ASV Announces 2nd Quarter 1999 Results
20 July 1999
ASV Announces 2nd Quarter 1999 Results
GRAND RAPIDS, Minn., July 20 -- ASV Inc. ,
which manufactures Posi-Track(R) all-purpose crawlers, today reported its
results for the second quarter ended June 30, 1999. Second quarter 1999 net
sales were $9,064,173 compared to $10,484,279 for the same period in 1998.
Second quarter 1999 net income decreased to $688,695, or $.07 a share,
compared to $927,079, or $.11 for second quarter 1998.
For the six months ended June 30, 1999, net sales were $17,526,818
compared to $19,513,117 in 1998; net income was $1,337,642 compared to
$1,718,917 in 1998; and earnings per share were $.14 compared with $.20 for
1998.
"The second quarter results reflected the continued transition to the
Caterpillar dealer network," said ASV President Gray Lemke. "But the progress
is clear. While some of our existing, independent dealers have elected to
continue doing business with us, the majority of our sales now come from
Caterpillar dealers."
During its second quarter, ASV added Caterpillar dealers in California,
Idaho, Indiana, Iowa, Minnesota, Tennessee, Washington and Wyoming. Currently
30 Caterpillar dealers, representing over 200 locations, are selling and
servicing the Posi-Track.
In the second quarter of 1999, ASV also began a comprehensive training
program for Caterpillar dealers, noted Lemke.
"Educating and training Caterpillar dealers on the Posi-Track's unique
undercarriage, which gives our machines extremely low ground pressure, power
and versatility, is a necessary process that takes time to accomplish," Lemke
added. "But we believe the benefits of a well-schooled Caterpillar dealer, who
completely understands the benefits and technical features of the machine,
outweigh any short-term setbacks."
ASV took additional steps during the second quarter of 1999 to build and
strengthen its relationship with the Caterpillar dealer network. To assist the
company in introducing its products to Cat dealers, Mark Glasnapp, a
Caterpillar Project Manager, joined ASV as General Manager of Marketing and
Commercial Agreements. Glasnapp is based in Grand Rapids, working for ASV and
reporting to Caterpillar. The arrangement represents ASV's and Caterpillar's
commitment to bring about widespread distribution of the Posi-Track to
Caterpillar dealers, Lemke said. Glasnapp brings to his assignment at ASV more
than 20 years of experience at Caterpillar, where he's held various marketing
and management positions in the United States, Australia and Europe.
"Mark Glasnapp will lead our efforts to continually add Cat dealerships to
our network," said Lemke. "He understands our products and customers, and has
the expertise to work with Caterpillar dealers."
In addition, Lemke said that ASV will introduce the Posi-Track 4810, the
first machine from ASV to incorporate Caterpillar engines. The new Cat-powered
model is expected to go into production in the third quarter of 1999, and will
replace the current HD4500 Series. Moreover, in second quarter 1999, ASV also
began creating the infrastructure necessary to enable Caterpillar dealers to
interface directly with ASV's computer system to simplify the order process.
"Our goal is to make the order and warranty process for ASV's products as
simple as Cat's own internal process," Lemke said.
ASV's association with Caterpillar coincides with Caterpillar's
introduction of a new line of compact construction equipment, a market
Caterpillar estimates to be $4 billion a year worldwide.
ASV designs, manufactures and sells all-purpose crawlers and related
accessories and attachments. With its patent-pending Maximum Traction and
Support System(TM) undercarriage, ASV leads all rubber-tracked, all-purpose
crawlers in technology and innovation. ASV's primary product, the Posi-Track,
traverses nearly any terrain with minimal damage to the ground, making it
effective in industries such as construction, landscaping and agriculture.
For more information, visit ASV's website at http://www.asvi.com
Note: The statements regarding ASV Inc. contained in this release that
are not historical in nature, particularly those that utilize terminology such
as "may," "will," "expects," "anticipates," "believes," "could," or "plans,"
are forward-looking statements based on current expectations and assumptions,
and entail various risks and uncertainties that could cause actual results to
differ materially from those expressed in such forward-looking statements.
Political, economic, climatic, taxes, regulatory, technological, competitive
and other factors, such as ASV's ability to realize the anticipated benefits
from its relationship with Caterpillar and its dealers, could cause actual
results to differ materially from those anticipated in forward-looking
statements. Additional information regarding these risk factors and
uncertainties is detailed from time to time in the company's SEC filings,
including but not limited to, its report on Form 10-K for the year ended
December 31, 1998, and in its report on Form 10-Q for the three months ended
March 31, 1999.
Condensed financial statements are as follows:
A.S.V., INC.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
Three Months Ended Six Months Ended
June 30, June 30,
1999 1998 1999 1998
Net sales $9,064,173 $10,484,279 $17,526,818 $19,513,117
Cost of goods sold 6,645,345 7,923,015 12,870,863 14,694,010
Gross profit 2,418,828 2,561,264 4,655,955 4,819,107
Operating expenses:
Selling, general and
administrative 1,252,499 942,703 2,365,658 1,750,898
Research and
development 155,176 105,088 263,384 203,537
1,407,675 1,047,791 2,629,042 1,954,435
Operating income 1,011,153 1,513,473 2,026,913 2,864,672
Other income (expense)
Interest expense (60,229) (126,579) (126,132) (255,525)
Other, net 62,771 105,185 146,861 139,770
Income before
income taxes 1,013,695 1,492,079 2,047,642 2,748,917
Provision for
income taxes 325,000 565,000 710,000 1,030,000
NET INCOME $688,695 $927,079 $1,337,642 $1,718,917
Net income per common
share - Diluted** $.07 $.11 $.14 $.20
Diluted weighted
average shares 10,081,662 9,031,745 9,880,775 8,975,213
** Includes add-back of after-tax effect of interest expense for
convertible debentures for 1998.
A.S.V., INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS June 30, December 31,
1999 1998
CURRENT ASSETS
Cash & short-term investments $2,808,086 $551,600
Accounts receivable, net 6,653,235 4,563,840
Inventories 30,511,759 18,776,758
Prepaid expenses and other 921,881 1,076,446
Total current assets 40,894,961 24,968,644
PROPERTY AND EQUIPMENT, net 4,699,693 4,563,996
Total assets $45,594,654 $29,532,640
LIABILITIES & SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Line of credit $95,000 $3,535,000
Current portion of long-term liabilities 256,567 219,417
Accounts payable 2,955,023 2,913,526
Accrued expenses 1,073,741 885,072
Income taxes payable 125,747 --
Total current liabilities 4,506,078 7,553,015
LONG-TERM LIABILITIES, less
current portion 2,235,736 2,464,385
SHAREHOLDERS' EQUITY 38,852,840 19,515,240
Total liabilities &
shareholders' equity $45,594,654 $29,532,640