-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, J0aejsXYIdkBMjjHCkJBMKNGFFJsLvnU+fVSRwTlv6I0Ew2AJ+VVGxyNd79N6ssR ht3+xb2qOhvqdz3zO/mySw== 0000856386-95-000026.txt : 19950427 0000856386-95-000026.hdr.sgml : 19950427 ACCESSION NUMBER: 0000856386-95-000026 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950401 FILED AS OF DATE: 19950426 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: 95531486 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 10Q-GEHL COMPANY 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 April 1, 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 0-18110 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 April 1, 1995 Common Stock, $.10 Par Value 6,171,189 GEHL COMPANY FORM 10-Q April 1, 1995 REPORT INDEX Page No. PART I. - FINANCIAL INFORMATION: Condensed Consolidated Statements of Income for the Three-Month Periods Ended April 1, 1995 and April 2, 1994 . . . . . . . . . . . . . . . . . . . 3 Condensed Consolidated Balance Sheets at April 1, 1995, December 31, 1994, and April 2, 1994 . . . . . . . . 4 Condensed Consolidated Statements of Cash Flows for the Three-Month Periods Ended April 1, 1995 and April 2, 1994 . . . . . . . . . . . . . . . . . . . 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 . . . . . . . . . . . . . . . . . . . . . . . . 11 PART I - FINANCIAL INFORMATION GEHL COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share data; unaudited)
Three Months Ended April 1, April 2, 1995 1994 NET SALES $ 38,268 $ 34,242 Cost of goods sold 27,588 24,549 -------- -------- GROSS PROFIT 10,680 9,693 Selling, general and administrative expenses 7,622 7,934 -------- -------- INCOME FROM OPERATIONS 3,058 1,759 Interest expense (1,516) (1,753) Interest income 463 328 Other expense, net (167) (559) --------- --------- INCOME (LOSS) BEFORE INCOME TAXES 1,838 (225) Income tax provision 25 37 -------- --------- NET INCOME (LOSS) $ 1,813 $ (262) ======== ========== EARNINGS (LOSS) PER SHARE $ .29 $ (.04)
The accompanying notes are an integral part of the financial statements. GEHL COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands)
April 1, December 31, April 2, 1995 1994 1994 ASSETS (Unaudited) (Unaudited) Cash $ 4,107 $ 2,570 $ 2,274 Accounts receivable-net 78,372 72,393 86,992 Finance contracts receivable-net 5,190 3,389 5,671 Inventories 22,898 21,452 24,146 Prepaid expenses and other assets 2,590 2,817 2,050 -------- -------- -------- Total Current Assets 113,157 102,621 121,133 -------- -------- -------- Property, plant and equipment-net 20,036 20,433 19,359 Finance contracts receivable-net, non-current 3,081 2,258 3,284 Other assets 5,643 5,715 6,941 --------- -------- -------- TOTAL ASSETS $141,917 $131,027 $150,717 ========= ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Current portion of long-term debt obligations $ 179 $ 180 $ 787 Accounts payable 14,377 14,477 15,320 Accrued liabilities 14,153 14,053 14,373 ------- -------- -------- Total Current Liabilities 28,709 28,710 30,480 ------- -------- -------- Line of credit facility 54,988 45,879 60,749 Long-term debt obligations 8,766 8,821 17,947 Other long-term liabilities 1,306 1,334 831 ------- -------- -------- Total Long-Term Liabilities 65,060 56,034 79,527 ------- -------- -------- Common stock, $.10 par value, 25,000,000 shares authorized, 6,171,189, 6,169,523 and 6,141,441 shares outstanding, respectively 617 617 614 Preferred stock, $.10 par value, 2,000,000 shares authorized, no shares issued - - - Capital in excess of par 26,185 26,133 25,896 Retained earnings 21,346 19,533 14,200 ------- -------- -------- Total Shareholders' Equity 48,148 46,283 40,710 ------- -------- -------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $141,917 $ 131,027 $150,717 ======== ========= ========
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 April 1, April 2, 1995 1994 CASH FLOWS FROM OPERATING ACTIVITIES: Net Income (Loss) $ 1,813 $ (262) Adjustments to reconcile net income (loss) to net cash (used for) provided by operating activities: Depreciation and amortization 718 957 Increase in finance contracts receivable (7,692) (6,136) Proceeds from sales of finance contracts 4,889 3,763 Cost of sales of finance contracts 123 67 Net changes in remaining working capital items (7,311) (4,570) Other 50 77 ---------- -------- Net cash (used for) provided by operating activities (7,410) (6,104) ---------- -------- CASH FLOWS FROM INVESTING ACTIVITIES: Property, plant and equipment additions, net (234) 52 Other assets 155 160 ---------- -------- Net cash (used for) provided by investing activities (79) 212 ---------- -------- CASH FLOWS FROM FINANCING ACTIVITIES: Decrease in long-term debt obligations (55) (95) Increase (decrease) in long-term liabilities (28) 33 Proceeds from line of credit facility 9,109 6,770 ---------- -------- Net cash provided by financing activities 9,026 6,708 ---------- -------- Net increase in cash 1,537 816 Cash, beginning of period 2,570 1,458 --------- -------- Cash, end of period $ 4,107 $ 2,274 ========= ========= Supplemental disclosure of cash flow information: Cash paid for the following: Interest $ 1,393 $ 1,390 Income Taxes $ 939 $ 39
The accompanying notes are an integral part of the financial statements. GEHL COMPANY AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS April 1, 1995 (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 April 1, 1995 and April 2, 1994 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. The results of operations for the three months ended April 1, 1995 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, 1994 as filed with the Securities and Exchange Commission. NOTE 2 - EARNINGS PER SHARE Earnings per share is computed by dividing net income (loss) by the weighted average number of common shares 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 6,202,996 and 6,135,067 for the three months ended April 1, 1995 and April 2, 1994, respectively. NOTE 3 - INCOME TAXES The income tax provision is determined by applying an estimated annual effective income tax rate to income (loss) before income taxes. The estimated annual effective income tax rate is based on the most recent annualized forecast of pretax income (loss), 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): April 1, December 31, 1995 1994 Raw materials and supplies $ 3,803 $ 3,711 Work-in-process 9,830 10,252 Finished machines and parts 26,122 24,346 ------- ------- Total current cost value 39,755 38,309 Adjustment to LIFO basis (16,857) (16,857) ------- ------- $22,898 $21,452 ======= ======= NOTE 5 - CONTINGENCIES The Company has received informal notification from the City of West Bend, Wisconsin that it may have some financial responsibility with respect to the closure of a landfill site used by the City of West Bend from the mid-1960's through 1984. The amount of the Company's potential financial obligation, if any, is not presently determinable. The City of West Bend is currently taking remedial action with respect to the landfill site. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION Results of Operations Three Months Ended April 1, 1995 Compared to Three Months Ended April 2, 1994 Net sales for the first quarter of 1995 of $38.3 million were $4.1 million, or 12%, higher than the $34.2 million in the comparable period of 1994. Gehl Agriculture sales increased 3% to $24.3 million in the first quarter of 1995 from $23.6 million in the first quarter of 1994. Gehl Construction's net sales increased 32% to $14.0 million in the first quarter of 1995 from $10.6 million in the first quarter of 1994. The Gehl Construction increase resulted from strong demand for the Company's products, particularly for skid steer loaders and rough-terrain telescoping boom forklifts. Gross profit increased $987,000, or 10%, during the first quarter of 1995 versus the comparable period of 1994, primarily due to increased sales volume. Gross profit as a percent of net sales decreased to 27.9% for the first quarter of 1995 from 28.3% in the comparable period of 1994, due primarily to a change in the product mix of shipments. Gross profit as a percent of net sales for Gehl Agriculture decreased to 25.3% for the first quarter of 1995 from 28.9% in the first quarter of 1994. The primary reason for the lower percentage was the impact of a change in the mix of products shipped in the first quarter of 1995 versus products shipped in comparable 1994. The change in mix included a heavier emphasis on shipments of certain discontinued products at little or no gross profit and a higher level of 1995 shipments of certain products where cost increases incurred by the Company exceeded price increases over the past twelve months. Gross profit as a percent of net sales for Gehl Construction increased to 32.4% in the first quarter of 1995 from 27.0% in the first quarter of 1994. The primary reasons for the percentage improvement were: 1) the impact of a change in the mix of products shipped in the first quarter of 1995 versus products shipped in comparable 1994, 2) the percentage of export sales, typically made at a lower gross margin than domestic sales, constituting a smaller portion of first quarter sales in 1995 than in 1994, 3) the full impact of lowering the overall cost structure of Gehl Construction as a result of the first quarter 1994 transfer of paving products production to the Yankton, South Dakota plant from the Lithonia, Georgia plant, which was closed in January, 1994, and 4) certain economies of scale associated with the increased level of production at the plants manufacturing construction equipment. Selling, general and administrative expenses decreased $312,000, or 4%, during the first quarter of 1995 versus the comparable period of 1994. The decrease related primarily to reductions from 1994 first quarter expense levels associated with allowance for doubtful accounts and product liability costs, offset, in part, by increased sales promotion costs. As a percent of net sales, selling, general and administrative expenses decreased to 19.9% during the first quarter of 1995 versus 23.2% in the comparable period of 1994. Income from operations in the first quarter of 1995 was $3.1 million versus $1.8 million in the first quarter of 1994. The improvement was due primarily to increased sales volume and a reduction in selling, general and administrative expenses from 1994 levels. Interest expense decreased $237,000, or 14%, to $1.52 million in the first quarter of 1995 from $1.75 million in the first quarter of 1994. The decrease was a result of a decrease in average debt outstanding to $59.6 million in the first quarter of 1995 versus $75.7 million in the first quarter of 1994 offset, in part, by an increase in the average rate of interest paid by the Company. The average interest rate paid rose to 9.8% in the first quarter of 1995 from 9.1% in the first quarter of 1994, due to increases in the prime rate which serves as the base for the Company's interest rate under its line of credit facility. The rate increase was partially offset by the impact of a decrease in the mark-up over the prime rate on the Company's loans under its line of credit facility, which decrease was effective October 1994. Other expense, net was $167,000 in the first quarter of 1995 versus $559,000 in the comparable period of 1994. The decrease resulted, in part, from the quarterly revaluation of certain previous sales of finance contracts made under variable interest rate arrangements. Lower U.S. Treasury bill rates at April 1, 1995 than at December 31, 1994, resulted in $15,000 of income from this year's first quarter revaluation. The quarterly revaluation one year ago at April 2, 1994 had resulted in $222,000 of expense. The remainder of the decrease in other expense, net is a result of Canadian foreign exchange income of $8,000 recorded in the first quarter of 1995 versus Canadian foreign exchange losses of $150,000 incurred in the first quarter of 1994. Under generally accepted accounting principles, the Company was not required to record a federal income tax provision related to its 1995 first quarter operating income due to the existence of net operating loss carryforwards, nor was the Company permitted to record a deferred tax benefit related to its 1994 first quarter net operating loss. Financial Condition The Company's working capital was $84.4 million at April 1, 1995, as compared to $73.9 million at December 31, 1994, and $90.7 million at April 2, 1994. The increase since December 31, 1994 resulted primarily from seasonal increases in accounts receivable, finance contracts receivables and inventories financed with borrowings under the Company's line of credit facility. The decrease from April 2, 1994 primarily relates to a reduction in accounts receivable. The Company's first quarter 1995 cash flow used for operating activities was $7.4 million versus $6.1 million used for operating activities in comparable 1994. The first quarter cash flow from operating activities is normally negative due to seasonal increases in accounts receivables and inventories. The Company currently anticipates that cash flow from operations will be positive for the remaining quarters of 1995, as was the case in 1994. Capital expenditures for property, plant and equipment during the first quarter of 1995 were approximately $234,000. Outstanding commitments as of April 1, 1995 totaled approximately $266,000. The Company plans to make approximately $3.5 million of capital expenditures during 1995. As of April 1, 1995, the weighted average interest rate paid by the Company on outstanding borrowings under its line of credit facility was 9.7%. The Company had available unused borrowing capacity of $18.0 million, $19.2 million and $12.7 million under the line of credit facility at April 1, 1995, December 31, 1994, and April 2, 1994, respectively. At April 1, 1995, December 31, 1994, and April 2, 1994, the borrowings outstanding under the line of credit facility were $55.0 million, $45.9 million and $60.7 million, respectively. The sale of finance contracts is an important component of the Company's overall liquidity. Gehl 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 April 1, 1995, Gehl serviced $56.9 million of such contracts, of which $48.1 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 April 1, 1995 was $48.1 million. This was $7.4 million higher than the $40.7 million of shareholders' equity at April 2, 1994, due primarily to income earned from April 3, 1994 through April 1, 1995. PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibits 3.1 Amendment to Gehl Company By-laws, dated February 24, 1995 [Incorporated by reference to Exhibit 3.2 to the Company's Annual Report on Form 10-K for the year ended December 31, 1994] 3.2 By-laws of Gehl Company, as amended [Incorporated by reference to Exhibit 3.3 to the Company's Annual Report on Form 10-K for the year ended December 31, 1994] 10.1 Supplemental Retirement Benefit Agreement by and between William D. Gehl and Gehl Company, as amended [Incorporated by reference to Exhibit 10.4 to the Company's Annual Report on Form 10-K for the year ended December 31, 1994] 10.2 Supplemental Retirement Benefit Agreement by and between Victor A. Mancinelli and Gehl Company, as amended [Incorporated by reference to Exhibit 10.5 to the Company's Annual Report on Form 10-K for the year ended December 31, 1994] 27 Financial Data Schedule (b) Reports on Form 8-K No reports on Form 8-K were filed by the Company during the quarter ended April 1, 1995. 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: April 26, 1995 By: /s/ William D. Gehl William D. Gehl President and Chief Executive Officer Date: April 26, 1995 By: /s/ Kenneth F. Kaplan Kenneth F. Kaplan Vice President of Finance and Treasurer (Chief Financial and Accounting Officer) EX-27 2
5 This schedule contains summary financial information extracted from Gehl Company's consolidated balance sheet at April 1, 1995 and consolidated statements of income for the three month period ended April 1, 1995 and is qualified in its entirety by reference to such financial statements. 1000 3-MOS DEC-31-1995 JAN-1-1995 APR-1-1995 4107 0 83562 0 22898 113157 51706 31670 141917 28709 63754 617 0 0 47531 141917 38268 38268 27588 27588 0 0 1516 1838 25 1813 0 0 0 1813 .29 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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