10-Q

FORM 10-Q

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended June 26, 2004

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

Wisconsin	39-0300430
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
143 Water Street, West Bend, WI	53095
(Address of principal executive offices)	(Zip Code)

(262) 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 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 by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).     Yes                No     X   

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 June 26, 2004
Common Stock, $.10 Par Value	5,482,018

Gehl Company

FORM 10-Q

June 26, 2004

Report Index

			Page No.
PART  I.	Financial Information
	Item 1.	Financial Statements
		Condensed Consolidated Statements of Income for the Three- and
		Six-month Periods Ended June 26, 2004 and
		June 28, 2003	3
		Condensed Consolidated Balance Sheets at June 26, 2004,
		December 31, 2003, and June 28, 2003	4
		Condensed Consolidated Statements of Cash Flows for
		the Six-month Periods Ended June 26, 2004 and
		June 28, 2003	5
		Notes to Condensed Consolidated Financial Statements	6
	Item 2.	Management's Discussion and Analysis of Results of
		Operations and Financial Condition	12
	Item 3.	Quantitative and Qualitative Disclosures about Market Risk	20
	Item 4.	Controls and Procedures	20
PART II.	Other Information
	Item 2.	Changes in Securities, Use of Proceeds
		and Issuer Purchases of Equity Securities	21
	Item 4.	Submission of Matters to a Vote of Security Holders	21
	Item 6.	Exhibits and Reports on Form 8-K	22
Signatures			23

2

PART I – Financial Information

Item 1.  Financial Statements

Gehl Company and Subsidiaries
Condensed Consolidated Statements of Income
(unaudited and in thousands, except per share data)

	Three Months Ended						Six Months Ended
	June 26, 2004			June 28, 2003			June 26, 2004			June 28, 2003
Net sales	$	95,499		$	68,551		$	180,186		$	127,082
Cost of goods sold		76,472			54,085			143,763			100,353
Gross profit		19,027			14,466			36,423			26,729
Selling, general and
administrative expenses		12,278			10,818			25,060			21,852
Restructuring and other charges		--			121			--			281
Total operating expenses		12,278			10,939			25,060			22,133
Income from operations		6,749			3,527			11,363			4,596
Interest expense		(656	)		(984	)		(1,244	)		(1,883	)
Interest income		474			528			900			1,031
Other (expense) income, net		(721	)		275			(838	)		384
Income before income taxes		5,846			3,346			10,181			4,128
Provision for income taxes		1,931			1,105			3,361			1,379
Net income	$	3,915		$	2,241		$	6,820		$	2,749
Net income per share:
Diluted	$	0.69		$	0.42		$	1.22		$	0.51
Basic	$	0.72		$	0.42		$	1.26		$	0.51

The accompanying notes are an integral part of the financial statements.

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Gehl Company and Subsidiaries
Condensed Consolidated Balance Sheets
(unaudited and in thousands, except share data)

	June 26, 2004			December 31, 2003			June 28, 2003
Assets
Cash	$	2,597		$	3,688		$	4,742
Accounts receivable - net		132,277			92,474			118,098
Finance contracts receivable - net		9,346			2,546			6,426
Inventories		29,341			31,598			36,550
Deferred income tax assets		7,128			7,128			8,469
Prepaid expenses and other current assets		4,374			4,503			1,877
Total current assets		185,063			141,937			176,162
Property, plant and equipment - net		33,960			35,316			45,056
Finance contracts receivable - net, non-current		4,182			1,982			2,932
Goodwill		11,748			11,748			11,748
Other assets		13,240			12,371			12,105
Total assets	$	248,193		$	203,354		$	248,003
Liabilities and Shareholders' Equity
Current portion of debt obligations	$	113		$	186		$	1,289
Accounts payable		41,695			31,556			36,321
Accrued and other current liabilities		30,794			26,861			26,663
Total current liabilities		72,602			58,603			64,273
Line of credit facility		46,588			26,340			55,736
Long-term debt obligations		168			198			8,690
Deferred income tax liabilities		1,742			1,742			1,644
Other long-term liabilities		20,878			18,471			18,981
Total long-term liabilities		69,376			46,751			85,051
Common stock, $.10 par value,
25,000,000 shares authorized, 5,482,018,
5,333,439 and 5,311,494 shares outstanding,
respectively		548			533			531
Preferred stock, $.10 par value,
2,000,000 shares authorized, 250,000 shares
designated as Series A preferred stock, no
shares issued		--			--			--
Capital in excess of par		8,259			6,665			6,410
Retained earnings		108,922			102,102			102,221
Accumulated other comprehensive loss		(11,514	)		(11,300	)		(10,483	)
Total shareholders' equity		106,215			98,000			98,679
Total liabilities and shareholders' equity	$	248,193		$	203,354		$	248,003

The accompanying notes are an integral part of the financial statements.

4

Gehl Company and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(unaudited and in thousands)

	Six Months Ended
	June 26, 2004			June 28, 2003
Cash Flows from Operating Activities
Net income	$	6,820		$	2,749
Adjustments to reconcile net income to net cash
used for operating activities:
Depreciation		2,467			2,550
Amortization		15			13
Gain on sale of property, plant and equipment		(86	)		--
Cost of sales of finance contracts		296			10
Proceeds from sales of finance contracts		57,318			46,979
Increase in finance contracts receivable		(66,613	)		(49,312	)
Net changes in remaining working capital items		(21,979	)		(6,668	)
Net cash used for operating activities		(21,762	)		(3,679	)
Cash Flows from Investing Activities
Property, plant and equipment additions		(1,337	)		(808	)
Proceeds from the sale of property, plant and equipment		378			--
Other assets		(123	)		(112	)
Net cash used for investing activities		(1,082	)		(920	)
Cash Flows from Financing Activities
Proceeds from revolving credit loans		20,248			8,359
Repayments of other borrowings - net		(103	)		(635	)
Proceeds from issuance of common stock		1,608			102
Treasury stock purchases		--			(728	)
Net cash provided by financing activities		21,753			7,098
Net (decrease) increase in cash		(1,091	)		2,499
Cash, beginning of period		3,688			2,243
Cash, end of period	$	2,597		$	4,742
Supplemental disclosure of cash flow information:
Cash paid (received) for the following:
Interest	$	1,257		$	1,781
Income taxes	$	539		$	(503	)

The accompanying notes are an integral part of the financial statements.

5

Gehl Company and Subsidiaries
Notes to Condensed Consolidated Financial Statements
June 26, 2004

(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 accounting principles generally accepted in the United States of America 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 June 26, 2004 and June 28, 2003 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. Certain prior year amounts have been reclassified to conform to the current year presentation. Such reclassifications had no impact on previously reported net income. Due in part to the seasonal nature of the Company’s business, the results of operations for the six-month period ended June 26, 2004 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, 2003 as filed with the Securities and Exchange Commission.

Note 2 – Stock Based Compensation

        The Company maintains stock option plans for certain of its directors, officers and key employees and accounts for these plans under the recognition and measurement principles of Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees.” No compensation expense has been recognized for options granted under these plans as the option price was equal to the market value of the Company’s common stock on the date of grant.

6

The effect on net income and net income per share had the Company applied the fair value recognition provisions of SFAS No. 123, “Accounting for Stock-Based Compensation,” is presented below (in thousands, except per share data):

	Three Months Ended
	June 26, 2004			June 28, 2003
Net income, as reported	$	3,915		$	2,241
Less:  stock-based compensation expense determined
based on the fair value method, net of tax		(152	)		(175	)
Pro forma net income	$	3,763		$	2,066
Diluted net income per share:
As reported	$	.69		$	.42
Pro forma	$	.67		$	.39
Basic net income per share:
As reported	$	.72		$	.42
Pro forma	$	.69		$	.39

	Six Months Ended
	June 26, 2004			June 28, 2003
Net income, as reported	$	6,820		$	2,749
Less:  stock-based compensation expense determined
based on the fair value method, net of tax		(304	)		(302	)
Pro forma net income	$	6,516		$	2,447
Diluted net income per share:
As reported	$	1.22		$	.51
Pro forma	$	1.17		$	.46
Basic net income per share:
As reported	$	1.26		$	.51
Pro forma	$	1.21		$	.46

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):

	June 26, 2004			December 31, 2003			June 28, 2003
Raw materials and supplies	$	15,658		$	11,456		$	13,799
Work-in-process		2,924			3,011			2,809
Finished machines and parts		33,707			40,079			43,445
Total current cost value		52,289			54,546			60,053
Adjustment to LIFO basis		(22,948	)		(22,948	)		(23,503	)
LIFO inventory value	$	29,341		$	31,598		$	36,550

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Note 5 – Product Warranties and Other Guarantees

        In general, the Company provides warranty coverage on equipment for a period of up to twelve months. The Company’s reserve for warranty claims is established based on the best estimate of the amounts necessary to settle future and existing claims on products sold as of the balance sheet date. While the Company’s warranty costs have historically been within its calculated estimates, it is possible that future warranty costs could differ from those estimates. The changes in the carrying amount of the Company’s total product warranty liability for the six-month period ended June 26, 2004 were as follows (in thousands):

Balance as of December 31, 2003	$	4,054
Accruals for warranties issued during the period		1,930
Accruals related to pre-existing warranties
(including changes in estimates)		--
Settlements made (in cash or in kind) during the period		(1,799	)
Balance as of June 26, 2004	$	4,185

Note 6 – Employee Retirement Plans

        The Company sponsors two qualified defined benefit pension plans for certain of its employees. The following table provides disclosure of the net periodic benefit cost (in thousands):

	For the Three Months Ended						For the Six Months Ended
	June 26, 2004			June 28, 2003			June 26, 2004			June 28, 2003
Service cost	$	197		$	174		$	393		$	348
Interest cost		670			638			1,340			1,276
Expected return on plan assets		(753	)		(734	)		(1,506	)		(1,468	)
Amortization of prior service cost		52			53			104			106
Amortization of net loss		310			157			621			314
Net periodic benefit cost	$	476		$	288		$	952		$	576

        In April 2004, the Pension Funding Equity Act of 2004 (“the Pension Funding Act”) was signed into law providing a temporary solution to several issues that arose from the discontinuance of new-issue, 30-year Treasury Bonds several years ago. Under the Pension Funding Act, companies will use high-quality corporate bond rates for key liability measures in place of the extrapolated long-term treasury rates used prior to the Pension Funding Act. This will reduce required pension contributions during 2004 and 2005. As a result of the Pension Funding Act, the Company’s estimated 2004 pension contributions will be reduced from $7.7 million to $6.4 million. As of June 26, 2004, $1.7 million of contributions have been made during 2004.

8

        The Company maintains an unfunded non-qualified supplemental retirement benefit plan for certain management employees. The following table provides disclosure of the net periodic benefit cost (in thousands):

	For the Three Months Ended				For the Six Months Ended
	June 26, 2004		June 28, 2003		June 26, 2004		June 28, 2003
Service cost	$	73	$	56	$	146	$	113
Interest cost		73		64		146		128
Amortization of prior service cost		23		21		46		42
Amortization of net loss		12		5		25		10
Net periodic benefit cost	$	181	$	146	$	363	$	293

        The Company provides postemployment benefits to certain retirees, which includes subsidized health insurance benefits for early retirees prior to their attaining age 65. The following table provides disclosure of the net periodic benefit cost (in thousands):

	For the Three Months Ended				For the Six Months Ended
	June 26, 2004		June 28, 2003		June 26, 2004		June 28, 2003
Service cost	$	16	$	14	$	31	$	27
Interest cost		21		23		43		46
Amortization of transition obligation		6		6		12		12
Amortization of net loss		5		5		10		10
Net periodic benefit cost	$	48	$	48	$	96	$	95

Note 7 – Accounting Pronouncements

        In December 2003, the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the “Modernization Act”) introduced a prescription drug benefit under Medicare, as well as a federal subsidy to sponsors of retiree health care benefit plans. In January 2004, the Financial Accounting Standards Board (“FASB”) issued FASB Staff Position (“FSP”) No. FAS 106-1, “Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003” (“106-1”). FSP No. FAS 106-1 permits a sponsor of a postretirement health care plan that provides a prescription drug benefit to make a one-time election to defer accounting for the effects of the Modernization Act if there is insufficient data, time or guidance available to ensure appropriate accounting. As permitted by FSP No. FAS 106-1, the Company elected to defer the accounting for the effects of the Modernization Act. In May 2004, the FASB issued FSP No. FAS 106-2, “Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003,” which surpersedes FSP No. FAS 106-1. The Company reviewed FSP No. FAS 106-2 and has concluded that the Company’s accounting for postemployment health insurance will not be impacted by FSP No. FAS 106-2 as the Company will not be eligible to receive a government subsidy as defined in the Modernization Act.

9

        In January 2003, the FASB issued FASB Interpretation No. 46, “Consolidation of Variable Interest Entities, an interpretation of ARB No. 51” (“FIN 46”). FIN 46 clarifies the application of Accounting Research Bulletin No. 51, “Consolidated Financial Statements” to certain entities in which, among others, equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. The consolidation provisions of FIN 46, as revised, were effective immediately for interests created after January 31, 2003 and were effective on March 31, 2004 for interests created before February 1, 2003. As of June 26, 2004, the Company did not own an interest in any variable interest entities.

Note 8 – Net Income Per Share and Comprehensive Income

        Basic net income per common share is computed by dividing net income by the weighted- average number of common shares outstanding for the period. Diluted net income per common share is computed by dividing net income by the weighted-average number of common shares and, if applicable, common stock equivalents that would arise from the exercise of stock options.

        A reconciliation of the shares used in the computation of earnings per share follows (in thousands):

	Three Months Ended
	June 26, 2004		June 28, 2003
Basic shares		5,454		5,346
Effect of options		186		5
Diluted shares		5,640		5,351

	Six Months Ended
	June 26, 2004		June 28, 2003
Basic shares		5,405		5,360
Effect of options		163		12
Diluted shares		5,568		5,372

        Accumulated other comprehensive loss is primarily comprised of minimum pension liability and foreign currency translation adjustments. Comprehensive income was $3.9 million and $6.6 million for the three- and six-month periods ended June 26, 2004, respectively, which reflects the Company’s net income reduced by currency translation adjustments of $0.0 million and $0.2 million, respectively. Comprehensive income was $2.6 million and $3.2 million for the three- and six-month periods ended June 28, 2003, respectively, which reflects the Company’s net income plus currency translation adjustments of $0.4 million and $0.5 million, respectively.

10

Note 9 – Business Segments

        The Company operates in two business segments: Construction equipment and Agricultural equipment. The long-term financial performance of the Company’s reportable segments is affected by separate economic conditions and cycles. The segments are managed separately based on the fundamental differences in their operations. Following is selected segment information (in thousands):

	Three Months Ended				Six Months Ended
	June 26, 2004		June 28, 2003		June 26, 2004		June 28, 2003
Net Sales:
Construction	$	61,567	$	44,123	$	115,987	$	79,921
Agricultural		33,932		24,428		64,199		47,161
Consolidated	$	95,499	$	68,551	$	180,186	$	127,082
Income from Operations:
Construction	$	5,262	$	3,299	$	9,434	$	4,557
Agricultural		1,487		228		1,929		39
Consolidated	$	6,749	$	3,527	$	11,363	$	4,596

Note 10 – Stock Repurchases

        In September 2001, the Company’s Board of Directors authorized a stock repurchase plan providing for the repurchase of up to 500,000 shares of the Company’s outstanding common stock. No shares were repurchased during the three- and six-month periods ended June 26, 2004. During the three- and six-month periods ended June 28, 2003, the Company repurchased 51,500 shares and 73,700 shares, respectively, in the open market under this authorization at an aggregate cost of $0.5 million and $0.7 million, respectively. As of June 26, 2004, the Company has repurchased an aggregate of 151,900 shares under this authorization. All treasury stock acquired by the Company has been cancelled and returned to the status of authorized but unissued shares.

Note 11 – Subsequent Event

        On July 22, 2004, in conjunction with the establishment of a strategic alliance with Manitou, the world’s largest manufacturer of telescopic handlers, the Company issued 961,768 shares of common stock to Manitou at an aggregate purchase price of $19.8 million. The proceeds from the sale of the common stock were used to pay down the Company’s line of credit facility.

        Beginning in 2005, The Company and Manitou will distribute select models of each others’ telescopic handler product lines in the United States agricultural and construction markets through their respective dealer networks. Pursuant to a license agreement with Manitou, the Company will also begin to manufacture two series of Manitou compact telescopic handlers for the agricultural and construction markets at the Company’s Yankton, South Dakota facility.

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Item 2.  Management’s Discussion and Analysis of Results of Operations and Financial Condition

Recent Developments

        On July 22, 2004, in conjunction with the establishment of a strategic alliance with Manitou, the world’s largest manufacturer of telescopic handlers, the Company issued 961,768 shares of common stock to Manitou at an aggregate purchase price of $19.8 million. The proceeds from the sale of the common stock were used to pay down the Company’s line of credit facility.

        Beginning in 2005, The Company and Manitou will distribute select models of each others’ telescopic handler product lines in the United States agricultural and construction markets through their respective dealer networks. Pursuant to a license agreement with Manitou, the Company will also begin to manufacture two series of Manitou compact telescopic handlers for the agricultural and construction markets at the Company’s Yankton, South Dakota facility.

Results of Operations

Three Months Ended June 26, 2004 Compared to Three Months Ended June 28, 2003

Net Sales

        Net sales in the three months ended June 26, 2004 (“2004 second quarter”) were $95.5 million compared to $68.6 million in the three months ended June 28, 2003 (“2003 second quarter”), an increase of $26.9 million, or 39%.

        Construction equipment segment net sales were $61.6 million in the 2004 second quarter compared to $44.1 million in the 2003 second quarter, an increase of $17.4 million, or 40%. Shipments of skid loaders in the 2004 second quarter were up significantly from the 2003 second quarter due to demand for new Gehl skid loaders models introduced in January 2004, as well as increased demand for Mustang brand skid loaders. Telescopic handler shipments increased over 80% during the 2004 second quarter as demand from larger rental customers continued to grow in the 2004 second quarter. Demand for compact track loaders, a product introduced in mid-2002, continued to grow and resulted in 2004 second quarter shipments which were up significantly from the 2003 second quarter. The Company’s European subsidiary, Gehl Europe, also posted strong sales during the 2004 second quarter.

        Agricultural equipment segment net sales were $33.9 million in the 2004 second quarter, compared to $24.4 million in the 2003 second quarter, an increase of $9.5 million, or 39%. Milk prices paid to dairy farmers in the 2004 second quarter averaged nearly $17.75 per hundred weight, compared to approximately $9.43 per hundred weight in the 2003 second quarter. The significant increase in milk prices contributed to the generally improved economic environment compared to the 2003 second quarter. Skid loader shipments during the 2004 second quarter were up approximately 50% as demand for the new models of Gehl brand skid loaders introduced in January 2004 remained strong. Shipments of agricultural implements increased 20% from the 2003 second quarter.

        Of the Company’s total net sales reported for the 2004 second quarter, $16.7 million were made outside of the United States compared with $14.2 million in the 2003 second quarter. The increase in export sales was primarily due to increased sales in Europe.

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Gross Profit

        Gross profit was $19.0 million in the 2004 second quarter compared to $14.5 million in the 2003 second quarter, an increase of $4.6 million, or 32%. Gross profit as a percent of net sales (gross margin) was 19.9% for the 2004 second quarter compared to 21.1% for the 2003 second quarter.

        Gross margin for the construction equipment segment was 21.3% in the 2004 second quarter compared with 23.2% for the 2003 second quarter. Gross margin for the agricultural equipment segment was 17.5% in the 2004 second quarter compared to 17.4% in the 2003 second quarter. The 2004 second quarter gross margin for both segments was adversely impacted by rising costs of steel and other component parts and increased costs of finished goods sourced from overseas due to the weak U.S. dollar versus the Euro and the yen. The unfavorable impact of these issues on the agricultural equipment segment gross margin was offset by a more favorable mix of products shipped, as well as lower levels of discounts and sales incentives incurred in the 2004 second quarter compared to the 2003 second quarter. The construction equipment segment gross margin further reflects the unfavorable mix of both product shipments and customers shipped to during the 2004 second quarter.

Selling, General and Administrative Expenses

        Selling, general and administrative expenses were $12.3 million, or 12.9% of net sales, in the 2004 second quarter compared to $10.8 million, or 15.8% of net sales, in the 2003 second quarter. The increase in selling, general and administrative expenses is primarily the result of items that vary with sales levels. However, selling, general and administrative expenses as a percentage of net sales improved as the growth in net sales exceeded expense increases.

Income from Operations

        Income from operations in the 2004 second quarter was $6.7 million, or 7.1% of net sales, compared to $3.5 million, or 5.1 % of net sales, in the 2003 second quarter, an increase of $3.2 million, or 91%.

Interest Expense

        Interest expense was $0.7 million in the 2004 second quarter compared to $1.0 million in the 2003 second quarter, a decrease of $0.3 million, or 33%. The decrease in the Company’s average outstanding debt balance, due to decreases in average working capital requirements, primarily contributed to the decrease in the 2004 second quarter interest expense.

Other Income (Expense), Net

        The Company incurred net other expense of $0.7 million in the 2004 second quarter compared to net other income of $0.3 million in the 2003 second quarter. The Company’s costs of selling retail finance contracts during the 2004 second quarter increased $0.6 million from the 2003 second quarter, due to an increasing interest rate environment and a higher level of retail finance contracts being sold during the 2004 second quarter. In addition the Company incurred foreign exchange transaction expense in the 2004 second quarter of $0.1 million compared to foreign exchange transaction income in the 2003 second quarter of $0.2 million.

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Net Income

        Net income was $3.9 million in the 2004 second quarter compared with $2.2 million in the 2003 second quarter, an increase of $1.7 million, or 75%.

Six Months Ended June 26, 2004 Compared to Six Months Ended June 28, 2003

Net Sales

        Net sales in the six months ended June 26, 2004 (“2004 six months”) were $180.2 million compared to $127.1 million in the six months ended June 28, 2003 (“2003 six months”), an increase of $53.1 million, or 42%.

        Construction equipment segment net sales were $116.0 million in the 2004 six months compared to $79.9 million in the 2003 six months, an increase of $36.1 million, or 45%. Shipments of skid loaders in the 2004 six months were up significantly from the 2003 six months due to demand for new Gehl skid loaders models introduced in January 2004, as well as increased demand for Mustang brand skid loaders. Telescopic handler shipments increased over 70% during the 2004 six months as demand from larger rental customers was strong. Demand for compact track loaders, a product introduced in mid-2002, continued to grow and resulted in shipments in the 2004 six months which were up significantly from the 2003 six months. The Company’s European subsidiary, Gehl Europe, also posted strong sales during the 2004 six months.

        Agricultural equipment segment net sales were $64.2 million in the 2004 six months, compared to $47.2 million in the 2003 six months, an increase of $17.0 million, or 36%. Milk prices paid to dairy farmers in the 2004 six months averaged nearly $14.90 per hundred weight, compared to approximately $9.60 per hundred weight in the 2003 six months. Skid loader shipments during the 2004 six months increased over 40% as demand for the new models of Gehl brand skid loaders introduced in January 2004 was strong. Demand for compact track loaders was also strong and resulted in shipments in the 2004 six months, which were up significantly from the 2003 six months. In addition, shipments of agricultural implements in the 2004 six months increased 16% from the 2003 six months.

        Of the Company’s total net sales reported for the 2004 six months, $29.6 million were made outside of the United States compared with $24.8 million in the 2003 six months. The increase in export sales was primarily due to increased sales in Europe.

Gross Profit

        Gross profit was $36.4 million in the 2004 six months compared to $26.7 million in the 2003 six months, an increase of $9.7 million, or 36%. Gross profit as a percent of net sales (gross margin) was 20.2% for the 2004 six months compared to 21.0% for the 2003 six months.

        Gross margin for the construction equipment segment was 21.9% for the 2004 six months compared with 23.0% for the 2003 six months. Gross margin for the agricultural equipment segment was 17.2% for the 2004 six months compared to 17.7% for the 2003 six months. The 2004 six months gross margin for both segments was adversely impacted by rising costs of steel and other component parts, increased costs of finished goods sourced from overseas due to the weak U.S. dollar versus the Euro and the yen and manufacturing inefficiencies associated with the start-up of production of the new Gehl skid loader models. The unfavorable impact of these issues on the agricultural equipment segment gross margin were partially offset by a more favorable mix of products shipped, as well as lower levels of discounts and sales incentives incurred in the 2004 six months. The construction equipment segment gross margin further reflects the unfavorable mix of both product shipments and customers shipped to during the 2004 six months.

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Selling, General and Administrative Expenses

        Selling, general and administrative expenses were $25.1 million, or 13.9% of net sales, in the 2004 six months compared to $21.9 million, or 17.2% of net sales, in the 2003 six months. The increase in selling, general and administrative expenses is primarily the result of items that vary with sales levels. However, selling, general and administrative expenses as a percentage of net sales improved as the growth in net sales exceeded expense increases.

Income from Operations

        Income from operations in the 2004 six months was $11.4 million, or 6.3% of net sales, compared to $4.6 million, or 3.6% of net sales, in the 2003 six months, an increase of $6.8 million.

Interest Expense

        Interest expense was $1.2 million in the 2004 six months compared to $1.9 million in the 2003 six months, a decrease of $0.6 million, or 34%. The decrease in the Company’s average outstanding debt balance, due to decreases in average working capital requirements, primarily contributed to the decrease in interest expense in the 2004 six months.

Other Income (Expense), Net

        The Company incurred net other expense of $0.8 million in the 2004 six months compared to net other income of $0.4 million in the 2003 second quarter. The Company’s costs of selling retail finance contracts during the 2004 six months increased $0.3 million from the 2003 six months, due to an increasing interest rate environment and a higher level of retail finance contracts being sold during the 2004 six months. In addition, the Company incurred foreign exchange transaction expense in the 2004 second six months of $0.4 million compared to foreign exchange transaction income in the 2003 six months of $0.3 million.

Net Income

        Net income was $6.8 million in the 2004 six months compared with $2.7 million in the 2003 six months, an increase of $4.1 million.

Financial Condition

        The Company’s working capital was $112.5 million at June 26, 2004, as compared to $83.3 million at December 31, 2003, and $111.9 million at June 28, 2003. The slight increase since June 28, 2003 was primarily due to increases in accounts receivable ($14.2 million) offset by a decrease in inventory ($7.2 million) and increases in accounts payable ($5.3 million). The increase in accounts receivable was due to strong shipments in the 2004 six months, which were primarily driven by the shipments of the new Gehl brand skid loaders and strong demand for telescopic handlers and compact track loaders. The decrease in inventory was due to decreases in finished goods resulting from the strong demand for the Company’s products. The increase in accounts payable was due to increased production resulting from strong shipments as well as the timing of payment.

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        The increase in working capital from December 31, 2003 was primarily due to increased accounts receivable ($39.8 million) offset ,in part, by increases in accounts payable ($10.1 million). The increase in accounts receivable was due to strong shipments in the 2004 six months, which were primarily driven by the shipments of the new Gehl brand skid loaders and strong demand for telescopic handlers and compact track loaders as well as normal seasonal sales patterns. The increase in accounts payable was due to increased production resulting from strong shipments as well as normal seasonal production increases.

        Capital expenditures for property, plant and equipment during the 2004 six months were approximately $1.3 million. During 2004, the Company plans to make an aggregate of up to $5.0 million in capital expenditures. The Company believes that its present manufacturing facilities will be sufficient to provide adequate capacity for its operations in 2004.

        As of June 26, 2004, the weighted-average interest rate paid by the Company on outstanding borrowings under its line of credit facility (“Facility”) was 4.03%. The Company had available unused borrowing capacity of $42.4 million, $46.8 million and $18.9 million under the Facility at June 26, 2004, December 31, 2003, and June 28, 2003, respectively. A March 23, 2004 amendment to the Facility increased the amount available under the Facility from $75 million to $90 million from the period March 1 to July 15 each year through December 31, 2007. As a result, borrowing capacity on July 16, 2004 decreased by $15 million. At June 26, 2004, December 31, 2003, and June 28, 2003, the Company’s outstanding borrowings under the Facility were $46.6 million, $26.3 million and $55.7 million, respectively. The changes in borrowings from June 28, 2003 and December 31, 2003 to June 26, 2004 were primarily due to changes in working capital requirements. The Company believes it has adequate capital resources and borrowing capacity to meet its projected capital requirements for the foreseeable future. Requirements for working capital, capital expenditures, pension fund contributions and debt maturities in fiscal 2004 will continue to be funded by operations and borrowings under the Facility.

        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 substantially all contracts whether or not sold. At June 26, 2004, the Company serviced $201.1 million of such contracts, of which $186.2 million were owned by other parties. The Company believes that it will be able to arrange sufficient capacity to sell its finance contracts for the foreseeable future.

        At June 26, 2004, shareholders’ equity had increased $7.5 million to $106.2 million from $98.7 million at June 28, 2003. This increase primarily reflected the impact of the net income earned from June 28, 2003 to June 26, 2004 and currency translation adjustments, offset by the minimum pension liability adjustment recorded in 2003.

        In September 2001, the Company’s Board of Directors authorized a stock repurchase plan providing for the repurchase of up to 500,000 shares of the Company’s outstanding common stock. No shares were repurchased under this authorization during the three- and six-month periods ended June 26, 2004. During the three- and six-month periods ended June 28, 2003, the Company repurchased 51,500 and 73,700 shares, respectively, in the open market under this authorization at an aggregate cost of $0.5 million and $0.7 million, respectively. As of June 26, 2004, the Company has repurchased an aggregate of 151,900 shares under this authorization. All treasury stock acquired by the Company has been cancelled and returned to the status of authorized but unissued shares.

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        Other than the extension of the expiration date of the Company’s Facility to December 31, 2007 resulting from a March 23, 2004 amendment to the Facility, there have been no material changes to the annual maturities of debt obligations nor to the future minimum non-cancelable operating lease payments as disclosed in Management’s Discussion and Analysis of Results of Operations and Financial Condition and Notes 7 and 14, respectively, of Notes to Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2003 as filed with the Securities and Exchange Commission.

Accounting Pronouncements

        In December 2003, the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the “Modernization Act”) introduced a prescription drug benefit under Medicare, as well as a federal subsidy to sponsors of retiree health care benefit plans. In January 2004, the Financial Accounting Standards Board (“FASB”) issued FASB Staff Position (“FSP”) No. FAS 106-1, “Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003” (“106-1”). FSP No. FAS 106-1 permits a sponsor of a postretirement health care plan that provides a prescription drug benefit to make a one-time election to defer accounting for the effects of the Modernization Act if there is insufficient data, time or guidance available to ensure appropriate accounting. As permitted by FSP No. FAS 106-1, the Company elected to defer the accounting for the effects of the Modernization Act. In May 2004, the FASB issued FSP No. FAS 106-2, “Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003,” which surpersedes FSP No. FAS 106-1. The Company reviewed FSP No. FAS 106-2 and has concluded that the Company’s accounting for postemployment health insurance will not be impacted by FSP No. FAS 106-2 as the Company will not be eligible to receive a government subsidy as defined in the Modernization Act.

        In January 2003, the FASB issued FASB Interpretation No. 46, “Consolidation of Variable Interest Entities, an interpretation of ARB No. 51” (“FIN 46”). FIN 46 clarifies the application of Accounting Research Bulletin No. 51, “Consolidated Financial Statements” to certain entities in which, among others, equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. The consolidation provisions of FIN 46, as revised, were effective immediately for interests created after January 31, 2003 and were effective on March 31, 2004 for interests created before February 1, 2003. As of June 26, 2004, the Company did not own an interest in any variable interest entities.

Critical Accounting Policies and Estimates

        The preparation of the Company’s condensed consolidated financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, net sales and expenses. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions and materially impact the carrying value of the assets and liabilities. The Company believes the following accounting policies are critical to the Company’s business operations and the understanding of the Company’s results of operations and financial condition.

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Allowance for Doubtful Accounts

        The Company’s accounts receivable are reduced by an allowance for amounts that may be uncollectible in the future. In circumstances where the Company is aware of a specific customer’s inability to meet its financial obligations, a specific reserve for bad debts is recorded against the accounts receivable balance to reduce the amount due to the net amount reasonably expected to be collected. Additionally, a general percentage of past due receivables is reserved, based on the Company’s past experience of collectibility. If circumstances change (i.e., higher than expected defaults or an unexpected material adverse change in a major customer’s ability to meet its financial obligations), estimates of the recoverability of amounts due could be reduced by a material amount.

Inventories

        Inventories are valued at the lower of cost or market value. Cost is determined using the last-in, first-out (LIFO) method for the majority of the Company’s inventories. In valuing inventory, management is required to make assumptions regarding the level of reserves required to value potentially obsolete or slow moving items to the lower of cost or market value. Inventory reserves are established taking into account inventory age and frequency of use or sale. While calculations are made involving these factors, significant management judgment regarding expectations for future events is involved. Future events that could significantly influence management’s judgment and related estimates include general economic conditions in markets where the Company’s products are sold, as well as new products and design changes introduced by the Company.

Accrued Warranty

        The Company establishes reserves related to the warranties provided on its products. Specific reserves are maintained for programs related to known machine safety and reliability issues. When establishing specific reserves, estimates are made regarding the size of the population, the type of program, costs to be incurred and estimated participation. Additionally, general reserves are maintained based on the historical percentage relationships of warranty costs to machine sales and applied to current equipment sales. If these estimates and related assumptions change, reserve levels may require adjustment.

Accrued Product Liability

        The Company records a general reserve for potential product liability claims based on the Company’s prior claim experience and specific reserves for known product liability claims. Specific reserves for known claims are valued based upon the Company’s prior claims experience, including consideration of the jurisdiction, circumstances of the accident, type of loss or injury, identity of plaintiff, other potential responsible parties, analysis of outside counsel, and analysis of internal product liability counsel. Actual product liability costs could be different due to a number of variables, including decisions of juries or judges.

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Goodwill Impairment

        In connection with SFAS No. 142, “Goodwill and Other Intangible Assets,” the Company is required to perform goodwill impairment reviews, at least annually, using a fair-value-based approach. The Company performs its annual impairment review as of December 31. As part of the annual impairment review, an estimate of the fair value of the Company’s construction equipment segment (the entire carrying amount of goodwill is allocated to the construction segment), primarily by using a discounted cash flow analysis, is performed. Significant assumptions used in this analysis include: expected future revenue growth rates, operating profit margins, working capital levels and a weighted average cost of capital. Changes in assumptions could significantly impact the estimate of the fair value of the construction equipment segment, which could result in a goodwill impairment charge and could have a significant impact on the results of the construction equipment segment and the consolidated financial statements.

Pension and Postemployment Benefits

        Pension and postemployment benefit costs and obligations are dependent on assumptions used in calculation of these amounts. These assumptions, used by actuaries, include discount rates, expected return on plan assets for funded plans, rate of salary increases, health care cost trend rates, mortality rates and other factors. In accordance with accounting principles generally accepted in the United States, actual results that differ from the actuarial assumptions are accumulated and amortized to future periods and therefore affect recognized expense and recorded obligations in future periods. While the Company believes that the assumptions used are appropriate, differences in actual experience or changes in assumptions may materially effect its financial position or results of operations.

Outlook

        First half sales were stronger than the Company had originally forecasted and order backlog remains robust, indicating that the Company’s markets continue to show signs of strength. Offsetting this positive trend, however, is the continued uncertainty over the magnitude and duration of higher steel prices. If the situation continues as it is today, these increased costs may offset some of the benefits of higher sales. Based on actual results for the year to date, along with the current market outlook, the Company now expects its net sales for the full year 2004 to be in the range of 42% to 45% over 2003 levels. If the Company’s sales levels meet projected forecasts, the Company expects to earn in the range of $1.90 to $2.05 per diluted share in 2004, after giving effect to the 961,768 newly issued shares purchased by Manitou in conjunction with the recently announced strategic alliance (see Recent Developments above).

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Forward-Looking Statements

        Certain statements included in this filing are “forward-looking statements” intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact, including the statements in the section entitled “Outlook,” are forward-looking statements. When used in this filing, words such as the Company “believes,” “anticipates,” “expects”, “estimates” or “projects” or words of similar meaning are generally intended to identify forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to certain risks, uncertainties, assumptions and other factors, some of which are beyond the Company’s control, that could cause actual results to differ materially from those anticipated as of the date of this filing. Factors that could cause such a variance include, but are not limited to, any interruption in the expected general economic recovery, unanticipated changes in capital market conditions, the Company’s ability to implement successfully its strategic initiatives, market acceptance of newly introduced products, unexpected issues related to the pricing and availability of raw materials (including steel) and component parts, the ability of the Company to increase its prices to reflect higher prices for raw materials and component parts, the cyclical nature of the Company’s business, the Company’s and its customers’ access to credit, competitive pricing, product initiatives and other actions taken by competitors, disruptions in production capacity, excess inventory levels, the effect of changes in laws and regulations (including government subsidies and international trade regulations), technological difficulties, changes in currency exchange rates or interest rates, unanticipated difficulties or charges arising out of the proposed sale of the Company’s Owatonna, Minnesota manufacturing facility, the Company’s ability to secure sources of liquidity necessary to fund its operations, changes in environmental laws, the impact of any acquisition effected by the Company, and employee and labor relations. Shareholders, potential investors, and other readers are urged to consider these factors in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements included in this filing are only made as of the date of this filing, and the Company undertakes no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances. In addition, the Company’s expectations for fiscal year 2004 are based in part on certain assumptions made by the Company, including those relating to commodities prices, which are strongly affected by weather and other factors and can fluctuate significantly, housing starts and other construction activities, which are sensitive to, among other things, interest rates and government spending, and the performance of the U.S. economy generally. The accuracy of these or other assumptions could have a material effect on the Company’s ability to achieve its expectations.

Item 3.  Quantitative and Qualitative Disclosures about Market Risk

        There are no material changes to the information provided in response to this item as set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2003 as filed with the Securities and Exchange Commission.

Item 4.  Controls and Procedures

The Company’s management, with the participation of the Company’s principal executive officer and principal financial officer, has evaluated the Company’s disclosure controls and procedures as of June 26, 2004. Based upon that evaluation, the Company’s principal executive officer and principal financial officer have concluded that the Company’s disclosure controls and procedures were effective as of June 26, 2004. There was no change in the Company’s internal control over financial reporting that occurred during the three months ended June 26, 2004, that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II – Other Information

Item 2.  Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities

        In September 2001, the Company’s Board of Directors authorized a stock repurchase plan providing for the repurchase of up to 500,000 shares of the Company’s outstanding common stock in open market or privately negotiated transactions. The plan does not have an expiration date. No shares were repurchased under the plan during the three- and six-month periods ended June 26, 2004. As of June 26, 2004, the Company had authority to repurchase 348,100 shares under the plan.

Item 4.  Submission of Matters to a Vote of Security Holders

        At the Company’s 2004 annual meeting of shareholders held on April 23, 2004, William D. Gehl and John W. Splude were re-elected as directors of the Company for terms expiring at the 2006 annual meeting of shareholders. The following table sets forth certain information with respect to the election of directors at the 2004 annual meeting:

Name of Nominee	Shares Voted For		Shares Withholding Authority
William D. Gehl		4,491,571		462,975
John W. Splude		4,103,511		851,035

The following table sets forth the other directors of the Company whose terms of office continued after the 2004 annual meeting:

Name of Director	Year in Which Term Expires
Nicholas C. Babson		2005
Thomas J. Boldt		2005
Kurt Helletzgruber		2005
John T. Byrnes		2006
Richard J. Fotsch		2006
Dr. Hermann Viets		2006

In addition, at the 2004 annual meeting, shareholders approved the Gehl Company 2004 Equity Incentive Plan. With respect to such approval, the number of shares voted For and Against were 3,097,371 and 997,053, respectively. The number of shares abstaining and the number of shares subject to broker non-votes were 26,326 and 833,796, respectively.

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Item 6.  Exhibits and Reports on Form 8-K

(a) Exhibits

Exhibit No. Document Description

10.1 Gehl Company 2004 Equity Incentive Plan [Incorporated by reference to Appendix B to the Company's Proxy Statement for the 2004 Annual Meeting of Shareholders]

10.2 Form of Non-Qualified Stock Option Agreement used in conjunction with the Gehl Company 2004 Equity Incentive Plan

10.3 Form of Stock Option Agreement for Non-Employee Directors used in conjunction with the Gehl Company 2004 Equity Incentive Plan

10.4 Form of Election Relating to Withholding Taxes In Connection With the Exercise of a Non-Qualified Stock Option used in conjunction with the Gehl Company 2004 Equity Incentive Plan

10.5 Form of Change in Control and Severance Agreement between Gehl Company and Kenneth H. Feucht dated as of May 1, 2004 [Incorporated by reference to Exhibit 10.8 of the Company's Quarterly report on Form 10-Q for the quarter ended July 1, 2000]

10.6 Form of Amendment to the Change in Control and Severance Agreement between Gehl Company and Kenneth H. Feucht dated as of May 1, 2004 [Incorporated by reference to Exhibits 10.3 and 10.4 of the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2001]

10.7 Shareholder Agreement, dated July 22, 2004, by and between Gehl Company and Manitou BF S.A.

31.1 Certification of the Chief Executive Officer pursuant to section 302 of the Sarbanes-Oxley Act of 2002.

31.2 Certification of the Chief Financial Officer pursuant to section 302 of the Sarbanes-Oxley Act of 2002.

32.1 Certification of Periodic Financial Report by the Chief Executive Officer and Chief Financial Officer pursuant to section 906 of the Sarbanes-Oxley Act of 2002.

Except as otherwise noted, all documents incorporated by reference are to Commission File No. 0-18110.

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(b) Reports on Form 8-K

The Company furnished a Current Report on Form 8-K on April 23, 2004 reporting under Items 7 and 12 the Company’s financial results for the three months ended March 27, 2004.

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:  August 9, 2004	By:	/s/  William D. Gehl
		William D. Gehl Chairman of the Board and Chief Executive Officer
Date:  August 9, 2004	By:	/s/  Kenneth P. Hahn
		Kenneth P. Hahn Vice President of Finance and Chief Financial Officer (Principal Financial and Accounting Officer)

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GEHL COMPANY

INDEX TO EXHIBITS

Exhibit No. Document Description

10.1 Gehl Company 2004 Equity Incentive Plan [Incorporated by reference to Appendix B to the Company's Proxy Statement for the 2004 Annual Meeting of Shareholders]

10.2 Form of Non-Qualified Stock Option Agreement used in conjunction with the Gehl Company 2004 Equity Incentive Plan

10.3 Form of Stock Option Agreement for Non-Employee Directors used in conjunction with the Gehl Company 2004 Equity Incentive Plan

10.4 Form of Election Relating to Withholding Taxes In Connection With the Exercise of a Non-Qualified Stock Option used in conjunction with the Gehl Company 2004 Equity Incentive Plan

10.5 Form of Change in Control and Severance Agreement between Gehl Company and Kenneth H. Feucht dated as of May 1, 2004 [Incorporated by reference to Exhibit 10.8 of the Company's Quarterly report on Form 10-Q for the quarter ended July 1, 2000]

10.6 Form of Amendment to the Change in Control and Severance Agreement between Gehl Company and Kenneth H. Feucht dated as of May 1, 2004 [Incorporated by reference to Exhibits 10.3 and 10.4 of the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2001]

10.7 Shareholder Agreement, dated July 22, 2004, by and between Gehl Company and Manitou BF S.A.

31.1 Certification of the Chief Executive Officer pursuant to section 302 of the Sarbanes-Oxley Act of 2002.

31.2 Certification of the Chief Financial Officer pursuant to section 302 of the Sarbanes-Oxley Act of 2002.

32.1 Certification of Periodic Financial Report by the Chief Executive Officer and Chief Financial Officer pursuant to section 906 of the Sarbanes-Oxley Act of 2002.

Except as otherwise noted, all documents incorporated by reference are to Commission File No. 0-18110.

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EX-10.2

EXHIBIT 10.2

GEHL COMPANY

2004 EQUITY INCENTIVE PLAN

NON-QUALIFIED STOCK OPTION AGREEMENT

        THIS AGREEMENT, made and entered into as of this ____ day of _______________, ____, by and between GEHL COMPANY, a Wisconsin corporation (the “Company”), and ______________________________ (the “Optionee”).

W I T N E S S E T H :

        WHEREAS, the Company has adopted the Gehl Company 2004 Equity Incentive Plan (the “Plan”), the terms of which, to the extent not stated herein, are specifically incorporated by reference in this Agreement; and

        WHEREAS, one of the purposes of the Plan is to permit the granting of options to purchase shares of the Company’s Common Stock, $.10 par value (the “Common Stock”), to certain key employees of the Company and its affiliates; and

        WHEREAS, the Optionee is now employed by the Company or an affiliate of the Company in a key capacity, and the Company desires the Optionee to remain in such employ, and to secure or increase his stock ownership in the Company in order to increase his incentive and personal interest in the welfare of the Company.

        NOW, THEREFORE, in consideration of the premises and of the covenants and agreements herein set forth, the parties hereby mutually covenant and agree as follows:

        1.     Grant of Option. Subject to the terms and conditions of the Plan and this Agreement, the Company grants to the Optionee an option (the “Option”) to purchase from the Company all or any part of the aggregate amount of _______ shares of Common Stock (the “Optioned Shares”). The Option is intended to constitute a non-qualified stock option and shall not be treated as an incentive stock option within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended.

        2.     Option Price. The price to be paid for the Optioned Shares shall be $______ per share, which has been determined by the Compensation Committee of the Board of Directors of the Company (the “Committee”) to be not less than 100% of the fair market value of such stock on the date of grant of the Option.

        3.     Exercisability and Termination of Option. Except as provided herein, the Option may be exercised only while the Optionee is an employee of either the Company or an affiliate of the Company and only if the Optionee has been continuously so employed since the date of grant of the Option. Subject to Paragraph 6, the Option may be exercised by the Optionee in whole, or in part from time to time, during the period beginning ______________, ____, and ending _____________________, ____, but only in accordance with the following schedule:

Elapsed Period of Time After Date Option is Granted	Cumulative Percentage of Shares Subject to Option Which May be Purchased (which number of shares shall be rounded down to the nearest whole number)
Less than One (1) Year	0 %
One (1) Year	33-1/3 %
Two (2) Years	66-2/3 %
Three (3) Years	100 %

provided, however, that notwithstanding the foregoing vesting schedule, the Option shall become immediately exercisable in full following a Change of Control of the Company (as such term is defined in the Plan).

        4.     Manner of Exercise and Payment. Subject to the provisions of Paragraph 3 hereof, the Option may be exercised only by written notice to the Company, served upon the Secretary of the Company at its office at West Bend, Wisconsin, specifying the number of shares in respect to which the Option is being exercised. Subject to the provisions of this Agreement, the notice of exercise must be accompanied by full payment of the option price of the shares being purchased (i) in cash or by certified check or bank draft; (ii) by tendering previously acquired shares of Common Stock (valued at their “fair market value” as determined in the manner provided below); or (iii) by any combination of the means of payment set forth in subparagraphs (i) and (ii). For purposes of this Paragraph 4, the “fair market value” of a share of Common Stock shall be equal to the last per share sale price of such Common Stock as reflected on The Nasdaq Stock Market on the trading day next preceding the date of exercise; provided, however, that if the principal market for the shares of Common Stock is then a national securities exchange, the “fair market value” shall be the closing price per share for the Common Stock on the principal securities exchange on which the Common Stock is traded on the trading date next preceding the date of exercise, or, in either case above, if no trading occurred on the trading date next preceding the exercise date, then the “fair market value” per share of Common Stock shall be determined with reference to the next preceding date on which the Common Stock was traded. For purposes of subparagraphs (ii) and (iii) above, the term “previously acquired shares of Common Stock” shall only include Common Stock owned by the Optionee for at least six months prior to the exercise of the Option and shall not in any event include shares of Common Stock which are being acquired pursuant to the exercise of the Option. No shares shall be issued until full payment therefor has been made.

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        5.     Nontransferability of the Option. The Option shall not be assignable, alienable, saleable or transferable by the Optionee other than by will or the laws of descent and distribution; provided, however, that the Optionee shall be entitled, in the manner provided in Paragraph 9 hereof, to designate a beneficiary to exercise his rights, and to receive any shares of Common Stock issuable, with respect to the Option upon the death of the Optionee. The Option may be exercised during the lifetime of the Optionee only by the Optionee or, if permitted by applicable law, the Optionee’s guardian or legal representative.

        6.     Exercisability After Termination of Employment.

                (a)     Death or Disability; Retirement. In the event the Optionee dies while he is in the employ of the Company or any affiliate or if his employment is terminated by reason of his retirement on or after attaining age 60 or by reason of his disability, the Option, to the extent not theretofore exercised, may be exercised in full as follows: (i) by the legal representative of the Optionee (who for purposes of this Agreement may be the Optionee’s beneficiary as designated pursuant to Paragraph 9) at any time within twelve months after the date of the Optionee’s death while in the employ of the Company or any affiliate; or (ii) by the Optionee or his legal representative or guardian at any time within twelve months after the termination of the Optionee’s employment by reason of retirement on or after attaining age 60 or by reason of his disability, but in no event under subparagraphs (i) or (ii) later than ten years after the date of grant of the Option.

                (b)     Voluntary Termination; Termination for Cause. In the event the Optionee voluntarily terminates his employment with the Company and any affiliates or if his employment is terminated for Cause (as hereinafter defined), the Option, to the extent not theretofore exercised, shall immediately terminate upon such termination of employment. For purposes of this Agreement, the term Cause shall mean any termination of the Optionee by action of the Board of Directors of the Company because of the failure of the Optionee to fulfill his obligations with the Company or any affiliate thereof or because of serious willful misconduct by the Optionee in respect of his obligations with the Company or any affiliate thereof which would cause a substantial and demonstrable detriment to the Company, as, for example, the commission by the Optionee of a felony or the perpetration by the Optionee of a common-law fraud against the Company or any affiliate thereof, or any major material action (i.e., not procedural or operational differences) taken against the expressed directive of the Board of Directors of the Company.

                (c)     Other. In the event that the Optionee is discharged or leaves the employ of the Company and its affiliates for any reason (other than the death or disability of the Optionee, the retirement of the Optionee on or after attaining age 60, the Optionee’s voluntary termination of his employment or the termination of the Optionee for Cause), the Option, to the extent not theretofore exercised but then permitted under the percentage limitations of Paragraph 3 hereof, may be exercised by the Optionee or by his legal representative or guardian at any time within three months after the date of termination of employment upon the tender to the Company, in cash or its equivalent, of the full purchase price, but in no event later than ten years after the date of grant of the Option.

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        7.     Tax Withholding. The Company may deduct and withhold from any cash otherwise payable to the Optionee (whether payable as salary, bonus or other compensation) such amount as may be required for the purpose of satisfying the Company’s obligation to withhold Federal, state or local taxes. Further, in the event the amount so withheld is insufficient for such purpose, the Company may require that the Optionee pay to the Company upon its demand or otherwise make arrangements satisfactory to the Company for payment of such amount as may be requested by the Company in order to satisfy its obligation to withhold any such taxes.

                The Optionee shall be permitted to satisfy the Company’s tax withholding requirements by making a written election (in accordance with such rules and regulations and in such form as the Committee may determine) to have the Company withhold shares of Common Stock otherwise issuable to the Optionee (the “Withholding Election”) or to deliver to the Company shares of Common Stock (the “Delivery Election”) in each case having a fair market value on the date income is recognized (the “Tax Date”) pursuant to the exercise of the Option equal to the minimum amount required to be withheld. If a Delivery Election is in effect at the time of the exercise of the Option, the Optionee shall deliver the shares of Common Stock subject to such Delivery Election on, or as soon as practicable after, the Tax Date. If the number of shares of Common Stock withheld or delivered to satisfy withholding tax requirements shall include a fractional share, the number of shares withheld or delivered shall be reduced to the next lower whole number and the Optionee shall deliver cash in lieu of such fractional share, or otherwise make arrangements satisfactory to the Company for payment of such amount. A Withholding Election or Delivery Election must be received by the Secretary of the Company on or prior to the Tax Date.

        8.     Capital Adjustments Affecting the Common Stock. The number of Optioned Shares subject hereto and the related per share exercise price shall be subject to adjustment in accordance with Section 4(b) of the Plan.

        9.     Designation of Beneficiary.

                (a)      The person whose name appears on the signature page hereof after the caption “Beneficiary” or any successor designated by the Optionee in accordance herewith (the person who is the Optionee’s beneficiary at the time of his death is herein referred to as the “Beneficiary”) shall be entitled to exercise the Option, to the extent it is exercisable, after the death of the Optionee. The Optionee may from time to time revoke or change his beneficiary without the consent of any prior beneficiary by filing a new designation with the Committee. The last such designation received by the Committee shall be controlling; provided, however, that no designation, or change or revocation thereof, shall be effective unless received by the Committee prior to the Optionee’s death, and in no event shall any designation be effective as of a date prior to such receipt.

                (b)      If no such Beneficiary designation is in effect at the time of the Optionee’s death, or if no designated Beneficiary survives the Optionee or if such designation conflicts with law, the Optionee’s estate acting through his legal representative shall be entitled to exercise the Option, to the extent it is exercisable after the death of the Optionee. If the Committee is in doubt as to the right of any person to exercise the Option, the Company may refuse to recognize such exercise, without liability for any interest or dividends on the Optioned Shares, until the Committee determines the person entitled to exercise the Option, or the Company may apply to any court of appropriate jurisdiction and such application shall be a complete discharge of the liability of the Company therefor.

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        10.     Transfer Restriction. The shares to be acquired upon exercise of the Option may not be sold or offered for sale except pursuant to an effective registration statement under the Securities Act of 1933, as amended, or in a transaction which, in the opinion of counsel for the Company, is exempt from the registration provisions of said Act.

        11.     Status of Optionee. The Optionee shall not be deemed for any purposes to be a shareholder of the Company with respect to any of the Optioned Shares except to the extent that the Option shall have been exercised with respect thereto, the shares shall have been fully paid, and a stock certificate issued therefor. Neither the Plan nor the Option shall confer upon the Optionee any right to continue in the employ of the Company, nor to interfere in any way with the right of the Company to terminate the employment of the Optionee at any time.

        12.     Powers of the Company Not Affected. The existence of the Option shall not affect in any way the right or power of the Company or its shareholders to make or authorize any or all adjustments, recapitalizations, reorganizations or other changes in the Company’s capital structure or its business, or any merger or consolidation of the Company, or any issuance of bonds, debentures, preferred or prior preference stock ahead of or affecting the Common Stock or the rights thereof, or dissolution or liquidation of the Company, or any sale or transfer of all or any part of the Company’s assets or business or any other corporate act or proceeding, whether of a similar character or otherwise.

        13.     Interpretation by Committee. As a condition of the granting of the Option, the Optionee agrees, for himself and his legal representatives or guardians, that this Agreement shall be interpreted by the Committee and that any interpretation by the Committee of the terms of this Agreement and any determination made by the Committee pursuant to this Agreement shall be final, binding and conclusive.

        IN WITNESS WHEREOF, the Company has caused this instrument to be executed by its duly authorized officers, and the Optionee has hereunto affixed his hand as of the day and year first above written.

GEHL COMPANY
By:
	Name / Title
Attest:
	Name / Title

______________________________________, Optionee

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Beneficiary:   

Address of Beneficiary:   

Beneficiary's Tax Identification/   

Social Security No.:   

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EX-10.3

EXHIBIT 10.3

GEHL COMPANY
2004 EQUITY INCENTIVE PLAN

STOCK OPTION AGREEMENT
FOR NON-EMPLOYEE DIRECTORS

        THIS AGREEMENT, dated as of this _____ day of ________________, ____, by and between Gehl Company, a Wisconsin corporation (the "Company"), and _________________ (the "Optionee").

W I T N E S S E T H :

        WHEREAS, the Company has adopted the Gehl Company 2004 Equity Incentive Plan (the “Plan”), the terms of which, to the extent not stated herein, are specifically incorporated by reference in this Agreement; and

        WHEREAS, the Plan authorizes the automatic grant of options to purchase shares of the Company’s Common Stock, $.10 par value (the “Common Stock”), to members of the Company’s Board of Directors who are not employees of the Company or any affiliate of the Company (a “Non-Employee Director”); and

        WHEREAS, the Optionee is now a Non-Employee Director, and the Company desires him to continue as a member of the Company’s Board of Directors and to secure or increase his stock ownership in the Company as an added incentive for him to continue his association with the Company.

        NOW, THEREFORE, in consideration of the premises and of the covenants and agreements herein set forth, the parties hereby mutually covenant and agree as follows:

        1.     Grant of Option. Subject to the terms and conditions of the Plan and this Agreement, the Company hereby grants to the Optionee an option (the “Option”) to purchase from the Company all or any part of the aggregate amount of 2,000 shares of Common Stock (the “Optioned Shares”). The Option is intended to constitute a non-qualified stock option and shall not be treated as an incentive stock option within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended, or any successor provision thereto.

        2.     Option Price. The per share exercise price to be paid for the Optioned Shares shall be $_____.

        3.     Exercisability and Termination of Option. The Option may be exercised by the Optionee only in accordance with the following schedule:

Elapsed Period of Time After Date Option is Granted	Cumulative Percentage of Shares Subject to Option Which May be Purchased (which number of shares shall be rounded down to the nearest whole number)
Less than One (1) Year	0 %
One (1) Year	33-1/3 %
Two (2) Years	66-2/3 %
Three (3) Years	100 %

Notwithstanding the foregoing schedule, if the Optionee ceases to be a director of the Company by reason of death, disability or retirement prior to ______________, ____, or in the event of a Change of Control of the Company (as defined in the Plan) prior to ______________, ____, the Option shall become immediately exercisable in full. The Option shall terminate on the earlier of: (i) _______________, ____; or (ii) twelve months after the Optionee ceases to be a director of the Company for any reason, including as a result of the Optionee’s death, disability or retirement.

        4.     Manner of Exercise and Payment. Subject to the provisions of Paragraph 3 hereof and the Plan, the Option may be exercised in full at any time or in part from time to time by delivery to the Secretary of the Company at the Company’s principal office in West Bend, Wisconsin, of a written notice of exercise specifying the number of shares with respect to which the Option is being exercised. The notice of exercise must be accompanied by payment in full of the exercise price of the shares being purchased: (i) in cash or its equivalent; (ii) by tendering previously acquired shares of Common Stock (valued at their “market value” as of the date of exercise, as determined in the manner provided in Section 6(b)(iv) of the Plan); or (iii) by any combination of the means of payment set forth in subparagraphs (i) and (ii). For purposes of subparagraphs (ii) and (iii) above, the term “previously acquired shares of Common Stock” shall only include shares of Common Stock owned by the Optionee at least six months prior to the exercise of the Option for which payment is being made and shall not in any event include shares of Common Stock which are being acquired pursuant to the exercise of the Option. No shares shall be issued until full payment therefor has been made.

        5.     Nontransferability of the Option. The Option shall not be transferable by the Optionee other than by will or the laws of descent and distribution; provided, however, that the Optionee shall be entitled, in the manner provided in Paragraph 6 hereof, to designate a beneficiary to exercise his rights, and to receive any shares of Common Stock issuable, with respect to the Option upon the death of the Optionee. The Option may be exercised during the lifetime of the Optionee only by the Optionee or, if permitted by applicable law, the Optionee’s guardian or legal representative.

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        6.       Designation of Beneficiary.

                  (a)      The person whose name appears on the signature page hereof after the caption “Beneficiary” or any successor designated by the Optionee in accordance herewith (the person who is the Optionee’s beneficiary at the time of his death herein referred to as the “Beneficiary”) shall be entitled to exercise the Option, to the extent it is exercisable, after the death of the Optionee. The Optionee may from time to time revoke or change his Beneficiary without the consent of any prior Beneficiary by filing a new designation with the Compensation Committee of the Board of Directors of the Company or such other committee of the Board which shall have been designated to administer the Plan (the “Committee”). The last such designation received by the Committee shall be controlling; provided, however, that no designation, or change or revocation thereof, shall be effective unless received by the Committee prior to the Optionee’s death, and in no event shall any designation be effective as of a date prior to such receipt.

                  (b)     If no such Beneficiary designation is in effect at the time of the Optionee’s death, or if no designated Beneficiary survives the Optionee or if such designation conflicts with law, the Optionee’s estate shall be entitled to exercise the Option, to the extent it is exercisable after the death of the Optionee. If the Committee is in doubt as to the right of any person to exercise the Option, the Company may refuse to recognize such exercise, without liability for any interest or dividends on the Optioned Shares, until the Committee determines the person entitled to exercise the Option, or the Company may apply to any court of appropriate jurisdiction and such application shall be a complete discharge of the liability of the Company therefor.

        7.     Capital Adjustments Affecting the Common Stock. The number of Optioned Shares subject hereto and the related per share exercise price shall be subject to adjustment in accordance with Section 4(b) of the Plan.

        8.     Transfer Restrictions. The shares to be acquired upon exercise of the Option may not be sold or otherwise disposed of except pursuant to an effective registration statement under the Securities Act of 1933, as amended, or in a transaction which, in the opinion of counsel for the Company, is exempt from registration under said Act.

        9.     Status of Optionee. The Optionee shall have no rights as a shareholder with respect to shares covered by the Option until the date of issuance of stock certificates to the Optionee and only after such shares are fully paid. The Option shall not confer upon the Optionee the right to continue as a director of the Company.

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        10.     Interpretation by Committee. As a condition of the granting of the Option, the Optionee agrees, for himself and his personal representatives, that this Agreement shall be interpreted by the Committee and that, subject to the express terms of the Plan, any interpretation by the Committee of the terms of this Agreement and any determination made by the Committee pursuant to this Agreement shall be final, binding and conclusive.

        IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized officers, and the Optionee has hereunto affixed his hand as to the day and year first above written.

GEHL COMPANY
By:
	Name / Title
Attest:
	Name / Title

______________________________________, Optionee

Beneficiary:   

Address of Beneficiary:   

Beneficiary's Tax Identification/   

Social Security No.:   

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EX-10.4

EXHIBIT 10.4

GEHL COMPANY2004
EQUITY INCENTIVE PLAN

ELECTION RELATING TO WITHHOLDING
TAXES IN CONNECTION WITH THE EXERCISE
OF A NON-QUALIFIED STOCK OPTION

        The undersigned optionee (the “Optionee”) hereby elects pursuant to the terms of the Non-Qualified Stock Option Agreement, dated as of , between the Optionee and Gehl Company (the “Company”), granting to the Optionee a Non-Qualified Stock Option under the Company’s 2004 Equity Incentive Plan (the “Plan”), to have the Company withhold the number of shares of Common Stock of the Company (the “Common Stock”) otherwise issuable to the Optionee or to deliver shares of Common Stock to the Company having a fair market value on the Tax Date, as defined below, equal to the minimum amount required to be withheld as a result of the Optionee’s exercise of all or any part of such Non-Qualified Stock Option to satisfy the Company’s obligation to withhold local, state and Federal income taxes. If the number of shares of Common Stock determined pursuant to the preceding sentence shall include a fractional share, the number of shares withheld or delivered shall be reduced to the next lower whole number and the Optionee shall deliver to the Company cash in lieu of such fractional share, or otherwise make arrangements satisfactory to the Company for payment of such amount. The Optionee’s “Tax Date” shall be the date on which the Optionee recognizes income as a result of the exercise of the Non-Qualified Stock Option.

        This election must be received by the Secretary of the Company at its office in West Bend, Wisconsin on or prior to the Optionee’s Tax Date.

        This election shall be irrevocable and shall be subject to disapproval, in whole or in part, by the Committee (as such term is defined in the Plan).

        Dated this _____ day of _____________, ______.

Optionee

        Received _________________, ______.

GEHL COMPANY
By:
	Name / Title

EX-10.7

Exhibit 10.7

SHAREHOLDER AGREEMENT

        THIS SHAREHOLDER AGREEMENT (this “Agreement”) is made and entered into as of this 22nd day of July, 2004, by and between Gehl Company (the “Company”) and Manitou BF S.A. (the “Shareholder”).

RECITALS

         WHEREAS, the Company and the Shareholder have entered into a Manufacturing License, Technical Assistance and Supply Agreement, dated as of July 22, 2004 (such Manufacturing Agreement as renewed or extended from time to time is hereafter referred to as the “Manufacturing Agreement”) and an OEM Supply Agreement, dated as of July 22, 2004 (such Supply Agreement as renewed or extended from time to time is hereafter referred to as the “Selling Agreement”), pursuant to which agreements the parties thereto have agreed to cooperate in the manufacture, distribution and sale of specified telescopic handlers and related attachments in the United States market (the Selling Agreement and the Manufacturing Agreement are collectively referred to herein as the “Telehandler Agreements”); and

        WHEREAS, in connection with entering into the Telehandler Agreements, the Shareholder will acquire record and beneficial ownership of 961,768 shares (the “Shares”) of the Company’s common stock, $.10 par value (the “Common Stock”); and

        WHEREAS, the parties desire to define certain terms and conditions regarding the Shareholder’s investment in the Company.

AGREEMENT

        NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants, agreements and conditions hereinafter set forth and intending to be legally bound hereby, the parties hereto agree as follows:

1. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDER

                         The Shareholder hereby represents and warrants to the Company as follows:

    (a)        The Shareholder is a corporation duly organized and validly existing under the laws of France.

    (b)        The Shareholder has full legal right, power and authority to enter into and perform this Agreement, and the execution and delivery of this Agreement by the Shareholder and the consummation by the Shareholder of the transactions contemplated hereby have been duly authorized by all necessary corporate action on behalf of the Shareholder. This Agreement constitutes a legally valid and binding agreement of the Shareholder, enforceable in accordance with its terms.

    (c)        Prior to effecting the transactions contemplated by this Agreement, the Shareholder owned (either beneficially or otherwise) no shares of Common Stock. The Shareholder is acquiring the Shares pursuant to Section 3 of this Agreement, as principal, solely for investment for the Shareholder’s own account and not in conjunction with any other person, directly or indirectly, and not with a view to, or for offer or sale in connection with, any distribution of the Shares in violation of the Securities Act of 1933, as amended (the “Securities Act”), and not with a view to exercising control over the Company, merging or otherwise combining the Company with any other person or effecting any change in the corporate structure of the Company or (except as contemplated by this Agreement) the manner in which the Company conducts its business.

    (d)        The Shareholder is an “accredited investor” as defined in Rule 501 under the Securities Act. The Shareholder acknowledges that the Company has made available to the Shareholder the opportunity to obtain information respecting the business and financial condition of the Company and to evaluate the merits and risks of the investment in the Shares, including, without limitation, information contained in the Company’s public filings with the United States Securities and Exchange Commission (the “SEC”). The Shareholder also acknowledges that it has had an opportunity to ask questions of the officers of the Company regarding the financial merits and risks of the investment in the Shares and, to the extent the Shareholder has taken advantage of such opportunity, has received satisfactory answers concerning such matters. The Company has made available to the Shareholder all documents and information that the Shareholder has requested relating to the Shares.

    (e)        The form of Schedule 13G attached hereto as Exhibit A, to be filed by the Shareholder pertaining to the Company, does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading.

    (f)        All future amendments to the Schedule 13G filed by the Shareholder pertaining to the Company will not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made, in light of the circumstances under which they are made, not misleading. The Shareholder will not engage in any fraudulent, deceptive or manipulative acts or practices in connection with the Common Stock.

2. REPRESENTATIONS and WARRANTIES OF THE COMPANY

                         The Company hereby represents and warrants to the Shareholder as follows:

    (a)        The Company is a corporation duly organized and validly existing under the laws of the State of Wisconsin.

    (b)        The Company has full legal right, power and authority to enter into and perform this Agreement, and the execution and delivery of this Agreement by the Company and the consummation by the Company of the transactions contemplated hereby have been duly authorized by the Board of Directors of the Company, authorization by no other body or party being required by law. This Agreement constitutes a legally valid and binding agreement of the Company, enforceable in accordance with its terms.

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    (c)        As of the date hereof, the Company’s authorized capital stock consists of: (i) 2,000,000 shares of preferred stock (of which 250,000 shares have been designated as Series A preferred stock), none of which have been issued; and (ii) 25,000,000 shares of Common Stock of which 5,493,050 shares are issued and outstanding and 1,096,863 shares are reserved for issuance pursuant to options and other rights to acquire Common Stock.

    (d)        The Shares have been duly authorized for issuance and sale to the Shareholder pursuant to this Agreement and, when issued and delivered by the Company pursuant to this Agreement against payment of the consideration set forth herein, shall be validly issued, fully paid and nonassessable (except for certain statutory liabilities that may be imposed by Section 180.0622(2)(b) of the Wisconsin Business Corporation Law for unpaid employee wages).

3. ACQUISITION OF SHARES

    (a)        The Shareholder hereby agrees to purchase, and the Company hereby agrees to sell to the Shareholder at the closing described in subsection (b) hereof (the “Closing”), the Shares. The per Share purchase price for the Shares to be purchased by the Shareholder at the Closing hereunder shall be $20.60.

    (b)        The Closing shall take place at 11:00 A.M., Central Time, on July 22, 2004. The Closing shall take place at the offices of the Company, 143 Water Street, West Bend, WI, or at such other time and place as may be agreed upon by the parties. At the Closing, the Company shall deliver to the Shareholder certificates representing the Shares and the Shareholder shall deliver to the Company by wire or inter- or intra-bank transfer in immediately available funds to the account of the Company the aggregate purchase price with respect to the Shares.

4. LIMITATION ON TRANSFER; RIGHT OF FIRST REFUSAL BY THE COMPANY

    (a)        During the period that both of the Telehandler Agreements are in effect, the Shareholder shall not be permitted to effect a Transfer (as defined herein) of any of the Shares.

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    (b)        Following the termination of one or both of the Telehandler Agreements, the Company shall, upon the written request of the Shareholder, use the Company’s reasonable efforts (including, without limitation, consulting with the Company’s financial advisor) to identify to Shareholder prospective purchasers (each a “Prospective Purchaser”) that may have an interest in purchasing portions of the Shares in block transactions. In the event that the Shareholder should decide to effect a Transfer of any of the Shares following the termination of one or both of the Telehandler Agreements (whether to a Prospective Purchaser or to any other person), the Shareholder shall give prior written notice to the Company of such intent to Transfer. Such notice shall specify (i) the number of Shares to be transferred (the “Offered Shares”), (ii) the date of the proposed Transfer (which shall not be less than ninety (90) days after receipt by the Company of such notice), (iii) the identity of the proposed transferee, (iv) the consideration per Share to be received upon such Transfer and the terms of payment (such price and terms of payment referred to collectively as the “Offering Price”), (v) a description of the nature of the proposed Transfer and (vi) a copy of any written documents embodying an offer to purchase the Offered Shares. Such written notice to the Company shall constitute an offer to sell all the Offered Shares to the Company at the Offering Price. The Company shall have the option, but not the obligation, to purchase the Offered Shares pursuant to this Section 4(b). To the extent that the Offering Price consists of consideration other than cash or promissory notes (“Other Consideration”), then the value of such Other Consideration shall be payable in cash based on an appraised value of the Other Consideration determined by an independent appraiser mutually agreed to by the Company and the Shareholder. If the parties cannot agree on an independent appraiser, then each party shall promptly appoint an independent appraiser, and such independent appraisers shall appoint a third independent appraiser to perform the appraisal of the Other Consideration. The cost of performing such appraisal shall be shared equally by the Company and the Shareholder. The option in favor of the Company created hereunder shall be in effect for a period ninety (90) days from the date of receipt of notice by the Company of the pending Transfer, except to the extent that the Offering Price includes Other Consideration in which case such ninety (90) day period shall be extended through the period ending ninety (90) days after final determination of the cash equivalent of the Other Consideration. If the Company elects to exercise its option to purchase the Offered Shares, it shall indicate such election in writing to the Shareholder within the period of the option created hereunder. Thereafter, the Company shall pay to the Shareholder the purchase price immediately upon the Shareholder tendering to the Company, free and clear of any encumbrances, such share certificate or certificates (duly endorsed for transfer) representing the Offered Shares. Upon the lapse of the purchase option provided to the Company hereunder, and provided such Transfer is otherwise permitted under this Agreement or applicable law (including securities laws), the Shareholder shall be free to Transfer the Offered Shares to the transferee identified in the original notice to the Company at any time during the subsequent one (1) month period; provided, that such Transfer is made at a price not less than, nor at terms of payment more beneficial to the purchaser than, the Offering Price. The term “Transfer” shall mean the sale, exchange, pledge, transfer by operation of law, assignment or other disposal (whether voluntary or involuntary) of any Shares held by the Shareholder.

    (c)        Notwithstanding anything to the contrary in this Section 4, following the termination of one or both of the Telehandler Agreements, the Shareholder shall be entitled to sell Shares in open market transactions effected on such primary market or exchange on which the Common Stock is then traded provided that all such transactions shall be made in accordance with the limitations set forth in Rule 144 promulgated under the Securities Act (or any successor rule), including, without limitation, the limitations set forth in subsections (c), (d), (e) and (f) of Rule 144, regardless of whether the Shareholder is no longer an “affiliate” of the Company and regardless of whether the time period set forth in subsection (k) of Rule 144 has expired.

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5. CALL OPTION

                         Following the termination of one or both of the Telehandler Agreements, the Company shall have the ongoing option, but not the obligation, to purchase all of the Shares then held by the Shareholder at a price per Share equal to the average of the last sale or closing prices of the Common Stock (on such primary stock exchange or market on which the Common Stock is then traded) over the thirty (30) trading day period immediately preceding the date of delivery of the Company’s notice of exercise of its option. If the Company elects to exercise such option, it shall indicate such election in writing to the Shareholder. In the event that the Shareholder objects to such notice, the Shareholder shall so notify the Company within ten (10) days of receipt of such notice and the Company’s call notice shall be voided and its right to provide a subsequent call notice shall be automatically suspended for six (6) months. The Shareholder shall be entitled to provide a notice of objection on two (2) separate occasions (which may be successive) pursuant to this Section 5. Within ten (10) days after receipt of a call notice to which the Shareholder either does not object or is not entitled to object, the Shareholder shall tender to the Company the certificates, free and clear of any encumbrances and duly endorsed for transfer, representing all of the Shares then held by the Shareholder. The Company shall, within ninety (90) days after the receipt of such certificates, pay in cash to the Shareholder the purchase price for such Shares. In the event that the Common Stock is not then traded on a stock exchange or market, then the Company shall be permitted to exercise its call option by notifying the Shareholder of its intent to purchase all of the Shares then held by the Shareholder and the parties (subject to the Shareholder’s right to object to such notice as described above) shall thereafter seek to negotiate a mutually acceptable per Share purchase price. If the parties cannot agree on a per Share purchase price, then either the Company will be permitted to withdraw the notice of exercise of its call option (subject to renotice in the future at the Company’s sole discretion) or the parties will by mutual agreement select an independent appraiser to determine a per Share purchase price within a range of prices as fixed by the parties. If the Company does not withdraw its notice and the parties cannot agree on an independent appraiser and/or a price range, then each party shall promptly appoint an independent appraiser, and such independent appraisers shall appoint a third independent appraiser to determine a per Share purchase price. The cost of performing such appraisal shall be shared equally by the Company and the Shareholder. Within ten (10) days after final determination of the per Share purchase price by the parties or an independent appraiser, the Shareholder shall tender to the Company the certificates, free and clear of any encumbrances and duly endorsed for transfer, representing all of the Shares then held by the Shareholder. The Company shall, within ninety (90) days after the receipt of such certificates, pay in cash to the Shareholder the purchase price for such Shares.

6. STANDSTILL

                         During the period that both of the Telehandler Agreements are in effect and for a period of seven (7) years thereafter, neither the Shareholder nor any of its Representatives (as defined herein) (acting on behalf of the Shareholder) will, directly or indirectly, without the prior written consent of the Company or its Board of Directors:

    (a)        acquire, offer to acquire, or agree to acquire, directly or indirectly, by purchase or otherwise, ownership (including without limitation “beneficial ownership” as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended) of any additional (i.e., in addition to the Shares) Voting Securities (as defined herein) or direct or indirect rights to acquire any additional Voting Securities of the Company or any subsidiary or affiliate thereof, or of any successor to or person in control of the Company, or any assets of the Company or any subsidiary, division or affiliate thereof or of any such successor or controlling person; provided, however, that the foregoing shall not prohibit the Shareholder from acquiring additional Voting Securities of the Company as a result of a pro rata dividend paid by the Company with respect to the Shares;

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    (b)        make, or in any way participate in, directly or indirectly, any “solicitation” of “proxies” to vote (as such terms are used in the rules of the SEC), or otherwise seek to advise or influence any person or entity with respect to the voting of any Voting Securities of the Company;

    (c)        (i) take any action to solicit, initiate or encourage any inquiries or the making or implementation of any proposal or offer with respect to a merger, acquisition, consolidation or similar transaction involving, or any purchase of all or any significant portion of the assets or any equity securities of, the Company or any subsidiary or affiliate thereof (a “Company Acquisition Proposal”), other than the transactions contemplated by this Agreement, (ii) agree to endorse any Company Acquisition Proposal, or (iii) engage in negotiations with, or disclose any nonpublic information relating to the Company or any subsidiary or affiliate thereof or afford access to the properties, books or records of the Company or any subsidiary or affiliate thereof to, any person that the Shareholder believes may be considering making, or has made, a Company Acquisition Proposal;

    (d)        form, join or in any way participate in a “group” as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, in connection with any of the foregoing;

    (e)        otherwise act, alone or in concert with others, to seek to control or influence the management, Board of Directors or policies of the Company;

    (f)        disclose any intention, plan or arrangement inconsistent with the foregoing;

    (g)        advise, assist or encourage any other persons in connection with any of the foregoing;

    (h)        take any action which might require the Company to make a public announcement regarding the possibility of an extraordinary transaction involving the Company or any of its securities or assets;

    (i)        file any application with any regulatory authority seeking approval or authority in connection with any action described above; or

    (j)        request the Company, its Board of Directors or any of their Representatives, directly or indirectly, to amend or waive any provision of this Section 6.

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                         Notwithstanding the foregoing, nothing in this Section 6 shall prohibit the Representative of the Shareholder who is elected as a director of the Company pursuant to Section 7 hereof from fulfilling his fiduciary obligations as a member of the Company’s Board of Directors.

                         As used in this Agreement, the term “Representative” means, as it relates to any person, such person’s affiliates (as defined in Rule 405 under the Securities Act and its and their directors, officers, employees, agents, advisors (including, without limitation, financial advisors, counsel and accountants), controlling persons, lenders and investors. As used in this Agreement, the term “Voting Securities” means, as it relates to any person, any securities of the person entitled to vote generally for the election of directors or securities convertible into such securities.

7. BOARD REPRESENTATION

                         For so long as both of the Telehandler Agreements are in effect and the Shareholder owns all of the Shares purchased hereunder, the Company agrees to use reasonable efforts to cause Marcel Claude Braud to be nominated as a candidate for and to cause him to be elected by the Company’s shareholders as a director of the Company. The Company’s obligations relative to the election of Mr. Braud as a director shall become effective in connection with the Company’s 2005 Annual Meeting of Shareholders.

8. LEGENDS AND STOP TRANSFER ORDERS

                         The Shareholder understands that stop transfer instructions will be given to the Company’s transfer agent with respect to the Shares and that there will be placed on all certificates issued to the Shareholder representing the Shares, or any substitutions or replacements therefor, a legend stating substantially as follows:

“The securities represented by this certificate are subject to the provisions of a Shareholder Agreement, dated as of July 22, 2004, between Gehl Company and Manitou BF S.A., and may not be sold, transferred, assigned or otherwise disposed of except in accordance therewith. A copy of said Shareholder Agreement is on file at the office of the Secretary of Gehl Company.”

9. TERM

                         This Agreement shall remain in effect for so long as the Shareholder shall retain any interest in all or any portion of the Shares and for the period contemplated by Section 6 hereof.

10. MISCELLANEOUS

10.1 Assignment; Parties in Interest.

    (a)        Assignment. The rights and obligations of the parties hereunder may not be assigned, transferred or encumbered without the prior written consent of each other party.

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    (b)        Parties in Interest. This Agreement shall be binding upon, inure to the benefit of, and be enforceable by the respective successors and permitted assigns of the parties hereto. Nothing contained herein shall be deemed to confer upon any other person any right or remedy under or by reason of this Agreement.

10.2 Governing Law.

                         This Agreement shall be governed and construed in accordance with the internal laws of the State of Wisconsin, excluding any choice of law rules that may direct the application of the laws of another jurisdiction.

10.3 Amendment and Modification.

                         This Agreement may only be amended or modified in a writing signed by the parties hereto.

10.4 Entire Agreement.

                         This instrument embodies the entire agreement between the parties hereto with respect to the subject matter hereof, and there have been and are no agreements, representations or warranties between the parties other than those set forth or provided for herein.

10.5 Counterparts.

                         This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

10.6 Headings.

                         The headings in this Agreement are inserted for convenience only and shall not constitute a part hereof.

10.7 Severability.

                         In the event any court of competent jurisdiction shall deem any provision of this Agreement to be invalid or unenforceable, then the remaining provisions of this Agreement shall remain in full force and effect notwithstanding the invalidity or unenforceability of the offending provision.

10.8 Specific Performance.

                         The Shareholder agrees that any violation or breach of the provisions contained in this Agreement will result in irreparable injury to the Company for which a remedy at law would be inadequate and that, in addition to any relief at law that may be available to the Company for such violation or breach and regardless of any other provision contained in this Agreement, the Company shall be entitled to such injunctive and other equitable relief as a court may grant.

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10.9 Notices.

                         All notices, requests, demands and other communications hereunder shall be given in writing and shall be: (a) personally delivered; (b) sent by facsimile transmission or other electronic means of transmitting written documents; or (c) sent to the parties at their respective addresses indicated herein by registered or certified U.S. mail, return receipt requested and postage prepaid, or by private overnight mail courier service.

If to the Company, to:

Gehl Company

143 Water Street

West Bend, Wisconsin  53095

Attention:   Michael J. Mulcahy

                      Vice President, Secretary and General Counsel

Facsimile:    (262) 334-6603

with a copy to:

Benjamin F. Garmer, III

Jay O. Rothman

Foley & Lardner LLP

777 East Wisconsin Avenue

Milwaukee, Wisconsin  53202-5306

Facsimile:   (414) 297-4900

If to the Shareholder, to:

Manitou BF S.A.

ZI 430 route de a Aubiniere

BP 249

F-44158 Aneenis cedex

France

Attn: Marcel Claude Braud

Facsimile:   33 2 40 09 1703

with a copy to:

John Burleson

Pakis, Giotes, Page & Burleson, P.C.

801 Washington Avenue, Suite 800

Waco, Texas   76701-1289

Facsimile:   (254) 297-7301

                         If personally delivered, such communication shall be deemed delivered upon actual receipt; if electronically transmitted, such communication shall be deemed delivered the next business day after transmission; if sent by overnight courier, such communication shall be deemed delivered upon receipt; and if sent by U.S. mail, such communication shall be deemed delivered as of the date of delivery indicated on the receipt issued by the relevant postal service, or, if the addressee fails or refuses to accept delivery, as of the date of such failure or refusal. Either party to this Agreement may change its address for the purposes of this Agreement by giving written notice thereof to the other party.

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10.10 Mediation Disputes.

                         In the event that either party hereto perceives there to be any dispute among the parties arising out of or in connection with the negotiation, interpretation, performance or non-performance of this Agreement or any of its terms, the party perceiving the dispute shall first give written notice thereof (in reasonable detail) to the other pursuant to Section 10.9 above, and to any extent that such dispute is not resolved within thirty (30) days after the giving of such notice, during which period the parties agree to negotiate in good faith in an effort to resolve such dispute, the dispute shall be submitted to mediation before either party resorts to litigation of any kind. Mediation is a voluntary dispute resolution process in which the parties to the dispute meet with an impartial person, called a mediator, who would help to resolve the dispute informally and confidentially. Mediators facilitate the resolution of disputes but cannot impose binding decisions, as the parties to the dispute must agree before any settlement between them is binding. If the need for mediation arises, the parties to the dispute shall choose a mutually acceptable mediator and shall share the costs of the mediation services equally. The mediator shall be a lawyer familiar with business transactions of the type contemplated in this Agreement who shall not have been previously employed by or affiliated with any of the parties hereto. The mediation shall occur at or reasonably adjacent to the offices (in the U.S.) of one of the parties, and the party hosting (or having offices most adjacent to the site of) the mediation shall bear one-half (1/2) of the reasonable travel expenses of not more than three representatives/counsel of the other party. If the parties cannot agree as to which of them shall host the mediation, the right to host the mediation shall be determined by the last digit of the closing value of the Dow Jones Industrial Average (as reflected in The Wall Street Journal) on its second trading day following the day on which the notice of dispute is deemed given under Section 10.9 above; if such last digit is even, Shareholder shall have the right to host, and if such digit is odd, Company shall have such right. The parties agree to participate in the mediation process for at least sixty (60) days following the engagement of a mediator. Notwithstanding the foregoing, the parties shall not be bound by this Section 10.10 in the event the dispute relates to a violation of Section 6 hereof.

10.11 Consent to Jurisdiction.

                         All disputes arising under or in connection with this Agreement shall be heard exclusively in, and each party consents to the exclusive jurisdiction and proper venue of, the United States District Court for the Eastern District of Wisconsin, U.S.A. Each party consents to personal and subject matter jurisdiction and venue in such court and waives and relinquishes all right to attack the suitability or convenience of such venue or forum by reason of their present or future domiciles, or by any other reason. Each party agrees that all directions issued by the forum court, including all injunctions and other decrees, will be binding and enforceable in all jurisdictions and countries.

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        IN WITNESS WHEREOF, the parties have executed this Agreement as of the date and year first above written.

GEHL COMPANY
By:	/s/  William D. Gehl
	William D. Gehl Chief Executive Officer

MANITOU BF S.A.
By:	/s/  Marcel Claude Braud
	Marcel Claude Braud President

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EX-31.1

Exhibit 31.1

I, William D. Gehl, Chairman of the Board of Directors and Chief Executive Officer of Gehl Company, certify that:

        1.      I have reviewed this quarterly report on Form 10-Q of Gehl Company;

        2.      Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

        3.      Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

        4.      The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and we have:

        (a)        designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

        (b)        evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

        (c)        disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrants’ fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

        5.      The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

        (a)        all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

        (b)        any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 9, 2004	/s/ William D. Gehl
	William D. Gehl
	Chairman of the Board of Directors and
	Chief Executive Officer
	(Principal Executive Officer)

EX-31.2

Exhibit 31.2

I, Kenneth P. Hahn, Vice President of Finance and Chief Financial Officer of Gehl Company, certify that:

        1.      I have reviewed this quarterly report on Form 10-Q of Gehl Company;

        2.      Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

        3.      Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

        4.      The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and we have:

        (a)      designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

        (b)      evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

        (c)      disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrants’ fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

        5.      The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

        (a)      all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

        (b)      any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 9, 2004	/s/ Kenneth P. Hahn
	Kenneth P. Hahn
	Vice President of Finance and
	Chief Financial Officer
	(Principal Financial Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION OF PERIODIC FINANCIAL REPORTS

Solely for the purposes of complying with Section 906 of the Sarbanes-Oxley Act of 2002, we, William D. Gehl, Chairman of the Board of Directors and Chief Executive Officer, and Kenneth P. Hahn, Vice President of Finance and Chief Financial Officer, of Gehl Company, certify, based on our knowledge, that:

(1) the Quarterly Report on Form 10-Q for the three-month period ended June 26, 2004 (the “Quarterly Report”) to which this statement is an exhibit fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)) and

(2) information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of Gehl Company.

Dated:  August 9, 2004

/s/ William D. Gehl

William D. Gehl

/s/ Kenneth P. Hahn

Kenneth P. Hahn