-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, U7DvxHg54IdqVPq3Bdf/tAczzir/y+9QUfMsXHAQyllnYSR7eoXjKXtGi/pIrYDR 1oL0WqTjLQBmpbnR8hejfg== 0000216275-95-000030.txt : 19951214 0000216275-95-000030.hdr.sgml : 19951214 ACCESSION NUMBER: 0000216275-95-000030 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19951031 FILED AS OF DATE: 19951213 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: JLG INDUSTRIES INC CENTRAL INDEX KEY: 0000216275 STANDARD INDUSTRIAL CLASSIFICATION: CONSTRUCTION, MINING & MATERIALS HANDLING MACHINERY & EQUIP [3530] IRS NUMBER: 251199382 STATE OF INCORPORATION: PA FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-08454 FILM NUMBER: 95601313 BUSINESS ADDRESS: STREET 1: JLG DR CITY: MCCONNELLSBURG STATE: PA ZIP: 17233 BUSINESS PHONE: 7174855161 10-Q 1 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 period ended October 31, 1995 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 Identification No.) incorporation or organization) 1 JLG Drive, McConnellsburg, PA 17233 (Address of Principal Executive Offices) (Zip Code) (7l7) 485-5161 Registrant's telephone number, including area code 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 _________ At December 8, 1995, there were 14,380,032 shares of capital stock of the Registrant outstanding, and the aggregate market value of the voting stock held by nonaffiliates of the Registrant at that date was $406,235,904. PART I FINANCIAL INFORMATION JLG INDUSTRIES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) October 31, July 31, 1995 1995 (Unaudited) ASSETS Current assets Cash $14,345 $12,973 Accounts receivable 36,019 33,466 Inventories: Finished goods 11,712 7,630 Work in process 17,188 13,357 Raw materials 12,015 12,459 40,915 33,446 Future income tax benefits 4,293 4,219 Other current assets 1,461 464 Total Current Assets 97,033 84,568 Property, plant and equipment - net 25,853 24,785 Equipment held for rental - net 7,461 5,052 Other assets 5,371 5,303 $135,718 $119,708 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Current portion of long-term debt $243 $243 Accounts payable 26,205 20,028 Accrued expenses 21,863 18,893 Total Current Liabilities 48,311 39,164 Long-Term debt 2,198 2,260 Other liabilities and deferred credits 8,681 9,854 Shareholders' equity Capital stock: Authorized shares: 35,000 at $.20 par Outstanding shares: Fiscal 1996 - 14,295 shares; Fiscal 1995 - 14,275 shares 2,859 2,855 Additional paid-in capital 10,634 10,121 Equity adjustment from translation (1,856) (1,799) Retained earnings 64,891 57,253 Total Shareholders' Equity 76,528 68,430 $135,718 $119,708 The accompanying notes are an integral part of these financial statements. JLG INDUSTRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in thousands) (Unaudited) Three Months Ended October 31, 1995 1994 Net sales $86,701 $53,724 Cost of sales 65,207 40,740 Gross profit 21,494 12,984 Selling, general and administrative expenses 9,711 6,788 Income from operations 11,783 6,196 Other deductions: Interest expense (45) (112) Miscellaneous, net 231 (111) Income before taxes 11,969 5,973 Income tax provision 4,189 2,110 Net income $7,780 $3,863 Net income per share $.54 $.27 Dividends per share $.01 $.0063 Weighted average shares outstanding 14,294 14,028 The accompanying notes are an integral part of these financial statements. JLG INDUSTRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited) Three Months Ended October 31, 1995 1994 OPERATIONS: Net income $7,780 $3,863 Adjustments to reconcile net income to cash (used for) provided by operating activities: Depreciation and amortization 1,381 732 Provision for self-insured losses (854) 647 Deferred income taxes (4) (53) 8,303 5,189 Changes in operating assets and liabilities (2,293) (717) Changes in other assets and liabilities (2,174) 705 Cash provided by operations 3,836 5,177 INVESTMENTS: Purchases of property, plant and equipment (2,201) (1,133) FINANCING: Repayment of long-term debt (63) (325) Payment of dividends (143) (87) Cash used for financing (206) (412) CURRENCY ADJUSTMENTS - Effect of exchange rate changes on cash flows (57) (141) CASH: Net increase 1,372 3,491 Beginning balance 12,973 8,088 $14,345 $11,579 The accompanying notes are an integral part of these financial statements. JLG INDUSTRIES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS October 31, 1995 (unaudited) NOTE A - BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements have been prepared 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 the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Interim results for the three months ended October 31, 1995 are not necessarily indicative of the results that may be expected for the fiscal year as a whole. For further information, refer to consolidated financial statements and notes thereto included in the Company's annual report on Form 10-K for the fiscal year ended July 31, 1995. NOTE B - 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 October 31, 1995, must necessarily be based on management's estimate of expected fiscal year-end inventory levels and costs. NOTE C - COMMITMENTS AND CONTINGENCIES The Company is a party to personal injury and property damage litigation arising out of incidents involving the use of its products. The Company's insurance program for fiscal year 1996 is comprised of a self-insured retention of $5 million and catastrophic coverage of $20 million in excess of the retention. The Company contracts with an independent insurance firm to provide claims handling and adjustment services. The Company's estimates with respect to claims are based on internal evaluations of the merits of individual claims and the reserves assigned by the Company's independent insurance carrier. The methods of making such estimates and establishing the resulting accrued liability are reviewed continually, and any adjustments resulting therefrom 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 claims of which the Company is aware, accrued liabilities of $7.6 million and $8.4 million were established at October 31, 1995 and July 31, 1995, respectively. While the Company's ultimate liability may exceed or be less than the amounts accrued, the Company believes that it is unlikely that it would experience losses that are materially in excess of such reserve amounts. As of October 31, 1995 and July 31, 1995, there were no insurance recoverables or offset implications and there were no claims by the Company being contested by insurers. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The Company is a leading manufacturer, distributor and international marketer of mobile elevating work platforms and truck-mounted material handling equipment used primarily in construction and industrial applications. Sales are made principally to independent equipment distributors that rent the Company's products and provide service support to equipment users. Equipment purchases by end-users, either directly from the Company or through distributors, comprise a significant, but smaller portion of sales. Demand for the Company's products tends to be cyclical, responding historically to varying levels of construction and industrial activity, principally in the United States and, to a lesser extent, in other industrialized nations. During recessionary conditions, demand for equipment held for rental typically declines more sharply than demand for equipment purchased by end-users. Other factors affecting demand include the availability and cost of financing for equipment purchases and the market availability of used equipment. Due to the cyclical demand, the Company's financial performance and cash flows tend to fluctuate. However, the Company continually strives to reduce operating costs and increase manufacturing efficiencies. The Company also considers the development and introduction of new and improved products and expansion into underserved geographic markets to be important factors in maintaining and strengthening its market position and reducing cyclical fluctuations in financial performance and cash flows. Results of Operations Net sales for the first quarter of fiscal 1996 were $86.7 million, $33.0 million or 61% above the first quarter last year. The growth in revenues included increased demand across virtually all product classes and markets. New products introduced over the preceding two-year period contributed over 25% to sales. Gross profit, as a percent of net sales, was 25% for the first fiscal quarter of 1996 and 24% for the same quarter of 1995. Lower manufacturing costs due to continued improvements in manufacturing processes, lower warranty and product liability costs, and higher selling prices contributed to the margin improvement. Offsetting factors included increased materials costs, a less profitable product mix and costs associated with outsourcing additional production due to capacity limitations and the substantial increase in demand. Selling, general and administrative expenses were $9.7 million, or 11.2%, of net sales, for the first fiscal quarter of 1996 compared to $6.8 million, or 12.6% of net sales for the 1995 comparable period. The dollar increase included increased personnel and related expenses, higher consulting and research and development costs. The effective income tax rate was 35% for the first fiscal quarters of 1996 and 1995. The effective income tax rate for the 1996 quarter reflects an increased tax benefit related to export sales. The rate for 1995 quarter reflects a decrease in estimated taxes payable. Financial Condition The Company continues to maintain a strong financial position. Working capital was $48.7 million at October 31, 1995 and $45.4 million at July 31, 1995. Despite a doubling of earnings, cash flow from operating earnings was lower for the fiscal 1996 quarter due to increased working capital requirements to support the growth in sales and additions to the Company's fleet of equipment held for rental. At October 31, 1995, the Company had unused credit lines totaling $10 million and cash balances of $14.3 million. The Company considers these resources, coupled with cash expected to be generated by operations, adequate to meet its foreseeable funding needs, including approximately $7 million budgeted for capital expenditures in fiscal 1996. In addition, the Company intends to relocate and expand its scissor lift manufacturing facility in 1996. Acquisition, relocation and refitting costs are estimated to be $9 million payable over twelve months. The Company intends to finance this project with borrowed capital. The Company's exposure to product liability claims is discussed in Note C -- Commitments and Contingencies. Future results of operations, financial condition and liquidity may be affected to the extent that the Company's ultimate liability with respect to product liability varies from current estimates. Outlook Management expects fiscal year 1996 to be another strong year. Consensus economic forecasts predict no domestic recession in the near term, and forecasts for Western Europe and the Pacific Rim nations, except Japan, are generally optimistic. Demand for the Company's elevating work platforms remains very strong, while demand for material handling products has softened coinciding with reduced residential construction activity. Rental fleet utilization remains strong throughout the United States and demand for used equipment exceeds its supply. The Company's backlog is robust, and new products to be introduced during the third fiscal quarter, together with expanded international distribution, should spur demand. Management has targeted additional manufacturing cost reductions and a slight improvement in gross profit as a percentage of net sales. Capacity constraints and outsourcing requirements, particularly for scissor lift production, will be offsetting factors. This should be alleviated in fiscal 1997 once the new scissor lift manufacturing facility is fully operational. Product mix also affects gross margins and is difficult to forecast. The timing and terms of the proposed divestiture of the Material Handling Division are uncertain, but Management does not expect this transaction to have a material effect on the Company's results of operations in fiscal 1996. Ernst & Young LLP Independent Auditors' Review Report The Board of Directors JLG Industries, Inc. We have reviewed the accompanying condensed consolidated balance sheet of JLG Industries, Inc. and subsidiaries as of October 31, 1995, and the related condensed consolidated statements of income and cash flows for the three-month periods ended October 31, 1995 and 1994. 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 generally accepted auditing standards, 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 generally accepted accounting principles. We have previously audited, in accordance with generally accepted auditing standards, the consolidated balance sheet of JLG Industries, Inc. as of July 31, 1995, 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 7, 1995, 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, 1995, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived. November 14, 1995 Ernst & Young LLP Baltimore, Maryland PART II OTHER INFORMATION Item 1 None/not applicable. Item 2 Effective as of November 22, 1995, the Company's Articles of Incorporation were amended to increase the Company's authorized Capital Stock par value $.20 per share to 35,000,000 shares. The effects of this action on the rights of the Company's shareholders were previously reported in the Company's proxy materials filed with the Commission on October 16, 1995. Item 3 None/not applicable. Item 4 The Company held its Annual Meeting of Shareholders on November 20, 1995. Management solicited proxies for the election of eight directors, for ratification of the appointment of Ernst & Young LLP as the Company's independent auditors for the 1996 fiscal year and ratification and approval of amendments to the Company's Articles of Incorporation. Of the 14,309,084 shares of capital stock outstanding on the record date, 11,440,447 were voted in person or by proxy at the meeting date. The tabulated results are set forth below: 1. Election of directors: FOR WITHHELD L. D. Black 11,401,371 39,076 C. H. Diller, Jr. 11,402,233 39,214 G. R. Kempton 11,403,019 37,428 J. A. Mezera 11,388,669 51,778 G. Palmer 11,402,619 37,828 S. Rabinowitz 11,401,619 38,828 T. C. Wajnert 11,379,919 60,528 C. O. Wood, III 11,404,019 36,428 2. Ratification of the appointment of Ernst & Young LLP as independent auditors for the ensuing year. FOR AGAINST ABSTAIN 11,406,783 13,732 0 3. Ratification and approval of amendments to the Company's Articles of Incorporation. BROKER FOR AGAINST ABSTAIN NON-VOTES 9,328,122 1,892,578 87,090 132,657 Item 5 None/not applicable. Item 6 EXHIBITS AND REPORTS ON FORM 8-K (a) The following exhibits are included herein: 3 Articles of Incorporation as amended through November 22, 1995 15 Letter re: Unaudited Interim Financial Information (b) The Company was not required to file Form 8-K pursuant to requirements of such form for any of the three months ended October 31, 1995. 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/ Charles H. Diller, Jr. Charles H. Diller, Jr. Executive Vice President and Chief Financial Officer EX-3 2 ARTICLES OF INCORPORATION ARTICLES OF INCORPORATION OF JLG INDUSTRIES, INC. (a Pennsylvania corporation) 1. The name of the corporation is: JLG Industries, Inc. 2. The address of this corporation's current registered office in this Commonwealth is: JLG Drive, McConnellsburg, Pennsylvania 17233 3. The purpose or purposes of the corporation which shall be organized under this Act are as follows: to manufacture all kinds and variety of mechanical appliances, instruments and machines and any and all variety of products; to provide research, development, consultation, design, engineering and production services and to have the powers necessary and essential thereto as well as to engage in other lawful act or activity for which corporation may be organized under Pennsylvania Business Corporation Law. 4. The term of its existence is perpetual. 5. The aggregate number of shares which the corporation is authorized to issue is Thirty Five Million (35,000,000) shares $.20 par value capital stock with a total par value of $7,000,000. 6. The names and addresses of each of the first directors, who shall serve until the first annual meeting, are: John L. Grove 171 Apple Drive, Greencastle, Penna. Paul K. Shockey R.D.#3, Greencastle, Penna. Benjamin A. Stevens 141 Apple Drive, Greencastle, Penna. 7. The names and addresses of each of the incorporators and the number and class of shares subscribed by each are: John L. Grove 171 Apple Drive, Greencastle, Penna. 10 sh. Paul K. Shockey R.D.#3, Greencastle, Penna. 10 sh. Benjamin A. Stevens 141 Apple Drive, Greencastle, Penna. 10 sh. 8. Cumulative voting is not permitted in the election of directors of the corporation. 9. A. Directors and officers as fiduciaries. A director or officer of the Corporation shall stand in a fiduciary relation to the Corporation and shall perform his or her duties as a director or officer, including his or her duties as a member of any committee of the Board upon which he or she may serve, in good faith, in a manner he or she reasonably believe to be in the best interests of the Corporation, and with such care, including reasonable inquiry, skill and diligence, as a person of ordinary prudence would use under similar circumstances. In performing his or her duties, a director or officer shall be entitled to rely in good faith on information, opinions, reports or statements, including financial statements and other financial data, in each case prepared or presented by: one or more officers or employees of the Corporation whom the director or officer reasonably believes to be reliable and competent with respect to the matters presented; counsel, public accountants or other persons as to matters that the director or officer reasonably believes to be within the professional or expert competence of such person; or a committee of the Board of Directors upon which the director or officer does not serve, duly designated in accordance with law, as to matters within its designated authority, which committee the director or officer reasonably believes to merit confidence. A director or officer shall not be considered to be acting in good faith if he or she has knowledge concerning the matter in question that would cause his or her reliance to be unwarranted. Absent breach of fiduciary duty, lack of good faith or self-dealing, actions taken as a director or officer of the Corporation or any failure to take any action shall be presumed to be in the best interests of the Corporation. B. Personal liability of directors. A director of the Corporation shall not be personally liable, as such, for monetary damages (including, without limitation, any judgment, amount paid in settlement, penalty, punitive damages or expense of any nature including, without limitation, attorneys' fees and disbursements) for any action taken, or any failure to take any action, unless the director has breached or failed to perform the duties of his or her office under these Articles, the By-Laws or applicable provisions of law, and the breach or failure to perform constitutes self- dealing, willful misconduct or recklessness. C. Personal liability of officers. An officer of the Corporation shall not be personally liable, as such, to the Corporation or its shareholders, for monetary damages (including, without limitation, any judgment, amount paid in settlement, penalty, punitive damages or expense of any nature including, without limitation, attorneys' fees and disbursements) for any action taken, or any failure to take any action, unless the officer has breached or failed to perform the duties of his or her office under these Articles, the By-Laws or applicable provisions of law, and the breach or failure to perform constitutes self-dealing, willful misconduct or recklessness. D. Interpretation of article. The provisions of Sections B and C of this Article 9 shall not apply to the responsibility or liability of a director or officer, as such, pursuant to any criminal statute of for the payment of taxes pursuant to local, state or federal law. The provisions of this Article 9 have been adopted pursuant to the authority of section 204A(10) of the Pennsylvania Business Corporation Law, shall be effective as to any act or failure to act occurring on or after November 23, 1987, shall be deemed to be a contract with each director or officer of the Corporation who serves as such at any time while this Article is in effect, and each person who serves as a director or officer of the Corporation while this Article is in effect shall be deemed to be doing so in reliance on the provisions of this Article. The provisions of this Article are cumulative of and shall be in addition to and independent of any and all other limitations on the liabilities of directors or officers of the Corporation, as such, or rights of indemnification by the Corporation, to which a director or officer of the Corporation may be entitled, whether such limitations or rights arise under or are created by any statute, rule of law, by-law, agreement, vote of shareholders or directors or otherwise. No amendment to or repeal of this Article 9, nor the adoption of any provision of these Articles inconsistent with this Article, shall apply to or have any effect on the liability or alleged liability of any director or officer of the Corporation for or with respect to any acts or omissions of such director or officer occurring prior to such amendment, repeal or adoption of an inconsistent provision. In any action, suit or proceeding involving the application of the provisions of this Article 9, the party or parties challenging the right of a director or officer to the benefits of this Article shall have the burden of proof. EX-15 3 LETTER RE UNAUDITED INTERIM FINANCIAL INFORMATION EXHIBIT 15 November 14, 1995 The Board of Directors JLG Industries, Inc. We are aware of the incorporation by reference in the registration statements (Form S-8 No. 33-60366, Form S-8 No. 2-87955 and Form S-8 No. 33-75746) of JLG Industries, Inc. of our report dated November 14, 1995, relating to the unaudited condensed consolidated interim financial statements of JLG Industries, Inc., which are included in its Form 10-Q for the quarter ended October 31, 1995. Pursuant to Rule 436(c) of the Securities Act of 1933 our report is not a part of the registration statement prepared or certified by accountants within the meaning of Section 7 or 11 of the Securities Act of 1933. Ernst & Young LLP EX-27 4 ARTICLE 5 FDS FOR FORM 10-Q
5 1000 3-MOS JUL-31-1996 OCT-31-1995 14345 0 37369 1350 40915 97033 45973 20120 135718 48311 0 2859 0 0 73669 135718 86701 86701 65207 74918 231 0 45 11969 4189 7780 0 0 0 7780 .54 .54
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