Gehl Co. last week reported all-time record quarterly net sales from continuing operations of $139.5 million for the quarter ended June 30, 2006, an increase of 9 percent from 2005 second-quarter net sales from continuing operations of $128.3 million.
All-time record quarterly income from continuing operations was $9.4 million, or 75 cents per diluted share, for the second quarter of 2006 compared with income from continuing operations of $5.8 million, or 55 cents per diluted share, for the second quarter of 2005. Second-quarter 2005 income from continuing operations included a $1.5 million after-tax warranty charge, or 14 cents per diluted share. This warranty charge was reversed, in full, in the 2005 fourth quarter.
For the first six months of 2006, Gehl reported net sales from continuing operations of $261.6 million, an increase of 10 percent from 2005 first six-month net sales from continuing operations of $237.2 million. Income from continuing operations was $15.8 million, or $1.27 per diluted share, for the first six months of 2006 compared to $10.7 million, or $1.02 per diluted share, for the first six months of 2005. Net income for the first six months of 2005 was similarly impacted by the warranty charge described above.
“We are extremely pleased with our second quarter and first half of the year results as we achieved all-time record sales, net income and earnings per share in the quarter and continued to improve gross margins,” said William Gehl, chairman and CEO. “We are focused on compact equipment and driving cost out of our business. We continue to see the benefits of this strategy in our results.”
In April, the company announced the discontinuation of its agricultural implement product lines. Income from continuing operations for the first six months of 2006 does not include the after-tax charge of $9 million, or 73 cents per diluted share, that the company recorded related to the discontinuance of these product lines. Of the $9 million charge, $8.9 million, or 72 cents per diluted share, and $0.1 million, or 1cent per diluted share, was recorded in the first and second quarters of 2006, respectively.
Including the after-tax charges and results of the discontinued operations, the company recorded net income of $9.3 million in the 2006 second quarter and $6.7 million in the 2006 first six months compared to $5.6 million in the 2005 second quarter and $10.5 million in the 2005 first six months.
The company reaffirmed its 2006 full-year outlook with net sales from continuing operations in the range of $485 million to $495 million and earnings per diluted share from continuing operations of $2.20 to $2.30. Expected earnings per diluted share include an estimated 6 cents per share of compensation expense related to the company’s adoption of Statement of Financial Accounting Standards No. 123R, which requires companies to recognize compensation expense for all stock-based awards.
Gehl Co., headquartered in West Bend, Wis., is a manufacturer of compact equipment used worldwide in construction and agricultural markets.