JLG Jlg Industries

JLG Industries, Inc. (NYSE:JLG) today announced record consolidated financial results for the fiscal fourth-quarter and full-year ended July 31, 2006. Financial highlights for the periods included: -- Revenue growth of 21 percent and $48 million of net income earned during the fourth quarter -- Revenue growth of 32 percent and earnings improvement of 161 percent for fiscal year 2006 -- Continued strong cash flow from operations funding growth -- Strong demand continued for access products in construction markets "Along with achieving new records for both quarterly and full-year revenues and earnings, we achieved other significant milestones in 2006," stated Bill Lasky, Chairman of the Board, President and Chief Executive Officer. "We completed our manufacturing realignment and capacity expansion in preparation for the Caterpillar alliance and a projected increase in demand for JLG access equipment. Shipments of Caterpillar-branded telehandlers to European dealers began in late July and we will begin shipping to North American dealers in November under our exclusive 20-year private label alliance agreement. Despite some economic uncertainty and reduced residential construction activity, non-residential construction projections continue to be robust into calendar 2007. Combined with increased international activity and the new Caterpillar volume, this will continue to drive demand for JLG access products." Fourth-Quarter 2006 Results During the fourth quarter, revenues were $688 million, compared to $570 million during the same period last year. This increase of 21 percent was primarily due to sustained strong demand for access equipment as new machine revenues rose 25 percent. Earnings for the quarter totaled $48 million, or 45 cents per share, compared to $36 million, or 35 cents per share, during the fourth quarter of 2005. Operating income was $78 million, or 11.4 percent of sales, compared to $60 million, or 10.5 percent, during the same period last year. Full-Year 2006 Results Consolidated revenues were $2.3 billion, a 32 percent increase when compared to $1.7 billion in 2005. Net income was $149 million, or $1.40 per share, compared to $57 million, or 60 cents per share last year. The 2006 results include a one time pre-tax gain of $14.6 million ($8.8 million net of tax), or 8 cents per share, from the sale of the Gradall excavator business during the third quarter and $1.9 million ($1.2 million net of tax), or 1 cent per share of charges associated with the early extinguishment of debt. The 2005 results include $6.5 million ($4.0 million net of tax) or 4 cents per share of charges associated with the early extinguishment of debt. Operating income was $263 million, or 11.5 percent of revenues in 2006, compared to $120 million, or 6.9 percent, in fiscal 2005. Cash and cash equivalents were $328 million at July 31, 2006 compared to $224 million a year ago. Cash flow from operations was $119 million. Fiscal-Year 2007 Outlook "Demand for our products remained strong in the fourth quarter, continuing the pattern we have seen throughout fiscal 2006," said Jim Woodward, Executive Vice President and Chief Financial Officer. "As a result, our earnings quality improved significantly despite the additional expenses associated with our Caterpillar alliance preparations and other strategic initiatives. Excluding the gain on the sale of the excavator business, the fiscal 2006 operating margin improved to 10.9 percent compared to 6.9 percent in 2005. On a full year basis, we achieved our 23-percent target for incremental operating margin." "We anticipate continued strong demand in fiscal 2007 and project revenue growth to be 20 to 25 percent greater than our record fiscal 2006 level of $2.3 billion. With a substantial portion of our manufacturing realignment and capacity expansion behind us, and the start up of shipments under the new Caterpillar alliance, we expect fiscal 2007 earnings per share to be in a range of $1.72 to $1.82." Quarterly Conference Call Scheduled for 2 p.m. Today Management's detailed analysis of the Company's quarterly results will be provided during a conference call this afternoon at 2 p.m. Eastern Time. The call and accompanying slide presentation can be accessed via JLG's website at www.jlg.com, or by dialling (800) 901-5217 in the U.S. and Canada, or (617) 786-2964 from international locations. Callers must reference participant password #14994468. Please dial in 10 minutes prior to the start of the call. A replay of the call will be available on the website later in the day. About JLG Industries, Inc. JLG Industries, Inc. is the world's leading producer of access equipment (aerial work platforms and telehandlers). The Company's diverse product portfolio encompasses leading brands such as JLG(R) aerial work platforms; JLG, SkyTrak(R), Lull(R) and Gradall(R) telehandlers; and an array of complementary accessories that increase the versatility and efficiency of these products for end users. JLG markets its products and services through a multi-channel approach that includes a highly trained sales force and utilizes a broad range of marketing techniques, integrated supply programs and a network of distributors in the industrial, commercial, institutional and construction markets. In addition, JLG offers world-class after-sales service and support for its customers. JLG's manufacturing facilities are located in the United States, Belgium, and France, with sales and service operations on six continents. Forward-Looking Statements This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not guarantees of future performance and involve a number of risks and uncertainties that could cause actual results to differ materially from those indicated by the forward-looking statements. Important factors that could cause actual results to differ materially from those suggested by the forward-looking statements include, but are not limited to, the following: (i) general economic and market conditions, including political and economic uncertainty in areas of the world where we do business; (ii) varying and seasonal levels of demand for our products and services; (iii) risks associated with acquisitions; (iv) credit risks from our financing of customer purchases; (v) risks arising from dependence on third-party suppliers; and (vi) costs of raw materials and energy, as well as other risks as detailed in the Company's SEC reports, including the report on Form 10-Q for the quarter ended April 30, 2006. In this release and accompanying tables, we refer to various non-GAAP measures including adjustments to reported GAAP earnings, AFS operations as if accounted for under the equity method, as well as our disclosure of free cash flow, EBITDA and net debt. We believe that these measures are useful to investors in analyzing the Company's operating performance. For more information, visit www.jlg.com. NOTE: Information contained on our website is not incorporated by reference into this press release. -0- *T JLG INDUSTRIES, INC. FINANCIAL DASHBOARD (in thousands, except per share data and as otherwise identified) Fiscal Year Quarter Ended Ended July April January July 31, 31, 30, 29, 2006 2006 2006 2006 ----------- --------- --------- --------- REVENUES AND PROFITABILITY Revenues $2,289,396 $687,632 $629,615 $494,426 Gross profit margin 19.4% 19.5% 18.8% 19.4% EBITDA 297,930 88,234 90,952 59,400 ---------------------------- Trailing twelve month EBITDA 297,930 297,930 280,799 243,633 ---------------------------- Trailing twelve month EBITDA margin 13.0% 13.0% 12.9% 11.9% ---------------------------- Operating income (loss) 262,984 78,194 84,690 49,734 Operating profit (loss) margin 11.5% 11.4% 13.5% 10.1% Net income (loss) margin 6.5% 7.0% 7.3% 5.5% Reported earnings (loss) per diluted share (1) $1.40 $0.45 $0.43 $0.26 IMPACT OF SELECTED ITEMS ON: (2) income (expense) PRE-TAX INCOME Strategic Initiatives/Integration (in both Cost of sales (COS), Selling & administrative and product development (SA&PD)) $(22,019) $(9,848) $(7,951) $(3,375) Restructuring and repositioning charges (in both COS, Restructuring) - - - - Net expenses on early extinguishment of debt (1,939) (492) (873) (574) Currency effects (in Miscellaneous-net) (2,767) 21 (2,847) (672) Bad debt charges (in SA&PD) (6,368) (1,289) (234) (1,336) Inventory charges (in COS) (2,074) (141) 106 (551) Early vesting incentives (in both COS, SA&PD) - - - - Other Incentive pay (in both COS, SA&PD) (25,938) (9,938) (6,266) (4,888) Restatement expenses (in SA&PD) - - - - Estimated net unrecovered steel cost (in COS) (3) (6,005) - - - Gain related to sale of Gradall excavator product line 14,572 - 14,572 - NET INCOME Strategic Initiatives/Integration (in both COS and SA&PD) (13,581) (6,247) (4,789) (2,146) Restructuring and repositioning charges (in both COS, Restructuring) - - - - Net expenses on early extinguishment of debt (1,196) (312) (526) (365) Currency effects (in Miscellaneous-net) (1,707) 13 (1,715) (427) Bad debt charges (in SA&PD) (3,928) (818) (141) (850) Inventory charges (in COS) (1,279) (89) 64 (350) Early vesting incentives (in both COS, SA&PD) - - - - Other Incentive pay (in both COS, SA&PD) (15,999) (6,304) (3,774) (3,109) Restatement expenses (in SA&PD) - - - - Estimated net unrecovered steel cost (in COS) (3) (3,704) - - - Gain related to sale of Gradall excavator product line 8,988 - 8,777 - EARNINGS PER SHARE (1) Strategic Initiatives/Integration (in both COS and SA&PD) (0.13) (0.06) (0.04) (0.02) Restructuring and repositioning charges (in both COS, Restructuring) - - - - Net expenses on early extinguishment of debt (0.01) - - - Currency effects (in Miscellaneous-net) (0.02) - (0.02) - Bad debt charges (in SA&PD) (0.04) (0.01) - (0.01) Inventory charges (in COS) (0.01) - - - Early vesting incentives (in both COS, SA&PD) - - - - Other Incentive pay (in both COS, SA&PD) (0.15) (0.06) (0.04) (0.03) Restatement expenses (in SA&PD) - - - - Estimated net unrecovered steel cost (in COS) (3) (0.03) - - - Gain related to sale of Gradall excavator product line 0.08 - 0.08 - BALANCE SHEET & LIQUIDITY MEASURES Cash & cash equivalents $328,096 $328,096 $304,895 $183,344 Trade accounts and finance receivables, net 445,631 445,631 393,966 379,813 Inventories 212,864 212,864 216,901 227,957 Total balance sheet debt 239,581 239,581 252,047 273,721 Limited recourse debt from finance receivables monetizations 23,719 23,719 28,516 45,318 Net debt (4) (112,234) (112,234) (81,364) 45,059 ---------------------------- Net debt (4) to total capitalization - - - 7% ---------------------------- Maximum loss exposure under loss pool agreements related to finance receivable monetizations 8,818 8,818 8,818 11,346 Equity 675,432 675,432 625,736 566,870 Working capital 607,460 607,460 575,593 523,417 Depreciation and amortization 28,551 6,410 7,701 7,907 Capital expenditures, net of retirements 32,241 15,837 9,622 3,653 Free cash flow (5) 114,330 30,870 126,423 (53,050) ---------------------------- FINANCIAL RATIOS Days sales outstanding 51.2 51.2 46.8 62.3 Days payables outstanding 44.2 44.2 45.2 40.6 Inventory turnover (annualized) 7.6 7.6 7.5 7.6 Quarter Fiscal Quarter Ended Year Ended October Ended July May 30, July 31, 31, 1, 2005 2005 2005 2005 --------- ----------- --------- --------- REVENUES AND PROFITABILITY Revenues $477,723 $1,735,030 $569,579 $505,356 Gross profit margin 19.9% 16.6% 19.3% 19.4% EBITDA 59,344 154,185 71,103 53,786 ---------------------------- Trailing twelve month EBITDA 211,344 154,185 154,185 121,445 ---------------------------- Trailing twelve month EBITDA margin 11.1% 8.9% 8.9% 7.6% ---------------------------- Operating income (loss) 50,366 120,261 59,722 51,267 Operating profit (loss) margin 10.5% 6.9% 10.5% 10.1% Net income (loss) margin 5.8% 3.3% 6.3% 4.5% Reported earnings (loss) per diluted share (1) $0.27 $.60 $.35 $.24 IMPACT OF SELECTED ITEMS ON: (2) income (expense) PRE-TAX INCOME Strategic Initiatives/Integration (in both Cost of sales (COS), Selling & administrative and product development (SA&PD)) $(845) $(6,261) $(2,131) $(1,141) Restructuring and repositioning charges (in both COS, Restructuring) - - - - Net expenses on early extinguishment of debt - (6,493) (217) (6,276) Currency effects (in Miscellaneous-net) 731 5,826 1,419 (961) Bad debt charges (in SA&PD) (3,509) (6,977) (2,533) (1,364) Inventory charges (in COS) (1,488) (4,423) (1,244) (1,279) Early vesting incentives (in both COS, SA&PD) - (1,658) - (227) Other Incentive pay (in both COS, SA&PD) (4,846) (22,194) (14,810) (7,384) Restatement expenses (in SA&PD) - - - - Estimated net unrecovered steel cost (in COS) (3) (6,005) (64,753) (8,702) (8,307) Gain related to sale of Gradall excavator product line - - - - NET INCOME Strategic Initiatives/Integration (in both COS and SA&PD) (503) (3,846) (1,325) (687) Restructuring and repositioning charges (in both COS, Restructuring) - - - - Net expenses on early extinguishment of debt - (3,988) (135) (3,778) Currency effects (in Miscellaneous-net) 435 3,578 882 (579) Bad debt charges (in SA&PD) (2,088) (4,285) (1,575) (821) Inventory charges (in COS) (885) (2,717) (774) (770) Early vesting incentives (in both COS, SA&PD) - (1,018) - (137) Other Incentive pay (in both COS, SA&PD) (2,883) (13,632) (9,209) (4,445) Restatement expenses (in SA&PD) - - - - Estimated net unrecovered steel cost (in COS) (3) (3,573) (39,771) (5,411) (5,001) Gain related to sale of Gradall excavator product line - - - - EARNINGS PER SHARE (1) Strategic Initiatives/Integration (in both COS and SA&PD) - (0.04) (0.01) (0.01) Restructuring and repositioning charges (in both COS, Restructuring) - - - - Net expenses on early extinguishment of debt - (0.04) - (0.04) Currency effects (in Miscellaneous-net) - 0.04 0.01 (0.01) Bad debt charges (in SA&PD) (0.02) (0.04) (0.02) (0.01) Inventory charges (in COS) (0.01) (0.03) (0.01) (0.01) Early vesting incentives (in both COS, SA&PD) - (0.01) - - Other Incentive pay (in both COS, SA&PD) (0.03) (0.14) (0.09) (0.05) Restatement expenses (in SA&PD) - - - - Estimated net unrecovered steel cost (in COS) (3) (0.03) (0.42) (0.05) (0.05) Gain related to sale of Gradall excavator product line - - - - BALANCE SHEET & LIQUIDITY MEASURES Cash & cash equivalents $230,947 $223,597 $223,597 $172,480 Trade accounts and finance receivables, net 379,393 419,866 419,866 377,190 Inventories 218,881 169,097 169,097 185,370 Total balance sheet debt 278,877 289,351 289,351 299,075 Limited recourse debt from finance receivables monetizations 55,921 63,658 63,658 70,586 Net debt (4) (7,991) 2,096 2,096 59,248 ---------------------------- Net debt (4) to total capitalization - - - 12% ---------------------------- Maximum loss exposure under loss pool agreements related to finance receivable monetizations 11,855 22,160 22,160 22,168 Equity 507,140 478,592 478,592 436,238 Working capital 505,787 489,187 489,187 451,660 Depreciation and amortization 6,533 28,899 7,365 7,488 Capital expenditures, net of retirements 3,129 13,435 8,282 490 Free cash flow (5) 10,087 267,457 57,152 226,844 ---------------------------- FINANCIAL RATIOS Days sales outstanding 62.7 57.1 57.1 55.4 Days payables outstanding 46.4 50.5 50.5 55.7 Inventory turnover (annualized) 7.8 7.6 7.6 6.9 Quarter Ended Fiscal Year January October Ended 30, 31, July 31, 2005 2004 2004 --------- --------- ----------- REVENUES AND PROFITABILITY Revenues $353,434 $306,661 $1,193,962 Gross profit margin 15.3% 8.4% 18.9% EBITDA 27,111 2,185 105,660 -------------------------------------- Trailing twelve month EBITDA 97,995 90,653 105,660 -------------------------------------- Trailing twelve month EBITDA margin 7.0% 7.0% 8.8% -------------------------------------- Operating income (loss) 17,607 (8,335) 75,906 Operating profit (loss) margin 5.0% -2.7% 6.4% Net income (loss) margin 2.1% -2.8% 2.2% Reported earnings (loss) per diluted share (1) $.08 $(.10) $.30 IMPACT OF SELECTED ITEMS ON: (2) income (expense) PRE-TAX INCOME Strategic Initiatives/Integration (in both Cost of sales (COS), Selling & administrative and product development (SA&PD)) $(1,093) $(1,896) $(15,975) Restructuring and repositioning charges (in both COS, Restructuring) - - (119) Net expenses on early extinguishment of debt - - - Currency effects (in Miscellaneous- net) 3,087 2,281 (2,309) Bad debt charges (in SA&PD) (1,948) (1,132) (11,560) Inventory charges (in COS) (308) (1,592) (4,519) Early vesting incentives (in both COS, SA&PD) (436) (995) (1,771) Other Incentive pay (in both COS, SA&PD) - - (16,923) Restatement expenses (in SA&PD) - - (1,264) Estimated net unrecovered steel cost (in COS) (3) (20,980) (26,764) (4,695) Gain related to sale of Gradall excavator product line - - - NET INCOME Strategic Initiatives/Integration (in both COS and SA&PD) (692) (1,191) (10,160) Restructuring and repositioning charges (in both COS, Restructuring) - - (76) Net expenses on early extinguishment of debt - - - Currency effects (in Miscellaneous- net) 1,954 1,432 (1,469) Bad debt charges (in SA&PD) (1,233) (711) (7,352) Inventory charges (in COS) (195) (1,000) (2,874) Early vesting incentives (in both COS, SA&PD) (276) (625) (1,126) Other Incentive pay (in both COS, SA&PD) - - (10,763) Restatement expenses (in SA&PD) - - (804) Estimated net unrecovered steel cost (in COS) (3) (13,280) (16,808) (2,986) Gain related to sale of Gradall excavator product line - - - EARNINGS PER SHARE (1) Strategic Initiatives/Integration (in both COS and SA&PD) (0.01) (0.01) (0.11) Restructuring and repositioning charges (in both COS, Restructuring) - - - Net expenses on early extinguishment of debt - - - Currency effects (in Miscellaneous- net) 0.02 0.02 (0.02) Bad debt charges (in SA&PD) (0.01) (0.01) (0.08) Inventory charges (in COS) - (0.01) (0.03) Early vesting incentives (in both COS, SA&PD) - (0.01) (0.01) Other Incentive pay (in both COS, SA&PD) - - (0.12) Restatement expenses (in SA&PD) - - (0.01) Estimated net unrecovered steel cost (in COS) (3) (0.15) (0.19) (0.03) Gain related to sale of Gradall excavator product line - - - BALANCE SHEET & LIQUIDITY MEASURES Cash & cash equivalents $24,305 $66,498 $37,656 Trade accounts and finance receivables, net 354,350 333,316 400,597 Inventories 182,606 170,731 154,405 Total balance sheet debt 383,534 389,609 423,534 Limited recourse debt from finance receivables monetizations 77,601 85,733 121,794 Net debt (4) 286,092 242,381 269,553 -------------------------------------- Net debt (4) to total capitalization 50% 47% 49% -------------------------------------- Maximum loss exposure under loss pool agreements related to finance receivable monetizations 22,168 22,168 22,198 Equity 284,746 276,780 281,270 Working capital 340,786 328,671 340,552 Depreciation and amortization 6,958 7,088 25,681 Capital expenditures, net of retirements 2,010 2,653 11,978 Free cash flow (5) (43,711) 27,172 (98,450) -------------------------------------- FINANCIAL RATIOS Days sales outstanding 83.7 92.0 78.4 Days payables outstanding 46.5 54.6 57.0 Inventory turnover (annualized) 6.4 5.9 5.8 (1) On March 27, 2006, we distributed a two-for-one stock split of our then outstanding common stock. All share and per share data included in this Financial Dashboard and the accompanying consolidated condensed financial statements have been restated to reflect the stock split. (2) Net of the quarter and annual effective tax rates. EPS is calculated by dividing the net income (loss) amounts by the respective diluted shares for each period. Individual quarterly net income (loss) per diluted share may not equal the fiscal year EPS due to changes in the number of common shares outstanding during the year. Repositioning charges are reported in COS. (3) Net unrecovered steel cost is an estimate based upon a baseline average of steel prices per ton for various types of steel in fiscal 2004 compared to the impact of steel prices incurred for various types of steel. These estimates include assumptions regarding the steel content of and sources of our products and their components. The steel price increases are netted against steel surcharges invoiced to our customers. (4) Net debt reflects total balance sheet debt plus off-balance sheet financing, less cash and limited recourse debt from finance receivables monetizations. (5) Free cash flow is defined as cash flow from operating activities, investing activities, payment of dividends, exercise of stock options, and the effect of exchange rate changes on cash less changes in accounts receivable securitization, limited recourse debt from finance receivables monetizations and off-balance sheet debt. JLG INDUSTRIES, INC. CONSOLIDATED CONDENSED STATEMENTS OF INCOME (in thousands, except per share data) (Quarterly data is unaudited) Fiscal Year Quarter Ended Ended July 31, July 31, April 30, January October 2006 2006 2006 29, 2006 30, 2005 ----------- --------- --------- --------- --------- Revenues Net sales $2,268,322 $682,789 $624,686 $488,411 $472,436 Financial products 11,093 2,647 2,216 3,256 2,974 Rentals 9,981 2,196 2,713 2,759 2,313 ----------- --------- --------- --------- --------- 2,289,396 687,632 629,615 494,426 477,723 Cost of sales 1,846,371 553,394 511,552 398,566 382,859 ----------- --------- --------- --------- --------- Gross profit 443,025 134,238 118,063 95,860 94,864 Gross profit margin 19.4% 19.5% 18.8% 19.4% 19.9% Selling and administrative expenses 164,362 45,975 41,025 39,301 38,061 Selling & administrative % 7.2% 6.7% 6.5% 7.9% 8.0% Product development expenses 30,251 10,069 6,920 6,825 6,437 Product development % 1.3% 1.5% 1.1% 1.4% 1.3% Gain related to sale of Gradall excavator product line (14,572) - (14,572) - - Restructuring charges - - - - - ----------- --------- --------- --------- --------- Income (loss) from operations 262,984 78,194 84,690 49,734 50,366 Operating profit (loss) margin 11.5% 11.4% 13.5% 10.1% 10.5% Other income (deductions): Interest expense (net of interest income) (17,710) (2,526) (4,030) (6,688) (4,466) Miscellaneous, net (3,166) (195) (3,974) 69 934 ----------- --------- --------- --------- --------- Income (loss) before taxes 242,108 75,473 76,686 43,115 46,834 Income tax provision (benefit) 92,764 27,602 30,499 15,695 18,968 ----------- --------- --------- --------- --------- Net income (loss) $149,344 $47,871 $46,187 $27,420 $27,866 =========== ========= ========= ========= ========= Return on revenues 6.5% 7.0% 7.3% 5.5% 5.8% Earnings (loss) per common share $1.43 $.45 $.44 $.26 $.27 =========== ========= ========= ========= ========= Earnings (loss) per common share - assuming dilution $1.40 $.45 $.43 $.26 $.27 =========== ========= ========= ========= ========= Cash Dividends per share $.0150 $.0050 $.0050 $.0025 $.0025 =========== ========= ========= ========= ========= Average basic shares outstanding 104,294 105,465 105,088 104,042 102,424 =========== ========= ========= ========= ========= Average diluted shares outstanding 106,518 107,199 107,232 106,374 105,112 =========== ========= ========= ========= ========= Fiscal Year Quarter Ended Ended July 31, July 31, May 1, January October 2005 2005 2005 30, 2005 31, 2004 ----------- --------- --------- --------- --------- Revenues Net sales $1,713,782 $563,805 $499,899 $347,947 $302,131 Financial products 11,915 2,826 3,373 3,056 2,660 Rentals 9,333 2,948 2,084 2,431 1,870 ----------- --------- --------- --------- --------- 1,735,030 569,579 505,356 353,434 306,661 Cost of sales 1,447,785 459,893 407,464 299,462 280,966 ----------- --------- --------- --------- --------- Gross profit 287,245 109,686 97,892 53,972 25,695 Gross profit margin 16.6% 19.3% 19.4% 15.3% 8.4% Selling and administrative expenses 142,383 43,927 39,524 30,810 28,122 Selling & administrative % 8.2% 7.7% 7.8% 8.7% 9.2% Product development expenses 24,601 6,037 7,101 5,555 5,908 Product development % 1.4% 1.1% 1.4% 1.6% 1.9% Gain related to sale of Gradall excavator product line - - - - - Restructuring charges - - - - - ----------- --------- --------- --------- --------- Income (loss) from operations 120,261 59,722 51,267 17,607 (8,335) Operating profit (loss) margin 6.9% 10.5% 10.1% 5.0% -2.7% Other income (deductions): Interest expense (net of interest income) (28,609) (4,905) (7,418) (7,852) (8,434) Miscellaneous, net 1,436 2,595 (6,105) 2,076 2,870 ----------- --------- --------- --------- --------- Income (loss) before taxes 93,088 57,412 37,744 11,831 (13,899) Income tax provision (benefit) 35,915 21,716 15,022 4,347 (5,170) ----------- --------- --------- --------- --------- Net income (loss) $57,173 $35,696 $22,722 $7,484 $(8,729) =========== ========= ========= ========= ========= Return on revenues 3.3% 6.3% 4.5% 2.1% -2.8% Earnings (loss) per common share $.61 $.35 $.24 $.09 $(.10) =========== ========= ========= ========= ========= Earnings (loss) per common share - assuming dilution $.60 $.35 $.24 $.08 $(.10) =========== ========= ========= ========= ========= Cash Dividends per share $.0100 $.0025 $.0025 $.0025 $.0025 =========== ========= ========= ========= ========= Average basic shares outstanding 93,058 100,722 94,182 87,596 86,554 =========== ========= ========= ========= ========= Average diluted shares outstanding 95,586 103,312 96,574 89,976 86,554 =========== ========= ========= ========= ========= Fiscal Year Ended July 31, 2004 ------------ Revenues Net sales $1,170,186 Financial products 15,203 Rentals 8,573 ------------ 1,193,962 Cost of sales 968,562 ------------ Gross profit 225,400 Gross profit margin 18.9% Selling and administrative expenses 128,465 Selling & administrative % 10.8% Product development expenses 21,002 Product development % 1.8% Gain related to sale of Gradall excavator product line - Restructuring charges 27 ------------ Income (loss) from operations 75,906 Operating profit (loss) margin 6.4% Other income (deductions): Interest expense (net of interest income) (35,397) Miscellaneous, net 1,372 ------------ Income (loss) before taxes 41,881 Income tax provision (benefit) 15,232 ------------ Net income (loss) $26,649 ============ Return on revenues 2.2% Earnings (loss) per common share $.31 ============ Earnings (loss) per common share - assuming dilution $.30 ============ Cash Dividends per share $.0100 ============ Average basic shares outstanding 85,720 ============ Average diluted shares outstanding 88,064 ============ JLG INDUSTRIES, INC. CONSOLIDATED CONDENSED BALANCE SHEETS (in thousands, except per share data) (Quarterly data is unaudited) July 31, April 30, January 29, October 30, 2006 2006 2006 2005 ----------- ----------- ----------- ----------- ASSETS --------------- Current assets Cash and cash equivalents $328,096 $304,895 $183,344 $230,947 Trade accounts and finance receivables, net 445,631 393,966 379,813 379,393 Inventories 212,864 216,901 227,957 218,881 Assets held for sale - - 49,941 - Other current assets 47,613 26,595 42,715 48,417 ----------- ----------- ----------- ----------- Total current assets 1,034,204 942,357 883,770 877,638 Property, plant and equipment, net 98,345 87,447 82,746 84,879 Equipment held for rental, net 21,477 21,934 36,684 38,401 Finance receivables, less current portion 29,193 29,472 26,500 29,688 Pledged finance receivables, less current portion 7,668 11,923 18,623 26,589 Goodwill 57,388 60,513 60,419 61,598 Intangible assets, net 74,142 74,557 75,371 31,795 Other assets 74,872 72,197 68,379 64,675 ----------- ----------- ----------- ----------- $1,397,289 $1,300,400 $1,252,492 $1,215,263 =========== =========== =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY --------------- Current liabilities Short-term debt and current portion of long-term debt $8,484 $8,447 $6,515 $1,486 Current portion of limited recourse debt from finance receivables monetizations 16,001 16,531 26,558 29,045 Accounts payable 233,746 221,342 187,591 200,281 Accrued expenses 168,513 120,444 139,689 141,039 ----------- ----------- ----------- ----------- Total current liabilities 426,744 366,764 360,353 371,851 Long-term debt, less current portion 207,378 215,084 221,888 221,470 Limited recourse debt from finance receivables monetizations, less current portion 7,718 11,985 18,760 26,876 Accrued post- retirement benefits 25,748 25,193 31,797 31,455 Other long-term liabilities 19,984 23,152 22,117 28,464 Provisions for contingencies 34,285 32,486 30,707 28,007 Shareholders' equity Capital stock: Authorized shares: 200,000 at $.20 par value Issued shares: 106,751; fiscal 2005 - 103,290; fiscal 2004 - 87,806 21,350 21,268 21,100 20,666 Additional paid-in capital 209,290 206,710 193,021 165,119 Retained earnings 458,276 410,937 365,280 338,124 Unearned compensation - - - - Accumulated other comprehensive loss (13,484) (13,179) (12,531) (16,769) ----------- ----------- ----------- ----------- Total share- holders' equity 675,432 625,736 566,870 507,140 ----------- ----------- ----------- ----------- $1,397,289 $1,300,400 $1,252,492 $1,215,263 =========== =========== =========== =========== July 31, May 1, January October July 31, 2005 2005 30, 2005 31, 2004 2004 ----------- ----------- --------- --------- ----------- ASSETS --------------- Current assets Cash and cash equivalents $223,597 $172,480 $24,305 $66,498 $37,656 Trade accounts and finance receivables, net 419,866 377,190 354,350 333,316 400,597 Inventories 169,097 185,370 182,606 170,731 154,405 Assets held for sale - 3,500 4,300 - - Other current assets 56,739 55,253 43,166 45,739 41,058 ----------- ----------- --------- --------- ----------- Total current assets 869,299 793,793 608,727 616,284 633,716 Property, plant and equipment, net 85,855 78,270 82,387 89,443 91,504 Equipment held for rental, net 22,570 27,220 23,163 26,842 21,190 Finance receivables, less current portion 30,354 31,836 36,992 39,002 33,747 Pledged finance receivables, less current portion 33,649 40,459 50,372 56,413 86,559 Goodwill 61,641 63,134 63,165 63,017 62,885 Intangible assets, net 32,086 33,465 33,848 34,590 35,240 Other assets 68,143 56,848 80,420 66,991 62,603 ----------- ----------- --------- --------- ----------- $1,203,597 $1,125,025 $979,074 $992,582 $1,027,444 =========== =========== ========= ========= =========== LIABILITIES AND SHAREHOLDERS' EQUITY --------------- Current liabilities Short-term debt and current portion of long-term debt $1,496 $1,552 $3,744 $1,788 $1,729 Current portion of limited recourse debt from finance receivables monetizations 29,642 29,708 26,660 26,725 32,585 Accounts payable 200,323 194,588 139,742 150,600 139,990 Accrued expenses 148,651 116,285 97,795 108,500 118,860 ----------- ----------- --------- --------- ----------- Total current liabilities 380,112 342,133 267,941 287,613 293,164 Long-term debt, less current portion 224,197 226,937 302,189 302,088 300,011 Limited recourse debt from finance receivables monetizations, less current portion 34,016 40,878 50,941 59,008 89,209 Accrued post- retirement benefits 31,113 30,801 30,423 30,211 29,666 Other long-term liabilities 27,233 24,116 23,536 21,362 20,542 Provisions for contingencies 28,334 23,922 19,298 15,520 13,582 Shareholders' equity Capital stock: Authorized shares: 200,000 at $.20 par value Issued shares: 106,751; fiscal 2005 - 103,290; fiscal 2004 - 87,806 20,658 20,390 17,880 17,814 17,562 Additional paid-in capital 170,367 153,779 28,147 26,204 20,790 Retained earnings 310,516 275,077 252,579 245,319 254,268 Unearned compensation (7,397) (2,642) (3,433) (4,019) (5,333) Accumulated other comprehensive loss (15,552) (10,366) (10,427) (8,538) (6,017) ----------- ----------- --------- --------- ----------- Total share- holders' equity 478,592 436,238 284,746 276,780 281,270 ----------- ----------- --------- --------- ----------- $1,203,597 $1,125,025 $979,074 $992,582 $1,027,444 =========== =========== ========= ========= =========== JLG INDUSTRIES, INC. CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOW (in thousands) (Quarterly data is unaudited) Fiscal Year Ended Quarter Ended July 31, July 31, April 30, Jan. 29, Oct. 30, 2006 2006 2006 2006 2005 --------- --------- --------- --------- --------- OPERATIONS Net income (loss) $149,344 $47,871 $46,187 $27,420 $27,866 Adjustments to reconcile net income (loss) to cash flow from operating activities: Gain related to sale of Gradall excavator product line (14,572) - (14,572) - - (Gain) loss on sale of property, plant and equipment (383) (359) 5 57 (86) Gain on sale of equipment held for rental (13,745) (506) (7,555) (5,612) (72) Non-cash charges and credits: Depreciation and amortization 28,551 6,410 7,701 7,907 6,533 Other 24,377 971 11,238 5,137 7,031 Changes in selected working capital items: Accounts receivable (45,350) (58,188) (13,080) (13,268) 39,186 Inventories (64,712) 5,470 10,368 (30,523) (50,027) Accounts payable 42,312 12,405 35,610 (5,669) (34) Other operating assets and liabilities 33,484 29,722 9,160 (6,722) 1,324 Changes in finance receivables (2,315) 3,394 (3,645) (3,415) 1,351 Changes in pledged finance receivables (627) (65) (133) (233) (196) Changes in other assets and liabilities (17,613) 1,035 (11,506) (3,720) (3,422) --------- --------- --------- --------- --------- Cash flow from operating activities 118,751 48,160 69,778 (28,641) 29,454 INVESTMENTS Purchases of property, plant and equipment (32,597) (16,065) (9,643) (3,744) (3,145) Proceeds from the sale of property, plant and equipment 739 587 16 34 102 Purchases of equipment held for rental (43,527) (4,246) (11,890) (9,270) (18,121) Proceeds from the sale of equipment held for rental 50,552 3,413 32,396 14,305 438 Proceeds from the sale of Gradall excavator product line 32,992 576 32,416 - - Cash portion of acquisitions (47,093) - (58) (47,035) - Other 150 (204) 422 (40) (28) --------- --------- --------- --------- --------- Cash flow used for investing activities (38,784) (15,939) 43,659 (45,750) (20,754) FINANCING Net issuance (repayment) of short-term debt 52 14 26 23 (11) Issuance of long- term debt 10,000 - 10,000 - - Repayment of long- term debt (21,455) (8,584) (12,678) (96) (97) Issuance of limited recourse debt - - - - - Repayment of limited recourse debt - - - - - Payment of dividends (1,584) (532) (530) (264) (258) Net proceeds from issuance of common stock - - - - - Cash proceeds received from the exercise of stock options 18,494 493 4,510 13,327 164 Excess tax benefits from stock-based compensation 20,384 - 7,323 13,017 44 --------- --------- --------- --------- --------- Cash flow from financing activities 25,891 (8,609) 8,651 26,007 (158) CURRENCY ADJUSTMENTS Effect of exchange rate changes on cash (1,359) (411) (537) 781 (1,192) CASH AND CASH EQUIVALENTS Net change in cash and cash equivalents 104,499 23,201 121,551 (47,603) 7,350 Beginning balance 223,597 304,895 183,344 230,947 223,597 --------- --------- --------- --------- --------- Ending balance $328,096 $328,096 $304,895 $183,344 $230,947 ========= ========= ========= ========= ========= Fiscal Year Ended Quarter Ended July 31, July 31, May 1, Jan. 30, Oct. 31, 2005 2005 2005 2005 2004 --------- --------- --------- --------- --------- OPERATIONS Net income (loss) $57,173 $35,696 $22,722 $7,484 $(8,729) Adjustments to reconcile net income (loss) to cash flow from operating activities: Gain related to sale of Gradall excavator product line - - - - - (Gain) loss on sale of property, plant and equipment 948 828 (22) (19) 161 Gain on sale of equipment held for rental (11,711) (3,791) (1,286) (5,334) (1,300) Non-cash charges and credits: Depreciation and amortization 28,899 7,365 7,488 6,958 7,088 Other 6,986 (5,953) 6,225 3,965 2,749 Changes in selected working capital items: Accounts receivable (25,948) (42,151) (16,355) (29,659) 62,217 Inventories (15,268) 16,321 (3,463) (11,758) (16,368) Accounts payable 60,423 5,868 54,834 (10,833) 10,554 Other operating assets and liabilities 30,623 38,335 7,188 (2,340) (12,560) Changes in finance receivables 1,877 1,459 1,944 6,970 (8,496) Changes in pledged finance receivables 36 (190) (248) (917) 1,391 Changes in other assets and liabilities 8,374 495 21,946 (12,920) (1,147) --------- --------- --------- --------- --------- Cash flow from operating activities 142,412 54,282 100,973 (48,403) 35,560 INVESTMENTS Purchases of property, plant and equipment (15,443) (9,134) (1,342) (2,072) (2,895) Proceeds from the sale of property, plant and equipment 1,060 24 874 81 81 Purchases of equipment held for rental (31,249) (5,590) (6,719) (8,851) (10,089) Proceeds from the sale of equipment held for rental 35,065 11,775 3,103 16,037 4,150 Proceeds from the sale of Gradall excavator product line - - - - - Cash portion of acquisitions (105) - - (105) - Other 366 (35) 503 (56) (46) --------- --------- --------- --------- --------- Cash flow used for investing activities (10,306) (2,960) (3,581) 5,034 (8,799) FINANCING Net issuance (repayment) of short-term debt (6) (58) (1,961) 1,955 58 Issuance of long- term debt 156,018 (38) 26,002 45,038 85,016 Repayment of long- term debt (232,666) (3,060) (99,374) (45,140) (85,092) Issuance of limited recourse debt - - - - - Repayment of limited recourse debt - - - - - Payment of dividends (925) (257) (224) (224) (220) Net proceeds from issuance of common stock 119,421 (113) 119,534 - - Cash proceeds received from the exercise of stock options 19,826 6,750 6,714 1,276 5,086 Excess tax benefits from stock-based compensation - - - - - --------- --------- --------- --------- --------- Cash flow from financing activities 61,668 3,224 50,691 2,905 4,848 CURRENCY ADJUSTMENTS Effect of exchange rate changes on cash (7,833) (3,429) 92 (1,729) (2,767) CASH AND CASH EQUIVALENTS Net change in cash and cash equivalents 185,941 51,117 148,175 (42,193) 28,842 Beginning balance 37,656 172,480 24,305 66,498 37,656 --------- --------- --------- --------- --------- Ending balance $223,597 $223,597 $172,480 $24,305 $66,498 ========= ========= ========= ========= ========= Fiscal Year Ended July 31, 2004 --------- OPERATIONS Net income (loss) $26,649 Adjustments to reconcile net income (loss) to cash flow from operating activities: Gain related to sale of Gradall excavator product line - (Gain) loss on sale of property, plant and equipment 319 Gain on sale of equipment held for rental (12,451) Non-cash charges and credits: Depreciation and amortization 25,681 Other 17,006 Changes in selected working capital items: Accounts receivable (66,296) Inventories 9,188 Accounts payable 33,207 Other operating assets and liabilities 13,506 Changes in finance receivables (6,112) Changes in pledged finance receivables (14,866) Changes in other assets and liabilities (11,090) --------- Cash flow from operating activities 14,741 INVESTMENTS Purchases of property, plant and equipment (12,387) Proceeds from the sale of property, plant and equipment 90 Purchases of equipment held for rental (26,689) Proceeds from the sale of equipment held for rental 33,269 Proceeds from the sale of Gradall excavator product line - Cash portion of acquisitions (109,557) Other 333 --------- Cash flow used for investing activities (114,941) FINANCING Net issuance (repayment) of short-term debt 27 Issuance of long- term debt 351,999 Repayment of long- term debt (362,506) Issuance of limited recourse debt 13,979 Repayment of limited recourse debt (253) Payment of dividends (871) Net proceeds from issuance of common stock - Cash proceeds received from the exercise of stock options 2,414 Excess tax benefits from stock-based compensation - --------- Cash flow from financing activities 4,789 CURRENCY ADJUSTMENTS Effect of exchange rate changes on cash 258 CASH AND CASH EQUIVALENTS Net change in cash and cash equivalents (95,153) Beginning balance 132,809 --------- Ending balance $37,656 ========= JLG INDUSTRIES, INC. CONSOLIDATED SELECTED SUPPLEMENTAL FINANCIAL INFORMATION (in thousands) (Quarterly data is unaudited) Fiscal Year Ended Quarter Ended July 31, July 31, April 30, Jan. 29, Oct. 30, 2006 2006 2006 2006 2005 ----------- --------- --------- --------- --------- SEGMENT INFORMATION REVENUES: North American Distribution $1,704,030 $509,653 $462,772 $369,725 $361,880 European Distribution 407,143 137,233 124,521 83,062 62,327 Rest of World Distribution 166,820 37,985 40,051 38,329 50,455 Access Financial Solutions 11,403 2,761 2,271 3,310 3,061 ----------- --------- --------- --------- --------- $2,289,396 $687,632 $629,615 $494,426 $477,723 =========== ========= ========= ========= ========= SEGMENT PROFIT (LOSS): North American Distribution $254,167 $79,554 $75,997 $47,903 $50,713 European Distribution 38,969 14,082 16,032 6,659 2,196 Rest of World Distribution 39,411 7,966 8,304 9,001 14,140 Access Financial Solutions 4,937 1,544 1,139 1,166 1,088 Corporate expense (77,585) (25,419) (17,443) (15,891) (18,832) ----------- --------- --------- --------- --------- Segment profit (loss) 259,899 77,727 84,029 48,838 49,305 Add: AFS' interest expense 3,085 467 661 896 1,061 ----------- --------- --------- --------- --------- Operating Income (Loss) $262,984 $78,194 $84,690 $49,734 $50,366 =========== ========= ========= ========= ========= PRODUCT GROUP REVENUES Aerial work platforms $1,159,778 $360,367 $320,827 $234,710 $243,874 Telehandlers 776,001 254,546 202,637 160,715 158,103 Excavators 26,798 - 865 16,902 9,031 After-sales service and support, including parts sales, and used and reconditioned equipment sales 305,745 67,876 100,357 76,084 61,428 Financial products 11,093 2,647 2,216 3,256 2,974 Rentals 9,981 2,196 2,713 2,759 2,313 ----------- --------- --------- --------- --------- $2,289,396 $687,632 $629,615 $494,426 $477,723 =========== ========= ========= ========= ========= GEOGRAPHIC REVENUES United States $1,678,674 $500,788 $456,630 $366,343 $354,913 Europe 408,513 138,010 124,621 83,349 62,533 Other international 202,209 48,834 48,364 44,734 60,277 ----------- --------- --------- --------- --------- $2,289,396 $687,632 $629,615 $494,426 $477,723 =========== ========= ========= ========= ========= Fiscal Year Ended Quarter Ended July 31, July 31, May 1, Jan. 30, Oct. 31, 2005 2005 2005 2005 2004 ----------- --------- --------- --------- --------- SEGMENT INFORMATION REVENUES: North American Distribution $1,329,682 $444,383 $387,442 $258,793 $239,064 European Distribution 261,602 82,426 85,960 56,631 36,585 Rest of World Distribution 129,995 38,390 28,506 34,866 28,233 Access Financial Solutions 13,751 4,380 3,448 3,144 2,779 ----------- --------- --------- --------- --------- $1,735,030 $569,579 $505,356 $353,434 $306,661 =========== ========= ========= ========= ========= SEGMENT PROFIT (LOSS): North American Distribution $114,255 $64,422 $48,275 $12,113 $(10,555) European Distribution 21,489 4,564 8,630 5,878 2,417 Rest of World Distribution 32,475 10,084 7,047 8,218 7,126 Access Financial Solutions 4,420 2,303 1,211 712 194 Corporate expense (58,774) (22,854) (15,344) (10,766) (9,810) ----------- --------- --------- --------- --------- Segment profit (loss) 113,865 58,519 49,819 16,155 (10,628) Add: AFS' interest expense 6,396 1,203 1,448 1,452 2,293 ----------- --------- --------- --------- --------- Operating Income (Loss) $120,261 $59,722 $51,267 $17,607 $(8,335) =========== ========= ========= ========= ========= PRODUCT GROUP REVENUES Aerial work platforms $888,073 $313,962 $278,071 $171,517 $124,523 Telehandlers 511,766 157,948 141,660 92,490 119,668 Excavators 61,562 18,144 17,864 17,213 8,341 After-sales service and support, including parts sales, and used and reconditioned equipment sales 252,381 73,751 62,304 66,727 49,599 Financial products 11,915 2,826 3,373 3,056 2,660 Rentals 9,333 2,948 2,084 2,431 1,870 ----------- --------- --------- --------- --------- $1,735,030 $569,579 $505,356 $353,434 $306,661 =========== ========= ========= ========= ========= GEOGRAPHIC REVENUES United States $1,311,450 $437,066 $379,624 $256,027 $238,733 Europe 264,032 84,126 86,224 56,819 36,863 Other international 159,548 48,387 39,508 40,588 31,065 ----------- --------- --------- --------- --------- $1,735,030 $569,579 $505,356 $353,434 $306,661 =========== ========= ========= ========= ========= Fiscal Year Ended July 31, 2004 ----------- SEGMENT INFORMATION REVENUES: North American Distribution $930,802 European Distribution 177,392 Rest of World Distribution 69,870 Access Financial Solutions 15,898 ----------- $1,193,962 =========== SEGMENT PROFIT (LOSS): North American Distribution $92,512 European Distribution 3,765 Rest of World Distribution 15,293 Access Financial Solutions 1,695 Corporate expense (48,274) ----------- Segment profit (loss) 64,991 Add: AFS' interest expense 10,915 ----------- Operating Income (Loss) $75,906 =========== PRODUCT GROUP REVENUES Aerial work platforms $562,056 Telehandlers 358,865 Excavators 52,689 After-sales service and support, including parts sales, and used and reconditioned equipment sales 196,576 Financial products 15,203 Rentals 8,573 ----------- $1,193,962 =========== GEOGRAPHIC REVENUES United States $923,696 Europe 178,392 Other international 91,874 ----------- $1,193,962 =========== JLG INDUSTRIES, INC. EBITDA QUARTERLY PERIODS (in thousands) July 31, April 30, January 29, October 30, July 31, 2006 2006 (1) 2006 2005 2005 -------- --------- ----------- ----------- -------- Net income (loss) $47,871 $46,187 $27,420 $27,866 $35,696 Interest expense 6,351 6,565 8,378 5,977 6,326 Income tax provision (benefit) 27,602 30,499 15,695 18,968 21,716 Depreciation and amortization 6,410 7,701 7,907 6,533 7,365 -------- --------- ----------- ----------- -------- EBITDA $88,234 $90,952 $59,400 $59,344 $71,103 ======== ========= =========== =========== ======== May 1, January 30, October 31, July 31, 2005 2005 2004 2004 -------- ----------- ----------- -------- Net income (loss) $22,722 $7,484 ($8,729) $15,271 Interest expense 8,554 8,322 8,996 9,274 Income tax provision (benefit) 15,022 4,347 (5,170) 8,748 Depreciation and amortization 7,488 6,958 7,088 5,070 -------- ----------- ----------- -------- EBITDA $53,786 $27,111 $2,185 $38,363 ======== =========== =========== ======== (1) Includes gain on the sale of the Gradall excavator product line. We monitor our EBITDA, which is a supplemental measure to GAAP that provides additional information concerning our leverage position and our historical ability to meet debt service and capital expenditure and working capital requirements. EBITDA also is an indicator of profitability, particularly in our capital-intensive industry. EBITDA reflects our earnings (loss) before interest, taxes and depreciation and amortization. EBITDA as presented differs from measures of EBITDA calculated for purposes of financial covenants in our note indentures and senior credit facilities. JLG INDUSTRIES, INC. EBITDA AND EBITDA MARGINS TRAILING TWELVE MONTH PERIODS (in thousands) July 31, April 30, January 29, 2006 (1) 2006 (1) 2006 ----------- ----------- ----------- Net income $149,344 $137,169 $113,704 Interest expense 27,271 27,246 29,235 Income tax provision 92,764 86,878 71,401 Depreciation and amortization 28,551 29,506 29,293 ----------- ----------- ----------- EBITDA $297,930 $280,799 $243,633 =========== =========== =========== Revenues $2,289,396 $2,171,343 $2,047,084 =========== =========== =========== EBITDA Margin 13.0% 12.9% 11.9% =========== =========== =========== October 30, July 31, May 1, 2005 2005 2005 ----------- ----------- ----------- Net income $93,768 $57,173 $36,748 Interest expense 29,179 32,198 35,146 Income tax provision 60,053 35,915 22,947 Depreciation and amortization 28,344 28,899 26,604 ----------- ----------- ----------- EBITDA $211,344 $154,185 $121,445 =========== =========== =========== Revenues $1,906,092 $1,735,030 $1,590,611 =========== =========== =========== EBITDA Margin 11.1% 8.9% 7.6% =========== =========== =========== January 30, October 31, July 31, 2005 2004 2004 ----------- ----------- ----------- Net income $22,713 $17,387 $26,649 Interest expense 35,992 37,218 38,098 Income tax provision 12,815 9,765 15,232 Depreciation and amortization 26,475 26,283 25,681 ----------- ----------- ----------- EBITDA $97,995 $90,653 $105,660 =========== =========== =========== Revenues $1,403,942 $1,287,038 $1,193,962 =========== =========== =========== EBITDA Margin 7.0% 7.0% 8.8% =========== =========== =========== (1) Includes gain on the sale of the Gradall excavator product line. We monitor our EBITDA, which is a supplemental measure to GAAP that provides additional information concerning our leverage position and our historical ability to meet debt service and capital expenditure and working capital requirements. EBITDA also is an indicator of profitability, particularly in our capital-intensive industry. EBITDA reflects our earnings before interest, taxes and depreciation and amortization. EBITDA as presented differs from measures of EBITDA calculated for purposes of financial covenants in our note indentures and senior credit facilities. JLG INDUSTRIES, INC. NET DEBT (in thousands) July 31, April 30, January October July 31, 2006 2006 29, 2006 30, 2005 2005 ---------- --------- ------------------- --------- Revolving credit facilities $- $- $- $- $- Cash management facilities - - - - - $125 million senior notes 89,545 97,545 109,975 109,975 109,975 $175 million senior subordinated notes 113,750 113,750 113,750 113,750 113,750 Miscellaneous debt 18,886 19,455 9,678 4,751 4,859 Fair value of interest rate swaps (8,898) (9,908) (7,799) (8,428) (5,909) Gain on terminated interest rate swap 2,579 2,689 2,799 2,908 3,018 ---------- --------- --------- --------- --------- Bank debt and notes 215,862 223,531 228,403 222,956 225,693 Limited recourse debt from finance receivables monetizations * 23,719 28,516 45,318 55,921 63,658 ---------- --------- --------- --------- --------- Total balance sheet debt 239,581 252,047 273,721 278,877 289,351 ---------- --------- --------- --------- --------- Net present value of off-balance sheet rental fleet lease - - - - - Net present value of off-balance sheet production equipment leases - - - - - ---------- --------- --------- --------- --------- Total off- balance sheet financing - - - - - ---------- --------- --------- --------- --------- Total balance sheet debt and off-balance sheet financing 239,581 252,047 273,721 278,877 289,351 Less: cash and cash equivalents 328,096 304,895 183,344 230,947 223,597 Less: limited recourse debt from finance receivables monetizations 23,719 28,516 45,318 55,921 63,658 ---------- --------- --------- --------- --------- Net debt ($112,234) $(81,364) $45,059 $(7,991) $2,096 ========== ========= ========= ========= ========= Shareholders' Equity $675,432 $625,736 $566,870 $507,140 $478,592 ========== ========= ========= ========= ========= Net Debt-to-Net Debt plus Shareholders' Equity - - 7% - - ========== ========= ========= ========= ========= Total Balance Sheet Debt-to-Total Balance Sheet Debt plus Shareholders' Equity 26% 29% 33% 35% 38% ========== ========= ========= ========= ========= * Maximum loss exposure under loss pool agreements related to finance receivable monetizations $8,818 $8,818 $11,346 $11,855 $22,160 ========== ========= ========= ========= ========= May 1, January October July 31, 2005 30, 2005 31, 2004 2004 ---------- ---------- --------- --------- Revolving credit facilities $- $- $- $- Cash management facilities - 1,944 - - $125 million senior notes 112,975 125,000 125,000 125,000 $175 million senior subordinated notes 113,750 175,000 175,000 175,000 Miscellaneous debt 5,014 5,128 5,219 5,236 Fair value of interest rate swaps (6,378) (6,120) (6,492) (8,814) Gain on terminated interest rate swap 3,128 4,981 5,149 5,318 ---------- ---------- --------- --------- Bank debt and notes 228,489 305,933 303,876 301,740 Limited recourse debt from finance receivables monetizations * 70,586 77,601 85,733 121,794 ---------- ---------- --------- --------- Total balance sheet debt 299,075 383,534 389,609 423,534 ---------- ---------- --------- --------- Net present value of off-balance sheet rental fleet lease 656 755 1,012 1,070 Net present value of off-balance sheet production equipment leases 2,583 3,709 3,991 4,399 ---------- ---------- --------- --------- Total off- balance sheet financing 3,239 4,464 5,003 5,469 ---------- ---------- --------- --------- Total balance sheet debt and off-balance sheet financing 302,314 387,998 394,612 429,003 Less: cash and cash equivalents 172,480 24,305 66,498 37,656 Less: limited recourse debt from finance receivables monetizations 70,586 77,601 85,733 121,794 ---------- ---------- --------- --------- Net debt $59,248 $286,092 $242,381 $269,553 ========== ========== ========= ========= Shareholders' Equity $436,238 $284,746 $276,780 $281,270 ========== ========== ========= ========= Net Debt-to-Net Debt plus Shareholders' Equity 12% 50% 47% 49% ========== ========== ========= ========= Total Balance Sheet Debt-to-Total Balance Sheet Debt plus Shareholders' Equity 41% 57% 58% 60% ========== ========== ========= ========= * Maximum loss exposure under loss pool agreements related to finance receivable monetizations $22,168 $22,168 $22,168 $22,198 ========== ========== ========= ========= We monitor our net debt, which is a supplemental measure to GAAP that provides additional information concerning our leverage position and our historical ability to meet debt service and capital expenditure and working capital requirements. We define net debt as the sum of total balance sheet debt and other off-balance sheet financing, minus cash and limited recourse debt arising from our monetizations of customer finance receivables. JLG INDUSTRIES, INC. FREE CASH FLOW (in thousands) Fiscal Year Quarter Ended Ended July April January October July 31, 31, 30, 29, 30, 2006 2006 2006 2006 2005 --------- -------- --------- --------- -------- Net income (loss) $149,344 $47,871 $46,187 $27,420 $27,866 Adjustments to reconcile net income (loss) to cash flow from operating activities: Non-cash items 24,228 6,516 (3,183) 7,489 13,406 Accounts receivable (45,350) (58,188) (13,080) (13,268) 39,186 Inventories (64,712) 5,470 10,368 (30,523) (50,027) Other current assets 17,653 (7,860) 11,633 4,345 9,535 Accounts payable 42,312 12,405 35,610 (5,669) (34) Accrued expenses 15,831 37,582 (2,473) (11,067) (8,211) Finance receivables (2,315) 3,394 (3,645) (3,415) 1,351 Other cash from operations (17,613) 1,035 (11,506) (3,720) (3,422) Purchases of property, plant and equipment (32,597) (16,065) (9,643) (3,744) (3,145) Proceeds from the sale of property, plant and equipment 739 587 16 34 102 Purchases of equipment held for rental (43,527) (4,246) (11,890) (9,270) (18,121) Proceeds from the sale of equipment held for rental 50,552 3,413 32,396 14,305 438 Proceeds from the sale of Gradall excavator product line 32,992 576 32,416 - - Cash portion of acquisitions (47,093) - (58) (47,035) - Other cash from investments 150 (204) 422 (40) (28) Payment of dividends (1,584) (532) (530) (264) (258) Net proceeds from issuance of common stock - - - - - Cash proceeds received from the exercise of stock options 18,494 493 4,510 13,327 164 Excess tax benefits from stock-based compensation 20,384 - 7,323 13,017 44 Effect of exchange rate changes on cash (1,359) (411) (537) 781 (1,192) Seller financing (5,000) - - (5,000) - Capital lease assumed in OmniQuip acquisition - - - - - Debt assumed in Delta acquisition - - - - - Other (1) 2,801 (966) 2,087 (753) 2,433 --------- -------- --------- --------- -------- Free Cash Flow $114,330 $30,870 $126,423 $(53,050) $10,087 ========= ======== ========= ========= ======== Fiscal Year Quarter Ended Ended July May January October July 31, 31, 1, 30, 31, 2005 2005 2005 2005 2004 --------- -------- --------- --------- -------- Net income (loss) $57,173 $35,696 $22,722 $7,484 ($8,729) Adjustments to reconcile net income (loss) to cash flow from operating activities: Non-cash items 25,122 (1,551) 12,405 5,570 8,698 Accounts receivable (25,948) (42,151) (16,355) (29,659) 62,217 Inventories (15,268) 16,321 (3,463) (11,758) (16,368) Other current assets (12,553) 899 (14,132) 3,497 (2,817) Accounts payable 60,423 5,868 54,834 (10,833) 10,554 Accrued expenses 43,176 37,436 21,320 (5,837) (9,743) Finance receivables 1,877 1,459 1,944 6,970 (8,496) Other cash from operations 8,374 495 21,946 (12,920) (1,147) Purchases of property, plant and equipment (15,443) (9,134) (1,342) (2,072) (2,895) Proceeds from the sale of property, plant and equipment 1,060 24 874 81 81 Purchases of equipment held for rental (31,249) (5,590) (6,719) (8,851) (10,089) Proceeds from the sale of equipment held for rental 35,065 11,775 3,103 16,037 4,150 Proceeds from the sale of Gradall excavator product line - - - - - Cash portion of acquisitions (105) - - (105) - Other cash from investments 366 (35) 503 (56) (46) Payment of dividends (925) (257) (224) (224) (220) Net proceeds from issuance of common stock 119,421 (113) 119,534 - - Cash proceeds received from the exercise of stock options 19,826 6,750 6,714 1,276 5,086 Excess tax benefits from stock-based compensation - - - - - Effect of exchange rate changes on cash (7,833) (3,429) 92 (1,729) (2,767) Seller financing - - - - - Capital lease assumed in OmniQuip acquisition - - - - - Debt assumed in Delta acquisition - - - - - Other (1) 4,898 2,689 3,088 (582) (297) --------- -------- --------- --------- -------- Free Cash Flow $267,457 $57,152 $226,844 ($43,711) $27,172 ========= ======== ========= ========= ======== Fiscal Year Ended July 31, 2004 --------- Net income (loss) $26,649 Adjustments to reconcile net income (loss) to cash flow from operating activities: Non-cash items 30,555 Accounts receivable (66,296) Inventories 9,188 Other current assets 8,780 Accounts payable 33,207 Accrued expenses 4,726 Finance receivables (6,112) Other cash from operations (11,090) Purchases of property, plant and equipment (12,387) Proceeds from the sale of property, plant and equipment 90 Purchases of equipment held for rental (26,689) Proceeds from the sale of equipment held for rental 33,269 Proceeds from the sale of Gradall excavator product line - Cash portion of acquisitions (109,557) Other cash from investments 333 Payment of dividends (871) Net proceeds from issuance of common stock - Cash proceeds received from the exercise of stock options 2,414 Excess tax benefits from stock-based compensation - Effect of exchange rate changes on cash 258 Seller financing (10,000) Capital lease assumed in OmniQuip acquisition (3,630) Debt assumed in Delta acquisition (103) Other (1) (1,184) --------- Free Cash Flow ($98,450) ========= (1) Includes changes in other off-balance sheet debt. In addition to measuring our cash flow generation and usage based upon the Statements of Cash Flows, we also measure our free cash flow. We define free cash flow as cash flow from operating activities, investing activities, payment of dividends, cash proceeds received from the exercise of stock options, excess tax benefits from stock-based compensation and the effect of exchange rate changes on cash less changes in accounts receivable securitization, limited recourse debt from finance receivables monetizations and off-balance sheet debt. Our measure of free cash flow may not be comparable to similarly titled measures being disclosed by other companies and is not a measure of financial performance that is in accordance with GAAP. We utilize free cash flow to explain the change in our net debt position from the prior period. JLG INDUSTRIES, INC. STATEMENTS OF INCOME (in thousands, except per share data) (unaudited) CONSOLIDATED JLG Industries, Inc. and Consolidated Subsidiaries -------------------------- Fiscal Year Ended July 31, 2006 2005 ------------ ------------ Revenues Net sales $2,268,322 $1,713,782 Financial products 11,093 11,915 Rentals 9,981 9,333 ------------ ------------ 2,289,396 1,735,030 Cost of sales 1,846,371 1,447,785 ------------ ------------ Gross profit 443,025 287,245 Selling and administrative expenses 164,362 142,383 Product development expenses 30,251 24,601 Gain related to sale of Gradall excavator product line (14,572) - ------------ ------------ Income from operations 262,984 120,261 Other income (deductions): Interest expense, net of interest income (17,710) (28,609) Miscellaneous, net (3,166) 1,436 ------------ ------------ Income before taxes 242,108 93,088 Income tax provision 92,764 35,915 Equity in income of Access Financial Solutions - - ------------ ------------ Net income $149,344 $57,173 ============ ============ Earnings per common share $1.43 $.61 ============ ============ Earnings per common share - assuming dilution $1.40 $.60 ============ ============ Cash dividends per share $.015 $.01 ============ ============ Weighted average shares outstanding 104,294 93,058 ============ ============ Weighted average shares outstanding - assuming dilution 106,518 95,586 ============ ============ EQUIPMENT OPERATIONS JLG Industries, Inc. with Access Financial Solutions on the Equity Basis -------------------------- Fiscal Year Ended July 31, 2006 2005 ------------ ------------ Revenues Net sales $2,268,322 $1,713,782 Financial products - - Rentals 9,671 7,497 ------------ ------------ 2,277,993 1,721,279 Cost of sales 1,846,200 1,446,935 ------------ ------------ Gross profit 431,793 274,344 Selling and administrative expenses 161,152 140,298 Product development expenses 30,251 24,601 Gain related to sale of Gradall excavator product line (14,572) - ------------ ------------ Income from operations 254,962 109,445 Other income (deductions): Interest expense, net of interest income (14,625) (22,213) Miscellaneous, net (3,166) 1,436 ------------ ------------ Income before taxes 237,171 88,668 Income tax provision 90,872 34,209 Equity in income of Access Financial Solutions 3,045 2,714 ------------ ------------ Net income $149,344 $57,173 ============ ============ Earnings per common share Earnings per common share - assuming dilution Cash dividends per share Weighted average shares outstanding Weighted average shares outstanding - assuming dilution FINANCIAL SERVICES Access Financial Solutions -------------------------- Fiscal Year Ended July 31, 2006 2005 ------------ ------------ Revenues Net sales $- $- Financial products 11,093 11,915 Rentals 310 1,836 ------------ ------------ 11,403 13,751 Cost of sales 171 850 ------------ ------------ Gross profit 11,232 12,901 Selling and administrative expenses 3,210 2,085 Product development expenses - - Gain related to sale of Gradall excavator product line - - ------------ ------------ Income from operations 8,022 10,816 Other income (deductions): Interest expense, net of interest income (3,085) (6,396) Miscellaneous, net - - ------------ ------------ Income before taxes 4,937 4,420 Income tax provision 1,892 1,706 Equity in income of Access Financial Solutions - - ------------ ------------ Net income $3,045 $2,714 ============ ============ Earnings per common share Earnings per common share - assuming dilution Cash dividends per share Weighted average shares outstanding Weighted average shares outstanding - assuming dilution JLG INDUSTRIES, INC. BALANCE SHEETS (in thousands, except per share data) (unaudited) CONSOLIDATED JLG Industries, Inc. and Consolidated Subsidiaries --------------------------------------- July 31, 2006 2005 ------------------- ------------------- ASSETS ------------------------------- Current assets Cash and cash equivalents $328,096 $223,597 Trade accounts and finance receivables - net 445,631 419,866 Inventories 212,864 169,097 Other current assets 47,613 56,739 ------------------- ------------------- Total current assets 1,034,204 869,299 Property, plant and equipment - net 98,345 85,855 Equipment held for rental - net 21,477 22,570 Finance receivables, less current portion 29,193 30,354 Pledged receivables, less current portion 7,668 33,649 Goodwill 57,388 61,641 Intangible assets - net 74,142 32,086 Investment in Access Financial Solutions - - Receivable from Access Financial Solutions - - Other assets 74,872 68,143 ------------------- ------------------- $1,397,289 $1,203,597 =================== =================== LIABILITIES AND SHAREHOLDERS' EQUITY ------------------------------- Current liabilities Short-term debt and current portion of long-term debt $8,484 $1,496 Current portion of limited recourse debt from finance receivables monetizations 16,001 29,642 Accounts payable 233,746 200,323 Accrued expenses 168,513 148,651 ------------------- ------------------- Total current liabilities 426,744 380,112 Long-term debt, less current portion 207,378 224,197 Limited recourse debt from finance receivables monetizations, less current portion 7,718 34,016 Payable to JLG Industries, Inc. - - Accrued post-retirement benefits 25,748 31,113 Other long-term liabilities 19,984 27,233 Provisions for contingencies 34,285 28,334 Shareholders' equity Capital stock: Authorized shares: 200,000 at $.20 par value Issued and outstanding shares: 106,751 shares; fiscal 2005 - 103,290 shares 21,350 20,658 Additional paid-in capital 209,290 170,367 Retained earnings 458,276 310,516 Unearned compensation - (7,397) Accumulated other comprehensive loss (13,484) (15,552) ------------------- ------------------- Total shareholders' equity 675,432 478,592 ------------------- ------------------- $1,397,289 $1,203,597 =================== =================== EQUIPMENT OPERATIONS JLG Industries, Inc. with Access Financial Solutions on the Equity Basis --------------------------------------- July 31, 2006 2005 ------------------- ------------------- ASSETS ------------------------------- Current assets Cash and cash equivalents $328,096 $223,597 Trade accounts and finance receivables - net 405,003 373,417 Inventories 212,864 169,097 Other current assets 47,613 56,739 ------------------- ------------------- Total current assets 993,576 822,850 Property, plant and equipment - net 98,253 85,698 Equipment held for rental - net 21,384 22,259 Finance receivables, less current portion - - Pledged receivables, less current portion - - Goodwill 57,388 61,641 Intangible assets - net 74,142 32,086 Investment in Access Financial Solutions 43,530 40,485 Receivable from Access Financial Solutions 8,403 5,868 Other assets 74,899 68,009 ------------------- ------------------- $1,371,575 $1,138,896 =================== =================== LIABILITIES AND SHAREHOLDERS' EQUITY ------------------------------- Current liabilities Short-term debt and current portion of long-term debt $8,484 $1,496 Current portion of limited recourse debt from finance receivables monetizations - - Accounts payable 233,746 200,323 Accrued expenses 168,458 148,615 ------------------- ------------------- Total current liabilities 410,688 350,434 Long-term debt, less current portion 207,378 224,197 Limited recourse debt from finance receivables monetizations, less current portion - - Payable to JLG Industries, Inc. - - Accrued post-retirement benefits 25,748 31,113 Other long-term liabilities 19,984 27,233 Provisions for contingencies 32,345 27,327 Shareholders' equity Capital stock: Authorized shares: 200,000 at $.20 par value Issued and outstanding shares: 106,751 shares; fiscal 2005 - 103,290 shares 21,350 20,658 Additional paid-in capital 209,290 170,367 Retained earnings 458,276 310,516 Unearned compensation - (7,397) Accumulated other comprehensive loss (13,484) (15,552) ------------------- ------------------- Total shareholders' equity 675,432 478,592 ------------------- ------------------- $1,371,575 $1,138,896 =================== =================== FINANCIAL SERVICES Access Financial Solutions --------------------------------------- July 31, 2006 2005 ------------------- ------------------- ASSETS ------------------------------- Current assets Cash and cash equivalents $- $- Trade accounts and finance receivables - net 40,628 46,449 Inventories - - Other current assets - - ------------------- ------------------- Total current assets 40,628 46,449 Property, plant and equipment - net 92 157 Equipment held for rental - net 93 311 Finance receivables, less current portion 29,193 30,354 Pledged receivables, less current portion 7,668 33,649 Goodwill - - Intangible assets - net - - Investment in Access Financial Solutions - - Receivable from Access Financial Solutions - - Other assets (27) 134 ------------------- ------------------- $77,647 $111,054 =================== =================== LIABILITIES AND SHAREHOLDERS' EQUITY ------------------------------- Current liabilities Short-term debt and current portion of long-term debt $- $- Current portion of limited recourse debt from finance receivables monetizations 16,001 29,642 Accounts payable - - Accrued expenses 55 36 ------------------- ------------------- Total current liabilities 16,056 29,678 Long-term debt, less current portion - - Limited recourse debt from finance receivables monetizations, less current portion 7,718 34,016 Payable to JLG Industries, Inc. 8,403 5,868 Accrued post-retirement benefits - - Other long-term liabilities - - Provisions for contingencies 1,940 1,007 Shareholders' equity Capital stock: Authorized shares: 200,000 at $.20 par value Issued and outstanding shares: 106,751 shares; fiscal 2005 - 103,290 shares 30,000 30,000 Additional paid-in capital - - Retained earnings 13,530 10,485 Unearned compensation - - Accumulated other comprehensive loss - - ------------------- ------------------- Total shareholders' equity 43,530 40,485 ------------------- ------------------- $77,647 $111,054 =================== =================== JLG INDUSTRIES, INC. STATEMENTS OF CASH FLOWS (in thousands) (unaudited) CONSOLIDATED JLG Industries, Inc. and Consolidated Subsidiaries --------------------------------------- Fiscal Year Ended July 31, 2006 2005 ------------------- ------------------- Operations Net income $149,344 $57,173 Adjustments to reconcile net income to cash flow from operating activities: Gain related to sale of Gradall excavator product line (14,572) - (Gain) loss on sale of property, plant and equipment (383) 948 (Gain) loss on sale of equipment held for rental (13,745) (11,711) Non-cash charges and credits: Depreciation and amortization 28,551 28,899 Other 24,377 6,986 Changes in selected working capital items: Accounts receivable (45,350) (25,948) Inventories (64,712) (15,268) Accounts payable 42,312 60,423 Other operating assets and liabilities 33,484 30,623 Changes in finance receivables (2,315) 1,877 Changes in pledged finance receivables (627) 36 Changes in other assets and liabilities (17,613) 8,374 ------------------- ------------------- Cash flow from operating activities 118,751 142,412 Investments Purchases of property, plant and equipment (32,597) (15,443) Proceeds from the sale of property, plant and equipment 739 1,060 Purchases of equipment held for rental (43,527) (31,249) Proceeds from the sale of equipment held for rental 50,552 35,065 Proceeds from the sale of excavator product line 32,992 - Cash portion of acquisitions (47,093) (105) Investment in income of Access Financial Solutions - - Other 150 366 ------------------- ------------------- Cash flow used for investing activities (38,784) (10,306) Financing Net increase in short-term debt 52 (6) Issuance of long-term debt 10,000 156,018 Repayment of long-term debt (21,455) (232,666) Change in receivable from Access Financial Solutions - - Change in payable to JLG Industries, Inc. - - Payment of dividends (1,584) (925) Net proceeds from issuance of common stock - 119,421 Cash proceeds received from the exercise of stock options 18,494 19,826 Excess tax benefits from stock-based compensation 20,384 - ------------------- ------------------- Cash flow from financing activities 25,891 61,668 Currency Adjustments Effect of exchange rate changes on cash (1,359) (7,833) ------------------- ------------------- Cash and Cash Equivalents Net change in cash and cash equivalents 104,499 185,941 Beginning balance 223,597 37,656 ------------------- ------------------- Ending balance $328,096 $223,597 =================== =================== EQUIPMENT OPERATIONS JLG Industries, Inc. with Access Financial Solutions on the Equity Basis --------------------------------------- Fiscal Year Ended July 31, 2006 2005 ------------------- ------------------- Operations Net income $149,344 $57,173 Adjustments to reconcile net income to cash flow from operating activities: Gain related to sale of Gradall excavator product line (14,572) - (Gain) loss on sale of property, plant and equipment (383) 948 (Gain) loss on sale of equipment held for rental (13,745) (11,711) Non-cash charges and credits: Depreciation and amortization 28,281 28,011 Other 23,339 7,503 Changes in selected working capital items: Accounts receivable (41,143) (45,612) Inventories (64,712) (15,268) Accounts payable 42,312 60,423 Other operating assets and liabilities 33,465 30,795 Changes in finance receivables - - Changes in pledged finance receivables - - Changes in other assets and liabilities (17,870) 7,129 ------------------- ------------------- Cash flow from operating activities 124,316 119,391 Investments Purchases of property, plant and equipment (32,597) (15,248) Proceeds from the sale of property, plant and equipment 739 1,060 Purchases of equipment held for rental (43,527) (31,236) Proceeds from the sale of equipment held for rental 50,552 35,065 Proceeds from the sale of excavator product line 32,992 - Cash portion of acquisitions (47,093) (105) Investment in income of Access Financial Solutions (3,045) (2,714) Other 150 366 ------------------- ------------------- Cash flow used for investing activities (41,829) (12,812) Financing Net increase in short-term debt 52 (6) Issuance of long-term debt 10,000 156,018 Repayment of long-term debt (21,455) (232,666) Change in receivable from Access Financial Solutions (2,535) 25,530 Change in payable to JLG Industries, Inc. - - Payment of dividends (1,584) (925) Net proceeds from issuance of common stock - 119,421 Cash proceeds received from the exercise of stock options 18,494 19,826 Excess tax benefits from stock-based compensation 20,384 - ------------------- ------------------- Cash flow from financing activities 23,356 87,198 Currency Adjustments Effect of exchange rate changes on cash (1,344) (7,836) ------------------- ------------------- Cash and Cash Equivalents Net change in cash and cash equivalents 104,499 185,941 Beginning balance 223,597 37,656 ------------------- ------------------- Ending balance $328,096 $223,597 =================== =================== FINANCIAL SERVICES Access Financial Solutions --------------------------------------- Fiscal Year Ended July 31, 2006 2005 ------------------- ------------------- Operations Net income $3,045 $2,714 Adjustments to reconcile net income to cash flow from operating activities: Gain related to sale of Gradall excavator product line - - (Gain) loss on sale of property, plant and equipment - - (Gain) loss on sale of equipment held for rental - - Non-cash charges and credits: Depreciation and amortization 270 888 Other 1,038 (517) Changes in selected working capital items: Accounts receivable (4,207) 19,664 Inventories - - Accounts payable - - Other operating assets and liabilities 19 (172) Changes in finance receivables (2,315) 1,877 Changes in pledged finance receivables (627) 36 Changes in other assets and liabilities 257 1,245 ------------------- ------------------- Cash flow from operating activities (2,520) 25,735 Investments Purchases of property, plant and equipment - (195) Proceeds from the sale of property, plant and equipment - - Purchases of equipment held for rental - (13) Proceeds from the sale of equipment held for rental - - Proceeds from the sale of excavator product line - - Cash portion of acquisitions - - Investment in income of Access Financial Solutions - - Other - - ------------------- ------------------- Cash flow used for investing activities - (208) Financing Net increase in short-term debt - - Issuance of long-term debt - - Repayment of long-term debt - - Change in receivable from Access Financial Solutions - - Change in payable to JLG Industries, Inc. 2,535 (25,530) Payment of dividends - - Net proceeds from issuance of common stock - - Cash proceeds received from the exercise of stock options - - Excess tax benefits from stock-based compensation - - ------------------- ------------------- Cash flow from financing activities 2,535 (25,530) Currency Adjustments Effect of exchange rate changes on cash (15) 3 ------------------- ------------------- Cash and Cash Equivalents Net change in cash and cash equivalents - - Beginning balance - - ------------------- ------------------- Ending balance $- $- =================== =================== *T JLG Industries, Inc. (NYSE:JLG) today announced record consolidated financial results for the fiscal fourth-quarter and full-year ended July 31, 2006. Financial highlights for the periods included: Revenue growth of 21 percent and $48 million of net income earned during the fourth quarter Revenue growth of 32 percent and earnings improvement of 161 percent for fiscal year 2006 Continued strong cash flow from operations funding growth Strong demand continued for access products in construction markets "Along with achieving new records for both quarterly and full-year revenues and earnings, we achieved other significant milestones in 2006," stated Bill Lasky, Chairman of the Board, President and Chief Executive Officer. "We completed our manufacturing realignment and capacity expansion in preparation for the Caterpillar alliance and a projected increase in demand for JLG access equipment. Shipments of Caterpillar-branded telehandlers to European dealers began in late July and we will begin shipping to North American dealers in November under our exclusive 20-year private label alliance agreement. Despite some economic uncertainty and reduced residential construction activity, non-residential construction projections continue to be robust into calendar 2007. Combined with increased international activity and the new Caterpillar volume, this will continue to drive demand for JLG access products." Fourth-Quarter 2006 Results During the fourth quarter, revenues were $688 million, compared to $570 million during the same period last year. This increase of 21 percent was primarily due to sustained strong demand for access equipment as new machine revenues rose 25 percent. Earnings for the quarter totaled $48 million, or 45 cents per share, compared to $36 million, or 35 cents per share, during the fourth quarter of 2005. Operating income was $78 million, or 11.4 percent of sales, compared to $60 million, or 10.5 percent, during the same period last year. Full-Year 2006 Results Consolidated revenues were $2.3 billion, a 32 percent increase when compared to $1.7 billion in 2005. Net income was $149 million, or $1.40 per share, compared to $57 million, or 60 cents per share last year. The 2006 results include a one time pre-tax gain of $14.6 million ($8.8 million net of tax), or 8 cents per share, from the sale of the Gradall excavator business during the third quarter and $1.9 million ($1.2 million net of tax), or 1 cent per share of charges associated with the early extinguishment of debt. The 2005 results include $6.5 million ($4.0 million net of tax) or 4 cents per share of charges associated with the early extinguishment of debt. Operating income was $263 million, or 11.5 percent of revenues in 2006, compared to $120 million, or 6.9 percent, in fiscal 2005. Cash and cash equivalents were $328 million at July 31, 2006 compared to $224 million a year ago. Cash flow from operations was $119 million. Fiscal-Year 2007 Outlook "Demand for our products remained strong in the fourth quarter, continuing the pattern we have seen throughout fiscal 2006," said Jim Woodward, Executive Vice President and Chief Financial Officer. "As a result, our earnings quality improved significantly despite the additional expenses associated with our Caterpillar alliance preparations and other strategic initiatives. Excluding the gain on the sale of the excavator business, the fiscal 2006 operating margin improved to 10.9 percent compared to 6.9 percent in 2005. On a full year basis, we achieved our 23-percent target for incremental operating margin." "We anticipate continued strong demand in fiscal 2007 and project revenue growth to be 20 to 25 percent greater than our record fiscal 2006 level of $2.3 billion. With a substantial portion of our manufacturing realignment and capacity expansion behind us, and the start up of shipments under the new Caterpillar alliance, we expect fiscal 2007 earnings per share to be in a range of $1.72 to $1.82." Quarterly Conference Call Scheduled for 2 p.m. Today Management's detailed analysis of the Company's quarterly results will be provided during a conference call this afternoon at 2 p.m. Eastern Time. The call and accompanying slide presentation can be accessed via JLG's website at www.jlg.com, or by dialling (800) 901-5217 in the U.S. and Canada, or (617) 786-2964 from international locations. Callers must reference participant password #14994468. Please dial in 10 minutes prior to the start of the call. A replay of the call will be available on the website later in the day. About JLG Industries, Inc. JLG Industries, Inc. is the world's leading producer of access equipment (aerial work platforms and telehandlers). The Company's diverse product portfolio encompasses leading brands such as JLG(R) aerial work platforms; JLG, SkyTrak(R), Lull(R) and Gradall(R) telehandlers; and an array of complementary accessories that increase the versatility and efficiency of these products for end users. JLG markets its products and services through a multi-channel approach that includes a highly trained sales force and utilizes a broad range of marketing techniques, integrated supply programs and a network of distributors in the industrial, commercial, institutional and construction markets. In addition, JLG offers world-class after-sales service and support for its customers. JLG's manufacturing facilities are located in the United States, Belgium, and France, with sales and service operations on six continents. Forward-Looking Statements This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not guarantees of future performance and involve a number of risks and uncertainties that could cause actual results to differ materially from those indicated by the forward-looking statements. Important factors that could cause actual results to differ materially from those suggested by the forward-looking statements include, but are not limited to, the following: (i) general economic and market conditions, including political and economic uncertainty in areas of the world where we do business; (ii) varying and seasonal levels of demand for our products and services; (iii) risks associated with acquisitions; (iv) credit risks from our financing of customer purchases; (v) risks arising from dependence on third-party suppliers; and (vi) costs of raw materials and energy, as well as other risks as detailed in the Company's SEC reports, including the report on Form 10-Q for the quarter ended April 30, 2006. In this release and accompanying tables, we refer to various non-GAAP measures including adjustments to reported GAAP earnings, AFS operations as if accounted for under the equity method, as well as our disclosure of free cash flow, EBITDA and net debt. We believe that these measures are useful to investors in analyzing the Company's operating performance. For more information, visit www.jlg.com. NOTE: Information contained on our website is not incorporated by reference into this press release. JLG INDUSTRIES, INC. FINANCIAL DASHBOARD (in thousands, except per share data and as otherwise identified) Fiscal Year Quarter Ended Ended July April January July 31, 31, 30, 29, 2006 2006 2006 2006 ----------- --------- --------- --------- REVENUES AND PROFITABILITY Revenues $2,289,396 $687,632 $629,615 $494,426 Gross profit margin 19.4% 19.5% 18.8% 19.4% EBITDA 297,930 88,234 90,952 59,400 ---------------------------- Trailing twelve month EBITDA 297,930 297,930 280,799 243,633 ---------------------------- Trailing twelve month EBITDA margin 13.0% 13.0% 12.9% 11.9% ---------------------------- Operating income (loss) 262,984 78,194 84,690 49,734 Operating profit (loss) margin 11.5% 11.4% 13.5% 10.1% Net income (loss) margin 6.5% 7.0% 7.3% 5.5% Reported earnings (loss) per diluted share (1) $1.40 $0.45 $0.43 $0.26 IMPACT OF SELECTED ITEMS ON: (2) income (expense) PRE-TAX INCOME Strategic Initiatives/Integration (in both Cost of sales (COS), Selling & administrative and product development (SA&PD)) $(22,019) $(9,848) $(7,951) $(3,375) Restructuring and repositioning charges (in both COS, Restructuring) - - - - Net expenses on early extinguishment of debt (1,939) (492) (873) (574) Currency effects (in Miscellaneous-net) (2,767) 21 (2,847) (672) Bad debt charges (in SA&PD) (6,368) (1,289) (234) (1,336) Inventory charges (in COS) (2,074) (141) 106 (551) Early vesting incentives (in both COS, SA&PD) - - - - Other Incentive pay (in both COS, SA&PD) (25,938) (9,938) (6,266) (4,888) Restatement expenses (in SA&PD) - - - - Estimated net unrecovered steel cost (in COS) (3) (6,005) - - - Gain related to sale of Gradall excavator product line 14,572 - 14,572 - NET INCOME Strategic Initiatives/Integration (in both COS and SA&PD) (13,581) (6,247) (4,789) (2,146) Restructuring and repositioning charges (in both COS, Restructuring) - - - - Net expenses on early extinguishment of debt (1,196) (312) (526) (365) Currency effects (in Miscellaneous-net) (1,707) 13 (1,715) (427) Bad debt charges (in SA&PD) (3,928) (818) (141) (850) Inventory charges (in COS) (1,279) (89) 64 (350) Early vesting incentives (in both COS, SA&PD) - - - - Other Incentive pay (in both COS, SA&PD) (15,999) (6,304) (3,774) (3,109) Restatement expenses (in SA&PD) - - - - Estimated net unrecovered steel cost (in COS) (3) (3,704) - - - Gain related to sale of Gradall excavator product line 8,988 - 8,777 - EARNINGS PER SHARE (1) Strategic Initiatives/Integration (in both COS and SA&PD) (0.13) (0.06) (0.04) (0.02) Restructuring and repositioning charges (in both COS, Restructuring) - - - - Net expenses on early extinguishment of debt (0.01) - - - Currency effects (in Miscellaneous-net) (0.02) - (0.02) - Bad debt charges (in SA&PD) (0.04) (0.01) - (0.01) Inventory charges (in COS) (0.01) - - - Early vesting incentives (in both COS, SA&PD) - - - - Other Incentive pay (in both COS, SA&PD) (0.15) (0.06) (0.04) (0.03) Restatement expenses (in SA&PD) - - - - Estimated net unrecovered steel cost (in COS) (3) (0.03) - - - Gain related to sale of Gradall excavator product line 0.08 - 0.08 - BALANCE SHEET & LIQUIDITY MEASURES Cash & cash equivalents $328,096 $328,096 $304,895 $183,344 Trade accounts and finance receivables, net 445,631 445,631 393,966 379,813 Inventories 212,864 212,864 216,901 227,957 Total balance sheet debt 239,581 239,581 252,047 273,721 Limited recourse debt from finance receivables monetizations 23,719 23,719 28,516 45,318 Net debt (4) (112,234) (112,234) (81,364) 45,059 ---------------------------- Net debt (4) to total capitalization - - - 7% ---------------------------- Maximum loss exposure under loss pool agreements related to finance receivable monetizations 8,818 8,818 8,818 11,346 Equity 675,432 675,432 625,736 566,870 Working capital 607,460 607,460 575,593 523,417 Depreciation and amortization 28,551 6,410 7,701 7,907 Capital expenditures, net of retirements 32,241 15,837 9,622 3,653 Free cash flow (5) 114,330 30,870 126,423 (53,050) ---------------------------- FINANCIAL RATIOS Days sales outstanding 51.2 51.2 46.8 62.3 Days payables outstanding 44.2 44.2 45.2 40.6 Inventory turnover (annualized) 7.6 7.6 7.5 7.6 Quarter Fiscal Quarter Ended Year Ended October Ended July May 30, July 31, 31, 1, 2005 2005 2005 2005 --------- ----------- --------- --------- REVENUES AND PROFITABILITY Revenues $477,723 $1,735,030 $569,579 $505,356 Gross profit margin 19.9% 16.6% 19.3% 19.4% EBITDA 59,344 154,185 71,103 53,786 ---------------------------- Trailing twelve month EBITDA 211,344 154,185 154,185 121,445 ---------------------------- Trailing twelve month EBITDA margin 11.1% 8.9% 8.9% 7.6% ---------------------------- Operating income (loss) 50,366 120,261 59,722 51,267 Operating profit (loss) margin 10.5% 6.9% 10.5% 10.1% Net income (loss) margin 5.8% 3.3% 6.3% 4.5% Reported earnings (loss) per diluted share (1) $0.27 $.60 $.35 $.24 IMPACT OF SELECTED ITEMS ON: (2) income (expense) PRE-TAX INCOME Strategic Initiatives/Integration (in both Cost of sales (COS), Selling & administrative and product development (SA&PD)) $(845) $(6,261) $(2,131) $(1,141) Restructuring and repositioning charges (in both COS, Restructuring) - - - - Net expenses on early extinguishment of debt - (6,493) (217) (6,276) Currency effects (in Miscellaneous-net) 731 5,826 1,419 (961) Bad debt charges (in SA&PD) (3,509) (6,977) (2,533) (1,364) Inventory charges (in COS) (1,488) (4,423) (1,244) (1,279) Early vesting incentives (in both COS, SA&PD) - (1,658) - (227) Other Incentive pay (in both COS, SA&PD) (4,846) (22,194) (14,810) (7,384) Restatement expenses (in SA&PD) - - - - Estimated net unrecovered steel cost (in COS) (3) (6,005) (64,753) (8,702) (8,307) Gain related to sale of Gradall excavator product line - - - - NET INCOME Strategic Initiatives/Integration (in both COS and SA&PD) (503) (3,846) (1,325) (687) Restructuring and repositioning charges (in both COS, Restructuring) - - - - Net expenses on early extinguishment of debt - (3,988) (135) (3,778) Currency effects (in Miscellaneous-net) 435 3,578 882 (579) Bad debt charges (in SA&PD) (2,088) (4,285) (1,575) (821) Inventory charges (in COS) (885) (2,717) (774) (770) Early vesting incentives (in both COS, SA&PD) - (1,018) - (137) Other Incentive pay (in both COS, SA&PD) (2,883) (13,632) (9,209) (4,445) Restatement expenses (in SA&PD) - - - - Estimated net unrecovered steel cost (in COS) (3) (3,573) (39,771) (5,411) (5,001) Gain related to sale of Gradall excavator product line - - - - EARNINGS PER SHARE (1) Strategic Initiatives/Integration (in both COS and SA&PD) - (0.04) (0.01) (0.01) Restructuring and repositioning charges (in both COS, Restructuring) - - - - Net expenses on early extinguishment of debt - (0.04) - (0.04) Currency effects (in Miscellaneous-net) - 0.04 0.01 (0.01) Bad debt charges (in SA&PD) (0.02) (0.04) (0.02) (0.01) Inventory charges (in COS) (0.01) (0.03) (0.01) (0.01) Early vesting incentives (in both COS, SA&PD) - (0.01) - - Other Incentive pay (in both COS, SA&PD) (0.03) (0.14) (0.09) (0.05) Restatement expenses (in SA&PD) - - - - Estimated net unrecovered steel cost (in COS) (3) (0.03) (0.42) (0.05) (0.05) Gain related to sale of Gradall excavator product line - - - - BALANCE SHEET & LIQUIDITY MEASURES Cash & cash equivalents $230,947 $223,597 $223,597 $172,480 Trade accounts and finance receivables, net 379,393 419,866 419,866 377,190 Inventories 218,881 169,097 169,097 185,370 Total balance sheet debt 278,877 289,351 289,351 299,075 Limited recourse debt from finance receivables monetizations 55,921 63,658 63,658 70,586 Net debt (4) (7,991) 2,096 2,096 59,248 ---------------------------- Net debt (4) to total capitalization - - - 12% ---------------------------- Maximum loss exposure under loss pool agreements related to finance receivable monetizations 11,855 22,160 22,160 22,168 Equity 507,140 478,592 478,592 436,238 Working capital 505,787 489,187 489,187 451,660 Depreciation and amortization 6,533 28,899 7,365 7,488 Capital expenditures, net of retirements 3,129 13,435 8,282 490 Free cash flow (5) 10,087 267,457 57,152 226,844 ---------------------------- FINANCIAL RATIOS Days sales outstanding 62.7 57.1 57.1 55.4 Days payables outstanding 46.4 50.5 50.5 55.7 Inventory turnover (annualized) 7.8 7.6 7.6 6.9 Quarter Ended Fiscal Year January October Ended 30, 31, July 31, 2005 2004 2004 --------- --------- ----------- REVENUES AND PROFITABILITY Revenues $353,434 $306,661 $1,193,962 Gross profit margin 15.3% 8.4% 18.9% EBITDA 27,111 2,185 105,660 -------------------------------------- Trailing twelve month EBITDA 97,995 90,653 105,660 -------------------------------------- Trailing twelve month EBITDA margin 7.0% 7.0% 8.8% -------------------------------------- Operating income (loss) 17,607 (8,335) 75,906 Operating profit (loss) margin 5.0% -2.7% 6.4% Net income (loss) margin 2.1% -2.8% 2.2% Reported earnings (loss) per diluted share (1) $.08 $(.10) $.30 IMPACT OF SELECTED ITEMS ON: (2) income (expense) PRE-TAX INCOME Strategic Initiatives/Integration (in both Cost of sales (COS), Selling & administrative and product development (SA&PD)) $(1,093) $(1,896) $(15,975) Restructuring and repositioning charges (in both COS, Restructuring) - - (119) Net expenses on early extinguishment of debt - - - Currency effects (in Miscellaneous- net) 3,087 2,281 (2,309) Bad debt charges (in SA&PD) (1,948) (1,132) (11,560) Inventory charges (in COS) (308) (1,592) (4,519) Early vesting incentives (in both COS, SA&PD) (436) (995) (1,771) Other Incentive pay (in both COS, SA&PD) - - (16,923) Restatement expenses (in SA&PD) - - (1,264) Estimated net unrecovered steel cost (in COS) (3) (20,980) (26,764) (4,695) Gain related to sale of Gradall excavator product line - - - NET INCOME Strategic Initiatives/Integration (in both COS and SA&PD) (692) (1,191) (10,160) Restructuring and repositioning charges (in both COS, Restructuring) - - (76) Net expenses on early extinguishment of debt - - - Currency effects (in Miscellaneous- net) 1,954 1,432 (1,469) Bad debt charges (in SA&PD) (1,233) (711) (7,352) Inventory charges (in COS) (195) (1,000) (2,874) Early vesting incentives (in both COS, SA&PD) (276) (625) (1,126) Other Incentive pay (in both COS, SA&PD) - - (10,763) Restatement expenses (in SA&PD) - - (804) Estimated net unrecovered steel cost (in COS) (3) (13,280) (16,808) (2,986) Gain related to sale of Gradall excavator product line - - - EARNINGS PER SHARE (1) Strategic Initiatives/Integration (in both COS and SA&PD) (0.01) (0.01) (0.11) Restructuring and repositioning charges (in both COS, Restructuring) - - - Net expenses on early extinguishment of debt - - - Currency effects (in Miscellaneous- net) 0.02 0.02 (0.02) Bad debt charges (in SA&PD) (0.01) (0.01) (0.08) Inventory charges (in COS) - (0.01) (0.03) Early vesting incentives (in both COS, SA&PD) - (0.01) (0.01) Other Incentive pay (in both COS, SA&PD) - - (0.12) Restatement expenses (in SA&PD) - - (0.01) Estimated net unrecovered steel cost (in COS) (3) (0.15) (0.19) (0.03) Gain related to sale of Gradall excavator product line - - - BALANCE SHEET & LIQUIDITY MEASURES Cash & cash equivalents $24,305 $66,498 $37,656 Trade accounts and finance receivables, net 354,350 333,316 400,597 Inventories 182,606 170,731 154,405 Total balance sheet debt 383,534 389,609 423,534 Limited recourse debt from finance receivables monetizations 77,601 85,733 121,794 Net debt (4) 286,092 242,381 269,553 -------------------------------------- Net debt (4) to total capitalization 50% 47% 49% -------------------------------------- Maximum loss exposure under loss pool agreements related to finance receivable monetizations 22,168 22,168 22,198 Equity 284,746 276,780 281,270 Working capital 340,786 328,671 340,552 Depreciation and amortization 6,958 7,088 25,681 Capital expenditures, net of retirements 2,010 2,653 11,978 Free cash flow (5) (43,711) 27,172 (98,450) -------------------------------------- FINANCIAL RATIOS Days sales outstanding 83.7 92.0 78.4 Days payables outstanding 46.5 54.6 57.0 Inventory turnover (annualized) 6.4 5.9 5.8 (1) On March 27, 2006, we distributed a two-for-one stock split of our then outstanding common stock. All share and per share data included in this Financial Dashboard and the accompanying consolidated condensed financial statements have been restated to reflect the stock split. (2) Net of the quarter and annual effective tax rates. EPS is calculated by dividing the net income (loss) amounts by the respective diluted shares for each period. Individual quarterly net income (loss) per diluted share may not equal the fiscal year EPS due to changes in the number of common shares outstanding during the year. Repositioning charges are reported in COS. (3) Net unrecovered steel cost is an estimate based upon a baseline average of steel prices per ton for various types of steel in fiscal 2004 compared to the impact of steel prices incurred for various types of steel. These estimates include assumptions regarding the steel content of and sources of our products and their components. The steel price increases are netted against steel surcharges invoiced to our customers. (4) Net debt reflects total balance sheet debt plus off-balance sheet financing, less cash and limited recourse debt from finance receivables monetizations. (5) Free cash flow is defined as cash flow from operating activities, investing activities, payment of dividends, exercise of stock options, and the effect of exchange rate changes on cash less changes in accounts receivable securitization, limited recourse debt from finance receivables monetizations and off-balance sheet debt. JLG INDUSTRIES, INC. CONSOLIDATED CONDENSED STATEMENTS OF INCOME (in thousands, except per share data) (Quarterly data is unaudited) Fiscal Year Quarter Ended Ended July 31, July 31, April 30, January October 2006 2006 2006 29, 2006 30, 2005 ----------- --------- --------- --------- --------- Revenues Net sales $2,268,322 $682,789 $624,686 $488,411 $472,436 Financial products 11,093 2,647 2,216 3,256 2,974 Rentals 9,981 2,196 2,713 2,759 2,313 ----------- --------- --------- --------- --------- 2,289,396 687,632 629,615 494,426 477,723 Cost of sales 1,846,371 553,394 511,552 398,566 382,859 ----------- --------- --------- --------- --------- Gross profit 443,025 134,238 118,063 95,860 94,864 Gross profit margin 19.4% 19.5% 18.8% 19.4% 19.9% Selling and administrative expenses 164,362 45,975 41,025 39,301 38,061 Selling & administrative % 7.2% 6.7% 6.5% 7.9% 8.0% Product development expenses 30,251 10,069 6,920 6,825 6,437 Product development % 1.3% 1.5% 1.1% 1.4% 1.3% Gain related to sale of Gradall excavator product line (14,572) - (14,572) - - Restructuring charges - - - - - ----------- --------- --------- --------- --------- Income (loss) from operations 262,984 78,194 84,690 49,734 50,366 Operating profit (loss) margin 11.5% 11.4% 13.5% 10.1% 10.5% Other income (deductions): Interest expense (net of interest income) (17,710) (2,526) (4,030) (6,688) (4,466) Miscellaneous, net (3,166) (195) (3,974) 69 934 ----------- --------- --------- --------- --------- Income (loss) before taxes 242,108 75,473 76,686 43,115 46,834 Income tax provision (benefit) 92,764 27,602 30,499 15,695 18,968 ----------- --------- --------- --------- --------- Net income (loss) $149,344 $47,871 $46,187 $27,420 $27,866 =========== ========= ========= ========= ========= Return on revenues 6.5% 7.0% 7.3% 5.5% 5.8% Earnings (loss) per common share $1.43 $.45 $.44 $.26 $.27 =========== ========= ========= ========= ========= Earnings (loss) per common share - assuming dilution $1.40 $.45 $.43 $.26 $.27 =========== ========= ========= ========= ========= Cash Dividends per share $.0150 $.0050 $.0050 $.0025 $.0025 =========== ========= ========= ========= ========= Average basic shares outstanding 104,294 105,465 105,088 104,042 102,424 =========== ========= ========= ========= ========= Average diluted shares outstanding 106,518 107,199 107,232 106,374 105,112 =========== ========= ========= ========= ========= Fiscal Year Quarter Ended Ended July 31, July 31, May 1, January October 2005 2005 2005 30, 2005 31, 2004 ----------- --------- --------- --------- --------- Revenues Net sales $1,713,782 $563,805 $499,899 $347,947 $302,131 Financial products 11,915 2,826 3,373 3,056 2,660 Rentals 9,333 2,948 2,084 2,431 1,870 ----------- --------- --------- --------- --------- 1,735,030 569,579 505,356 353,434 306,661 Cost of sales 1,447,785 459,893 407,464 299,462 280,966 ----------- --------- --------- --------- --------- Gross profit 287,245 109,686 97,892 53,972 25,695 Gross profit margin 16.6% 19.3% 19.4% 15.3% 8.4% Selling and administrative expenses 142,383 43,927 39,524 30,810 28,122 Selling & administrative % 8.2% 7.7% 7.8% 8.7% 9.2% Product development expenses 24,601 6,037 7,101 5,555 5,908 Product development % 1.4% 1.1% 1.4% 1.6% 1.9% Gain related to sale of Gradall excavator product line - - - - - Restructuring charges - - - - - ----------- --------- --------- --------- --------- Income (loss) from operations 120,261 59,722 51,267 17,607 (8,335) Operating profit (loss) margin 6.9% 10.5% 10.1% 5.0% -2.7% Other income (deductions): Interest expense (net of interest income) (28,609) (4,905) (7,418) (7,852) (8,434) Miscellaneous, net 1,436 2,595 (6,105) 2,076 2,870 ----------- --------- --------- --------- --------- Income (loss) before taxes 93,088 57,412 37,744 11,831 (13,899) Income tax provision (benefit) 35,915 21,716 15,022 4,347 (5,170) ----------- --------- --------- --------- --------- Net income (loss) $57,173 $35,696 $22,722 $7,484 $(8,729) =========== ========= ========= ========= ========= Return on revenues 3.3% 6.3% 4.5% 2.1% -2.8% Earnings (loss) per common share $.61 $.35 $.24 $.09 $(.10) =========== ========= ========= ========= ========= Earnings (loss) per common share - assuming dilution $.60 $.35 $.24 $.08 $(.10) =========== ========= ========= ========= ========= Cash Dividends per share $.0100 $.0025 $.0025 $.0025 $.0025 =========== ========= ========= ========= ========= Average basic shares outstanding 93,058 100,722 94,182 87,596 86,554 =========== ========= ========= ========= ========= Average diluted shares outstanding 95,586 103,312 96,574 89,976 86,554 =========== ========= ========= ========= ========= Fiscal Year Ended July 31, 2004 ------------ Revenues Net sales $1,170,186 Financial products 15,203 Rentals 8,573 ------------ 1,193,962 Cost of sales 968,562 ------------ Gross profit 225,400 Gross profit margin 18.9% Selling and administrative expenses 128,465 Selling & administrative % 10.8% Product development expenses 21,002 Product development % 1.8% Gain related to sale of Gradall excavator product line - Restructuring charges 27 ------------ Income (loss) from operations 75,906 Operating profit (loss) margin 6.4% Other income (deductions): Interest expense (net of interest income) (35,397) Miscellaneous, net 1,372 ------------ Income (loss) before taxes 41,881 Income tax provision (benefit) 15,232 ------------ Net income (loss) $26,649 ============ Return on revenues 2.2% Earnings (loss) per common share $.31 ============ Earnings (loss) per common share - assuming dilution $.30 ============ Cash Dividends per share $.0100 ============ Average basic shares outstanding 85,720 ============ Average diluted shares outstanding 88,064 ============ JLG INDUSTRIES, INC. CONSOLIDATED CONDENSED BALANCE SHEETS (in thousands, except per share data) (Quarterly data is unaudited) July 31, April 30, January 29, October 30, 2006 2006 2006 2005 ----------- ----------- ----------- ----------- ASSETS --------------- Current assets Cash and cash equivalents $328,096 $304,895 $183,344 $230,947 Trade accounts and finance receivables, net 445,631 393,966 379,813 379,393 Inventories 212,864 216,901 227,957 218,881 Assets held for sale - - 49,941 - Other current assets 47,613 26,595 42,715 48,417 ----------- ----------- ----------- ----------- Total current assets 1,034,204 942,357 883,770 877,638 Property, plant and equipment, net 98,345 87,447 82,746 84,879 Equipment held for rental, net 21,477 21,934 36,684 38,401 Finance receivables, less current portion 29,193 29,472 26,500 29,688 Pledged finance receivables, less current portion 7,668 11,923 18,623 26,589 Goodwill 57,388 60,513 60,419 61,598 Intangible assets, net 74,142 74,557 75,371 31,795 Other assets 74,872 72,197 68,379 64,675 ----------- ----------- ----------- ----------- $1,397,289 $1,300,400 $1,252,492 $1,215,263 =========== =========== =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY --------------- Current liabilities Short-term debt and current portion of long-term debt $8,484 $8,447 $6,515 $1,486 Current portion of limited recourse debt from finance receivables monetizations 16,001 16,531 26,558 29,045 Accounts payable 233,746 221,342 187,591 200,281 Accrued expenses 168,513 120,444 139,689 141,039 ----------- ----------- ----------- ----------- Total current liabilities 426,744 366,764 360,353 371,851 Long-term debt, less current portion 207,378 215,084 221,888 221,470 Limited recourse debt from finance receivables monetizations, less current portion 7,718 11,985 18,760 26,876 Accrued post- retirement benefits 25,748 25,193 31,797 31,455 Other long-term liabilities 19,984 23,152 22,117 28,464 Provisions for contingencies 34,285 32,486 30,707 28,007 Shareholders' equity Capital stock: Authorized shares: 200,000 at $.20 par value Issued shares: 106,751; fiscal 2005 - 103,290; fiscal 2004 - 87,806 21,350 21,268 21,100 20,666 Additional paid-in capital 209,290 206,710 193,021 165,119 Retained earnings 458,276 410,937 365,280 338,124 Unearned compensation - - - - Accumulated other comprehensive loss (13,484) (13,179) (12,531) (16,769) ----------- ----------- ----------- ----------- Total share- holders' equity 675,432 625,736 566,870 507,140 ----------- ----------- ----------- ----------- $1,397,289 $1,300,400 $1,252,492 $1,215,263 =========== =========== =========== =========== July 31, May 1, January October July 31, 2005 2005 30, 2005 31, 2004 2004 ----------- ----------- --------- --------- ----------- ASSETS --------------- Current assets Cash and cash equivalents $223,597 $172,480 $24,305 $66,498 $37,656 Trade accounts and finance receivables, net 419,866 377,190 354,350 333,316 400,597 Inventories 169,097 185,370 182,606 170,731 154,405 Assets held for sale - 3,500 4,300 - - Other current assets 56,739 55,253 43,166 45,739 41,058 ----------- ----------- --------- --------- ----------- Total current assets 869,299 793,793 608,727 616,284 633,716 Property, plant and equipment, net 85,855 78,270 82,387 89,443 91,504 Equipment held for rental, net 22,570 27,220 23,163 26,842 21,190 Finance receivables, less current portion 30,354 31,836 36,992 39,002 33,747 Pledged finance receivables, less current portion 33,649 40,459 50,372 56,413 86,559 Goodwill 61,641 63,134 63,165 63,017 62,885 Intangible assets, net 32,086 33,465 33,848 34,590 35,240 Other assets 68,143 56,848 80,420 66,991 62,603 ----------- ----------- --------- --------- ----------- $1,203,597 $1,125,025 $979,074 $992,582 $1,027,444 =========== =========== ========= ========= =========== LIABILITIES AND SHAREHOLDERS' EQUITY --------------- Current liabilities Short-term debt and current portion of long-term debt $1,496 $1,552 $3,744 $1,788 $1,729 Current portion of limited recourse debt from finance receivables monetizations 29,642 29,708 26,660 26,725 32,585 Accounts payable 200,323 194,588 139,742 150,600 139,990 Accrued expenses 148,651 116,285 97,795 108,500 118,860 ----------- ----------- --------- --------- ----------- Total current liabilities 380,112 342,133 267,941 287,613 293,164 Long-term debt, less current portion 224,197 226,937 302,189 302,088 300,011 Limited recourse debt from finance receivables monetizations, less current portion 34,016 40,878 50,941 59,008 89,209 Accrued post- retirement benefits 31,113 30,801 30,423 30,211 29,666 Other long-term liabilities 27,233 24,116 23,536 21,362 20,542 Provisions for contingencies 28,334 23,922 19,298 15,520 13,582 Shareholders' equity Capital stock: Authorized shares: 200,000 at $.20 par value Issued shares: 106,751; fiscal 2005 - 103,290; fiscal 2004 - 87,806 20,658 20,390 17,880 17,814 17,562 Additional paid-in capital 170,367 153,779 28,147 26,204 20,790 Retained earnings 310,516 275,077 252,579 245,319 254,268 Unearned compensation (7,397) (2,642) (3,433) (4,019) (5,333) Accumulated other comprehensive loss (15,552) (10,366) (10,427) (8,538) (6,017) ----------- ----------- --------- --------- ----------- Total share- holders' equity 478,592 436,238 284,746 276,780 281,270 ----------- ----------- --------- --------- ----------- $1,203,597 $1,125,025 $979,074 $992,582 $1,027,444 =========== =========== ========= ========= =========== JLG INDUSTRIES, INC. CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOW (in thousands) (Quarterly data is unaudited) Fiscal Year Ended Quarter Ended July 31, July 31, April 30, Jan. 29, Oct. 30, 2006 2006 2006 2006 2005 --------- --------- --------- --------- --------- OPERATIONS Net income (loss) $149,344 $47,871 $46,187 $27,420 $27,866 Adjustments to reconcile net income (loss) to cash flow from operating activities: Gain related to sale of Gradall excavator product line (14,572) - (14,572) - - (Gain) loss on sale of property, plant and equipment (383) (359) 5 57 (86) Gain on sale of equipment held for rental (13,745) (506) (7,555) (5,612) (72) Non-cash charges and credits: Depreciation and amortization 28,551 6,410 7,701 7,907 6,533 Other 24,377 971 11,238 5,137 7,031 Changes in selected working capital items: Accounts receivable (45,350) (58,188) (13,080) (13,268) 39,186 Inventories (64,712) 5,470 10,368 (30,523) (50,027) Accounts payable 42,312 12,405 35,610 (5,669) (34) Other operating assets and liabilities 33,484 29,722 9,160 (6,722) 1,324 Changes in finance receivables (2,315) 3,394 (3,645) (3,415) 1,351 Changes in pledged finance receivables (627) (65) (133) (233) (196) Changes in other assets and liabilities (17,613) 1,035 (11,506) (3,720) (3,422) --------- --------- --------- --------- --------- Cash flow from operating activities 118,751 48,160 69,778 (28,641) 29,454 INVESTMENTS Purchases of property, plant and equipment (32,597) (16,065) (9,643) (3,744) (3,145) Proceeds from the sale of property, plant and equipment 739 587 16 34 102 Purchases of equipment held for rental (43,527) (4,246) (11,890) (9,270) (18,121) Proceeds from the sale of equipment held for rental 50,552 3,413 32,396 14,305 438 Proceeds from the sale of Gradall excavator product line 32,992 576 32,416 - - Cash portion of acquisitions (47,093) - (58) (47,035) - Other 150 (204) 422 (40) (28) --------- --------- --------- --------- --------- Cash flow used for investing activities (38,784) (15,939) 43,659 (45,750) (20,754) FINANCING Net issuance (repayment) of short-term debt 52 14 26 23 (11) Issuance of long- term debt 10,000 - 10,000 - - Repayment of long- term debt (21,455) (8,584) (12,678) (96) (97) Issuance of limited recourse debt - - - - - Repayment of limited recourse debt - - - - - Payment of dividends (1,584) (532) (530) (264) (258) Net proceeds from issuance of common stock - - - - - Cash proceeds received from the exercise of stock options 18,494 493 4,510 13,327 164 Excess tax benefits from stock-based compensation 20,384 - 7,323 13,017 44 --------- --------- --------- --------- --------- Cash flow from financing activities 25,891 (8,609) 8,651 26,007 (158) CURRENCY ADJUSTMENTS Effect of exchange rate changes on cash (1,359) (411) (537) 781 (1,192) CASH AND CASH EQUIVALENTS Net change in cash and cash equivalents 104,499 23,201 121,551 (47,603) 7,350 Beginning balance 223,597 304,895 183,344 230,947 223,597 --------- --------- --------- --------- --------- Ending balance $328,096 $328,096 $304,895 $183,344 $230,947 ========= ========= ========= ========= ========= Fiscal Year Ended Quarter Ended July 31, July 31, May 1, Jan. 30, Oct. 31, 2005 2005 2005 2005 2004 --------- --------- --------- --------- --------- OPERATIONS Net income (loss) $57,173 $35,696 $22,722 $7,484 $(8,729) Adjustments to reconcile net income (loss) to cash flow from operating activities: Gain related to sale of Gradall excavator product line - - - - - (Gain) loss on sale of property, plant and equipment 948 828 (22) (19) 161 Gain on sale of equipment held for rental (11,711) (3,791) (1,286) (5,334) (1,300) Non-cash charges and credits: Depreciation and amortization 28,899 7,365 7,488 6,958 7,088 Other 6,986 (5,953) 6,225 3,965 2,749 Changes in selected working capital items: Accounts receivable (25,948) (42,151) (16,355) (29,659) 62,217 Inventories (15,268) 16,321 (3,463) (11,758) (16,368) Accounts payable 60,423 5,868 54,834 (10,833) 10,554 Other operating assets and liabilities 30,623 38,335 7,188 (2,340) (12,560) Changes in finance receivables 1,877 1,459 1,944 6,970 (8,496) Changes in pledged finance receivables 36 (190) (248) (917) 1,391 Changes in other assets and liabilities 8,374 495 21,946 (12,920) (1,147) --------- --------- --------- --------- --------- Cash flow from operating activities 142,412 54,282 100,973 (48,403) 35,560 INVESTMENTS Purchases of property, plant and equipment (15,443) (9,134) (1,342) (2,072) (2,895) Proceeds from the sale of property, plant and equipment 1,060 24 874 81 81 Purchases of equipment held for rental (31,249) (5,590) (6,719) (8,851) (10,089) Proceeds from the sale of equipment held for rental 35,065 11,775 3,103 16,037 4,150 Proceeds from the sale of Gradall excavator product line - - - - - Cash portion of acquisitions (105) - - (105) - Other 366 (35) 503 (56) (46) --------- --------- --------- --------- --------- Cash flow used for investing activities (10,306) (2,960) (3,581) 5,034 (8,799) FINANCING Net issuance (repayment) of short-term debt (6) (58) (1,961) 1,955 58 Issuance of long- term debt 156,018 (38) 26,002 45,038 85,016 Repayment of long- term debt (232,666) (3,060) (99,374) (45,140) (85,092) Issuance of limited recourse debt - - - - - Repayment of limited recourse debt - - - - - Payment of dividends (925) (257) (224) (224) (220) Net proceeds from issuance of common stock 119,421 (113) 119,534 - - Cash proceeds received from the exercise of stock options 19,826 6,750 6,714 1,276 5,086 Excess tax benefits from stock-based compensation - - - - - --------- --------- --------- --------- --------- Cash flow from financing activities 61,668 3,224 50,691 2,905 4,848 CURRENCY ADJUSTMENTS Effect of exchange rate changes on cash (7,833) (3,429) 92 (1,729) (2,767) CASH AND CASH EQUIVALENTS Net change in cash and cash equivalents 185,941 51,117 148,175 (42,193) 28,842 Beginning balance 37,656 172,480 24,305 66,498 37,656 --------- --------- --------- --------- --------- Ending balance $223,597 $223,597 $172,480 $24,305 $66,498 ========= ========= ========= ========= ========= Fiscal Year Ended July 31, 2004 --------- OPERATIONS Net income (loss) $26,649 Adjustments to reconcile net income (loss) to cash flow from operating activities: Gain related to sale of Gradall excavator product line - (Gain) loss on sale of property, plant and equipment 319 Gain on sale of equipment held for rental (12,451) Non-cash charges and credits: Depreciation and amortization 25,681 Other 17,006 Changes in selected working capital items: Accounts receivable (66,296) Inventories 9,188 Accounts payable 33,207 Other operating assets and liabilities 13,506 Changes in finance receivables (6,112) Changes in pledged finance receivables (14,866) Changes in other assets and liabilities (11,090) --------- Cash flow from operating activities 14,741 INVESTMENTS Purchases of property, plant and equipment (12,387) Proceeds from the sale of property, plant and equipment 90 Purchases of equipment held for rental (26,689) Proceeds from the sale of equipment held for rental 33,269 Proceeds from the sale of Gradall excavator product line - Cash portion of acquisitions (109,557) Other 333 --------- Cash flow used for investing activities (114,941) FINANCING Net issuance (repayment) of short-term debt 27 Issuance of long- term debt 351,999 Repayment of long- term debt (362,506) Issuance of limited recourse debt 13,979 Repayment of limited recourse debt (253) Payment of dividends (871) Net proceeds from issuance of common stock - Cash proceeds received from the exercise of stock options 2,414 Excess tax benefits from stock-based compensation - --------- Cash flow from financing activities 4,789 CURRENCY ADJUSTMENTS Effect of exchange rate changes on cash 258 CASH AND CASH EQUIVALENTS Net change in cash and cash equivalents (95,153) Beginning balance 132,809 --------- Ending balance $37,656 ========= JLG INDUSTRIES, INC. CONSOLIDATED SELECTED SUPPLEMENTAL FINANCIAL INFORMATION (in thousands) (Quarterly data is unaudited) Fiscal Year Ended Quarter Ended July 31, July 31, April 30, Jan. 29, Oct. 30, 2006 2006 2006 2006 2005 ----------- --------- --------- --------- --------- SEGMENT INFORMATION REVENUES: North American Distribution $1,704,030 $509,653 $462,772 $369,725 $361,880 European Distribution 407,143 137,233 124,521 83,062 62,327 Rest of World Distribution 166,820 37,985 40,051 38,329 50,455 Access Financial Solutions 11,403 2,761 2,271 3,310 3,061 ----------- --------- --------- --------- --------- $2,289,396 $687,632 $629,615 $494,426 $477,723 =========== ========= ========= ========= ========= SEGMENT PROFIT (LOSS): North American Distribution $254,167 $79,554 $75,997 $47,903 $50,713 European Distribution 38,969 14,082 16,032 6,659 2,196 Rest of World Distribution 39,411 7,966 8,304 9,001 14,140 Access Financial Solutions 4,937 1,544 1,139 1,166 1,088 Corporate expense (77,585) (25,419) (17,443) (15,891) (18,832) ----------- --------- --------- --------- --------- Segment profit (loss) 259,899 77,727 84,029 48,838 49,305 Add: AFS' interest expense 3,085 467 661 896 1,061 ----------- --------- --------- --------- --------- Operating Income (Loss) $262,984 $78,194 $84,690 $49,734 $50,366 =========== ========= ========= ========= ========= PRODUCT GROUP REVENUES Aerial work platforms $1,159,778 $360,367 $320,827 $234,710 $243,874 Telehandlers 776,001 254,546 202,637 160,715 158,103 Excavators 26,798 - 865 16,902 9,031 After-sales service and support, including parts sales, and used and reconditioned equipment sales 305,745 67,876 100,357 76,084 61,428 Financial products 11,093 2,647 2,216 3,256 2,974 Rentals 9,981 2,196 2,713 2,759 2,313 ----------- --------- --------- --------- --------- $2,289,396 $687,632 $629,615 $494,426 $477,723 =========== ========= ========= ========= ========= GEOGRAPHIC REVENUES United States $1,678,674 $500,788 $456,630 $366,343 $354,913 Europe 408,513 138,010 124,621 83,349 62,533 Other international 202,209 48,834 48,364 44,734 60,277 ----------- --------- --------- --------- --------- $2,289,396 $687,632 $629,615 $494,426 $477,723 =========== ========= ========= ========= ========= Fiscal Year Ended Quarter Ended July 31, July 31, May 1, Jan. 30, Oct. 31, 2005 2005 2005 2005 2004 ----------- --------- --------- --------- --------- SEGMENT INFORMATION REVENUES: North American Distribution $1,329,682 $444,383 $387,442 $258,793 $239,064 European Distribution 261,602 82,426 85,960 56,631 36,585 Rest of World Distribution 129,995 38,390 28,506 34,866 28,233 Access Financial Solutions 13,751 4,380 3,448 3,144 2,779 ----------- --------- --------- --------- --------- $1,735,030 $569,579 $505,356 $353,434 $306,661 =========== ========= ========= ========= ========= SEGMENT PROFIT (LOSS): North American Distribution $114,255 $64,422 $48,275 $12,113 $(10,555) European Distribution 21,489 4,564 8,630 5,878 2,417 Rest of World Distribution 32,475 10,084 7,047 8,218 7,126 Access Financial Solutions 4,420 2,303 1,211 712 194 Corporate expense (58,774) (22,854) (15,344) (10,766) (9,810) ----------- --------- --------- --------- --------- Segment profit (loss) 113,865 58,519 49,819 16,155 (10,628) Add: AFS' interest expense 6,396 1,203 1,448 1,452 2,293 ----------- --------- --------- --------- --------- Operating Income (Loss) $120,261 $59,722 $51,267 $17,607 $(8,335) =========== ========= ========= ========= ========= PRODUCT GROUP REVENUES Aerial work platforms $888,073 $313,962 $278,071 $171,517 $124,523 Telehandlers 511,766 157,948 141,660 92,490 119,668 Excavators 61,562 18,144 17,864 17,213 8,341 After-sales service and support, including parts sales, and used and reconditioned equipment sales 252,381 73,751 62,304 66,727 49,599 Financial products 11,915 2,826 3,373 3,056 2,660 Rentals 9,333 2,948 2,084 2,431 1,870 ----------- --------- --------- --------- --------- $1,735,030 $569,579 $505,356 $353,434 $306,661 =========== ========= ========= ========= ========= GEOGRAPHIC REVENUES United States $1,311,450 $437,066 $379,624 $256,027 $238,733 Europe 264,032 84,126 86,224 56,819 36,863 Other international 159,548 48,387 39,508 40,588 31,065 ----------- --------- --------- --------- --------- $1,735,030 $569,579 $505,356 $353,434 $306,661 =========== ========= ========= ========= ========= Fiscal Year Ended July 31, 2004 ----------- SEGMENT INFORMATION REVENUES: North American Distribution $930,802 European Distribution 177,392 Rest of World Distribution 69,870 Access Financial Solutions 15,898 ----------- $1,193,962 =========== SEGMENT PROFIT (LOSS): North American Distribution $92,512 European Distribution 3,765 Rest of World Distribution 15,293 Access Financial Solutions 1,695 Corporate expense (48,274) ----------- Segment profit (loss) 64,991 Add: AFS' interest expense 10,915 ----------- Operating Income (Loss) $75,906 =========== PRODUCT GROUP REVENUES Aerial work platforms $562,056 Telehandlers 358,865 Excavators 52,689 After-sales service and support, including parts sales, and used and reconditioned equipment sales 196,576 Financial products 15,203 Rentals 8,573 ----------- $1,193,962 =========== GEOGRAPHIC REVENUES United States $923,696 Europe 178,392 Other international 91,874 ----------- $1,193,962 =========== JLG INDUSTRIES, INC. EBITDA QUARTERLY PERIODS (in thousands) July 31, April 30, January 29, October 30, July 31, 2006 2006 (1) 2006 2005 2005 -------- --------- ----------- ----------- -------- Net income (loss) $47,871 $46,187 $27,420 $27,866 $35,696 Interest expense 6,351 6,565 8,378 5,977 6,326 Income tax provision (benefit) 27,602 30,499 15,695 18,968 21,716 Depreciation and amortization 6,410 7,701 7,907 6,533 7,365 -------- --------- ----------- ----------- -------- EBITDA $88,234 $90,952 $59,400 $59,344 $71,103 ======== ========= =========== =========== ======== May 1, January 30, October 31, July 31, 2005 2005 2004 2004 -------- ----------- ----------- -------- Net income (loss) $22,722 $7,484 ($8,729) $15,271 Interest expense 8,554 8,322 8,996 9,274 Income tax provision (benefit) 15,022 4,347 (5,170) 8,748 Depreciation and amortization 7,488 6,958 7,088 5,070 -------- ----------- ----------- -------- EBITDA $53,786 $27,111 $2,185 $38,363 ======== =========== =========== ======== (1) Includes gain on the sale of the Gradall excavator product line. We monitor our EBITDA, which is a supplemental measure to GAAP that provides additional information concerning our leverage position and our historical ability to meet debt service and capital expenditure and working capital requirements. EBITDA also is an indicator of profitability, particularly in our capital-intensive industry. EBITDA reflects our earnings (loss) before interest, taxes and depreciation and amortization. EBITDA as presented differs from measures of EBITDA calculated for purposes of financial covenants in our note indentures and senior credit facilities. JLG INDUSTRIES, INC. EBITDA AND EBITDA MARGINS TRAILING TWELVE MONTH PERIODS (in thousands) July 31, April 30, January 29, 2006 (1) 2006 (1) 2006 ----------- ----------- ----------- Net income $149,344 $137,169 $113,704 Interest expense 27,271 27,246 29,235 Income tax provision 92,764 86,878 71,401 Depreciation and amortization 28,551 29,506 29,293 ----------- ----------- ----------- EBITDA $297,930 $280,799 $243,633 =========== =========== =========== Revenues $2,289,396 $2,171,343 $2,047,084 =========== =========== =========== EBITDA Margin 13.0% 12.9% 11.9% =========== =========== =========== October 30, July 31, May 1, 2005 2005 2005 ----------- ----------- ----------- Net income $93,768 $57,173 $36,748 Interest expense 29,179 32,198 35,146 Income tax provision 60,053 35,915 22,947 Depreciation and amortization 28,344 28,899 26,604 ----------- ----------- ----------- EBITDA $211,344 $154,185 $121,445 =========== =========== =========== Revenues $1,906,092 $1,735,030 $1,590,611 =========== =========== =========== EBITDA Margin 11.1% 8.9% 7.6% =========== =========== =========== January 30, October 31, July 31, 2005 2004 2004 ----------- ----------- ----------- Net income $22,713 $17,387 $26,649 Interest expense 35,992 37,218 38,098 Income tax provision 12,815 9,765 15,232 Depreciation and amortization 26,475 26,283 25,681 ----------- ----------- ----------- EBITDA $97,995 $90,653 $105,660 =========== =========== =========== Revenues $1,403,942 $1,287,038 $1,193,962 =========== =========== =========== EBITDA Margin 7.0% 7.0% 8.8% =========== =========== =========== (1) Includes gain on the sale of the Gradall excavator product line. We monitor our EBITDA, which is a supplemental measure to GAAP that provides additional information concerning our leverage position and our historical ability to meet debt service and capital expenditure and working capital requirements. EBITDA also is an indicator of profitability, particularly in our capital-intensive industry. EBITDA reflects our earnings before interest, taxes and depreciation and amortization. EBITDA as presented differs from measures of EBITDA calculated for purposes of financial covenants in our note indentures and senior credit facilities. JLG INDUSTRIES, INC. NET DEBT (in thousands) July 31, April 30, January October July 31, 2006 2006 29, 2006 30, 2005 2005 ---------- --------- ------------------- --------- Revolving credit facilities $- $- $- $- $- Cash management facilities - - - - - $125 million senior notes 89,545 97,545 109,975 109,975 109,975 $175 million senior subordinated notes 113,750 113,750 113,750 113,750 113,750 Miscellaneous debt 18,886 19,455 9,678 4,751 4,859 Fair value of interest rate swaps (8,898) (9,908) (7,799) (8,428) (5,909) Gain on terminated interest rate swap 2,579 2,689 2,799 2,908 3,018 ---------- --------- --------- --------- --------- Bank debt and notes 215,862 223,531 228,403 222,956 225,693 Limited recourse debt from finance receivables monetizations * 23,719 28,516 45,318 55,921 63,658 ---------- --------- --------- --------- --------- Total balance sheet debt 239,581 252,047 273,721 278,877 289,351 ---------- --------- --------- --------- --------- Net present value of off-balance sheet rental fleet lease - - - - - Net present value of off-balance sheet production equipment leases - - - - - ---------- --------- --------- --------- --------- Total off- balance sheet financing - - - - - ---------- --------- --------- --------- --------- Total balance sheet debt and off-balance sheet financing 239,581 252,047 273,721 278,877 289,351 Less: cash and cash equivalents 328,096 304,895 183,344 230,947 223,597 Less: limited recourse debt from finance receivables monetizations 23,719 28,516 45,318 55,921 63,658 ---------- --------- --------- --------- --------- Net debt ($112,234) $(81,364) $45,059 $(7,991) $2,096 ========== ========= ========= ========= ========= Shareholders' Equity $675,432 $625,736 $566,870 $507,140 $478,592 ========== ========= ========= ========= ========= Net Debt-to-Net Debt plus Shareholders' Equity - - 7% - - ========== ========= ========= ========= ========= Total Balance Sheet Debt-to-Total Balance Sheet Debt plus Shareholders' Equity 26% 29% 33% 35% 38% ========== ========= ========= ========= ========= * Maximum loss exposure under loss pool agreements related to finance receivable monetizations $8,818 $8,818 $11,346 $11,855 $22,160 ========== ========= ========= ========= ========= May 1, January October July 31, 2005 30, 2005 31, 2004 2004 ---------- ---------- --------- --------- Revolving credit facilities $- $- $- $- Cash management facilities - 1,944 - - $125 million senior notes 112,975 125,000 125,000 125,000 $175 million senior subordinated notes 113,750 175,000 175,000 175,000 Miscellaneous debt 5,014 5,128 5,219 5,236 Fair value of interest rate swaps (6,378) (6,120) (6,492) (8,814) Gain on terminated interest rate swap 3,128 4,981 5,149 5,318 ---------- ---------- --------- --------- Bank debt and notes 228,489 305,933 303,876 301,740 Limited recourse debt from finance receivables monetizations * 70,586 77,601 85,733 121,794 ---------- ---------- --------- --------- Total balance sheet debt 299,075 383,534 389,609 423,534 ---------- ---------- --------- --------- Net present value of off-balance sheet rental fleet lease 656 755 1,012 1,070 Net present value of off-balance sheet production equipment leases 2,583 3,709 3,991 4,399 ---------- ---------- --------- --------- Total off- balance sheet financing 3,239 4,464 5,003 5,469 ---------- ---------- --------- --------- Total balance sheet debt and off-balance sheet financing 302,314 387,998 394,612 429,003 Less: cash and cash equivalents 172,480 24,305 66,498 37,656 Less: limited recourse debt from finance receivables monetizations 70,586 77,601 85,733 121,794 ---------- ---------- --------- --------- Net debt $59,248 $286,092 $242,381 $269,553 ========== ========== ========= ========= Shareholders' Equity $436,238 $284,746 $276,780 $281,270 ========== ========== ========= ========= Net Debt-to-Net Debt plus Shareholders' Equity 12% 50% 47% 49% ========== ========== ========= ========= Total Balance Sheet Debt-to-Total Balance Sheet Debt plus Shareholders' Equity 41% 57% 58% 60% ========== ========== ========= ========= * Maximum loss exposure under loss pool agreements related to finance receivable monetizations $22,168 $22,168 $22,168 $22,198 ========== ========== ========= ========= We monitor our net debt, which is a supplemental measure to GAAP that provides additional information concerning our leverage position and our historical ability to meet debt service and capital expenditure and working capital requirements. We define net debt as the sum of total balance sheet debt and other off-balance sheet financing, minus cash and limited recourse debt arising from our monetizations of customer finance receivables. JLG INDUSTRIES, INC. FREE CASH FLOW (in thousands) Fiscal Year Quarter Ended Ended July April January October July 31, 31, 30, 29, 30, 2006 2006 2006 2006 2005 --------- -------- --------- --------- -------- Net income (loss) $149,344 $47,871 $46,187 $27,420 $27,866 Adjustments to reconcile net income (loss) to cash flow from operating activities: Non-cash items 24,228 6,516 (3,183) 7,489 13,406 Accounts receivable (45,350) (58,188) (13,080) (13,268) 39,186 Inventories (64,712) 5,470 10,368 (30,523) (50,027) Other current assets 17,653 (7,860) 11,633 4,345 9,535 Accounts payable 42,312 12,405 35,610 (5,669) (34) Accrued expenses 15,831 37,582 (2,473) (11,067) (8,211) Finance receivables (2,315) 3,394 (3,645) (3,415) 1,351 Other cash from operations (17,613) 1,035 (11,506) (3,720) (3,422) Purchases of property, plant and equipment (32,597) (16,065) (9,643) (3,744) (3,145) Proceeds from the sale of property, plant and equipment 739 587 16 34 102 Purchases of equipment held for rental (43,527) (4,246) (11,890) (9,270) (18,121) Proceeds from the sale of equipment held for rental 50,552 3,413 32,396 14,305 438 Proceeds from the sale of Gradall excavator product line 32,992 576 32,416 - - Cash portion of acquisitions (47,093) - (58) (47,035) - Other cash from investments 150 (204) 422 (40) (28) Payment of dividends (1,584) (532) (530) (264) (258) Net proceeds from issuance of common stock - - - - - Cash proceeds received from the exercise of stock options 18,494 493 4,510 13,327 164 Excess tax benefits from stock-based compensation 20,384 - 7,323 13,017 44 Effect of exchange rate changes on cash (1,359) (411) (537) 781 (1,192) Seller financing (5,000) - - (5,000) - Capital lease assumed in OmniQuip acquisition - - - - - Debt assumed in Delta acquisition - - - - - Other (1) 2,801 (966) 2,087 (753) 2,433 --------- -------- --------- --------- -------- Free Cash Flow $114,330 $30,870 $126,423 $(53,050) $10,087 ========= ======== ========= ========= ======== Fiscal Year Quarter Ended Ended July May January October July 31, 31, 1, 30, 31, 2005 2005 2005 2005 2004 --------- -------- --------- --------- -------- Net income (loss) $57,173 $35,696 $22,722 $7,484 ($8,729) Adjustments to reconcile net income (loss) to cash flow from operating activities: Non-cash items 25,122 (1,551) 12,405 5,570 8,698 Accounts receivable (25,948) (42,151) (16,355) (29,659) 62,217 Inventories (15,268) 16,321 (3,463) (11,758) (16,368) Other current assets (12,553) 899 (14,132) 3,497 (2,817) Accounts payable 60,423 5,868 54,834 (10,833) 10,554 Accrued expenses 43,176 37,436 21,320 (5,837) (9,743) Finance receivables 1,877 1,459 1,944 6,970 (8,496) Other cash from operations 8,374 495 21,946 (12,920) (1,147) Purchases of property, plant and equipment (15,443) (9,134) (1,342) (2,072) (2,895) Proceeds from the sale of property, plant and equipment 1,060 24 874 81 81 Purchases of equipment held for rental (31,249) (5,590) (6,719) (8,851) (10,089) Proceeds from the sale of equipment held for rental 35,065 11,775 3,103 16,037 4,150 Proceeds from the sale of Gradall excavator product line - - - - - Cash portion of acquisitions (105) - - (105) - Other cash from investments 366 (35) 503 (56) (46) Payment of dividends (925) (257) (224) (224) (220) Net proceeds from issuance of common stock 119,421 (113) 119,534 - - Cash proceeds received from the exercise of stock options 19,826 6,750 6,714 1,276 5,086 Excess tax benefits from stock-based compensation - - - - - Effect of exchange rate changes on cash (7,833) (3,429) 92 (1,729) (2,767) Seller financing - - - - - Capital lease assumed in OmniQuip acquisition - - - - - Debt assumed in Delta acquisition - - - - - Other (1) 4,898 2,689 3,088 (582) (297) --------- -------- --------- --------- -------- Free Cash Flow $267,457 $57,152 $226,844 ($43,711) $27,172 ========= ======== ========= ========= ======== Fiscal Year Ended July 31, 2004 --------- Net income (loss) $26,649 Adjustments to reconcile net income (loss) to cash flow from operating activities: Non-cash items 30,555 Accounts receivable (66,296) Inventories 9,188 Other current assets 8,780 Accounts payable 33,207 Accrued expenses 4,726 Finance receivables (6,112) Other cash from operations (11,090) Purchases of property, plant and equipment (12,387) Proceeds from the sale of property, plant and equipment 90 Purchases of equipment held for rental (26,689) Proceeds from the sale of equipment held for rental 33,269 Proceeds from the sale of Gradall excavator product line - Cash portion of acquisitions (109,557) Other cash from investments 333 Payment of dividends (871) Net proceeds from issuance of common stock - Cash proceeds received from the exercise of stock options 2,414 Excess tax benefits from stock-based compensation - Effect of exchange rate changes on cash 258 Seller financing (10,000) Capital lease assumed in OmniQuip acquisition (3,630) Debt assumed in Delta acquisition (103) Other (1) (1,184) --------- Free Cash Flow ($98,450) ========= (1) Includes changes in other off-balance sheet debt. In addition to measuring our cash flow generation and usage based upon the Statements of Cash Flows, we also measure our free cash flow. We define free cash flow as cash flow from operating activities, investing activities, payment of dividends, cash proceeds received from the exercise of stock options, excess tax benefits from stock-based compensation and the effect of exchange rate changes on cash less changes in accounts receivable securitization, limited recourse debt from finance receivables monetizations and off-balance sheet debt. Our measure of free cash flow may not be comparable to similarly titled measures being disclosed by other companies and is not a measure of financial performance that is in accordance with GAAP. We utilize free cash flow to explain the change in our net debt position from the prior period. JLG INDUSTRIES, INC. STATEMENTS OF INCOME (in thousands, except per share data) (unaudited) CONSOLIDATED JLG Industries, Inc. and Consolidated Subsidiaries -------------------------- Fiscal Year Ended July 31, 2006 2005 ------------ ------------ Revenues Net sales $2,268,322 $1,713,782 Financial products 11,093 11,915 Rentals 9,981 9,333 ------------ ------------ 2,289,396 1,735,030 Cost of sales 1,846,371 1,447,785 ------------ ------------ Gross profit 443,025 287,245 Selling and administrative expenses 164,362 142,383 Product development expenses 30,251 24,601 Gain related to sale of Gradall excavator product line (14,572) - ------------ ------------ Income from operations 262,984 120,261 Other income (deductions): Interest expense, net of interest income (17,710) (28,609) Miscellaneous, net (3,166) 1,436 ------------ ------------ Income before taxes 242,108 93,088 Income tax provision 92,764 35,915 Equity in income of Access Financial Solutions - - ------------ ------------ Net income $149,344 $57,173 ============ ============ Earnings per common share $1.43 $.61 ============ ============ Earnings per common share - assuming dilution $1.40 $.60 ============ ============ Cash dividends per share $.015 $.01 ============ ============ Weighted average shares outstanding 104,294 93,058 ============ ============ Weighted average shares outstanding - assuming dilution 106,518 95,586 ============ ============ EQUIPMENT OPERATIONS JLG Industries, Inc. with Access Financial Solutions on the Equity Basis -------------------------- Fiscal Year Ended July 31, 2006 2005 ------------ ------------ Revenues Net sales $2,268,322 $1,713,782 Financial products - - Rentals 9,671 7,497 ------------ ------------ 2,277,993 1,721,279 Cost of sales 1,846,200 1,446,935 ------------ ------------ Gross profit 431,793 274,344 Selling and administrative expenses 161,152 140,298 Product development expenses 30,251 24,601 Gain related to sale of Gradall excavator product line (14,572) - ------------ ------------ Income from operations 254,962 109,445 Other income (deductions): Interest expense, net of interest income (14,625) (22,213) Miscellaneous, net (3,166) 1,436 ------------ ------------ Income before taxes 237,171 88,668 Income tax provision 90,872 34,209 Equity in income of Access Financial Solutions 3,045 2,714 ------------ ------------ Net income $149,344 $57,173 ============ ============ Earnings per common share Earnings per common share - assuming dilution Cash dividends per share Weighted average shares outstanding Weighted average shares outstanding - assuming dilution FINANCIAL SERVICES Access Financial Solutions -------------------------- Fiscal Year Ended July 31, 2006 2005 ------------ ------------ Revenues Net sales $- $- Financial products 11,093 11,915 Rentals 310 1,836 ------------ ------------ 11,403 13,751 Cost of sales 171 850 ------------ ------------ Gross profit 11,232 12,901 Selling and administrative expenses 3,210 2,085 Product development expenses - - Gain related to sale of Gradall excavator product line - - ------------ ------------ Income from operations 8,022 10,816 Other income (deductions): Interest expense, net of interest income (3,085) (6,396) Miscellaneous, net - - ------------ ------------ Income before taxes 4,937 4,420 Income tax provision 1,892 1,706 Equity in income of Access Financial Solutions - - ------------ ------------ Net income $3,045 $2,714 ============ ============ Earnings per common share Earnings per common share - assuming dilution Cash dividends per share Weighted average shares outstanding Weighted average shares outstanding - assuming dilution JLG INDUSTRIES, INC. BALANCE SHEETS (in thousands, except per share data) (unaudited) CONSOLIDATED JLG Industries, Inc. and Consolidated Subsidiaries --------------------------------------- July 31, 2006 2005 ------------------- ------------------- ASSETS ------------------------------- Current assets Cash and cash equivalents $328,096 $223,597 Trade accounts and finance receivables - net 445,631 419,866 Inventories 212,864 169,097 Other current assets 47,613 56,739 ------------------- ------------------- Total current assets 1,034,204 869,299 Property, plant and equipment - net 98,345 85,855 Equipment held for rental - net 21,477 22,570 Finance receivables, less current portion 29,193 30,354 Pledged receivables, less current portion 7,668 33,649 Goodwill 57,388 61,641 Intangible assets - net 74,142 32,086 Investment in Access Financial Solutions - - Receivable from Access Financial Solutions - - Other assets 74,872 68,143 ------------------- ------------------- $1,397,289 $1,203,597 =================== =================== LIABILITIES AND SHAREHOLDERS' EQUITY ------------------------------- Current liabilities Short-term debt and current portion of long-term debt $8,484 $1,496 Current portion of limited recourse debt from finance receivables monetizations 16,001 29,642 Accounts payable 233,746 200,323 Accrued expenses 168,513 148,651 ------------------- ------------------- Total current liabilities 426,744 380,112 Long-term debt, less current portion 207,378 224,197 Limited recourse debt from finance receivables monetizations, less current portion 7,718 34,016 Payable to JLG Industries, Inc. - - Accrued post-retirement benefits 25,748 31,113 Other long-term liabilities 19,984 27,233 Provisions for contingencies 34,285 28,334 Shareholders' equity Capital stock: Authorized shares: 200,000 at $.20 par value Issued and outstanding shares: 106,751 shares; fiscal 2005 - 103,290 shares 21,350 20,658 Additional paid-in capital 209,290 170,367 Retained earnings 458,276 310,516 Unearned compensation - (7,397) Accumulated other comprehensive loss (13,484) (15,552) ------------------- ------------------- Total shareholders' equity 675,432 478,592 ------------------- ------------------- $1,397,289 $1,203,597 =================== =================== EQUIPMENT OPERATIONS JLG Industries, Inc. with Access Financial Solutions on the Equity Basis --------------------------------------- July 31, 2006 2005 ------------------- ------------------- ASSETS ------------------------------- Current assets Cash and cash equivalents $328,096 $223,597 Trade accounts and finance receivables - net 405,003 373,417 Inventories 212,864 169,097 Other current assets 47,613 56,739 ------------------- ------------------- Total current assets 993,576 822,850 Property, plant and equipment - net 98,253 85,698 Equipment held for rental - net 21,384 22,259 Finance receivables, less current portion - - Pledged receivables, less current portion - - Goodwill 57,388 61,641 Intangible assets - net 74,142 32,086 Investment in Access Financial Solutions 43,530 40,485 Receivable from Access Financial Solutions 8,403 5,868 Other assets 74,899 68,009 ------------------- ------------------- $1,371,575 $1,138,896 =================== =================== LIABILITIES AND SHAREHOLDERS' EQUITY ------------------------------- Current liabilities Short-term debt and current portion of long-term debt $8,484 $1,496 Current portion of limited recourse debt from finance receivables monetizations - - Accounts payable 233,746 200,323 Accrued expenses 168,458 148,615 ------------------- ------------------- Total current liabilities 410,688 350,434 Long-term debt, less current portion 207,378 224,197 Limited recourse debt from finance receivables monetizations, less current portion - - Payable to JLG Industries, Inc. - - Accrued post-retirement benefits 25,748 31,113 Other long-term liabilities 19,984 27,233 Provisions for contingencies 32,345 27,327 Shareholders' equity Capital stock: Authorized shares: 200,000 at $.20 par value Issued and outstanding shares: 106,751 shares; fiscal 2005 - 103,290 shares 21,350 20,658 Additional paid-in capital 209,290 170,367 Retained earnings 458,276 310,516 Unearned compensation - (7,397) Accumulated other comprehensive loss (13,484) (15,552) ------------------- ------------------- Total shareholders' equity 675,432 478,592 ------------------- ------------------- $1,371,575 $1,138,896 =================== =================== FINANCIAL SERVICES Access Financial Solutions --------------------------------------- July 31, 2006 2005 ------------------- ------------------- ASSETS ------------------------------- Current assets Cash and cash equivalents $- $- Trade accounts and finance receivables - net 40,628 46,449 Inventories - - Other current assets - - ------------------- ------------------- Total current assets 40,628 46,449 Property, plant and equipment - net 92 157 Equipment held for rental - net 93 311 Finance receivables, less current portion 29,193 30,354 Pledged receivables, less current portion 7,668 33,649 Goodwill - - Intangible assets - net - - Investment in Access Financial Solutions - - Receivable from Access Financial Solutions - - Other assets (27) 134 ------------------- ------------------- $77,647 $111,054 =================== =================== LIABILITIES AND SHAREHOLDERS' EQUITY ------------------------------- Current liabilities Short-term debt and current portion of long-term debt $- $- Current portion of limited recourse debt from finance receivables monetizations 16,001 29,642 Accounts payable - - Accrued expenses 55 36 ------------------- ------------------- Total current liabilities 16,056 29,678 Long-term debt, less current portion - - Limited recourse debt from finance receivables monetizations, less current portion 7,718 34,016 Payable to JLG Industries, Inc. 8,403 5,868 Accrued post-retirement benefits - - Other long-term liabilities - - Provisions for contingencies 1,940 1,007 Shareholders' equity Capital stock: Authorized shares: 200,000 at $.20 par value Issued and outstanding shares: 106,751 shares; fiscal 2005 - 103,290 shares 30,000 30,000 Additional paid-in capital - - Retained earnings 13,530 10,485 Unearned compensation - - Accumulated other comprehensive loss - - ------------------- ------------------- Total shareholders' equity 43,530 40,485 ------------------- ------------------- $77,647 $111,054 =================== =================== JLG INDUSTRIES, INC. STATEMENTS OF CASH FLOWS (in thousands) (unaudited) CONSOLIDATED JLG Industries, Inc. and Consolidated Subsidiaries --------------------------------------- Fiscal Year Ended July 31, 2006 2005 ------------------- ------------------- Operations Net income $149,344 $57,173 Adjustments to reconcile net income to cash flow from operating activities: Gain related to sale of Gradall excavator product line (14,572) - (Gain) loss on sale of property, plant and equipment (383) 948 (Gain) loss on sale of equipment held for rental (13,745) (11,711) Non-cash charges and credits: Depreciation and amortization 28,551 28,899 Other 24,377 6,986 Changes in selected working capital items: Accounts receivable (45,350) (25,948) Inventories (64,712) (15,268) Accounts payable 42,312 60,423 Other operating assets and liabilities 33,484 30,623 Changes in finance receivables (2,315) 1,877 Changes in pledged finance receivables (627) 36 Changes in other assets and liabilities (17,613) 8,374 ------------------- ------------------- Cash flow from operating activities 118,751 142,412 Investments Purchases of property, plant and equipment (32,597) (15,443) Proceeds from the sale of property, plant and equipment 739 1,060 Purchases of equipment held for rental (43,527) (31,249) Proceeds from the sale of equipment held for rental 50,552 35,065 Proceeds from the sale of excavator product line 32,992 - Cash portion of acquisitions (47,093) (105) Investment in income of Access Financial Solutions - - Other 150 366 ------------------- ------------------- Cash flow used for investing activities (38,784) (10,306) Financing Net increase in short-term debt 52 (6) Issuance of long-term debt 10,000 156,018 Repayment of long-term debt (21,455) (232,666) Change in receivable from Access Financial Solutions - - Change in payable to JLG Industries, Inc. - - Payment of dividends (1,584) (925) Net proceeds from issuance of common stock - 119,421 Cash proceeds received from the exercise of stock options 18,494 19,826 Excess tax benefits from stock-based compensation 20,384 - ------------------- ------------------- Cash flow from financing activities 25,891 61,668 Currency Adjustments Effect of exchange rate changes on cash (1,359) (7,833) ------------------- ------------------- Cash and Cash Equivalents Net change in cash and cash equivalents 104,499 185,941 Beginning balance 223,597 37,656 ------------------- ------------------- Ending balance $328,096 $223,597 =================== =================== EQUIPMENT OPERATIONS JLG Industries, Inc. with Access Financial Solutions on the Equity Basis --------------------------------------- Fiscal Year Ended July 31, 2006 2005 ------------------- ------------------- Operations Net income $149,344 $57,173 Adjustments to reconcile net income to cash flow from operating activities: Gain related to sale of Gradall excavator product line (14,572) - (Gain) loss on sale of property, plant and equipment (383) 948 (Gain) loss on sale of equipment held for rental (13,745) (11,711) Non-cash charges and credits: Depreciation and amortization 28,281 28,011 Other 23,339 7,503 Changes in selected working capital items: Accounts receivable (41,143) (45,612) Inventories (64,712) (15,268) Accounts payable 42,312 60,423 Other operating assets and liabilities 33,465 30,795 Changes in finance receivables - - Changes in pledged finance receivables - - Changes in other assets and liabilities (17,870) 7,129 ------------------- ------------------- Cash flow from operating activities 124,316 119,391 Investments Purchases of property, plant and equipment (32,597) (15,248) Proceeds from the sale of property, plant and equipment 739 1,060 Purchases of equipment held for rental (43,527) (31,236) Proceeds from the sale of equipment held for rental 50,552 35,065 Proceeds from the sale of excavator product line 32,992 - Cash portion of acquisitions (47,093) (105) Investment in income of Access Financial Solutions (3,045) (2,714) Other 150 366 ------------------- ------------------- Cash flow used for investing activities (41,829) (12,812) Financing Net increase in short-term debt 52 (6) Issuance of long-term debt 10,000 156,018 Repayment of long-term debt (21,455) (232,666) Change in receivable from Access Financial Solutions (2,535) 25,530 Change in payable to JLG Industries, Inc. - - Payment of dividends (1,584) (925) Net proceeds from issuance of common stock - 119,421 Cash proceeds received from the exercise of stock options 18,494 19,826 Excess tax benefits from stock-based compensation 20,384 - ------------------- ------------------- Cash flow from financing activities 23,356 87,198 Currency Adjustments Effect of exchange rate changes on cash (1,344) (7,836) ------------------- ------------------- Cash and Cash Equivalents Net change in cash and cash equivalents 104,499 185,941 Beginning balance 223,597 37,656 ------------------- ------------------- Ending balance $328,096 $223,597 =================== =================== FINANCIAL SERVICES Access Financial Solutions --------------------------------------- Fiscal Year Ended July 31, 2006 2005 ------------------- ------------------- Operations Net income $3,045 $2,714 Adjustments to reconcile net income to cash flow from operating activities: Gain related to sale of Gradall excavator product line - - (Gain) loss on sale of property, plant and equipment - - (Gain) loss on sale of equipment held for rental - - Non-cash charges and credits: Depreciation and amortization 270 888 Other 1,038 (517) Changes in selected working capital items: Accounts receivable (4,207) 19,664 Inventories - - Accounts payable - - Other operating assets and liabilities 19 (172) Changes in finance receivables (2,315) 1,877 Changes in pledged finance receivables (627) 36 Changes in other assets and liabilities 257 1,245 ------------------- ------------------- Cash flow from operating activities (2,520) 25,735 Investments Purchases of property, plant and equipment - (195) Proceeds from the sale of property, plant and equipment - - Purchases of equipment held for rental - (13) Proceeds from the sale of equipment held for rental - - Proceeds from the sale of excavator product line - - Cash portion of acquisitions - - Investment in income of Access Financial Solutions - - Other - - ------------------- ------------------- Cash flow used for investing activities - (208) Financing Net increase in short-term debt - - Issuance of long-term debt - - Repayment of long-term debt - - Change in receivable from Access Financial Solutions - - Change in payable to JLG Industries, Inc. 2,535 (25,530) Payment of dividends - - Net proceeds from issuance of common stock - - Cash proceeds received from the exercise of stock options - - Excess tax benefits from stock-based compensation - - ------------------- ------------------- Cash flow from financing activities 2,535 (25,530) Currency Adjustments Effect of exchange rate changes on cash (15) 3 ------------------- ------------------- Cash and Cash Equivalents Net change in cash and cash equivalents - - Beginning balance - - ------------------- ------------------- Ending balance $- $- =================== ===================