JLG Industries Inc had lower profits on higher acquisition-stoked quarterly sales and has moved to upgrade controls and procedures, which are currently under federal review.
JLG reported a profit of USD2.2 million on sales of USD230.5 million for its second quarter, which ended on January 31, against a profit of USD4.2 million on sales of USD144.0 million last year.
The significant increase in sales reflects the August 1 acquisition of the OmniQuip business unit of Textron Inc (
Forkliftaction.com News #115).
JLG said it had cut 279 OmniQuip-related jobs out of 350 slated reductions, leaving 71 positions in limbo as of January 31. JLG incurred costs of USD2 million for involuntary employee termination benefits and was obligated for another USD8.1 million as of January 31.
JLG said its initial "integration of the OmniQuip acquisition is on track and ahead of an aggressive schedule". In a second phase, JLG intends to establish a common supply base and integrate the OmniQuip and JLG brands and marketing programs.
"With the economic recovery well underway in North America and a modest recovery projected in the Euro zone for calendar 2004, demand for our core access equipment is strengthening," JLG said. "Order patterns strengthened considerably for all product groups, and we remain cautiously optimistic that order patterns will continue to reflect increased fleet refreshment activity and customer confidence."
JLG had restated financial statements and taken steps to improve its disclosure controls and procedures, which "were found to be ineffective in identifying an accounting error", the company said. The error related to the timing of revenue recording for one transaction.
"The restatement results in an USD8.7 million reduction of revenue and USD1.8 million reduction in net income in the fourth quarter of fiscal 2003," which ended on July 31, JLG said.
JLG disclosed the restatement plan on February 18 and said on February 27 that the US Securities & Exchange Commission had begun an informal inquiry into the company's accounting and financial reporting.