28.02.2004

JLG announces SEC investigation

JLG Industries, Inc. has announced that it has received notification that the Securities and Exchange Commission ("SEC") has begun an informal inquiry in connection with the Company's announcement of a restatement of its audited financial statements for the year ended July 31, 2003 and possibly for the first quarter of the current fiscal year to October 31, 2003.

The notification states that the inquiry should not be construed as an expression or opinion of the SEC that any violation of law has occurred.

Late last week JLG announced that it was restating its fiscal 2003 results after it was discovered that a transaction with a single customer with $8.7 million in net revenues, $1.8 million in net profit and $.04 per share for the full year and fourth quarter ended July 31, 2003 was recognized prematurely.

The restatement will result in a reduction of the stated revenue and profit in the fourth quarter and full year of fiscal 2003 and an equal or greater increase in revenue and profit for the first three quarters of the current financial year. Reported results for 2003 were revenues of $759.8 million, net income of $14.2 million, and earnings per share of $.33.

The transaction, with a single customer, was originally recorded in July 2003. The Company has since concluded that the transaction was incorrectly reported as a full sale, rather than a "consignment sale", which under generally accepted accounting principles, permits recognition of the revenues only upon final sale of the equipment by the consignee. As of February 2004, all of the equipment has now been sold, the majority in the fiscal 2004 second quarter (ending Jan 31 2004).

JLG notified its auditors of the issue and has acknowledged a weakness in its internal controls, while launching an investigation going back three years to look for any similar occurrences.

Pending completion of the review, the Company is delaying announcing earnings for the second quarter.

Second quarter revenue is expected to be approximately $237.3 million, an increase of $86 million or 57 percent from the prior year period. Sales from the OmniQuip acquisition contributed $49.8 million to the increase.