JLG Industries Inc recorded robust growth in the fiscal year ended July 31 but acknowledged near-term uncertainty because of higher material costs for steel and petroleum-based components.

JLG Chief Executive Bill Lasky said the company was optimistic about the next fiscal year "fuelled by an improved North American economy and the successful integration of our OmniQuip acquisition."

JLG acquired Textron Inc's OmniQuip unit for USD100 million in August 2003 (Forkliftaction.com News #115) and accounted for a full year of OmniQuip business in the financial report.

Increases in machinery sales pushed much of JLG's supply chain beyond capacity and added wrinkles to the integration of the challenging multifaceted OmniQuip. The component shortages included drive trains and hydraulic systems.

It was discovered that the OmniQuip telehandler supply base was not as robust as that of firms providing components for the JLG and Gradall lines, Mr Lasky said. Only 15 per cent of supply was common between OmniQuip and JLG/Gradall.

JLG noted that numerous suppliers were boosting capacity - typically a nine-month process - and should have the ability to generate necessary components as JLG's next busy season arrives in early 2005.

Among raw materials, "steel prices have been the most volatile, and the range of forecast estimates within the industry varies widely", Lasky said. JLG is assuming the average price of steel will exceed the prior year's baseline by 75 per cent.

In addressing the steel issue, JLG added a base price increase averaging 3 per cent in mid-September after initiating a surcharge of 2.8 per cent in March. So far, JLG's competition had not increased prices, but "our competitors cannot ship aerial work platforms (AWPs) as well as we can", Lasky said. The latest increase would apply to all incoming orders, but not to JLG's backlog, of about USD198 million as of July 31, or to existing annual customer agreements.

JLG recorded profit of USD26.6 million on sales of USD1.19 billion for the fiscal year ended July 31. While not directly comparable, JLG had profit of USD12.4 million on sales of USD751 million for the previous fiscal year.

In the latest year, AWPs accounted for USD562.1 million in sales, telehandlers for USD358.9 million and excavators for USD52.7 million.

The OmniQuip division, including SkyTrak, Lull and military products, had sales of USD250 million, up 17 per cent. Other JLG-brand AWPs had sales of USD552 million, up 31 per cent, and the JLG and Gradall-brand telehandlers were at USD149 million, up 26 per cent.

On a geographic basis, sales totalling USD923.7 million occurred in the United States with USD178.4 million taking place in Europe and USD91.9 million in other countries and regions.

Lasky outlined a five-year strategic plan pointing JLG toward USD2 billion in sales, diversification of distribution channels, expansion of after-market business and elimination of USD100 million in costs, net of inflation.

JLG intends to institutionalise Six Sigma quality practices and grow through acquisitions, joint ventures and alliances, he said.