ASV Announces 4th Quarter and Fiscal 1999 Results
1 March 2000
ASV Announces 4th Quarter and Fiscal 1999 Results
GRAND RAPIDS, Minn., March 1 -- ASV, Inc.
today announced its financial results for its 4th quarter and fiscal 1999.
For the three months ended December 31, 1999, net sales totaled $9,860,338, an
increase of 22% over net sales for the same period in 1998. Net income for
the 4th quarter of 1999 was $53,513, or $.01 per share, compared with net
income of $524,720, or $.07 per share, for the fourth quarter of 1998.
For the year ended December 31, 1999, net sales totaled $36,168,415
compared with $39,018,904 for 1998. Net income for fiscal 1999 was
$1,412,053, or $.14 per share, compared with $3,366,055, or $.40 per share for
1998.
ASV President Gary Lemke, commenting on the 4th quarter results, said, "We
are encouraged with the sales growth we achieved in the fourth quarter,
particularly the positive market acceptance of our newest model
Posi-Track(TM), the 4810. This model accounted for 75% of our 4th quarter
unit shipments. Net income decreased mainly because of the continued
investment ASV made in strengthening our dealer network and increasing the
effectiveness of our dealer support programs and sales force. The benefits
from these expenditures typically do not show up immediately, but we believe
the investments made are essential to our future growth. Net income also
decreased because of the sales commission paid to Caterpillar in 1999. We
also increased our investment in our research and development efforts as we
continue to develop our newest product, a smaller, lighter rubber tracked
machine. This new machine will be marketed to the rapidly growing landscape
industry as well as the utility vehicle market.
Discussing the fiscal 1999 results, Lemke said, "1999 was a year that saw
many changes for ASV. Based on the success we had selling to Caterpillar
dealers in prior years, we felt the transition to additional Caterpillar
dealers would be a relatively simple process. However, the degree to which
these additional Caterpillar dealers embraced new products, such as ASV's
Posi-Track, varied greatly. This required increased training and market
development activity by both ASV and the dealers to get the necessary
marketing programs and other support in place. We believe we now have many of
these tools in place needed for our dealers to actively promote and sell the
Posi-Track. Our current dealer network is comprised of 15 independent dealers
and 50 Caterpillar dealers, with approximately 350 total locations in the
United States, Canada and Australia."
Continuing his discussion of the 1999 results, Lemke said, "Net sales for
1999 decreased slightly as did our gross profit percentage. The decrease in
sales was a result of the dealer transition matters discussed above. The
decrease in our gross profit percentage was due mainly to the introduction of
the model 4810 Posi-Track and the initial production delays encountered during
third quarter.
"We are very excited about our new, smaller machine, which should provide
the landscape market a new product that can significantly reduce hand labor.
We are anticipating building our first production run of these machines in the
second quarter of 2000. This machine is expected to be sold through multiple
distribution channels. We expect our research and development efforts to
continue in 2000 as we refine this product and explore additional product
offerings and enhancements," Lemke added.
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 anticipated production timing and
distribution methods of its new smaller machine 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 current and expected future model machines, ASV's
ability to achieve timely production and enter into appropriate distribution
arrangements for its new smaller machine 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 Years Ended
December 31, December 31,
1999 1998 1999 1998
Net sales $9,860,338 $8,107,884 $36,168,415 $39,018,904
Cost of goods sold 7,673,176 6,200,371 27,739,554 29,487,983
Gross profit 2,187,162 1,907,513 8,428,861 9,530,921
Operating expenses:
Selling, general
and administrative 1,916,856 896,051 5,670,629 3,479,911
Research and
development 118,929 38,375 531,375 319,324
2,035,785 934,426 6,202,004 3,799,235
Operating income 151,377 973,087 2,226,857 5,731,686
Other income (expense)
Interest expense (117,452) (192,614) (306,202) (576,224)
Other, net 49,588 19,247 246,398 190,593
Income before
income taxes 83,513 799,720 2,167,053 5,346,055
Provision for income
taxes 30,000 275,000 755,000 1,980,000
NET INCOME $53,513 $524,720 $1,412,053 $3,366,055
Net income per
common share
Diluted** $.01 $.07 $.14 $.40
Diluted weighted
average shares 9,935,817 9,026,984 9,941,616 9,015,513
** Includes add-back of after-tax effect of interest expense for
convertible debentures for 1998.
A.S.V., INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS December 31, December 31,
1999 1998
CURRENT ASSETS
Cash & short-term investments $1,990,880 $551,600
Accounts receivable, net 8,661,049 4,563,840
Inventories 32,391,256 18,776,758
Other current assets 811,076 1,076,446
Total current assets 43,854,261 24,968,644
PROPERTY AND EQUIPMENT, net 4,795,674 4,563,996
Total assets $48,649,935 $29,532,640
LIABILITIES & SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Line of credit $4,080,000 $3,535,000
Current portion of long-term liabilities 254,412 219,417
Accounts payable 1,775,883 2,913,526
Accrued expenses 1,246,673 885,072
Total current liabilities 7,356,968 7,553,015
LONG-TERM LIABILITIES, less current portion 2,197,046 2,464,385
SHAREHOLDERS' EQUITY 39,095,921 19,515,240
Total liabilities & shareholders' equity $48,649,935 $29,532,640