ASV Holdings, Inc. (Nasdaq: ASV), a leading provider of
rubber-tracked compact track loaders and wheeled skid steer loaders
in the compact construction equipment market, today announced that
it is delaying the release of its Fourth Quarter and Full Year 2018
results.
Delay in Final Financial
Results
Chairman and Chief Executive Officer, Andrew Rooke commented,
“Although we are substantially through the 2018 audit, we are not
yet in a position to provide final results for the fourth quarter
and full year 2018. We require the completion of our analyses of
any potential impairment to the carrying value of our goodwill and
intangible assets as of December 31, 2018. We are updating our
analyses as a result of our assessment of conditions that may
indicate that we could have an impairment, such as the Company’s
recent results, share price performance and market capitalization.
In the event of any impairment the company would be required to
record a non-cash impairment charge to the fourth quarter results.
Whether an impairment charge will be required and if so, the amount
of such charge have not been determined. We anticipate completing
our analysis and announcing our final results by the end of March
and in time to file our Annual Report on Form 10-K.”
The Company reported preliminary Fourth Quarter and Full year
2018 results. All of the preliminary financial information in this
press release is preliminary and subject to completion of yearend
financial reporting processes, reviews and audit.
Preliminary Fourth Quarter 2018 and
Comparison to Fourth Quarter 2017
- $33.1 million in Net Sales represented
8.6% year-over-year growth from $30.5 million, driven by 24%
“same-store” dealer sales growth in North America, lower sales to
Australia and lower sales of OEM undercarriages and parts.
- 8th consecutive quarter of
year-over-year quarterly machine revenue growth with 31%
year-over-year increase in North American machine sales and 17.2%
overall machine sales, to $24.6 million.
- Gross Margin of 8.6% compared to 13.6%,
was adversely impacted 340 basis points by increased material costs
net of price recovery, and 200 basis points from an increase in our
reserve for slow moving inventory.
- Unadjusted net loss for the quarter
modestly greater than 2017 fourth quarter GAAP net loss of $(0.8)
million.
- $30.2 million backlog of orders at
December 31, 2018, up $17.5 million or 137.8% from December 31,
2017.
Preliminary Full Year 2018 and
Comparison to Full Year 2017
- $127.6 million in Net Sales represented
3.5% year-over-year growth from $123.3 million driven by 16%
“same-store” dealer sales growth in North America lower sales to
Australia and lower sales of OEM undercarriages and parts.
- 2018 gross margin of 11.9%, compared to
15.1%, was adversely impacted 190 basis points by increased
material costs, net of price recovery.
Chairman and Chief Executive Officer, Andrew Rooke commented,
“Positive trends of North American same store sales growth and
machine sales growth in the quarter were offset by significant net
material cost increases and restricted engine availability that
curtailed production and resulted in a loss for the quarter.
Despite such headwinds that we, and our industry in general, faced
throughout the year, particularly in the second half, we recorded
our 8th consecutive quarter of year over year machine sales growth
and achieved our third consecutive quarter of total net sales
growth. As of the end of the year, our North American dealer
network stood at 286 retail and rental locations at year-end,
compared to 222 at the end of last year. This includes the addition
of locations during the fourth quarter from our newly signed
independent rental company to whom we shipped our first orders. Our
increasing brand recognition, new product launches and
strengthening dealer support resulted in further progress towards
our goal of expanding our North American network and improving the
sell-through and turnover at each location.
“We have taken actions which are designed to combat the material
price increases and engine shortages that have impacted our
performance. In addition to focusing our near-term sales efforts on
machine models that are not affected by engine shortages, we are
aggressively seeking to reduce our material costs through product
design optimization, selectively insourcing fabrication manufacture
and resourcing to lower cost suppliers, from which we expect
approximately $2.0 million in margin recovery in 2019. Further, in
addition to the steel surcharge pricing implemented in May 2018,
and in line with our principal competitors, we implemented price
increases at the start of 2019 to offset the higher level of input
costs in our industry.
“Housing and construction activity, while moderating towards the
end of the year, still showed growth over 2017, and we reported a
$30.2 million backlog as of year-end, which affords us some
visibility for the first half of 2019. While the industry-wide
engine and component shortages that impacted 2018 delivery times
seem likely to remain a challenge through the first quarter of
2019, cost reductions, continued success increasing the dealer
count and dealer sell-through, and the easing of bottlenecks in the
supply chain should all result in top-to-bottom improvements in the
year ahead. Going forward we would expect to achieve revenue growth
and margins recovering to levels more in-line with the upper bounds
of our historical range.”
Conference Call:Management will host a conference call at
4:30 PM Eastern Time today to discuss the update with the
investment community. Anyone interested in participating in the
call should dial 800-239-9838 if calling within the United States
or 323-794-2551 if calling internationally. A replay will be
available until 11:59 PM ET March 21, 2018 which can be accessed by
dialing 844-512-2921 if calling within the United States or
412-317-6671 if calling internationally. Please use passcode
9871909 to access this replay. The call will additionally be
broadcast live and archived for 90 days over the internet.
About ASV Holdings, Inc.
ASV Holdings, Inc. is a designer and manufacturer of compact
construction equipment. Its patented Posi-Track rubber tracked,
multi-level suspension undercarriage system provides a competitive
market differentiator for its Compact Track Loader (CTL) product
line with brand attributes of power, performance and
serviceability. It’s wheeled Skid Steer Loaders (SSLs) also share
the common brand attributes. Equipment is sold through an
independent dealer network throughout North America, Australia, and
New Zealand. The company also sells OEM equipment and aftermarket
parts. ASV owns and operates a 238,000 square-foot production
facility in Grand Rapids, MN.
Forward-Looking Statements
This release contains forward-looking statements. In some cases,
you can identify forward-looking statements by terminology such as
“may,” “should,” “expects,” “plans,” “anticipates,” “believes,”
“estimates,” “predicts,” “potential,” “intends” or “continue,” and
other similar expressions that are predictions of or indicate
future events and future trends, or the negative of these terms or
other comparable terminology. Forward-looking statements in this
release include, without limitation: (1) projections of revenue,
earnings, capital structure and other financial items, (2)
statements of our plans and objectives, (3) statements regarding
the capabilities and capacities of our business operations, (4)
statements of expected future economic conditions and the effect on
us and on dealers or OEM customers, (5) expected benefits of our
cost reduction measures, and (6) assumptions underlying statements
regarding us or our business.
Our actual results may differ from information contained in
these forward looking-statements for many reasons, including those
described in the section entitled “Risk Factors” in our Form 10K
which are available on our EDGAR page at www.sec.gov. These
statements are only current predictions and are subject to known
and unknown risks, uncertainties and other factors that may cause
our or our industry’s actual results, levels of activity,
performance or achievements to be materially different from those
anticipated by the forward-looking statements. We discuss many of
these risks in greater detail under the heading “Risk Factors” and
elsewhere in the Form 10K. You should not rely upon forward-looking
statements as predictions of future events. Although we believe
that the expectations reflected in the forward-looking statements
are reasonable, we cannot guarantee future results, levels of
activity, performance or achievements. Except as required by law,
after the date of this release, we are under no duty to update or
revise any of the forward-looking statements, whether as a result
of new information, future events or otherwise.
We obtained the industry, market and competitive position data
in this release from our own internal estimates and research as
well as from industry and general publications and research surveys
and studies conducted by third parties. While we believe that each
of these studies and publications is reliable, we have not
independently verified market and industry data from third-party
sources. While we believe our internal company research is reliable
and the market definitions we use are appropriate, neither such
research nor these definitions have been verified by any
independent source.
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version on businesswire.com: https://www.businesswire.com/news/home/20190314005779/en/
ASV Holdings, Inc.Andrew RookeChairman and Chief Executive
Officer218-327-5389andrew.rooke@asvi.com
Darrow Associates Inc.Peter Seltzberg, Managing DirectorInvestor
Relations(516) 419-9915pseltzberg@darrowir.com
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