Item 1. Business
Overview
Gehl Company (the "Company" or "Gehl") designs, manufactures, distributes, sells and finances equipment used in the light construction equipment and the agricultural equipment industries. The Company's construction segment ("Gehl Construction") manufactures and markets skid steer loaders, rough-terrain telescopic forklifts, and asphalt pavers used by contractors, sub-contractors, owner operators and municipalities. The Company's agricultural segment ("Gehl Agriculture") has manufactured agricultural implements for 138 years, and today markets a broad range of equipment used primarily in the dairy and livestock industries, including haymaking, forage harvesting, materials handling (skid steer loaders and attachments), manure handling and feedmaking equipment. The Company believes that it is currently the largest non-tractor agricultural equipment manufacturer in North America.
Equipment for Gehl Construction is manufactured in two South Dakota facilities and equipment for Gehl Agriculture is manufactured in plants in Wisconsin, Pennsylvania and South Dakota. The Company was founded in 1859 and was incorporated in the State of Wisconsin in 1890.
Business Segments
The Company operates in two business segments, construction and agriculture. The following table shows certain information relating to the Company's operations by industry segment (dollars in thousands):
Year Ended December 31, 1994 1995 1996
Amount % Amount % Amount %
Net sales: Gehl Construction $ 51,796 35.3% $ 64,381 42.0% $ 70,826 44.4%
Gehl Agriculture 94,824 64.7 89,071 58.0 88,836 55.6 ------- ---- --------- ------ ------- ------
Total . $146,620 100% $153,452 100% $159,662 100%
Income from operations: Gehl Construction $ 8,542 65.9% $ 13,164 96.7% $ 12,967 83.4%
Gehl Agriculture 4,419 34.1 449 3.3 2,580 16.6 ------ ----- ------ ----- ------ -----
Total . $12,961 100% $ 13,613 100% $ 15,547 100%
The Company had no intersegment sales or transfers during the years set forth above. For segment information with respect to identifiable assets, depreciation/amortization and capital expenditures for the construction and agriculture markets, see Note 12 of "Notes to Consolidated Financial Statements", included on Pages 22 and 23 of the Gehl Company 1996 Annual Report to Shareholders, which pages are incorporated by reference herein.
Gehl Construction
Products:
Gehl Construction markets equipment in the following three product areas:
1. Skid Steer Loaders - Gehl Construction offers six models of skid steer loaders which feature a choice of hand-operated controls or hand and foot controls. The skid steer loader, with its fixed-wheel four-wheel drive, is used principally for materials handling duties. The skid steer loader may also be used with a variety of attachments, including dirt, snow and cement buckets, pallet forks and hydraulically-operated devices such as cold planers, backhoes, brooms, trenchers, snowblowers, industrial grapples, tree diggers, concrete breakers, augers and many more.
2. Rough-Terrain Forklifts - Gehl markets five models of Dynalift[R] rough-terrain telescopic forklifts and one model of the Dyna- Handler[R] , a rough-terrain telescopic forklift with digging capabilities. These forklifts are designed to handle heavy loads (up to 10,000 pounds) reaching horizontally and vertically for use by a variety of customers, including masons, roofers and building contractors.
3. Asphalt Pavers - Four models of Power Box[R] pavers are marketed by Gehl. These pavers allow variable paving widths from 4 1/2 to 13 feet and are used for both commercial and municipal jobs such as county and municipal road, sidewalk, golf cart path, jogging trail, parking lot, driveway, trailer court and tennis court preparation.
Marketing and Distribution:
The Company maintains a separate distribution system for Gehl Construction. The Company markets its equipment in North America through 116 independent dealers (with 261 outlets) and worldwide through 23 distributors. The top ten dealers and distributors in Gehl Construction accounted for approximately 13% of the Company's sales for the year ended December 31, 1996; however, no single dealer or distributor accounted for more than 4% of the Company's sales for that period. Sales of the skid steer loader and rough- terrain forklift product lines by Gehl Construction each accounted for more than 10% of the Company's net sales in 1994, 1995 and 1996.
The Company believes that maintenance and expansion of its dealer network is important to its success in the light construction equipment market. Gehl Construction provides various forms of support for its dealers, including sales and service training, and, in the United States and Canada, floor plan financing for its dealers and retail financing for both its dealers and their customers. The light construction equipment dealers in North America are also supported by district sales managers who provide a variety of services, including training, equipment demonstrations and sales, warranty and service assistance.
Industry and Competition:
Gehl Construction's product lines face competition in each of their markets. In general, each line competes with a small group of from seven to twelve different companies. No one company competes directly with Gehl Construction across all of its product lines. In the compact asphalt paving equipment market niche Gehl serves, the Company believes it is first or second in terms of market share. In the rough-terrain telescopic forklift market, the Company believes it and four other competitors share at least 75% of the market among them. In the skid steer loader product market, three other companies share over 80% of the market. The Company believes that it shares a greater portion of the balance of the skid steer loader market than does any of its remaining competitors. The Company competes within the light construction equipment markets based primarily on price, quality, service and distribution.
Gehl Construction's primary markets outside of North America are in Europe, Latin America, the Middle East and the Pacific Rim. The Company believes it is a significant competitor in the skid steer loader market in Western Europe.
Gehl Agriculture
Products:
Gehl Agriculture markets equipment in five product areas.
1. Haymaking - Gehl's haymaking line includes a broad range of products used to harvest and process hay crops for livestock feed. The Company offers disc mowers, a wide range of pull-type disc and sickle mower conditioners, hay rakes and variable- chamber round balers.
2. Forage Harvesting - The Company believes that it currently manufactures and sells one of the industry's most complete lines of forage harvesting equipment, including forage harvesters, wagons and blowers.
3. Materials Handling - Gehl Agriculture's materials handling line consists of six different models of skid steer loaders and the Dyna-Handler[R] forklift. The skid steer loader is a compact, fixed-wheel four-wheel drive unit typically equipped with a bucket or fork and is used for moving a variety of material. The Dyna-Handler[R] is a rough-terrain telescopic forklift with digging capabilities. The skid steer loader and Dyna-Handler[R] forklift are marketed by both Gehl Agriculture and Gehl Construction.
4. Manure Handling - Gehl offers a broad range of manure spreaders, including the Scavenger[R]. The Scavenger[R] "V-Tank" side- discharge manure spreader incorporates a hydraulically controlled auger which allows the spreader to handle a wide range of semi-liquid waste products, including municipal sludge. For handling mostly solid manure, the Company also markets four models of rear-discharge box spreaders.
5. Feedmaking - The Company believes that it offers the broadest line of portable feedmaking equipment in the industry. Gehl Agriculture offers the Gehl Mix-All[R] line of grinder mixers and a line of mixer feeders and a feeder wagon for both mixing feed rations and delivery to livestock feeders.
Marketing and Distribution:
In North America, Gehl's agricultural equipment is sold through approximately 557 geographically dispersed dealers (with 615 outlets). Eighty-one of these dealers are located in Canada. Gehl Agriculture also markets products through 22 distributors in Europe, the Middle East, the Pacific Rim and Latin America. The Company has no Company-owned dealers and its dealers may sell equipment produced by other agricultural equipment manufacturers.
It has been and remains the Company's objective to increase the share of Gehl products sold by a Gehl dealer. Gehl Agriculture is not dependent for its sales on any specific dealer or group of dealers. The top ten dealers and distributors in Gehl Agriculture accounted for approximately 7% of the Company's sales for the year ended December 31, 1996 and no one dealer or distributor accounted for over 1.5% of the Company's sales during that period. Sales of the skid steer loader product line by Gehl Agriculture accounted for more than 10% of the Company's net sales in 1994, 1995 and 1996.
The Company provides various forms of support for its dealer network, including sales and service training. The Company also provides floor plan and retail finance support for products sold by its dealers in the United States and Canada.
The Company employs district sales managers to assist its agricultural dealers by providing training, equipment demonstrations and assistance with sales, warranty and servicing matters. The Company currently operates three service parts distribution centers located in: Memphis, Tennessee; Syracuse, New York; and Minneapolis, Minnesota. The Company also contracts for two service parts distribution locations in Rockwood, Ontario and Saskatoon, Saskatchewan.
Industry and Competition:
The agricultural equipment industry has seen significant consolidation and retrenchment since 1980. This has served to reduce the total number of competitors, to strengthen certain major competitors, and to reduce the strength of certain other companies in the industry. The Company competes within the agricultural equipment industry based primarily on price, quality, service and distribution.
The agricultural equipment markets in North America are highly competitive and require substantial capital outlays. The Company has four major competitors as well as numerous other limited line manufacturers and importers. The largest manufacturers in the agricultural equipment industry, the Company's major competitors, generally produce tractors and combines as well as a full line of tillage and planting equipment. Such manufacturers also market, to varying degrees, haymaking, forage harvesting, materials handling, manure handling and/or feedmaking equipment, the areas in which the Company's agricultural products are concentrated. Except for one competitor, no other single competitor competes with the Company in each of its product lines. The Company believes that it is the only non-tractor manufacturer in the industry that produces equipment in each of these product lines. Smaller manufacturers which compete with the Company produce only a limited line of specialty items and often compete only in regional markets.
Gehl Agriculture primarily serves the dairy and livestock industries. Compared to a more volatile period in the late 1980's through 1992, milk prices, cash income, land values, and the general economy were more favorable and stable for the dairy farmer in 1993 through 1996. These more favorable conditions and lower debt to equity ratios than generally experienced in most of the 1980's led to increased buying by farmers of agriculture equipment in 1993 and 1994. In 1995 and 1996 industry market demand varied, with demand for the Company's products generally lower than in 1994.
Approximately 80% of the Company's agricultural dealers also carry the tractor and combine product lines of a major manufacturer. In addition to selling the tractors and combines of a major manufacturer, many of these dealers carry the major manufacturer's entire line of products, some of which directly compete with the products offered by Gehl Agriculture. Gehl Agriculture's dealers also market equipment manufactured by limited line manufacturers which compete with specific product lines offered by the Company.
Gehl Agriculture's primary markets outside of North America are in Europe and the Pacific Rim. In these markets the Company competes with both agricultural manufacturers from the United States, some of which have manufacturing facilities in foreign countries, and foreign manufacturers. The Company does not believe, however, that it is presently a significant competitor in any of these foreign markets.
Backlog
The backlog of unfilled equipment orders (which orders are subject to cancellation in certain circumstances) as of December 31, 1996 was $42.7 million versus $47.5 million at December 31, 1995. Virtually all orders in the backlog at December 31, 1996 should be shipped in 1997. The decreased backlog at December 31, 1996 was due to somewhat larger percentage decreases in Gehl Construction compared to Gehl Agriculture orders. Order backlog is lower in Gehl Construction due to a reduced rate of sales growth and in Gehl Agriculture due to reduced market demand for certain products.
As the Company has increased its sales of Gehl Construction products, the Company has been successful in reducing the seasonality of its sales. However, some sales seasonality still remains, primarily in April through June, the Company's second fiscal quarter. The Company's first and fourth fiscal quarters in January through March and October through December, respectively, have traditionally been its weakest. Because the haymaking and forage equipment products are primarily retailed by the Company's dealers in the Spring, Summer, and early Fall, the Company's floor plan financed accounts receivable generally reach a seasonal peak in early Summer and a post-seasonal low in late Fall.
Floor Plan and Retail Financing
Floor Plan Financing:
The Company, as is typical in the industry, generally provides floor plan financing for its dealers. Products shipped to dealers under the Company's floor plan financing program are recorded by the Company as sales and the dealers' obligations to the Company are reflected as accounts receivable.
The Company provides interest-free floor plan financing to its dealers, in Gehl Construction for varying periods of time generally up to six months and in Gehl Agriculture generally for up to one year. Gehl dealers who sell products utilizing floor plan financing are required to make immediate payment for those products to the Company upon sale or delivery to the retail customer. At the end of the interest-free period, if the equipment remains unsold to retail customers, the Company generally charges interest to the dealer at a rate of between 1.5% to 3.0% above the prime rate or on occasion provides interest-free extensions of up to six months upon payment by the dealer of curtailments generally between 10% to 20% of the original invoice price to the dealer. This type of floor plan equipment financing accounts for approximately 90% of Gehl's accounts receivable, with all such floor planned receivables required to be secured by a first priority security interest in the equipment sold.
Retail Financing:
The Company also provides retail financing primarily to facilitate the sale of Gehl equipment to end users. Additionally, a number of Gehl dealers purchase equipment which is held for rental to the public. The Company also provides retail financing to such dealers in connection with these purchases. Retail financing in the United States is provided by the Company through Gehl Finance[R], the Company's finance division. Retail financing is provided in Canada by third parties at rates subsidized by the Company. The Company does not offer or sponsor retail financing outside of North America.
The Company maintains arrangements with third parties pursuant to which the Company sells with recourse certain of the Company's finance contracts. The finance contracts require periodic installments of principal and interest over periods of up to 60 months; interest rates are based on market conditions. The majority of these contracts have maturities of 36 to 48 months. The Company continues to service the finance contracts it sells, including cash collections. See Note 2 of "Notes to Consolidated Financial Statements," Page 18, and "Management's Discussion and Analysis," Page 13 of the Gehl Company 1996 Annual Report to Shareholders, which pages are incorporated by reference herein.
Employees
As of December 31, 1996, the Company had 832 employees, of which 538 were hourly employees and 294 were salaried employees. At the production facilities in West Bend, Wisconsin, one of four Gehl production facilities, 226 hourly employees are covered by a collective bargaining agreement with the United Paperworkers International Union (formerly the Allied Industrial Workers) which expires December 31, 1999. None of the remaining employees of the Company are represented by unions. There have been no labor-related work stoppages at the Company's facilities during the past twenty-three years.
Manufacturing
The Company is currently expanding its two South Dakota manufacturing facilities and believes that its present manufacturing facilities, as expanded, will be sufficient to provide adequate capacity for its operations in 1997.
Component parts needed in the manufacture of the Company's equipment are primarily produced by the Company. The Company obtains raw materials (principally steel), component parts that it does not manufacture, most notably engines and hydraulics, and supplies from third party suppliers. All such materials and components used are available from a number of sources. The Company is not dependent on any supplier that cannot be readily replaced and has not experienced difficulty in obtaining necessary purchased materials.
In addition to the equipment it manufacturers, the Company markets equipment acquired from third party suppliers. Products acquired from these suppliers accounted for less than 10% of the Company's sales in 1996.
Research and Development
The Company attempts to maintain and strengthen its market position through internal new product development and incremental improvement to existing products. Products obtained through acquisition have generally undergone redesign by the Company to enhance their marketability. This redesign was in some cases major.
The Company's research and development is devoted to developing new products that meet specific customer needs and to devising incremental improvements to existing products. Research and development performed by the Company includes the designing and testing of new and improved products as well as the fabrication of prototypes. The Company expended approximately $2.2 million, $1.4 million and $1.2 million on research and development for the years ended December 31, 1996, 1995 and 1994, respectively.
Patents and Trademarks
The Company possesses rights under a number of domestic and foreign patents and trademarks relating to its products and business. While the Company considers the patents and trademarks important in the operation of its business, including the Gehl[R] name and the group of patents relating to the Scavenger[R] manure spreader, the business of the Company is not dependent on any single patent or trademark or group of patents or trademarks.
Export Sales
Information regarding the Company's export sales is included in Note 12 of "Notes to Consolidated Financial Statements," Page 23, of the Gehl Company 1996 Annual Report to Shareholders, which page is incorporated by reference herein.
Item 2.
Item 2. Properties
The following table sets forth certain information as of December 31, 1996, relating to the Company's principal manufacturing facilities. See "Management's Discussion and Analysis - Liquidity and Capital Resources, Capital Expenditures," Page 13, of the Gehl Company 1996 Annual Report to Shareholders, which page is incorporated by reference herein.
Approximate Floor Area in Owned or Square Feet Leased(1) Principal Uses West Bend, WI 450,000 Owned General offices and engineering, research and development and manufacture of products for Gehl Agriculture
Madison, SD 110,000 Owned Manufacture of skid steer loaders for Gehl Construction and Gehl Agriculture Lebanon, PA 170,000 Owned(2) Manufacture of products for Gehl Agriculture
Yankton, SD 68,000 Owned Manufacture of products for Gehl Construction
(1) For information regarding collateral pledges and the Company's lease commitments and options, see Notes 5 and 10 of "Notes to Consolidated Financial Statements", included on Pages 9 and 22, of the Gehl Company 1996 Annual Report to Shareholders, which pages are incorporated by reference herein.
(2) This facility is financed with the proceeds from the sale of industrial development bonds maturing in 2010.
The Company also operates three service parts centers located in: Memphis, Tennessee; Syracuse, New York; and Minneapolis, Minnesota. The Company leases these facilities, except for the Minneapolis center which is owned.
Item 3.
Item 3. Legal Proceedings.
The Company is a defendant from time to time in actions for product liability and other matters arising out of its ordinary business operations. The Company believes that the actions presently pending will not have a material adverse effect on its consolidated financial position or results of operations. To the Company's knowledge, there are no material legal proceedings to which any director, officer, affiliate or more than 5% shareholder of the Company (or any associate of the foregoing persons) is a party adverse to the Company or any of its subsidiaries or has a material interest adverse to the Company or its subsidiaries.
Item 4.
Item 4. Submission of Matters to a Vote of Security Holders.
No matters were submitted to a vote of security holders during the quarter ended December 31, 1996.
Executive Officers of the Registrant.
Set forth below is certain information concerning the executive officers of the Company as of February 1, 1997:
Name, Age and Position Business Experience
William D. Gehl, 50, Mr. Gehl has served as Chairman of the Chairman, President, Chief Board of Directors of the Company since Executive Officer and April, 1996. Mr. Gehl has served as Director President and Chief Executive Officer of the Company since November, 1992 and has served as a director of the Company since 1987. From January, 1990 until joining the Company, Mr. Gehl served as Executive Vice President, Chief Operating Officer, General Counsel and Secretary of The Ziegler Companies, Inc. (a financial services holding company). Mr. Gehl held various senior management positions with the Ziegler Companies from 1978 to 1990.
Victor A. Mancinelli, 53, Mr. Mancinelli has served as Executive Executive Vice President Vice President and Chief Operating and Chief Operating Officer Officer of the Company since November, 1992. From 1990 to 1992, Mr. Mancinelli served as Group Vice President of W. H. Brady Co. From 1987 to 1990, Mr. Mancinelli served as President and Chief Operating Officer of Syracuse China Corp., a subsidiary of Canadian Pacific Ltd. Prior to 1987, Mr. Mancinelli served in a variety of management positions with Cummins Engine Company, Inc.
John W. Gehl, 55, Mr. Gehl has served as Vice President, Vice President, International of the Company since 1992. International Mr. Gehl joined the Company in 1962 and has served as a Vice President of the Company since 1977 and in a variety of positions in marketing, manufacturing and strategic planning. Mr. Gehl has been a director of the Company since 1974.
Kenneth P. Hahn, 39, Mr. Hahn joined the Company as Corporate Vice President of Finance Controller in April, 1988. Mr. Hahn was and Treasurer elected as an executive officer of the Company in April, 1994. Mr. Hahn was appointed Vice President of Finance and Treasurer in February, 1997.
Michael J. Mulcahy, 50, Mr. Mulcahy has served as General Counsel of the Company since 1974 and became Secretary in 1977 and a Vice President in 1986. Mr. Mulcahy has also served, since 1988, as President of Equipco Insurance Company, Ltd., which provides liability insurance coverage for equipment manufacturers, including the Company.
Richard J. Semler, 57, Mr. Semler joined the Company in May, Vice President of Data 1960 and has served in his current Systems position with the Company since January, 1977.
All officers of the Company are elected annually by the Board of Directors following the Annual Meeting of Shareholders. The 1997 Annual Meeting of Shareholders is currently scheduled for April 16, 1997. The Company has employment agreements with William D. Gehl, pursuant to which he is to serve as President and Chief Executive Officer of the Company through the expiration of the agreement on December 31, 1998, and Victor A. Mancinelli, pursuant to which he is to serve as Executive Vice President and Chief Operating Officer of the Company through the expiration of the agreement on September 30, 1998.
PART II
Item 5.
Item 5. Market for Registrant's Common Equity and Related Shareholder Matters.
Information required by this item is included on Page 25 of the Gehl Company 1996 Annual Report to Shareholders, which page is hereby incorporated herein by reference.
Item 6.
Item 6. Selected Financial Data.
Information required by this item is included on Page 24 of the Gehl Company 1996 Annual Report to Shareholders, which page is hereby incorporated herein by reference.
Item 7.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.
Information required by this item is included on Pages 10 through 13 of the Gehl Company 1996 Annual Report to Shareholders, which pages are hereby incorporated herein by reference.
Item 8.
Item 8. Financial Statements and Supplementary Data.
Information required by this item is included on Page 9 and Pages 14 through 23 of the Gehl Company 1996 Annual Report to Shareholders, which pages are hereby incorporated herein by reference.
Item 9.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
There have been no changes in or disagreements with the Company's accountants regarding accounting and financial disclosure required to be reported pursuant to this item.
PART III
Item 10.
Item 10. Directors and Executive Officers of the Registrant.
Pursuant to Instruction G, the information required by this item with respect to directors is hereby incorporated herein by reference from the caption entitled "Election of Directors" set forth in the Company's definitive Proxy Statement for its 1997 Annual Meeting of Shareholders ("Proxy Statement"). Information with respect to executive officers of the Company appears at the end of Part I, Pages 8 through 9 of this Annual Report on Form 10-K.
Item 11.
Item 11. Executive Compensation.
Pursuant to Instruction G, the information required by this item is hereby incorporated herein by reference from the captions entitled "Board of Directors" and "Executive Compensation" set forth in the Proxy Statement; provided, however, that the subsection entitled "Executive Compensation - Report on Executive Compensation" shall not be deemed to be incorporated herein by reference.
Item 12.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
Pursuant to Instruction G, the information required by this item is hereby incorporated by reference herein from the caption "Principal Shareholders" set forth in the Proxy Statement.
Item 13.
Item 13. Certain Relationships and Related Transactions.
Pursuant to Instruction G, the information required by this item is hereby incorporated by reference from the caption "Executive Compensation - Summary Compensation Information" set forth in the Proxy Statement.
The Proxy Statement will be filed with the Commission pursuant to Regulation 14A within 120 days after the end of the Company's fiscal year.
PART IV
Item 14.
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
(a) 1 and 2. Financial statements and financial statement schedule.
Reference is made to the separate index to the Company's consolidated financial statements and schedule contained on Page 14 hereof.
3. Exhibits.
Reference is made to the separate exhibit index contained on Pages 17 through 19 hereof.
(b) Reports on Form 8-K.
No reports on Form 8-K were filed by the Company during the quarter ended December 31, 1996.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
GEHL COMPANY
Date: February 21, 1997 By /s/ William D. Gehl William D. Gehl, Chairman of the Board, President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
Signature Title Date
/s/ William D. Gehl Chairman of the Board, President, February 21, 1997 William D. Gehl Chief Executive Officer and Director (Principal Executive Officer)
/s/ Kenneth P. Hahn Vice President of Finance and Treasurer February 21, 1997 Kenneth P. Hahn (Principal Financial and Accounting Officer)
/s/ Thomas J. Boldt Director February 21, 1997 Thomas J. Boldt
/s/ Fred M. Butler Director February 21, 1997 Fred M. Butler
/s/ John W. Gehl Director February 21, 1997 John W. Gehl
/s/ William P. Killian Director February 21, 1997 William P. Killian
/s/ Arthur W. Nesbitt Director February 21, 1997 Arthur W. Nesbitt
/s/ Roger E. Secrist Director February 21, 1997 Roger E. Secrist
/s/ John W. Splude Director February 21, 1997 John W. Splude
GEHL COMPANY
INDEX TO FINANCIAL STATEMENTS AND
FINANCIAL STATEMENT SCHEDULES
Page(s) in Annual Report*
The following documents are filed as part of this report: (1) Financial Statements: Report of Independent Accountants 9 Consolidated Balance Sheets at December 31, 1996 and 1995 14 Consolidated Statements of Income for the three years ended December 31, 1996 15 Consolidated Statements of Shareholders' Equity for the three years ended December 31, 1996 15 Consolidated Statements of Cash Flows for the three years ended December 31, 1996 16 Notes to Consolidated Financial Statements 17-23
* Incorporated by reference from the indicated pages of the Gehl Company 1996 Annual Report to Shareholders.
Page in Form 10-K
(2) Financial Statement Schedule: Report of Independent Accountants on Financial Statement Schedule 15 For the three years ended December 31, 1996 -- Schedule II - Valuation and Qualifying Accounts 16
All other schedules are omitted because they are not applicable or the required information is shown in the financial statements or notes thereto.
REPORT OF INDEPENDENT ACCOUNTANTS ON
FINANCIAL STATEMENT SCHEDULE
To the Board of Directors of Gehl Company
Our audits of the consolidated financial statements referred to in our report dated February 10, 1997 appearing in the 1996 Annual Report to Shareholders of Gehl Company (which report and consolidated financial statements are incorporated by reference in this Annual Report on Form 10-K) also included an audit of the Financial Statement Schedule listed in Item 14(a) of this Form 10-K. In our opinion, this Financial Statement Schedule presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements.
PRICE WATERHOUSE LLP Milwaukee, Wisconsin February 10, 1997
GEHL COMPANY AND SUBSIDIARIES SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (in thousands)
Additions --------- Balance at Charged to Charged Balance Beginning Costs and to Other at End Period Description of Year Expenses Accounts Deductions of Year - ------ ----------- --------- ---------- --------- ---------- -------
Year Ended December 31, 1994 Return & Allowances $ 115 $ - $ - $ - $ 115
Allowance for Doubtful Accounts- Trade Receiv- ables 1,843 (888) - 316 639
Volume Discounts 2,108 2,200 - 2,318 1,990
Product Discontinuance - 1,600 - - 1,600 ----- ----- ----- ----- ----- Total $4,066 $2,912 $ - $2,634 $4,344 ====== ====== ===== ====== ===== Allowances for Doubtful Accounts - Retail Contracts $ 650 $ 424 $ - $ 570 $ 504 ===== ===== ==== ===== ===== Inventory Obsolescence Reserve $3,881 $1,523 $ - $1,352 $4,052 ====== ====== ==== ===== =====
Income Tax Valuation Allowance $7,096 $ - $ - $1,409 $5,687 ====== ====== ==== ===== =====
Year Ended December 31, 1995 Return & Allowances $ 115 $ - $ - $ - $ 115
Allowance for Doubtful Accounts- Trade Receiv- ables 639 165 - 52 752
Volume Discounts 1,990 2,026 - 2,213 1,803
Product Discontin- uance 1,600 - - 265 1,335
------ ------ ----- ------ ------ Total $4,344 $2,191 $ - $2,530 $4,005
====== ====== ===== ====== ======
Allowances for Doubtful Accounts - Retail Contracts $ 504 $ 428 $ - $ 365 $567 ===== ===== ==== ===== =====
Inventory Obsolescence Reserve $4,052 $ 502 $ - $1,777 $2,777 ====== ===== ==== ===== =====
Income Tax Valuation Allowance $5,687 $ - $ - $3,038 $2,649 ====== ====== ==== ===== ====== Year Ended December 31, 1996 Return & Allowances $ 115 $ 35 $ - $ - $ 150
Allowance for Doubtful Accounts- Trade Receiv- ables 752 64 - 255 561
Volume Discounts 1,803 2,389 - 2,463 1,729
Product Discontin- uance 1,335 (131) - 429 775
----- ----- --- ----- ----- Total $4,005 $2,357 $ - $3,147 $3,215 ====== ====== ==== ====== ===== Allowances for Doubtful Accounts - Retail Contracts $ 567 $ 276 $ - $ 252 $591 ====== ====== ===== ====== ====== Inventory Obsolescence Reserve $2,777 $ 527 $ - $1,564 $1,740 ====== ====== ====== ====== ======
Income Tax Valuation Allowance $2,649 $ - $ - $1,414 $1,235 ====== ====== ====== ====== ======
GEHL COMPANY
INDEX TO EXHIBITS
Exhibit Number Document Description
(3.1) Restated Articles of Incorporation of Gehl Company [Incorporated by reference to Exhibit 3.1 to the Company's Form S-1 Registration Statement (Reg. No. 33-31571)]
(3.2) By-laws of Gehl Company, as amended [Incorporated by reference to Exhibit 3.3 of the Company's Annual Report on Form 10-K for the year ended December 31, 1995]
(4.1) Amendment to Amended and Restated Loan and Security Agreement by and between Deutsche Financial Services Corporation, f/k/a ITT Commercial Finance Corp., Deutsche Financial Services Canada Corporation and Gehl Company and its subsidiaries, dated December 1, 1995 [Incorporated by reference to Exhibit 4.1 of the Company's Annual Report on Form 10-K for the year ended December 31, 1995]
(4.2) Common Stock Purchase Warrant, dated as of March 5, 1993, from Gehl Company to State of Wisconsin Investment Board [Incorporated by reference to Exhibit 4.14 to the Company's Annual Report on Form 10-K for the year ended December 31, 1992]
(4.3) Loan Agreement between Pennsylvania Economic Development Financing Authority and Gehl Company, dated as of September 1, 1990 [Incorporated by reference to Exhibit 4.1 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 29, 1990]
(4.4) First Supplemental Loan Agreement between Pennsylvania Economic Development Financing Authority and Gehl Company, dated as of April 23, 1993 [Incorporated by reference to Exhibit 4.3 to the Company's Quarterly Report on Form 10-Q for the quarter ended April 3, 1993]
(4.5) Second Supplemental Loan Agreement between Pennsylvania Economic Development Financing Authority and Gehl Company, dated as of February 1, 1994 [Incorporated by reference to Exhibit 4.10 to the Company's Annual Report on Form 10-K for the year ended December 31, 1993]
(4.6) Mortgage and Security Agreement by and between Gehl Company and First Pennsylvania Bank N.A., dated as of September 1, 1990 [Incorporated by reference to Exhibit 4.2 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 29, 1990]
(10.1)* Form of Supplemental Retirement Benefit Agreement between Gehl Company and Messrs. J.W. Gehl, Hahn, Mulcahy and Semler [Incorporated by reference to Exhibit 10.4 to the Company's Form S-1 Registration Statement (Reg. No. 33-31571)].
(10.2)* Employment Agreement between Gehl Company and William D. Gehl, dated as of July 1, 1995 [Incorporated by reference to Exhibit 10.2 of the Company's Annual Report on Form 10-K for the year ended December 31, 1995]
(10.3)* Employment Agreement by and between Victor A. Mancinelli and Gehl Company, dated as of October 1, 1995 [Incorporated by reference to Exhibit 10.3 of the Company's Annual Report on Form 10-K for the year ended December 31, 1995]
(10.4)* Supplemental Retirement Benefit Agreement by and between William D. Gehl and Gehl Company [Incorporated by reference to Exhibit 10.4 of the Company's Annual Report on Form 10-K for the year ended December 31, 1995]
(10.5)* Supplemental Retirement Benefit Agreement by and between Victor A. Mancinelli and Gehl Company [Incorporated by reference to Exhibit 10.5 of the Company's Annual Report on Form 10-K for the year ended December 31, 1995]
(10.6)* Gehl Company Shareholder Value Added Management Incentive Compensation Plan [Incorporated by reference to Exhibit 10.6 of the Company's Annual Report on Form 10-K for the year ended December 31, 1995]
(10.7) Gehl Savings Plan, as amended [Incorporated by reference to Exhibit 10.6 to the Company's Annual Report on Form 10-K for the year ended December 31, 1994]
(10.8)* Gehl Company Retirement Income Plan "B", as amended [Incorporated by reference to Exhibit 10.7 to the Company's Annual Report on Form 10-K for the year ended December 31, 1994]
(10.9)* Gehl Company 1987 Stock Option Plan, as amended
(10.10)* Form of Stock Option Agreement used in conjunction with the Gehl Company 1987 Stock Option Plan [Incorporated by reference to Exhibit 4.2 to the Company's Form S-8 Registration Statement (Reg. No. 33-38392)]
(10.11)* Gehl Company 1995 Stock Option Plan, as amended
(10.12)* Form of Stock Option Agreement for executive officers used in conjunction with the Gehl Company 1995 Stock Option Plan. [Incorporated by reference to Exhibit 10.12 of the Company's Annual Report on Form 10-K for the year ended December 31, 1995]
(10.13)* Form of Stock Option Agreement for non-employee directors used in conjunction with the Gehl Company 1995 Stock Option Plan. [Incorporated by reference to Exhibit 10.13 of the Company's Annual Report on Form 10-K for the year ended December 31, 1995]
(10.14) Technical Assistance and License Agreement by and between Gehl Company and Rheiner Maschinenfabrik Windhoff AG, dated as of May 4, 1985, as amended [Incorporated by reference to Exhibit 10.13 to the Company's Form S-1 Registration Statement (Reg. No. 33-31571)]
(10.15) Distributorship Agreement by and between Gehl Company and Gehl GmbH, dated as of April 15, 1985 [Incorporated by reference to Exhibit 10.16 to the Company's Form S-1 Registration Statement (Reg. No. 33-31571)]
(10.16) Trademark Licensing Agreement by and between Gehl Company and Gehl GmbH, dated as of April 15, 1985 [Incorporated by reference to Exhibit 10.17 to the Company's Form S-1 Registration Statement (Reg. No. 33-31571)]
(13) Portions of the Gehl Company 1996 Annual Report to Shareholders that are incorporated by reference herein
(21) Subsidiaries of Gehl Company [Incorporated by reference to Exhibit 21 to the Company's Annual Report on Form 10-K for the year ended December 31, 1994]
(23) Consent of Price Waterhouse LLP
(27) Financial Data Schedule
(99) Proxy Statement for 1997 Annual Meeting of Shareholders (To be filed with the Securities and Exchange Commission under Regulation 14A within 120 days after the end of the Company's fiscal year; except to the extent incorporated by reference, the Proxy Statement for the 1997 Annual Meeting of Shareholders shall not be deemed to be filed with the Securities and Exchange Commission as part of this Annual Report or Form 10-K)
* A management contract or compensatory plan or arrangement.