JLG's Third-Quarter Performance Proves Impressive
In terms of net income, the company reported $22.7 million, or $0.47 per diluted share, which is more than double the $8.7 million ($0.20 per diluted share) achieved the prior year. Adjusted to exclude the impact of integration expenses and expenses associated with the early extinguishment of debt, earnings for Q3 were $0.56 per diluted share. This is a 133% increase, versus $0.24 per diluted share in the prior year. Cash flow from operations was $101 million for the quarter compared to a use of $25 million cash last year during the same period.
"International sales grew 75% year-over-year and domestic sales increased by 54%,” said Bill Lasky, chairman of the board, president, and CEO. “Our operating profit margin improvement reflects the full impact of pricing actions taken earlier in the year, the benefits of the OmniQuip synergies, Six Sigma initiatives, and ongoing productivity improvements. The order board has more than doubled sequentially to $665 million with delivery dates extending well into our 2006 fiscal year."
For the first nine months of fiscal 2005, consolidated revenues were $1.17 billion — a 52% increase from the prior year period of $769 million. Reflecting the high price of raw materials partly offset by price increases, operating income was $60.5 million for the current year-to-date period and $44.0 million for the prior year period. On a year-to-date basis, cash flow from operations was $88 million compared to a use of $45 million cash in the prior year period.
"We were extremely pleased by the success of our equity offering during the quarter," said Jim Woodward, executive vice president and CFO. "We used the proceeds to repurchase a portion of our Senior Subordinated Notes and Senior Notes. These transactions, combined with our other business activities including $101 million in cash flow from operations, resulted in a quarter-end cash and marketable securities position of $172 million and a reduction in net debt-to-net debt plus shareholders' equity ratio from 50% to 12% sequentially."
Economic activity, particularly in commercial and non-residential construction activity, were the primary drivers of equipment demand, noted Woodward. “Fleet age, rental and utilization rates for our type of equipment continues to drive demand in most all geographic regions and product lines," he said. "Rental companies are continuing their strong pace of equipment refreshment propelled by some of the highest utilization rates they have seen since the last cycle peak in 2000. If historical patterns hold true, in the near- to mid-term, we should be moving from a strong cyclical recovery into an expansion phase as improving economic conditions in our principal markets and higher construction spending continue to drive demand. We also expect the continuing improvement of component availability to help drive operating efficiency gains.”
In light of this outlook, Woodward said the company expects full year revenue growth of 40 to 45% versus its previously stated guidance of 30 to 35%.
