Gehl Reports Drop in U.S. Sales, 31-Percent Increase in International Sales
March 3, 2008 • West Bend, Wis.-based Gehl Company today reported 2007 income from continuing operations of $24.9 million, or $2.00 per diluted share, on net sales of $457.6 million, and fourth quarter income from continuing operations of $4.7 million, or $0.38 per diluted share, on net sales of $102.2 million.
Net sales for full year 2007 were $457.6 million compared with $486.2 million for 2006, a decrease of 6 percent. Sales outside of the
Although industry retail demand in
Net sales for the fourth quarter ended Dec. 31, 2007, were $102.2 million, a decrease of 1 percent from the 2006 fourth quarter net sales of $103.6 million. Net sales remained solid in the quarter despite continued weakness in North American residential construction activity. The company's telehandler retail demand declined 16 percent in the fourth quarter in an industrywide market that declined more than 24 percent.
“We are pleased to report significant improvement in the company's performance in difficult domestic markets, as reflected by our continued market share gains,” said William Gehl, chairman and CEO. “Gross margin expansion and the growth of our international sales are positive developments reflecting our global compact equipment strategy, investments in product research and development and continued emphasis on cost reductions.”
In its outlook for 2008, the company stated that it does not anticipate that North American housing conditions will improve appreciably in 2008. While the company anticipates continued growth in the international markets, current forecasts anticipate that the North American compact equipment markets will decline 10 to 30 percent in 2008, varying by product category.
Based on current 2008 market forecasts, current company backlog position, new product acceptance rate, targeted market share gains and field inventory adjustments, the company expects 2008 net sales to be in the range of $405 million to $425 million. The company intends to continue to reduce North American field inventory levels in 2008 to position dealer inventory levels in advance of new product introductions in 2009. Gross margin in 2008 is expected to decline due to a change in product mix, increasing commodity costs, primarily steel, and lower production volumes compared to 2007. In addition, operating expenses will increase due to planned incremental investments in product research and development, information technology projects and programs designed to enhance dealer communication totaling approximately $3.2 million. The company expects income per share from continuing operations of $0.95 to $1.20 in 2008. The company anticipates generating operating cash flow of $40 million to $60 million driven by decreases in field and factory inventory.
