JLG Announces Record Revenues, Stock Jumps 26%
February 25, 2005 • JLG Industries, Inc., McConnellsburg, Pa., announces its consolidated revenues reached $353 million for the second quarter, which ended January 30, a 49% increase from the prior year. The company reported net income of $7.5 million, or $0.17 per diluted share, compared with net income of $2.2 million, or $0.05 per diluted share, in the prior year. Adjusted to eliminate the impact of the OmniQuip integration expenses, earnings per diluted share for the second quarter were $0.19 versus $0.11 in the prior year. At the opening bell on Wall Street, this announcement sent JLG's stock soaring upwards with a 26% increase in value in just a matter of hours.
On a GAAP basis, the operating profit margin was 5% of revenues versus 4.5% in the comparable year-ago period. Excluding integration costs, the second quarter operating income was $18.7 million, or 5.3%, of revenues, versus $14.8 million, or 6.3%, for the year-ago period, and it was a significant improvement from the loss of $6.4 million reported in the first quarter of the current fiscal year. Net unrecovered steel costs, before-tax, were an estimated $21 million in the second quarter, compared to the $26.8 million reported in the first quarter. These costs represent increases in steel and related commodity costs against fiscal 2004 baselines, which were offset in part by increased customer pricing. The favorable trend from the first quarter reflects previously announced product price increases effective in January, the third month of JLG's fiscal second quarter.
"The record revenues in the second quarter, coming on the heels of record sales in the first quarter, further confirm the strong demand for our products," said Bill Lasky, chairman of the board, president, and chief executive officer. "Sales in the United States increased by 44%, while international sales grew 65% year-over-year, and the order book increased 44% sequentially to $290 million.”
Lasky said although the price of steel and other commodities is still high, the rate of change has slowed dramatically. “The increase in the base prices of our machines and the steel surcharge, which we previously announced, did not recover the increased costs in the first five months of our fiscal year but come closer to neutralizing those increased costs for the remainder of this year,” he said.
Year to Date Results
For the first half of fiscal 2005, consolidated revenues are $660 million, a 47% increase from the prior year period. Including the impact of continued OmniQuip integration costs, results were a loss of $0.03 per share year-to-date versus income of $0.06 last year. Adjusted to eliminate the impact of integration expense, year-to-date earnings were $0.02 per diluted share versus $0.18 for the prior year period. The favorable impact of continuing strong demand, productivity improvements, and cost savings were more than offset by higher costs of raw materials and manufacturing inefficiencies related to component shortages.
JLG also continued to improve key operating metrics and reduce trade receivable days sales outstanding to 83.7 from 115.4 in the year-ago quarter, while improving inventory turns to 6.4 from 4.6. Net debt was reduced by $17 million from the comparable period last year.
