Exhibit 99.1
[JLG INDUSTRIES, INC. LOGO]
PRESS RELEASE
FOR IMMEDIATE RELEASE
1 JLG Drive
McConnellsburg, PA 17233-9533
Telephone (717) 485-5161 CONTACT: JUNA ROWLAND
Fax (717) 485-6417 DIRECTOR - CORPORATE & INVESTOR RELATIONS
www.jlg.com (240) 313-1816, IR@JLG.COM
JLG FILES FINANCIAL RESTATEMENT
IMPACT LIMITED TO SINGLE TRANSACTION AS PREVIOUSLY REPORTED
MCCONNELLSBURG, PA, MARCH 16, 2004 - JLG Industries, Inc. (NYSE: JLG)
announced that the Company has conducted an internal review of its revenue
recognition practices for the last three fiscal years as well as the first six
months of the current fiscal year. In addition, Ernst & Young LLP has performed
agreed-upon procedures with respect to the financial statements for the same
periods. As a result of our internal review and the procedures performed by
Ernst & Young LLP, the Company has identified no other transactions or
circumstances that would require it to alter the scope of the restatement beyond
what the Company disclosed in its press release dated February 18, 2004.
We have restated our financial statements for the fiscal year ended
July 31, 2003 and first quarter ending October 31, 2003 of the current fiscal
year to correct our premature recognition of revenues from one transaction with
a single customer that we originally recorded in July 2003. Upon re-examination
of the transaction terms and subsequent history we concluded that the
transaction was incorrectly reported as a sale, rather than a consignment sale,
which under generally accepted accounting principles, allows recognition of the
revenues only upon final sale of the equipment by the consignee. We notified
both the Audit Committee of the Board of Directors and Ernst & Young LLP, the
Company's independent auditors regarding this matter. The restatement results in
an $8.7 million reduction of revenue and $1.8 million reduction in net income in
the fourth quarter of fiscal 2003. Prior to the date of the amended reports, the
consignee had sold all of the equipment. Accordingly, the reclassification of
this transaction will result in an increase in revenue and profit recognized
over the first three quarters of fiscal 2004 offset in part by the expense
associated with our internal inquiry and subsequent restatement.
We have also taken significant steps to strengthen our control
processes and procedures in order to identify and rectify the accounting error
and prevent the recurrence of the circumstances that resulted in the need to
restate prior period financial statements. While actual plans involve many
detailed steps, the general categories addressed include:
- Strengthening our documentation and formal process to review and
approve proposed revenue transactions prior to their occurrence.
- Supplementing our revenue recognition policy to include a clearly
understandable summary of key elements of the policy to better ensure
broader understanding of the policy among our personnel.
- Conducting training sessions for affected employees on applicable
policies and procedures.
- Implementing additional detection controls to identify and correct
accounting errors on a timely basis before such errors reach our
financial statements.
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JLG Industries, Inc. - page 2
We believe these changes eliminate the previously identified weakness in our
controls, but we intend during the current quarter to further improve these
controls principally through additional modifications to our information systems
to automate and provide redundancies for some of these processes. We are
expanding the scope of the engagement of our internal auditors
PricewaterhouseCoopers and will continue to seek their assistance in
implementing appropriate procedures and controls.
Our management team has taken full responsibility for the error that
caused the restatement and subsequent events. We are committed to ensuring that
JLG continues to adhere to the highest principles of business ethics in a manner
that preserves and advances our Company's valuable reputation. To avoid any
appearance that might contradict that commitment, our officers have requested,
and our board has agreed, that we reverse the accelerated vesting of all officer
restricted share awards that occurred in January and February shortly before our
initial announcement of the restatement. These awards will be restored to their
prior status and therefore will be eligible to vest again in six months only if
our share price returns to the average levels that triggered the prior early
vesting.
The effect of the restatement is as follows:
FOR THE FISCAL YEAR ENDED FOR THE THREE MONTHS ENDED
JULY 31, 2003 OCTOBER 31, 2003
PREVIOUSLY PREVIOUSLY
---------- ----------
REPORTED AS RESTATED CHANGE REPORTED AS RESTATED CHANGE
-------- ----------- ------ -------- ----------- ------
STATEMENTS OF INCOME DATA:
Net sales $733,480 $724,819 ($8,661) $207,002 $208,392 $1,390
Revenues 759,789 751,128 (8,661) 212,195 213,585 1,390
Costs of sales 622,475 616,686 (5,789) 174,333 175,319 986
Gross profit 137,314 134,442 (2,872) 37,862 38,266 404
Income from operations 39,193 36,321 (2,872) 9,362 9,766 404
Income before taxes 17,899 15,027 (2,872) 426 830 404
Income tax provision 3,724 2,635 (1,089) 149 297 148
Net income 14,175 12,392 (1,783) 277 533 256
Earnings per common share 0.33 0.29 (0.04) 0.01 0.01 --
Earnings per common share-assuming dilution 0.33 0.29 (0.04) 0.01 0.01 --
STATEMENTS OF CASH FLOWS DATA:
Net income $14,175 $12,392 ($1,783) $277 $533 $256
Non-cash charges and credits-Deferred
income taxes (5,247) (6,336) (1,089) 3,171 3,319 148
Accounts receivable (43,985) (35,324) 8,661 2,409 1,020 (1,389)
Inventories 48,926 43,137 (5,789) 5,900 6,885 985
BALANCE SHEETS DATA:
Accounts receivable - net $266,180 $257,519 ($8,661) $297,001 $289,729 ($7,272)
Inventories 116,886 122,675 5,789 148,397 153,200 4,803
Other current assets (deferred tax assets) 45,385 46,474 1,089 53,311 54,252 941
Total current assets 605,762 603,979 (1,783) 551,950 550,422 (1,528)
Total assets 937,985 936,202 (1,783) 974,477 972,949 (1,528)
Retained earnings 230,273 228,490 (1,783) 230,334 228,806 (1,528)
Total shareholders' equity 249,497 247,714 (1,783) 250,439 248,911 (1,528)
Total liabilities and shareholders' equity 937,985 936,202 (1,783) 974,477 972,949 (1,528)
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JLG Industries, Inc. - page 3
ABOUT JLG
JLG Industries, Inc. is the world's leading producer of access
equipment and highway-speed telescopic hydraulic excavators. The Company's
diverse product portfolio encompasses leading brands such as JLG(R) aerial work
platforms; JLG, Sky Trak(R), Lull(R) and Gradall(R) telehandlers; Gradall
excavators; 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 network that includes a highly
trained and skilled direct sales force, direct marketing, the Internet,
integrated supply programs and a network of distributors. In addition, JLG
offers world-class after-sales service and support for its customers in the
industrial, commercial, institutional and construction markets. JLG's
manufacturing facilities are located in the United States and Belgium, with
sales and service locations on six continents.
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) limitations on
customer access to credit for purchases; (iv) credit risks from our financing of
customer purchases; (v) interest and foreign currency exchange rates; and (vi)
costs of raw materials and energy, as well as other risks as detailed in the
Company's SEC reports, including the amended report on Form 10-Q for the quarter
ended October 31, 2003.
For more information, visit www.jlg.com. NOTE: Information contained
on our website is not incorporated by reference into this press release.
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