Back to GetFilings.com
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended July 31, 1995 Commission file number 0-8454
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
JLG INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
PENNSYLVANIA 25-1199382
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
JLG Drive, McConnellsburg, PA 17233
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (7l7) 485-5161
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act:
Capital Stock ($.20 par value)
(Title of class)
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 by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [ ]
At October 11, 1995, there were 14,304,018 shares of capital stock of the
Registrant outstanding, and the aggregate market value of the voting stock held
by nonaffiliates of the Registrant at that date was $321,840,405.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Proxy Statement for the 1995 annual meeting of shareholders are
incorporated by reference into Part III.
PART I
ITEM 1. BUSINESS
General
The Company, organized in 1969, is a leading manufacturer, distributor
and international marketer of elevating work platforms. The Company also
produces truck-mounted materials-handling equipment. The Company's
products are used for high-reach applications, primarily in the
construction, industrial, petrochemical, commercial and sports and
entertainment industries.
Products
Elevating Work Platforms. Elevating work platforms are designed to
permit workers to position themselves and their tools and materials
easily and quickly in elevated work areas that otherwise might have to be
reached by the erection of scaffolding, by the use of ladders, or through
some other device. Elevating work platforms consist of self-propelled
boom-type and scissor-type lifts and push-around lifts. These work
platforms are mounted either at the end of a telescoping and/or
articulating boom or on top of a scissor-type lifting mechanism, which in
turn are mounted on mobile, four-wheel chassis. The Company offers
elevating work platforms powered by electric motors or gasoline, diesel,
or propane engines. All of the Company's elevating work platforms are
designed for stable operation in elevated positions and self-propelled
models travel on grades of up to twenty-four degrees.
Boom-type self-propelled elevating work platforms are especially useful
for reaching over machinery and equipment that is mounted on floors and
for reaching other elevated positions not easily approached by a vertical
lifting device. The Company produces boom-type self-propelled elevating
work platform models of various sizes with platform heights ranging up to
150 feet. The boom may be rotated up to 360 degrees in either direction,
raised or lowered from vertical to below horizontal, and extended while
the work platform remains horizontal and stable. Vehicles on which the
booms are mounted may be maneuvered forward or backward and steered in
any direction by the operator from the work platform. Boom-type models
have standard-sized work platforms, which vary in size up to 3 by 8 feet,
and the rated lift capacities range from 500 to 2,000 pounds. The
distributor net price of the Company's standard models at July 31, 1995
ranged from approximately $18,200 to $325,000.
Scissor-type self-propelled elevating work platforms are designed to
provide larger work areas, and generally to allow for heavier loads than
boom-type lifts. Scissor-type lift vehicles may be maneuvered in a
manner similar to boom-type models, but the platforms may be extended
only vertically, except for an available option that extends the deck
horizontally up to 6 feet. The scissor-type models have maximum
elevation capabilities of up to 50 feet and various platform sizes up to
6 by 14 feet. The rated lift capacities range from 500 to 2,500 pounds.
The distributor net price of the Company's standard models at July 31,
1995 ranged from approximately $9,000 to $47,400.
In 1992, the Company began manufacturing a line of push-around elevating
work platforms used primarily in indoor maintenance applications. This
line consists of a work platform attached to an aluminum mast that
extends vertically, which in turn is mounted on a steel base. Available
in various one and two-man models, these machines can be rolled in their
retracted position through standard door openings and can be loaded by
one person onto the bed of a pick-up truck. They have maximum elevation
capabilities of up to 36 feet and rated lift capacities from 300 to 750
pounds. The distributor net price of the Company's standard models at
July 31, 1995 ranged from approximately $3,600 to $8,600.
Materials-Handling Products. The Company's materials-handling products
consist of boom truck cranes and trolley-type and articulating
unloaders. The cranes and unloaders are mounted on various commercial
truck chassis or trailers and are used primarily in construction and
maintenance applications. Lifting capacities of the various models range
up to 28 tons, and with the main boom and jib fully extended, tip heights
range up to 170 feet. The distributor net price of the Company's
standard models at July 31, 1995, excluding the vehicle on which they are
mounted, ranged from approximately $18,200 to $88,100.
The Company has fourteen registered trademarks and thirty-seven patents
and considers them to be beneficial in its business.
Marketing
The Company's products are marketed internationally primarily through a
network of independent distributors. The Company's distributors,
operating from nearly four hundred locations, sell and rent the Company's
products and provide service support. The Company also sells directly
through its own marketing organizations to certain major accounts as well
as to customers in parts of the world where independent distribution is
either not available or not commercially feasible.
The Company supports the sales, service, and rental programs of its
distributors with product advertising, cooperative promotional programs,
major trade show participation, and distributor personnel training in
both service and product attributes. The Company supplements domestic
sales and service support to its international customers through its
overseas facilities in the United Kingdom and Australia.
The Company maintains a national rental fleet of elevating work
platforms. The purpose of this fleet is to assist the Company's
distributors in servicing large, one-time projects and in meeting periods
of unanticipated rental demand, and to make available more equipment to
distributors with growing markets, but limited financial resources.
Product Development
The Company invests significantly in product development and
diversification, including improvement of existing products and
modification of existing products for special applications. Product
development expenditures totaled $5,542,000, $4,373,000, and $3,385,000
for the fiscal years 1995, 1994 and 1993, respectively. New products
introduced in the past two years accounted for approximately 24% percent
of fiscal 1995 machine sales.
Competition
In selling its major products, the Company experiences two types of
competition. The Company competes with more traditional means of
accomplishing the tasks performed by elevating work platforms, such as
ladders, scaffolding and other devices.
The Company believes that its elevating work platforms in many
applications are safer, more versatile and more efficient, taking into
account labor costs, than those traditional methods and that its
elevating work platforms enjoy competitive advantages when the job calls
for frequent movement from one location to another at the same site or
when there is a need to return to the ground frequently for tools and
materials.
The Company competes principally with nine elevating work platform
manufacturers and three boom truck manufacturers and many manufacturers
of unloader products. Some of the Company's competitors are parts of, or
are affiliated with, companies which are larger and have greater
financial resources than the Company. The Company believes that its
product quality, customer service, experienced distribution network,
national rental fleet and reputation for leadership in product
improvement and development provide the Company with significant
competitive advantages.
Executive Officers of the Registrant
Positions with the Company
Name Age (date of initial election)
L. David Black 58 Chairman of the Board, President and
Chief Executive Officer (1993);
President and Chief Executive Officer
(1991); prior to 1991, President and Chief
Operating Officer (1990).
Charles H. Diller, Jr. 50 Executive Vice President and Chief
Financial Officer (1990).
Michael Swartz 50 Senior Vice President - Marketing (1990).
Rao G. Bollimpalli 57 Senior Vice President - Engineering (1990).
Raymond F. Treml 55 Senior Vice President - Manufacturing
(1990).
All executive officers listed above are elected to hold office for one year or
until their successors are elected and qualified, and have been employed in the
capacities noted for more than five years, except as indicated. No family
relationship exists among the above named executive officers.
Product Liability
Because the Company's products are used to elevate and move personnel and
materials above the ground, use of the Company's products involves exposure to
personal injury as well as property damage, particularly if operated carelessly
or without proper maintenance.
The Company is a party to personal injury and property damage litigation
arising out of incidents involving the use of its products. The Company's
program for fiscal 1995 to insure against exposure to such litigation is
comprised of a self-insurance retention of $5 million and catastrophic coverage
of $10 million in excess of the retention. The Company has accrued as a reserve
$8.4 million with respect to pending and potential claims for all years in
which the Company is liable under its self-insurance retention. The number of
product liability claims filed each year fluctuates significantly. The number
of potential claims has been affected by the substantial growth in sales over
the past two years which has dramatically increased machine population and
number of users. This has exerted upward pressure on the number of claims,
which the Company has countered through product design safety innovations.
Product liability costs, based upon the Company's best estimate of anticipated
losses, for years ended July 31, 1995, 1994 and 1993, approximated 1.4%, 2.6%
and 2.8% of net sales, respectively.
For additional information relative to product liability insurance coverage and
cost, see Item 3 Legal Proceedings.
Employees
The Company had 2,222 and 1,620 persons in its employ as of July 31, 1995 and
1994, respectively. The Company believes its employee relations are good, and
it has experienced no work stoppages as a result of labor problems.
Foreign Operations
The Company manufactures its products in the U.S. for sales throughout the
world. Sales to customers outside the U.S. were 18%, 16% and 26% of net sales
for 1995, 1994 and 1993, respectively. Export sales were up substantially in
dollar terms, but the percentage gain was only modest due to the continued
strong growth of our domestic sales.
ITEM 2. PROPERTIES
The Company has manufacturing plants and office space at five sites in
Pennsylvania totaling 546,000 square feet and situated on 87 acres of land. Of
this, 496,000 square feet are owned, with the remainder under long-term lease.
The Company has several international sales offices under short-term operating
leases.
The Company's McConnellsburg and Bedford, Pennsylvania facilities totalling
$7.2 million in assets have been encumbered as security for Company long-term
loans borrowings aggregating $2.2 million.
The Company's properties used in its operations are considered to be in good
operating condition, well-maintained and suitable for their present purposes.
ITEM 3. LEGAL PROCEEDINGS
The Company is a party to personal injury and property damage litigation
arising out of incidents involving the use of its products. The Company's
program for fiscal 1995 to insure against exposure to such litigation is
comprised of a self-insurance retention of $5 million and catastrophic coverage
of $10 million in excess of the retention. The Company contracts with an
independent insurance firm to provide claims handling and adjustment services.
The Company's estimates with respect to claims are based on internal
evaluations of the merits of individual claims and the reserves assigned by the
Company's independent insurance carrier. The methods of making such estimates
and establishing the resulting accrued liability are reviewed continually, and
any adjustments resulting therefrom are reflected in current earnings. Claims
are paid over varying periods, which generally do not exceed five years.
Accrued liabilities for future claims are not discounted.
With respect to all claims of which the Company is aware, accrued liabilities
of $8.4 million and $8.0 million were established at July 31, 1995 and 1994,
respectively. While the Company's ultimate liability may exceed or be less
than the amounts accrued, the Company believes that it is unlikely that it
would experience losses that are materially in excess of such reserve amounts.
As of July 31, 1995 and 1994, there were no insurance recoverables or offset
implications and there were no claims by the Company being contested by
insurers.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED SHAREHOLDER
MATTERS
The Company's capital stock is traded on the NASDAQ National Market under the
symbol JLGI. The table below sets forth the market prices and average shares
traded daily for the past two fiscal years:
Average Shares
Price per Share Traded Daily
Quarter 1995 1994 1995 1994
Ended High Low High Low
October 31 $10 7/16 $8 1/2 $4 3/4 $3 13/16 54,763 31,673
January 31 $10 7/16 $8 1/2 $7 $4 5/16 82,921 94,296
April 30 $10 3/4 $8 1/2 $8 3/16 $6 1/16 90,100 81,692
July 31 $18 1/8 $9 5/8 $9 1/8 $6 1/8 107,248 115,743
The Company's quarterly cash dividend rate is currently $.01 per share, or $.04
on an annual basis. The Board of Directors reinstated payment of the quarterly
cash dividend in fiscal 1994, after it was suspended in November, 1991 due to
the economic recession and its impact on the Company's results. The Board
continually reviews the its dividend policy, but believes, at this time, that
it is in the best interests of the Company to continue to reinvest the majority
of its earnings into the growth of the business.
As of July 31, 1995, there were approximately 2,300 record holders of the
Company's shares, including 1,300 employee holders. Record holders exclude
participants in security position listings and other indirect shareholders.
ITEM 6. SELECTED FINANCIAL DATA
ELEVEN YEAR FINANCIAL SUMMARY
(in thousands of dollars,
except per share data)
Year ended July 31
RESULTS OF OPERATIONS
Net sales $269,211 $176,443 $123,034 $110,479 $94,439 $149,281 $121,330 $81,539 $59,827 $59,323 $49,696
Gross profit 65,953 42,154 28,240 22,542 20,113 37,767 32,384 23,598 17,075 16,347 13,625
Selling, general
and administrative
expenses (33,254) (27,147) (23,323) (22,024) (21,520) (21,834) (18,974) (14,117) (11,946) (12,910) (11,030)
Restructuring
charges (4,922) (2,781) (1,015)
Income (loss) from
operations 32,699 15,007 4,917 (4,404) (4,188) 14,918 13,410 9,481 5,129 3,437 2,595
Interest expense (376) (380) (458) (1,218) (1,467) (2,344) (1,375) (925) (1,039) (1,750) (1,562)
Other income (expense)
net 376 (24) 180 (149) (707) 858 399 485 958 51 (15)
Income (loss) before
taxes and extraordinary
credit 32,699 14,603 4,639 (5,771) (6,362) 13,432 12,434 9,041 5,048 1,738 1,018
Extraordinary credit 1,063 560
Income tax (provision)
benefit (11,941) (5,067) (1,410) 2,733 3,122 (4,950) (4,882) (3,766) (3,008) (1,063) (55)
Net income (loss) 20,758 9,536 3,229 (3,038) (3,240) 8,482 7,552 5,275 2,040 1,738 1,523
PER SHARE DATA
Net income (loss) 1.47 .68 .22 (.21) (.23) .60 .54 .38 .15 .13 .11
Cash dividends .0275 .025 .015 .0625 .05 .0375 .025
Shares used in computation
(in thousands) 14,169 13,983 14,545 14,359 14,181 14,040 14,006 13,777 13,618 13,591 13,531
PERFORMANCE MEASURES
Return on sales 7.7% 5.4% 2.6% (2.8%) (3.4%) 5.7% 6.2% 6.5% 3.4% 2.9% 3.1%
Return on assets 20.2% 12.1% 4.6% (4.0%) (4.2%) 10.4% 11.9% 10.8% 4.9% 4.1% 3.9%
Return on shareholders'
equity 37.1% 23.8% 8.5% (7.9%) (7.7%) 21.8% 23.5% 21.2% 9.8% 9.0% 8.8%
FINANCIAL POSITION
Working capital 45,404 32,380 26,689 33,304 36,468 47,289 34,745 27,378 16,895 20,070 15,525
Current assets as a percent of current
liabilities 216% 208% 217% 268% 266% 304% 254% 250% 216% 369% 226%
Property, plant and
equipment, net 24,785 19,344 13,877 13,511 13,726 14,402 11,343 8,677 7,975 8,422 8,397
Total assets 119,708 91,634 72,518 73,785 74,861 86,741 70,570 57,692 42,431 42,478 40,775
Total debt 2,503 7,578 4,471 12,553 14,175 18,404 13,799 11,805 5,513 12,238 12,727
Total debt as a percent of total
capitalization 4% 14% 10% 25% 27% 29% 28% 29% 20% 37% 41%
Shareholders'
equity 68,430 45,706 38,939 37,186 38,596 44,109 35,331 28,465 22,582 20,512 18,438
Book value per
share 4.79 3.27 2.66 2.58 2.71 3.13 2.52 2.04 1.66 1.50 1.35
OTHER DATA
Product development
expenditures 5,542 4,373 3,385 3,628 3,430 3,520 2,904 2,910 2,010 2,313 1,646
Capital expenditures, net
of retirements 8,618 7,762 3,570 1,364 1,637 4,615 4,054 1,619 1,197 1,605 920
Depreciation and
amortization 3,875 2,801 2,500 2,569 1,953 1,771 1,609 1,968 1,830 2,266 2,162
Employees 2,222 1,620 1,324 1,014 1,182 1,565 1,455 972 804 600 797
This summary should be read in conjunction with Management's Discussion and
Analysis.
All share and per share data have been adjusted for the two-for-one stock
splits distributed in April and October, 1995.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The Company is a leading manufacturer, distributor and international and
marketer of mobile elevating work platforms and truck-mounted material handling
equipment used primarily in construction and industrial applications. Sales
are made principally to independent equipment distributors that lease the
Company's products and provide service support to equipment users. Equipment
purchases by end-users, either directly from the Company or through
distributors, comprise a significant, but smaller portion of sales.
Demand for the Company's products tends to be cyclical, responding historically
to varying levels of construction and industrial activity, principally in the
United States and, to a lesser extent, in other industrialized nations. During
recessionary conditions, demand for equipment held for rental typically
declines more sharply than demand for equipment purchased by end-users. Other
factors affecting demand include the availability and cost of financing for
equipment purchases and the market availability of used equipment.
Due to the cyclical demand, the Company's financial performance and cash flows
tend to fluctuate. However, the Company continually strives to reduce
operating costs and increase manufacturing efficiencies. The Company also
considers the development and introduction of new and improved products and
expansion into underserved geographic markets to be important factors in
maintaining and strengthening its market position and reducing cyclical
fluctuations in financial performance and cash flows.
Results of Operations
Net sales reached a new high in 1995, rising by 53% over 1994 and by 43% from
1993 to 1994. The growth in revenues for both years included increased demand
across virtually all product classes. Continued strong North American demand
for both 1995 and 1994, combined with improvement in the European market in
1995, generated the record sales. Foreign sales as a percent of total sales
were 18%, 16% and 26% in 1995, 1994 and 1993, respectively. New products
introduced over a two-year period contributed over 24% and 25% to sales in 1995
and 1994, respectively. Management does not believe that any single customer
is material to the Company's business on an ongoing basis. The level of sales
to a particular customer may vary significantly from year to year. In 1995 and
1994, sales to one customer amounted to 13% and 12% of net sales, respectively.
In 1993, no single customer accounted for more than 10% of net sales.
Gross profit, as a percent of sales, was 24% for both 1995 and 1994. Lower
manufacturing costs due to continued improvements in manufacturing processes,
lower warranty and product liability costs, and higher selling prices offset
increased material costs, a less profitable product mix and costs associated
with outsourcing additional production as a result of the substantial increase
in demand and capacity limitations. Gross profit increased to 24% in 1994 from
23% in 1993, primarily as a result of process cost reductions. This improvement
was partially offset by increases in certain overhead expenses, higher
personnel costs, changes in product mix and competitive pricing pressures.
Selling, general and administrative expenses were $33.3 million, $27.1 million
and $23.3 million, or as a percent of sales, 12%, 15% and 19% for 1995, 1994
and 1993, respectively. The dollar increase for both years included increased
advertising, commissions and other personnel related expenses. In addition,
research and development spending grew by 27% from 1994 to 1995 and 29% from
1993 to 1994 as the Company continued to invest in the development of new
products. The expenditure increase from 1993 to 1994 also included an increase
in the provision for doubtful accounts.
The effective income tax rate increased to 37% in 1995 compared to 35% and 30%
in 1994 and 1993, respectively. The effective income tax rate for 1994
reflects the benefit of closing an overseas facility. The rate for 1993
includes a decrease in estimated taxes payable.
Financial Condition
The Company strengthened its financial position during 1995 through increased
cash from operations and debt reduction. Cash generated from operating
activities increased to $17.9 million in 1995, compared to $11.4 million in
both 1994 and 1993. Working capital was $45.4 million and $32.4 million at July
31, 1995 and 1994, respectively. Capital expenditures increased substantially
in both 1995 and 1994, as the Company continued to invest in property, plant
and equipment needed to support business growth and improve productivity and
quality. The ratio of debt to total capital at July 31, 1995, decreased to 4%
from 14% at July 31, 1994, principally due to the repayment of debt with cash
generated from operations. The increase from 10% at July 31, 1993, to 14% in
1994 was due to borrowed funds to purchase treasury shares.
At July 31, 1995, the Company had unused credit lines totaling $10 million and
cash balances of $13 million. The Company considers these resources, coupled
with cash expected to be generated by operations, adequate to meet its
foreseeable funding needs, including $7 million budgeted for capital
expenditures in fiscal 1996. In addition, the Company intends to relocate and
expand its scissor lift manufacturing facility in 1996. Acquisition,
relocation and refitting costs are estimated to be $9 million payable over
twelve months. The Company intends to finance this project with borrowed
capital.
The Company's exposure to product liability claims is discussed in the
Commitments, Contingencies note to the consolidated financial statements.
Future results of operations, financial condition and liquidity may be affected
to the extent that the Company's ultimate liability with respect to product
liability varies from current estimates.
Outlook
Management expects fiscal year 1996 to be another strong year. Consensus
economic forecasts predict no domestic recession in the near term, and
forecasts for Western Europe and the Pacific Rim nations, except Japan, are
generally optimistic. The existing markets for the Company's products,
particularly elevating work platforms, continue to grow, although at a somewhat
slower rate than a year ago. Rental fleet utilization remains strong in the
United States and demand for used equipment exceeds its supply. The Company's
backlog remains strong, and new products to be introduced during the third
fiscal quarter, together with expanded international distribution, should spur
demand. Management has targeted additional manufacturing cost reductions and a
slight improvement in gross profit as a percentage of net sales. Capacity
constraints and outsourcing requirements, particularly for scissor lift
production, will be offsetting factors. This should be alleviated in fiscal
1997 once the new Bedford facility is fully operational. Product mix also
affects gross margins and is difficult to forecast. The timing and terms of
the proposed divestiture of the Material Handling Division are uncertain, but
Management does not expect this transaction to have a material effect on the
Company's results of operations in fiscal 1996.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The following consolidated financial statements of JLG Industries, Inc. and its
subsidiaries, are included herein as indicated below:
Consolidated Balance Sheets - July 31, 1995 and 1994
Consolidated Statements of Income - Years Ended July 31, 1995, 1994
and 1993
Consolidated Statements of Shareholders' Equity - Years Ended July
31, 1995, 1994 and 1993
Consolidated Statements of Cash Flows - Years Ended July 31, 1995,
1994 and 1993
Notes to the Consolidated Financial Statements - July 31, 1995
Report of Independent Auditors
JLG INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands except per share data)
July 31
1995 1994
ASSETS
Current Assets
Cash $12,973 $8,088
Accounts receivable, less allowance for
doubtful accounts of $1,325 in 1995 and
$965 in 1994 33,466 25,750
Inventories:
Finished goods 7,630 4,968
Work in process 13,357 9,242
Raw materials 12,459 9,012
33,446 23,222
Future income tax benefits 4,219 3,531
Other current assets 464 1,871
Total Current Assets 84,568 62,462
Property, Plant and Equipment
Land and improvements 3,038 2,033
Building and improvements 11,524 12,750
Machinery and equipment 29,290 22,924
43,852 37,707
Less allowance for depreciation 19,067 18,363
24,785 19,344
Equipment Held for Rental 5,052 4,190
Other Assets 5,303 5,638
$119,708 $91,634
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Current portion of long-term debt $243 $1,301
Accounts payable 20,028 14,770
Accrued expenses 18,893 14,011
Total Current Liabilities 39,164 30,082
Long-Term Debt 2,260 6,277
Other Liabilities and Deferred Credits 9,854 9,569
Shareholders' Equity
Capital stock:
Authorized shares: 17,081 at $.20 par value
Issued and outstanding shares: 1995 -
14,275 shares; 1994 - 13,969 shares 2,855 2,939
Additional paid-in capital 10,121 10,861
Equity adjustment from translation (1,799) (1,899)
Retained earnings 57,253 36,884
Treasury stock (3,079)
Total Shareholders' Equity 68,430 45,706
$119,708 $91,634
The accompanying notes are an integral part of these financial statements.
JLG INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands except per share data)
Fiscal Years Ended July 31
1995 1994 1993
Net Sales $269,211 $176,443 $123,034
Cost of sales 203,258 134,289 94,794
Gross Profit 65,953 42,154 28,240
Selling, general and
administrative expenses 33,254 27,147 23,323
Income from Operations 32,699 15,007 4,917
Other income (deductions):
Interest expense (376) (380) (458)
Miscellaneous, net 376 (24) 180
Income before Taxes 32,699 14,603 4,639
Income tax provision 11,941 5,067 1,410
Net Income $20,758 $9,536 $3,229
Net Income per Share $1.47 $.68 $.22
The accompanying notes are an integral part of these financial statements.
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
(in thousands except share data)
Equity
Additional Adjustment
Capital Stock Paid-in from Retained Treasury
Shares Par Value Capital Translation Earnings Stock
Balances at July 31, 1992 14,431 $ 2,886 $ 9,870 ($41) $24,471
Net income for the year 3,229
Aggregate translation
adjustment, net of deferred
tax benefit of $1,308 (1,993)
Contribution to employee stock
ownership plan 195 39 478
Balances at July 31, 1993 14,626 2,925 10,348 (2,034) 27,700
Net income for the year 9,536
Dividends paid: $.025 per share (352)
Aggregate translation
adjustment, net of deferred
tax benefit of $1,032 135
Stock option transactions 68 14 309
Purchase of treasury stock (823) (3,500)
Contribution to employee stock
ownership plan 98 204 421
Balances at July 31, 1994 13,969 2,939 10,861 (1,899) 36,884 (3,079)
Net income for the year 20,758
Dividends paid: $.0275 per share (389)
Aggregate translation
adjustment, net of deferred
tax benefit of $837 100
Retirement of treasury stock (120) (2,440) 2,560
Stock option transactions 184 36 1,060
Contribution to employee stock
ownership plan 122 640 519
Balances at July 31, 1995 14,275 $2,855 $10,121 ($1,799) $57,253
The accompanying notes are an integral part of these statements
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Year Ended July 31,
1995 1994 1993
Operations
Net income $20,758 $9,536 $3,229
Adjustments to reconcile net income to
cash provided by operating activities:
Depreciation 3,875 2,801 2,500
Provision for self-insured losses 408 2,292 1,425
Deferred income taxes (596) (1,233) 1,050
Changes in operating assets and liabilities:
Accounts receivable (7,522) (4,686) (6,452)
Inventories (9,867) (3,682) 4,628
Other current assets 1,412 21 156
Accounts payable 5,251 3,728 4,899
Accrued expenses 3,951 2,659 1,285
Changes in other assets and liabilities 279 (72) (1,304)
Cash provided by operations 17,949 11,364 11,416
Investments
Purchases of property, plant
and equipment (11,035) (7,963) (3,780)
Proceeds from sale of property, plant
and equipment 2,417 201 210
Cash used for investments (8,618) (7,762) (3,570)
Financing
Repayment of long-term debt (5,081) (1,904) (7,980)
Issuance of long-term debt 5,000
Payment of dividends (389) (352)
Purchase of treasury stock (3,500)
Stock issued for employee benefit plans 1,159 625 513
Cash used for financing (4,311) (131) (7,467)
Currency Adjustments
Effect of exchange rate changes on cash (135) (231) (471)
Cash
Net change in cash 4,885 3,240 (92)
Beginning balance 8,088 4,848 4,940
Ending balance $12,973 $8,088 $4,848
The accompanying notes are an integral part of these statements.
JLG INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands except per share data)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICES
Principles of Consolidation and Statement Presentation
The consolidated financial statements include the accounts of the Company and
its subsidiaries. Significant intercompany accounts and transactions have been
eliminated in consolidation.
Cash and Cash Equivalents
The Company considers all highly liquid investments with a maturity of three
months or less when purchased to be cash equivalents and classifies such
amounts as cash.
Inventories
Inventories are stated at the lower of cost or market. Cost is determined
using the LIFO (last-in, first-out) method. Inventories at July 31, 1995 and
1994 would have been higher by $4,528 and $4,434, respectively, had the Company
used FIFO cost, which approximates current cost, rather than LIFO cost for
valuation of its inventories. In 1993, the liquidation of LIFO inventories
decreased cost of sales and, therefore, increased income before taxes by $294.
Property, Plant and Equipment and Equipment Held for Rental
Property, plant and equipment held for rental are stated at cost, net of
accumulated depreciation. Depreciation is computed using the straight-line
method, based on useful lives of 15 years for land improvements, 10 to 20 years
for buildings and improvements, three to 10 years for machinery and equipment
and three to seven years for equipment held for rental.
Income Taxes
Deferred income tax assets and liabilities arise from differences between the
tax basis of assets or liabilities and their reported amounts in the financial
statements. Deferred tax balances are determined by using the tax rate
expected to be in effect when the taxes are paid or refunds received.
Capital Stock
On February 23, 1995 and September 7, 1995, the Company declared two-for-one
stock splits of the Company's then outstanding common stock. The splits were
effected by stock dividends. All share and per share data included in this
Annual Report have been restated to reflect the stock splits.
Product Development
The Company incurred product development and other engineering expenses of
$5,542, $4,373 and $3,385 in 1995, 1994 and 1993, respectively, which were
charged to expense as incurred.
Translation of Foreign Currencies
The translation of foreign currencies into U.S. dollars is performed for
balance sheet accounts using current exchange rates in effect at the balance
sheet date and for revenue and expense accounts using an average exchange rate
for the period. The gains or losses resulting from translation are included in
shareholders' equity.
Net Income per Share
Net income per share is based on the average number of shares of Common stock
outstanding during each year. The effect of Common stock equivalents is
immaterial to earnings per share.
INCOME TAXES
The income tax provision consisted of the following for the years ended July
31:
1995 1994 1993
Current:
Federal $10,641 $5,373 $ 360
State 1,896 927
12,537 6,300 360
Deferred:
Federal (483) (833) 954
State (113) (400) 96
(596) (1,233) 1,050
$11,941 $5,067 $1,410
On a net basis, the Company made income tax payments of $11,858 in 1995 and
$5,700 in 1994 and received income tax refunds of $1,195 in 1993.
The difference between the U.S. federal statutory income tax rate and the
Company's effective tax rate is as follows for the years ended July 31:
1995 1994 1993
Statutory U.S. federal income tax rate 34% 34% 34%
State tax provision, net of federal effect 4 4 6
Net tax effect of foreign operations (2) 3
Adjustments to reflect 1993 tax return as filed (9)
Other (1) (1) (4)
37% 35% 30%
Components of deferred tax assets and liabilities were as follows at July 31:
1995 1994
Future income tax benefits:
Contingent liabilities provisions $3,811 $3,932
Employee benefits 1,154 970
Translation adjustments 918 1,166
Inventory valuation provisions 887 928
Other 1,360 563
8,130 7,559
Deferred tax liabilities:
Depreciation and asset basis differences 925 597
Other 145 154
1,070 751
7,060 6,808
Less valuation allowance (234) (383)
Net deferred tax assets $6,826 $6,425
BANK CREDIT LINES AND LONG-TERM DEBT
The Company has available a $10 million unsecured bank revolving line of credit
with a term of two years, renewable annually, and at an interest rate of prime
or a spread over LIBOR. The facility further provides for borrowings using
bankers acceptances at prevailing discount rates. The Company also has the
option to convert outstanding borrowings under the facility to an amortizing
term loan with a repayment period of up to five years, and at an interest rate
based on the yield of U.S. Treasury securities with the same maturity. There
were no amounts outstanding under this facility at July 31, 1995 and 1994.
Long-term debt was as follows at July 31:
1995 1994
Bank installment loans due $4,750
Industrial revenue bonds due in 1999
with interest at 7% $1,000 1,000
State agency mortgages due through 2004
with interest averaging 3.6% 662 760
Industrial revenue mortgages due through
2004 with interest at 5.5% 677 754
Other 164 314
2,503 7,578
Less current portion (243) (1,301)
$2,260 $6,277
The bank revolving line of credit requires the maintenance of certain financial
ratios. Borrowings aggregating $2.2 million under certain long-term loans are
secured by $7.2 million in assets of the Company. Interest paid on all
borrowings was $378, $461 and $511 in 1995, 1994, and 1993, respectively.
The aggregate amounts of long-term debt outstanding at July 31, 1995 which will
become due in 1996 through 2000 are: $243, $246, $189, $1,142 and $143.
EMPLOYEE BENEFIT PLANS
The Company's stock incentive plan has reserved 3,032 common shares that may be
awarded to key employees in the form of options to purchase Common shares,
restricted shares and limited appreciation rights. The option price is set by
the Company's Board of Directors and, for all options currently outstanding,
is the fair market value of the shares on their date of grant.
The directors stock option plan provides for annual grants to each outside
director of a single option to purchase six thousand shares of Common stock,
providing the Company earned a net profit, before extraordinary items, for the
prior year. The option price shall be equal to the shares' fair market value
on their date of grant. An aggregate of 702 shares of Common stock is
authorized to be issued under the plan.
Outstanding options and transactions involving the plans are summarized as
follows:
1995 1994
Outstanding options at the beginning of the year 620 525
Options granted ($3.37 to $16.89 per share) 76 114
Options cancelled ($1.31 to $8.81 per share) (4) (2)
Options exercised ($1.31 to $8.81 per share) (55) (17)
Outstanding options at the end of the year 637 620
Exercisable options at the end of the year
($1.31 to $8.81 per share) 175 89
The Company has two discretionary, defined-contribution retirement plans
covering all its eligible U.S. employees. The Company's policy is to fund
these pension costs as accrued. Plan assets are invested in money market
funds, government securities, mutual funds and the Company's Common stock. The
aggregate expense relating to these plans was $2,298, $1,888 and $1,025 in
1995, 1994 and 1993, respectively.
ACCRUED EXPENSES
Components of accrued expenses were as follows at July 31:
1995 1994
Salaries, wages and related taxes $ 6,609 $ 4,337
Income taxes 2,718 2,335
Contingent liabilities, current portion 2,378 1,965
Employee benefits 1,563 1,626
Other 5,625 3,748
$18,893 $14,011
INDUSTRY AND EXPORT DATA
The Company operates in one dominant industry segment - the manufacturing and
selling of mobile, hydraulically-operated equipment. The Company's customers
are predominantly U.S. based equipment rental firms. Additionally, its
receivables from these customers are generally not collateralized. In 1995 and
1994, sales to one customer amounted to 13% and 12% of net sales, respectively.
For 1993, no single customer represented 10% or more of net sales. Sales to
customers outside the U. S. were 18%, 16% and 26% of net sales for 1995, 1994
and 1993, respectively.
COMMITMENTS AND CONTINGENCIES
The Company is a party to personal injury and property damage litigation
arising out of incidents involving the use of its products. The Company's
insurance program for fiscal year 1995 is comprised of a self-insured retention
of $5 million and catastrophic coverage of $20 million in excess of the
retention. The Company contracts with an independent insurance firm to provide
claims handling and adjustment services. The Company's estimates with respect
to claims are based on internal evaluations of the merits of individual claims
and the reserves assigned by the Company's independent insurance carrier. The
methods of making such estimates and establishing the resulting accrued
liability are reviewed continually, and any adjustments resulting therefrom are
reflected in current earnings. Claims are paid over varying periods, which
generally do not exceed five years. Accrued liabilities for future claims are
not discounted.
With respect to all claims of which the Company is aware, accrued liabilities
of $8.4 million and $8.0 million were established at July 31, 1995 and 1994,
respectively. While the Company's ultimate liability may exceed or be less
than the amounts accrued, the Company believes that it is unlikely that it
would experience losses that are materially in excess of such reserve amounts.
As of July 31, 1995 and 1994, there were no insurance recoverables or offset
implications and there were no claims by the Company being contested by
insurers.
The Company leases equipment under operating leases expiring in various years.
These leases require the Company to pay all maintenance and general operating
costs. Future minimum lease payments are: $1,068, $527, $472 and $59 in 1996
through 1999, respectively. Rental expense for all operating leases was $906,
$955, and $763 in 1995, 1994 and 1993, respectively.
UNAUDITED QUARTERLY FINANCIAL INFORMATION
Unaudited financial information was as follows for the fiscal quarters within
the years ended July 31:
Net
Net Income
Net Sales Gross Profit Income per Share
1995
October 31 $ 53,724 $12,984 $ 3,863 $ .27
January 31 52,175 13,449 3,752 .27
April 30 75,809 18,082 6,089 .43
July 31 87,503 21,438 7,054 .50
$269,211 $65,953 $20,758 $1.47
1994
October 31 $ 36,757 $ 8,629 $ 1,252 $ .09
January 31 34,172 7,765 1,095 .08
April 30 50,141 12,601 3,514 .25
July 31 55,373 13,159 3,675 .26
$176,443 $42,154 $ 9,536 $ .68
Gross profit for the first three quarters of fiscal 1994 has been restated from
amounts previously reported by the Company in its interim financial statements.
Restated amounts reflect the reclassification of certain costs between expense
categories.
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
To The Board of Directors and Shareholders
JLG Industries, Inc.
McConnellsburg, Pennsylvania
We have audited the accompanying consolidated balance sheets of JLG Industries,
Inc. as of July 31, 1995 and 1994, and the related consolidated statements of
income, shareholders' equity, and cash flows for each of the three years in the
period ended July 31, 1995. Our audits also included the financial statement
schedule listed in the Index at Item 14(a). These financial statements and
schedule are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and
schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of JLG
Industries, Inc. at July 31, 1995 and 1994, and the consolidated results of its
operations and its cash flows for each of the three years in the period ended
July 31, 1995 in conformity with generally accepted accounting principles.
Also, in our opinion, the related financial statement schedule, when considered
in relation to the basic financial statements taken as a whole, presents fairly
in all material respects the information set forth therein.
ERNST & YOUNG LLP
Baltimore, Maryland
September 7, 1995
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information required by this Item 10 relating to identification of
directors is incorporated herein by reference from pages 2 through 4 of the
Company's Proxy Statement under the caption "Election of Directors."
Identification of officers is presented in Item 1 of this report under the
caption "Executive Officers of the Registrant."
ITEM 11. EXECUTIVE COMPENSATION
The information required by this Item 11 relating to executive compensation is
hereby incorporated by reference from pages 3 through 4, under the caption
"Board of Directors," and pages 5 through 11, under the caption "Executive
Compensation," of the Company's Proxy Statement.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this Item 12 relating to security ownership of
certain beneficial owners and management is hereby incorporated by reference
from pages 4 and 5 of the Company's Proxy Statement under the caption "Voting
Securities and Principal Holders." There is no required disclosure regarding
change in control.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this Item 12 relating to certain relationships and
related transactions is hereby incorporated by reference from page 13 of the
Company's Proxy Statement under the caption "Certain Transactions."
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) (1) and (2) The following consolidated financial statements of the
registrant and its subsidiaries are included in Item 8.
Consolidated Balance Sheets - July 31, 1995 and 1994
Consolidated Statements of Income - Years ended July 31, 1995, 1994 and
1993
Consolidated Statements of Shareholders' Equity - Years ended
July 31, 1995, 1994 and 1993
Consolidated Statements of Cash Flows - Years ended July 31, 1995, 1994
and 1993
Notes to Consolidated Financial Statements - July 31, 1995
The following consolidated financial schedule of the registrant and its
subsidiaries is included in Item 14(d):
Schedule II - Valuation and Qualifying Accounts
All other schedules for which provision is made in the applicable accounting
regulation of the Securities and Exchange Commission are not required under the
related instructions or are inapplicable and, therefore, have been omitted.
(a) (3) Listing of Exhibits
Exhibit
Number Exhibit
3.1 Certificate of incorporation of JLG Industries, Inc., which
appears as Exhibit 1 (a) to the Company's Form 10 Registration
Statement (File No. 0-8454 -- filed April 22, 1977), is hereby
incorporated by reference.
3.2 Amendment to Section 5 of the Company's Articles of Incorporation
effective as of September 15, 1995.
3.3 By-Laws of JLG Industries, Inc., which appears as Exhibit 3 to the
Company's Form 10-Q (File No. 0-8454 -- filed March 16, 1995), is
hereby incorporated by reference.
4.1 Trust Indenture between the Bedford County, Pennsylvania
Industrial Development Authority and the Fulton County National
Bank and Trust Company, as Trustee, which appears as Exhibit B5
to the Company's Form 10-K (File No. 0-8454 -- filed
October 24, 1979), is hereby incorporated by reference.
4.2 Installment Sale Agreement between Bedford County, Pennsylvania
Industrial Development Authority and JLG Industries, Inc., which
appears as Exhibit B6 to the Company's Form 10-K (File
No. 0-8454 -- filed October 24, 1979), is hereby incorporated
by reference.
4.3 Agreement to disclosed upon request.
10.1 Form of Deferred Compensation Benefit Agreement dated March 1,
1989 with certain retired key employees which appears as
Exhibit 10.2 to the Company's 10-K (File No. 0-8454 -- filed
October 18, 1989), is hereby incorporated by reference.
10.2 Form of Deferred Compensation Benefit Agreement dated
March 1, 1990 with certain key employees, which appears as
Exhibit 10.4 to the Company's Form 10-K (File No. 0-8454 --
filed October 18, 1990), is hereby incorporated by reference.
10.3 Form of Deferred Compensation Benefit Agreement dated
August 15, 1990 between JLG Industries, Inc. and L. David
Black, which appears as Exhibit 10.5 to the Company's Form 10-K
(File No. 0-8454 -- filed October 18, 1990), is hereby
incorporated by reference.
10.4 Stock Redemption Agreement dated August 27, 1980, between JLG
Industries, Inc. and Paul K. Shockey, which appears as Exhibit
25 to the Company's Form S-7 (Registration No. 2-69194 -- filed
September 18, 1980), is hereby incorporated by reference.
10.5 Directors' Deferred Compensation Plan date July 29, 1986,
which appears as Exhibit 10.5 to the Company's Form 10-K (File
No 0-8454 -- filed October 28, 1986), is hereby incorporated by
reference.
10.6 JLG Industries, Inc. Stock Incentive Plan dated May 23, 1991 which
appears as Exhibit 10.10 to the Company's Form 10-K (File No. 0-
8454 -- filed October 27, 1992), is hereby incorporated by
reference.
10.7 Credit Agreement dated December 21, 1989 among JLG Industries,
Inc., the First National Bank of Maryland, and Philadelphia
National Bank, which appears as Exhibit 4.1 to the Company's 10-Q
(File No. 0-8454 -- filed March 12, 1990), is hereby incorporated
by reference.
10.8 First Modification Agreement, dated January 29, 1990 to the
Credit Agreement dated December 21, 1989 among JLG Industries,
Inc., the First National Bank of Maryland, and Philadelphia
National Bank, which appears as Exhibit 4.3 to the Company's
10-Q (File No. 0-8454 -- filed March 12, 1990), is hereby
incorporated by reference.
10.9 Second Modification Agreement, dated September 17, 1993 to the
Credit Agreement dated December 21, 1989 among JLG Industries,
Inc., the First National Bank of Maryland, and Philadelphia
National Bank, which appears as Exhibit 10.12 to the Company's 10-
K (File No. 0-8454 -- filed October 20, 1993), is hereby
incorporated by reference.
10.10 JLG Industries, Inc. Directors Stock Option Plan amended and
restated as of September 7, 1995.
22 Listing of subsidiaries.
23 Consent of independent auditors
(b) The Company was not required to file Form 8-K pursuant to requirements of
such form in the fourth quarter of fiscal 1995.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
JLG INDUSTRIES, INC.
(Registrant)
By: /s/ L. David Black Date: October 19, 1995
L. David Black, Chairman of the Board, President and
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities on the dates indicated.
By: /s/ Charles H. Diller, Jr. Date: October 19, 1995
Charles H. Diller, Jr., Executive Vice President,
Chief Financial Officer and Director
By: /s/ George R. Kempton Date: October 19, 1995
George R. Kempton, Director
By: /s/ Gerald Palmer Date: October 19, 1995
Gerald Palmer, Director
By: /s/ Stephen Rabinowitz Date: October 19, 1995
Stephen Rabinowitz, Director
By: /s/ Paul Shockey Date: October 19, 1995
Paul Shockey, Secretary and Director
By: /s/ Charles O. Wood, III Date: October 19, 1995
Charles O. Wood, III, Director
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
JLG INDUSTRIES, INC. AND SUBSIDIARIES
(thousands of dollars)
Col. A Col. B Col. C Col. D Col. E
Additions
Balance at Charged to Charged to Balance at
Beginning of Costs and Other Accounts Deductions- End of
Classification Period Expenses Describe Describe(1)(2) Period
Year ended July 31, 1995:
Allowance for Doubtful
Accounts $965 360 $1,325
Year ended July 31, 1994:
Allowance for Doubtful
Accounts $664 644 (343) $965
Year ended July 31, 1993:
Allowance for Doubtful
Accounts $655 173 164 $664
Note:
(1)Amounts written off and transferred to other accounts in the current year.
(2)Adjustment resulting from conversion of foreign currencies.