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 1, 2000
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)
(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 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 July 1, 2000
Common Stock, $.10 Par Value 5,480,671
<PAGE>
GEHL COMPANY
FORM 10-Q
July 1, 2000
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 1,
2000 and July 3, 1999 . . . . . . . . . . . . 3
Condensed Consolidated Balance Sheets at July 1,
2000, December 31, 1999, and July 3, 1999 4
Condensed Consolidated Statements of Cash Flows
for the Six-month period Ended July 1, 2000 and
July 3, 1999 . . . . . . . . . . . . . . . . 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 . . . . . . . . . . . . . . 13
Item 6. Exhibits and Reports on Form 8-K . . . . . . . 14
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . 15
<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 1, July 3, July 1, July 3,
2000 1999 2000 1999
<S> <C> <C> <C> <C>
NET SALES $ 77,510 $ 83,848 $ 148,206 $ 152,811
Cost of goods sold 56,037 59,733 107,451 109,920
-------- -------- --------- ---------
GROSS PROFIT 21,473 24,115 40,755 42,891
Selling, general and
administrative
expenses 11,498 12,487 23,242 25,026
-------- -------- --------- ---------
INCOME FROM OPERATIONS 9,975 11,628 17,513 17,865
Interest expense (1,391) (777) (2,264) (1,554)
Interest income 445 425 825 838
Other expense, net (1,138) (777) (1,923) (1,217)
-------- -------- --------- ---------
INCOME BEFORE INCOME TAXES 7,891 10,499 14,151 15,932
Income tax provision 2,762 3,727 4,953 5,656
-------- -------- --------- ---------
NET INCOME $ 5,129 $ 6,772 $ 9,198 $ 10,276
======== ======== ========= =========
EARNINGS PER SHARE
Diluted $ .90 $ 1.01 $ 1.60 $ 1.53
Basic $ .93 $ 1.05 $ 1.65 $ 1.59
</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 1, December 31, July 3,
2000 1999 1999
(Unaudited) (Unaudited)
<S> <C> <C> <C>
ASSETS
Cash $ 3,885 $ 1,010 $ 3,446
Accounts receivable-net 86,093 68,551 79,873
Finance contracts receivable-net 16,140 12,074 10,270
Inventories 41,109 35,206 28,764
Deferred tax assets 8,431 8,431 7,138
Other current assets 356 511 1,077
-------- -------- --------
Total Current Assets 156,014 125,783 130,568
Property, plant and equipment-net 43,090 37,028 33,681
Finance contracts receivable
net, non-current 9,584 7,311 6,169
Intangible assets 15,334 15,706 16,080
Other assets 7,982 8,332 8,683
--------- -------- --------
TOTAL ASSETS $232,004 $194,160 $195,181
========= ======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current portion of long-term
debt obligations $ 326 $ 519 $ 556
Accounts payable 27,146 25,077 25,312
Accrued liabilities 29,169 30,703 32,906
-------- -------- --------
Total Current Liabilities 56,641 56,299 58,774
-------- -------- --------
Line of credit facility 53,266 22,038 13,399
Long-term debt obligations 8,967 9,059 9,300
Other long-term liabilities 6,017 5,391 5,233
Deferred income taxes 3,949 3,949 3,943
-------- -------- --------
Total Long-Term Liabilities 72,199 40,437 31,875
-------- -------- --------
Common stock, $.10 par value,
25,000,000 shares authorized,
5,480,671, 5,645,620 and
6,483,244 shares outstanding,
respectively 548 565 650
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 7,853 11,294 28,789
Retained earnings 95,666 86,468 76,559
Accumulated other comprehensive
loss (903) (903) (1,152)
-------- -------- -------
Total Shareholders' Equity 103,164 97,424 104,532
-------- -------- -------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $232,004 $194,160 $195,181
======== ======== ========
</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 1, July 3,
2000 1999
CASH FLOWS FROM OPERATING
ACTIVITIES:
<S> <C> <C>
Net Income $ 9,198 $ 10,276
Adjustments to reconcile net
income to net cash (used for)
provided by operating activities:
Depreciation 2,482 2,148
Amortization 438 393
Proceeds from sales of finance contracts 40,656 36,770
Increase in finance contracts
receivable (49,112) (39,033)
Cost of sales of finance contracts 2,117 1,414
Net change in working capital items (22,755) 1,032
--------- --------
Net cash (used for) provided by
operating activities (16,976) 13,000
--------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Property, plant and equipment
additions, net (8,544) (1,687)
Other assets 284 (2,449)
Net cash (used for) investing --------- --------
activities (8,260) (4,136)
--------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from (repayments of)
line of credit facility 31,228 (5,960)
Proceeds from issuance of common stock 406 465
Treasury stock purchases (3,864) (314)
Other 341 (496)
-------- --------
Net cash provided by (used for)
financing activities 28,111 (6,305)
-------- --------
Net increase in cash 2,875 2,559
Cash, beginning of period 1,010 887
-------- --------
Cash, end of period $ 3,885 $ 3,446
======== ========
Supplemental disclosure of cash
flow information:
Cash paid for the following:
Interest $ 2,009 $ 1,517
Income Taxes $ 6,047 $ 4,574
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
GEHL COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
July 1, 2000
(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 1, 2000 and July 3, 1999 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. Due in part to the seasonal nature of the Company's business, the
results of operations for the six months ended July 1, 2000 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, 1999 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, inventories by major classification would have
been as follows (in thousands):
July 1, 2000 December 31, 1999 July 3, 1999
Raw materials and supplies $ 17,304 $ 17,371 $ 17,068
Work-in-process 5,388 5,767 5,430
Finished machines and parts 37,612 31,263 25,662
--------- -------- --------
Total current cost value 60,304 54,401 48,160
Adjustment to LIFO basis (19,195) (19,195) (19,396)
--------- -------- --------
$ 41,109 $ 35,206 $ 28,764
======== ======== ========
NOTE 4 ACCOUNTING PRONOUNCEMENTS
The Financial Accounting Standards Board (FASB) has issued Statement of
Financial Accounting Standards (SFAS) No. 133, "Accounting for Derivative
Investments and Hedging Activities" which was originally effective for fiscal
quarters of fiscal years beginning after June 15, 1999. The statement, as
amended by SFAS No. 137 and 138, 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 materially affect the
Company's financial condition or results of operations.
NOTE 5 EARNINGS 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 which would arise from the exercise of stock options.
A reconciliation of the shares used in the computation of earnings per
share follows (in thousands):
For the second quarter ended: July 1, 2000 July 3, 1999
------------ ------------
Basic shares 5,520 6,467
Effect of options 165 262
------------ ------------
Diluted shares 5,685 6,729
============ ============
For the six months ended: July 1, 2000 July 3, 1999
------------ ------------
Basic shares 5,560 6,461
Effect of options 177 248
------------ ------------
Diluted shares 5,737 6,709
============ ============
Accumulated other comprehensive loss is comprised entirely of minimum
pension liability adjustments. Comprehensive income equaled net income for
the six months ended July 1, 2000 and July 3, 1999, as the minimum pension
liability amount did not change from the respective prior year-end amount.
NOTE 6 STOCK REPURCHASE
In March 2000, the Company's Board of Directors authorized a repurchase plan
providing for the repurchase of up to an additional 325,000 shares of the
Company's outstanding common stock. As of July 1, 2000, 102,400 shares had
been repurchased in the open market under this authorization at an aggregate
cost of $1.7 million. In March 1999, a repurchase plan relating to up to
325,000 shares of the Company's outstanding common stock was authorized. As of
April 1, 2000, all of the authorized shares under that plan had been
repurchased at an aggregate cost of $5.8 million. The treasury stock acquired
by the Company has been cancelled and returned to the status of authorized but
unissued shares.
NOTE 7 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 are 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
July 1, 2000 July 3, 1999 July 1, 2000 July 3, 1999
Net Sales:
Construction $48,892 $51,355 $ 89,195 $ 91,601
Agricultural 28,618 32,493 59,011 61,210
------- ------- ------- -------
Consolidated $77,510 $83,848 $148,206 $152,811
======= ======= ======== ========
Income from Operations:
Construction $ 6,765 $ 7,599 $ 11,085 $ 12,393
Agricultural 3,210 4,029 6,428 5,472
------- ------- -------- --------
Consolidated $ 9,975 $11,628 $ 17,513 $ 17,865
======= ======= ======== ========
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
Results of Operations
Three Months Ended July 1, 2000 Compared to Three Months Ended July 3, 1999
Net sales for the second quarter of 2000 of $77.5 million were 8% lower
than the $83.8 million in the comparable period of 1999. Construction
equipment net sales decreased 5% to $48.9 million in the second quarter of
2000 from $51.3 million in the second quarter of 1999. In general, the
reduction in Construction equipment sales from the 1999 level was due
primarily to the impact of higher interest rates on construction activity,
especially in the U.S. housing sector; low equipment rental rates resulting in
the deferral of purchases of equipment by some of the Company's customers; and
changes in dealers' purchasing patterns, resulting in dealers deferring orders
until closer to time of use. With respect to specific product lines, shipments
of telescopic handlers for the second quarter of 2000 were below comparable
levels of 1999. The Company believes that telescopic handler sales are more
closely tied to the U.S. housing construction market than any other
construction equipment product sold by the Company. Although Construction
equipment sales were down, the Company did realize a positive contribution in
the second quarter of 2000 from shipments of new equipment, primarily mini-
excavators, introduced within the past twelve months.
Agricultural equipment net sales decreased 12% in the second quarter of
2000 to $28.6 million from $32.5 million in the second quarter of 1999 due
primarily to lower shipments of forage harvesting equipment and manure
spreading equipment. Partially offsetting these reductions was an increased
level of disc mower conditioner shipments as a result of new product offerings
in 2000. Higher interest rates; the continuation of low milk prices; regional
weather conditions; and the fact that dairy farmers purchased higher levels of
equipment in 1998 and 1999, in part due to the more favorable milk prices
experienced during those years, contributed to the overall decline in demand
for agricultural equipment by farmers.
Of the Company's total net sales reported for the second quarter of 2000,
$9.5 million represented sales made outside of the United States compared with
$11.8 million in the comparable period of 1999. The decrease in export sales
was due primarily to a reduction in shipments into the Canadian agricultural
market and decreased orders from Europe due to a decline in the value of the
Euro versus the U.S. dollar.
Gross profit decreased $2.6 million, or 11%, during the second quarter of
2000 versus the comparable period of 1999, due primarily to decreased sales
volume. Gross profit as a percent of net sales decreased to 27.7% for the
second quarter of 2000 from 28.8% in the comparable period of 1999. Gross
profit as a percent of net sales for Construction equipment decreased to 25.6%
in the second quarter of 2000 from 27.5% in the second quarter of 1999. The
decrease in Construction equipment gross margin was a function of a) decreased
telescopic handler sales, which sales are generally at higher gross margins
than other construction equipment, b) increased industry competition which has
resulted in overall gross margin compression, and c) increased mini-excavator
shipments, which sales are generally at lower gross margins than other
construction equipment. Gross profit as a percent of net sales for
Agricultural equipment increased to 31.3% in the second quarter of 2000 from
30.8% in the comparable period of 1999.
Selling, general and administrative expenses decreased $989,000, or 8%,
during the second quarter of 2000 versus the comparable period of 1999, due
primarily to lower sales related costs. As a percent of net sales, selling,
general and administrative expenses decreased slightly to 14.8% during the
second quarter of 2000 versus 14.9% in the comparable period of 1999.
Income from operations in the second quarter of 2000 was $10.0 million
versus $11.6 million in the second quarter of 1999.
Interest expense increased $614,000 to $1,391,000 in the second quarter of
2000 from $777,000 in the second quarter of 1999. This resulted from an
increase in average debt outstanding to $61.0 million in the second quarter of
2000 versus $36.2 million in the second quarter of 1999, and an increase in
the average rate of interest paid by the Company to 8.6% in the second quarter
of 2000 versus 7.6% in the comparable period of 1999.
Other expense increased $361,000 to $1,138,000 in the second quarter of
2000 from $777,000 in the second quarter of 1999. This was caused by
increased costs of sales of finance contracts which resulted from a) selling
$4.3 million more receivables in the second quarter of 2000 versus the
comparable period in 1999, b) lower finance rates offered to Gehl finance
customers, and c) increased discount rates used in selling finance contracts
to third parties resulting from the general trend of overall interest rates.
Second quarter 2000 net income was $5.1 million versus $6.8 million in the
second quarter of 1999. Diluted earnings were $.90 per share for the second
quarter of 2000 versus $1.01 per share in the second quarter of 1999.
Six Months Ended July 1, 2000 Compared to Six Months Ended July 3, 1999
Net sales for the first six months of 2000 of $148.2 million were $4.6
million, or 3%, lower than the $152.8 million of net sales in the comparable
period of 1999. Construction equipment net sales decreased 3% to $89.2
million in the first six months of 2000 from $91.6 million in the first six
months of 1999. In general, the reduction in Construction equipment sales
from the 1999 level was due primarily to the impact of higher interest rates
on construction activity, especially in the U.S. housing sector; low equipment
rental rates resulting in the deferral of purchases of equipment by some of
the Company's customers; and changes in dealers' purchasing patterns, resulting
in dealers deferring orders until closer to time of use. With respect to
specific product lines, shipments of telescopic handlers for the first six
months of 2000 were below comparable levels of 1999 which was reflective of a
reduction in retail sales activity of telescopic handers throughout the
industry for the first six months of 2000. Although Construction equipment
sales were down, the Company did realize a positive contribution in the first
six months of 2000 from shipments of new equipment, primarily mini-excavators,
introduced within the past twelve months.
Agriculture equipment net sales decreased 4% to $59.0 million in the first
six months of 2000 from $61.2 million in the first six months of 1999 due
primarily to reduced shipments of forage harvesting equipment. Partially
offsetting this reduction was an increased level of disc mower conditioner
shipments as a result of new product offerings in 2000. Higher interest rates;
continuation of low milk prices; regional weather conditions; and the fact
that dairy farmers purchased higher levels of equipment in 1998 and 1999, in
part due to the more favorable milk prices experienced during those years,
contributed to the overall decline in demand for agricultural equipment by
farmers.
Of the Company's total net sales reported for the first six months of 2000,
sales made outside the United States of $20.3 million were comparable to the
level of international sales experienced in the first six months of 1999.
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.
Gross profit decreased $2.1 million, or 5%, in the first six months of 2000
versus the comparable period of 1999, due primarily to decreased sales volume.
Gross profit as a percent of net sales decreased to 27.5% for the first six
months of 2000 from 28.1% in the comparable period of 1999. Gross profit as a
percent of net sales for Construction equipment decreased to 25.5% in the
first six months of 2000 from 27.1% in the first six months of 1999. The
decrease in Construction equipment gross margin was a function of a) decreased
telescopic handler sales, which sales are generally at higher gross margins
than other construction equipment, b) increased industry competition which has
resulted in overall gross margin compression, and c) increased mini-excavator
shipments, which sales are generally at lower gross margins than other
construction equipment. Gross profit as a percent of net sales for
Agriculture equipment increased to 30.6% for the first six months of 2000 from
29.5% for the first six months of 1999, due in part to improved efficiencies
at the manufacturing plants.
Selling, general and administrative expenses decreased $1.8 million, or 7%,
during the first six months of 2000 versus the comparable period of 1999, due
primarily to lower selling related costs in 2000 versus 1999. As a percent of
net sales, selling, general and administrative expenses decreased to 15.7%
during the first six months of 2000 versus 16.4% in the comparable period of
1999.
Income from operations in the first six months of 2000 of $17.5 million was
2% lower than the $17.9 million for the comparable period of 1999.
Interest expense increased $710,000 to $2.3 million in the first six months
of 2000 from $1.6 million in the first six months of 1999. The increase was a
result of an increase in average debt outstanding to $51.2 million in the
first six months of 2000 versus $35.7 million in the comparable period of 1999
combined with an increase in the average rate of interest paid by the Company
to approximately 8.5% in the first six months of 2000 versus 7.7% in the
comparable period of 1999.
Other expense increased $706,000 to $1,923,000 for the six months ended
July 1, 2000 from $1,217,000 for the six months ended July 3, 1999. This was
caused by increased costs of sales of finance contracts which resulted from a)
selling $4.6 million more receivables in the first six months of 2000 versus
the same period in 1999, b) lower finance rates offered to Gehl finance
customers, and c) increased discount rates used in selling finance contracts
to third parties resulting from the general trend of overall interest rates.
Net income was $9.2 million for the six months ended July 1, 2000 versus
$10.3 million for the six months ended July 3, 1999. Because of the reduced
number of outstanding shares of Company stock as of July 1, 2000, compared to
July 3, 1999, resulting from stock repurchased by the Company during the
twelve month period, earnings per diluted share for the first six months of
2000 of $1.60 per share exceeded the $1.53 per diluted share reported for the
first six months of 1999. Based upon the market conditions described above,
the Company expects earnings for the year ended December 31, 2000 to be less
than the earnings realized for the year ended December 31, 1999.
Financial Condition
The Company's working capital of $99.4 million at July 1, 2000 increased
from $69.5 million at December 31, 1999, and $71.8 million at July 3, 1999
due primarily to increases in accounts and finance contracts receivable and
inventory. The increase in inventories at July 1, 2000 compared to July 3,
1999 reflects the impact of new products offered since mid-1999 combined with
an inventory build-up resulting from the slowing sales trend. The Company has
adjusted production levels in an attempt to reduce inventory in accordance
with current market demand.
Capital expenditures for property, plant and equipment during the first six
months of 2000 were approximately $8.5 million. The Company plans to make up
to $15 million in capital expenditures in 2000. Outstanding capital
expenditure commitments as of July 1, 2000 totaled approximately $3 million.
As of July 1, 2000, the weighted-average interest rate paid by the Company
on outstanding borrowings under its line of credit facility was 8.5%. The
Company had available unused borrowing capacity of $19.8 million, $49.8
million and $60.2 million under the line of credit facility at July 1, 2000,
December 31, 1999, and July 3, 1999, respectively. At July 1, 2000, December
31, 1999, and July 3, 1999, the borrowings outstanding under the line of
credit facility were $53.3 million, $22.0 million and $13.4 million,
respectively. The increased amounts outstanding under the line of credit
facility at July 1, 2000 were primarily the result of borrowings used to
repurchase Company stock, expand plant facilities and fund working capital
increases.
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 July 1, 2000, the Company serviced
$127.3 million of such contracts, of which $101.5 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 1, 2000 was $103.2 million. This was $1.3
million lower than the $104.5 million of shareholders' equity at July 3, 1999,
due primarily to the $22.1 million expended to repurchase Company stock from
July 4, 1999 to July 1, 2000 which was substantially offset by income earned
during the same period.
In March 2000, the Company's Board of Directors authorized a repurchase plan
providing for the repurchase of up to an additional 325,000 shares of the
Company's outstanding common stock. As of July 1, 2000, 102,400 shares had
been repurchased in the open market under this authorization at an aggregate
cost of $1.7 million. In March 1999, a repurchase plan relating to up to
325,000 shares of the Company's outstanding common stock was authorized. As of
April 1, 2000, all of the authorized shares under that plan had been
repurchased at an aggregate cost of $5.8 million.
Accounting Pronouncements
The Financial Accounting Standards Board (FASB) has issued Statement of
Financial Accounting Standards (SFAS) No. 133, "Accounting for Derivative
Investments and Hedging Activities" which was originally effective for fiscal
quarters of fiscal years beginning after June 15, 1999. The statement, as
amended by SFAS No. 137 and 138, 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 materially affect the
Company's financial condition 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, changes
in housing starts and construction activity, general economic conditions,
changes in commodity prices, especially milk, market acceptance of existing
and new products offered by the Company, changes in the cost of raw materials
and component parts purchased by the Company, and interest rate 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 Form 10-K for the year ended December
31, 1999 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 20, 2000, John
T. Byrnes, Richard J. Fotsch and Dr. Hermann Viets were elected as directors
of the Company for terms expiring in 2003. The following table sets for
certain information with respect to the election of directors at the annual
meeting:
Name of Nominee Shares Voted For Shares Withholding Authority
John T. Byrnes 5,031,110 25,312
Richard J. Fotsch 5,021,838 34,584
Hermann Viets 5,031,047 25,375
The following table sets forth the other directors of the Company whose terms
of office continued after the 2000 annual meeting:
Name of Director Year in Which Term Expires
Fred M. Butler 2001
William D. Gehl 2001
John W. Splude 2001
Nicholas C. Babson 2002
Thomas J. Boldt 2002
William P. Killian 2002
In addition, at the 2000 Annual Meeting, shareholders approved the Gehl
Company 2000 Equity Incentive Plan. With respect to such approval, the number
of shares voted For and Against were 3,066,068 and 1,207,405, respectively.
The number of shares abstaining and the number of shares subject to broker
non-votes were 43,992 and 738,957, respectively.
Item 6. Exhibits and Report on Form 8-K
(a) Exhibits
4.1 Ninth Amendment to Amended and Restated Loan and Security
Agreement by and between Deutsche Financial Services
Corporation, Deutsche Financial Services, a division of
Deutsche Bank Canada and Gehl Company and its subsidiaries,
dated as of June 20, 2000.
10.1 Gehl Company 1995 Stock Option Plan, as amended
10.2 Gehl Company 2000 Equity Incentive Plan [Incorporated by
reference to Appendix A to the Company's Proxy Statement for the
2000 Annual Meeting of Shareholders]
10.3 Form of Non-Qualified Stock Option Agreement used in
conjunction with the Gehl Company 2000 Equity Incentive Plan
[Incorporated by reference to Exhibit 4.5 to the Company's
Registration Statement on Form S-8 (Registration No. 333-
36102)]
10.4 Form of Stock Option Agreement for Non-Employee Directors used
in conjunction with the Gehl Company 2000 Equity Incentive Plan
[Incorporated by reference to Exhibit 4.6 to the Company's
Registration Statement on Form S-8 (Registration No. 333-
36102)]
10.5 Amendments to Amended and Restated Employment Agreement between
Gehl Company and William D. Gehl dated as of April 19, 2000
10.6 Amendment to Supplemental Retirement Agreement between Gehl
Company and William D. Gehl dated as of April 20, 2000
10.7 Form of Supplemental Retirement Benefit Agreement between Gehl
Company and each of Messrs. Hahn, Moore, Mulcahy and Semler
10.8 Form of Change in Control and Severance Agreement between Gehl
Company and each of Messrs. Hahn, Moore, Mulcahy and Semler
10.9 Gehl Company Director Stock Grant Plan, as amended
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 1, 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.
GEHL COMPANY
Date: August 14, 2000 By:/s/ William D. Gehl
William D. Gehl
Chairman of the Board, President
and Chief Executive Officer
Date: August 14, 2000 By:/s/ Kenneth P. Hahn
Kenneth P. Hahn
Vice President of Finance,
Treasurer and Chief Financial
Officer (Principal Financial
and Accounting Officer)
GEHL COMPANY
FORM 10-Q
July 1, 2000
EXHIBIT INDEX
Exhibit
Number Document Description
4.1 Ninth Amendment to Amended and Restated Loan and Security Agreement
by and between Deutsche Financial Services Corporation, Deutsche
Financial Services, a division of Deutsche Bank Canada and Gehl
Company and its subsidiaries, dated as of June 20, 2000.
10.1 Gehl Company 1995 Stock Option Plan, as amended
10.2 Gehl Company 2000 Equity Incentive Plan [Incorporated by reference
to appendix A to the Company's Proxy Statement for the 2000 Annual
Meeting of Shareholders]
10.3 Form of Non-Qualified Stock Option Agreement used in conjunction
with the Gehl Company 2000 Equity Incentive Plan [Incorporated by
reference to Exhibit 4.5 to the Company's Registration Statement on
Form S-8 (Registration No. 333-36102)]
10.4 Form of Stock Option Agreement for Non-Employee Directors used in
conjunction with the Gehl Company 2000 Equity Incentive Plan
[Incorporated by reference to Exhibit 4.6 to the Company's
Registration Statement on Form S-8 (Registration No. 333-36102)]
10.5 Amendments to Amended and Restated Employment Agreement between Gehl
Company and William D. Gehl dated as of April 19, 2000
10.6 Amendment to Supplemental Retirement Agreement between Gehl Company
and William D. Gehl dated as of April 20, 2000
10.7 Form of Supplemental Retirement Benefit Agreement between Gehl
Company and each of Messrs. Hahn, Moore, Mulcahy and Semler
10.8 Form of Change in Control and Severance Agreement between Gehl
Company and each of Messrs. Hahn, Moore, Mulcahy and Semler
10.9 Gehl Company Director Stock Grant Plan, as amended
27 Financial Data Schedule [EDGAR version only]
