0000856386-95-000028.txt : 19950802 0000856386-95-000028.hdr.sgml : 19950802 ACCESSION NUMBER: 0000856386-95-000028 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19950701 FILED AS OF DATE: 19950801 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: 95557921 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 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 July 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 July 1, 1995 Common Stock, $.10 Par Value 6,181,518 GEHL COMPANY FORM 10-Q July 1, 1995 REPORT INDEX Page No. PART I. - FINANCIAL INFORMATION: Condensed Consolidated Statements of Income for the Three- and Six-Month Periods Ended July 1, 1995 and July 2, 1994 . . . . . . . . . . . . . . . . . . . . . . . . . 3 Condensed Consolidated Balance Sheets at July 1, 1995, December 31, 1994, and July 2, 1994 . . . . . . . . . . . . . . . 4 Condensed Consolidated Statements of Cash Flows for the Six-Month Periods Ended July 1, 1995 and July 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 4. Submission of Matters to a Vote of Security Holders . . . 12 Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . 12 SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 PART I - FINANCIAL INFORMATION GEHL COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share data; unaudited)
Three Months Six Months Ended Ended July 1, July 2, July 1, July 2, 1995 1994 1995 1994 NET SALES $42,730 $41,916 $80,998 $76,158 Cost of goods sold 30,033 29,062 57,621 53,611 ------- -------- ------- -------- GROSS PROFIT 12,697 12,854 23,377 22,547 Selling, general and administrative expenses 7,837 9,143 15,459 17,077 ------- -------- ------- -------- INCOME FROM OPERATIONS 4,860 3,711 7,918 5,470 Interest expense (1,672) (1,890) (3,188) (3,643) Interest income 477 529 947 857 Other (expense) income, net (42) (557) (216) (1,116) -------- -------- ------- -------- INCOME BEFORE INCOME TAXES 3,623 1,793 5,461 1,568 Income tax provision 25 38 50 75 ------- -------- ------- -------- NET INCOME $3,598 $1,755 $5,411 $1,493 ======= ======== ======= ======== EARNINGS PER SHARE $.58 $.28 $.87 $.24
The accompanying notes are an integral part of the financial statements GEHL COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands)
July 1, December 31, July 2, 1995 1994 1994 ASSETS (Unaudited) (Unaudited) Cash $ 5,542 $ 2,570 $ 4,566 Accounts receivable-net 78,373 72,393 81,885 Finance contracts receivable-net 6,229 3,389 5,707 Inventories 21,678 21,452 21,239 Prepaid expenses and other assets 3,541 2,817 1,609 ---------- ----------- ---------- Total Current Assets 115,363 102,621 115,006 ---------- ----------- ---------- Property, plant and equipment-net 19,877 20,433 20,843 Finance contracts receivable-net, 3,665 2,258 3,259 non-current Other assets 5,570 5,715 6,398 ---------- ----------- ---------- TOTAL ASSETS $ 144,475 $ 131,027 $ 145,506 ========== =========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY Current portion of long-term debt $ 173 $ 180 $1,114 obligations Accounts payable 14,875 14,477 14,589 Accrued liabilities 14,938 14,053 15,869 ---------- ----------- ---------- Total Current Liabilities 29,986 28,710 31,572 ---------- ----------- ---------- Line of credit facility 52,529 45,879 52,300 Long-term debt obligations 8,724 8,821 18,016 Other long-term liabilities 1,393 1,334 1,107 ---------- ----------- ---------- Total Long-Term Liabilities 62,646 56,034 71,423 ---------- ----------- --------- Common stock, $.10 par value, 25,000,000 shares authorized, 6,181,518, 6,169,523 and 6,142,691 shares outstanding, respectively 618 617 614 Preferred stock, $.10 par value, 2,000,000 shares authorized, no shares issued - - - Capital in excess of par 26,281 26,133 25,942 Retained earnings 24,944 19,533 15,955 ---------- ----------- ---------- Total Shareholders' Equity 51,843 46,283 42,511 ---------- ----------- ---------- TOTAL LIABILITIES AND SHAREHOLDERS' $ 144,475 $ 131,027 $ 145,506 EQUITY ========== =========== ==========
The accompanying notes are an integral part of the financial statements. GEHL COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands; unaudited)
Six Months Ended July 1, July 2, 1995 1994 CASH FLOWS FROM OPERATING ACTIVITIES: Net Income $5,411 $1,493 Adjustments to reconcile net income to net cash (used for) provided by operating activities: Depreciation and amortization 1,412 1,898 Increase in finance contracts receivable (17,906) (16,785) Proceeds from sales of finance contracts 13,152 13,727 Cost of sales of finance contracts 199 389 Net changes in remaining working capital (5,660) 4,620 items Other 91 183 --------- -------- Net cash (used for) provided by operating (3,301) 5,525 activities --------- -------- CASH FLOWS FROM INVESTING ACTIVITIES: Property, plant and equipment additions, net (709) (1,525) Other assets 312 177 --------- -------- Net cash used for investing activities (397) (1,348) --------- -------- CASH FLOWS FROM FINANCING ACTIVITIES: Increase (decrease) in long-term debt (97) 301 obligations Increase (decrease) in long-term liabilities 59 309 Proceeds from (repayments of) credit facility 6,650 (1,679) Proceeds from issuance of common stock 58 - --------- -------- Net cash provided by (used for) financing 6,670 (1,069) activities --------- -------- Net increase in cash 2,972 3,108 Cash, beginning of period 2,570 1,458 --------- -------- Cash, end of period $5,542 $4,566 ========= ======== Supplemental disclosure of cash flow information: Cash paid for the following: Interest $3,059 $ 2,903 Income Taxes $1,704 $ 33
The accompanying notes are an integral part of the financial statements. GEHL COMPANY AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS July 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 and six month periods ended July 1, 1995 and July 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 six months ended July 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 by the weighted average number of common stock 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 6,255,959 and 6,170,707 for the three months ended July 1, 1995 and July 2, 1994, respectively, and 6,229,478 and 6,170,346 for the six months ended July 1, 1995 and July 2, 1994, respectively. 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 of net operating losses. 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): July 1, December 31, 1995 1994 ----------- ----------- Raw materials and supplies $ 3,516 $ 3,711 Work-in-process 8,658 10,252 Finished machines and parts 26,361 24,346 ---------- ---------- Total current cost value 38,535 38,309 Adjustment to LIFO basis (16,857) (16,857) ---------- ---------- $ 21,678 $ 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 July 1, 1995 Compared to Three Months Ended July 2, 1994 Net sales for the second quarter of 1995 of $42.7 million were $814,000, or 2%, higher than the $41.9 million in the comparable period of 1994. Gehl Agriculture sales decreased 4% to $26.4 million in the second quarter of 1995 from $27.4 million in the second quarter of 1994. This decrease is reflective of the Company's overall strategy to further reduce equipment inventory at agricultural dealers and reflects market conditions slightly less strong than in comparable 1994. Gehl Construction's net sales increased 13% to $16.3 million in the second quarter of 1995 from $14.5 million in the second quarter of 1994. The Gehl Construction increase primarily resulted from strong demand for the Company's rough-terrain telescoping boom forklift and service parts. Gross profit decreased $157,000, or 1%, during the second quarter of 1995 versus the comparable period of 1994, primarily due to a change in the product mix of shipments. Gross profit as a percent of net sales decreased to 29.7% for the second quarter of 1995 from 30.7% in the comparable period of 1994. Gross profit as a percent of net sales for Gehl Agriculture decreased to 27.9% for the second quarter of 1995 from 31.2% in the second quarter of 1994. The primary reasons for the lower percentage were the impact of a change in the mix of products shipped in the second quarter of 1995 versus products shipped in comparable 1994 and the percentage of export sales, typically made at a lower gross margin than domestic sales, constituting a higher portion of second quarter sales in 1995 than in 1994. The change in mix included a heavier emphasis on shipments of certain products where vendor cost increases incurred by the Company exceeded price increases to the Company's customers over the past twelve months. Gross profit as a percent of net sales for Gehl Construction increased to 32.7% in the second quarter of 1995 from 29.7% in the second 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 second 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 second 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 $1.3 million, or 14%, during the second quarter of 1995 versus the comparable period of 1994. The decrease related primarily to reductions from 1994 second quarter expense levels associated with allowance for doubtful accounts and product liability costs. As a percent of net sales, selling, general and administrative expenses decreased to 18.3% during the second quarter of 1995 versus 21.8% in the comparable period of 1994. Income from operations in the second quarter of 1995 was $4.9 million versus $3.7 million in the second quarter of 1994. The improvement was due primarily to a reduction in selling, general and administrative expenses from 1994 levels. Interest expense decreased $218,000, or 12%, to $1.7 million in the second quarter of 1995 from $1.9 million in the second quarter of 1994. The decrease was a result of a decrease in average debt outstanding to $64.6 million in the second quarter of 1995 versus $76.7 million in the second quarter of 1994. The impact of the decrease in average debt outstanding was offset, in part, by an increase in the average rate of interest paid by the Company. The average interest rate paid rose to 10.2% in the second quarter of 1995 from 9.6% in the second 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 in October 1994. Other expense, net was $42,000 in the second quarter of 1995 versus $557,000 in the comparable period of 1994. The decrease in expense was primarily due to a reduction in the costs of selling finance contracts and from the quarterly revaluation of certain previous sales of finance contracts made under variable interest rate arrangements, resulting in income in the second quarter of 1995 versus expense in 1994's second quarter. Under generally accepted accounting principles, the Company was not required to record a federal income tax provision related to either its 1995 or 1994 second quarter operating income due to the existence of net operating loss carryforwards. Six Months Ended July 1, 1995 Compared to Six Months Ended July 2, 1994 Net sales for the first six months of 1995 of $81.0 million were $4.8 million, or 6%, higher than the $76.2 million in the comparable period of 1994. Gehl Agriculture's net sales decreased slightly to $50.7 million in the first six months of 1995 from $51.1 million in the first six months of 1994. Gehl Construction's net sales increased 21% to $30.3 million in the first six months of 1995 from $25.1 million in the first six months of 1994. The Gehl Construction increase resulted from strong demand for the Company's products, particularly for skid steer loaders, rough-terrain telescoping boom forklifts and service parts. Gross profit increased $830,000, or 4%, during the first six months of 1995 versus the comparable period of 1994, primarily due to the increased sales volume. Gross profit as a percent of net sales decreased to 28.9% for the first six months of 1995 from 29.6% 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 26.7% for the first six months of 1995 from 30.1% in the comparable period of 1994. The primary reason for the lower percentage was the impact of a change in the mix of products shipped in the first six months of 1995 versus products shipped in comparable 1994. The change in mix included a higher level of 1995 shipments of certain products where cost increases incurred by the Company exceeded price increases over the past twelve months and a heavier emphasis on shipments of certain discontinued products at little or no gross profit. Gross profit as a percent of net sales for Gehl Construction increased to 32.6% in the first six months of 1995 from 28.6% in the first six months 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 six months 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 the first six months 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 $1.6 million, or 9%, during the first six months of 1995 versus the comparable period of 1994. The decrease related primarily to reductions, from 1994 first six month 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 19.1% during the first six months of 1995 versus 22.4% in the comparable period of 1994. Income from operations in the first six months of 1995 was $7.9 million versus $5.5 million in the comparable period of 1994. The improvement was due primarily to a reduction in selling, general and administrative expenses and increased sales volume from 1994 levels. Interest expense decreased $455,000, or 12%, to $3.2 million in the first six months of 1995 from $3.6 million in the first six months of 1994. The decrease was a result of a decrease in average debt outstanding to $61.9 million in the first six months of 1995 versus $75.7 million in the comparable period 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 10.1% for the first six months of 1995 from 9.4% in the first six months 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 in October 1994. Other expense, net was $216,000 in the first six months of 1995 versus $1.1 million in the comparable period of 1994. The decrease in expense 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 July 1, 1995 than at December 31, 1994, resulted in $73,000 of income from revaluations performed in the first six months of 1995. The quarterly revaluations performed during the first six months of 1994 had resulted in $420,000 of expense. The decrease in other expense, net was also the result of a $190,000 reduction in costs of selling finance contracts. The remainder of the decrease in other expense, net was the result of Canadian foreign exchange income of $39,000 recorded in the first six months of 1995 versus Canadian foreign exchange losses of $143,000 occurring in the comparable period of 1994. Under generally accepted accounting principles, the Company was not required to record a federal income tax provision related to the net operating income recorded in the first six months of either 1995 or 1994 due to the existence of net operating loss carryforwards. Financial Condition The Company's working capital was $85.4 million at July 1, 1995, as compared to $73.9 million at December 31, 1994, and $83.4 million at July 2, 1994. The increase since December 31, 1994 resulted primarily from seasonal increases in accounts receivable and finance contracts receivable financed with borrowings under the Company's line of credit facility. The Company's cash flow used for operating activities in the first six months of 1995 was $3.3 million versus $5.5 million provided by operating activities in comparable 1994. The second quarter 1995 cash flow provided by operations was $4.1 million as compared to 1994's second quarter of $11.6 million provided by operations. The 1995 second quarter and six month cash flow decreases from 1994 were due primarily to lower year-to-year reductions of accounts receivable, as the levels of accounts receivable have been reduced to more appropriate levels. Capital expenditures for property, plant and equipment during the first six months of 1995 were approximately $709,000. Outstanding commitments as of July 1, 1995 totaled approximately $517,000. The Company expects to make approximately $3.0 million of capital expenditures during 1995. As of July 1, 1995, the weighted average interest rate paid by the Company on outstanding borrowings under its line of credit facility was 9.6%. The Company had available unused borrowing capacity of $20.2 million, $19.2 million, and $18.1 million under the line of credit facility at July 1, 1995, December 31, 1994, and July 2, 1994, respectively. At July 1, 1995, December 31, 1994, and July 2, 1994, the borrowings outstanding under the line of credit facility were $52.5 million, $45.9 million and $52.3 million, respectively. Total long-term debt outstanding was $61.4 million at July 1, 1995, a $10.0 million, or 14%, reduction from $71.4 million at July 2, 1994. 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 July 1, 1995, Gehl serviced $58.3 million of such contracts, of which $47.8 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 July 1, 1995 was $51.8 million. This was $9.3 million higher than the $42.5 million of shareholders' equity at July 2, 1994, due primarily to income earned from July 3, 1994 through July 1, 1995. PART II - OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders. At the Company's annual meeting of shareholders held on April 27, 1995, Fred M. Butler, William D. Gehl and John W. Splude were elected as directors of the Company for terms expiring in 1998. The following table sets forth certain information with respect to the election of directors at the annual meeting: Shares Withholding Name of Nominee Shares Voted For Authority Fred M. Butler 5,146,179 44,660 William D. Gehl 5,141,611 49,228 John W. Splude 5,145,954 44,885 The following table sets forth the other directors of the Company whose terms of office continued after the 1995 annual meeting: Year in Which Name of Director Term Expires Roger E. Secrist 1996 Richard G. Sim 1996 John W. Findley 1997 John W. Gehl 1997 Arthur W. Nesbitt 1997 Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits 4.1 First Amendment to Amended and Restated Loan and Security Agreement by and between Deutsche Financial Services (formerly known as ITT Commercial Finance Corp.) and Gehl Company and its subsidiaries, dated May 10, 1995 27 Financial Data Schedule [included in the EDGAR filing only] (b) Reports on Form 8-K No reports on Form 8-K were filed by the Company during the quarter ended July 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: July 31, 1995 By: /s/ William D. Gehl William D. Gehl President and Chief Executive Officer Date: July 31, 1995 By: /s/ Kenneth F.Kaplan Kenneth F. Kaplan Vice President of Finance and Treasurer (Chief Financial and Accounting Officer) GEHL COMPANY FORM 10-Q July 1, 1995 EXHIBIT INDEX Exhibit No. Document Description 4.1 First Amendment to Amended and Restated Loan and Security Agreement by and between Deutsche Financial Services (formerly known as ITT Commercial Finance Corp.) and Gehl Company and its subsidiaries, dated May 10, 1995. 27 Financial Data Schedule [included in the EDGAR filing only] EX-4 2 EXHIBIT 4.1 GEHL COMPANY FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT This Amendment is made to that certain Amended and Restated Loan and Security Agreement between Gehl Company and its subsidiaries/divisions including but not limited to Hedlund Martin, Inc. and Gehl Power Products, Inc. (individually and collectively, "Gehl Company") and Deutsche Financial Services Corporation (formerly known as ITT Commercial Finance Corp.) ("DFS") dated as of October 1, 1994, as amended ("Agreement"). FOR VALUE RECEIVED, DFS and Gehl Company agree as follows: 1. All references in the Agreement to "ITT: will be deemed to be references to "DFS". 2. Section 2.1(a) of the Agreement is hereby restated in its entirety to read as follows: "(a) `Maximum Line of Credit': In consideration of Gehl Company's performance of its Obligations and subject to Sections 3 and 4, DFS grants to Gehl Company separate lines of credit of (a) SIXTY- EIGHT MILLION FIVE HUNDRED THOUSAND UNITED STATES DOLLARS ($68,500,000.00 U.S.) (the `U.S. Line'), and (b) that fluctuating amount of Canadian Dollars which, from day-to-day, shall equal, based on the daily noon spot exchange rate of the Royal Bank of Canada (the `Exchange Rate') SIX MILLION FIVE HUNDRED THOUSAND UNITED STATES DOLLARS ($6,500,000.00 U.S.) (the `Canadian line') for the period commencing on the execution of this Agreement until December 31, 1997. Such lines of credit are collectively called the `Maximum Line of Credit'; loans under the U.S. Line are called `U.S. Loans'; and loans under the Canadian Line are called `Canadian Loans'. U.S. Loans shall be repayable only in United States Dollars and Canadian Loans shall be repayable only in Canadian Dollars. Gehl Company agrees that for purposes of determining loan availability and over-advance positions, all outstanding Canadian Loans shall be valued daily, at the then current Exchange Rate (for example: if on January 1, Gehl Company borrowed $8,500,000 Canadian which at the time was equivalent to $6,500,000 U.S., and on January 3, the Exchange Rate changed such that $8,500,000 Canadian was then valued at $7,000,000 U.S., Gehl Company will be deemed over-advanced by $500,000). Any over-advance will be immediately repayable by Gehl Company upon demand by DFS. In determining credit available at any given time for U.S. Loans pursuant to the provisions of Sections 3.2 and 4.2 or Canadian Loans pursuant to the provisions of Section 3.2, Canadian Loans may be made only with respect to Eligible Accounts arising from sales payable in Canadian Dollars, and U.S. Loans may be made only with respect to Eligible Accounts, including, but not limited to, Eligible Retail Accounts, arising from sale payable in United States dollars and Eligible Inventory. Gehl Company agrees that all reports, agings, records and other information provided by it pursuant to this Agreement, including without limitation, those provided pursuant to Section 3.1, shall, in form and detail reasonably satisfactory to DFS, separately identify Gehl Company's Accounts payable in Canadian Dollars from those payable in United States Dollars." 3. Section 2.1(b) of the Agreement is hereby restated in its entirety to read as follows: "(b) Supplemental Line of Credit. DFS grants to Gehl Company a Supplemental Line of Credit in an amount not to exceed Twenty Five Million Dollars ($25,000,000.00) of the U.S. Line." 4. The first sentence of Section 2.3 of the Agreement is hereby restated in its entirety to read as follows: "Gehl Company acknowledges that DFS may, in its sole discretion, make any Canadian Loan by causing its Canadian affiliate, Deutsche Financial Services Canada Corporation, or any other affiliate of DFS ("DFS Canada") to fund or make advances of such loans on DFS' behalf, or to make or continue such Canadian Loans directly." All references in the Agreement to "ITT Canada" will be deemed to be references to "DFS Canada". 5. Section 4.2 of the Agreement is hereby restated in its entirety to read as follows: "4.2 Available Credit. On receipt of each Inventory Schedule and Retail Account Schedule, DFS will credit Gehl Company at the following percentages of the net amount of the Eligible Inventory and Eligible Retail Accounts, respectively, listed in such Schedule: Finished Goods 75% Service Parts 25% Eligible Retail Accounts (except Eligible Repurchased Retail Accounts) 75% Eligible Repurchased Retail Accounts 50% DFS will loan Gehl Company, on request, such amounts so credited or a part thereof as provided by the terms of Section 2.1 and this section; provided, however, that (i) the outstanding principal balance of all advances or loans made on Eligible Repurchased Retail Accounts will at no time exceed One Million Dollars ($1,000,000.00), (ii) the aggregate outstanding principal balance of all advances or loans made on Finished Goods and Service Parts will at no time exceed Fourteen Million Dollars ($14,000,000.00), and (iii) the outstanding principal balance of all advances or loans made on Eligible Retail Accounts (except Eligible Repurchased Retail Accounts) will at no time exceed Ten Million Dollars ($10,000,000.00). No advances or loans need be made by DFS if Gehl Company is in Default." 6. All other terms and provisions of the Agreement, to the extent not inconsistent with the foregoing, are ratified and remain unchanged and in full force and effect. IN WITNESS WHEREOF, Gehl Company and DFS have executed this Amendment on this 10th day of May, 1995. GEHL COMPANY ATTEST: M. Mulcahy/s/ By: K.F. Kaplan/s/ Secretary Title: Vice President HEDLUND MARTIN, INC. ATTEST: M. Mulcahy/s/ By: K.F. Kaplan/s/ Secretary Title: Treasurer GEHL POWER PRODUCTS, INC. ATTEST: M. Mulcahy/s/ By: K.F. Kaplan/s/ Secretary Title: Treasurer DEUTSCHE FINANCIAL SERVICES CORPORATION By: Thomas R. Meredith/s/ Title: Regional Vice President EX-27 3 EXHIBIT 27 GEHL COMPANY
5 This schedule contains summary financial information extracted from Gehl Company's consolidated balance sheet at July 1, 1995 and consolidated statements of income for the six month period ended July 1, 1995 and is qualified in its entirety by reference to such financial statements. 1000 6-MOS DEC-31-1995 JAN-1-1995 JUL-1-1995 5542 0 84602 0 21678 115363 52157 32280 144475 29986 61253 618 0 0 51225 144475 80998 80998 57621 57621 0 0 3188 5461 50 5411 0 0 0 5411 .87 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