Order patterns remained strong but higher steel prices and supplier constraints bedevilled JLG Industries Inc in the fiscal first quarter ended October 31.

Pre-tax unrecovered steel costs, estimated at USD26.8 million, contributed to JLG reporting a loss of USD8.7 million for the period. JLG had a profit of USD533,000 in the comparable year-earlier quarter.

"Even synergies from the OmniQuip integration were not enough to offset the steel increases," Chairman Bill Lasky said.

JLG bought Textron Inc's OmniQuip unit in August 2003. OmniQuip integration expenses for the quarter were USD1.9 million and for fiscal 2004, USD16.0 million.

The access equipment maker aims to obtain an effective 6 per cent price increase in January through increases in a steel surcharge and base prices and reductions in consumer discounts.

"Every shipment after December 31 will be subject to the new pricing, including orders currently in the backlog," the company said.

The surcharge goes to 3.5 per cent from the 2.75 per cent imposed in March.

An initial base price increase averaging 3 per cent was effective in mid-September, but "most comes in January as we get our backlog repriced as of that date," said chief financial officer Jim Woodward.

Steel poses a headache. JLG needs more costly high-grade plate steel for its military products and requires harder-to-source steel in metric measurements for SkyTrak telehandlers and the Pro-Fit series of electric scissors.

Steel was selling on a weighted average at USD290 per metric ton and JLG was expecting the price to go to USD510, Woodward said.

"Now, it looks like USD600-USD700 (per metric) ton on a weighted average", or more than 100 per cent higher than the previous year.

JLG was experiencing "a lot of shortage of critical components from suppliers we share with others in the industry", Lasky said. JLG estimated that related manufacturing inefficiencies cost USD6.0 million during the quarter.

One analyst asked about JLG prices versus competitors.

"We are higher than anyone in the market on normal prices," Lasky said. Noting JLG's price increases this year, "we led (the industry in raising prices). We found it surprising some did not follow, but, the bottom line, we will continue to lead."

JLG hinted at more price rises if steel pressures continue. "If we need to make increases in February or March, we will," Lasky said.

For the quarter, JLG recorded sales of USD124.5 million for aerial work platforms, USD119.7 million for telehandlers and USD8.3 million for excavators.

JLG reported total first quarter sales of USD306.7 million, up 44 per cent from the previous year period's sales of USD213.6 million. The OmniQuip transition makes it difficult to directly compare those sales results.