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JLG reports sales up, profit up

Thursday, 28 Sep 2006 ( #279 ) - McCONNELLSBURG, PA, United States
News Story
A JLG military telehandler.
Telehandler manufacturer JLG Industries Inc has set aggressive five-year goals after recording dramatic financial gains.

For the fiscal year ended July 31, compared with FY2005, JLG’s sales increased 32 per cent to USD2.29 billion from USD1.74 billion. Profit jumped 161 per cent to USD149.3 million from USD57.2 million.

The 2006 results include a once-only, pre-tax gain of USD14.6 million from the February sale of JLG’s Gradall excavator business to Alamo Group Inc and USD1.9 million for charges associated with early extinguishment of debt.

"We achieved other significant milestones in 2006," CEO Bill Lasky said. "We completed our manufacturing realignment and capacity expansion in preparation for the Caterpillar alliance and a projected increase in demand for JLG access equipment."

An updated five-year JLG strategic plan targets sales of USD4 billion by 2011 and a diversification of channels to market so no single source represents more than 30 per cent of revenue. "We want to drive cost and waste out of our products and processes and institutionalise Six Sigma [quality initiatives] throughout the company," Lasky said. JLG wanted "to add a third core business by 2011" through acquisitions, alliances or joint ventures.

Lasky gave an update on the next steps for JLG’s private-label Caterpillar Inc program under a 20-year strategic alliance.

JLG intended to consolidate as many as eight telehandler product lines, extract costs and design new models without impacting end-user comfort zones. JLG was working with Caterpillar on telehandler redesigns, initially for the European market. JLG had "now grown into number one in the world with different families" of telehandlers, and that business was "our greatest opportunity for cost reduction", Lasky said.

JLG began shipping Caterpillar-branded telehandlers to European dealers on July 26 and anticipated a November start for shipments to dealers in the United States and Canada.

Jim Woodward, chief financial officer, said JLG might invest in capability for larger aerial booms and create an engineering technical centre. Engineering resources were "now scattered across six locations", Woodward said. JLG was contemplating consolidating to a single location in McConnellsburg.      

Woodward said JLG wanted to lower manufacturing expenses and "get more than the rate of inflation out of our products. We must be more successful this year".

Lasky said a Service Plus site would open in Atlanta, Georgia, in October. A five-year plan for expanding after-market business called for annually opening perhaps two more Service Plus sites in locations to be identified.

JLG had opened a Service Plus site in Houston, Texas, for repair and maintenance, reconditioning, and training on all JLG manufactured products, and, earlier, had established an initial site in McConnellsburg.

In January, JLG said Joe Dixon had joined the firm as president of the JLG Service Plus Inc subsidiary.

Fortune magazine’s 2006 list of the 100 fastest growing companies placed JLG 22nd on the basis of profit, sales and total return over three years. JLG’s total shareholder return ranked 17th.
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