ASV Reports Third Quarter 1999 Results
21 October 1999
ASV Reports Third Quarter 1999 Results
GRAND RAPIDS, Minn., Oct. 21 -- ASV Inc. ,
which manufactures Posi-Track(TM) all-purpose crawlers, today reported its
results for the third quarter ended September 30, 1999. Net sales for third
quarter 1999 were $8,781,259 compared with $11,397,903 for the same period in
1998. Third quarter 1999 net income was $20,898, or $.00 per share, compared
with $1,122,418, or $.13 per share for third quarter 1998.
For the nine months ended September 30, 1999, net sales were $26,308,077
compared with $30,911,020 in 1998; net income was $1,358,540 compared with
$2,841,335 in 1998; and earnings per share were $.14 in 1999 compared with
$.33 in 1998.
"ASV's third quarter results reflect the continuing transition to the
Caterpillar(R) dealer network and were also effected by the start up of
production of our newest model Posi-Track, the 4810," said ASV President Gary
Lemke. "We experienced production delays on the 4810 during the period, which
caused delays in third quarter shipments. Our gross profit percentage
decreased due to production inefficiencies from the start up of the 4810
production line and a recently completed $1.7 million military contract.
Selling expenses increased during the third quarter primarily due to increased
dealer start up costs, training and market development costs."
However, according to Lemke, the commitment to the development of the 4810
and the training of more than 100 Caterpillar dealer representatives is
expected to be worth the time and effort.
"The 4810, with its Caterpillar engine and greater use of Caterpillar
components, has received positive comments from Caterpillar dealers and
customers alike," he said. "The Caterpillar 3054 turbo engine is an excellent
match to our hydraulic drive and implement systems. That, combined with ASV's
unique Maximum Traction and Support System(TM) (MTSS) undercarriage, provides
for an outstanding combination of speed, power, traction and flotation. The
new 4810 was just introduced to dealers in August 1999 and ASV currently has
an order backlog of approximately $2.8 million. We expect this order rate to
increase as more dealers and customers are exposed to the 4810."
During the third quarter, ASV added Caterpillar dealers in Colorado,
Wisconsin, Ohio, Kentucky, and North and South Dakota. There are currently
35 Caterpillar dealers, representing over 250 locations, selling and servicing
the Posi-Track. ASV is actively pursuing distribution through additional
Caterpillar dealers in Australia, as well as Central and South America. To
service the growing number of Caterpillar dealers, ASV has increased its
number of technical field representatives. These representatives will provide
training and support to ASV's dealers on an ongoing basis.
Another notable event occurring during the third quarter for ASV was the
completion of the interface between ASV and Caterpillar's computer systems.
This interface allows Caterpillar dealers to order ASV Posi-Tracks and parts,
as well as process warranty claims on-line in the same manner they do for
Caterpillar products.
"I believe this computer interface, which provides ASV access to
Caterpillar's vast computer resources, further demonstrates Caterpillar's
commitment to ASV," said Lemke.
In addition, Lemke noted positive news coverage ASV is receiving on the
new 4810 Posi-Track. Most notably, Equipment World, a leading construction
trade publication, is featuring the 4810 in a lengthy positive profile in its
October 1999 issue. The magazine notes of the 4810 that "A stem-to-stern
reworking of the previous design -- plus a few suggestions from new co-owner
Caterpillar -- boosts performance and reduces maintenance on this go-anywhere
workhorse."
ASV designs, manufactures and sells all-purpose crawlers and related
accessories and attachments. With its patent-pending Maximum Traction and
Support System 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's future order rate for its model 4810
Posi-Track and other statements 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 market acceptance of ASV's model 4810 Posi-Track
and 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-Q for the six months ended June 30, 1999.
Condensed financial statements are as follows:
A.S.V., INC.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
Three Months Ended Nine Months Ended
September 30, September 30,
1999 1998 1999 1998
Net sales $8,781,259 $11,397,903 $26,308,077 $30,911,020
Cost of goods sold 7,195,515 8,593,602 20,066,378 23,287,612
Gross profit 1,585,744 2,804,301 6,241,699 7,623,408
Operating expenses:
Selling, general and
administrative 1,388,115 832,962 3,753,773 2,583,860
Research and
development 149,062 77,412 412,446 280,949
1,537,177 910,374 4,166,219 2,864,809
Operating income 48,567 1,893,927 2,075,480 4,758,599
Other income (expense)
Interest expense (62,618) (128,085) (188,750) (383,610)
Other, net 49,949 31,576 196,810 171,346
Income before income
taxes 35,898 1,797,418 2,083,540 4,546,335
Provision for income taxes 15,000 675,000 725,000 1,705,000
NET INCOME $20,898 $1,122,418 $1,358,540 $2,841,335
Net income per common
share -- Diluted** $.00 $.13 $.14 $.33
Diluted weighted average
shares 10,069,097 9,084,640 9,943,549 9,011,689
** Includes add-back of after-tax effect of interest expense for
convertible debentures for 1998.
A.S.V., INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS September 30, December 31,
1999 1998
CURRENT ASSETS
Cash & short-term investments $1,324,446 $551,600
Accounts receivable, net 8,699,927 4,563,840
Inventories 33,271,646 18,776,758
Prepaid expenses and other 934,270 1,076,446
Total current assets 44,230,289 24,968,644
PROPERTY AND EQUIPMENT, net 4,769,652 4,563,996
Total assets $48,999,941 $29,532,640
LIABILITIES & SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Line of credit $1,620,000 $3,535,000
Current portion of long-term
liabilities 253,708 219,417
Accounts payable 4,807,498 2,913,526
Accrued expenses 1,102,355 885,072
Total current liabilities 7,783,561 7,553,015
LONG-TERM LIABILITIES, less
current portion 2,216,770 2,464,385
SHAREHOLDERS' EQUITY 38,999,610 19,515,240
Total liabilities & shareholders'
equity $48,999,941 $29,532,640