Lehman Brothers Conference 1 March 18, 2005 JLG Industries, Inc. Focused on Access Lehman Brothers High Yield Bond & Syndicated Loan Conference March 18, 2005 Lehman Brothers Conference 2 March 18, 2005 JLG Representatives JLG Representatives James H. Woodward, Jr. Executive Vice President & Chief Financial Officer Robert E. Cribbs Vice President & Treasurer James H. Woodward, Jr. Executive Vice President & Chief Financial Officer Robert E. Cribbs Vice President & Treasurer
16
Embed
JLG Industries, Inc. - library.corporate-ir.netlibrary.corporate-ir.net/library/77/777/77716/items/142767/JLG... · JLG …Focused on Access ... JLG Industries, Inc. Focused on Access
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
JLG…Focused on Access March 1, 2005
1
Lehman Brothers Conference 1 March 18, 2005
JLG Industries, Inc.Focused on Access
Lehman Brothers High Yield Bond & Syndicated Loan
ConferenceMarch 18, 2005
Lehman Brothers Conference 2 March 18, 2005
JLG RepresentativesJLG Representatives
James H. Woodward, Jr.Executive Vice President &
Chief Financial Officer
Robert E. CribbsVice President & Treasurer
James H. Woodward, Jr.Executive Vice President &
Chief Financial Officer
Robert E. CribbsVice President & Treasurer
JLG…Focused on Access March 1, 2005
2
Lehman Brothers Conference 3 March 18, 2005
Safe Harbor StatementSafe Harbor StatementForward Looking Statements represent the Company’s expectations or beliefs concerning future events. Actual results may differ materially. Any forward looking statements made by or on behalf of the Company may involve certain risks and uncertainties, including cyclical demand, a consolidating customer base, competition, continued innovation, product liability, availability of product components and other risks, as detailed in the Company’s SEC reports, including the report on Form 10-Q for the fiscal quarter ended January 30, 2005. Undue reliance should not be placed on any forward looking statements made by or on behalf of the Company. The Company undertakes no obligations to publicly update or revise any forward looking statement. Non-GAAP metrics included in this presentation reflect information that management believes is useful in analyzing the Company's performance. Reconciliation of these metrics to corresponding GAAP measures appears at the end of these presentation materials and/or on the investor relations section of our website www.jlg.com.
Lehman Brothers Conference 4 March 18, 2005
AgendaAgenda
Overview of JLG Five-year strategic planFinancial reviewOutlook Questions
JLG…Focused on Access March 1, 2005
3
Lehman Brothers Conference 5 March 18, 2005
Product Portfolio Product Portfolio
Hydraulic Telescopic Excavator
Vertical Mast Lift
European-Design Telehandler
Rear-Pivot Telehandler
Military-Design Telehandler
Traversing Boom Telehandler
All-Wheel Steer Telehandler
Boom Lift
Scissor Lift
Lehman Brothers Conference 6 March 18, 2005
Good News from the Second QuarterGood News from the Second Quarter
Year-over-year consolidated results• Record revenues for the quarter up 49%
– U.S. revenues up 44%– International revenues up 65%
Year-over-year consolidated results• DSO improved to 84 from 115• Inventory turns improved to 6.4 from 4.6• Net debt reduced $17 million• Strong order board at $290 million vs. $111
million
New product introductions at CONEXPO
Lehman Brothers Conference 8 March 18, 2005
More Good News . . .More Good News . . .Steel costs – slowing escalation• Contract negotiations concluding• Commitments in place for full year demand
Supplier chain management• Component availability improving• Costs beginning to stabilize
New product pricing structure in effect
JLG…Focused on Access March 1, 2005
5
Lehman Brothers Conference 9 March 18, 2005
We Are Addressing the Steel SituationWe Are Addressing the Steel SituationSteel prices began rising dramatically in the Spring of 2004 and continued into the SummerWe have responded with:― 2.755% steel surcharge in March 2004 (realized only 1.6% through calendar year end)― Increased steel surcharge to 3.5% in January 2005 (announced in September)― Increased base machine prices 3.0% in January 2005 (announced in September)― Reduced discounts by 1% in January 2005
Full effect of pricing actions will be realized in the second half of the fiscal year― ~6.0% increase in FQ3 versus prior year
Combination of price increases and cost reductions should neutralize raw material prices going forward
Steel prices began rising dramatically in the Spring of 2004 and continued into the SummerWe have responded with:― 2.755% steel surcharge in March 2004 (realized only 1.6% through calendar year end)― Increased steel surcharge to 3.5% in January 2005 (announced in September)― Increased base machine prices 3.0% in January 2005 (announced in September)― Reduced discounts by 1% in January 2005
Full effect of pricing actions will be realized in the second half of the fiscal year― ~6.0% increase in FQ3 versus prior year
Combination of price increases and cost reductions should neutralize raw material prices going forward
FQ3 FQ4 FQ1 FQ2 FQ3
FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APR Steel SurchargeSteel Surcharge
Base Price IncreaseBase Price Increase
Total Total
2.755% (only 1.6% realized given contracts)
1.6%
3.5%
3.0%
7.5%
Summary of Pricing Actions
Reduced DiscountsReduced Discounts 1.0%
Lehman Brothers Conference 10 March 18, 2005
FiveFive--Year Strategic PlanYear Strategic Plan
JLG…Focused on Access March 1, 2005
6
Lehman Brothers Conference 11 March 18, 2005
1FiveFive--Year Strategic PlanYear Strategic Plan
Grow access business to $2 billion
2 Diversify channels to market
3 Expand our after-market business
4 Eliminate cost from our entire business
5
6
7
Institutionalize Six Sigma
Grow through acquisitions, joint ventures and alliances
Attract, develop and retain
quality people
Lehman Brothers Conference 12 March 18, 2005
Financial OverviewFinancial OverviewRobert E. Cribbs
Net Debt (1) / EBITDA 3.5x 3.5x 2.7x 2.6x 2.9x Note: Acquired OmniQuip in August 2003 and Delta Manlift SAS in April 2004.
(1) Net Debt reflects total balance sheet debt plus off-balance financing, less cash and limited recourse debt from finance receivable monetizations.(2) Through January 30, 2005
Lehman Brothers Conference 14 March 18, 2005
$353
$282
$249
$425
$214
$156
$233
$160
$218
$307
$237
$156
$230
$207
$151
$319$292
$219 $209 $206
$234
$340
Revenues by QuarterRevenues by Quarter
% Ann. Growth 46.6 (8.7) (20.1) (2.5) 59.0 46.71
(1) Represents six months ended 1/30/05 versus six months ended 1/25/04(1) Represents six months ended 1/30/05 versus six months ended 1/25/04
Net debt reflects total balance sheet debt plus off-balance sheet financing, less cash and limited recourse debt from finance receivables monetizations.
(1) Includes fair value of interest rate swaps, current portion of long-term debt and other misc. debt(2) Based on LTM EBITDA of $98.0 million (1) Includes fair value of interest rate swaps, current portion of long-term debt and other misc. debt(2) Based on LTM EBITDA of $98.0 million
Equity clawback expireson June 15, 2005
Redeem 35% of Sr. Sub. Notes $61.3 Redemption Premium plus interest through redemption date
6.9
Fees & Expenses 6.8 General Corporate Purposes (Cash) 51.3
Total Uses $126.3
As of January 30, 2005 Actual As Adjusted Cash and Cash Equivalents $24.3 $76.8 Revolving Credit Facility 0.0 0.0 Cash Management Facility 1.9 1.9 8.25% Senior Notes Due 2008 125.0 125.0 8.375% Senior Sub. Notes Due 2012 175.0 113.8 Other Debt 1 4.0 2.2 $305.9 $242.9
Fiscal year 2005• Continuing global demand for access products• Revenue growth 30 to 35% for full year• Full effect of pricing structure in second half• Stabilizing component availability• Steel costs stable• EPS target of $1.05 to $1.15*
* Excluding one-time charge associated with early extinguishment of debt
Lehman Brothers Conference 24 March 18, 2005
Growth Opportunities: North AmericaGrowth Opportunities: North AmericaAerial Work PlatformsTelehandlersServicePLUSBig Box RetailersHome Improvement Industrial Distribution
JLG…Focused on Access March 1, 2005
13
Lehman Brothers Conference 25 March 18, 2005
Growth Opportunities: InternationalGrowth Opportunities: InternationalAerial Work PlatformsTelehandlersExcavatorsIndustrial DistributionEquipment Services
Lehman Brothers Conference 26 March 18, 2005
Investment CharacteristicsInvestment CharacteristicsAccess industry leader• Aerial work platforms — #1 globally• Telehandlers — #3 globally and
#1 in North America
Technology leader
Extensive global presence
Proven acquisition strategy
Strong and experienced management team
JLG…Focused on Access March 1, 2005
14
Lehman Brothers Conference 27 March 18, 2005
“If the work is in the air, “If the work is in the air, JLG equipmentJLG equipment
will be there”will be there”
Lehman Brothers Conference 28 March 18, 2005
Reconciliations of Reconciliations of NonNon--GAAP Measures GAAP Measures
We monitor our EBITDA, which is a supplemental measure to GAAP that provides additional information concerning our leverage position and our historical ability to meet debt service and capital expenditure and working capital requirements. EBITDA also is an indicator of profitability, particularlyin our capital-intensive industry. EBITDA reflects our earnings (loss) before interest, taxes and depreciation and amortization. EBITDA as presented differsfrom measures of EBITDA calculated for purposes of financial covenants in our note indentures and senior credit facilities.
Fiscal Year Ended July 31,
Lehman Brothers Conference 30 March 18, 2005
Trailing 12Trailing 12--Month EBITDA ReconciliationMonth EBITDA Reconciliation$ in thousands JLG INDUSTRIES, INC.
EBITDA AND EBITDA MARGINSTRAILING TWELVE MONTH PERIODS
(in thousands)
January 30, October 31, July 31, April 25, January 25, October 26,2005 2004 2004 2004 2004 2003
We monitor our EBITDA, which is a supplemental measure to GAAP that provides additional information concerning our leverage position and our historical ability to meet debt service and capital expenditure and working capital requirements. EBITDA also is an indicator of profitability, particularly in our capital-intensive industry. EBITDA reflects our earnings before interest, taxes and depreciation and amortization. EBITDA as presented differsfrom measures of EBITDA calculated for purposes of financial covenants in our note indentures and senior credit facilities.
JLG…Focused on Access March 1, 2005
16
Lehman Brothers Conference 31 March 18, 2005
Net Debt ReconciliationNet Debt Reconciliation$ in thousands
January 30, July 31, July 31, July 31, July 31,2005 2004 2003 2002 2001
Revolving credit facilities -$ -$ -$ -$ 275,000$ $15 million cash management facility 1,944 - - - - $25 million overdraft credit facility - - - 13,935 21,685 $125 million senior notes 125,000 125,000 125,000 - - $175 million senior subordinated notes 175,000 175,000 175,000 175,000 - Miscellaneous debt 5,128 5,236 1,983 1,909 2,502 Fair value of interest rate swaps (6,120) (8,814) (12,347) 914 - Gain on terminated interest rate swap 4,981 5,318 5,994 - - Bank debt and notes 305,933 301,740 295,630 191,758 299,187 Limited recourse debt from finance receivables monetizations 77,601 121,794 164,940 87,571 - Total balance sheet debt 383,534 423,534 460,570 279,329 299,187 Net present value of off-balance sheet rental fleet lease 755 1,070 2,341 5,582 16,656 Net present value of off-balance sheet production equipment leases 3,709 4,399 5,941 7,749 11,448 Accounts receivable securitization - - - - 50,600 Total off-balance sheet financing 4,464 5,469 8,282 13,331 78,704 Total balance sheet debt and off-balance sheet financing 387,998 429,003 468,852 292,660 377,891 Less: cash 24,305 37,656 132,809 6,205 9,254 Less: limited recourse debt from finance receivables monetizations 77,601 121,794 164,940 87,571 - Net debt $286,092 $269,553 $171,103 $198,884 $368,637
Total Balance Sheet Debt-to-Total Balance Sheet Debt plus Book Capitalization 57% 60% 65% 54% 47%
EBITDA $97,995 $105,660 $62,949 $56,435 $105,267
Total Balance Sheet Debt/EBITDA 3.9 x 4.0 x 7.3 x 4.9 x 2.8 x
Net Debt/EBITDA 2.9 x 2.6 x 2.7 x 3.5 x 3.5 x
We monitor our net debt, which is a supplemental measure to GAAP that provides additional information concerning our leverage position and our historical ability to meet debt service and capital expenditure and working capital requirements. We define net debt as the sum of total balance sheet debt and other off-balance sheetfinancing, minus cash and limited recourse debt arising from our monetizations of customer finance receivables.
Lehman Brothers Conference 32 March 18, 2005
Free Cash Flow ReconciliationFree Cash Flow Reconciliation$ in thousands
LTMJanuary 30,
2005 2004 2003 2002 2001Net (loss) income $22,713 $26,649 $12,392 ($101,592) $34,206Adjustments to reconcile net (loss) income to cash flow from operating activities:Non-cash items 17,952 30,555 21,278 136,468 34,417 Accounts receivable (6,935) (66,296) (35,324) (40,110) (18,949) Inventories (29,119) 9,188 43,137 24,462 (41,807) Other current assets (13,689) 8,780 (15,960) 3,110 (1,653) Accounts payable 43,131 33,207 (46,026) 52,685 (39,897) Accrued expenses 16,540 4,726 3,254 12,084 (1,247) Finance receivables (10,463) (6,112) 40,487 57,154 (132,790) Other cash from operations (20,396) (11,090) (3,295) (28,136) (5,722) Purchases of property, plant and equipment (10,924) (12,387) (10,806) (12,954) (15,787) Proceeds from sale of property, plant and equipment 162 90 216 172 416 Purchases of equipment held for rental (33,677) (26,689) (16,342) (26,429) (33,406) Proceeds from sale of equipment held for rental 48,758 33,269 19,063 28,924 31,251 Cash portion of acquisitions (14,291) (109,557) - - - Other cash from investments 378 333 (689) 405 (1,540) Payment of dividends (881) (871) (859) (1,058) (1,699) Purchase of common stock - - - - (22,201) Exercise of stock options 7,880 2,414 93 2,033 (781) Effect of exchange rate changes on cash (4,696) 258 1,852 (807) 102 Seller financing - (10,000) - - - Capital lease assumed in OmniQuip acquisition - (3,630) - - - Debt assumed in Delta acquisition (103) (103) - - - Other (1) 4,976 (1,184) 15,310 63,342 (8,679) Free Cash Flow $17,316 ($98,450) $27,781 $169,753 ($225,766)
(1) Includes changes in other off-balance sheet debt.
In addition to measuring our cash flow generation and usage based upon the Statements of Cash Flows, we also measure our free cash flow. We define free cash flow as cash flow from operating activities, investing activities, payment of dividends, exercise of stock options, and the effectof exchange rate changes on cash less changes in accounts receivable securitization, limited recourse debt from finance receivables monetizations andoff-balance sheet debt. Our measure of free cash flow may not be comparable to similarly titled measures being disclosed by other companies and is not ameasure of financial performance that is in accordance with GAAP. We utilize free cash flow to explain the change in our net debt position from the prior period.