-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, F65YmJVXd0Ls9VHm0q1h8XUgFEsDHYgZMmGzjLwyjxK2gvrNidxzAPKEvAlidDjS 51SCWLu/W4Nd7NEUep9RIA== /in/edgar/work/20000810/0001045969-00-000590/0001045969-00-000590.txt : 20000921 0001045969-00-000590.hdr.sgml : 20000921 ACCESSION NUMBER: 0001045969-00-000590 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20000630 FILED AS OF DATE: 20000810 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ASV INC /MN/ CENTRAL INDEX KEY: 0000926763 STANDARD INDUSTRIAL CLASSIFICATION: [3531 ] IRS NUMBER: 411459569 STATE OF INCORPORATION: MN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-25620 FILM NUMBER: 690449 BUSINESS ADDRESS: STREET 1: P O BOX 5160 STREET 2: 840 LILY LANE CITY: GRAND RAPIDS STATE: MN ZIP: 55744-5160 BUSINESS PHONE: 2183273434 MAIL ADDRESS: STREET 1: PO BOX 5160 STREET 2: 840 LILY LANE CITY: GRAND RAPIDS STATE: MN ZIP: 55744-5160 10-Q 1 0001.txt FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2000 Commission file number: 0-25620 A.S.V., Inc. (Exact name of registrant as specified in its charter) Minnesota 41-1459569 --------- ---------- State or other jurisdiction of I.R.S. Employer Identification No. incorporation of organization 840 Lily Lane Grand Rapids, MN 55744 (218) 327-3434 ---------------------- -------------- Address of principal executive offices Registrant's telephone number Check whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. [X] Yes [ ] No As of August 7, 2000, 9,701,541 shares of registrant's $.01 par value Common Stock were outstanding. PART I - FINANCIAL INFORMATION ITEM 1 - FINANCIAL STATEMENTS A.S.V., INC. CONSOLIDATED BALANCE SHEETS (UNAUDITED)
June 30, December 31, 2000 1999 ----------- ------------ ASSETS CURRENT ASSETS Cash and cash equivalents ........................... $ 298,805 $ 743,184 Short-term investments .............................. 999,776 1,247,696 Accounts receivable, net ............................ 12,308,906 8,661,049 Inventories ......................................... 29,798,312 32,391,256 Prepaid expenses and other .......................... 854,049 811,076 ----------- ----------- Total current assets 44,259,848 43,854,261 Property and equipment, net ............................ 4,715,040 4,795,674 ----------- ----------- Total Assets $48,974,888 $48,649,935 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Line of credit ...................................... $ 1,875,000 $ 4,080,000 Current portion of long-term liabilities ............ 80,588 254,412 Accounts payable .................................... 2,972,142 1,775,883 Accrued liabilities Compensation ...................................... 235,713 252,708 Warranties ........................................ 450,000 450,000 Commission ........................................ 450,536 306,831 Other ............................................. 239,862 237,134 Income taxes payable ................................ 250,952 -- ----------- ----------- Total current liabilities 6,554,793 7,356,968 ----------- ----------- LONG-TERM LIABILITIES, less current portion ............ 2,157,342 2,197,046 ----------- ----------- COMMITMENTS AND CONTINGENCIES .......................... -- -- SHAREHOLDERS' EQUITY Capital stock, $.01 par value: Preferred stock, 11,250,000 shares authorized; no shares outstanding ............................. -- -- Common stock, 33,750,000 shares authorized; 9,701,541 shares issued and outstanding in 2000; 9,686,457 shares issued and outstanding in 1999 ... 97,015 96,865 Additional paid-in capital .......................... 31,010,016 30,859,403 Retained earnings ................................... 9,155,722 8,139,653 ----------- ----------- 40,262,753 39,095,921 ----------- ----------- Total Liabilities and Shareholders' Equity $48,974,888 $48,649,935 =========== ===========
See notes to consolidated financial statements. 2 A.S.V., INC. CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
Three Months Ended Six Months Ended June 30, June 30, ------------------------------- ------------------------------- 2000 1999 2000 1999 ------------- -------------- ------------- -------------- Net sales................................... $ 12,124,441 $ 9,064,173 $ 23,308,025 $ 17,526,818 Cost of goods sold.......................... 9,157,072 6,645,345 17,807,986 12,870,863 ------------- -------------- ------------- -------------- Gross profit....................... 2,967,369 2,418,828 5,500,039 4,655,955 Operating expenses: Selling, general and administrative 1,847,874 1,252,499 3,518,197 2,365,658 Research and development 121,222 155,176 256,370 263,384 ------------- -------------- ------------- -------------- Operating income................... 998,273 1,011,153 1,725,472 2,026,913 Other income (expense) Interest expense (70,798) (60,229) (164,001) (126,132) Other, net 24,833 62,771 54,598 146,861 ------------- -------------- ------------- -------------- Income before income taxes......... 952,308 1,013,695 1,616,069 2,047,642 Provision for income taxes.................. 353,000 325,000 600,000 710,000 ------------- -------------- ------------- -------------- NET EARNINGS....................... $ 599,308 $ 688,695 $ 1,016,069 $ 1,337,642 ============= ============== ============= ============== Net earnings per common share Basic.................................. $ .06 $ .07 $ .10 $ .14 ============= ============== ============= ============== Diluted................................ $ .06 $ .07 $ .10 $ .14 ============= ============== ============= ============== Weighted average number of common shares outstanding Basic.................................. 9,698,837 9,662,264 9,693,849 9,488,210 ============= ============== ============= ============== Diluted................................ 9,875,867 10,081,662 9,915,453 9,880,775 ============= ============== ============= ==============
See notes to consolidated financial statements. 3 A.S.V., INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Six months ended June 30,
2000 1999 ------------ ------------ Cash flows from operating activities: Net earnings ..................................................... $ 1,016,069 $ 1,337,642 Adjustments to reconcile net earnings to net cash provided by (used in) operating activities: Depreciation ................................................. 199,050 171,000 Interest accrued on capital lease obligation ................. 24,144 24,144 Deferred income taxes ........................................ (50,000) (65,000) Effect of warrant earned ..................................... 75,600 75,600 Changes in assets and liabilities: Accounts receivable ........................................ (3,647,857) (2,089,395) Inventories ................................................ 2,592,944 (11,735,001) Prepaid expenses and other ................................. 7,027 219,565 Accounts payable ........................................... 1,196,259 41,497 Accrued expenses ........................................... 129,438 188,669 Income taxes payable ....................................... 285,952 300,747 ------------ ------------ Net cash provided by (used in) operating activities ................. 1,828,626 (11,530,532) ------------ ------------ Cash flows from investing activities: Purchase of property and equipment ............................... (118,416) (306,697) Purchase of short-term investments ............................... (2,080) (3,509,129) Redemption of short-term investments ............................. 250,000 1,003,000 ------------ ------------ Net cash provided by (used in) investing activities ................. 129,504 (2,812,826) ------------ ------------ Cash flows from financing activities: Principal payments on line of credit, net ........................ (2,205,000) (3,440,000) Principal payments on long-term liabilities ...................... (237,672) (215,643) Proceeds from sale of common stock and warrant, net of offering costs ................................................ -- 17,551,105 Proceeds from exercise of stock options .......................... 62,108 547,321 Retirements of common stock ...................................... (21,945) (349,068) ------------ ------------ Net cash provided by (used in) financing activities ................. (2,402,509) 14,093,715 ------------ ------------ Net decrease in cash and cash equivalents ........................... (444,379) (249,643) Cash and cash equivalents at beginning of period .................... 743,184 308,565 ------------ ------------ Cash and cash equivalents at end of period .......................... $ 298,805 $ 58,922 ============ ============ Supplemental disclosure of cash flow information: Cash paid for interest ........................................... $ 189,936 $ 139,445 Cash paid for income taxes ....................................... 324,390 310,264 Supplemental disclosure of non-cash investing and financing activity: Tax benefit from exercise of stock options ....................... $ 35,000 $ 175,000
See notes to consolidated financial statements. 4 A.S.V., INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2000 (Unaudited) NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Interim Financial Information The accompanying unaudited, consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (US GAAP) for interim financial information. Accordingly, they do not include all of the footnotes required by US GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal, recurring adjustments) considered necessary for a fair presentation have been included. Results for the interim periods are not necessarily indicative of the results for an entire year. NOTE 2. INVENTORIES Inventories consist of the following: June 30, December 31, 2000 1999 ----------- ------------ Raw materials, semi-finished and work in process inventory $17,184,724 $19,531,208 Finished goods 7,283,883 7,574,115 Used equipment held for resale 5,329,705 5,285,933 ----------- ----------- $29,798,312 $32,391,256 =========== =========== NOTE 3. LINE OF CREDIT During the second quarter of 2000, the Company amended its line of credit agreement with its primary bank. The amended line of credit provides for an expiration date of the earlier of demand or June 1, 2001. All other major terms and conditions remain the same. NOTE 4. SUBSEQUENT EVENT On July 11, 2000 the Company entered into a non-binding letter of intent with Caterpillar Inc. ("Caterpillar") that calls for Caterpillar to make an additional investment in ASV of approximately 500,000 shares of the Company's Common Stock at $18 per share. 5 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Background In January 1999, the Company closed on a strategic alliance with Caterpillar Inc. ("Caterpillar") whereby Caterpillar purchased, for an aggregate purchase price of $18 million, one million newly issued shares of the Company's Common Stock and a warrant to purchase 10,267,127 newly issued shares of the Company's Common Stock (the "Transaction"). In connection with the Transaction, the Company received, among other items, access to Caterpillar's worldwide dealer network through which it can distribute its products. Since the closing of the Transaction with Caterpillar, the Company has been working closely with Caterpillar and its dealers to introduce the Company's products to those Caterpillar dealers not currently selling and servicing the Posi-Track product line. Since the closing of the Transaction, the Company has been meeting with potential Caterpillar dealers and educating them on the benefits of a rubber tracked machine. The Company also put in place many systems that it believes will help Caterpillar dealers interface with the Company. In September 1999, the Company's computer systems were integrated with Caterpillar's computer systems. This allows Caterpillar dealers to order machines, attachments, parts and process warranty claims on-line in a manner similar to how they perform these tasks with Caterpillar factories. As a result of the Transaction, the Company's near term revenues, profitability and other financial results were lower than if the Transaction had not been entered into. The decline is related to a number of factors, including (i) the commission paid to Caterpillar for sales made to Caterpillar dealers, (ii) transition issues affecting orders from the preexisting non-Caterpillar affiliated dealers, and (iii) certain other costs of implementing the Transaction and the agreements contemplated by the Commercial Alliance Agreement. The Company anticipates that these factors may continue to effect its near term financial results. Over the longer term, however, management believes that the Company will be able to achieve improved financial results due to the Transaction and the Commercial Alliance Agreement. On July 11, 2000 the Company entered into a non-binding letter of intent with Caterpillar that calls for Caterpillar to make an additional investment in ASV. Caterpillar is expected to purchase 500,000 shares of the Company's Common Stock at $18 per share. The proceeds will help fund ASV participation in new product development programs. Results of Operations The following table sets forth certain Statement of Earnings data as a percentage of net sales:
Three Months Ended June 30, Six Months Ended June 30, 2000 1999 2000 1999 -------- -------- -------- -------- Net sales .............................. 100.0% 100.0% 100.0% 100.0% Cost of goods sold ..................... 75.5 73.3 76.4 73.4 Gross profit ........................... 24.5 26.7 23.6 26.6 Selling, general and administrative .... 15.2 13.8 15.1 13.5 Research and development ............... 1.0 1.7 1.1 1.5 Operating income ....................... 8.2 11.2 7.4 11.6 Net earnings ........................... 4.9 7.6 4.4 7.6
For the three months ended June 30, 2000 and 1999. Net Sales. Net sales for the three months ended June 30, 2000 increased 34% to approximately $12,124,000, compared with approximately $9,064,000 for the same period in 1999. The main factor for the increase in sales was due primarily to the continued increased sales of the Company's model 4810 Posi-Track, which was introduced in the third quarter of 1999. The 4810 utilizes several Caterpillar components, including a Caterpillar engine, which the Company believes enhances its appeal to those Caterpillar dealers selling the Company's products. In addition, the Company has more dealers selling and servicing its Posi-Track machines in 2000. As of July 31, 2000, the Company had approximately 60 Caterpillar dealers and 12 independent dealers representing approximately 390 locations compared with 30 Caterpillar dealers and 25 independent dealers, representing approximately 240 locations, as of July 31, 1999. Sales of used equipment also increased for the three-month period ended June 30, 2000 as a result of increased marketing efforts. 6 Gross Profit. Gross profit for the three months ended June 30, 2000 increased to approximately $2,967,000 compared with approximately $2,419,000 in 1999. However, the gross profit percentage decreased from 26.7% in 1999 to 24.5% in 2000. The increase in gross profit dollars is due to the increased sales volume for 2000. The decreased gross profit percentage can be attributed to a lesser number of units produced in 2000, which resulted in higher fixed costs per unit. Also, a greater amount of used equipment was sold in 2000, which carries a lower gross profit percentage than new machines. On September 1, 1999, the Company's warranty policy changed with respect to all machines sold after that date. This was accomplished at the same time as the integration of the Company's computer system with Caterpillar's computer system to allow Caterpillar dealers to process warranty claims on-line, eliminating the need to file paper warranty claims. The changes in the Company's warranty policy include the elimination of reimbursing dealers labor relating to warranty repairs, eliminating travel costs relating to warranty repairs and the elimination of the 15% warranty discount provided on parts used in warranty repairs. In addition, should a Caterpillar manufactured part, such as an engine, fail during the warranty period, Caterpillar is responsible for providing the warranty on that part. The Company believes the changes to its warranty policy will help it better manage its warranty costs in the future. Selling, General and Administrative Expenses. Selling, general and administrative expenses increased from approximately $1,252,000, or 13.8% of net sales in 1999, to approximately $1,848,000, or 15.2% of net sales in 2000. These increases are due primarily to additional dealer support programs put in place during the second half of 1999, including the hiring of field service representatives during the fourth quarter of 1999. Also the Company paid a greater commission to Caterpillar in 2000 due to increased sales to Caterpillar dealers. The commission paid to Caterpillar increased from approximately $238,000 in the second quarter of 1999 to approximately $451,000 in the second quarter of 2000. Research and Development Expenses. Research and development expenses decreased from approximately $155,000 in second quarter of 1999 to approximately $121,000 for the second quarter of 2000. The decrease was due to the completion of testing and the start of production of the Company's newest model, the RCo30 All Surface Loader. In connection with the letter of intent entered into with Caterpillar, and in order to maintain its competitive advantage over other manufacturers of similar products, the Company believes it will increase the level of spending on research and development activities. It is expected the main thrust of these activities will be directed towards extensions of the Company's current product lines and improvements of existing products. Interest Expense. Interest expense increased from approximately $60,000 for the second quarter of 1999 to approximately $71,000 for the second quarter of 2000. The increase was due to greater utilization of the Company's line of credit to fund current operations in 2000. Net Earnings. Net earnings for the second quarter of 2000 were approximately $599,000 compared with approximately $689,000 for the second quarter of 1999. The decrease was the result of increased sales, offset by a decreased gross profit percentage, increased operating expenses and increased interest expense. In addition, in the second quarter of 1999, the Company recorded a $50,000 income tax benefit for amended income tax returns for prior years. No similar benefit was available in the second quarter of 2000. For the six months ended June 30, 2000 and 1999. Net Sales. Net sales for the six months ended June 30, 2000 increased 33%, to approximately $23,308,000 compared with approximately $17,527,000 for the same period in 1999. This increase was due primarily to the continued increased sales of the Company's model 4810 Posi-Track and increased number of Caterpillar dealer locations as discussed above. For the six months ended June 30, 2000, sales of parts, used equipment and other items decreased approximately 7% compared with the same period in 1999 due to the combination of two offsetting factors. First, sales of used equipment increased approximately $507,000 from increased marketing efforts. Second, other sales decreased as the Company had no military contracts in place during 2000 as it did in 1999. Gross Profit. Gross profit for the six months ended June 30, 2000 was approximately $5,500,000, or 23.6% of net sales compared with approximately $4,656,000, or 26.6% of net sales, for the six months ended June 30, 1999. The increased gross profit was due to increased sales in 2000. The decreased gross profit percentage in 2000 was due to a lesser number of units produced in 2000, which resulted in higher fixed costs per unit, and also a greater amount of used equipment sold in 2000, which generally carries a lower gross profit percentage than new machines. 7 Selling, General and Administrative Expenses. Selling, general and administrative expenses increased from approximately $2,366,000, or 13.5% of net sales for the six months ended June 30, 1999, to approximately $3,518,000, or 15.1% of net sales, for the six months ended June 30, 2000. These increases are due primarily to additional dealer support programs put in place during the second half of 1999, including the hiring of field service representatives during the fourth quarter of 1999. Also the Company paid a greater commission to Caterpillar in 2000 due to increased sales to Caterpillar dealers and a full six months of commissionable sales in 2000 compared with five months in 1999. The commission paid to Caterpillar increased from approximately $429,000 for the six months ended June 30, 1999 to approximately $824,000 for the same period in 2000. Research and Development Expenses. Research and development expenses decreased slightly from approximately $263,000 in 1999 to approximately $256,000 in 2000. The decrease was due mainly to the completion of testing and the start of production during the second quarter of 2000 of the Company's newest model, the RCo30 All Surface Loader. Interest Expense. Interest expense increased from approximately $126,000 for the six months ended June 30, 1999 to approximately $164,000 for the same period in 2000. The increase was due to greater utilization of the Company's line of credit to fund current operations in 2000. Net Earnings. Net earnings for the six months ended June 30, 2000 decreased to approximately $1,016,000 from approximately $1,338,000 for 1999. The decrease was a result of increased sales, offset by a decreased gross profit percentage, increased operating expenses and increased interest expense. In addition, in the second quarter of 1999, the Company recorded a $50,000 income tax benefit for amended income tax returns for prior years. No similar benefit was available in the second quarter of 2000. Liquidity and Capital Resources At June 30, 2000, working capital increased approximately $1,208,000 to approximately $37,705,000 compared with approximately $36,497,000 at December 31, 1999. This increase was due to several factors. First, accounts receivable increased as the Company experienced a 33% rise in sales in the first half of 2000 over 1999. In addition, the Company has offered extended payment terms, generally less than 150 days, on certain sales of its products, thereby causing accounts receivable, along with working capital, to increase. Second, working capital increased as the Company's borrowings on its line of credit has decreased due to improved cash flow. Third, working capital decreased due to decreased inventory, primarily raw materials, as the Company has reduced its investment in raw materials. Finally, working capital was reduced by increased income taxes payable due to higher levels of taxable income in the second quarter of 2000. The Company continues to work on reducing its inventory levels. In an effort to reduce its used equipment inventory, a retail store was opened in May 2000 in Grand Rapids, Minnesota to sell used Posi-Tracks and related accessories directly to the end user. The Company anticipates the RCo30 All Surface Loader will also be sold from this location to retail customers in the Grand Rapids area beginning in the third quarter of 2000. The Company began production of its newest model machine, the RCo30 All Surface Loader, in June 2000. The RCo30 is significantly smaller than any of the Company's previous models and will be primarily marketed towards the landscape industry. The Company expects the RCo30 to be sold through multiple distribution channels. Sales of the RCo30 began in July 2000. The Company believes its existing cash and marketable securities, together with cash expected to be provided by operations and available, unused credit lines, will satisfy the Company's projected working capital needs and other cash requirements for at least the next twelve months. The statements contained in this Form 10-Q regarding Caterpillar's plans to increase its ownership in ASV, the number of shares Caterpillar intends to purchase, the price at which Caterpillar intends to purchase the shares and ASV's intended use of the proceeds from the sale of shares to Caterpillar are forward-looking statements. The letter of intent entered into between ASV and Caterpillar is non-binding, and there can be no assurance that the transactions contemplated by the letter of intent ultimately will be consummated. Certain factors may effect whether these transactions are consummated or whether the terms of these transactions are modified, including the parties' ability to successfully negotiate definitive agreements setting forth the parties understanding, market conditions and corporate developments at ASV or Caterpillar. 8 In addition, the statements set forth above under "Liquidity and Capital Resources" and elsewhere in this Form 10-Q which are not historical facts are forward-looking statements, including the statements regarding the Company's anticipated distribution of its new RCo30 machine, anticipated reduced warranty costs, expected revenue, profitability and other financial results in 2000 and beyond and the Company's capital needs. These forward-looking statements involve risks and uncertainties, many of which are outside the Company's control and, accordingly, actual results may differ materially. Factors that might cause such a difference include, but are not limited to, lack of market acceptance of ASV's machines, ASV's ability to achieve timely production and enter into appropriate distribution arrangements for its RCo30 machine, unexpected delays in obtaining raw materials, unexpected delays in the manufacturing process, unexpected additional expenses or operating losses or the activities of competitors. Additional factors include the Company's ability to realize the anticipated benefits from the relationship with Caterpillar and the factors set forth in the Risk Factors filed as Exhibit 99 to the Company's Report on Form 10-Q for the period ended June 30, 1999. Any forward-looking statements provided from time-to-time by the Company represent only management's then-best current estimate of future results or trends. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company has no history of, and does not anticipate in the future, investing in derivative financial instruments, derivative commodity instruments or other such financial instruments. Transactions with international customers are entered into in US dollars, precluding the need for foreign currency hedges. Additionally, the Company invests in money market funds and fixed rate U.S. government and corporate obligations, which experience minimal volatility. Thus, the exposure to market risk is not material. PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS None ITEM 2. CHANGES IN SECURITIES None ITEM 3. DEFAULTS UPON SENIOR SECURITIES None ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS The annual meeting of shareholders of A.S.V., Inc. was held on June 2, 2000. Matters submitted at the meeting for vote by the shareholders were as follows: (a) Election of Directors. The following directors were elected at the Annual Meeting, each with the following votes: For Against --- ------- Philip C. Smaby 9,314,229 37,912 Gary D. Lemke 9,316,329 35,812 Edgar E. Hetteen 9,318,252 33,889 Jerome T. Miner 9,315,805 36,339 Karlin S. Symons 9,316,854 35,287 Leland T. Lynch 9,316,429 35,712 James H. Dahl 9,320,352 31,789 R. E. "Teddy" Turner, IV 9,315,054 37,087 Richard A. Benson 9,221,151 130,990 Richard A. Cooper 9,218,876 133,266 9 (b) Ratification of Appointment of Independent Public Accountants. Shareholders ratified the appointment of Grant Thornton LLP as the Company's independent public accountants for the fiscal year ending December 31, 2000, with a vote of 9,334,211 votes for, 11,415 votes against and 6,425 shares abstaining. ITEM 5. OTHER INFORMATION None ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits Exhibit Number Description ------ ------------ 3.1 Second Restated Articles of Incorporation of the Company (a) 3.1a Amendment to Second Restated Articles of Incorporation of the Company filed January 6, 1997 (e) 3.1b Amendment to Second Restated Articles of Incorporation of the Company filed May 4, 1998 (h) 3.2 Bylaws of the Company (a) 3.3 Amendment to Bylaws of the Company adopted April 13, 1999 (l) 4.1 Specimen form of the Company's Common Stock Certificate (a) 4.3* 1994 Long-Term Incentive and Stock Option Plan (a) 4.4 Warrant issued to Leo Partners, Inc. on December 1, 1996 (d) 4.5* 1996 Incentive and Stock Option Plan (e) 4.6* 1996 Incentive and Stock Option Plan, as amended (f) 4.7* 1998 Non-Employee Director Stock Option Plan (f) 4.8* Amendment to 1998 Non-Employee Director Stock Option Plan 4.9 Securities Purchase Agreement dated October 14, 1998 between Caterpillar Inc. and the Company (h) 4.10 Warrant issued to Caterpillar Inc. on January 29, 1999 (i) 4.11 Voting Agreement dated as of October 14, 1998 by certain shareholders of the Company and Caterpillar Inc. (h) 10.1 Development Agreement dated July 14, 1994 among the Iron Range Resources and Rehabilitation Board, the Grand Rapids Economic Development Authority ("EDA") and the Company (b) 10.2 Lease and Option Agreement dated July 14, 1994 between the EDA and the Company (b) 10.3 Option Agreement dated July 14, 1994 between the EDA and the Company (b) 10.4 Supplemental Lease Agreement dated April 18, 1997 between the EDA and the Company (e) 10.5 Supplemental Development Agreement dated April 18, 1997 between the EDA and the Company (e) 10.6 Line of Credit dated May 22, 1997 between Norwest Bank Minnesota North, N.A. and the Company (e) 10 10.7* Employment Agreement dated October 17, 1994 between the Company and Thomas R. Karges (c) 10.8 Consulting Agreement between the Company and Leo Partners, Inc. dated December 1, 1996 (d) 10.9 Extension of Lease Agreement dated May 13, 1998 between the EDA and the Company (g) 10.10 First Amendment to Credit Agreement dated September 30, 1998 between Norwest Bank Minnesota North, N.A. and the Company (g) 10.11 Commercial Alliance Agreement dated October 14, 1998 between Caterpillar Inc. and the Company (h) 10.12 Management Services Agreement dated January 29, 1999 between Caterpillar Inc. and the Company (j) 10.13 Marketing Agreement dated January 29, 1999 between Caterpillar Inc. and the Company (j) 10.14 Third Amendment to Credit Agreement dated June 9, 1999 between Norwest Bank Minnesota North, N.A. and the Company (k) 10.15 Fourth Amendment to Credit Agreement dated June 1, 2000 between Norwest Bank Minnesota North, N.A. and the Company 11 Statement re: Computation of Per Share Earnings 22 List of Subsidiaries (a) 27 Financial Data Schedule for the three months ended June 30, 2000 99 Risk Factors (k) -------------------------------------------------------------- (a) Incorporated by reference to the Company's Registration Statement on Form SB-2 (File No. 33"61284C) filed July 7, 1994. (b) Incorporated by reference to the Company's Post-Effective Amendment No. 1 to Registration Statement on Form SB-2 (File No. 33"61284C) filed August 3, 1994. (c) Incorporated by reference to the Company's Quarterly Report on Form 10-QSB for the quarter ended September 30, 1994 (File No. 33-61284C) filed November 11, 1994. (d) Incorporated by reference to the Company's Annual Report on Form 10-KSB for the year ended December 31, 1996 (File No. 0-25620) filed electronically March 28, 1997. (e) Incorporated by reference to the Company's Quarterly Report on Form 10-QSB for the quarter ended June 30, 1997 (File No. 0-25620) filed electronically August 13, 1997. (f) Incorporated by reference to the Company's Definitive Proxy Statement for the year ended December 31, 1997 (File No. 0-25620) filed electronically April 28, 1998. (g) Incorporated by reference to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1998 (File No. 0-25620) filed electronically August 12, 1998. (h) Incorporated by reference to the Company's Current Report on Form 8-K (File No. 0-25620) filed electronically October 27, 1998. (i) Incorporated by reference to the Company's Current Report on Form 8-K (File No. 0-25620) filed electronically February 11, 1999. 11 (j) Incorporated by reference to the Company's Annual Report on Form 10-K for the year ended December 31, 1998 (File No. 0-25620) filed electronically March 26, 1999. (k) Incorporated by reference to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1999 (File No. 0-25620) filed electronically August 9, 1999. (l) Incorporated by reference to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 1999 (File No. 0-25620) filed electronically November 12, 1999. * Indicates management contract or compensation plan or arrangement. (b) Reports on Form 8-K No reports on Form 8-K were filed during the quarter ended June 30, 2000. - -------------------------------------------------------------------------------- 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. A.S.V., Inc. Dated: August 11, 2000 By /s/ Gary Lemke ------------------------------------- Gary Lemke President Dated: August 11, 2000 By /s/ Thomas R. Karges ------------------------------------- Thomas R. Karges Chief Financial Officer (principal financial and accounting officer) 12 EXHIBIT INDEX
Exhibit Method of Filing ------- ---------------- 4.8 Amendment to 1998 Non-Employee Director Stock Option Plan......... Filed herewith electronically 10.15 Fourth Amendment to Credit Agreement.............................. Filed herewith electronically 11 Statement re: Computation of Per Share Earnings................... Filed herewith electronically 27 Financial Data Schedule........................................... Filed herewith electronically
13 EX-4.8 2 0002.txt AMENDMENT TO 1998 NON-EMPLOYEE DIRECTOR STOCK Exhibit 4.8 A.S.V., INC. AMENDMENT TO 1998 NONEMPLOYEE DIRECTOR STOCK OPTION PLAN ADOPTED AT A MEETING OF THE BOARD OF DIRECTORS HELD JANUARY 18, 2000 NOW, THEREFORE, BE IT RESOLVED, that Section 6(a) of the A.S.V., Inc. 1998 Non-employee Director Stock Option Plan (the "Plan") shall be amended to read in its entirety as follows: (a) Annual Option Grants. An option to purchase 3,000 shares of Common Stock shall be granted automatically on the first business day of each calendar year (the "Annual Option Grant Date") during the term of the Plan, beginning on January 2, 2001 to each eligible director in office on such Annual Grant Date. In addition, on a one-time only basis, an option to purchase 5,000 shares of Common Stock shall be granted effective as of January 18, 2000 to each eligible director in office on such date. RESOLVED FURTHER, that Section 6(b) of the Plan shall be amended to read in its entirety as follows: (b) Grants to New Directors. An option to purchase 2,250 shares of Common Stock shall be granted automatically on the day that any eligible director is first elected to the Board of Directors; provided, however, that if such day is not a business day, such grant shall be effective on the first business day following such election. Such grants shall be made only to eligible directors who were not directors of the Company prior to the date this Plan was adopted by the Board of Directors. RESOLVED FURTHER, that a new Section 6(f) shall be added to the Plan to read as follows: (f) Election to Decline Option. Notwithstanding anything contained in this agreement to the contrary, any eligible director may decline to receive options hereunder by notice to the Company. EX-10.15 3 0003.txt FOURTH AMENDMENT TO CREDIT AGREEMENT Exhibit 10.15 Norwest Bank Minnesota North, National Association Fourth Amendment to Credit Agreement - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- THIS FOURTH AMENDMENT TO CREDIT AGREEMENT (the "Amendment") is dated as of the 1st day of June 2000, and is by and between A.S.V., Inc. (the "Borrower") and Norwest Bank Minnesota North, --- --------- National Association, a national banking association (the "Bank"). REFERENCE IS HEREBY MADE to that certain Credit Agreement dated May 22, 1997 (the "Agreement") and First Amendment to Credit Agreement dated June 30, 1998 and Second Amendment to Credit Agreement dated January 25, 1999 and Third Amendment to Credit Agreement dated June 9, 1999, ("the Agreement") whereby the Bank agreed to provide a Ten Million and 00/100 Dollars ($10,000,000.00) line of credit to be used for working capital with a Line Expiration Date of the earlier of Demand or June 1, 2000. WHEREAS, the Bank is willing to grant the Borrower's request, subject to the provisions of the Amendment; NOW, THEREFORE, the Bank and the Borrower agree as follows: 1. All references in the Agreement to the Line Expiration Date of June 1, 2000 are hereby amended to on the earlier of DEMAND or June 1, 2001. 2. Page 6, Tangible Net Worth, of the Agreement is amended in its entirety as follows: Maintain a minimum Tangible Net Worth of at least $38,500,000.00 as of the end of each fiscal year. THE BORROWER hereby represents and warrants to the Bank as follows: A. The Agreement constitutes a valid, legal and binding obligation owed by the Borrower to the Bank, subject to no counterclaim, defense, offset, abatements or recoupment. B. As of the date of the Amendment, (i) all of the representations and warranties contained in the Agreement are true and (ii) there exists no Event of Default and no event which, with the giving of notice or the passage of time, or both, could become an Event of Default. C. The execution, delivery and performance of this Amendment by the Borrower are within its corporate powers, have been duly authorized, and are not in contravention of law or the terms of the Borrower's Articles of Incorporation or by-laws, or of any undertaking to which the Borrower is a party or by which it is bound. D. Except as modified by the Amendment, the Agreement remains unchanged and in full force and effect. IN WITNESS WHEREOF, the Borrower and the Bank have executed this Amendment as of the date first written above. A.S.V., Inc. NORWEST BANK MINNESOTA NORTH, NATIONAL ASSOCIATION By:/s/ Thomas R. Karges By: /s/ Gerald K. Johnson ---------------------------------- -------------------------------- Its CFO Its Vice President EX-11 4 0004.txt COMPUTATION OF EARNINGS PER SHARE A.S.V., Inc. Exhibit 11 - Computation of Earnings per Share
Three Months Ended Six Months Ended June 30, June 30, ------------------------ ------------------------- 2000 1999 2000 1999 ---- ---- ---- ---- Basic Earnings Net earnings $ 599,308 $ 688,695 $ 1,016,069 $ 1,337,642 =========== =========== =========== =========== Shares Weighted average number of common shares outstanding 9,698,837 9,662,264 9,693,849 9,488,210 =========== =========== =========== =========== Basic earnings per common share $ .06 $ .07 $ .10 $ .14 =========== =========== =========== =========== Diluted Earnings Net earnings $ 599,308 $ 688,695 $ 1,016,069 $ 1,337,642 =========== =========== =========== =========== Shares Weighted average number of common shares outstanding 9,698,837 9,662,264 9,693,849 9,488,210 Assuming exercise of options and warrants reduced by the number of shares which could have been purchased with the proceeds from the exercise of such options and warrants 177,030 419,398 221,604 392,565 ----------- ----------- ----------- ----------- Weighted average number of common and common equivalent shares outstanding 9,875,867 10,081,662 9,915,453 9,880,775 =========== =========== =========== =========== Diluted earnings per common share $ .06 $ .07 $ .10 $ .14 =========== =========== =========== ===========
EX-27 5 0005.txt FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED BALANCE SHEETS AND STATEMENT OF EARNINGS FOUND ON PAGES 2 AND 3 OF THE COMPANY'S FORM 10-Q FOR THE YEAR TO DATE, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 6-MOS DEC-31-1999 JAN-01-2000 JUN-30-2000 298,805 999,776 12,348,906 40,000 29,798,312 44,259,848 6,168,388 1,453,348 48,974,888 6,554,793 2,157,342 97,015 0 0 40,165,738 48,974,888 23,308,025 23,308,025 17,807,986 17,807,986 3,774,567 0 164,001 1,616,069 600,000 1,016,069 0 0 0 1,016,069 .10 .10
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