-----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, JDZ/OW6MbsPgGdqGoB2OuFLcXlRp+Q2Mat4/YWTU56dsl6aPwv9ChhV07JYX3xwX Z17c7XNaHKJAdoR7kOV0Pg== 0000856386-97-000011.txt : 19970513 0000856386-97-000011.hdr.sgml : 19970513 ACCESSION NUMBER: 0000856386-97-000011 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970329 FILED AS OF DATE: 19970512 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: GEHL CO CENTRAL INDEX KEY: 0000856386 STANDARD INDUSTRIAL CLASSIFICATION: FARM MACHINERY & EQUIPMENT [3523] IRS NUMBER: 390300430 STATE OF INCORPORATION: WI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-18110 FILM NUMBER: 97601202 BUSINESS ADDRESS: STREET 1: 143 WATER STREET CITY: WEST BEND STATE: WI ZIP: 53095 BUSINESS PHONE: 4143349461 MAIL ADDRESS: STREET 1: 143 WATER STREET CITY: WEST BEND STATE: WI ZIP: 53095 10-Q 1 GEHL COMPANY 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended March 29, 1997 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 0-18110 GEHL COMPANY (Exact name of registrant as specified in its charter) Wisconsin 39-0300430 (State or other jurisdiction of incorporation (I.R.S. Employer or organization) Identification No.) 143 Water Street, West Bend, WI 53095 (Address of principal executive office) (zip code) (414) 334-9461 (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 Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class Outstanding at March 29, 1997 Common Stock, $.10 Par Value 6,188,685 GEHL COMPANY FORM 10-Q March 29, 1997 REPORT INDEX Page No. PART I. - FINANCIAL INFORMATION: Condensed Consolidated Statements of Income for the Three-Month Periods Ended March 29, 1997 and March 30, 1996 . . . . . . . . . . . . . . . . . . 3 Condensed Consolidated Balance Sheets at March 29, 1997, December 31, 1996, and March 30, 1996 . . . . . . 4 Condensed Consolidated Statements of Cash Flows for the Three-Month Periods Ended March 29, 1997 and March 30, 1996 . . . . . . . . . . . . . . . . . . 5 Notes to Condensed Consolidated Financial Statements 6 Management's Discussion and Analysis of Results of Operations and Financial Condition . . . . . . . . 8 PART II. - OTHER INFORMATION: Item 6. Exhibits and Reports on Form 8-K . . . . . 10 SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . 10 PART I - FINANCIAL INFORMATION GEHL COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share data; unaudited)
Three Months Ended March 29, March 30, 1997 1996 NET SALES $ 43,675 $ 39,165 Cost of goods sold 30,692 28,149 --------- -------- GROSS PROFIT 12,983 11,016 Selling, general and administrative expenses 8,832 8,033 --------- -------- INCOME FROM OPERATIONS 4,151 2,983 Interest expense (468) (1,041) Interest income 322 409 Other expense, net (53) (52) ---------- --------- INCOME BEFORE INCOME TAXES 3,952 2,299 Income tax provision 1,423 403 ---------- --------- NET INCOME $ 2,529 $ 1,896 ========= ======== EARNINGS PER SHARE $ .39 $ .31
The accompanying notes are an integral part of the financial statements. GEHL COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands)
March 29, December 31, March 30, 1997 1996 1996 ASSETS (Unaudited) (Unaudited) Cash $ 3,137 $ 4,208 $ 3,740 Accounts receivable-net 64,420 55,141 71,951 Finance contracts receivable-net 5,763 5,098 7,214 Inventories 17,483 18,642 22,856 Deferred tax asset 5,035 5,035 4,397 Prepaid expenses and other assets 1,821 1,624 1,401 -------- --------- ---------- Total Current Assets 97,659 89,748 111,559 -------- --------- ---------- Property, plant and equipment-net 22,487 21,678 20,438 Finance contracts receivable-net, non- current 3,446 3,063 4,228 Other assets 5,666 5,636 5,365 -------- --------- ---------- TOTAL ASSETS $ 129,258 $ 120,125 $ 141,590 ========= ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY Current portion of long-term debt obligations $ 181 $ 178 $ 167 Accounts payable 16,142 14,384 14,191 Accrued liabilities 18,934 17,574 16,126 --------- --------- ---------- Total Current Liabilities 35,257 32,136 30,484 --------- --------- ---------- Line of credit facility 13,717 10,454 42,365 Long-term debt obligations 8,697 8,740 8,785 Other long-term liabilities 1,671 1,594 1,485 Deferred income taxes 2,369 2,369 1,425 --------- --------- ---------- Total Long-Term Liabilities 26,454 23,157 54,060 --------- --------- ---------- Common stock, $.10 par value, 25,000,000 shares authorized, 6,188,685, 6,158,720 and 6,218,765 shares issued, respectively 619 616 622 Preferred stock, $.10 par value, 2,000,000 shares authorized, no shares issued - - - Capital in excess of par 26,338 26,155 26,586 Retained earnings 40,590 38,061 30,373 --------- --------- ---------- 67,547 64,832 57,581 Less: Treasury stock (76,393 shares at March 30, 1996) at cost - - (535) --------- --------- ---------- Total Shareholders' Equity 67,547 64,832 57,046 --------- --------- ---------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 129,258 $ 120,125 $ 141,590 ========== ========== ==========
The accompanying notes are an integral part of the financial statements. GEHL COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands; unaudited)
Three Months Ended March 29, March 30, 1997 1996 CASH FLOWS FROM OPERATING ACTIVITIES: Net Income $ 2,529 $ 1,896 Adjustments to reconcile net income to net cash (used for) provided by operating activities: Depreciation and amortization 697 675 Increase in finance contracts receivable (6,254) (8,765) Proceeds from sales of finance contracts 5,127 5,028 Cost of sales of finance contracts 79 11 Net changes in remaining working capital items (5,299) (2,087) ---------- --------- Net cash (used for) provided by operating activities (3,121) (3,242) ---------- --------- CASH FLOWS FROM INVESTING ACTIVITIES: Property, plant and equipment additions, net (1,482) (760) Other assets 46 505 --------- --------- Net cash (used for) provided by investing activities (1,436) (255) ---------- --------- CASH FLOWS FROM FINANCING ACTIVITIES: Decrease in long-term debt obligations (40) (63) Increase in long-term liabilities 77 46 Proceeds from line of credit facility 3,263 4,517 Treasury stock purchase - (535) Proceeds from issuance of common stock 186 6 ---------- --------- Net cash provided by financing activities 3,486 3,971 ---------- --------- Net (decrease) increase in cash (1,071) 474 Cash, beginning of period 4,208 3,266 ---------- --------- Cash, end of period $ 3,137 $ 3,740 ========== ========= Supplemental disclosure of cash flow information: Cash paid for the following: Interest $ 444 $ 1,007 Income Taxes $ 23 $ 299
The accompanying notes are an integral part of the financial statements. GEHL COMPANY AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS March 29, 1997 (Unaudited) NOTE 1 - BASIS OF PRESENTATION The condensed consolidated financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although management believes that the disclosures are adequate to make the information presented not misleading. In the opinion of management, the information furnished for the three- month periods ended March 29, 1997 and March 30, 1996 includes all adjustments, consisting only of normal recurring accruals, necessary for a fair presentation of the results of operations and financial position of the Company. Due in part to the seasonal nature of the Company's business, the results of operations for the three months ended March 29, 1997 are not necessarily indicative of the results to be expected for the entire year. It is suggested that these interim financial statements be read in conjunction with the financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 1996 as filed with the Securities and Exchange Commission. NOTE 2 - EARNINGS PER SHARE Earnings per share is computed by dividing net income by the weighted average number of common shares outstanding and, if applicable, common stock equivalents which would arise from the exercise of stock options and warrants. The weighted average number of shares used in the computations was 6,404,340 and 6,203,045 for the three months ended March 29, 1997 and March 30, 1996, respectively. The Financial Accounting Standards Board has issued Statement of Financial Accounting Standards No. 128, "Earnings per Share" (SFAS 128). SFAS 128 replaces primary EPS with basic EPS, which excludes dilution, and requires presentation of both basic and diluted EPS on the face of the income statement. Diluted EPS is computed similarly to the current fully diluted EPS. SFAS 128 is effective for financial statements issued for periods ending after December 15, 1997, and requires restatement of all prior-period EPS data presented. The adoption of this statement is not expected to materially affect either future or prior-period EPS. NOTE 3 - INCOME TAXES The income tax provision is determined by applying an estimated annual effective income tax rate to income before income taxes. The estimated annual effective income tax rate is based on the most recent annualized forecast of pretax income, permanent book/tax differences, and tax credits. NOTE 4 - INVENTORIES If all of the Company's inventories had been valued on a current cost basis, which approximated FIFO value, estimated inventories by major classification would have been as follows (in thousands): March 29, December 31, March 30, 1997 1996 1996 Raw materials and supplies $ 3,833 $ 3,547 $ 3,898 Work in process 10,263 9,120 9,292 Finished machines and parts 22,182 24,770 28,539 ------- ------- ------- Total current cost value 36,278 37,437 41,729 Adjustment to LIFO basis (18,795) (18,795) (18,873) ------- ------- -------- $17,483 $18,642 $22,856 ======= ======= ======== MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION Results of Operations Three Months Ended March 29, 1997 Compared to Three Months Ended March 30, 1996 Net sales for the first quarter of 1997 of $43.7 million were $4.5 million, or 12%, higher than the $39.2 million in the comparable period of 1996. Gehl Construction's net sales increased 21% to $20.7 million in the first quarter of 1997 from $17.1 million in the first quarter of 1996. The Gehl Construction increase resulted from continued strong demand for the Company's skid loader, rough-terrain telescopic forklift and paving equipment product lines. Gehl Agriculture sales increased 4% to $23.0 million in the first quarter of 1997 from $22.1 million in the first quarter of 1996. The increase was due primarily to increased shipments of forage harvesting and manure handling equipment. Of the Company's total net sales reported for the first quarter of 1997, $7.6 million were made outside of the United States. Gross profit increased $2.0 million, or 18%, during the first quarter of 1997 versus the comparable period of 1996, due primarily to increased sales volume. Gross profit as a percent of net sales increased to 29.7% for the first quarter of 1997 from 28.1% in the comparable period of 1996. A shift in the mix of product shipments toward the relatively higher margin Gehl Construction products combined with an improvement in the gross profit of Agriculture shipments resulted in the overall Company increase in gross profit as a percent of net sales. Gross profit as a percent of net sales for Gehl Construction did, however, decrease to 30.7% in the first quarter of 1997 from 31.7% in the first quarter of 1996. The primary reasons for the decrease were a shift in mix of product shipments and a competitive pricing environment in which price increases have not kept pace with cost increases. Gross profit as a percent of net sales for Gehl Agriculture increased to 28.8% in the first quarter of 1997 from 25.4% for the first quarter of 1996. The primary reasons for the increase were: 1) reduced product costs due to higher overhead absorption associated with increased levels of production, 2) export sales, typically made at a lower gross margin than domestic sales, constituting a smaller portion of the first quarter shipments in 1997 than in 1996, and 3) the impact of a change in the mix of products shipped in the first quarter of 1997 versus products shipped in comparable 1996. Selling, general and administrative expenses increased $799,000, or 10%, during the first quarter of 1997 versus the comparable period of 1996 due primarily to increased investments in research and development costs and increased selling expenses. As a percent of net sales, selling, general and administrative expenses decreased to 20.2% of net sales during the first quarter of 1997 versus 20.5% in the comparable period of 1996. First quarter 1997 income from operations of $4.2 million was 39% higher than the $3.0 million for the first quarter of 1996. Interest expense decreased $573,000, or 55%, to $468,000 in the first quarter of 1997 from $1,041,000 in the first quarter of 1996. The decrease was a result of a reduction in average debt outstanding to $21.3 million in the first quarter of 1997 versus $50.0 million in the first quarter of 1996. The average rate of interest paid by the Company in the first quarter of 1997 increased slightly to 8.3% from 8.1% for the comparable period of 1996. The decrease in the average debt outstanding was primarily the result of the application of cash generated from reduced accounts receivable and inventory levels and increased shareholders' equity over the past twelve months. Interest income decreased $87,000, or 21%, to $322,000 in the first quarter of 1997 from $409,000 in the comparable period of 1996 due primarily to reduced interest income earned on floor plan wholesale receivables and retail finance receivables during the first quarter of 1997 as compared with the first quarter of 1996. The Company's effective income tax rate was 36% for the first quarter of 1997 versus 17.5% for the first quarter of 1996. Financial Condition The Company's working capital was $62.4 million at March 29, 1997, as compared to $57.6 million at December 31, 1996, and $81.1 million at March 30, 1996. The increase since December 31, 1996 resulted primarily from seasonal increases in accounts receivable. The decrease from March 30, 1996 was due primarily to a reduction in accounts receivable and inventory levels. The Company's first quarter 1997 cash flow used for operating activities was $3.1 million versus $3.2 million used for operating activities in comparable 1996. The first quarter cash flow from operating activities is normally negative due to seasonal increases in accounts receivable. Capital expenditures for property, plant and equipment during the first quarter of 1997 were approximately $1.5 million. The Company plans to make a total of approximately $8.0 million of capital expenditures in 1997, including $4.0 million to expand its two South Dakota manufacturing facilities and add equipment necessary to increase production levels of skid loaders, rough- terrain telescopic forklifts and paving products. Outstanding commitments as of March 29, 1997 totaled approximately $1.7 million, including $1.4 million related to the aforementioned plant expansion projects. As of March 29, 1997, the weighted average interest rate paid by the Company on outstanding borrowings under its line of credit facility was 7.6%. The Company had available unused borrowing capacity of $50.6 million, $45.4 million and $28.9 million under the line of credit facility at March 29, 1997, December 31, 1996, and March 30, 1996, respectively. At March 29, 1997, December 31, 1996, and March 30, 1996, the borrowings outstanding under the line of credit facility were $13.7 million, $10.5 million and $42.4 million, respectively. The sale of finance contracts is an important component of the Company's overall liquidity. The Company has arrangements with several financial institutions and financial service companies to sell, with recourse, its finance contracts receivable. The Company continues to service all contracts whether or not sold. At March 29, 1997, Gehl serviced $60.4 million of such contracts, of which $50.6 million were owned by other parties. The Company believes that it has sufficient capacity to sell its retail finance contracts for the foreseeable future. Shareholders' equity at March 29, 1997 was $67.5 million. This was $10.5 million higher than the $57.0 million of shareholders' equity at March 30, 1996, due primarily to income earned from March 31, 1996 through March 29, 1997. PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibits 10.1 Gehl Company Director Stock Grant Plan 27 Financial Data Schedule [EDGAR version only] (b) Reports on Form 8-K No reports on Form 8-K were filed by the Company during the quarter ended March 29, 1997. SIGNATURES 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. GEHL COMPANY Date: May 12, 1997 By: /s/ William D. Gehl William D. Gehl Chairman, President and Chief Executive Officer Date: May 12, 1997 By: /s/ Kenneth P. Hahn Kenneth P. Hahn Vice President of Finance and Treasurer (Principal Financial and Accounting Officer) GEHL COMPANY FORM 10-Q March 29, 1997 EXHIBIT INDEX Exhibit Number Document Description 10.1 Gehl Company Director Stock Grant Plan 27 Financial Data Schedule [EDGAR version only] EX-10 2 Approved: _________________ __________________________ Michael J. Mulcahy, Secretary GEHL COMPANY DIRECTOR STOCK GRANT PLAN 1.Purpose. The purpose of the Gehl Company Director Stock Grant Plan (the Plan ) is to promote the best interests of the Company and its shareholders by providing a means to attract and retain competent independent directors and to provide opportunities for additional stock ownership by such directors which will further increase their proprietary interest in the Company and, consequently, their identification with the interests with the interests of the Shareholders of the Company. 2.Administration. The Plan shall be administered by the Compensation and Benefits Committee of the Board of Directors of the Company (the "Administrator"), subject to review by the Board of Directors (the "Board"). The Administrator may adopt such rules and regulations for carrying out the Plan as it may deem proper and in the best interests of the Company. The interpretation by the Board of any provision of the Plan or any related documents shall be final. 3.Stock Subject to the Plan. Subject to adjustment in accordance with the provisions of paragraph 7, the total number of shares of common stock, $.10 par value, of the Company ("Common Stock") available for awards under the Plan shall be 25,000. Shares of Common Stock to be delivered under the Plan shall be made available from presently authorized but unissued Common Stock or authorized and issued shares of Comomon Stock reacquired and held as treasury shares, or a combination thereof. In no event shall the Company be required to issue fractional shares of Common Stock under the Plan. Whenever under the terms of the Plan a fractional share of Common Stock would otherwise be required to be issued, there shall be paid in lieu thereof one full share of Common Stock. 4.Director Grants. Each member of the Board who is not an employee of the Company or any subsidiary of the Company shall receive a grant of Common Stock (a Director Grant ) on the 31st day of December of each year in payment of a portion of his or her retainer fee for serving as a member of the Board. 5.Grant Amount. Each Director Grant shall consist of such number of shares of Common Stock whose value on the issue date equals $3,000.00. For purposes of the Plan, the value of the Common Stock as of the issue date shall equal the last sale price of a share of Common Stock on The Nasdaq Stock Market on the issue date (or if no sale took place on such exchange on such date, the last sale price on such exchange on the most recent preceding date on which a sale took place). 6.Restrictions on Transfer. Shares of Common Stock acquired under the Plan may not be sold or otherwise disposed of except pursuant to an effective registration statement under the Securities Act of 1933, as amended, or except in a transaction which, in the opinion of counsel, is exempt from registration under said Act. All certificates evidencing shares subject to Director Grants may bear an appropriate legend evidencing any such transfer restriction. The Administrator may require each person receiving a Director Grant under the Plan to represent in writing that such person is acquiring the shares of Common Stock without a view to the distribution thereof. All dividends and voting rights for shares awarded under the Plan shall accrue as of the issue date of the Director Grant. 7.Adjustment Povisions. In the event of any change in the Common Stock by reason of a declaration of a stock divident (other than a stock dividend declared in lieu of an ordinary cash divident), spin-off, merger, consolidation, recapitalization, or split-up, combination or exchange of shares, or otherwise, the aggregate number of shares available under this Plan shall be appropriately adjusted in order to prevent dilution or enlargement of the benefits intended to be made available under the Plan. 8.Amendment of Plan. The Board shall have the right to amend the Plan at any time or from time to time in any manner that it may deem appropriate, provided that such amendments shall not be made more than once every six months. 9.Governing Law. The Plan, all awards hereunder, and all determinations made and actions taken pursuant to the Plan shall be governed by the internal laws of the State of Wisconsin and applicable federal law. 10.Term of Plan. The Plan shall terminate on such date as may be determined by the Board. Approved at the December 20, 1996 Board Meeting. 12/96 EX-27 3
5 This schedule contains summary financial information extracted from Gehl Company's condensed consolidated balance sheet at March 29, 1997 and condensed consolidated statements of income for the three-month period ended March 29, 1997 and is qualified in its entirety by reference to such financial statements. 1000 3-MOS DEC-31-1997 JAN-1-1997 MAR-29-1997 3137 0 70183 0 17483 97659 58511 36024 129258 35257 22414 619 0 0 66928 129258 43675 43675 30692 30692 0 0 468 3952 1423 2529 0 0 0 2529 .39 0 Company presents receivables on a net basis in compliance with Article 10 of Regulation S-X. Includes all non-current portion of debt obligations Not reported
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