 | ) | (28,609 | ) | ||||||||||||||
| Miscellaneous, net | 2,147 | (3,166 | ) | (195 | ) | (3,974 | ) | 69 | 934 | 1,436 | ||||||||||||||||||
| Income before taxes | 62,970 | 242,108 | 75,473 | 76,686 | 43,115 | 46,834 | 93,088 | |||||||||||||||||||||
| Income tax provision | 22,990 | 92,764 | 27,602 | 30,499 | 15,695 | 18,968 | 35,915 | |||||||||||||||||||||
| Net income | $ | 39,980 | $ | 149,344 | $ | 47,871 | $ | 46,187 | $ | 27,420 | $ | 27,866 | $ | 57,173 | ||||||||||||||
Return on revenues | 7.4 | % | 6.5 | % | 7.0 | % | 7.3 | % | 5.5 | % | 5.8 | % | 3.3 | % | ||||||||||||||
| Earnings per common share | $ | .38 | $ | 1.43 | $ | .45 | $ | .44 | $ | .26 | $ | .27 | $ | .61 | ||||||||||||||
| Earnings per common share — assuming dilution | $ | .37 | $ | 1.40 | $ | .45 | $ | .43 | $ | .26 | $ | .27 | $ | .60 | ||||||||||||||
| Cash Dividends per share | $ | .0050 | $ | .0150 | $ | .0050 | $ | .0050 | $ | .0025 | $ | .0025 | $ | .0100 | ||||||||||||||
| Average basic shares outstanding | 105,591 | 104,294 | 105,465 | 105,088 | 104,042 | 102,424 | 93,058 | |||||||||||||||||||||
| Average diluted shares outstanding | 107,174 | 106,518 | 107,199 | 107,232 | 106,374 | 105,112 | 95,586 | |||||||||||||||||||||
JLG Industries, Inc. — Page 6
JLG INDUSTRIES, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands, except per share data)
(Quarterly data is unaudited)
CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands, except per share data)
(Quarterly data is unaudited)
| October 29, | July 31, | April 30, | January 29, | October 30, | July 31, | |||||||||||||||||||
| 2006 | 2006 | 2006 | 2006 | 2005 | 2005 | |||||||||||||||||||
| ASSETS | ||||||||||||||||||||||||
| Current assets | ||||||||||||||||||||||||
| Cash and cash equivalents | $ | 307,947 | $ | 328,096 | $ | 304,895 | $ | 183,344 | $ | 230,947 | $ | 223,597 | ||||||||||||
| Trade accounts and finance receivables, net | 401,283 | 445,631 | 393,966 | 379,813 | 379,393 | 419,866 | ||||||||||||||||||
| Inventories | 326,406 | 212,864 | 216,901 | 227,957 | 218,881 | 169,097 | ||||||||||||||||||
| Assets held for sale | — | — | — | 49,941 | — | — | ||||||||||||||||||
| Other current assets | 39,917 | 47,613 | 26,595 | 42,715 | 48,417 | 56,739 | ||||||||||||||||||
| Total current assets | 1,075,553 | 1,034,204 | 942,357 | 883,770 | 877,638 | 869,299 | ||||||||||||||||||
| Property, plant and equipment, net | 106,033 | 98,345 | 87,447 | 82,746 | 84,879 | 85,855 | ||||||||||||||||||
| Equipment held for rental, net | 25,396 | 21,477 | 21,934 | 36,684 | 38,401 | 22,570 | ||||||||||||||||||
| Finance receivables, less current portion | 23,485 | 29,193 | 29,472 | 26,500 | 29,688 | 30,354 | ||||||||||||||||||
| Pledged finance receivables, less current portion | 4,715 | 7,668 | 11,923 | 18,623 | 26,589 | 33,649 | ||||||||||||||||||
| Goodwill | 57,382 | 57,388 | 60,513 | 60,419 | 61,598 | 61,641 | ||||||||||||||||||
| Intangible assets, net | 73,190 | 74,142 | 74,557 | 75,371 | 31,795 | 32,086 | ||||||||||||||||||
| Other assets | 75,707 | 74,872 | 72,197 | 68,379 | 64,675 | 68,143 | ||||||||||||||||||
| $ | 1,441,461 | $ | 1,397,289 | $ | 1,300,400 | $ | 1,252,492 | $ | 1,215,263 | $ | 1,203,597 | |||||||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||||||||||||
| Current liabilities | ||||||||||||||||||||||||
| Short-term debt and current portion of long-term debt | $ | 3,496 | $ | 8,484 | $ | 8,447 | $ | 6,515 | $ | 1,486 | $ | 1,496 | ||||||||||||
| Current portion of limited recourse debt from finance receivables monetizations | 14,590 | 16,001 | 16,531 | 26,558 | 29,045 | 29,642 | ||||||||||||||||||
| Accounts payable | 271,190 | 233,746 | 221,342 | 187,591 | 200,281 | 200,323 | ||||||||||||||||||
| Accrued expenses | 136,270 | 168,513 | 120,444 | 139,689 | 141,039 | 148,651 | ||||||||||||||||||
| Total current liabilities | 425,546 | 426,744 | 366,764 | 360,353 | 371,851 | 380,112 | ||||||||||||||||||
| Long-term debt, less current portion | 208,160 | 207,378 | 215,084 | 221,888 | 221,470 | 224,197 | ||||||||||||||||||
| Limited recourse debt from finance receivables monetizations, less current portion | 4,760 | 7,718 | 11,985 | 18,760 | 26,876 | 34,016 | ||||||||||||||||||
| Accrued post-retirement benefits | 25,748 | 25,748 | 25,193 | 31,797 | 31,455 | 31,113 | ||||||||||||||||||
| Other long-term liabilities | 21,891 | 19,984 | 23,152 | 22,117 | 28,464 | 27,233 | ||||||||||||||||||
| Provisions for contingencies | 38,054 | 34,285 | 32,486 | 30,707 | 28,007 | 28,334 | ||||||||||||||||||
| Shareholders’ equity | ||||||||||||||||||||||||
| Capital stock: | ||||||||||||||||||||||||
| Authorized shares: 200,000 at $.20 par value | ||||||||||||||||||||||||
| Issued shares: 106,754; fiscal 2006 — 106,751; fiscal 2005 — 103,290 | 21,351 | 21,350 | 21,268 | 21,100 | 20,666 | 20,658 | ||||||||||||||||||
| Additional paid-in capital | 212,344 | 209,290 | 206,710 | 193,021 | 165,119 | 170,367 | ||||||||||||||||||
| Retained earnings | 497,722 | 458,276 | 410,937 | 365,280 | 338,124 | 310,516 | ||||||||||||||||||
| Unearned compensation | — | — | — | — | — | (7,397 | ) | |||||||||||||||||
| Accumulated other comprehensive loss | (14,115 | ) | (13,484 | ) | (13,179 | ) | (12,531 | ) | (16,769 | ) | (15,552 | ) | ||||||||||||
| Total shareholders’ equity | 717,302 | 675,432 | 625,736 | 566,870 | 507,140 | 478,592 | ||||||||||||||||||
| $ | 1,441,461 | $ | 1,397,289 | $ | 1,300,400 | $ | 1,252,492 | $ | 1,215,263 | $ | 1,203,597 | |||||||||||||
JLG Industries, Inc. — Page 7
JLG INDUSTRIES, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOW
(in thousands)
(Quarterly data is unaudited)
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOW
(in thousands)
(Quarterly data is unaudited)
| Quarter Ended | Fiscal Year | Quarter Ended | Fiscal Year | |||||||||||||||||||||||||
| October 29, | Ended | July 31, | April 30, | January 29, | October 30, | Ended | ||||||||||||||||||||||
| 2006 | July 31, 2006 | 2006 | 2006 | 2006 | 2005 | July 31, 2005 | ||||||||||||||||||||||
| OPERATIONS | ||||||||||||||||||||||||||||
| Net income (loss) | $ | 39,980 | $ | 149,344 | $ | 47,871 | $ | 46,187 | $ | 27,420 | $ | 27,866 | $ | 57,173 | ||||||||||||||
| Adjustments to reconcile net income (loss) to cash flow from operating activities: | ||||||||||||||||||||||||||||
| Gain related to sale of Gradall excavator product line | — | (14,572 | ) | — | (14,572 | ) | — | — | — | |||||||||||||||||||
| (Gain) loss on sale of property, plant and equipment | (1 | ) | (383 | ) | (359 | ) | 5 | 57 | (86 | ) | 948 | |||||||||||||||||
| Gain on sale of equipment held for rental | (42 | ) | (13,745 | ) | (506 | ) | (7,555 | ) | (5,612 | ) | (72 | ) | (11,711 | ) | ||||||||||||||
| Non-cash charges and credits: | ||||||||||||||||||||||||||||
| Depreciation and amortization | 7,106 | 28,551 | 6,410 | 7,701 | 7,907 | 6,533 | 28,899 | |||||||||||||||||||||
| Other | 20,012 | 24,377 | 971 | 11,238 | 5,137 | 7,031 | 6,986 | |||||||||||||||||||||
| Changes in selected working capital items: | ||||||||||||||||||||||||||||
| Accounts receivable | 49,542 | (45,350 | ) | (58,188 | ) | (13,080 | ) | (13,268 | ) | 39,186 | (25,948 | ) | ||||||||||||||||
| Inventories | (113,624 | ) | (64,712 | ) | 5,470 | 10,368 | (30,523 | ) | (50,027 | ) | (15,268 | ) | ||||||||||||||||
| Accounts payable | 37,443 | 42,312 | 12,405 | 35,610 | (5,669 | ) | (34 | ) | 60,423 | |||||||||||||||||||
| Other operating assets and liabilities | (35,652 | ) | 33,484 | 29,722 | 9,160 | (6,722 | ) | 1,324 | 30,623 | |||||||||||||||||||
| Changes in finance receivables | 752 | (2,315 | ) | 3,394 | (3,645 | ) | (3,415 | ) | 1,351 | 1,877 | ||||||||||||||||||
| Changes in pledged finance receivables | (54 | ) | (627 | ) | (65 | ) | (133 | ) | (233 | ) | (196 | ) | 36 | |||||||||||||||
| Changes in other assets and liabilities | (1,163 | ) | (17,613 | ) | 1,035 | (11,506 | ) | (3,720 | ) | (3,422 | ) | 8,374 | ||||||||||||||||
| Cash flow from operating activities | 4,299 | 118,751 | 48,160 | 69,778 | (28,641 | ) | 29,454 | 142,412 | ||||||||||||||||||||
| INVESTMENTS | ||||||||||||||||||||||||||||
| Purchases of property, plant and equipment | (10,781 | ) | (32,597 | ) | (16,065 | ) | (9,643 | ) | (3,744 | ) | (3,145 | ) | (15,443 | ) | ||||||||||||||
| Proceeds from the sale of property, plant and equipment | 26 | 739 | 587 | 16 | 34 | 102 | 1,060 | |||||||||||||||||||||
| Purchases of equipment held for rental | (7,058 | ) | (43,527 | ) | (4,246 | ) | (11,890 | ) | (9,270 | ) | (18,121 | ) | (31,249 | ) | ||||||||||||||
| Proceeds from the sale of equipment held for rental | 90 | 50,552 | 3,413 | 32,396 | 14,305 | 438 | 35,065 | |||||||||||||||||||||
| Proceeds from the sale of Gradall excavator product line | — | 32,992 | 576 | 32,416 | — | — | — | |||||||||||||||||||||
| Cash portion of acquisitions | — | (47,093 | ) | — | (58 | ) | (47,035 | ) | — | (105 | ) | |||||||||||||||||
| Other | (48 | ) | 150 | (204 | ) | 422 | (40 | ) | (28 | ) | 366 | |||||||||||||||||
| Cash flow used for investing activities | (17,771 | ) | (38,784 | ) | (15,939 | ) | 43,659 | (45,750 | ) | (20,754 | ) | (10,306 | ) | |||||||||||||||
| FINANCING | ||||||||||||||||||||||||||||
| Net issuance (repayment) of short-term debt | (5,001 | ) | 52 | 14 | 26 | 23 | (11 | ) | (6 | ) | ||||||||||||||||||
| Issuance of long-term debt | — | 10,000 | — | 10,000 | — | — | 156,018 | |||||||||||||||||||||
| Repayment of long-term debt | (575 | ) | (21,455 | ) | (8,584 | ) | (12,678 | ) | (96 | ) | (97 | ) | (232,666 | ) | ||||||||||||||
| Payment of dividends | (534 | ) | (1,584 | ) | (532 | ) | (530 | ) | (264 | ) | (258 | ) | (925 | ) | ||||||||||||||
| Net proceeds from issuance of common stock | — | — | — | — | — | — | 119,421 | |||||||||||||||||||||
| Cash proceeds received from the exercise of stock options | 75 | 18,494 | 493 | 4,510 | 13,327 | 164 | 19,826 | |||||||||||||||||||||
| Excess tax benefits from stock-based compensation | 42 | 20,384 | — | 7,323 | 13,017 | 44 | — | |||||||||||||||||||||
| Cash flow from financing activities | (5,993 | ) | 25,891 | (8,609 | ) | 8,651 | 26,007 | (158 | ) | 61,668 | ||||||||||||||||||
| CURRENCY ADJUSTMENTS | ||||||||||||||||||||||||||||
| Effect of exchange rate changes on cash | (684 | ) | (1,359 | ) | (411 | ) | (537 | ) | 781 | (1,192 | ) | (7,833 | ) | |||||||||||||||
| CASH AND CASH EQUIVALENTS | ||||||||||||||||||||||||||||
| Net change in cash and cash equivalents | (20,149 | ) | 104,499 | 23,201 | 121,551 | (47,603 | ) | 7,350 | 185,941 | |||||||||||||||||||
| Beginning balance | 328,096 | 223,597 | 304,895 | 183,344 | 230,947 | 223,597 | 37,656 | |||||||||||||||||||||
| Ending balance | $ | 307,947 | $ | 328,096 | $ | 328,096 | $ | 304,895 | $ | 183,344 | $ | 230,947 | $ | 223,597 | ||||||||||||||
JLG Industries, Inc. — Page 8
JLG INDUSTRIES, INC.
CONSOLIDATED SELECTED SUPPLEMENTAL FINANCIAL INFORMATION
(in thousands)
(Quarterly data is unaudited)
CONSOLIDATED SELECTED SUPPLEMENTAL FINANCIAL INFORMATION
(in thousands)
(Quarterly data is unaudited)
| Quarter Ended | Fiscal Year | Quarter Ended | Fiscal Year | |||||||||||||||||||||||||
| October 29, | Ended | July 31, | April 30, | January 29, | October 30, | Ended | ||||||||||||||||||||||
| 2006 | July 31, 2006 | 2006 | 2006 | 2006 | 2005 | July 31, 2005 | ||||||||||||||||||||||
SEGMENT INFORMATION REVENUES: | ||||||||||||||||||||||||||||
| North American Distribution | $ | 370,962 | $ | 1,704,030 | $ | 509,653 | $ | 462,772 | $ | 369,725 | $ | 361,880 | $ | 1,329,682 | ||||||||||||||
| European Distribution | 118,915 | 407,143 | 137,233 | 124,521 | 83,062 | 62,327 | 261,602 | |||||||||||||||||||||
| Rest of World Distribution | 47,094 | 166,820 | 37,985 | 40,051 | 38,329 | 50,455 | 129,995 | |||||||||||||||||||||
| Access Financial Solutions | 2,339 | 11,403 | 2,761 | 2,271 | 3,310 | 3,061 | 13,751 | |||||||||||||||||||||
| $ | 539,310 | $ | 2,289,396 | $ | 687,632 | $ | 629,615 | $ | 494,426 | $ | 477,723 | $ | 1,735,030 | |||||||||||||||
SEGMENT PROFIT (LOSS): | ||||||||||||||||||||||||||||
| North American Distribution | $ | 55,135 | $ | 254,167 | $ | 79,554 | $ | 75,997 | $ | 47,903 | $ | 50,713 | $ | 114,255 | ||||||||||||||
| European Distribution | 19,367 | 38,969 | 14,082 | 16,032 | 6,659 | 2,196 | 21,489 | |||||||||||||||||||||
| Rest of World Distribution | 10,848 | 39,411 | 7,966 | 8,304 | 9,001 | 14,140 | 32,475 | |||||||||||||||||||||
| Access Financial Solutions | 425 | 4,937 | 1,544 | 1,139 | 1,166 | 1,088 | 4,420 | |||||||||||||||||||||
| Corporate expense | (23,936 | ) | (77,585 | ) | (25,419 | ) | (17,443 | ) | (15,891 | ) | (18,832 | ) | (58,774 | ) | ||||||||||||||
| Segment profit | 61,839 | 259,899 | 77,727 | 84,029 | 48,838 | 49,305 | 113,865 | |||||||||||||||||||||
| Add: AFS’ interest expense | 387 | 3,085 | 467 | 661 | 896 | 1,061 | 6,396 | |||||||||||||||||||||
| Operating income | $ | 62,226 | $ | 262,984 | $ | 78,194 | $ | 84,690 | $ | 49,734 | $ | 50,366 | $ | 120,261 | ||||||||||||||
PRODUCT GROUP REVENUES | ||||||||||||||||||||||||||||
| Aerial work platforms | $ | 299,388 | $ | 1,159,778 | $ | 360,367 | $ | 320,827 | $ | 234,710 | $ | 243,874 | $ | 888,073 | ||||||||||||||
| Telehandlers | 164,429 | 776,001 | 254,546 | 202,637 | 160,715 | 158,103 | 511,766 | |||||||||||||||||||||
| Excavators | — | 26,798 | — | 865 | 16,902 | 9,031 | 61,562 | |||||||||||||||||||||
| After-sales service and support, including parts sales, and used and reconditioned equipment sales | 70,574 | 305,745 | 67,876 | 100,357 | 76,084 | 61,428 | 252,381 | |||||||||||||||||||||
| Financial products | 2,288 | 11,093 | 2,647 | 2,216 | 3,256 | 2,974 | 11,915 | |||||||||||||||||||||
| Rentals | 2,631 | 9,981 | 2,196 | 2,713 | 2,759 | 2,313 | 9,333 | |||||||||||||||||||||
| $ | 539,310 | $ | 2,289,396 | $ | 687,632 | $ | 629,615 | $ | 494,426 | $ | 477,723 | $ | 1,735,030 | |||||||||||||||
GEOGRAPHIC REVENUES | ||||||||||||||||||||||||||||
| United States | $ | 364,914 | $ | 1,678,674 | $ | 500,788 | $ | 456,630 | $ | 366,343 | $ | 354,913 | $ | 1,311,450 | ||||||||||||||
| Europe | 119,344 | 408,513 | 138,010 | 124,621 | 83,349 | 62,533 | 264,032 | |||||||||||||||||||||
| Other international | 55,052 | 202,209 | 48,834 | 48,364 | 44,734 | 60,277 | 159,548 | |||||||||||||||||||||
| $ | 539,310 | $ | 2,289,396 | $ | 687,632 | $ | 629,615 | $ | 494,426 | $ | 477,723 | $ | 1,735,030 | |||||||||||||||
JLG Industries, Inc. — Page 9
JLG INDUSTRIES, INC.
EBITDA
QUARTERLY PERIODS
(in thousands)
EBITDA
QUARTERLY PERIODS
(in thousands)
| October 29, | July 31, | April 30, | January 29, | October 30, | July 31, | |||||||||||||||||||
| 2006 | 2006 | 2006 | 2006 | 2005 | 2005 | |||||||||||||||||||
| Net income | $ | 39,980 | $ | 47,871 | $ | 46,187 | $ | 27,420 | $ | 27,866 | $ | 35,696 | ||||||||||||
| Interest expense | 5,884 | 6,351 | 6,565 | 8,378 | 5,977 | 6,326 | ||||||||||||||||||
| Income tax provision | 22,990 | 27,602 | 30,499 | 15,695 | 18,968 | 21,716 | ||||||||||||||||||
| Depreciation and amortization | 7,106 | 6,410 | 7,701 | 7,907 | 6,533 | 7,365 | ||||||||||||||||||
| EBITDA | $ | 75,960 | $ | 88,234 | $ | 90,952 | $ | 59,400 | $ | 59,344 | $ | 71,103 | ||||||||||||
We monitor our EBITDA, which is a supplemental measure to GAAP that provides additional information concerning our leverage position and our historical ability to meet debt service and capital expenditure and working capital requirements. EBITDA also is an indicator of profitability, particularly in our capital-intensive industry. EBITDA reflects our earnings before interest, taxes and depreciation and amortization. EBITDA as presented differs from measures of EBITDA calculated for purposes of financial covenants in our note indentures and senior credit facilities.
JLG Industries, Inc. — Page 10
JLG INDUSTRIES, INC.
EBITDA AND EBITDA MARGINS
TRAILING TWELVE MONTH PERIODS
(in thousands)
EBITDA AND EBITDA MARGINS
TRAILING TWELVE MONTH PERIODS
(in thousands)
| October 29, | July 31, | April 30, | January 29, | October 30, | July 31, | |||||||||||||||||||
| 2006 | 2006 | 2006 | 2006 | 2005 | 2005 | |||||||||||||||||||
| Net income | $ | 161,458 | $ | 149,344 | $ | 137,169 | $ | 113,704 | $ | 93,768 | $ | 57,173 | ||||||||||||
| Interest expense | 27,178 | 27,271 | 27,246 | 29,235 | 29,179 | 32,198 | ||||||||||||||||||
| Income tax provision | 96,786 | 92,764 | 86,878 | 71,401 | 60,053 | 35,915 | ||||||||||||||||||
| Depreciation and amortization | 29,124 | 28,551 | 29,506 | 29,293 | 28,344 | 28,899 | ||||||||||||||||||
| EBITDA | $ | 314,546 | $ | 297,930 | $ | 280,799 | $ | 243,633 | $ | 211,344 | $ | 154,185 | ||||||||||||
| Revenues | $ | 2,350,983 | $ | 2,289,396 | $ | 2,171,343 | $ | 2,047,084 | $ | 1,906,092 | $ | 1,735,030 | ||||||||||||
| EBITDA Margin | 13.4 | % | 13.0 | % | 12.9 | % | 11.9 | % | 11.1 | % | 8.9 | % | ||||||||||||
We monitor our EBITDA, which is a supplemental measure to GAAP that provides additional information concerning our leverage position and our historical ability to meet debt service and capital expenditure and working capital requirements. EBITDA also is an indicator of profitability, particularly in our capital-intensive industry. EBITDA reflects our earnings before interest, taxes and depreciation and amortization. EBITDA as presented differs from measures of EBITDA calculated for purposes of financial covenants in our note indentures and senior credit facilities.
JLG Industries, Inc. — Page 11
JLG INDUSTRIES, INC.
NET DEBT
(in thousands)
NET DEBT
(in thousands)
| October 29, | July 31, | April 30, | January 29, | October 30, | July 31, | |||||||||||||||||||
| 2006 | 2006 | 2006 | 2006 | 2005 | 2005 | |||||||||||||||||||
| Revolving credit facilities | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
| Cash management facilities | — | — | — | — | — | — | ||||||||||||||||||
| $125 million senior notes | 89,545 | 89,545 | 97,545 | 109,975 | 109,975 | 109,975 | ||||||||||||||||||
| $175 million senior subordinated notes | 113,750 | 113,750 | 113,750 | 113,750 | 113,750 | 113,750 | ||||||||||||||||||
| Miscellaneous debt | 13,311 | 18,886 | 19,455 | 9,678 | 4,751 | 4,859 | ||||||||||||||||||
| Fair value of interest rate swaps | (7,419 | ) | (8,898 | ) | (9,908 | ) | (7,799 | ) | (8,428 | ) | (5,909 | ) | ||||||||||||
| Gain on terminated interest rate swap | 2,469 | 2,579 | 2,689 | 2,799 | 2,908 | 3,018 | ||||||||||||||||||
| Bank debt and notes | 211,656 | 215,862 | 223,531 | 228,403 | 222,956 | 225,693 | ||||||||||||||||||
| Limited recourse debt from finance receivables monetizations * | 19,350 | 23,719 | 28,516 | 45,318 | 55,921 | 63,658 | ||||||||||||||||||
| Total balance sheet debt | 231,006 | 239,581 | 252,047 | 273,721 | 278,877 | 289,351 | ||||||||||||||||||
| Less: cash and cash equivalents | 307,947 | 328,096 | 304,895 | 183,344 | 230,947 | 223,597 | ||||||||||||||||||
| Less: limited recourse debt from finance receivables monetizations | 19,350 | 23,719 | 28,516 | 45,318 | 55,921 | 63,658 | ||||||||||||||||||
| Net debt | $ | (96,291 | ) | $ | (112,234 | ) | $ | (81,364 | ) | $ | 45,059 | $ | (7,991 | ) | $ | 2,096 | ||||||||
| Shareholders’ Equity | $ | 717,302 | $ | 675,432 | $ | 625,736 | $ | 566,870 | $ | 507,140 | $ | 478,592 | ||||||||||||
| Net Debt-to-Net Debt plus Shareholders’ Equity | — | — | — | 7 | % | — | — | |||||||||||||||||
| Total Balance Sheet Debt-to-Total Balance Sheet Debt plus Shareholders’ Equity | 24 | % | 26 | % | 29 | % | 33 | % | 35 | % | 38 | % | ||||||||||||
| * Maximum loss exposure under loss pool agreements related to finance receivable monetizations | $ | 6,617 | $ | 8,818 | $ | 8,818 | $ | 11,346 | $ | 11,855 | $ | 22,160 | ||||||||||||
We monitor our net debt, which is a supplemental measure to GAAP that provides additional information concerning our leverage position and our historical ability to meet debt service and capital expenditure and working capital requirements. We define net debt as the sum of total balance sheet debt and other off-balance sheet financing, minus cash and limited recourse debt arising from our monetizations of customer finance receivables.
JLG Industries, Inc. — Page 12
JLG INDUSTRIES, INC.
FREE CASH FLOW
(in thousands)
FREE CASH FLOW
(in thousands)
| Quarter Ended | Fiscal Year | Quarter Ended | Fiscal Year | |||||||||||||||||||||||||
| October 29, | Ended | July 31, | April 30, | January 29, | October 30, | Ended | ||||||||||||||||||||||
| 2006 | July 31, 2006 | 2006 | 2006 | 2006 | 2005 | July 31, 2005 | ||||||||||||||||||||||
| Net income | $ | 39,980 | $ | 149,344 | $ | 47,871 | $ | 46,187 | $ | 27,420 | $ | 27,866 | $ | 57,173 | ||||||||||||||
| Adjustments to reconcile net income to cash flow from operating activities: | ||||||||||||||||||||||||||||
| Non-cash items | 27,075 | 24,228 | 6,516 | (3,183 | ) | 7,489 | 13,406 | 25,122 | ||||||||||||||||||||
| Accounts receivable | 49,542 | (45,350 | ) | (58,188 | ) | (13,080 | ) | (13,268 | ) | 39,186 | (25,948 | ) | ||||||||||||||||
| Inventories | (113,624 | ) | (64,712 | ) | 5,470 | 10,368 | (30,523 | ) | (50,027 | ) | (15,268 | ) | ||||||||||||||||
| Other current assets | (13,716 | ) | 17,653 | (7,860 | ) | 11,633 | 4,345 | 9,535 | (12,553 | ) | ||||||||||||||||||
| Accounts payable | 37,443 | 42,312 | 12,405 | 35,610 | (5,669 | ) | (34 | ) | 60,423 | |||||||||||||||||||
| Accrued expenses | (21,936 | ) | 15,831 | 37,582 | (2,473 | ) | (11,067 | ) | (8,211 | ) | 43,176 | |||||||||||||||||
| Finance receivables | 752 | (2,315 | ) | 3,394 | (3,645 | ) | (3,415 | ) | 1,351 | 1,877 | ||||||||||||||||||
| Other cash from operations | (1,163 | ) | (17,613 | ) | 1,035 | (11,506 | ) | (3,720 | ) | (3,422 | ) | 8,374 | ||||||||||||||||
| Purchases of property, plant and equipment | (10,781 | ) | (32,597 | ) | (16,065 | ) | (9,643 | ) | (3,744 | ) | (3,145 | ) | (15,443 | ) | ||||||||||||||
| Proceeds from the sale of property, plant and equipment | 26 | 739 | 587 | 16 | 34 | 102 | 1,060 | |||||||||||||||||||||
| Purchases of equipment held for rental | (7,058 | ) | (43,527 | ) | (4,246 | ) | (11,890 | ) | (9,270 | ) | (18,121 | ) | (31,249 | ) | ||||||||||||||
| Proceeds from the sale of equipment held for rental | 90 | 50,552 | 3,413 | 32,396 | 14,305 | 438 | 35,065 | |||||||||||||||||||||
| Proceeds from the sale of Gradall excavator product line | — | 32,992 | 576 | 32,416 | — | — | — | |||||||||||||||||||||
| Cash portion of acquisitions | — | (47,093 | ) | — | (58 | ) | (47,035 | ) | — | (105 | ) | |||||||||||||||||
| Other cash from investments | (48 | ) | 150 | (204 | ) | 422 | (40 | ) | (28 | ) | 366 | |||||||||||||||||
| Payment of dividends | (534 | ) | (1,584 | ) | (532 | ) | (530 | ) | (264 | ) | (258 | ) | (925 | ) | ||||||||||||||
| Net proceeds from issuance of common stock | — | — | — | — | — | — | 119,421 | |||||||||||||||||||||
| Cash proceeds received from the exercise of stock options | 75 | 18,494 | 493 | 4,510 | 13,327 | 164 | 19,826 | |||||||||||||||||||||
| Excess tax benefits from stock-based compensation | 42 | 20,384 | — | 7,323 | 13,017 | 44 | — | |||||||||||||||||||||
| Effect of exchange rate changes on cash | (684 | ) | (1,359 | ) | (411 | ) | (537 | ) | 781 | (1,192 | ) | (7,833 | ) | |||||||||||||||
| Seller financing | — | (5,000 | ) | — | — | (5,000 | ) | — | — | |||||||||||||||||||
Other(1) | (1,424 | ) | 2,801 | (966 | ) | 2,087 | (753 | ) | 2,433 | 4,898 | ||||||||||||||||||
| Free Cash Flow | $ | (15,943 | ) | $ | 114,330 | $ | 30,870 | $ | 126,423 | $ | (53,050 | ) | $ | 10,087 | $ | 267,457 | ||||||||||||
| (1) | Includes changes in other off-balance sheet debt. |
In addition to measuring our cash flow generation and usage based upon the Statements of Cash Flows, we also measure our free cash flow.
We define free cash flow as cash flow from operating activities, investing activities, payment of dividends, cash proceeds received from the exercise of stock options, excess tax benefits from stock-based compensation and the effect of exchange rate changes on cash less changes in accounts receivable securitization, limited recourse debt from finance receivables monetizations and off-balance sheet debt. Our measure of free cash flow may not be comparable to similarly titled measures being disclosed by other companies and is not a measure of financial performance that is in accordance with GAAP. We utilize free cash flow to explain the change in our net debt position from the prior period.
We define free cash flow as cash flow from operating activities, investing activities, payment of dividends, cash proceeds received from the exercise of stock options, excess tax benefits from stock-based compensation and the effect of exchange rate changes on cash less changes in accounts receivable securitization, limited recourse debt from finance receivables monetizations and off-balance sheet debt. Our measure of free cash flow may not be comparable to similarly titled measures being disclosed by other companies and is not a measure of financial performance that is in accordance with GAAP. We utilize free cash flow to explain the change in our net debt position from the prior period.
JLG Industries, Inc. – Page 13
JLG INDUSTRIES, INC.
STATEMENTS OF INCOME
(in thousands, except per share data)
(unaudited)
STATEMENTS OF INCOME
(in thousands, except per share data)
(unaudited)
| CONSOLIDATED | EQUIPMENT OPERATIONS | FINANCIAL SERVICES | ||||||||||||||||||||||
| JLG Industries, Inc. and | JLG Industries, Inc. with Access | |||||||||||||||||||||||
| Consolidated Subsidiaries | Financial Solutions on the Equity Basis | Access Financial Solutions | ||||||||||||||||||||||
| Three Months Ended | Three Months Ended | Three Months Ended | ||||||||||||||||||||||
| October 29, | October 30, | October 29, | October 30, | October 29, | October 30, | |||||||||||||||||||
| 2006 | 2005 | 2006 | 2005 | 2006 | 2005 | |||||||||||||||||||
| Revenues | ||||||||||||||||||||||||
| Net sales | $ | 534,391 | $ | 472,436 | $ | 534,391 | $ | 472,436 | $ | — | $ | — | ||||||||||||
| Financial products | 2,288 | 2,974 | — | — | 2,288 | 2,974 | ||||||||||||||||||
| Rentals | 2,631 | 2,313 | 2,580 | 2,226 | 51 | 87 | ||||||||||||||||||
| 539,310 | 477,723 | 536,971 | 474,662 | 2,339 | 3,061 | |||||||||||||||||||
| Cost of sales | 422,558 | 382,859 | 422,487 | 382,793 | 71 | 66 | ||||||||||||||||||
| Gross profit | 116,752 | 94,864 | 114,484 | 91,869 | 2,268 | 2,995 | ||||||||||||||||||
| Selling and administrative expenses | 42,721 | 38,061 | 41,265 | 37,215 | 1,456 | 846 | ||||||||||||||||||
| Product development expenses | 7,656 | 6,437 | 7,656 | 6,437 | — | — | ||||||||||||||||||
| Merger related costs | 4,149 | — | 4,149 | — | — | — | ||||||||||||||||||
| Income from operations | 62,226 | 50,366 | 61,414 | 48,217 | 812 | 2,149 | ||||||||||||||||||
| Other income (deductions): | ||||||||||||||||||||||||
| Interest expense, net of interest income | (1,403 | ) | (4,466 | ) | (1,016 | ) | (3,405 | ) | (387 | ) | (1,061 | ) | ||||||||||||
| Miscellaneous, net | 2,147 | 934 | 2,147 | 934 | — | — | ||||||||||||||||||
| Income before taxes | 62,970 | 46,834 | 62,545 | 45,746 | 425 | 1,088 | ||||||||||||||||||
| Income tax provision | 22,990 | 18,968 | 22,835 | 18,527 | 155 | 441 | ||||||||||||||||||
| Equity in income of Access Financial Solutions | — | — | 270 | 647 | — | — | ||||||||||||||||||
| Net income | $ | 39,980 | $ | 27,866 | $ | 39,980 | $ | 27,866 | $ | 270 | $ | 647 | ||||||||||||
| Earnings per common share | $ | .38 | $ | .27 | ||||||||||||||||||||
| Earnings per common share - assuming dilution | $ | .37 | $ | .27 | ||||||||||||||||||||
| Cash dividends per share | $ | .005 | $ | .0025 | ||||||||||||||||||||
| Weighted average shares outstanding | 105,591 | 102,424 | ||||||||||||||||||||||
| Weighted average shares outstanding - assuming dilution | 107,174 | 105,112 | ||||||||||||||||||||||
JLG Industries, Inc. — Page 14
JLG INDUSTRIES, INC.
BALANCE SHEETS
(in thousands, except per share data)
(unaudited)
BALANCE SHEETS
(in thousands, except per share data)
(unaudited)
| CONSOLIDATED | EQUIPMENT OPERATIONS | FINANCIAL SERVICES | ||||||||||||||||||||||
| JLG Industries, Inc. and | JLG Industries, Inc. with Access | |||||||||||||||||||||||
| Consolidated Subsidiaries | Financial Solutions on the Equity Basis | Access Financial Solutions | ||||||||||||||||||||||
| October 29, | July 31, | October 29, | July 31, | October 29, | July 31, | |||||||||||||||||||
| 2006 | 2006 | 2006 | 2006 | 2006 | 2006 | |||||||||||||||||||
| ASSETS | ||||||||||||||||||||||||
| Current assets | ||||||||||||||||||||||||
| Cash and cash equivalents | $ | 307,947 | $ | 328,096 | $ | 307,947 | $ | 328,096 | $ | — | $ | — | ||||||||||||
| Trade accounts and finance receivables — net | 401,283 | 445,631 | 358,271 | 405,003 | 43,012 | 40,628 | ||||||||||||||||||
| Inventories | 326,406 | 212,864 | 326,406 | 212,864 | — | — | ||||||||||||||||||
| Other current assets | 39,917 | 47,613 | 39,917 | 47,613 | — | — | ||||||||||||||||||
| Total current assets | 1,075,553 | 1,034,204 | 1,032,541 | 993,576 | 43,012 | 40,628 | ||||||||||||||||||
| Property, plant and equipment — net | 106,033 | 98,345 | 105,957 | 98,253 | 76 | 92 | ||||||||||||||||||
| Equipment held for rental — net | 25,396 | 21,477 | 25,347 | 21,384 | 49 | 93 | ||||||||||||||||||
| Finance receivables, less current portion | 23,485 | 29,193 | — | — | 23,485 | 29,193 | ||||||||||||||||||
| Pledged receivables, less current portion | 4,715 | 7,668 | — | — | 4,715 | 7,668 | ||||||||||||||||||
| Goodwill | 57,382 | 57,388 | 57,382 | 57,388 | — | — | ||||||||||||||||||
| Intangible assets — net | 73,190 | 74,142 | 73,190 | 74,142 | — | — | ||||||||||||||||||
| Investment in Access Financial Solutions | — | — | 43,800 | 43,530 | — | — | ||||||||||||||||||
| Receivable from Access Financial Solutions | — | — | 5,262 | 8,403 | — | — | ||||||||||||||||||
| Other assets | 75,707 | 74,872 | 75,567 | 74,899 | 140 | (27 | ) | |||||||||||||||||
| $ | 1,441,461 | $ | 1,397,289 | $ | 1,419,046 | $ | 1,371,575 | $ | 71,477 | $ | 77,647 | |||||||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||||||||||||
| Current liabilities | ||||||||||||||||||||||||
| Short-term debt and current portion of long-term debt | $ | 3,496 | $ | 8,484 | $ | 3,496 | $ | 8,484 | $ | — | $ | — | ||||||||||||
| Current portion of limited recourse debt from finance receivables monetizations | 14,590 | 16,001 | — | — | 14,590 | 16,001 | ||||||||||||||||||
| Accounts payable | 271,190 | 233,746 | 271,190 | 233,746 | — | — | ||||||||||||||||||
| Accrued expenses | 136,270 | 168,513 | 136,021 | 168,458 | 249 | 55 | ||||||||||||||||||
| Total current liabilities | 425,546 | 426,744 | 410,707 | 410,688 | 14,839 | 16,056 | ||||||||||||||||||
| Long-term debt, less current portion | 208,160 | 207,378 | 208,160 | 207,378 | — | — | ||||||||||||||||||
| Limited recourse debt from finance receivables monetizations, less current portion | 4,760 | 7,718 | — | — | 4,760 | 7,718 | ||||||||||||||||||
| Payable to JLG Industries, Inc. | — | — | — | — | 5,262 | 8,403 | ||||||||||||||||||
| Accrued post-retirement benefits | 25,748 | 25,748 | 25,748 | 25,748 | — | — | ||||||||||||||||||
| Other long-term liabilities | 21,891 | 19,984 | 21,891 | 19,984 | — | — | ||||||||||||||||||
| Provisions for contingencies | 38,054 | 34,285 | 35,238 | 32,345 | 2,816 | 1,940 | ||||||||||||||||||
| Shareholders’ equity | ||||||||||||||||||||||||
| Capital stock: | ||||||||||||||||||||||||
| Authorized shares: 200,000 at $.20 par value | ||||||||||||||||||||||||
| Issued and outstanding shares:106,754 shares; fiscal 2006 – 106,751 shares | 21,351 | 21,350 | 21,351 | 21,350 | 30,000 | 30,000 | ||||||||||||||||||
| Additional paid-in capital | 212,344 | 209,290 | 212,344 | 209,290 | — | — | ||||||||||||||||||
| Retained earnings | 497,722 | 458,276 | 497,722 | 458,276 | 13,800 | 13,530 | ||||||||||||||||||
| Accumulated other comprehensive loss | (14,115 | ) | (13,484 | ) | (14,115 | ) | (13,484 | ) | — | — | ||||||||||||||
| Total shareholders’ equity | 717,302 | 675,432 | 717,302 | 675,432 | 43,800 | 43,530 | ||||||||||||||||||
| $ | 1,441,461 | $ | 1,397,289 | $ | 1,419,046 | $ | 1,371,575 | $ | 71,477 | $ | 77,647 | |||||||||||||
JLG Industries, Inc. — Page 15
JLG INDUSTRIES, INC.
STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
| CONSOLIDATED | EQUIPMENT OPERATIONS | FINANCIAL SERVICES | ||||||||||||||||||||||
| JLG Industries, Inc. and | JLG Industries, Inc. with Access | |||||||||||||||||||||||
| Consolidated Subsidiaries | Financial Solutions on the Equity Basis | Access Financial Solutions | ||||||||||||||||||||||
| �� | Three Months Ended | Three Months Ended | Three Months Ended | |||||||||||||||||||||
| October 29, | October 30, | October 29, | October 30, | October 29, | October 30, | |||||||||||||||||||
| 2006 | 2005 | 2006 | 2005 | 2006 | 2005 | |||||||||||||||||||
| Operations | ||||||||||||||||||||||||
| Net income | $ | 39,980 | $ | 27,866 | $ | 39,980 | $ | 27,866 | $ | 270 | $ | 647 | ||||||||||||
| Adjustments to reconcile net income to cash flow from operating activities: | ||||||||||||||||||||||||
| (Gain) loss on sale of property, plant and equipment | (1 | ) | (86 | ) | (1 | ) | (86 | ) | — | — | ||||||||||||||
| (Gain) loss on sale of equipment held for rental | (42 | ) | (72 | ) | (42 | ) | (72 | ) | — | — | ||||||||||||||
| Non-cash charges and credits: | ||||||||||||||||||||||||
| Depreciation and amortization | 7,106 | 6,533 | 7,046 | 6,451 | 60 | 82 | ||||||||||||||||||
| Other | 20,012 | 7,031 | 19,215 | 6,733 | 797 | 298 | ||||||||||||||||||
| Changes in selected working capital items: | ||||||||||||||||||||||||
| Accounts receivable | 49,542 | 39,186 | 48,264 | 48,344 | 1,278 | (9,158 | ) | |||||||||||||||||
| Inventories | (113,624 | ) | (50,027 | ) | (113,624 | ) | (50,027 | ) | — | — | ||||||||||||||
| Accounts payable | 37,443 | (34 | ) | 37,443 | (34 | ) | — | — | ||||||||||||||||
| Other operating assets and liabilities | (35,652 | ) | 1,324 | (35,846 | ) | 1,285 | 194 | 39 | ||||||||||||||||
| Changes in finance receivables | 752 | 1,351 | — | — | 752 | 1,351 | ||||||||||||||||||
| Changes in pledged finance receivables | (54 | ) | (196 | ) | — | — | (54 | ) | (196 | ) | ||||||||||||||
| Changes in other assets and liabilities | (1,163 | ) | (3,422 | ) | (1,009 | ) | (3,395 | ) | (154 | ) | (27 | ) | ||||||||||||
| Cash flow from operating activities | 4,299 | 29,454 | 1,426 | 37,065 | 3,143 | (6,964 | ) | |||||||||||||||||
| Investments | ||||||||||||||||||||||||
| Purchases of property, plant and equipment | (10,781 | ) | (3,145 | ) | (10,781 | ) | (3,145 | ) | — | — | ||||||||||||||
| Proceeds from the sale of property, plant and equipment | 26 | 102 | 26 | 102 | — | — | ||||||||||||||||||
| Purchases of equipment held for rental | (7,058 | ) | (18,121 | ) | (7,058 | ) | (18,121 | ) | — | — | ||||||||||||||
| Proceeds from the sale of equipment held for rental | 90 | 438 | 90 | 438 | — | — | ||||||||||||||||||
| Investment in income of Access Financial Solutions | — | — | (270 | ) | (647 | ) | — | — | ||||||||||||||||
| Other | (48 | ) | (28 | ) | (48 | ) | (28 | ) | — | — | ||||||||||||||
| Cash flow used for investing activities | (17,771 | ) | (20,754 | ) | (18,041 | ) | (21,401 | ) | — | — | ||||||||||||||
| Financing | ||||||||||||||||||||||||
| Net decrease in short-term debt | (5,001 | ) | (11 | ) | (5,001 | ) | (11 | ) | — | — | ||||||||||||||
| Repayment of long-term debt | (575 | ) | (97 | ) | (575 | ) | (97 | ) | — | — | ||||||||||||||
| Change in receivable from Access Financial Solutions | — | — | 3,141 | (6,965 | ) | — | — | |||||||||||||||||
| Change in payable to JLG Industries, Inc. | — | — | — | — | (3,141 | ) | 6,965 | |||||||||||||||||
| Payment of dividends | (534 | ) | (258 | ) | (534 | ) | (258 | ) | — | — | ||||||||||||||
| Cash proceeds received from the exercise of stock options | 75 | 164 | 75 | 164 | — | — | ||||||||||||||||||
| Excess tax benefits from stock-based compensation | 42 | 44 | 42 | 44 | — | — | ||||||||||||||||||
| Cash flow from financing activities | (5,993 | ) | (158 | ) | (2,852 | ) | (7,123 | ) | (3,141 | ) | 6,965 | |||||||||||||
| Currency Adjustments | ||||||||||||||||||||||||
| Effect of exchange rate changes on cash | (684 | ) | (1,192 | ) | (682 | ) | (1,191 | ) | (2 | ) | (1 | ) | ||||||||||||
| Cash and Cash Equivalents | ||||||||||||||||||||||||
| Net change in cash and cash equivalents | (20,149 | ) | 7,350 | (20,149 | ) | 7,350 | — | — | ||||||||||||||||
| Beginning balance | 328,096 | 223,597 | 328,096 | 223,597 | — | — | ||||||||||||||||||
| Ending balance | $ | 307,947 | $ | 230,947 | $ | 307,947 | $ | 230,947 | $ | — | $ | — | ||||||||||||
Additional Information and Where to Find It
In connection with the proposed merger, the Company has filed a definitive proxy statement with the Securities and Exchange Commission. BEFORE MAKING ANY VOTING OR INVESTMENT DECISION, THE COMPANY’S SHAREHOLDERS ARE URGED TO READ THE DEFINITIVE PROXY STATEMENT BECAUSE IT CONTAINS IMPORTANT INFORMATION ABOUT THE PROPOSED MERGER. The definitive proxy statement is also available free of charge at the Securities and Exchange Commission’s website at www.sec.gov. Free copies of the definitive proxy statement and the Company’s other filings with the SEC may also be obtained from the Company. Free copies of JLG Industries’ filings may be obtained by directing a request to JLG Industries, Inc., 13224 Fountainhead Plaza, Hagerstown, Maryland 21742-2678, Attention: Investor Relations.
Oshkosh Truck, JLG Industries and their respective directors, executive officers and other members of their management and employees may be deemed to be soliciting proxies from JLG Industries’ shareholders in favor of the proposed acquisition. Information regarding Oshkosh Truck’s directors and executive officers is available in Oshkosh Truck’s proxy statement for its 2006 annual meeting of shareholders, which was filed with the SEC on December 20, 2005. Information regarding JLG Industries’ directors and executive officers is available in JLG Industries’ proxy statement for its 2006 annual meeting of shareholders, which was filed with the SEC on October 2, 2006. Additional information regarding the interests of such potential participants will be included in the proxy statement and the other relevant documents filed with the SEC when they become available.