GEHL CO (GEHL) SPO
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|Company Name||GEHL CO|
|Company Address||143 WATER STREET
WEST BEND, WI 53095
|CEO||William D. Gehl|
|Employees (as of 9/21/2005)||935|
|State of Inc||WI|
|Fiscal Year End||12/31|
|Exchange||Nasdaq National Market|
|Shares Over Alloted||0|
|Shareholder Shares Offered||562,500|
|Lockup Period (days)||180|
|Quiet Period Expiration||10/17/2005|
Unless we otherwise specify in the applicable prospectus supplement, we expect to use the net proceeds from the sale of the securities for general corporate purposes, which may include reduction or refinancing of debt or other corporate obligations, the financing of capital expenditures, acquisitions and additions to our working capital. Until we use the net proceeds from the sale of the securities for these purposes, we may place the net proceeds in temporary investments.
The compact construction equipment industry is competitive. We compete with global full-line suppliers (including Caterpillar Inc., Case Construction Equipment and Komatsu Ltd.) with a presence in every market and a broad range of products as well as with product line specialists (including JLG Industries, Inc., Ingersoll-Rand Company (Bobcat) and Takeuchi Mfg. Co. Ltd.). The agricultural equipment and implement industry is also competitive and has experienced significant consolidation and retrenchment over the past twenty years. This has served to reduce the total number of competitors and to strengthen certain major competitors. We have several major competitors in the agricultural industry (including Deere & Company, AGCO Corporation and CNH Global) as well as numerous other limited line manufacturers and importers (including Vermeer Manufacturing Company, Kuhn Group and H&S Manufacturing Company). The largest manufacturers in the agricultural equipment industry generally produce tractors and combines as well as a full line of tillage and planting equipment. Some of our competitors in both the construction and agricultural industries are larger than us and have greater financial, manufacturing, marketing and distribution resources. Competitive pricing, product initiatives and other actions taken by our competitors could cause us to lose customers or force us to decrease our sales prices, resulting in lower net sales and earnings. ------ We operate principally in the global compact construction equipment industry. Our equipment is primarily used for earthmoving, material handling and paving applications, particularly in projects where space, mobility and manpower are at a premium. Sales in this market are driven by activity in the residential, commercial and industrial construction, recycling and paving industries. The market for compact construction equipment is particularly dependent on the level of light construction and repair projects such as residential and light commercial building, landscaping and recycling. Job mechanization continues to drive demand in the compact construction market as construction providers look to replace costly manual labor with compact, affordable, multi-purpose machines. We primarily focus on seven compact construction equipment product categories: skid steer loaders, telescopic handlers, compact excavators, compact track loaders, all-wheel-steer loaders, asphalt pavers and compact mini-loaders. We also provide an assortment of related attachments, including pallet forks, augers and backhoes, primarily for skid steer loaders. We compete with numerous companies in each of our served markets, primarily based on price, quality, service and distribution. Our construction equipment product lines face competition in each of our markets. In general, each line competes with a small group of from seven to twelve different companies, some of which are larger than us. The primary markets for our construction equipment outside of North America are in Europe, Australia, Latin America, the Middle East and the Pacific Rim. We believe we are a significant competitor in the skid loader market in most of these markets.
We are a leader in the design, manufacture and distribution of compact equipment for construction and agriculture applications. Our compact equipment and related attachments are primarily used in a variety of earthmoving and material handling applications where space, mobility and manpower are at a
premium. We also manufacture agricultural implements and provide financing for our dealers and their customers. We have been in business for over 145 years. We believe our products are recognized as providing quality, reliability and performance to a loyal and growing customer base. We believe we are differentiated from other construction equipment manufacturers by our focus on the growing compact equipment market, our extensive compact equipment-focused distribution network, and our ability to offer a broad line of high-quality compact equipment to a wide variety of customers. Across our served compact equipment markets, we estimate the North American market size to be approximately $3.5 billion, which grew approximately 39% from 2003 to 2004. In 2004, we achieved net sales of $362 million, a 48% increase over 2003, and we have continued this growth with a 43% increase in net sales for the six months ended July 2, 2005, when compared to the first six months of 2004. We believe that we have one of the most extensive compact equipment-focused product offerings in North America. Our compact construction equipment consists of skid loaders, telescopic handlers, compact excavators, compact track loaders, all-wheel-steer loaders, compact mini-loaders and asphalt pavers. We also provide an assortment of related attachments, including pallet forks, augers and backhoes, primarily for skid steer loaders. Our agricultural implements encompass a broad range of products, including haymaking, forage harvesting, manure handling and feedmaking equipment. While we manufacture a majority of the products we sell, we have also proactively established strategic alliances with select European and Asian compact equipment manufacturers to distribute their products under our brand names. These alliances further broaden our product offering and leverage our distribution network. We market our products under the Gehl, Mustang and Edge brand names through our network of independent dealers located primarily in North America and Europe. Our dealers, which number in excess of 665 in North America along with approximately 90 distributors in the rest of the world, sell our compact equipment and attachments to contractors, sub-contractors, owner operators, rental stores, farmers, landscapers and municipalities. Many of our dealers also operate their own rental fleet. Over time, we have cultivated and built what we consider to be one of the largest independent compact equipment distribution networks in North America. Most of our largest competitors require their dealers to carry their full line of large and small equipment which may not be ideally suited for that dealer’s local market and customer base. We attempt to differentiate ourselves by offering dealers a comprehensive compact equipment offering and allowing them to carry only the products which optimize their overall product portfolio for their individual served market. We also support our dealer network by providing floor plan, retail and rental fleet financing. We believe the combination of our product offering and financing support provides a significant opportunity to continue to expand sales to existing dealers and attract additional dealers in new geographic regions. We manufacture our products at three facilities located in Yankton and Madison, South Dakota and West Bend, Wisconsin, and we have selling and distribution facilities in Illinois, Minnesota, Wisconsin and Germany. In 2005, we have planned capital expenditures of up to approximately $13.5 million, which includes the costs to expand our manufacturing facility in Yankton, South Dakota. In addition, we are also making significant investments in laser cutting, robotic welding and metal forming technologies. Under a license agreement with Manitou BF S.A., the world’s largest manufacturer of telescopic handlers, we will manufacture select models of Manitou telescopic handlers under the Gehl brand name for sale in the United States. We believe our competitive strengths include our: † leading compact equipment product offering † strong brand names † leading independent compact equipment distribution network † product development capabilities † key distribution and sourcing relationships † balanced approach to rental market † efficient, flexible operations † proven management team ------ Our principal executive offices are located at 143 Water Street, West Bend, Wisconsin 53095, and our telephone number is (262) 334-9461. Our website address is www.gehl.com.
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