Gehl Reports Decreased Telehandler Activity in Q3

November 2, 2007 • West Bend, Wis.-based Gehl Company reported third quarter income from continuing operations of $5 million, or $0.40 per diluted share, for the quarter ended September 30, 2007, compared with income from continuing operations of $7.4 million, or $0.59 per diluted share, for the third quarter of 2006.

Industry retail demand in North America for skid loaders and telehandlers was down 7 percent and 35 percent, respectively, in the third quarter of 2007 compared to the same period a year earlier. The company's retail performance continued to reflect market share gains in these two key product categories as its skid loader retail settlements grew 5 percent and while its telehandler retail activity declined 24 percent.

 

Net sales for the third quarter of 2007 were $104.9 million compared to net sales of $121 million in the third quarter of 2006. The company's international market performance continued to be strong, driven by continued market share gains, the value of foreign currencies relative to the U.S. dollar, and the underlying strength of the international construction markets. Sales outside of the United States were $33.3 million or 32 percent of total company sales in the third quarter of 2007, an increase of 42 percent versus the same period in 2006. The company's European and rest of world shipments were up 41 percent and 50 percent, respectively, in the third quarter of 2007 compared to the third quarter of 2006. Skid loader shipments outside of the U.S. represented 47 percent of total company skid loader shipments in the third quarter of 2007, up from 31 percent in the prior year third quarter.

 

Gross margin improved to 23.2 percent in the third quarter of 2007 compared to 21.8 percent in the third quarter of 2006. The increase was primarily driven by the favorable results the company continued to achieve from its added supply chain resources and investments in state-of-the-art manufacturing equipment.

 

For the first nine months of 2007, Gehl reported net sales from continuing operations of $355.4 million compared to $382.6 million in the first nine months of 2006. Income from continuing operations was $20.3 million, or $1.63 per diluted share, for the first nine months of 2007 compared to $23.1 million, or $1.86 per diluted share, for the first nine months of 2006.

 

“Our continued market share gains, international growth and strong gross margin improvement are all positive outcomes of the efforts of our employees. While we can't control the weakness that exists in the North American housing market, we continue to drive the improvement of our relative performance in the markets we serve,” said William Gehl, chairman and CEO.

 

Based on the company's results in the first nine months of 2007, current backlog position and management's expectation that the North American housing market will continue to experience weakness for the balance of 2007, the company adjusted its 2007 full year outlook. The company expects net sales from continuing operations in the range of $445 million to $460 million and earnings per diluted share from continuing operations of $1.90 to $2.00.

 

The company's board of directors also recently authorized a stock repurchase plan providing for the repurchase of up to 1 million shares of the company's outstanding common stock in open market or privately negotiated transactions. All treasury stock acquired by the company will be cancelled and returned to the status of authorized but unissued. The plan does not have an expiration date. The board terminated the previous plan, which was authorized in September 2001. The company had repurchased an aggregate of 227,850 shares of the 500,000 authorized shares.