Exhibit 99
For more information
Jay Lemke
Carmichael Lynch Spong
(612) 375-8529
jlemke@clynch.com
ASV Reports Record Results for 3rd Quarter 2004
Full Year EPS Guidance Increased from $1.12-1.20 to $1.20-1.26
GRAND RAPIDS, MN (October 26, 2004) -- ASV, Inc. (NASDAQ: ASVI) today
reported its second consecutive quarter of record net sales and net earnings
with its results for the third quarter of 2004. Net sales totaled $40.6 million
for the third quarter of 2004, compared with $29.2 million for the third quarter
of 2003. With the gross profit percentage increasing to 22.9%, net earnings
increased to a record level of $4.4 million, or $.34 per share, for the third
quarter of 2004, compared with $3.1 million, or $.29 cents per share, for the
third quarter of 2003, despite a 22% increase in the number of diluted shares
outstanding in the third quarter of 2004.
For the nine months ended September 30, 2004, net sales increased 61%
to $112.7 million, compared with $70.2 million for the same period in 2003. Net
earnings doubled to $12.2 million, or $.92 per share, for the nine months ended
September 30, 2004 compared with $6.1 million, or $.59 per share, for the same
period in 2003, even with a 30% increase in the number of diluted shares
outstanding for the nine months ended September 30, 2004.
Commenting on the third quarter results, ASV CEO Gary Lemke said, "ASV
experienced another quarter of record sales and profitability during the third
quarter of 2004. Our sales mix changed, as we had anticipated, as Caterpillar
Inc. (NYSE: CAT) increased its purchases of ASV's undercarriages for use on
their Multi-Terrain Loaders (MTL) during the third quarter of 2004. Sales of
undercarriages to Caterpillar were 40% of our sales for the third quarter of
2004, up from 26% for the second quarter of 2004. MTL orders continue strong and
we anticipate MTL undercarriage sales will account for approximately 37-40% of
our total sales for fiscal 2004, exclusive of Loegering's sales. Sales of
R-Series Posi-Track products accounted for 46% of our sales for the third
quarter of 2004, compared with 58% for the second quarter of 2004. Sales of
service parts increased to $5 million for the third quarter of 2004, compared
with $2.9 million for the comparable period in 2003, as the population of
machines and undercarriages in service steadily increases."
During the third quarter of 2004, ASV's gross profit percentage
increased to 22.9%, compared with 22.3% for the third quarter of 2003 and 22.4 %
for the second quarter of 2004. This increase in gross profit percentage was due
to savings realized from ASV's cost reduction project implemented during the
first quarter of 2004 as well as price increases on selected R-Series Posi-Track
products and MTL products during the third quarter of 2004. Partially offsetting
these increases were steel surcharges of approximately $800,000 during the third
quarter of 2004. Speaking on this matter, Lemke stated, "We're pleased to
achieve an increased gross profit percentage in the third quarter of 2004, even
with the level of steel surcharges we experienced. We believe our raw material
savings and price increases will offset the surcharges we expect to receive for
the balance of 2004."
Loegering Mfg. Inc. Acquisition
-------------------------------
On October 4, 2004, ASV closed on its acquisition of Loegering Mfg.
Inc. of Casselton, North Dakota in a merger transaction. ASV acquired all the
outstanding common stock of Loegering for $18.23 million through the issuance of
approximately 430,000 shares of ASV common stock valued at $14.75 million and
cash of $3.48 million. Of the total ASV shares issued in the transaction,
130,699 shares will be registered for resale on a Form S-3 Registration
Statement, with the remaining shares unregistered. Following completion of the
transaction, Loegering became a wholly owned subsidiary of ASV. In a related
transaction, ASV acquired real property representing Loegering's manufacturing
facility from Loegering affiliates for $1.57 million. Loegering, a 33-year-old
company, is the original manufacturer and a leader in over-the-tire steel tracks
for wheeled skid-steers and also provides attachments for the skid-steer market.
In addition, Loegering has developed new, proprietary technology -- the
Versatile Track System(R) (VTS(R)) -- a bolt on bolt off track system that will
convert most skid-steers from wheels to rubber tracks.
Speaking to the Loegering acquisition, Lemke stated "We believe the VTS
Track System has significant opportunities for the wheeled skid-steer market, of
which there are an estimated 500,000 units currently in service. The VTS Track
System allows skid-steer owners to experience many of the benefits of a rubber
track undercarriage on the machine they currently own. We anticipate the VTS
Track System will represent over 50% of Loegering's sales for the fourth quarter
of 2004."
Outlook
-------
Regarding ASV's overall outlook for the balance of 2004, Lemke stated,
"With the additional fourth quarter sales of Loegering, expected to be in the
range of $6-7.5 million, we anticipate our consolidated sales for 2004 will
reflect an increase of 59-64% over 2003. This translates into anticipated net
sales of $153-158 million for fiscal 2004. We anticipate ASV's diluted earnings
per share will reflect an increase of 54-62% over 2003, which equates to
expected earnings per share in the range of $1.20-1.26 for fiscal 2004, which
includes two to four cents accretion from Loegering. This earnings per share
guidance is based on an anticipated diluted share count of approximately 13.4
million shares outstanding for fiscal 2004, a 20% increase over 2003."
Continuing, Lemke stated, "With our recent acquisition of Loegering and
our annual planning conference with Caterpillar scheduled for later in the
fourth quarter, we believe it is too early to provide detailed guidance
regarding our anticipated sales and earnings levels for 2005. We believe the
market for rubber track loaders will continue to expand at a rapid rate in 2005
and anticipate ASV will experience another record year of sales and earnings in
2005."
Conference Call
---------------
ASV will conduct a live Webcast at 9 a.m. Central time, Tuesday,
October 26th to discuss its results for the third quarter of 2004 and its
outlook for the remainder of 2004. The call will be broadcast over the Internet
and can be accessed at either www.vcall.com or ASV's web site, www.asvi.com, in
the investor relations section under the "About ASV" tab. To listen to the call,
go to either of the two Web sites at least 15 minutes prior to the call to
register, download and install any needed audio software. A replay of this call
will be available both telephonically and over the Internet approximately two
hours after its conclusion. The telephonic replay will be available through
Wednesday, October 27th, and can be accessed by dialing 877-660-6853 and
entering account number 1628 and conference ID number 121557. The Internet
replay will be available for 30 days and can be accessed at www.vcall.com or
www.asvi.com.
About ASV
---------
ASV designs, manufactures and sells rubber-tracked, all-purpose
crawlers and related accessories and attachments. ASV also manufactures
rubber-tracked undercarriages, which are a primary component on Caterpillar's
Multi Terrain Loaders. With its patented undercarriage technology, ASV leads all
rubber-tracked, all-purpose crawlers in technology and innovation. ASV's
products are able to traverse nearly any terrain with minimal damage to the
ground, making it effective in industries such as construction, landscaping and
agriculture. For more information, visit ASV's website at www.asvi.com.
Forward-Looking Statements
--------------------------
Note: The statements set forth above regarding ASV's future expected
sales and earnings levels, the benefits of Loegering's products and technology,
including its VTS track system, the effect of the acquisition on ASV's financial
results, Loegering's anticipated sales and earnings for 2004 and the benefits of
the acquisition are forward-looking statements based on current expectations and
assumptions, and entail various risks and uncertainties that could cause actual
results to differ materially from those expressed in such forward-looking
statements. Certain factors may affect whether these anticipated events occur
including the risks and uncertainties associated with successfully integrating
the operations of Loegering, unanticipated delays, costs and expenses inherent
in the development and marketing of new products and services; developments in
the demand for each companies' products and services; ASV's ability to
successfully manufacture its products; unanticipated delays, costs or other
difficulties in the manufacture of the products; unanticipated problems or
delays experienced by Caterpillar relating to the manufacturing or marketing of
the MTL machines; market acceptance of the machines; deterioration of the
general market and economic conditions; corporate developments at ASV or
Caterpillar; ASV's ability to realize the anticipated benefits from its
relationship with Caterpillar and Loegering; relationships with major customers
and suppliers; the ability to retain key personnel; the impact of governmental
laws and regulations; competitive factors; and any future acts or threats of
terrorism or war. Any forward-looking statements provided from time-to-time by
the Company represent only management's then-best current estimate of future
results or trends. Additional information regarding these risk factors and
uncertainties is detailed from time to time in the Company's SEC filings,
including but not limited to, its report on Form 10-Q for the period ended June
30, 2004.
Condensed financial statements are as follows:
A.S.V., INC.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------------- --------------------------------
2004 2003 2004 2003
------------- -------------- -------------- --------------
Net sales................................... $ 40,607,328 $ 29,188,649 $ 112,742,264 $ 70,215,357
Cost of goods sold.......................... 31,303,643 22,676,469 87,100,595 55,567,464
------------- -------------- -------------- --------------
Gross profit....................... 9,303,685 6,512,180 25,641,669 14,647,893
Operating expenses:
Selling, general and administrative.... 2,345,209 1,510,603 6,341,065 4,554,786
Research and development............... 223,798 192,909 561,333 556,795
------------- -------------- -------------- --------------
Operating income................... 6,734,678 4,808,668 18,739,271 9,536,312
Other income (expense)
Interest expense....................... (27,907) (31,292) (84,684) (99,968)
Other, net............................. 216,088 19,067 577,501 106,100
------------- -------------- -------------- --------------
Income before income taxes......... 6,922,859 4,796,443 19,232,088 9,542,444
Provision for income taxes.................. 2,493,000 1,717,000 7,025,000 3,410,000
------------- -------------- -------------- --------------
NET EARNINGS........................... $ 4,429,859 $ 3,079,443 $ 12,207,088 $ 6,132,444
============= ============== ============== ==============
Net earnings per common share -- Diluted. $ .34 $ .29 $ .92 $ .59
============= ============== ============== ==============
Diluted weighted average shares ............ 13,105,023 10,743,850 13,307,484 10,430,048
============= ============== ============== ==============
A.S.V., INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS September 30, December 31,
2004 2003
----------------- -----------------
CURRENT ASSETS
Cash & short-term investments............................ $ 48,179,165 $ 29,708,418
Accounts receivable, net................................. 28,312,083 16,484,603
Inventories.............................................. 29,257,453 26,686,707
Other current assets..................................... 955,293 3,614,506
----------------- -----------------
Total current assets 106,703,994 76,494,234
PROPERTY AND EQUIPMENT, net.................................. 7,763,655 6,129,922
----------------- -----------------
Total assets $ 114,467,649 $ 82,624,156
================= =================
LIABILITIES & SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Current portion of long-term liabilities................. $ 141,867 $ 136,414
Accounts payable......................................... 7,429,059 6,004,890
Accrued liabilities...................................... 3,689,777 2,358,473
Income taxes payable..................................... 1,714,751 --
----------------- -----------------
Total current liabilities 12,975,454 8,499,777
LONG-TERM LIABILITIES, less current portion.................. 1,738,862 1,844,858
SHAREHOLDERS' EQUITY......................................... 99,753,333 72,279,521
----------------- -----------------
Total liabilities & shareholders' equity $ 114,467,649 $ 82,624,156
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