GEHL
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Gehl Company Tel: 262/334-9461
143 Water Street Fax: 262/334-6603
P.O. Box 179 http://www.gehl.com
West Bend, WI 53095-0179
USA
Contact:
Kenneth Hahn
Vice President, Finance & Treasurer
262-334-6632
News Release
GEHL REPORTS FIRST QUARTER 2001 RESULTS IN LINE WITH GUIDANCE
AND AHEAD OF ANALYSTS' EXPECTATIONS
Reaffirms Earnings Outlook for Second Quarter and Full Year
WEST BEND, WI, May 3, 2001 - Gehl Company (Nasdaq: GEHL), a manufacturer of
light construction and agricultural equipment, today reported net income for the
first quarter ending March 31, 2001 of $1.0 million, or $0.19 per diluted share,
in line with the Company's previous guidance of $.15 to $.21 per diluted share
and ahead of analysts' consensus expectations. Net sales were $63.7 million in
the quarter, exceeding the Company's guidance of $61.5 million to $63.5 million.
These results compare to net income of $4.1 million, or $0.70 per diluted share,
and net sales of $72.0 million for the first quarter of 2000.
"We believe Gehl's results this quarter, including our ability to deliver
both sales and earnings per share well within our stated targets despite an
increasingly challenging market, underscore the fundamental strength of our
business," said William D. Gehl, Chairman, President and CEO. "Within this
difficult economic environment, we remain focused on the key controllable
elements of our performance. We are actively managing operating expenses and
production levels, while moving aggressively to execute on our strategic
initiatives. We continue to work to generate long-term value for all Gehl
shareholders."
Gehl continued, "During the quarter, we rolled out new models of our skid
loader and telescopic handler product lines, introduced a completely new line of
round balers,
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Gehl Company
Gehl Reports First Quarter 2001 Results in Line with Guidance
And Ahead of Analysts' Expectations
May 3, 2001
page 2
deepened our presence in rural equipment and construction dealer markets,
launched our web-enabled attachment business, successfully implemented the first
phase of our enterprise resource planning ("ERP") systems, and continued to
explore acquisition opportunities to enhance our growth prospects."
Construction Equipment Sales
Sales of construction equipment in the first quarter of 2001 were $32.4
million, compared with $41.1 million in the first quarter of 2000. Newer
products, such as Gehl's compact excavator, provided approximately $2.5 million
of sales volume, up 20% from the first quarter of 2000. Company sales and
industry markets both continued to be unfavorably affected by factors that
impacted the second half of 2000, including a soft housing market, low rental
rates on equipment, especially of telescopic handlers, a weak Euro and generally
depressed market demand for light construction equipment. Offsetting these
adverse macroeconomic conditions, Gehl reported strong progress during the first
quarter on several key construction business initiatives, including introducing
mini-loaders to construction dealers and a new 12-ton excavator to Gehl and
Mustang dealers. The Company also began shipment of four new skid loader models
for Gehl and Mustang dealers, which are being favorably received by the market.
Agricultural Equipment Sales
Milk prices continued at low levels while fuel costs remained high
throughout the first quarter of 2001, creating a challenging environment for
agricultural equipment customers. Despite unsettled market conditions, sales of
Gehl agricultural equipment in the first quarter of 2001 increased one percent
over the year-ago period to $31.3 million. The increase was primarily a result
of favorable market acceptance of the Company's new round baler product line and
new Agri-Loader telescopic handler products designed exclusively for the
agricultural market, as well as sales to traditional agricultural dealers of the
Company's compact excavator and mini-loader products, which were not available
to
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Gehl Company
Gehl Reports First Quarter 2001 Results in Line with Guidance
And Ahead of Analysts' Expectations
May 3, 2001
page 3
dealers in the comparable period of 2000.
Gross Margins and Operating Expenses
For the first quarter of 2001, Gehl's gross margin was 25.5% versus 26.8%
during the same period in 2000. Gross margin for construction equipment was
21.8% for the first quarter, compared with 25.0% for the first quarter of 2000.
The decrease in construction equipment gross margin was the result of
competitive market conditions, lower production levels, higher utility costs and
a less favorable mix of product shipments. Gross margin for agricultural
equipment was 29.3%, compared with the 29.2% realized for the comparable period
in 2000.
Operating expense levels in the first quarter of 2001 were $12.7 million,
or 20% of net sales, an increase from $11.7 million, or 16.3% of net sales, in
the first quarter of 2000. To position the Company for future growth and market
share expansion, Gehl continues to invest in revenue-enhancing projects, such as
improved parts distribution, new product development, ERP systems and the new
web-enabled attachment distribution business. Such investments, combined with
increased selling-related costs resulting from very competitive market
conditions, as well as a lower level of sales, have contributed to the increased
operating expenses as a percent of net sales.
Second Quarter and Full Year Outlook
The Company reiterated its previous guidance for the second quarter,
estimating earnings to be in the range of $.61 to $.67 per diluted share. For
the full year 2001, Gehl expects net sales to increase approximately 5% to 8%
over 2000 levels to between $272 million and $280 million, and earnings to be in
the range of $1.52 to $1.62 per diluted share.
Mr. Gehl commented, "Despite difficult market conditions, we are
reaffirming our outlook ranges for the second quarter and the balance of 2001.
We also believe the
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Gehl Company
Gehl Reports First Quarter 2001 Results in Line with Guidance
And Ahead of Analysts' Expectations
May 3, 2001
page 4
reductions in interest rates since the beginning of 2001 will benefit our
industry and markets, although we believe that it may take 6 to 12 months for
the rate reductions to affect our industry."
Strategic Initiatives Update
The Company reported significant progress on the core set of strategic
initiatives the Board and management have undertaken to deliver long-term
shareholder value, including the introduction of significant new products, the
expansion and leveraging of the Company's multiple distribution channels, and
continuing critical research and development projects for the compact
construction and agricultural equipment marketplaces.
Gehl reported shipments of several new key products in the first quarter of
2001, including a line of smaller skid loaders for both Gehl and Mustang
dealers, as well as the new round baler product line and new Agri-Loader
products designed exclusively for the agricultural market. The Company plans to
begin shipments in 2001 of several additional new products for both the
construction and agricultural markets, including a new large skid loader for
Gehl and Mustang dealers, new mid-size models of compact excavators and new
models of forage harvesting equipment for the agricultural market.
Gehl also made progress during the quarter leveraging its existing
distribution channels to sell products across the Company's two business
segments. The Company introduced the Agri-Loader, a telescopic handler designed
exclusively for the agricultural market, to fifteen new rural equipment dealers,
doubling the number of dealers offering the product, and introduced its compact
excavators to seventeen new rural equipment dealers. Bolstering the distribution
of its mini-loaders across both the construction and agricultural markets, Gehl
introduced the product to ten new rural equipment dealers and three Gehl
construction dealers in the first quarter.
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Gehl Company
Gehl Reports First Quarter 2001 Results in Line with Guidance
And Ahead of Analysts' Expectations
May 3, 2001
page 5
Furthering its commitment to position the Company for long-term growth in
the compact construction equipment and compact agricultural equipment
marketplaces, Gehl continued critical research and development projects on skid
loaders and telescopic handlers.
To expand its compact equipment offerings in U.S. markets and enhance its
distribution network in Europe, Gehl continued to explore new distribution
relationships and strategic business combinations in North America and Europe.
Gehl's e-commerce initiative also continues to build momentum. A new
attachment distribution company, wholly-owned by Gehl Company, will operate as
an independent web-enabled wholesale distributor of special purpose attachments
which are used on skid loaders, compact excavators and other types of compact
construction equipment. As an independent distributor, the new company intends
to market an extensive range of attachments which will fit Gehl and Mustang
brands, as well as all other major makes and models. The company will offer a
range of strategic e-commerce capabilities including on-line product research,
financing, and technical support through its website, and will coordinate
inventory and shipping from a distribution center located in Owatonna, MN. Gehl
expects to formally launch its web-enabled business in the third quarter.
Forward Looking Statements
The Gehl Company intends that certain matters discussed in this press release
are "forward-looking statements" intended to qualify for the safe harbor from
liability established by the Private Securities Litigation Reform Act of 1995.
All statements other than statements of historical fact, including statements
regarding the Company's future financial position, business strategy, targets,
projected sales and earnings, and the plans and objectives of management for
future operations, are forward-looking statements. When used in this press
release, words such as the Company "believes," "anticipates," "expects" or
"estimates" or words of similar meaning are generally intended to identify
forward-looking statements. These forwarding-looking statements are not
guarantees of future performance and are subject to certain risks,
uncertainties, assumptions and other factors, some of which are beyond the
Company's control, that could cause actual results to differ materially from
those anticipated as of the date of this press release. Factors that could cause
such a variance include, but are not limited to, unanticipated changes in
general economic and capital market conditions, the Company's ability to
implement successfully its strategic initiatives, market acceptance of newly
introduced products, the
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Gehl Company
Gehl Reports First Quarter 2001 Results in Line with Guidance
And Ahead of Analysts' Expectations
May 3, 2001
page 6
cyclical nature of the Company's business, the Company's and its customers'
access to credit, competitive pricing, product initiatives and other actions
taken by competitors, disruptions in production capacity, excess inventory
levels, the effect of changes in laws and regulations (including government
subsidies and international trade regulations), technological difficulties,
changes in environmental laws, the impact of any acquisition effected by the
Company, and
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Gehl Company
Gehl Reports First Quarter 2001 Results in Line with Guidance
And Ahead of Analysts' Expectations
May 3, 2001
page 7
employee and labor relations. Shareholders, potential investors, and other
readers are urged to consider these factors in evaluating the forward-looking
statements and are cautioned not to place undue reliance on such forward-looking
statements. The forward-looking statements included in this release are only
made as of the date of this release, and the Company undertakes no obligation to
publicly update such forward-looking statements to reflect subsequent events or
circumstances. In addition, the Company's expectations for fiscal year 2001 are
based in part on certain assumptions made by the Company, including those
relating to commodities prices, which are strongly affected by weather and other
factors and can fluctuate significantly, housing starts and other construction
activities, which are sensitive to, among other things, interest rates and
government spending, and the performance of the U.S. economy generally. The
accuracy of these or other assumptions could have a material effect on the
Company's ability to achieve its expectations.
About Gehl Company
Gehl Company (Nasdaq: GEHL) is a leading manufacturer of equipment used
worldwide in construction and agricultural markets. Founded in 1859, Gehl is
headquartered in West Bend, WI, with manufacturing facilities in West Bend, WI;
Lebanon, PA; Madison and Yankton, SD; and Owatonna, MN. The Company markets its
products under the Gehl(R) and Mustang(R) brand names. Mustang product
information is available at www.mustangmfg.com. Gehl Company information is
available at www.gehl.com or contact: Gehl Company, 143 Water Street, West Bend,
WI 53095 (telephone: 262-334-9461).
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Gehl Company
Gehl Reports First Quarter 2001 Results in Line with Guidance
And Ahead of Analysts' Expectations
May 3, 2001
page 8
GEHL COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
For the First Quarter Ended
(unaudited)
----------------------------------
March 31, 2001 April 1, 2000
-------------- --------------
NET SALES $ 63,716 $ 72,054
Cost of goods sold 47,489 52,772
-------------- --------------
GROSS PROFIT 16,227 19,282
Selling, general
& administrative expenses 12,752 11,744
-------------- --------------
INCOME FROM OPERATIONS 3,475 7,538
Interest expense (1,196) (873)
Interest income 529 380
Other (expense) income, net (1,231) (785)
-------------- --------------
INCOME BEFORE INCOME TAXES 1,577 6,260
Income tax provision 552 2,191
-------------- --------------
NET INCOME $ 1,025 $ 4,069
============== ==============
EARNINGS PER SHARE
Diluted $ .19 $ .70
Weighted average number of common
shares and common stock equivalents 5,487 5,790
Basic $ .19 $ .73
Weighted average number of common 5,333 5,599
shares
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Gehl Company
Gehl Reports First Quarter 2001 Results in Line with Guidance
And Ahead of Analysts' Expectations
May 3, 2001
page 9
GEHL COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
December 31,
March 31, 2001 2000 April 1, 2000
(unaudited) (audited) (unaudited)
-------------- ------------- -------------
ASSETS
Cash $ 3,839 $ 2,590 $ 3,254
Accounts receivable - net 84,109 69,546 86,190
Inventories 44,606 45,598 42,219
Deferred tax assets 8,078 8,078 8,431
Other current assets 11,298 17,185 13,921
-------------- ------------- -------------
Total current assets 151,930 142,997 $ 154,015
Property, plant and
equipment - net 46,025 46,172 38,809
Intangible assets 12,923 13,086 15,521
Other assets 16,781 20,463 16,246
-------------- ------------- -------------
TOTAL ASSETS $ 227,659 $ 222,718 $ 224,591
============== ============= =============
LIABILITIES AND
SHAREHOLDERS' EQUITY
Total current liabilities $ 55,814 $ 50,027 $ 61,904
Long-term debt obligations 58,883 60,885 53,127
Other long-term obligations 3,773 3,692 5,976
Deferred income taxes 5,096 5,096 3,949
Total shareholders' equity 104,093 103,018 99,635
-------------- ------------- -------------
TOTAL LIABILITIES AND $ 227,659 $ 222,718 $ 224,591
SHAREHOLDERS' EQUITY
============== ============= =============
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Gehl Company
Gehl Reports First Quarter 2001 Results in Line with Guidance
And Ahead of Analysts' Expectations
May 3, 2001
page 10
GEHL COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
For the First Quarter Ended
(unaudited)
------------------------------
March 31, 2001 April 1, 2000
-------------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 1,025 $ 4,069
Adjustments to reconcile net income to
net cash provided by (used for)
operating activities:
Depreciation 1,237 1,250
Amortization 175 199
Proceeds from sales of finance contracts 28,407 14,796
Increase in finance contracts receivable (19,577) (17,681)
Cost of sales of finance contracts 1,233 865
Net change in working capital items (8,458) (19,001)
-------------- -------------
Net cash provided by (used for)
operating activities 4,042 (15,503)
-------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Property, plant and equipment additions, net (1,090) (3,031)
Other 187 113
-------------- -------------
Net cash used for investing activities (903) (2,918)
-------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
(Repayments of) proceeds from line
of credit facility (1,909) 22,079
Proceeds from issuance of common stock 50 273
Treasury stock purchases - (2,131)
Other (31) 444
-------------- -------------
Net cash (used for) provided by
financing activities (1,890) 20,665
-------------- -------------
Net increase in cash 1,249 2,244
Cash, beginning of period 2,590 1,010
-------------- -------------
Cash, end of period $ 3,839 $ 3,254
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