-----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, WhoPbY2XeTn4/X7PDX3LwXdxzNX//h4zUUxGW+8DEdLdpSBsoNz3wjyDG1RLB7xN 2lBM5zrgW/uH2djxOjMI4w== 0000950128-01-000466.txt : 20010228 0000950128-01-000466.hdr.sgml : 20010228 ACCESSION NUMBER: 0000950128-01-000466 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20010131 FILED AS OF DATE: 20010227 FILER: COMPANY DATA: COMPANY CONFORMED NAME: JLG INDUSTRIES INC CENTRAL INDEX KEY: 0000216275 STANDARD INDUSTRIAL CLASSIFICATION: CONSTRUCTION MACHINERY & EQUIP [3531] IRS NUMBER: 251199382 STATE OF INCORPORATION: PA FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-12123 FILM NUMBER: 1555806 BUSINESS ADDRESS: STREET 1: 1 JLG DR CITY: MCCONNELLSBURG STATE: PA ZIP: 17233 BUSINESS PHONE: 7174855161 10-Q 1 j8674301e10-q.txt JLG INDUSTRIES, INC. 1 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 January 31, 2001 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 February 20, 2001 was 41,910,037. 2 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.......................... 7 Item 3. Quantitative and Qualitative Disclosures about Market Risk.................................................. 9 Independent Accountants' Review Report.................................. 10 PART II Item 6. Exhibits and Reports on Form 8-K............................. 11 Signature ............................................................. 11 3 PART I FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS
JLG INDUSTRIES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) January 31, July 31, 2001 2000 ----------- -------- (Unaudited) ASSETS Current assets Cash and cash equivalents $ 14,804 $ 25,456 Trade receivables-net 186,552 172,511 Inventories 238,450 147,991 Other current assets 18,081 10,594 -------- -------- Total current assets 457,887 356,552 Property, plant and equipment - net 101,756 105,879 Goodwill - net 143,147 145,867 Lease receivables - net 45,180 -- Equipment held for rental - net 9,075 12,153 Other assets 26,856 33,136 -------- -------- $783,901 $653,587 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Short-term debt $ 20,944 $ 9,184 Accounts payable 115,326 116,616 Accrued expenses 60,100 64,829 -------- -------- Total current liabilities 196,370 190,629 Long-term debt 216,003 89,118 Accrued post-retirement benefits 23,169 22,943 Other long-term liabilities 15,005 12,623 Provisions for contingencies 15,087 14,223 Shareholders' equity Capital stock: Authorized shares: 100,000 at $.20 par Issued shares: 41,997 fiscal 2000 - 43,648 8,399 8,729 Additional paid-in capital 12,497 12,514 Retained earnings 304,145 308,966 Unearned compensation (1,266) (1,474) Accumulated other comprehensive income (5,508) (4,684) -------- -------- Total shareholders' equity 318,267 324,051 -------- -------- $783,901 $653,587 ======== ========
The accompanying notes are an integral part of these financial statements. 1 4
JLG INDUSTRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share data) (Unaudited) Three Months Ended Six Months Ended January 31, January 31, 2001 2000 2001 2000 -------- -------- -------- -------- Net sales $230,093 $206,868 $462,803 $424,863 Cost of sales 188,618 168,273 368,838 333,695 -------- -------- -------- -------- Gross profit 41,475 38,595 93,965 91,168 Selling and administrative expenses 24,125 22,386 46,030 45,716 Product development expenses 4,105 3,877 8,020 7,602 Goodwill amortization 1,488 1,527 2,979 3,088 -------- -------- -------- -------- Income from operations 11,757 10,805 36,936 34,762 Other income (deductions): Interest expense (6,052) (5,465) (10,108) (8,900) Miscellaneous, net 2,053 (444) 1,576 63 -------- -------- -------- -------- Income before taxes 7,758 4,896 28,404 25,925 Income tax provision 2,861 1,811 10,500 9,592 -------- -------- -------- -------- Net income $ 4,897 $ 3,085 $ 17,904 $ 16,333 ======== ======== ======== ======== Earnings per common share $ .12 $ .07 $ .42 $ .37 ======== ======== ======== ======== Earnings per common share - assuming dilution $ .12 $ .07 $ .42 $ .36 ======== ======== ======== ======== Cash dividends per share $ .01 $ .01 $ .02 $ .015 ======== ======== ======== ========
The accompanying notes are an integral part of these financial statements. 2 5
JLG INDUSTRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (Unaudited) Six Months Ended January 31, 2001 2000 --------- --------- Operations Net income $ 17,904 $ 16,333 Adjustments to reconcile net income to cash flow from operating activities: Gain on sale of joint venture (1,008) -- Non-cash charges and credits: Depreciation and amortization 12,935 13,862 Other 4,551 2,448 Changes in selected working capital items: Trade receivables (14,059) (26,279) Inventories (90,459) (72,864) Other operating assets and liabilities (13,478) (17,621) Lease receivables (45,180) Changes in other assets and liabilities 1,724 (4,511) --------- --------- Cash flow from operating activities (127,070) (88,632) Investments Net purchases of property, plant and equipment (4,695) (9,222) Additions to equipment held for rental 1,938 8,119 Retirements of equipment held for rental Proceeds from sale of joint venture 4,000 -- --------- --------- Cash flow from investing activities 1,243 (1,103) Financing Net increase in short-term debt 12,090 -- Issuance of long-term debt 264,150 162,088 Repayment of long-term debt (137,597) (83,159) Payment of dividends (860) (664) Purchase of common stock (22,201) -- Exercise of stock options and issuance of restricted awards 70 863 --------- --------- Cash flow from financing activities 115,652 79,128 Currency Adjustments Effect of exchange rate changes on cash (477) (51) --------- --------- Cash Net change in cash and cash equivalents (10,652) (10,658) Beginning balance 25,456 19,033 --------- --------- Ending balance $ 14,804 $ 8,375 ========= =========
The accompanying notes are an integral part of these financial statements. 3 6 JLG INDUSTRIES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS JANUARY 31, 2001 (in thousands, except per share data) (Unaudited) 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 six month period ended January 31, 2001 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, 2000. 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 January 31, 2001, must necessarily be based on management's estimate of expected fiscal year-end inventory levels and costs. Inventories consist of the following:
January 31, July 31, 2001 2000 ----------- -------- Finished goods $174,562 $ 97,858 Raw materials and work in process 65,812 52,775 -------- -------- 240,374 150,633 Less LIFO provision 1,924 2,642 -------- -------- $238,450 $147,991 ======== ========
REPURCHASE OF CAPITAL STOCK During the six months ended January 31, 2001, the Company repurchased 1.7 million shares of its capital stock at an aggregate cost of $22.2 million. At January 31, 2001, the Company had remaining Board authorization to repurchase an additional 2.5 million shares of its capital stock. 4 7 BASIC AND DILUTED EARNINGS PER SHARE The following table sets forth the computation of basic and diluted earnings per share for each of the periods ended January 31:
Three Months Ended Six Months Ended January 31, January 31, 2001 2000 2001 2000 ------- ------- ------- ------- Net income $ 4,897 $ 3,085 $17,904 $16,333 ======= ======= ======= ======= Denominator for basic earnings per share -- weighted average shares 41,866 43,998 42,512 43,989 Effect of dilutive securities - employee stock options and unvested restricted shares 706 1,725 511 1,626 ------- ------- ------- ------- Denominator for diluted earnings per share -- weighted average shares adjusted for dilutive securities 42,572 45,723 43,023 45,615 ======= ======= ======= ======= Earnings per common share $ .12 $ .07 $ .42 $ .37 ======= ======= ======= ======= Earnings per common share - assuming dilution $ .12 $ .07 $ .42 $ .36 ======= ======= ======= =======
During the quarter ended January 31, 2001, options to purchase 1.1 million shares of capital stock with exercise prices ranging from $13.69 to $21.94 were not included in the computation of diluted earnings per share because the exercise prices were greater than the average market price of the capital stock. 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 sets forth the components of comprehensive income for each of the periods ended January 31:
Three Months Ended Six Months Ended January 31, January 31, 2001 2000 2001 2000 ------ ------ ------- ------- Net income $4,897 $3,085 $17,094 $16,333 Aggregate currency translation adjustment (193) 113 824 28 ------ ------ ------- ------- $4,704 $3,198 $18,728 $16,361 ====== ====== ======= =======
SEGMENT INFORMATION The Company has organized its business into two segments consisting of manufactured products and services. The Machinery segment contains the design, manufacture and sale of new equipment, and the Equipment Services segment contains financing and leasing activities and after-sales service and support, including parts sales, equipment rentals, used equipment sales and rebuilt equipment. The Company evaluates performance 5 8 and allocates resources based on operating profit before interest, miscellaneous income/expense and income taxes. 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. Business segment information consisted of the following for each of the periods ended January 31:
Three Months Ended Six Months Ended January 31, January 31, 2001 2000 2001 2000 --------- --------- --------- --------- External sales: Machinery $ 191,600 $ 177,789 $ 401,293 $ 359,918 Equipment services 38,493 29,079 61,510 64,945 --------- --------- --------- --------- $ 230,093 $ 206,868 $ 462,803 $ 424,863 ========= ========= ========= ========= Segment profit (loss): Machinery $ 16,766 $ 14,349 $ 46,057 $ 38,542 Equipment services 4,540 8,091 12,322 19,178 General corporate (9,549) (11,635) (21,443) (22,958) --------- --------- --------- --------- $ 11,757 $ 10,805 $ 36,936 $ 34,762 ========= ========= ========= =========
The Company manufactures its products in the United States and sells these products globally, but principally in North America, Europe, Australia and South America. No single foreign country is significant to the consolidated operations. Sales by geographic area were as follows for of the periods ended January 31:
Three Months Ended Six Months Ended January 31, January 31, 2001 2000 2001 2000 -------- -------- -------- -------- United States $168,801 $148,924 $351,906 $311,839 Europe 49,869 42,946 85,922 82,517 Other 11,423 14,998 24,975 30,507 -------- -------- -------- -------- $230,093 $206,868 $462,803 $424,863 ======== ======== ======== ========
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 2001 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 $75 million in excess of the retention and international primary coverage. The Company contracts with an independent 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 firm. The methods of making such estimates and establishing the resulting accrued liability are reviewed frequently, 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 product liability claims of which the Company is aware, accrued liabilities of $16.4 million and $16.1 million were established at January 31, 2001 and July 31, 2000, 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 January 31, 2001 and 6 9 July 31, 2000, there were no insurance recoverables or offset implications and there were no claims by the Company being contested by insurers. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS FOR THE SECOND QUARTERS OF FISCAL 2001 AND 2000 Sales for the second quarter of fiscal 2001 were $230.1 million, up 11% over the $206.9 million in the comparable year-ago period. Included in the fiscal 2001 sales was $16.8 million associated with a sale-leaseback of rental fleet assets. Machinery sales for the current year quarter were $191.6 million an increase of $13.8 million, or 8%, from the $177.8 million for the comparable prior year quarter. The increase is principally attributable to strong aerial work platform sales. Equipment Services sales for the current year quarter were $38.5 million an increase of $9.4 million, or 32%, from the $29.1 million for the comparable prior year quarter. The second quarter of fiscal 2001 included the sale-leaseback of rental fleet assets, while the same quarter of fiscal 2000 benefited from a large sale by Equipment Services. Domestic sales for the second quarter of fiscal 2001 were $168.8 million, up 13% from the comparable year-ago period sales of $148.9 million. International sales for the second quarter of fiscal 2001 were $61.3 million, up 6% from the corresponding quarter of the previous year. The Company's sales by product (in thousands) consisted of the following for the second quarter ended January 31:
2001 2000 -------- -------- Aerial work platforms $158,907 $140,658 Material handlers 16,623 20,054 Excavators 16,070 17,077 Financing and leasing activities and after-sales service and support, including parts sales, equipment rentals, used equipment sales and rebuilt equipment 38,493 29,079 -------- -------- $230,093 $206,868 ======== ========
Gross profit margin was 18.0% for the second quarter of fiscal 2001 compared to the prior year quarter's 18.7%. The principal contributors to this reduction were the strengthening of the U. S. dollar against foreign currencies, particularly the Euro, British pound and Australian dollar, competitive pricing pressures and the effect of the rental fleet sale-leaseback transaction. These reductions were partially offset by ongoing cost savings initiatives and a more favorable product mix. Selling, administrative and product development expenses as a percent of sales improved to 12.3% for the current year second quarter from 12.7% for the prior year second quarter. In terms of dollars, the increase was principally due to increased bad debt expense and pension charges resulting from early retirements. Miscellaneous expense included currency gains of $1.9 million in second quarter of fiscal 2001 compared to losses of $898 thousand in the corresponding prior year period. The effective tax rate was 37% for the current and prior year quarters. RESULTS FOR THE FIRST SIX MONTHS OF FISCAL 2001 AND 2000 Sales for the first six months of fiscal 2001 were $462.8 million, up 9% over the $424.9 million in the comparable year-ago period. Machinery sales for the first six months of fiscal 2001 were $401.3 million an 7 10 increase of $41.4 million, or 12%, from the $359.9 million for the comparable prior year period. The increase is principally attributable to strong aerial work platform sales. Equipment Services sales for the current year six months were $61.5 million a decrease of $3.4 million, or 5%, from the $64.9 million for the comparable prior year period. The first six months of fiscal 2001 included the sale-leaseback of rental fleet assets, while the same period of fiscal 2000 benefited from several large sales by Equipment Services. Domestic sales for the first six months of fiscal 2001 were $351.9 million, up 13% from the comparable year-ago period sales of $311.8 million. International sales for the first six months of fiscal 2001 were $110.9 million, down 2% from the corresponding period of the previous year primarily due to the strong U. S. dollar. The Company's sales by product (in thousands) consisted of the following for the six months ended January 31:
2001 2000 -------- -------- Aerial work platforms $336,234 $292,411 Material handlers 36,991 38,386 Excavators 28,068 29,121 Financing and leasing activities and after-sales service and support, including parts sales, equipment rentals, used equipment sales and rebuilt equipment 61,510 64,945 -------- -------- $462,803 $424,863 ======== ========
Gross profit margin was 20.3% for the first six months of fiscal 2001 compared to the prior year period's 21.5%. The decrease was mainly due to the same factors as discussed in the second quarter comparison. Selling, administrative and product development expenses as a percent of sales improved to 11.7% for the first six months of fiscal 2001 from 12.5% for the comparable prior year period as the Company leveraged slightly higher expenses in fiscal 2001 over a larger sales base. In terms of dollars, the increase was mainly due to the same factors as discussed in the second quarter comparison. The increase in interest charges of $1.2 million for the first six months of fiscal 2001 compared to the same period of last year was principally due to increased investment in inventory and receivables. Miscellaneous expense included currency losses of $258 thousand in first six months of fiscal 2001 compared to $1.0 million in the corresponding prior year period. The current year period also benefited from a $1.0 million gain on the sale of the Company's interest in its Brazilian joint venture. The effective tax rate was 37% for the current and prior year periods. FINANCIAL CONDITION Cash flow used in operating activities was $127.1 million for the first six months of fiscal 2001 versus $88.6 million in the comparable period of fiscal 2000. Comparing January 31, 2001 to January 31, 2000, inventory increased approximately $40 million as a result of equipment built ahead of the peak-demand season. The increase in receivables reflects higher business and financing activities and extended payment terms which were partially offset by $47.5 million in accounts receivable securitization. Investing activities during the first six months of fiscal 2001 provided $1.2 million of cash compared to a use of $1.1 million for last year's comparable period. The improvement in cash provided by investing activities for the first six months of fiscal 2001 resulted principally from proceeds related to the rental fleet sale-leaseback transaction and the sale of the Company's interest in its Brazilian joint venture. In addition, the 8 11 comparable period of fiscal 2000 included one-time capital expenditures for new facilities in Shippensburg, Pennsylvania and Orrville, Ohio. Financing activities provided cash of $115.7 million for the first six months of fiscal 2001 compared to $79.1 million for the first six months of fiscal 2000. The increase in cash provided from financing activities largely resulted from higher borrowings under the Company's credit facilities due to the working capital investments discussed above. In conjunction with the Company's share repurchase program, the first six months of fiscal 2001 included the repurchase of 1.7 million shares at an aggregate cost of $22.2 million. At January 31, 2001, the Company had unused credit lines totaling $138 million. In order to meet its future cash requirements, the Company intends to use internally generated funds and to borrow under its credit facilities. Based on its forecasting process, the Company believes that these resources will be sufficient to meet its cash requirements over the next 12 months. In addition to measuring its cash flow generation and usage based upon the operating, investing, and financing classifications included in the Consolidated Statements of Cash Flows, the Company also measures its free cash flow. Free cash flow, a measure commonly employed by the financial community, is defined by the Company as cash flow from operating activities less capital expenditures including equipment held for rental, plus proceeds from the disposal of assets and unrealized currency gains or losses. During the first six months of fiscal 2001, the Company had negative free cash flow of $126.0 million compared to negative free cash flow of $89.2 million for the corresponding period in fiscal 2000 reflecting the strong seasonality of the second quarter and inventory built ahead of the peak-season demand. The Company's exposure to product liability claims is discussed in the note entitled Commitments and Contingencies of the Notes to Condensed Consolidated Financial Statements of this report. Future results of operations, financial condition and liquidity may be affected to the extent that the Company's ultimate exposure with respect to product liability varies from current estimates. OUTLOOK This Outlook section and other parts of this Management's Discussion and Analysis contain forward-looking information and involve certain risks and uncertainties that could significantly impact expected results. Certain important factors that, in some cases have affected, and in the future could affect, the Company's 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. Based on the first six months actual results together with prospects of lower interest rates and currency moderation, management reiterates its previously stated range of $1.55 to $1.60 in earnings per share for fiscal 2001 with a range for the third quarter of $.46 to $.50 per share. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company is exposed to market risk from changes in interest rates and foreign currency exchange rates, which could affect its future results of operations and financial condition. The Company manages exposure to these risks principally through its regular operating and financing activities. While the Company is exposed to changes in interest rates as a result of its outstanding debt, the Company does not currently utilize any derivative financial instruments related to its interest rate exposure. Total interest bearing liabilities at January 31, 2001 consisted of $232 million in variable rate borrowing, $48 million in accounts receivable securitization and $4 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 9 12 approximately $2.0 million on an annual basis. A hypothetical 10% change in interest rates would not result in a material change in the fair value of the Company's fixed rate debt. The Company does not have a material exposure to financial risk from using derivative financial instruments to manage its foreign currency exposures. For additional information, reference is made to Item 7 in the Company's annual report on Form 10-K for the fiscal year ended July 31, 2000. INDEPENDENT ACCOUNTANTS' REVIEW REPORT The Board of Directors JLG Industries, Inc. We have reviewed the accompanying condensed consolidated balance sheet of JLG Industries, Inc. (the "Company") as of January 31, 2001, and the related condensed consolidated statements of income for the three month and six-month periods ended January 31, 2001 and 2000 and condensed consolidated statements of cash flows for the six-month periods ended January 31, 2001 and 2000. 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 financial statements referred to above for them to be in conformity with generally accepted accounting principles. 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, 2000, 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 6, 2000, 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, 2000, 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 February14, 2001 10 13 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) The Company was not required to file Form 8-K pursuant to requirements of such form for any of the three months ended January 31, 2001. 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. Senior Vice President and Chief Financial Officer 11 EX-15 2 j8674301ex15.txt LETTER RE: UNAUDITED INTERIM FINANCIAL INFORMATION 1 Exhibit 15 The Board of Directors JLG Industries, Inc. McConnellsburg, PA 17233 We are aware of the incorporation by reference in the Registration Statements (Form S-8, No. 33-60366; Form S-8, No. 33-61333; and Form S-8, No. 33-75746) of JLG Industries, Inc. of our report dated February14, 2001, 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 January 31, 2001. /s/ Ernst & Young LLP Baltimore, Maryland February 23, 2001 EX-99 3 j8674301ex99.txt CAUTIONARY STATEMENTS 1 Exhibit 99 CAUTIONARY STATEMENTS PURSUANT TO THE SECURITIES LITIGATION REFORM ACT OF 1995 The Company wishes to inform its investors of the following important factors that in some cases have affected, and in the future could affect, the Company's results of operations and that could cause such future results of operations to differ materially from those expressed in any forward looking statements made by or on behalf of the Company. Disclosure of these factors is intended to permit the Company to take advantage of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. The Company has discussed many of these factors in prior SEC filings. Though the Company has attempted to list comprehensively these important cautionary factors, the Company wishes to caution investors that other factors may in the future prove to be important in affecting the Company's results of operations. Demand Variability - Demand for new equipment manufactured by the Company 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. Other factors affecting demand include the availability and cost of financing for equipment purchases, the market availability of used equipment and alternatives to purchases such as equipment leases directly from the Company. Company management regularly monitors these and other factors that affect demand for the Company's equipment. However, predicting levels of demand beyond a short term is necessarily imprecise and demand may at times change dramatically. Consolidating Customers Base; Rental Companies - The principal customers for the Company's new equipment are independent equipment rental companies that rent the Company's products and provide service support to equipment users. In recent years, growth in sales to equipment rental companies has outpaced growth in direct sales to end-users, resulting in equipment rental companies comprising a larger share of total sales. At the same time, there has been substantial consolidation in ownership among rental companies, resulting in a more limited number of major customers comprising a substantial portion of total sales. A change in purchasing decisions or ordering patterns by any of these major customers could materially affect overall demand for the Company's products and the Company's financial performance. More generally, during recessionary conditions, demand for equipment by equipment rental companies typically declines more sharply than demand for equipment purchased by end-users. The Company believes it is a preferred supplier to certain equipment rental companies whose continued business depends upon a package of products and services including financing, e-commerce ordering, just-in-time delivery, enhanced warranties, used equipment trade-ins and other customer services and after market support. Competition; Continued Innovation - The Company faces substantial competition in the market for its products. Product line expansion by existing competitors and potential entry by new competitors also may affect the Company's market position. Throughout its history, the Company has devoted substantial resources to product development and has generally succeeded in being a market leader in introducing new products or incorporating new features and functions into existing products. Successful product innovation by competitors that reach the market prior to comparable innovation by the Company or that are amenable to patent protection may adversely affect the Company's financial performance. Product Liability - Use of the Company's products involves risks of personal injury and property damage and liability exposure for the Company. The Company insures against this liability through a combination of a self-insurance retention and catastrophic insurance coverage in excess of the retention. The Company monitors all incidents of which it becomes aware involving the use of its products that result in personal injury or property damage and establishes accrued liability reserves on its financial statements based on liability 2 estimates with respect to claims arising from such incidents. Future or unreported incidents involving personal injury or property damage or unanticipated variances between actual liabilities for known incidents and Company estimates may adversely affect the Company's financial performance. Manufacturing Capacity; Production Levels - Given the variability of demand, the Company must periodically expand and contract its manufacturing facilities. Capital investment to acquire additional manufacturing facilities involves significant risks. Excess manufacturing capacity adversely affects profitability because higher fixed costs are spread over a lower sales volume. Insufficient capacity adversely affects profitability as long lead-times required to fill customer orders may impair the Company's ability to compete for new business and subcontracting costs incurred to increase capacity affect profitability. To ensure product availability, the Company from time to time manages inventory levels and its supply chain by maintaining relatively constant production levels. This practice could increase inventories and associated carrying costs which could adversely affect the Company's financial performance. Availability of Product Components - The Company obtains raw materials and certain manufactured components from third-party suppliers. To reduce material costs and inventories, the Company relies on supplier partnership arrangements with preferred vendors as a sole source for "just-in-time" delivery of many raw materials and manufactured components. Because the Company maintains limited raw material inventories, even brief unanticipated delays in delivery by suppliers, including those due to capacity constraints, labor disputes, impaired financial condition of suppliers, weather emergencies or other natural disasters, may adversely affect the Company's ability to satisfy its customers on a timely basis and thereby affect the Company's financial performance. Foreign Sales; Currency Risks - A substantial component of the Company's business has been export sales to Europe, Australia, Latin America, Africa and Asia. Maintenance and continued growth of this segment of the Company's business may be affected by changes in trade, monetary and fiscal policies, laws and regulations of the United States and other trading nations and by foreign currency exchange rate fluctuations and the ability or inability of the Company to hedge against exchange rate risks. Mergers and Acquisitions - The Company intends to pursue strategic acquisitions as a means of increasing sales and earnings and promoting shareholder value. Acquisitions generally may involve a number of risks that may affect the Company's financial performance including increased leverage, diversion of management resources, possible shareholder dilution, assumption of liabilities of acquired businesses and corporate culture conflicts. In addition, specific acquisitions may involve other risks unique to the acquired business. Finally, there is no assurance that the Company will be able to conclude satisfactory agreements to acquire any businesses as a means to increase sales and earnings. Unanticipated Litigation - The Company occasionally has faced unanticipated intellectual property and shareholder litigation which has involved significant unbudgeted expenditures. The costs and other effects of any future, unanticipated legal or administrative proceedings may be significant. Dependence Upon Key Personnel; Management Recruitment - The Company believes that it has developed a strong management team, which intends to continue the Company's growth and profitability. However, the loss or unavailability of certain key management personnel and the inability to attract, assimilate or retain additional highly qualified employees in the future could adversely affect the Company's business and prospects. -----END PRIVACY-ENHANCED MESSAGE-----