[GRAPHIC OMITTED][GEHL COMPANY LOGO]
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
Chief Financial Officer
262-334-6632
News Release
GEHL COMPANY REPORTS IMPROVED FIRST QUARTER EARNINGS
----------------------------------------------------
WEST BEND, WI, April 24, 2003 - Gehl Company (NASDAQ NM: GEHL), a
manufacturer of light construction and agricultural equipment, today reported
higher net income for the first quarter ended March 29, 2003, of $508,000, or
$.09 per diluted share, compared to net income of $229,000, or $.04 per diluted
share, in the first quarter of 2002. The net income amounts for the first
quarters of 2003 and 2002 include after-tax charges of $104,000, or $.02 per
diluted share, and $60,000, or $.01 per diluted share, respectively, relating to
previously announced restructuring and plant rationalization projects. Net sales
were $58.5 million in the quarter ended March 29, 2003, compared to net sales of
$60.1 million for the first quarter of 2002.
William D. Gehl, Chairman, President & CEO, stated "Despite markets which
have not improved since the beginning of the year, we were able to improve our
results for the first quarter of 2003 and to continue the improvement realized
in the last quarter of 2002. Aggressive cost control throughout all areas of the
Company, the closure last year of two of our five manufacturing facilities,
reduced costs associated with selling retail finance contracts and an 18%
increase in construction equipment sales due in part to the success of new
product introductions all contributed to our improved results."
"We continue," Mr. Gehl said, "to innovate our product lines, improve our
manufacturing and distribution processes and to seek every opportunity to reduce
our costs - all to better position the Company to benefit from the long awaited
economic upturn."
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Gehl Company
Gehl Reports First Quarter 2003 Results
April 24, 2003
page 2
Construction Equipment Sales
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Gehl construction equipment segment sales in the first quarter of 2003 were
$35.8 million, an 18% increase from first quarter 2002 net sales of $30.4
million. Demand for compact track loaders and all-wheel-steer loaders, new
products which were introduced in the second and third quarters of 2002,
respectively, was strong during the first quarter of 2003 and accounted for the
majority of the construction equipment segment sales increase.
Agricultural Equipment Sales
- ----------------------------
Gehl agricultural equipment segment sales in the first quarter of 2003 were
$22.7 million, down from $29.7 million in the year-ago period. Agricultural
equipment net sales were adversely impacted by significantly lower milk prices
as well as drought conditions in certain regions of the United States. Shipments
of compact track loaders, introduced in the second quarter of 2002, partially
offset reduced agricultural implement and skid loader shipments in the quarter.
Gross Margins and Expenses
- --------------------------
For the first quarter of 2003, Gehl's gross margin was 21.0%, versus 22.2%
during the same period in 2002. Gross margin for construction equipment was
22.8% for the first quarter, compared with 22.3% for the first quarter of 2002.
The increase in the gross margin for the construction equipment segment was
primarily the result of improved manufacturing efficiencies and the favorable
effects of the Company's recently completed plant rationalization project. Gross
margin for the agricultural equipment segment was 18.0%, compared with the 22.1%
realized for the comparable period in 2002. The decrease in agricultural
equipment gross margin was due to significant competitive pressure resulting in
higher sales discounts and sales incentives, reduced production levels, as well
as a less favorable mix of product shipments.
Selling, general and administrative expense levels in the first quarter of
2003 were $11.0 million, or 18.9% of net sales, a 7.4% decrease from $11.9
million, or 19.8% of net sales, in the first quarter of 2002. The decrease is
primarily due to the aggressive steps taken to control costs. Favorable foreign
exchange transaction impacts and lower
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Gehl Company
Gehl Reports First Quarter 2003 Results
April 24, 2003
page 3
interest and interest related costs, such as costs of selling retail finance
contracts receivable, due to the overall lower interest rate environment,
compared to the first quarter of 2002, contributed to the improved earnings.
Full Year Outlook
- -----------------
Based on the current market outlook, the Company's net sales are expected
to range between being flat to up approximately 4% in 2003. Any growth in net
sales is expected to result primarily from the sales of recently introduced
products and new products to be introduced in 2003. Growth in net sales is more
likely to occur in the construction equipment segment as compared with the
agricultural equipment segment. Overall, any anticipated sales growth would
likely occur in the latter portion of 2003 based on the Company's expectation of
a gradually improving economy. Though it remains difficult to predict results in
these unsettled economic times, if the economy experiences some gradual
improvement and the Company's sales levels meet projected forecasts, the Company
continues to expect to earn in the range of $.60 to $.75 per diluted share in
2003.
Forward Looking Statements
- --------------------------
Certain statements included 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 and 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", "estimates" or "projects" or words
of similar meaning are generally intended to identify forward-looking
statements. These forward-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, a delay in the expected general economic recovery, unanticipated
changes in capital market conditions, the Company's ability to implement
successfully its strategic initiatives, market acceptance of newly introduced
products, the cyclical nature of the Company's business, the Company's and its
customers' access to credit, competitive
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Gehl Company
Gehl Reports First Quarter 2003 Results
April 24, 2003
page 4
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 currency exchange rates,
the Company's ability to secure sources of liquidity necessary to fund its
operations, changes in environmental laws, the impact of any acquisition
effected by the Company, and 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 2003 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 NM: GEHL) is a manufacturer of compact equipment used
worldwide in construction and agricultural markets. Founded in 1859, the Company
is headquartered in West Bend, WI, with manufacturing facilities in West Bend,
WI; and Madison and Yankton, SD. The Company markets its products under the
Gehl(R)and Mustang(R)brand names. Mustang product information is available on
the Mustang Manufacturing website (www.mustangmfg.com). CE Attachments, Inc.
information is available at (www.ceattach.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).
( TABLES TO FOLLOW )
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GEHL COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
For the First Quarter Ended
(unaudited)
---------------------------------------------------------
March 29, 2003 March 30, 2002
--------------------- ---------------------
NET SALES $ 58,531 $ 60,068
Cost of goods sold 46,268 46,709
--------------------- ---------------------
GROSS PROFIT 12,263 13,359
Selling, general
and administrative expenses 11,034 11,921
Restructuring and other charges 160 92
--------------------- ---------------------
Total operating expenses 11,194 12,013
INCOME FROM OPERATIONS 1,069 1,346
Interest expense (899) (963)
Interest income 503 482
Other income (expense), net 109 (513)
--------------------- ---------------------
INCOME BEFORE INCOME TAXES 782 352
Income tax provision 274 123
--------------------- ---------------------
NET INCOME $ 508 $ 229
===================== =====================
EARNINGS PER SHARE
Diluted $ 0.09 $ 0.04
Weighted average number of common
shares and common stock equivalents 5,393 5,519
Basic $ 0.09 $ 0.04
Weighted average number of common
shares 5,374 5,374
GEHL COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
March 29, 2003 December 31, 2002 March 30, 2002
(unaudited) (audited) (unaudited)
-------------------- ----------------------- -----------------
ASSETS
Cash $ 2,642 $ 2,243 $ 1,200
Accounts receivable - net 113,730 97,627 106,515
Finance contracts receivable - net 5,164 4,701 5,820
Inventories 35,731 36,771 54,088
Deferred income taxes 8,469 8,469 10,171
Prepaid expenses and other current assets 2,182 3,203 1,646
-------------------- ----------------------- -----------------
Total current assets 167,918 153,014 179,440
Property, plant and equipment - net 45,761 46,697 44,686
Goodwill 11,696 11,696 12,556
Other assets 14,398 14,662 17,824
-------------------- ----------------------- -----------------
Total assets $ 239,773 $ 226,069 $ 254,506
==================== ======================= =================
LIABILITIES AND SHAREHOLDERS' EQUITY
Total current liabilities $ 56,290 $ 49,634 $ 59,801
Long-term debt obligations 62,698 56,135 77,422
Other long-term obligations 22,533 22,518 14,478
Deferred income taxes 1,644 1,644 2,460
Total shareholders' equity 96,608 96,138 100,345
-------------------- ----------------------- -----------------
Total liabilities and shareholders' equity $ 239,773 $ 226,069 $ 254,506
==================== ======================= =================
GEHL COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
For the First Quarter Ended
(unaudited)
-------------------------------------------------------
March 29, 2003 March 30, 2002
----------------------- ------------------------
CASH FLOW FROM OPERATING ACTIVITIES:
Net income $ 508 $ 229
Adjustments to reconcile net income to net cash
used for operating activities:
Depreciation 1,287 1,063
Amortization 6 61
Cost of sales of finance contracts 43 523
Proceeds from the sales of finance contracts 18,121 18,357
Increase in finance contracts receivable (18,800) (17,570)
Net change in remaining working capital items (6,401) (10,599)
----------------------- ------------------------
Net cash used for operating activities (5,236) (7,936)
CASH FLOW FROM INVESTING ACTIVITIES:
Property, plant and equipment additions - net (319) (2,259)
Other (108) 69
----------------------- ------------------------
Net cash used for investing activities (427) (2,190)
CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from revolving credit loans 6,597 8,864
Repayments of other borrowings - net (390) (203)
Proceeds from issuance of common stock 31 164
Treasury stock purchases (176) -
Other - 253
----------------------- ------------------------
Net cash provided by financing activities 6,062 9,078
Net increase (decrease) in cash 399 (1,048)
Cash, beginning of period 2,243 2,248
----------------------- ------------------------
Cash, end of period $ 2,642 $ 1,200
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