SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended July 3, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from.............. to ...................
Commission file number 0-18110
GEHL COMPANY
(Exact name of registrant as specified in its charter)
Wisconsin 39-0300430
(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification No.)
143 Water Street, West Bend, WI 53095
(Address of principal executive office) (Zip code)
(414) 334-9461
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at August 1, 1999
Common Stock, $.10 Par Value 5,817,344
<PAGE>
GEHL COMPANY
FORM 10-Q
July 3, 1999
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 July 3, 1999
and June 27, 1998 . . . . . . . . . . . . 3
Condensed Consolidated Balance Sheets at July 3, 1999,
December 31, 1998 and June 27, 1998 . . . 4
Condensed Consolidated Statements of Cash Flows for the
Six-Month Periods Ended July 3, 1999 and
June 27, 1998 . . . . . . . . . . . . . . 5
Notes to Condensed Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Results
of Operations and Financial Condition 8
Item 3. Quantitative and Qualitative Disclosures about
Market Risk . . . . . . . . . . . . . 12
PART II. - OTHER INFORMATION:
Item 4. Submission of Matters to a Vote of Security Holders 12
Item 6. Exhibits and Reports on Form 8-K . . . . 13
SIGNATURES . . . . . . . . . . . . . . . . . . . 14
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
GEHL COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data; unaudited)
<CAPTION>
Three Months Ended Six Months Ended
July 3, June 27, July 3, June 27,
1999 1998 1999 1998
-------- -------- -------- --------
<S> <C> <C> <C> <C>
NET SALES $ 83,848 $ 75,231 $152,811 $136,519
Cost of goods sold 59,733 54,056 109,920 99,493
-------- -------- -------- --------
GROSS PROFIT 24,115 21,175 42,891 37,026
Selling, general and
administrative expenses 12,487 11,676 25,026 22,549
-------- -------- -------- --------
INCOME FROM OPERATIONS 11,628 9,499 17,865 14,477
Interest expense (777) (1,251) (1,554) (2,427)
Interest income 425 407 838 753
Other expense, net (777) (578) (1,217) (596)
-------- -------- -------- --------
INCOME BEFORE INCOME TAXES 10,499 8,077 15,932 12,207
Income tax provision 3,727 2,867 5,656 4,333
-------- -------- -------- --------
NET INCOME $ 6,772 $ 5,210 $ 10,276 $ 7,874
======== ======== ======== ========
EARNINGS PER SHARE
Diluted $ 1.01 $ .78 $ 1.53 $ 1.18
Basic $ 1.05 $ .81 $ 1.59 $ 1.24
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
<TABLE>
GEHL COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
<CAPTION>
July 3, December 31, June 27,
1999 1998 1998
-------- ----------- --------
ASSETS (Unaudited) (Unaudited)
<S> <C> <C> <C>
Cash $ 3,446 $ 887 $ 6,380
Accounts receivable-net 79,873 70,806 85,084
Finance contracts receivable-net 10,270 9,786 10,766
Inventories 28,764 32,093 26,953
Deferred tax asset 7,138 7,138 4,217
Prepaid expenses and other assets 1,077 1,184 1,422
-------- -------- --------
Total Current Assets 130,568 121,894 134,822
-------- -------- --------
Property, plant and equipment-net 33,681 34,142 34,552
Finance contracts receivable-net,
non-current 6,169 5,804 3,924
Intangible assets 16,080 16,451 14,484
Other assets 8,683 6,256 5,482
-------- -------- --------
TOTAL ASSETS $ 195,181 $ 184,547 $ 193,264
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current portion of long-term
debt obligations $ 556 $ 597 $ 661
Accounts payable 25,312 23,562 27,219
Accrued liabilities 32,906 27,993 25,880
-------- -------- --------
Total Current Liabilities 58,774 52,152 53,760
-------- -------- --------
Line of credit facility 13,399 19,359 37,732
Long-term debt obligations 9,300 9,588 9,623
Other long-term liabilities 5,233 5,400 1,947
Deferred income taxes 3,943 3,943 3,421
-------- -------- --------
Total Long-Term Liabilities 31,875 38,290 52,723
-------- -------- --------
Common stock, $.10 par value,
25,000,000 shares authorized,
6,483,244, 6,438,945 and
6,401,824 shares outstanding,
respectively 650 644 640
Preferred stock, $.10 par value,
2,000,000 shares authorized,
250,000 shares designated as
Series A Preferred Stock, no
shares issued - - -
Treasury stock (314) - -
Capital in excess of par 28,789 28,330 27,634
Retained earnings 76,559 66,283 58,889
Accumulated other comprehensive
loss (1,152) (1,152) (382)
-------- -------- --------
Total Shareholders' Equity 104,532 94,105 86,781
-------- -------- --------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $195,181 $184,547 $193,264
======== ======== ========
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
<TABLE>
GEHL COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands; unaudited)
<CAPTION>
Six Months Ended
July 3, June 27,
1999 1998
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net income $ 10,276 $ 7,874
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation 2,148 2,118
Amortization 393 351
Proceeds from sales of finance contracts 36,770 20,994
Increase in finance contracts receivable (39,033) (25,031)
Cost of sales of finance contracts 1,414 588
Net change in working capital items 1,032 159
-------- --------
Net cash provided by operating activities 13,000 7,053
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Property, plant and equipment additions, net (1,687) (1,598)
Other assets (2,449) (38)
-------- --------
Net cash used for investing activities (4,136) (1,636)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Decrease in long-term debt obligations (329) (77)
(Decrease) increase in long-term
liabilities (167) 92
Repayments of credit facility (5,960) (1,625)
Proceeds from issuance of common stock 465 1,334
Purchase of treasury stock (314) -
-------- --------
Net cash used for financing activities (6,305) (276)
-------- --------
Net increase in cash 2,559 5,141
Cash, beginning of period 887 1,239
-------- --------
Cash, end of period $ 3,446 $ 6,380
======== ========
Supplemental disclosure of cash flow
information:
Cash paid for the following:
Interest $ 1,517 $ 2,329
Income taxes $ 4,574 $ 2,449
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
GEHL COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
July 3, 1999
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
The condensed consolidated financial statements included herein have been
prepared by the Company, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain information
and footnote disclosures normally included in financial statements prepared
in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations, although
management believes that the disclosures are adequate to make the
information presented not misleading.
In the opinion of management, the information furnished for the three- and
six-month periods ended July 3, 1999 and June 27, 1998 includes all
adjustments, consisting only of normal recurring accruals, necessary for a
fair presentation of the results of operations and financial position of the
Company. The results of operations for the six months ended July 3, 1999
are not necessarily indicative of the results to be expected for the entire
year due, in part, to the seasonal nature of the Company's operation.
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, 1998 as
filed with the Securities and Exchange Commission.
NOTE 2 - 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 3 - INVENTORIES
If all of the Company's inventories had been valued on a current cost basis,
which approximated FIFO value, estimated inventories by major classification
would have been as follows (in thousands):
July 3, December 31, June 27,
1999 1998 1998
--------- ----------- ----------
Raw materials and supplies $ 17,068 $ 15,656 $ 13,217
Work-in-process 5,430 5,863 5,522
Finished machines and parts 25,662 29,970 27,464
--------- --------- ----------
Total current cost value 48,160 51,489 46,203
Adjustment to LIFO basis (19,396) (19,396) (19,250)
--------- --------- ----------
$ 28,764 $ 32,093 $ 26,953
========= ========= ==========
NOTE 4 - ACCOUNTING PRONOUNCEMENTS
The Financial Accounting Standards Board (FASB) has issued Statement of
Financial Accounting Standards ("SFAS") No. 133 "Accounting for Derivative
Instruments and Hedging Activities" which was originally effective for
fiscal quarters of fiscal years beginning after June 15, 1999. In June
1999, the effective date was delayed one year and will be effective January
1, 2001 for the Company. Due to the Company's current limited use of
derivative instruments, the adoption of this statement is not expected to
have a material effect on the Company's financial condition or results of
operations.
NOTE 5 - EARNINGS PER SHARE
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 which would arise from the exercise of stock options and
warrants.
A reconciliation of the shares used in the computation of earnings per share
follows (in thousands):
For the second quarter ended: July 3, 1999 June 27, 1998
------------ -------------
Basic shares 6,467 6,399
Effect of options 262 290
------------ -------------
Diluted shares 6,729 6,689
============ =============
For the six months ended: July 3, 1999 June 27, 1998
------------ -------------
Basic shares 6,461 6,336
Effect of warrants and options 248 342
------------ -------------
Diluted shares 6,709 6,678
============ =============
NOTE 6 - BUSINESS SEGMENTS
The Company operates in two business segments: Construction equipment and
Agriculture equipment. The long-term financial performance of the Company's
reportable segments are affected by separate economic conditions and cycles.
The segments are managed separately based on the fundamental differences in
their operations. Effective December 31, 1998, the Company adopted SFAS No.
131, "Disclosures about Segments of an Enterprise and Related Information."
The Statement requires the Company to disclose selected segment information
on an interim basis; this information is set forth below (in thousands):
Three Months Ended Six Months Ended
July 3, 1999 June 27, 1998 July 3, 1999 June 27, 1998
Net Sales:
Construction $ 51,355 $ 45,427 $ 91,601 $ 79,481
Agriculture 32,493 29,804 61,210 57,038
-------- -------- -------- --------
Consoldated $ 83,848 $ 75,231 $152,811 $136,519
Income from Operations:
Construction $ 7,599 $ 6,720 $ 12,393 $ 9,760
Agriculture 4,029 2,779 5,472 4,717
-------- -------- -------- --------
Consolidated $ 11,628 $ 9,499 $ 17,865 $ 14,477
NOTE 7 - STOCK REPURCHASE
In March 1999, the Company's Board of Directors authorized the repurchase
of up to 325,000 shares of the Company's outstanding common stock. As of
July 3, 1999, 18,000 shares had been repurchased in the open market under
this authorization at an aggregate cost of $314,000.
NOTE 8 - SUBSEQUENT EVENT
On July 9, 1999, the Company repurchased 725,900 shares of its common
stock, at a per share purchase price of $20.50, from a shareholder (and
affiliates) in a privately negotiated transaction. The aggregate purchase
price of $14.9 million was financed with borrowings under the Company's
existing revolving credit facility. In connection with the repurchase, the
shareholder agreed not to acquire shares of the Company's stock or take
certain other actions until after July 9, 2009. This repurchase does not
impact the stock repurchase plan discussed in Note 7.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
Results of Operations
Three Months Ended July 3, 1999 Compared to Three Months Ended June 27, 1998
Net sales for the second quarter of 1999 of $83.8 million were 11% higher
than the $75.2 million of net sales in the comparable period of 1998.
Construction equipment net sales increased 13% to $51.3 million in the
second quarter of 1999 from $45.4 million in the second quarter of 1998. The
Construction equipment increase resulted from continued strong demand for
telescopic handlers and service parts shipments. Agriculture equipment net
sales increased 9% to $32.5 million in the second quarter of 1999 from $29.8
million in the second quarter of 1998, due primarily to increased shipments
of skid loaders and forage harvesting equipment. Of the Company's total net
sales reported for the second quarter of 1999, $11.8 million represented
sales made outside the United States compared with $12.3 million in the
comparable period of 1998. The decrease in international sales was due to
economic disruption in the Far East and Australia.
Gross profit increased $2.9 million, or 14%, during the second quarter of
1999 versus the comparable period of 1998, due primarily to increased sales
volume. Gross profit as a percent of net sales increased to 28.8% for the
second quarter of 1999 from 28.1% in the comparable period of 1998. Gross
profit as a percent of net sales for Construction equipment increased to
27.5% in the second quarter of 1999 from 26.3% in the second quarter of
1998. The increase in Construction equipment gross margin was a function of
increased telescopic handler and service parts sales, which sales are at
higher gross margins than other construction equipment, and improved
efficiencies at the manufacturing plants. Gross profit as a percent of net
sales for Agriculture equipment decreased slightly to 30.8% in the second
quarter of 1999 from 31.0% in the comparable period of 1998.
Selling, general and administrative expenses increased $811,000, or 7%,
during the second quarter of 1999 versus the comparable period of 1998 due
primarily to sales volume increases and continued investment in engineering
activities. As a percent of net sales, selling, general and administrative
expenses decreased to 14.9% during the second quarter of 1999 versus 15.5%
in the comparable period of 1998.
Income from operations in the second quarter of 1999 was $11.6 million
versus $9.5 million in the second quarter of 1998.
Interest expense decreased $474,000 to $777,000 in the second quarter of
1999 from $1,251,000 in the second quarter of 1998. This resulted from a
decrease in average debt outstanding to $36.2 million in the second quarter
of 1999 versus $59.0 million in the second quarter of 1998, and a decrease
in the average rate of interest paid by the Company to 7.6% in the second
quarter of 1999 versus 7.8% in the comparable period of 1998.
Other expense increased $199,000 to $777,000 in the second quarter of
1999 from $578,000 in the second quarter of 1998. This was due primarily to
selling $6.6 million more retail finance contracts to third parties in the
second quarter of 1999 versus the comparable period of 1998, resulting in an
increase in the cost of sales of finance contracts.
Second quarter 1999 net income of $6.8 million was a 30% increase from
$5.2 million in the second quarter of 1998. Diluted earnings were $1.01 per
share for the second quarter of 1999 versus $.78 per share in 1998.
Six Months Ended July 3, 1999 Compared to Six Months Ended June 27, 1998
Net sales for the first six months of 1999 of $152.8 million were $16.3
million, or 12%, higher than the $136.5 million of net sales in the
comparable period of 1998. Construction equipment net sales increased 15%
to $91.6 million in the first six months of 1999 from $79.5 million in the
first six months of 1998. The Construction equipment increase resulted from
continued strong demand for telescopic handlers and service parts shipments.
Agriculture equipment net sales increased 7% to $61.2 million in the first
six months of 1999 from $57.0 million in the first six months of 1998. The
increase was due to increased shipments of forage harvesting equipment, skid
loaders and disc mower conditioners offset by reduced shipments of haytools,
feedmaking and manure handling equipment. Of the Company's total net sales
reported for the first six months of 1999, $20.3 million represented sales
made outside the United States compared with $22.0 million in the
comparative period of 1998. The decrease in international sales was due to
economic disruption in the Far East and Australia. As the Company has
increased its sale of Construction equipment products, the Company has been
successful in reducing the seasonality of its sales. However, some sales
seasonality still remains, primarily in the Company's second quarter which
historically has tended to be its strongest quarter for sales, while sales
levels have historically tended to be lower in the first and fourth
quarters.
Gross profit increased $5.9 million, or 16%, in the first six months of
1999 versus the comparable period of 1998, due primarily to increased sales
volume. Gross profit as a percent of net sales increased to 28.1% for the
first six months of 1999 from 27.1% in the comparable period of 1998. Gross
profit as a percent of net sales for Construction equipment increased to
27.1% in the first six months of 1999 from 25.5% in the first six months of
1998. The increase in Construction gross margin was a function of increased
telescopic handler and service parts sales, which sales are at higher gross
margins than other construction equipment, and improved efficiencies at the
manufacturing plants. Gross profit as a percent of net sales for
Agriculture equipment increased to 29.5% for the first six months of 1999
from 29.4% for the first six months of 1998.
Selling, general and administrative expenses increased $2.5 million, or
11%, during the first six months of 1999 versus the comparable period of
1998 due primarily to sales volume increases and continued investment in
engineering activities. As a percent of net sales, selling, general and
administrative expenses decreased to 16.4% during the first six months of
1999 versus 16.5% in the comparable period of 1998.
Income from operations in the first six months of 1999 of $17.9 million
was 23% higher than the $14.5 million for the comparable period of 1998.
Interest expense decreased $873,000 to $1.5 million in the first six
months of 1999 from $2.4 million in the first six months of 1998. The
decrease was a result of a decrease in average debt outstanding to $35.7
million in the first six months of 1999 versus $57.5 million in the
comparable period of 1998 combined with a decrease in the average rate of
interest paid by the Company to approximately 7.7% in the first six months
of 1999 versus 7.9% in the comparable period of 1998.
Other expense increased $621,000 to $1,217,000 as of July 3, 1999 from
$596,000 at June 27, 1998. This was primarily a result of selling $15.8
million more retail finance contracts to third parties during the six months
ended July 3, 1999 versus the comparable period of 1998, resulting in an
increase in the cost of sales of finance contracts.
Net income of $10.3 million for the six months ended July 3, 1999 was a
31% increase from $7.9 million for the six months ended June 27, 1998.
Diluted earnings were $1.53 per share for the six months ended July 3, 1999
versus $1.18 per share for the six months ended June 27, 1998.
Financial Condition
The Company's working capital was $71.8 million at July 3, 1999 as
compared to $69.7 million at December 31, 1998 and $81.1 million at June 27,
1998. The decrease since June 27, 1998 was due primarily to decreases in
accounts receivable.
The Company's cash flow provided by operating activities in the first
six months of 1999 was $13.0 million versus $7.1 million in comparable 1998.
Capital expenditures for property, plant and equipment during the first
six months of 1999 were approximately $1.7 million. The Company expects to
make approximately $11.0 million of capital expenditures during 1999, which
includes approximately $5 million related to plant expansion activities at
its two South Dakota construction equipment manufacturing facilities. The
capital expenditures are expected to be funded with borrowings under the
Company's existing line of credit facility. Outstanding capital expenditure
commitments as of July 3, 1999 totaled approximately $1.2 million.
As of July 3, 1999, the weighted average interest rate paid by the
Company on outstanding borrowings under its line of credit facility was
7.2%. The Company had available unused borrowing capacity of $60.2 million,
$53.1 million and $35.8 million under the line of credit facility at July 3,
1999, December 31, 1998 and June 27, 1998, respectively. At July 3, 1999,
December 31, 1998 and June 27, 1998, the borrowings outstanding under the
line of credit facility were $13.4 million, $19.4 million and $37.7 million,
respectively.
The sale of finance contracts is an important component of the
Company's overall liquidity. Gehl has arrangements with several financial
institutions and finance service companies to sell, with recourse, its
finance contracts receivable. The Company continues to service
substantially all contracts whether or not sold. At July 3, 1999, Gehl
serviced $97.9 million of such contracts, of which $81.4 million were owned
by other parties. The Company believes that it has sufficient capacity to
sell its retail finance contracts for the foreseeable future.
Shareholders' equity at July 3, 1999 was $104.5 million. This amount
was $17.7 million higher than the $86.8 million of shareholders' equity at
June 27, 1998, due primarily to income earned from June 28, 1998 through
July 3, 1999.
On July 9, 1999, the Company repurchased 725,900 shares of its common
stock, at a per share purchase price of $20.50, from a shareholder (and
affiliates) in a privately negotiated transaction. The aggregate purchase
price of $14.9 million was financed with borrowings under the Company's
existing revolving credit facility.
Accounting Pronouncements
The Financial Accounting Standards Board (FASB) has issued Statement of
Financial Accounting Standards ("SFAS") No. 133 "Accounting for Derivative
Instruments and Hedging Activities" which was originally effective for
fiscal quarters of fiscal years beginning after June 15, 1999. In June
1999, the effective date was delayed by one year and will be effective
January 1, 2001 for the Company. Due to the Company's current limited use
of derivative instruments, the adoption of this statement is not expected to
have a material effect on the Company's financial condition or results of
operations.
Year 2000
The Year 2000 issue refers to computer systems which use two digits
rather than four to define a given year and which therefore might read a
date using "00" as the year 1900 rather than the Year 2000. As the Year
2000 approaches, such systems may be unable to process certain date-based
information. This could result in system failure or miscalculations causing
disruptions of operations and the potential inability to engage in normal
business activities.
In 1995, a Company-wide program was initiated to prepare its
Information Technology (IT) systems and applications for the Year 2000. The
initial focus of the Company's program contained the following steps:
assessment of the relevant issues; planning the conversion; implementing the
conversion; and testing. Those systems determined to be at risk were
prioritized and plans were put in place to upgrade systems by remediation,
replacement or outsourcing. By the end of June 1999, the assessment and
planning phases have been completed for all IT systems and applications.
The Company's objective to become Year 2000 compliant with its mission
critical IT activities and systems by mid-1999 has been met, allowing
substantial time for further testing, verification and the final completion
of less important systems in the second half of 1999.
In addition to the IT systems review noted above, the Company has
initiated processes to review and to modify, where appropriate, other areas
impacted by Year 2000. These areas include, but are not limited to,
personal computer hardware and software, remote location access to IT
systems, facility management and certain non-IT issues, such as the extent
to which embedded chips are used in machinery and equipment used in
operations. The Company has completed assessments and testing in all of the
above areas.
The Company is in the process of communicating with its significant
vendors to determine the extent to which the Company is vulnerable to those
third parties failure to remediate their own Year 2000 compliance issues.
The Company cannot guarantee that the failure of another company to be Year
2000 compliant will not have an adverse effect on the Company.
The Company believes that it has no exposure to contingencies related
to the Year 2000 issue for products it has sold. The Company has evaluated
its major customers and believes that the failure of these companies to
adequately prepare for Year 2000 issues will not have a material adverse
effect on the Company.
The Company expects to incur consulting and other expenses related to
its Year 2000 program. The cost of testing and the conversion of existing
and replacement system applications are not expected to exceed $400,000,
the majority of which expense has already been incurred. These costs have
been and will continue to be treated as period costs and expensed as
incurred.
Based upon the progress to date, the Company does not believe that
either future costs of modifications or the consequences of any unsuccessful
modifications being implemented by the Company will have a material adverse
effect on its financial position or results of operations. Nevertheless,
since it is not possible to anticipate all possible future situations,
especially when third parties are involved, the Company believes that the
most reasonably likely worst case Year 2000 scenario could result in
circumstances in which the Company may be unable to take customer orders,
manufacture and ship products, invoice customers or collect payments. The
Company continues to evaluate whether a contingency plan to deal with any
expected Year 2000 related failures is warranted.
No assurances can be given that Year 2000 compliance failures, if any,
particularly as they relate to third parties, will not have a material
adverse effect on the Company's financial position or results of operations.
Forward-Looking Statements
Certain matters discussed in this Quarterly Report on Form 10-Q are
"forward-looking statements" intended to qualify for the safe harbors from
liability established by the Private Securities Litigation Reform Act of
1995. These forward-looking statements can generally be identified as such
because the context of the statement will include such words as the Company
"believes," "anticipates" or "expects," or words of similar import.
Similarly, statements that describe the Company's future plans, objectives
or goals are also forward-looking statements. The forward-looking
statements are subject to certain risks and uncertainties which could cause
actual results to differ materially from those currently anticipated. Such
risks and uncertainties include competitive conditions in the markets served
by the Company, changes in the Company's plans regarding capital
expenditures, general economic conditions, unanticipated events related to
resolving Year 2000 issues, market acceptance of existing and new products
manufactured by the Company, changes in the cost of raw materials and
component parts purchased by the Company, and interest and foreign currency
fluctuations. Shareholders, potential investors and other readers are urged
to consider these factors carefully in evaluating the forward-looking
statements and are cautioned not to place undue reliance on such forward-
looking statements.
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, 1998 as filed with the Securities and Exchange
Commission.
<PAGE>
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
At the Company's annual meeting of shareholders held on April 21, 1999,
Nicholas C. Babson, Thomas J. Boldt and William P. Killian were elected as
directors of the Company for terms expiring in 2002 and Hermann Viets was
elected for a term expiring in 2000. The following table sets forth certain
information with respect to the election of directors at the annual meeting:
Name of Nominee Shares Shares Withholding
Voted For Authority
Hermann Viets 5,477,738 201,667
Nicholas C. Babson 5,469,538 209,967
Thomas J. Boldt 5,039,164 640,241
William P. Killian 5,481,036 198,369
The following table sets forth the other directors of the Company whose
terms of office continued after the 1999 annual meeting:
Name of Director Year in Which Term Expires
John W. Gehl 2000*
Arthur W. Nesbitt 2000
Fred M. Butler 2001
William D. Gehl 2001
John W. Splude 2001
*Mr. J.W. Gehl retired as a director on July 19, 1999.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
27 Financial Data Schedule [EDGAR version only]
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Company during the quarter
ended July 3, 1999.
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 13, 1999 By: /s/ William D. Gehl
William D. Gehl
Chairman of the Board,
President and Chief
Executive Officer
Date: August 13, 1999 By: /s/ Kenneth P. Hahn
Kenneth P. Hahn
Vice President of Finance,
Treasurer and Chief Financial
Officer
(Principal Financial and
Accounting Officer)
<PAGE>
GEHL COMPANY
FORM 10-Q
July 3, 1999
EXHIBIT INDEX
Exhibit
Number Document Description
27 Financial Data Schedule [EDGAR version only]
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Gehl
Company's consolidated balance sheet at July 3, 1999 and consolidated
statement of income for the six-month period ended July 3, 1999 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-1-1999
<PERIOD-END> JUL-03-1999
<CASH> 3446
<SECURITIES> 0
<RECEIVABLES> 90143
<ALLOWANCES> 0<F1>
<INVENTORY> 28764
<CURRENT-ASSETS> 130568
<PP&E> 77026
<DEPRECIATION> 43345
<TOTAL-ASSETS> 195181
<CURRENT-LIABILITIES> 58774
<BONDS> 22699<F2>
<COMMON> 650
0
0
<OTHER-SE> 103882
<TOTAL-LIABILITY-AND-EQUITY> 195181
<SALES> 152811
<TOTAL-REVENUES> 152811
<CGS> 109920
<TOTAL-COSTS> 109920
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1554
<INCOME-PRETAX> 15932
<INCOME-TAX> 5656
<INCOME-CONTINUING> 10276
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 10276
<EPS-BASIC> 1.59
<EPS-DILUTED> 1.53
<FN>
<F1>Company presents receivables on a net basis in compliance with Article 10
of Regulation S-X.
<F2>Includes all non-current portion of debt obligations.
</FN>
</TABLE>
