ASV Reports Record Results for 3rd Quarter 2004; Full Year EPS Guidance Increased from $1.12-1.20 to $1.20-1.26.GRAND RAPIDS Grand Rapids, city (1990 pop. 189,126), seat of Kent co., SW central Mich., on the Grand River; inc. 1850. The second largest city in the state, it is a distribution, wholesale, and industrial center for an area that yields fruit, dairy products, farm produce, , Minn. -- ASV ASV abbr. Bible American Standard Version ASV n abbr (= American Standard Version) → traduction de la Bible ASV n abbr (Bible) (= , Inc. (Nasdaq:ASVI ASVI Alien Status Verification Index ASVI Alien Status Verification Index (US INS) ) today reported its second consecutive quarter of record net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight and net earnings with its results for the third quarter of 2004. Net sales totaled $40.6 million for the third quarter of 2004, compared with $29.2 million for the third quarter of 2003. With the gross profit percentage increasing to 22.9%, net earnings increased to a record level of $4.4 million, or $.34 per share, for the third quarter of 2004, compared with $3.1 million, or $.29 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. , for the third quarter of 2003, despite a 22% increase in the number of diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. shares outstanding in the third quarter of 2004. For the nine months ended September September: see month. 30, 2004, net sales increased 61% to $112.7 million, compared with $70.2 million for the same period in 2003. Net earnings doubled to $12.2 million, or $.92 per share, for the nine months ended September 30, 2004 compared with $6.1 million, or $.59 per share, for the same period in 2003, even with a 30% increase in the number of diluted shares outstanding for the nine months ended September 30, 2004. Commenting on the third quarter results, ASV CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Gary Lemke said, "ASV experienced another quarter of record sales and profitability during the third quarter of 2004. Our sales mix sales mix See product mix. changed, as we had anticipated, as Caterpillar caterpillar (kăt`əpĭl'ər, kăt`ər–), common name for the larva of a moth or butterfly. Caterpillars have distinct heads and are segmented and wormlike. Inc. (NYSE NYSE See: New York Stock Exchange :CAT) increased its purchases of ASV's undercarriages for use on their Multi-Terrain Loaders (MTL MTL In currencies, this is the abbreviation for the Maltese Lira. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. ) during the third quarter of 2004. Sales of undercarriages to Caterpillar were 40% of our sales for the third quarter of 2004, up from 26% for the second quarter of 2004. MTL orders continue strong and we anticipate MTL undercarriage sales will account for approximately 37-40% of our total sales for fiscal 2004, exclusive of Loegering's sales. Sales of R-Series Posi-Track products accounted for 46% of our sales for the third quarter of 2004, compared with 58% for the second quarter of 2004. Sales of service parts increased to $5 million for the third quarter of 2004, compared with $2.9 million for the comparable period in 2003, as the population of machines and undercarriages in service steadily increases." During the third quarter of 2004, ASV's gross profit percentage increased to 22.9%, compared with 22.3% for the third quarter of 2003 and 22.4 % for the second quarter of 2004. This increase in gross profit percentage was due to savings realized from ASV's cost reduction project implemented during the first quarter of 2004 as well as price increases on selected R-Series Posi-Track products and MTL products during the third quarter of 2004. Partially offsetting these increases were steel surcharges of approximately $800,000 during the third quarter of 2004. Speaking on this matter, Lemke stated, "We're pleased to achieve an increased gross profit percentage in the third quarter of 2004, even with the level of steel surcharges we experienced. We believe our raw material savings and price increases will offset the surcharges we expect to receive for the balance of 2004." Loegering Mfg. Inc. Acquisition On October 4, 2004, ASV closed on its acquisition of Loegering Mfg. Inc. of Casselton, North Dakota Casselton is a city in Cass County, North Dakota in the United States. The population was 1,865 at the 2000 census. The city is named for George Cass, a president of the Northern Pacific Railway, which established a station there in 1876. in a merger transaction. ASV acquired all the outstanding common stock of Loegering for $18.23 million through the issuance of approximately 430,000 shares of ASV common stock valued at $14.75 million and cash of $3.48 million. Of the total ASV shares issued in the transaction, 130,699 shares will be registered for resale resale n. selling again, particularly at retail. In many states a "resale license" or "resale number" is required so that the state can monitor the collection of sales tax on retail sales. RESALE. on a Form S-3 Registration Statement, with the remaining shares unregistered. Following completion of the transaction, Loegering became a wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. of ASV. In a related transaction, ASV acquired real property representing Loegering's manufacturing facility from Loegering affiliates for $1.57 million. Loegering, a 33-year-old company, is the original manufacturer and a leader in over-the-tire steel tracks for wheeled skid-steers and also provides attachments for the skid-steer market. In addition, Loegering has developed new, proprietary technology - the Versatile Track System(R) (VTS See VOB and virtual tape system. VTS - A suite of test programs for Motif from OSF. (R)) - a bolt bolt Mechanical fastener, usually used with a nut, for connecting two or more parts. Bolted joints can be readily disassembled and reassembled; hence bolts or screw fasteners are used more than other types of mechanical fastener. on bolt off track system that will convert most skid-steers from wheels to rubber tracks Rubber tracks are Caterpillar tracks which are made of flexible rubber belt instead of rigid units that are joined to each other. The first rubber track was invented and constructed by Adolphe Kégresse and are often called Kégresse track, and was patented in 1913. . Speaking to the Loegering acquisition, Lemke stated "We believe the VTS Track System has significant opportunities for the wheeled skid-steer market, of which there are an estimated 500,000 units currently in service. The VTS Track System allows skid-steer owners to experience many of the benefits of a rubber track undercarriage on the machine they currently own. We anticipate the VTS Track System will represent over 50% of Loegering's sales for the fourth quarter of 2004." Outlook Regarding ASV's overall outlook for the balance of 2004, Lemke stated, "With the additional fourth quarter sales of Loegering, expected to be in the range of $6-7.5 million, we anticipate our consolidated sales for 2004 will reflect an increase of 59-64% over 2003. This translates into anticipated net sales of $153-158 million for fiscal 2004. We anticipate ASV's diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of will reflect an increase of 54-62% over 2003, which equates to expected earnings per share in the range of $1.20-1.26 for fiscal 2004, which includes two to four cents accretion The act of adding portions of soil to the soil already in possession of the owner by gradual deposition through the operation of natural causes. The growth of the value of a particular item given to a person as a specific bequest under the provisions of a will between the from Loegering. This earnings per share guidance is based on an anticipated diluted share count of approximately 13.4 million shares outstanding for fiscal 2004, a 20% increase over 2003." Continuing, Lemke stated, "With our recent acquisition of Loegering and our annual planning conference with Caterpillar scheduled for later in the fourth quarter, we believe it is too early to provide detailed guidance regarding our anticipated sales and earnings levels for 2005. We believe the market for rubber track loaders will continue to expand at a rapid rate in 2005 and anticipate ASV will experience another record year of sales and earnings in 2005." Conference Call ASV will conduct a live Webcast at 9 a.m. Central time, Tuesday, October 26th to discuss its results for the third quarter of 2004 and its outlook for the remainder of 2004. The call will be broadcast over the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the and can be accessed at either www.vcall.com or ASV's web site, www.asvi.com, in the investor relations Investor relations The process by which the corporation communicates with its investors. section under the "About ASV" tab. To listen to the call, go to either of the two Web sites at least 15 minutes prior to the call to register, download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. and install any needed audio software. A replay of this call will be available both telephonically and over the Internet approximately two hours after its conclusion. The telephonic replay will be available through Wednesday, October 27th, and can be accessed by dialing 877-660-6853 and entering account number 1628 and conference ID number 121557. The Internet replay will be available for 30 days and can be accessed at www.vcall.com or www.asvi.com. About ASV ASV designs, manufactures and sells rubber-tracked, all-purpose crawlers and related accessories and attachments. ASV also manufactures rubber-tracked undercarriages, which are a primary component on Caterpillar's Multi Terrain Loaders. With its patented undercarriage technology, ASV leads all rubber-tracked, all-purpose crawlers in technology and innovation. ASV's products are able to traverse traverse - traversal 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 www.asvi.com. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. Note: The statements set forth above regarding ASV's future expected sales and earnings levels, the benefits of Loegering's products and technology, including its VTS track system, the effect of the acquisition on ASV's financial results, Loegering's anticipated sales and earnings for 2004 and the benefits of the acquisition are forward-looking statements based on current expectations and assumptions, and entail entail, in law, restriction of inheritance to a limited class of descendants for at least several generations. The object of entail is to preserve large estates in land from the disintegration that is caused by equal inheritance by all the heirs and by the ordinary various risks and uncertainties that could cause actual results to differ materially from those expressed in such forward-looking statements. Certain factors may affect whether these anticipated events occur including the risks and uncertainties associated with successfully integrating the operations of Loegering, unanticipated delays, costs and expenses inherent in the development and marketing of new products and services; developments in the demand for each companies' products and services; ASV's ability to successfully manufacture its products; unanticipated delays, costs or other difficulties in the manufacture of the products; unanticipated problems or delays experienced by Caterpillar relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the manufacturing or marketing of the MTL machines; market acceptance of the machines; deterioration de·te·ri·o·ra·tion n. The process or condition of becoming worse. of the general market and economic conditions; corporate developments at ASV or Caterpillar; ASV's ability to realize the anticipated benefits from its relationship with Caterpillar and Loegering; relationships with major customers and suppliers; the ability to retain key personnel; the impact of governmental laws and regulations; competitive factors; and any future acts or threats of terrorism or war. Any forward-looking statements provided from time-to-time by the Company represent only management's then-best current estimate of future results or trends. 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 Form 10-Q See 10-Q. for the period ended June 30, 2004. Condensed con·dense v. con·densed, con·dens·ing, con·dens·es v.tr. 1. To reduce the volume or compass of. 2. To make more concise; abridge or shorten. 3. Physics a. financial statements are as follows:
A.S.V., INC.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------- --------------------------
2004 2003 2004 2003
------------ ------------ ------------- ------------
Net sales.........$40,607,328 $29,188,649 $112,742,264 $70,215,357
Cost of goods
sold............. 31,303,643 22,676,469 87,100,595 55,567,464
------------ ------------ ------------- ------------
Gross profit.. 9,303,685 6,512,180 25,641,669 14,647,893
Operating
expenses:
Selling, general
and
administrative. 2,345,209 1,510,603 6,341,065 4,554,786
Research and
development.... 223,798 192,909 561,333 556,795
------------ ------------ ------------- ------------
Operating
income....... 6,734,678 4,808,668 18,739,271 9,536,312
Other income
(expense)
Interest
expense........ (27,907) (31,292) (84,684) (99,968)
Other, net...... 216,088 19,067 577,501 106,100
------------ ------------ ------------- ------------
Income before
income
taxes........ 6,922,859 4,796,443 19,232,088 9,542,444
Provision for
income taxes..... 2,493,000 1,717,000 7,025,000 3,410,000
------------ ------------ ------------- ------------
NET EARNINGS....$ 4,429,859 $ 3,079,443 $ 12,207,088 $ 6,132,444
============ ============ ============= ============
Net earnings per
common share -
Diluted..........$ .34 $ .29 $ .92 $ .59
============ ============ ============= ============
Diluted weighted
average shares... 13,105,023 10,743,850 13,307,484 10,430,048
============ ============ ============= ============
A.S.V., INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS September 30, December 31,
2004 2003
------------- -------------
CURRENT ASSETS
Cash & short-term investments........$ 48,179,165 $ 29,708,418
Accounts receivable, net............. 28,312,083 16,484,603
Inventories.......................... 29,257,453 26,686,707
Other current assets................. 955,293 3,614,506
------------- -------------
Total current assets 106,703,994 76,494,234
PROPERTY AND EQUIPMENT, net............ 7,763,655 6,129,922
Total assets $114,467,649 $ 82,624,156
============= =============
LIABILITIES & SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Current portion of long-term
liabilities.........................$ 141,867 $ 136,414
Accounts payable..................... 7,429,059 6,004,890
Accrued liabilities.................. 3,689,777 2,358,473
Income taxes payable................. 1,714,751 --
------------- -------------
Total current liabilities 12,975,454 8,499,777
LONG-TERM LIABILITIES, less current
portion............................... 1,738,862 1,844,858
SHAREHOLDERS' EQUITY................... 99,753,333 72,279,521
------------- -------------
Total liabilities & shareholders'
equity $114,467,649 $ 82,624,156
============= =============
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