Gehl Company reported record first quarter income from continuing operations of $6.5 million, or $.52 per diluted share, for the quarter ended March 31, 2007, compared with income from continuing operations of $6.4 million, or $.51 per diluted share, for the first quarter of 2006.
Net sales for the first quarter of 2007 were $115.2 million compared to net sales of $122.1 million in the first quarter of 2006. The strength of the company’s international markets, along with continued market share gains, resulted in sound first quarter sales and record earnings.
Gross margin improved to 22.4 percent in the first quarter of 2007 compared to 21.5 percent in the first quarter of 2006. The gross margin increase was primarily driven by product mix, as well as the favorable results the company continued to achieve from its added supply chain resources and investments in manufacturing equipment.
Selling, general and administrative expenses, which came to $15.0 million during the first quarter, were flat with the comparable 2006 period.
However, as a percentage of net sales, these expenses increased to 13.0 percent compared to 12.3 percent in the prior year quarter, which partially reflected planned increases in research and development and information technology projects.
“We are off to a great start in 2007. We achieved record earnings, improved gross margin 90 basis points, increased our telehandler market share and generated strong international revenues led by a 45 percent sales increase in our Gehl Europe subsidiary, all of which reflect solid execution of our strategy,” said William D. Gehl, chairman and chief executive officer. “We are also excited about the positive response from the market on the launch of our new RS5-19, 5,000-pound lift capacity telehandler. The strength of our first quarter and the diversity of our served markets provide the solid foundation from which to build on throughout 2007.”
2007 Full Year Outlook
Based on the company’s first quarter results, current backlog position and management’s expectation that North American market conditions will stabilize, the company raised its 2007 full year outlook. The company now expects its net sales from continuing operations to be in the range of $475 million to $500 million and earnings per diluted share from continuing operations of $2.15 to $2.35.
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