ITEM 1. BUSINESS
General
The Company, organized in 1969, is a leading manufacturer, distributor and international marketer of elevating work platforms. The Company also produces truck-mounted materials-handling equipment. The Company's products are used for high-reach applications, primarily in the construction, industrial, petrochemical, commercial and sports and entertainment industries.
Products
Elevating Work Platforms. Elevating work platforms are designed to permit workers to position themselves and their tools and materials easily and quickly in elevated work areas that otherwise might have to be reached by the erection of scaffolding, by the use of ladders, or through some other device. Elevating work platforms consist of self-propelled boom-type and scissor-type lifts and push-around lifts. These work platforms are mounted either at the end of a telescoping and/or articulating boom or on top of a scissor-type lifting mechanism, which in turn are mounted on mobile, four-wheel chassis. The Company offers elevating work platforms powered by electric motors or gasoline, diesel, or propane engines. All of the Company's elevating work platforms are designed for stable operation in elevated positions and self-propelled models travel on grades of up to twenty-four degrees.
Boom-type self-propelled elevating work platforms are especially useful for reaching over machinery and equipment that is mounted on floors and for reaching other elevated positions not easily approached by a vertical lifting device. The Company produces boom-type self-propelled elevating work platform models of various sizes with platform heights ranging up to 150 feet. The boom may be rotated up to 360 degrees in either direction, raised or lowered from vertical to below horizontal, and extended while the work platform remains horizontal and stable. Vehicles on which the booms are mounted may be maneuvered forward or backward and steered in any direction by the operator from the work platform. Boom-type models have standard-sized work platforms, which vary in size up to 3 by 8 feet, and the rated lift capacities range from 500 to 2,000 pounds. The distributor net price of the Company's standard models at July 31, 1994 ranged from approximately $17,400 to $325,000.
Scissor-type self-propelled elevating work platforms are designed to provide larger work areas, and generally to allow for heavier loads than boom-type lifts. Scissor-type lift vehicles may be maneuvered in a manner similar to boom-type models, but the platforms may be extended only vertically, except for an available option that extends the deck horizontally up to 6 feet. The scissor-type models have maximum elevation capabilities of up to 50 feet and various platform sizes up to 6 by 14 feet. The rated lift capacities range from 500 to 2,500 pounds. The distributor net price of the Company's standard models at July 31, 1994 ranged from approximately $8,800 to $46,500.
In 1992, the Company began manufacturing a line of push-around elevating work platforms used primarily in indoor maintenance applications. This line consists of a work platform attached to an aluminum mast that extends vertically, which in turn is mounted on either an aluminum or a steel base. Available in various one and two-man models, these machines can be rolled in their retracted position through standard door openings. They have maximum elevation capabilities of up to 36 feet and rated lift capacities from 300 to 750 pounds. The distributor net price of the Company's standard models at July 31, 1994 ranged from approximately $3,300 to $8,600.
Materials-Handling Products. The Company's materials-handling products consist of boom truck cranes and trolley-type and articulating unloaders. The cranes and unloaders are mounted on various commercial truck chassis or trailers and are used primarily in construction and maintenance applications. Lifting capacities of the various models range up to 23 tons, and with the main boom and jib fully extended, tip heights range up to 141 feet. The distributor net price of the Company's standard models at July 31, 1994, excluding the vehicle on which they are mounted, ranged from approximately $18,200 to $61,600.
The Company has fourteen registered trademarks and forty-five patents and considers them to be beneficial in its business.
Marketing
The Company's products are marketed internationally primarily through a network of independent distributors. The Company's distributors, operating from over three hundred locations, sell and rent the Company's products and provide service support. The Company also sells directly through its own marketing organizations to certain major accounts as well as to customers in parts of the world where independent distribution is either not available or not commercially feasible.
The Company supports the sales, service, and rental programs of its distributors with product advertising, cooperative promotional programs, major trade show participation, and distributor personnel training in both service and product attributes. The Company supplements domestic sales and service support to its international customers through its overseas facilities in the United Kingdom and Australia.
The Company maintains a national rental fleet of elevating work platforms. The purpose of this fleet is to assist the Company's distributors in servicing large, one-time projects and in meeting periods of unanticipated rental demand, and to make available more equipment to distributors with growing markets, but limited financial resources.
Product Development
The Company invests significantly in product development and diversification, including improvement of existing products and modification of existing products for special applications. Product development expenditures totalled $4,373,000, $3,385,000, and $3,628,000 for the fiscal years 1994, 1993 and 1992, respectively. New products introduced in the past two years accounted for approximately 25% percent of fiscal 1994 machine sales.
Competition
In selling its major products, the Company experiences two types of competition. The Company competes with more traditional means of accomplishing the tasks performed by elevating work platforms, such as ladders, scaffolding and other devices.
The Company believes that its elevating work platforms in many applications are safer, more versatile and more efficient, taking into account labor costs, than those traditional methods and that its elevating work platforms enjoy competitive advantages when the job calls for frequent movement from one location to another at the same site or when there is a need to return to the ground frequently for tools and materials.
The Company competes principally with nine elevating work platform manufacturers and three boom truck manufacturers and many manufacturers of unloader products. Some of the Company's competitors are parts of, or are affiliated with, companies which are larger and have greater financial resources than the Company. The Company believes that its product quality, customer service, experienced distribution network, national rental fleet and reputation for leadership in product improvement and development provide the Company with significant competitive advantages.
Executive Officers of the Registrant Positions with the Company (date of Name Age initial election)
L. David Black 57 Chairman of the Board, President and Chief Executive Officer (1993); prior to 1993, President and Chief Executive Officer (1991); prior to 1991, President and Chief Operating Officer (1990) prior to 1990, President and Chief Executive Officer, The ARO
Charles H. Diller,Jr 49 Executive Vice President and Financial Officer (1990); Senior Vice President and Chief Financial Officer.
Rao G. Bollimpalli 56 Senior Vice President - Engineering (1990); prior to 1990, Vice President - Engineering.
Michael Swartz 50 Senior Vice President - Marketing (1990); prior to 1990, Vice President - Marketing.
Raymond F. Treml 54 Senior Vice President - Manufacturing (1990); prior to 1990, Vice President - Manufacturing.
All executive officers listed above are elected to hold office for one year or until their successors are elected and qualified, and have been employed in the capacities noted for more than five years, except as indicated. No family relationship exists among the above named executive officers.
Product Liability
Because the Company's products are used to elevate and move personnel and materials above the ground, use of the Company's products involves exposure to personal injury as well as property damage, particularly if operated carelessly or without proper maintenance.
The Company is a party to personal injury and property damage litigation arising out of incidents involving the use of its products. The Company's program for fiscal 1994 to insure against exposure to such litigation is comprised of a self-insurance retention of $5 million and catastrophic coverage of $10 million in excess of the retention. The Company has accrued as a reserve $8.0 million with respect to pending and potential claims for all years in which the Company is liable under its self-insurance retention. Product liability costs, based upon the Company's best estimate of anticipated losses, for years ended July 31, 1994, 1993 and 1992, approximated 2.6%, 2.8% and 3.3% of net sales, respectively.
For an additional discussion relative to product liability insurance coverage and cost, see the note entitled Commitments and Contingencies in the Notes to the Consolidated Financial Statements incorporated herein by reference from page 30 of the Company's Annual Report to shareholders.
Employees
The Company had 1,620 and 1,324 persons in its employ as of July 31, 1994 and 1993, respectively. The Company believes its employee relations are good, and it has experienced no work stoppages as a result of labor problems.
Foreign Operations
For financial information about the Company's domestic and foreign operations, see the note entitled Industry Segment and Geographical Areas in the Notes to the Consolidated Financial Statements incorporated herein by reference from page 29 of the Company's Annual Report to shareholders.
ITEM 2.
ITEM 2. PROPERTIES
The Company has manufacturing plants and office space at four sites in Pennsylvania totalling 477,000 square feet and situated on 85 acres of land. Of this, 445,000 square feet are owned, with the remainder under a long-term lease.
The Company owns a total of 123,000 square feet of buildings situated on 15 acres of land in the United Kingdom and Australia. With the elimination of manufacturing overseas, these facilities have been listed for sale. Pending a sale, the Company is subleasing 77,000 square feet in the United Kingdom and utilizing the remainder. The Company has several international sales offices under short-term operating leases.
The Company's McConnellsburg and Bedford, Pennsylvania facilities have been encumbered as security for Company borrowings. See the note entitled Bank Credit Lines and Long-Term Debt of the Notes to Consolidated Financial Statements incorporated herein by reference from page 27 of the Company's Annual Report to shareholders.
The Company's properties used in its operations are considered to be in good operating condition, well-maintained and suitable for their present purposes.
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS
See the note entitled Commitments and Contingencies of the Notes to Consolidated Financial Statements incorporated herein by reference from page 30 of the Company's Annual Report to shareholders.
ITEM 4.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
PART II
ITEM 5.
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED SHAREHOLDER MATTERS
The Company's Common Stock is traded on the NASDAQ National Market System under the symbol JLGI. For information concerning security holders, the market value of the Company's Common Stock, and dividends declared, see the caption Common Stock Data in the Investor Information section incorporated herein by reference from page 33 of the Company's Annual Report to shareholders.
ITEM 6.
ITEM 6. SELECTED FINANCIAL DATA
For selected financial data, see "Eleven-Year Financial Summary" incorporated herein by reference from pages 18 and 19 of the Company's Annual Report to shareholders.
ITEM 7.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
"Management's Discussion and Analysis" is incorporated herein by reference from pages 20 and 21 of the Company's Annual Report to shareholders.
ITEM 8.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The following consolidated financial statements of JLG Industries, Inc. and its subsidiaries, are incorporated herein by reference from pages 22 to 31 of the Company's Annual Report to shareholders.
Consolidated Balance Sheets - July 31, 1994 and 1993
Consolidated Statements of Operations - Years ended July 31, 1994, 1993 and 1992
Consolidated Statements of Shareholders' Equity - Years ended July 31, 1994, 1993 and 1992
Consolidated Statements of Cash Flows - Years ended July 31, 1994, 1993 and
Notes to Consolidated Financial Statements - July 31, 1994
For information relating to the Company's quarterly results of operations, see the note entitled Unaudited Quarterly Financial Information of the Notes to Consolidated Financial Statements incorporated herein by reference from page 30 of the Company's Annual Report to shareholders.
ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
ITEM 10.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information required by this Item 10 relating to identification of directors is incorporated herein by reference from pages 2 through 4 of the Company's Proxy Statement under the caption "Election of Directors." Identification of officers is presented in Item 1 of this report under the caption "Executive Officers of the Registrant."
ITEM 11.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this Item 11 relating to executive compensation is hereby incorporated by reference from pages 2 through 4, under the caption "Board of Directors," and pages 5 through 11, under the caption "Executive Compensation," of the Company's Proxy Statement.
ITEM 12.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this Item 12 relating to security ownership of certain beneficial owners and management is hereby incorporated by reference from pages 4 and 5 of the Company's Proxy Statement under the caption "Voting Securities and Principal Holders." There is no required disclosure regarding change in control.
ITEM 13.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this Item 13 relating to certain relationships and related transactions is hereby incorporated by reference from page 12 of the Company's Proxy Statement under the caption "Certain Transactions."
PART IV
ITEM 14.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) (1) and (2) The following consolidated financial statements of the registrant and its subsidiaries, included in the Annual Report to shareholders for the year ended July 31, 1994, are incorporated herein by reference in Item 8.
Consolidated Balance Sheets - July 31, 1994 and 1993
Consolidated Statements of Operations - Years ended July 31, 1994, 1993 and 1992
Consolidated Statements of Shareholders' Equity - Years ended July 31, 1994, 1993 and 1992
Consolidated Statements of Cash Flows - Years ended July 31, 1994, 1993 and 1992
Notes to Consolidated Financial Statements - July 31, 1994
The following consolidated financial schedules of the registrant and its subsidiaries are included in Item 14(d):
Schedule VIII - Valuation and Qualifying Accounts
Schedule IX - Short-term Borrowings
Schedule X - Supplementary Income Statement Information
All other schedules for which provision is made in the applicable accounting regulation of the Securities and Exchange Commission are not required under the related instructions or are inapplicable and, therefore, have been omitted.
(a) (3) Listing of Exhibits
Exhibit Number Exhibit
3.1 Certificate of incorporation of JLG Industries, Inc., which appears as Exhibit 1 (a) to the Company's Form 10 Registration Statement (File No. 0-8454 -- filed April 22, 1977), is hereby incorporated by reference.
3.2 By-Laws of JLG Industries, Inc.
4.1 Trust Indenture between the Bedford County, Pennsylvania Industrial Development Authority and the Fulton County National Bank and Trust Company, as Trustee, which appears aa Exhibit B5 to the Company's Form 10-K (File No. 0-8454 -- filed October 24, 1979), is hereby incorporated by reference.
4.2 Installment Sale Agreement between Bedford County, Pennsylvania Industrial Development Authority and JLG Industries, Inc., which appears as Exhibit B6 to the Company's Form 10-K (File No. 0-8454 -- filed October 24, 1979), is hereby incorporated by reference.
4.3 Agreement to disclose upon request.
10.1 Form of Deferred Compensation Benefit Agreement dated March 1, 1989 with certain retired key employees which appears as Exhibit 10.2 to the Company's 10-K (File No. 0-8454 -- filed October 18, 1989), is hereby incorporated by reference.
10.2 Form of Deferred Compensation Benefit Agreement dated March 1, 1990 with certain key employees, which appears as Exhibit 10.4 to the Company's Form 10-K (File No. 0-8454 -- filed October 18, 1990), is hereby incorporated by reference.
10.3 Form of Deferred Compensation Benefit Agreement dated August 15, 1990 between JLG Industries, Inc. and L. David Black, which appears as Exhibit 10.5 to the Company's Form 10-K (File No. 0-8454 -- filed October 18, 1990), is hereby incorporated by reference.
10.4 Stock Redemption Agreement dated August 27, 1980, between JLG Industries, Inc. and Paul K. Shockey, which appears as Exhibit 25 to the Company's Form S-7 (Registration No. 2-69194 -- filed September 18, 1980), is hereby incorporated by reference.
10.5 Directors' Deferred Compensation Plan dated July 29, 1986, which appears as Exhibit 10.5 to the Company's Form 10-K (File No. 0-8454 -- filed October 28, 1986), is hereby incorporated by reference.
10.6 JLG Industries, Inc. Stock Incentive Plan dated May 23, 1991, which appears as Exhibit 10.10 to the Company's Form 10-K (File No. 0-8454 -- filed October 27, 1992), is hereby incorporated by reference.
10.7 Credit Agreement dated December 21, 1989 among JLG Industries, Inc., the First National Bank of Maryland, and Philadelphia National Bank, which appears as Exhibit 4.1 to the Company's 10-Q (File No. 0-8454 -- filed March 12, 1990), is hereby incorporated by reference.
10.8 First Modification Agreement, dated January 29, 1990 to the Credit Agreement dated December 21, 1989 among JLG Industries, Inc., the First National Bank of Maryland, and Philadelphia National Bank, which appears as Exhibit 4.3 to the Company's 10-Q (File No. 0-8454 -- filed March 12, 1990), is hereby incorporated by reference.
10.9 Second Modification Agreement, dated September 17, 1993 to the Credit Agreement dated December 21, 1989 among JLG Industries, Inc., the First National Bank of Maryland, and Philadelphia National Bank, which appears as Exhibit 10.12 to the Company's 10-K (File No. 0-8454 -- filed October 20, 1993), is hereby incorporated by reference.
10.10 JLG Industries, Inc. Directors Stock Option Plan dated September 27, 1993, which appears as an exhibit to the Company's 1993 Proxy Statement (File No. 0-8454 -- filed October 12, 1993), is hereby incorporated by reference.
13 Annual Report to shareholders for year ended July 31, 1994.
22 Listing of subsidiaries.
24 Consent of independent auditors relating to the Registration Statement on Form S-8.
(b) The Company was not required to file Form 8-K pursuant to requirements of such form in the fourth quarter of fiscal 1994.
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.
JLG INDUSTRIES, INC. (Registrant)
By: /s/ L. David Black Date: October 12, 1994 L. David Black, 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 on the dates indicated.
By: /s/ Charles H. Diller, Jr. Date: October 12, 1994 Charles H. Diller, Jr., Executive Vice President, Chief Financial Officer and Director
By: /s/ Bernard J. Kotula Date: October 12, 1994 Bernard J. Kotula, Controller
By: /s/ Charles O. Wood, III Date: October 12, 1994 Charles O. Wood, III, Director
By: /s/ E. Mason Hendrickson Date: October 12, 1994 E. Mason Hendrickson, Director
By: /s/ H. Lyle Duffey Date: October 12, 1994 H. Lyle Duffey, Director
By: /s/ Paul Shockey Date: October 12, 1994 Paul Shockey, Secretary and Director
By: /s/ George R. Kempton Date: October 12, 1994 George R. Kempton, Director