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JLG earnings up, but lower than expected, president says

February 17, 2000

From staff reports

MCCONNELLSBURG, Pa. - JLG Industries Inc. today announced second-quarter revenues of $207 million, up 50 percent from the same period a year ago, but revenues were below expectations, L. David Black, chief executive officer and board chairman of the aerial manlift maker, said in a news release.

According to Black's statement, growth of the aerial work platform product group accounted for $28 million, or 41 percent of the revenue increase, while Gradall products, an earth-moving and excavating equipment maker that JLG bought in June, represented $41 million, or 59 percent of the increase.

Net income for the quarter was $3 million.

For the six-month period ended Jan. 31, the company reported sales of $425 million, up 59 percent from the $267 million reported in the period a year ago.

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Growth of the aerial platform division accounted for $80 million, or 51 percent of the revenue increase, while Gradall's contribution was $78 million, or 49 percent of the increase.

Net income for the six months was $16 million.

The company also announced Thursday that its board of directors authorized the repurchase up to 5 million shares of its common stock on the open market. That is more than 10 percent of JLG's total outstanding shares.

"As we previously announced, JLG's sales for the second quarter were substantially above the year-ago level but lower than initial expectations that we announced last fall, Black said in his release. "The shortfall was due principally to a stronger-than-anticipated shift in order patterns by rental companies to defer calendar-year-end purchases until the new year."

Black said many factors brought about the lower-than-expected profits. Primary among them was reduced sales volume. To a considerably lesser extent, profits were also affected by margin pressure from pricing, strengthening of the U.S. dollar against the Euro, aggressive acceptance of trade-ins to displace competitors' products, a less profitable product mix and higher-than-expected manufacturing costs for Gradall products due to changes in the production mix and startup costs at JLG's Orrville manufacturing plant, he said.

"I want to emphasize, however, that most of the factors which detracted from profits in the second quarter are reversible, and JLG is aggressively addressing each of these," Black said.

"To combat the current pricing environment, we are placing increased emphasis on improving manufacturing efficiencies and reducing costs."

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