UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark One)
[X] Quarterly Report Pursuant to Section 13 or 15 (d) of the Securities Exchange
Act of 1934
For the quarterly period ended April 30, 2002
or
[ ] Transition Report Pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934
For the transition period from to
---------------------- ----------------------
Commission file number: 0-8454
JLG INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
PENNSYLVANIA 25-1199382
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1 JLG Drive, McConnellsburg, PA 17233-9533
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(7l7) 485-5161
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No ______
The number of shares of capital stock outstanding as of June 7, 2002 was
42,695,186.
TABLE OF CONTENTS
PART 1
Item 1. Financial Information.......................................... 1
Condensed Consolidated Balance Sheets.......................... 1
Condensed Consolidated Statements of Income.................... 2
Condensed Consolidated Statements of Cash Flows................ 3
Notes to Condensed Consolidated Financial
Statements..................................................... 4
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations............................ 11
Item 3. Quantitative and Qualitative Disclosures about
Market Risk.................................................... 21
Independent Accountants' Review Report.................................... 22
PART II
Item 6. Exhibits and Reports on Form 8-K............................... 23
Signature ............................................................... 23
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
JLG INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data) April 30, July 31,
2002 2001
--------- ---------
(Unaudited)
ASSETS
Current assets
Cash and cash equivalents $ 3,291 $ 9,254
Trade receivables-net 208,308 189,913
Finance receivables - net 23,199 16,760
Pledged finance receivables 6,281 --
Inventories 163,379 189,841
Other current assets 27,289 18,787
--------- ---------
Total current assets 431,747 424,555
Property, plant and equipment - net 85,439 98,403
Equipment held for rental - net 23,599 20,002
Finance receivables, less current portion 79,942 115,071
Pledged finance receivables, less current portion 35,833 --
Goodwill - net 140,164 140,164
Other assets 19,938 27,394
--------- ---------
$ 816,662 $ 825,589
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Short-term debt $ 15,109 $ 22,193
Current portion of recourse/non-recourse debt 7,939 --
Accounts payable 122,463 76,723
Accrued expenses 59,734 70,887
--------- ---------
Total current liabilities 205,245 169,803
Long-term debt, less current portion 191,498 276,994
Recourse and non-recourse debt, less current portion 34,175 --
Accrued post-retirement benefits 24,629 23,757
Other long-term liabilities 9,968 9,601
Provisions for contingencies 11,992 11,993
Shareholders' equity
Capital stock:
Authorized shares: 100,000 at $.20 par
Issued shares: 42,723; fiscal 2001 - 42,144 8,545 8,429
Additional paid-in capital 16,470 14,256
Retained earnings 323,299 319,607
Unearned compensation (2,412) (3,377)
Accumulated other comprehensive income (6,747) (5,474)
--------- ---------
Total shareholders' equity 339,155 333,441
--------- ---------
$ 816,662 $ 825,589
========= =========
The accompanying notes are an integral part of these financial statements.
1
JLG INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
(Unaudited)
Three Months Ended Nine Months Ended
April 30, April 30,
2002 2001 2002 2001
--------- --------- --------- ---------
Revenues
Net sales $ 203,395 $ 215,897 $ 503,970 $ 675,472
Rentals 2,306 2,128 7,890 4,909
Financial products 3,031 1,448 9,386 1,895
--------- --------- --------- ---------
208,732 219,473 521,246 682,276
Cost of sales 174,465 172,295 432,389 541,133
--------- --------- --------- ---------
Gross profit 34,267 47,178 88,857 141,143
Selling and administrative expenses 19,188 19,616 54,049 65,646
Product development expenses 3,736 3,904 11,403 11,924
Goodwill amortization -- 1,529 -- 4,508
Restructuring charges 6,091 -- 6,091 --
--------- --------- --------- ---------
Income from operations 5,252 22,129 17,314 59,065
Other income (deductions):
Interest expense (3,345) (6,335) (11,710) (16,443)
Miscellaneous, net (659) 1,143 1,167 2,719
--------- --------- --------- ---------
Income before taxes 1,248 16,937 6,771 45,341
Income tax provision 412 6,276 2,235 16,776
--------- --------- --------- ---------
Net income $ 836 $ 10,661 $ 4,536 $ 28,565
========= ========= ========= =========
Earnings per common share $ .02 $ .26 $ .11 $ .68
========= ========= ========= =========
Earnings per common share -
assuming dilution $ .02 $ .25 $ .11 $ .67
========= ========= ========= =========
Cash dividends per share $ .005 $ .01 $ .02 $ .03
========= ========= ========= =========
Weighted average shares outstanding 42,107 41,699 41,931 42,271
========= ========= ========= =========
Weighted average shares outstanding -
assuming dilution 43,816 42,271 42,896 42,802
========= ========= ========= =========
The accompanying notes are an integral part of these financial statements.
2
JLG INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
Nine Months Ended
April 30,
2002 2001
--------- ---------
Operations
Net income $ 4,536 $ 28,565
Adjustments to reconcile net income to
cash flow from operating activities:
Gain on sale of joint venture -- (1,008)
Loss on sale of property, plant and equipment 372 1,590
Gain on sale of equipment held for rental (7,475) (2,205)
Non-cash charges and credits:
Depreciation and amortization 15,813 19,885
Other 6,753 8,899
Changes in selected working capital items:
Trade receivables (16,994) (28,619)
Inventories 26,455 (128,929)
Accounts payable 45,759 (19,254)
Other operating assets and liabilities (7,689) (15,658)
Changes in finance receivables (14,898) (39,395)
Changes in other assets and liabilities 3 (16)
--------- ---------
Cash flow from operating activities 52,635 (176,145)
Investments
Purchases of property, plant and equipment (10,246) (10,450)
Proceeds from sale of property, plant and equipment 150 123
Purchases of equipment held for rental (20,777) (21,015)
Proceeds from sale of equipment held for rental 21,214 27,629
Proceeds from sale of joint venture -- 4,000
--------- ---------
Cash flow from investing activities (9,659) 287
Financing
Net (decrease) increase in short-term debt (7,087) 10,923
Issuance of long-term debt 376,068 417,287
Repayment of long-term debt (419,446) (243,446)
Payment of dividends (843) (1,279)
Purchase of common stock -- (22,201)
Exercise of stock options and issuance of restricted awards 3,276 (529)
--------- ---------
Cash flow from financing activities (48,032) 160,755
Currency Adjustments
Effect of exchange rate changes on cash (907) (625)
--------- ---------
Cash
Net change in cash and cash equivalents (5,963) (15,728)
Beginning balance 9,254 25,456
--------- ---------
Ending balance $ 3,291 $ 9,728
========= =========
The accompanying notes are an integral part of these financial statements.
3
JLG INDUSTRIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2002
(in thousands, except per share data)
(Unaudited)
BASIS OF PRESENTATION
We have prepared the accompanying unaudited condensed consolidated financial
statements in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and Article
10 of Regulation S-X. Accordingly, they do not include all information and notes
required by generally accepted accounting principles for complete financial
statements. In our opinion, we have included all normal recurring adjustments
necessary to a fair presentation of results for the unaudited interim periods.
Interim results for the three-month and nine-month periods ended April 30, 2002
are not necessarily indicative of the results that may be expected for the
fiscal year as a whole. For further information, refer to the consolidated
financial statements and notes thereto included in our annual report on Form
10-K for the fiscal year ended July 31, 2001.
RECLASSIFICATIONS
Where appropriate, we have reclassified certain amounts in fiscal 2001 to
conform to the fiscal 2002 presentation.
RECENT ACCOUNTING PRONOUNCEMENTS
Effective August 1, 2001, the Company adopted the provisions of Emerging Issues
Task Force 00-25, "Vendor Income Statement Characterization of Consideration
Paid to a Reseller of the Vendor's Products". As a result of the adoption, the
Company now classifies the costs associated with sales incentives provided to
retailers as a reduction in net sales. These costs were previously included in
selling, general and administrative expenses. This reclassification was not
material to the applicable individual line items of the financial statements and
had no impact on reported income before income taxes, net income or income per
share amounts.
In June 2001, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standards ("SFAS") No. 143 "Accounting for Asset
Retirement Obligations," which is required to be adopted for financial
statements issued for fiscal years beginning after June 15, 2002. This statement
establishes the accounting and reporting standards for obligations associated
with the retirement of tangible long-lived assets and the associated asset
retirement costs. We do not expect adoption of this statement to have a
significant impact on our results of operations or financial position.
In August 2001, the FASB issued SFAS No. 144 entitled "Accounting for the
Impairment or Disposal of Long-Lived Assets," which is required to be adopted
for financial statements issued for fiscal years beginning after December 15,
2001. This statement establishes a single accounting model for long-lived assets
to be disposed of by sale and resolves significant implementation issues related
to SFAS No. 121 entitled "Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to be Disposed Of." We do not expect adoption of this
statement to have a significant impact on our results of operations or financial
position.
4
INVENTORIES AND COST OF SALES
A precise inventory valuation under the LIFO (last-in, first-out) method can
only be made at the end of each fiscal year; therefore, interim LIFO inventory
valuation determinations, including the determination at April 30, 2002, must
necessarily be based on our estimate of expected fiscal year-end inventory
levels and costs.
Inventories consist of the following:
April 30, July 31,
2002 2001
-------- --------
Finished goods $108,847 $137,500
Raw materials and work in process 57,627 56,185
-------- --------
166,474 193,685
Less LIFO provision 3,095 3,844
-------- --------
$163,379 $189,841
======== ========
GOODWILL
On August 1, 2001, we elected early adoption of SFAS No. 142, "Goodwill and
Other Intangible Assets". Under SFAS No. 142, goodwill and intangible assets
deemed to have indefinite lives will no longer be amortized but will be subject
to annual impairment tests. Other intangible assets will continue to be
amortized over their useful lives. Accordingly, we ceased amortization of all
goodwill.
In the year of adoption, SFAS No. 142 requires the first step of the goodwill
impairment test to be completed within the first six months of adoption and the
final step to be completed within twelve months. The first step is a screen for
potential impairment and the second measures the amount of impairment, if any.
During the second quarter of fiscal 2002, we performed an initial impairment
test by reporting unit, which indicated potential impairment of goodwill
attributable to our Gradall reporting unit resulting from changing business
conditions including consolidation of the material handler market, unplanned
excess manufacturing capacity costs and eroded margins due to competitive
pricing pressures. The measurement of the impairment loss has not yet been
finalized. We will finalize the measurement by the end of fiscal 2002.
5
This table presents our reconciliation of reported net income to adjusted net
income and the adjusted earnings per common share, as if SFAS No. 142 had been
adopted, for each of the periods ended April 30, 2002 and 2001:
Three Months Ended Nine Months Ended
April 30, April 30,
2002 2001 2002 2001
------- ------- ------- -------
Net income - reported $ 836 $10,661 $ 4,536 $28,565
Add: goodwill amortization -- 1,529 -- 4,508
------- ------- ------- -------
Net income - adjusted $ 836 $12,190 $ 4,536 $33,073
======= ======= ======= =======
Adjusted earnings per common share $ .02 $ .29 $ .11 $ .78
======= ======= ======= =======
Adjusted earnings per common share - assuming
dilution $ .02 $ .29 $ .11 $ .77
======= ======= ======= =======
FINANCE RECEIVABLES
Finance receivables represent sales-type leases resulting from the sale of our
products. Our net investment in finance receivables was as follows at:
April 30, July 31,
2002 2001
--------- ---------
Gross finance receivables $ 133,544 $ 123,124
Estimated residual value 45,067 45,067
--------- ---------
178,611 168,191
Unearned income (30,981) (35,402)
--------- ---------
Net finance receivables 147,630 132,789
Provision for losses (2,375) (958)
--------- ---------
$ 145,255 $ 131,831
========= =========
The following table displays the contractual maturity of our finance
receivables. It does not necessarily reflect future cash collections because of
various factors including the possible refinancing or sale of lease receivables
and repayments prior to maturity.
For the twelve-month periods ended April 30:
2003 $34,118
2004 27,340
2005 25,480
2006 24,050
2007 18,544
Thereafter 4,012
Residual value in equipment at lease end 45,067
Less: unearned finance income (30,981)
----------
Net investment in leases $147,630
==========
6
CHANGES IN ACCOUNTING ESTIMATES
During the second quarter of fiscal 2002, we determined that certain
volume-related customer incentives would not be achieved and that we would not
make a discretionary profit sharing contribution for calendar year 2001. These
changes resulted in an increase in net income of $4.1 million, or $.10 per
diluted share, for the first nine months of fiscal 2002.
BASIC AND DILUTED EARNINGS PER SHARE
This table presents our computation of basic and diluted earnings per share for
each of the periods ended April 30, 2002 and 2001:
Three Months Ended Nine Months Ended
April 30, April 30,
2002 2001 2002 2001
------- ------- ------- -------
Net income $ 836 $10,661 $ 4,536 $28,565
======= ======= ======= =======
Denominator for basic earnings per share --
weighted average shares 42,107 41,699 41,931 42,271
Effect of dilutive securities - employee stock
options and unvested restricted shares 1,709 572 965 531
------- ------- ------- -------
Denominator for diluted earnings per share --
weighted average shares adjusted for
dilutive securities 43,816 42,271 42,896 42,802
======= ======= ======= =======
Earnings per common share $ .02 $ .26 $ .11 $ .68
======= ======= ======= =======
Earnings per common share -
assuming dilution $ .02 $ .25 $ .11 $ .67
======= ======= ======= =======
During the quarter ended April 30, 2002, options to purchase 885 thousand shares
of capital stock at a range of $14.06 to $21.94 per share were not included in
the computation of diluted earnings per share because exercise prices for the
options were more than the average market price of the capital stock.
SEGMENT INFORMATION
We have organized our business into three segments - Machinery, Equipment
Services and Access Financial Solutions. The Access Financial Solutions segment
reflects operations of our wholly owned subsidiary Access Financial Solutions,
Inc. The Machinery segment contains the design, manufacture and sale of new
equipment. The Equipment Services segment contains after-sales service and
support, including parts sales, equipment rentals, and used and reconditioned
equipment sales. The Access Financial Solutions segment contains financing and
leasing activities. We evaluate performance of the Machinery and Equipment
Services segments and allocate resources based on operating profit before
interest, miscellaneous income/expense and income taxes. We evaluate performance
of the Access Financial Solutions segment and allocate resources based on its
operating profit less its interest expense.
7
Intersegment sales and transfers are not significant. The accounting policies of
the reportable segments are the same as those described in the summary of
significant accounting policies.
Our business segment information consisted of the following for each of the
periods ended April 30, 2002 and 2001:
Three Months Ended Nine Months Ended
April 30, April 30,
2002 2001 2002 2001
--------- --------- --------- ---------
External sales:
Machinery $ 165,857 $ 189,371 $ 425,352 $ 590,352
Equipment Services 39,361 28,239 85,259 89,251
Access Financial Solutions 3,514 1,863 10,635 2,673
--------- --------- --------- ---------
$ 208,732 $ 219,473 $ 521,246 $ 682,276
========= ========= ========= =========
Segment profit (loss):
Machinery $ 3,283 $ 21,014 $ 11,101 $ 63,842
Equipment Services 8,021 5,915 19,717 19,914
Access Financial Solutions 937 (71) 3,566 (1,437)
General corporate (8,059) (5,615) (20,248) (24,140)
--------- --------- --------- ---------
$ 4,182 $ 21,243 $ 14,136 $ 58,179
========= ========= ========= =========
We manufacture our products in the United States and Belgium and sell these
products globally, but principally in North America, Europe, Australia and South
America. No single foreign country is significant to the consolidated
operations. Our sales by geographic area consisted of the following for each of
the periods ended April 30, 2002 and 2001:
Three Months Ended Nine Months Ended
April 30, April 30,
2002 2001 2002 2001
-------- -------- -------- --------
United States $158,153 $168,775 $378,218 $520,681
Europe 37,521 38,487 110,530 124,409
Other 13,058 12,211 32,498 37,186
-------- -------- -------- --------
$208,732 $219,473 $521,246 $682,276
======== ======== ======== ========
COMPREHENSIVE INCOME
On an annual basis, comprehensive income is disclosed in the Statement of
Shareholders' Equity. This statement is not presented on a quarterly basis. The
following table presents the components of comprehensive income for each of the
periods ended April 30, 2002 and 2001:
Three Months Ended Nine Months Ended
April 30, April 30,
2002 2001 2002 2001
-------- -------- -------- --------
Net income $ 836 $ 10,661 $ 4,536 $ 28,565
Aggregate currency translation adjustment (1,431) (285) (1,272) (1,109)
-------- -------- -------- --------
$ (595) $ 10,376 $ 3,264 $ 27,456
======== ======== ======== ========
8
RESTRUCTURING COSTS
During the third quarter of fiscal 2002, we announced the closure of our
manufacturing facility in Orrville, Ohio as part of our capacity rationalization
plan for our Machinery segment. Operations at this facility will be integrated
into our McConnellsburg, Pennsylvania facility and the closure will result in a
reduction of approximately 170 people. As a result, we will incur a pre-tax
charge of $7.7 million, consisting of $6.1 million in restructuring costs
associated with personnel reductions and the write-down of idle facilities and
$1.6 million in charges related to relocating certain plant assets and start-up
costs associated with the move of the Orrville operations to McConnellsburg. The
$7.7 million consists of $3.4 million in cash charges and non-cash charges of
$4.3 million.
During the third quarter of fiscal 2002, we recorded a pre-tax charge of $6.6
million consisting of an accrual of $1.2 million for termination benefit costs
and a $4.9 million asset write-down and incurred $504 thousand in production
relocation costs. We reported $6.1 million in restructuring costs and $504
thousand in cost of goods sold. During the quarter, 47 employees were terminated
and we paid and charged $89 thousand of the termination benefit and lease
termination costs against the accrued liability.
At April 30, 2002, we included $6.2 million in assets held for sale on the
Condensed Consolidated Balance Sheet in other current assets and ceased
depreciating these assets during the third quarter of fiscal 2002.
COMMITMENTS AND CONTINGENCIES
We are a party to personal injury and property damage litigation arising out of
incidents involving the use of our products. Our insurance program for fiscal
year 2002 is comprised of a self-insured retention of $7 million for domestic
claims, insurance coverage of $2 million for international claims and
catastrophic coverage for domestic and international claims of $100 million in
excess of the retention and international primary coverage. We contract with an
independent firm to provide claims handling and adjustment services. Our
estimates with respect to claims are based on internal evaluations of the merits
of individual claims and the reserves assigned by our independent insurance
claims adjustment firm. We frequently review the methods of making such
estimates and establishing the resulting accrued liability, and any resulting
adjustments are reflected in current earnings. Claims are paid over varying
periods, which generally do not exceed five years. Accrued liabilities for
future claims are not discounted.
With respect to all product liability claims of which we are aware, we
established accrued liabilities of $17.3 million and $17.8 million at April 30,
2002 and July 31, 2001, respectively. These amounts are included in other
current liabilities and provisions for contingencies on our condensed
consolidated balance sheet. While our ultimate liability may exceed or be less
than the amounts accrued, we believe that it is unlikely that we would
experience losses that are materially in excess of such reserve amounts. The
provision for self-insured losses are included within cost of sales in our
condensed consolidated statement of income. As of April 30, 2002 and July 31,
2001, we had no insurance recoverables or offset implications and no claims by
us being contested by insurers.
9
At April 30, 2002, we are a party to multiple agreements whereby we guarantee
$83.3 million in indebtedness of others. Under the terms of these and various
related agreements and upon the occurrence of certain events, we generally have
the ability, among other things, to take possession of the underlying assets
and/or make demand for reimbursement from other parties for any payments made by
us under these agreements. At April 30, 2002, we had a $3.1 million reserve
related to these agreements. We believe that it is unlikely that we would
experience losses under these agreements that are materially in excess of this
reserve amount.
10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS FOR THE THIRD QUARTERS OF FISCAL 2002 AND 2001
Our revenues for the third quarter of fiscal 2002 were $208.7 million, down 5%
from the $219.5 million in the comparable year-ago period. The following tables
outline our revenues by segment, products and geography (in thousands) for the
quarter ended April 30, 2002 and 2001:
2002 2001
-------- --------
Segment:
Machinery $165,857 $189,371
Equipment Services 39,361 28,239
Access Financial Solutions (a) (b) 3,514 1,863
-------- --------
$208,732 $219,473
======== ========
Product:
Aerial work platforms $128,317 $148,985
Material handlers 20,600 23,660
Excavators 16,940 16,726
After-sales service and support, including
parts sales, and used and reconditioned
equipment sales 37,538 26,526
Rentals 2,306 2,128
Financial products (b) 3,031 1,448
-------- --------
$208,732 $219,473
======== ========
Geographic:
United States $158,153 $168,775
Europe 37,521 38,487
Other 13,058 12,211
-------- --------
$208,732 $219,473
======== ========
(a) Commencing with the third quarter of fiscal 2002, we began reporting our
financial services operation as a separate segment due to the increased
significance of this activity to our business and our increased investment
in it. In prior periods, this activity was included in our Equipment
Services segment.
(b) Revenues for our Access Financial Solutions segment and Financial products
are not equal because Access Financial Solutions also receives revenues
from rental purchase agreements that are recorded for accounting purposes
as rental revenues from operating leases.
The decrease in Machinery segment sales from $189.4 million to $165.9 million,
or 12%, was principally attributable to reduced aerial work platform and sales
resulting from a weakened economy and related factors affecting demand for these
products. The increase in Equipment Services segment revenues from $28.2 million
to $39.4 million, or 39%, was principally attributable to increased revenues
from the conversion of rental purchase agreements during the current year
quarter. The increase in Access
11
Financial Solutions segment revenues from $1.9 million to $3.5 million was
principally attributable to increased financing activities resulting from our
greater investment in this new business activity.
Our domestic revenues for the third quarter of fiscal 2002 were $158.2 million,
down 6% from the comparable year-ago period revenues of $168.8 million. The
decrease in our domestic revenues is primarily attributable to lower aerial work
platform sales in the weakened domestic economy. Revenues generated from sales
outside the United States for the third quarter of fiscal 2002 were $50.6
million, comparatively equal to the corresponding quarter of the previous year.
Our gross profit margin was 16.4% for the third quarter of fiscal 2002 compared
to the prior year quarter's 21.5%. The decline was primarily attributable to
lower margins in our Machinery segment offset in part by higher margins in our
Access Financial Solutions segment. The gross profit margin of our Machinery
segment was 13.1% for the third quarter of fiscal 2002 compared to 20.4% for the
third quarter of fiscal 2001. The decrease is principally due to volume-related
production costs resulting from shutdowns in the second quarter of the current
fiscal year and an increase in product liability expense. In order to accelerate
reduction of finished goods inventories in response to lower demand for our
products, during the second quarter we shut down all manufacturing facilities
for nearly half of the available production days resulting in higher average
production costs. The effect of the shutdowns flowed through the income
statement as the inventory produced during that quarter was sold. The gross
profit margin of our Equipment Services segment was 23.6% for the third quarter
of fiscal 2002 compared to 24.6% for the corresponding period in the prior year.
The decrease is primarily attributable to higher used equipment sales, which
have lower margins. The gross profit margin of our Access Financial Solutions
segment increased primarily because of increased revenues resulting from the
start-up of this segment during the prior year period. Because the costs
associated with these revenues are principally selling and administrative
expenses and interest expense, gross margins are typically higher in this
segment.
Our selling, administrative and product development expenses as a percent of
revenues were 11.0% for the current year third quarter compared to 10.7% for the
prior year third quarter. In dollar terms, these expenses were $0.6 million
lower in the third quarter of 2002 than in the third quarter of 2001. Our
Machinery segment's selling, administrative and product development expenses
decreased $3.8 million due primarily to reduction in travel and entertainment
expenses and bad debt provisions. Our Equipment Services segment's selling and
administrative expenses increased $0.2 million due primarily to increased
commission costs. Our Access Financial Solutions segment's selling and
administrative expenses increased $0.5 million due primarily to increased bad
debt provisions. Our general corporate selling, administrative and product
development expenses increased $2.4 million primarily due to lower pension
charges and higher software costs capitalized in the prior year quarter. In
addition, the third quarter of fiscal 2002 included increased bad debt
provisions, legal fees and costs related to establishing a shared service center
in Europe.
During the third quarter of fiscal 2002, we announced the closure of our
manufacturing facility in Orrville, Ohio as part of our capacity rationalization
plan for our Machinery segment. Operations at this facility will be integrated
into our McConnellsburg, Pennsylvania facility and the closure will result in a
reduction of approximately 170 people. As a result, we will incur a pre-tax
charge of $7.7 million, consisting of $6.1 million in restructuring costs
associated with personnel reductions and the write-down of idle facilities and
$1.6 million in charges related to relocating certain plant assets and start-up
costs
12
associated with the move of the Orrville operations to McConnellsburg. The $7.7
million consists of $3.4 million in cash charges and $4.3 million in non-cash
charges.
During the third quarter of fiscal 2002, we recorded a pre-tax charge of $6.6
million consisting of an accrual of $1.2 million for termination benefit costs
and a $4.9 million asset write-down and incurred $0.5 million in production
relocation costs. We reported $6.1 million in restructuring costs and $0.5
million in cost of goods sold. During the quarter, 47 employees were terminated
and we paid and charged $0.1 million of termination benefit and lease
termination costs against the accrued liability.
We were affected by the early adoption of SFAS No. 142. As a result of this new
accounting standard, we no longer amortize goodwill. This led to the reduction
of $1.5 million in goodwill amortization during the third quarter of fiscal 2002
compared to the third quarter of fiscal 2001.
Our miscellaneous income (deductions) category included currency losses of $0.9
million in the third quarter of fiscal 2002 compared to losses of $0.3 million
in the corresponding prior year period. The increase in currency losses is
primarily attributable to the strengthening of the U.S. dollar against the Euro
and Australian dollar during the third quarter of fiscal 2002 compared to the
prior year third quarter.
Our effective tax rate in the third quarter of fiscal 2002 was 33% as compared
to 37% for the third quarter of fiscal 2001. Since the amortization of goodwill
is not deductible for tax purposes, the elimination of its amortization as
discussed above reduced our effective tax rate.
RESULTS FOR THE FIRST NINE MONTHS OF FISCAL 2002 AND 2001
Our revenues for the first nine months of fiscal 2002 were $521.2 million, down
24% from the $682.3 million in the comparable year-ago period. The decline in
consolidated revenues was principally due to a decline in machinery sales. The
following tables outline our revenues by segment, products and geography (in
thousands) for the nine months ended April 30, 2002 and 2001:
2002 2001
-------- --------
Segment:
Machinery $425,352 $590,352
Equipment Services 85,259 89,251
Access Financial Solutions (a) (b) 10,635 2,673
-------- --------
$521,246 $682,276
======== ========
Product:
Aerial work platforms $327,909 $484,858
Material handlers 53,328 60,651
Excavators 44,115 44,794
After-sales service and support, including parts sales, and used and
reconditioned equipment sales 78,618 85,169
Rentals 7,890 4,909
Financial products (b) 9,386 1,895
-------- --------
$521,246 $682,276
======== ========
13
Geographic:
United States $378,218 $520,681
Europe 110,530 124,409
Other 32,498 37,186
-------- --------
$521,246 $682,276
======== ========
(a) Commencing with the third quarter of fiscal 2002, we began reporting our
financial services operation as a separate segment due to the increased
significance of this activity to our business and our increased investment
in it. In prior periods, this activity was included in our Equipment
Services segment.
(b) Revenues for our Access Financial Solutions segment and Financial products
are not equal because Access Financial Solutions also receives revenues
from rental purchase agreements that are recorded for accounting purposes
as rental revenues from operating leases.
The decrease in Machinery segment sales from $590.4 million to $425.4 million,
or 28%, was principally attributable to lower aerial work platform sales
resulting from a weakened economy and related factors affecting demand for these
products. Partially offsetting the decline in Machinery segment sales was the
reversal of previously recorded volume-related customer incentives. The decrease
in Equipment Services segment revenues from $89.3 million to $85.3 million, or
5%, was principally attributable to the absence in fiscal 2002 of the $19.9
million sale-leaseback of rental fleet assets that occurred during the first
nine months of fiscal 2001 and lower sales of trade-in used equipment, partially
offset by increased revenues from the conversion of rental purchase agreements.
The increase in Access Financial Solutions segment revenues from $2.7 million to
$10.6 million was principally attributable to increased financing activities
resulting from our greater investment in this new business activity.
Our domestic revenues for the first nine months of fiscal 2002 were $378.2
million, down 27% from the comparable year-ago period revenues of $520.7
million. The decrease in our domestic revenues was primarily attributable to
lower aerial work platform sales in the weakened domestic economy and the
sale-leaseback of rental fleet assets during the second quarter of fiscal 2001.
Revenues generated from sales outside the United States for the first nine
months of fiscal 2002 were $143.0 million, down 11% from the corresponding
period of the previous year. The decrease in our revenues generated from sales
outside the United States was primarily attributable to lower aerial work
platform sales primarily as a result of a softer European economy, a tight
credit environment for many of our European customers which reduced demand for
our products, and $3.1 million in revenue recognized in the first quarter of
fiscal 2001 related to the sale of our interest in a Brazilian joint venture.
Our gross profit margin was 17.0% for the first nine months of fiscal 2002
compared to the prior year period's 20.7%. The decline was attributable to lower
margins in our Machinery segment offset in part by higher margins in our
Equipment Services and Access Financial Solutions segments. The gross profit
margin of our Machinery segment was 13.1% for the first nine months of fiscal
2002 compared to 19.7% for the comparable prior nine-month period. The decrease
in the gross profit margin of our Machinery segment was principally due to
volume-related production costs resulting from shutdowns in the second quarter
of the current fiscal year. In order to accelerate reduction of finished goods
inventories in response to lower demand for our products, during the second
quarter we shut down all manufacturing facilities for nearly half of the
available production days resulting in higher average production costs.
14
The effect of the shutdowns flowed through the income statement as the inventory
produced during that quarter was sold. Partially offsetting the decline in gross
profit margin was the elimination of our discretionary profit sharing
contribution related to production personnel for calendar year 2001. The gross
profit margin of our Equipment Services segment was 27.1% for the first nine
months of fiscal 2002 compared to 25.5% for the comparable prior nine-month
period. The increase was primarily attributable to increased sales of higher
margin remanufactured, reconditioned and refurbished equipment, increased
revenues from the conversion of rental purchase agreements which have higher
margins, and decreased sales of lower margin trade-in equipment. The gross
profit margin of our Access Financial Solutions segment increased primarily
because of increased revenues resulting from the start-up of this segment during
the prior year period. Because the costs associated with these revenues are
principally selling and administrative expenses and interest expense, gross
margins are typically higher in this segment.
Our selling, administrative and product development expenses as a percent of
revenues were 12.6% for the first nine months of fiscal 2002 compared to 11.4%
for the comparable prior nine-month period. In dollar terms, these expenses were
$12.1 million lower in the first nine months of fiscal 2002 than in the
corresponding period of the previous year. Our Machinery segment's selling,
administrative and product development expenses decreased $9.3 million due
primarily to the same factors as discussed above in the third quarter comparison
and the elimination of our discretionary profit sharing contribution related to
selling and administrative personnel for calendar year 2001. Our Equipment
Services segment's selling and administrative expenses increased $0.5 million
mainly due to the same factor as discussed above in the third quarter comparison
partially offset by the elimination of our discretionary profit sharing
contribution related to selling and administrative personnel for calendar 2001.
Our Access Financial Solutions segment's selling and administrative expenses
increased $0.6 million due primarily to costs associated with the start-up of
this business. Our general corporate selling, administrative and product
development expenses decreased $3.9 million primarily due to lower pension
charges and the elimination of our discretionary profit sharing contribution.
Prior year pension expense was higher due to the early retirement of three
senior officers. In addition, the first nine months of fiscal 2002 included
increased legal fees and costs related to establishing a shared service center
in Europe.
We incurred restructuring and related charges of $6.6 million related to the
closing of our facility in Orrville, Ohio as discussed in the third quarter
comparison.
As discussed in the third quarter comparison, we were affected by the early
adoption of SFAS No. 142. As a result, our goodwill amortization decreased $4.5
million during the first nine months of fiscal 2002 compared to the
corresponding period of the prior year.
Our miscellaneous income (deductions) category included a gain of $1.0 million
from the sale of our interest in a Brazilian joint venture during the first
quarter of fiscal 2001.
Our effective tax rate for the first nine months of fiscal 2002 was 33% as
compared to 37% for the comparable period of fiscal 2001. The decrease in our
effective tax rate is primarily due to the elimination of the amortization of
goodwill as discussed in the third quarter comparison.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Our critical accounting policies are more fully described in the Summary of
Significant Accounting Policies note included in our annual report on Form 10-K
for the fiscal year ended July 31, 2001. As
15
disclosed in the Significant Accounting Policies note, the preparation of
financial statements in conformity with generally accepted accounting principles
requires our management to make estimates and assumptions about future events
that affect the amounts reported in the financial statements and related notes.
Future events and their effects cannot be determined with absolute certainty.
Therefore, the determination of estimates requires the exercise of judgment.
Actual results inevitably will differ from those estimates, and such differences
may be material to the financial statements.
We believe the most significant accounting estimates inherent in the preparation
of our financial statements include estimates associated with the evaluation of
potential impairment of goodwill as well as those used in the determination of
liabilities related to product liability, warranty activity, taxation,
guarantees, environmental matters and other contingencies. In addition,
significant estimates form the basis for the residual value of our finance
receivables and the fair market value of our used equipment as well as our
reserves with respect to sales and volume-related customer incentives,
collectibility of accounts and finance receivables, inventory valuations, lower
of cost or market of used equipment, pension benefits, postretirement benefits
and certain benefits provided to current employees. The process of determining
significant estimates is fact specific and takes into account factors such as
historical experience, current and expected economic conditions, product mix,
and in some cases, actuarial techniques and independent third party studies. We
regularly re-evaluate these significant factors and make adjustments where facts
and circumstances dictate.
FINANCIAL CONDITION
Cash flow from operating activities was $52.6 million for the first nine months
of fiscal 2002 versus cash used of $176.1 million in the comparable period of
fiscal 2001. The increase in cash flow from operating activities in the first
nine months of fiscal 2002 was primarily driven by a decrease in our inventory
investment as we shut down production facilities to begin to synchronize
inventory and sales levels, and an increase in accounts payable as day's
purchases outstanding increased to 74 days at April 30, 2002 compared to 46 days
at July 31, 2001 while the day's purchases outstanding for the comparable prior
year periods were relatively stable. The increase in accounts payable reflects
production shutdowns during July 2001 due to the slowing economy and the
resulting reduction in material purchases. Partially offsetting these effects
were increases in trade accounts and finance receivables. The increase in trade
accounts receivable reflects the elimination of $48.5 million in receivables
securitization in July 2001 offset in part by decreased receivables due to lower
sales. During February 2002, we terminated our receivables purchase agreement
and repurchased any outstanding amounts under the agreement. Access Financial
Solutions' finance receivables increased due to monetization activities which
resulted in $42.1 million in recourse and non-recourse debt and the related
pledged finance receivables, offset in part by decreased lease originations due
to lower sales. The comparable prior year period included increased investments
in receivables and inventories.
During the first nine months of fiscal 2002, we used $9.7 million of cash for
investing activities compared to cash provided from investing activities of $0.3
million for last year's comparable period. Our increase in cash usage was
principally due to the rental fleet sale-leaseback transaction and the sale of
our interest in our Brazilian joint venture that occurred during the first nine
months of fiscal 2001. We did not have any comparable transactions during the
first nine months of fiscal 2002.
We used $48.0 million of cash for financing activities for the first nine months
of fiscal 2002 compared to cash received of $160.8 million for the first nine
months of fiscal 2001. The decrease in cash provided from financing activities
largely resulted from lower borrowings under the Company's credit facilities
16
due to the working capital reductions discussed above. In addition, financing
activities for the first nine months of fiscal 2001 included expenditures
incurred to repurchase 1.7 million shares of our capital stock at an aggregate
cost of $22.2 million. We did not repurchase any of our stock in the first nine
months of fiscal 2002.
The following table provides a summary of our contractual obligations (in
thousands) at April 30, 2002:
Payments Due by Period
------------------------------------------------------------
Less than After 5
Total 1 Year 1-3 Years 4-5 Years Years
-------- --------- --------- --------- --------
Short and long-term debt (a) $206,608 $ 15,109 $190,439 $ 274 $ 786
Recourse and non-recourse debt 42,114 7,939 19,517 14,658 --
Operating leases (b) 31,810 5,478 10,532 14,726 1,074
-------- -------- -------- -------- --------
Total contractual obligations $280,532 $ 28,526 $220,488 $ 29,658 $ 1,860
======== ======== ======== ======== ========
(a) Included in long-term debt are our two separate credit facilities with a
group of financial institutions that provide for a secured revolving credit
facility with an aggregate commitment of $333.0 million. We also have a
$25.0 million secured bank revolving line of credit with a term of one
year, renewable annually. The credit facilities contain customary
affirmative and negative covenants including financial covenants requiring
the maintenance of specified consolidated interest coverage, leverage
ratios and a minimum net worth. If we were to become in default of these
covenants, the financial institutions could call the loans.
(b) Off-balance sheet items.
The following table provides a summary of our other commercial commitments (in
thousands) at April 30, 2002:
Amount of Commitment Expiration Per Period
---------------------------------------------
Total
Amounts Less than Over 5
Committed 1 Year 1-3 Years 4-5 Years Years
--------- --------- --------- --------- -------
Standby letters of credit $ 9,601 $ 9,601 $ -- $ -- $ --
Guarantees (a) 83,339 688 18,655 54,135 9,861
------- ------- ------- ------- -------
Total commercial commitments $92,940 $10,289 $18,655 $54,135 $ 9,861
======= ======= ======= ======= =======
(a) We discuss our guarantee agreements in the note entitled Commitments and
Contingencies of the Notes to Condensed Consolidated Financial Statements
of this report.
17
We also monitor our adjusted total debt which is a non-generally accepted
accounting principles ("GAAP") measure. Adjusted total debt reflects the sum of
total debt, accounts receivables securitizations and other off-balance sheet
financing, minus cash and limited and non-recourse debt arising from our
monetizations of customer finance receivables. The following presents adjusted
total debt (in thousands) as of:
April 30, July 31,
2002 2001
-------- --------
Total debt $248,721 $299,187
Accounts receivable securitization -- 50,600
Rental fleet sale/leaseback 8,284 16,656
Equipment sale/leaseback 9,066 11,448
-------- --------
Gross debt 266,071 377,891
Less cash 3,291 9,254
Less recourse and non-recourse debt 42,114 --
-------- --------
Adjusted total debt $220,666 $368,637
======== ========
As of April 30, 2002, we had unused credit lines totaling $153.5 million. In
order to meet our future cash requirements, we intend to use internally
generated funds and to borrow under our credit facilities. Availability of these
credit lines depends upon our continued compliance with certain covenants,
including certain financial ratios. Although we are currently in compliance with
all financial covenants in our senior credit facilities, during April 2002, the
senior credit facilities were amended to permit a monetization transaction and
to add back to the calculation of EBITDA the restructuring and repositioning
charges related to the Orrville facility closure. Without this amendment, we
would not have been in compliance with our interest coverage ratio and leverage
ratio covenants. These financial covenants become more stringent as of July 31,
2002 under the terms of our existing senior credit facilities.
In May 2002, we announced that we are seeking to raise, subject to market
conditions, $150 million through a private offering of senior subordinated
notes. If the offering is completed, the net proceeds will be used to repay
outstanding debt under our existing $250 million revolving credit facility, and
to repay outstanding debt under, and terminate, our $83 million working capital
facility. If the offering is completed, our remaining $250 million and $25
million senior credit facilities will be amended and restated. We anticipate
that these amended and restated credit facilities will contain revisions to the
financial covenants that provide greater capacity for us to remain in
compliance. Assuming that we maintain compliance with our financial covenants or
obtain necessary waivers, we believe that permitted borrowings under our unused
credit lines, together with expected internally generated funds, will be
sufficient to fund our seasonal requirements for working capital and our $24
million in budgeted capital expenditures through fiscal 2003. With the
seasonality of our business, our working capital requirements are typically
lower during the first half of our fiscal year and increase in the second half
to fund higher inventory and production levels to meet customer demand.
We also borrow under our credit lines to fund originations of customer finance
receivables in our Access Financial Solutions segment. Our senior lenders have
agreed, upon application of the net proceeds of the offering as described above,
to permit Access Financial Solutions to originate and have outstanding no more
than $150 million in finance receivables, other than pledged receivables that
secure on-balance
18
sheet, limited recourse and non-recourse monetizations. Our business plan
anticipates that we will originate substantially more than $150 million in
finance receivables. Accordingly, our plans require that we be able to monetize
our finance receivables through various means, including syndications,
securitizations or other limited or non-recourse transactions. We do not have in
place any guaranteed facility to monetize all of our finance receivables and
there can be no assurance that we will be able to monetize sufficient finance
receivables to avoid being constrained by the $150 million limit imposed in our
senior credit facilities. However, during the nine months ended April 30, 2002
we monetized through six different third parties approximately $53.6 million in
finance receivables, including $46.1 million during the third quarter and we are
continuing to examine other financing and monetization alternatives for Access
Financial Solutions.
In addition to measuring our cash flow generation and usage based upon the
operating, investing, and financing classifications included in the Consolidated
Statements of Cash Flows, we also measure our free cash flow. 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. With the commencement of reporting Access Financial
Solutions as a separate segment, we modified our definition of free cash flow
during the third quarter of fiscal 2002 to include in cash flow proceeds from
on-balance sheet, limited and non-recourse monetization transactions in our
Access Financial Solutions segment.
We define free cash flow, a non-GAAP measure commonly employed by the financial
community, as:
(1) cash flow from operating activities plus
(2) cash flow from investing activities, less
(3) (a) unrealized currency gains or losses, (b) proceeds from the
disposal and monetization of assets and (c) changes in
accounts receivable securitization and off-balance sheet debt.
19
During the first nine months of fiscal 2002, we had free cash flow of $146.8
million compared to negative free cash flow of $187.0 million for the
corresponding period in fiscal 2001. The change in free cash flow was
attributable principally to the same factors impacting cash flow described
above. The following table provides a reconciliation of our cash flow from
operating activities to our free cash flow (in thousands) for the nine months
ended April 30, 2002 and 2001:
Nine Months Ended
April 30,
-------------------------
2002 2001
--------- ----------
Cash flow from operating activities $ 52,635 $(176,145)
Cash flow from investing activities (9,659) 287
Unrealized currency gains 401 401
Changes in accounts receivable securitization, pledged
receivables monetization and off-balance sheet debt (a) 103,468 (11,546)
--------- ---------
Free cash flow $ 146,845 $(187,003)
========= =========
(a) Pledged receivables monetization reflects the proceeds of our sales, on a
non-recourse or limited recourse basis, of finance receivables and related
assets to third parties in transactions that are treated as debt for
purposes of GAAP but that are excluded from the definition of total debt
under our senior credit facilities, except to the extent of any expected
recourse liability.
OUTLOOK
This Outlook section and other parts of this Management's Discussion and
Analysis contain forward-looking statements within the meaning of the federal
securities laws which are intended to be covered by the safe harbors created
thereby. Forward-looking statements are those statements that are based upon our
current plans and expectations as opposed to historical and current facts and
are often identified herein by use of words including but not limited to "may,"
"believe," "will," "project," "expect," "estimate," "anticipate," and "plan."
These statements are based upon estimates and assumptions made by our management
that, although believed to be reasonable, are subject to numerous factors, risks
and uncertainties that could cause actual outcomes and results to be materially
different from those projected. Certain important factors that in some cases
have affected, and in the future could affect, our results of operations and
that could cause such future results of operations to differ are described in
"Cautionary Statements Pursuant to the Securities Litigation Reform Act" which
is an exhibit to this report. You are cautioned not to rely on such
forward-looking statements when evaluating the information contained in this
report. We undertake no obligation to publicly update or revise any
forward-looking statements.
There are signs that United States economy may have reached, and is possibly on
the upswing from, the bottom of the current cycle. While many economists
forecast an economic recovery beginning to materialize in the second half of
calendar 2002, economic indicators remain mixed. Interest rates remain low and,
despite strong housing activity, non-residential construction is down from the
prior year. Strength in the European economy varies among countries and credit
conditions for the financing of our European customers generally remain
challenging. It also remains to be seen whether any economic recovery would
involve accelerated economic growth ("V" shaped) or a more gradual return
towards previous levels of economic activity ("U" shaped). The speed of any
economic recovery will have a significant impact on our sales over the next
year.
20
Specific to us, these mixed economic factors affect our customers' demand for
our products. Large consolidated rental companies report their aerial segments
as among their best performing operations. During recent periods, many large
customers have rationalized the amount of equipment they require and aged their
fleets significantly. We believe that unless they change their business models
they will have to begin a replacement cycle soon. However, they remain cautious,
preferring to see solid evidence that the economy is getting stronger before
making investments in new equipment.
Assuming that current stabilization trends in the economy continue, we estimate
that our revenues for the second half of fiscal 2002 would be approximately
equal to the same period in 2001, our fiscal 2002 earnings would be in the range
of $.60 to $.65 per share, excluding restructuring and repositioning charges and
goodwill impairment charges, and our free cash flow would be approximately
$175.0 million.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to market risk from changes in interest rates and foreign
currency exchange rates, which could affect our future results of operations and
financial condition. We manage exposure to these risks principally through our
regular operating and financing activities.
While we are exposed to changes in interest rates as a result of our outstanding
debt, we do not currently utilize any derivative financial instruments related
to our interest rate exposure. Total interest bearing liabilities at April 30,
2002 consisted of $204.5 million in variable rate borrowing and $44.2 million in
fixed rate borrowing. At the current level of variable rate borrowing, a
hypothetical 10% increase in interest rates would decrease pre-tax current year
earnings by approximately $0.8 million on an annual basis. A hypothetical 10%
change in interest rates would not result in a material change in the fair value
of our fixed rate debt.
We do not have a material exposure to financial risk from using derivative
financial instruments to manage our foreign currency exposures. For additional
information, we refer you to Item 7 in our annual report on Form 10-K for the
fiscal year ended July 31, 2001.
21
INDEPENDENT ACCOUNTANTS' REVIEW REPORT
The Board of Directors
JLG Industries, Inc.
We have reviewed the accompanying condensed consolidated balance sheet of JLG
Industries, Inc. as of April 30, 2002, and the related condensed consolidated
statements of income and cash flows for the three-month and nine-month periods
ended April 30, 2002 and 2001. These financial statements are the responsibility
of the Company's management.
We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data, and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with auditing standards generally accepted in the United States,
which will be performed for the full year with the objective of expressing an
opinion regarding the financial statements taken as a whole. Accordingly, we do
not express such an opinion.
Based on our reviews, we are not aware of any material modifications that should
be made to the accompanying condensed consolidated financial statements referred
to above for them to be in conformity with accounting principles generally
accepted in the United States.
We have previously audited, in accordance with auditing standards generally
accepted in the United States, the consolidated balance sheet of JLG Industries,
Inc. as of July 31, 2001, and the related consolidated statements of income,
shareholders' equity, and cash flows for the year then ended (not presented
herein), and in our report dated September 10, 2001, except for the note
entitled "Bank Credit Lines and Long-term Debt" as to which the date is October
8, 2001, we expressed an unqualified opinion on those consolidated financial
statements. In our opinion, the information set forth in the accompanying
condensed consolidated balance sheet as of July 31, 2001, is fairly stated, in
all material respects, in relation to the consolidated balance sheet from which
it has been derived.
/s/ Ernst & Young LLP
Baltimore, Maryland
May 17, 2002
22
PART II OTHER INFORMATION
ITEMS 1 - 5
None/not applicable.
ITEM 6 -- EXHIBITS AND REPORTS ON FORM 8-K
(a) The following exhibits are included herein:
15 Letter re: Unaudited Interim Financial Information
99 Cautionary Statements Pursuant to the Securities Litigation
Reform Act
(b) We filed a Current Report on Form 8-K on February 25, 2002, which included
our Press Releases dated February 22, 2002. The items reported on such Form
8-K were Item 5. (Other Events) and Item 7. (Financial Statements and
Exhibits). We filed a Current Report on Form 8-K on March 27, 2002, which
included our Press Release dated March 27, 2002. The items reported on such
Form 8-K were Item 5. (Other Events) and Item 7. (Financial Statements and
Exhibits).
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized who is also signing in his capacity as
principal financial officer.
JLG INDUSTRIES, INC.
(Registrant)
/s/ James H. Woodward, Jr.
---------------------------------------
James H. Woodward, Jr.
Executive Vice President and
Chief Financial Officer
23