-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DKJKMBpMItlGmHaijRS3u9roYW5fsaYRWLEv/lFD2BQS7ZcChhPaYDFrouXYuIb/ IdRmliVz/XeiXxPCVx4FjQ== 0000856386-98-000023.txt : 19981111 0000856386-98-000023.hdr.sgml : 19981111 ACCESSION NUMBER: 0000856386-98-000023 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 19980926 FILED AS OF DATE: 19981110 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GEHL CO CENTRAL INDEX KEY: 0000856386 STANDARD INDUSTRIAL CLASSIFICATION: FARM MACHINERY & EQUIPMENT [3523] IRS NUMBER: 390300430 STATE OF INCORPORATION: WI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-18110 FILM NUMBER: 98743318 BUSINESS ADDRESS: STREET 1: 143 WATER STREET CITY: WEST BEND STATE: WI ZIP: 53095 BUSINESS PHONE: 4143349461 MAIL ADDRESS: STREET 1: 143 WATER STREET CITY: WEST BEND STATE: WI ZIP: 53095 10-Q 1 GEHL COMPANY 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended September 26, 1998 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from.............. to ................... Commission file number 0-18110 GEHL COMPANY (Exact name of registrant as specified in its charter) Wisconsin 39-0300430 (State or other jurisdiction of incorporation (I.R.S. Employer or organization) Identification No.) 143 Water Street, West Bend, WI 53095 (Address of principal executive office) (zip code) (414) 334-9461 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class Outstanding at September 26, 1998 Common Stock, $.10 Par Value 6,406,990 GEHL COMPANY FORM 10-Q September 26, 1998 REPORT INDEX Page No. PART I. - FINANCIAL INFORMATION: Item 1. Financial Statements Condensed Consolidated Statements of Income for the Three- and Nine-Month Periods Ended September 26, 1998 and September 27, 1997 . . . . . . . . . . . . . . . 3 Condensed Consolidated Balance Sheets at September 26, 1998, December 31, 1997 and September 27, 1997 . . . . . . 4 Condensed Consolidated Statements of Cash Flows for the Nine-Month Periods Ended September 26, 1998 and September 27, 1997 . . . . . . . . . . . . . . . . . 5 Notes to Condensed Consolidated Financial Statements . 6 Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition . . . . . . . . . . . 8 Item 3. Quantitative and Qualitative Disclosures about Market Risk 12 PART II. - OTHER INFORMATION: Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . 12 SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 PART I - FINANCIAL INFORMATION Item 1. Financial Statements GEHL COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share data; unaudited)
Three Months Ended Nine Months Ended Sept. 26, Sept. 27, Sept. 26, Sept. 27, 1998 1997 1998 1997 NET SALES $ 63,452 $ 48,140 $199,971 $143,407 Cost of goods sold 45,618 33,333 145,111 100,070 --------- --------- -------- -------- GROSS PROFIT 17,834 14,807 54,860 43,337 Selling, general and administrative expenses 10,734 8,885 33,283 26,668 --------- --------- -------- -------- INCOME FROM OPERATIONS 7,100 5,922 21,577 16,669 Interest expense (925) (412) (3,352) (1,339) Interest income 480 378 1,233 1,039 Other expense, net (363) (493) (959) (952) --------- --------- -------- -------- INCOME BEFORE INCOME TAXES 6,292 5,395 18,499 15,417 Income tax provision 2,234 1,942 6,567 5,550 --------- --------- -------- -------- NET INCOME $4,058 $3,453 $ 11,932 $ 9,867 ========= ========= ======== ======== EARNINGS PER SHARE Diluted $.61 $.52 $1.79 $1.52 Basic $.63 $.56 $1.88 $1.59
The accompanying notes are an integral part of the financial statements. GEHL COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) September 26, December 31, September 27, 1998 1997 1997 ASSETS (Unaudited) (Unaudited) Cash $ 4,925 $ 1,239 $ 3,204 Accounts receivable-net 77,975 72,190 63,277 Finance contracts receivable - net 8,892 8,210 6,507 Inventories 28,630 30,340 16,877 Deferred tax asset 4,217 4,217 4,112 Prepaid expenses and other assets 1,242 1,645 1,233 ----------- ---------- ----------- Total Current Assets 125,881 117,841 95,210 ----------- ---------- ----------- Property, plant and equipment-net 34,101 35,082 25,179 Finance contracts receivable-net, non-current 3,298 3,031 3,904 Intangible assets 14,317 14,816 - Other assets 5,725 5,453 5,633 ----------- ---------- ----------- TOTAL ASSETS $ 183,322 $ 176,223 $ 129,926 =========== ========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY Current portion of long-term debt obligations $ 639 $ 672 $ 193 Accounts payable 26,758 22,212 18,197 Accrued liabilities 26,341 21,444 20,560 ----------- ---------- ----------- Total Current Liabilities 53,738 44,328 38,950 Line of credit facility 23,583 39,357 3,423 Long-term debt obligations 9,726 9,689 8,593 Other long-term liabilities 1,979 1,855 1,722 Deferred income taxes 3,421 3,421 2,478 ----------- ---------- ----------- Total Long-Term Liabilities 38,709 54,322 16,216 ----------- ---------- ----------- Common stock, $.10 par value, 25,000,000 shares authorized, 6,406,990, 6,212,686 and 6,199,055 shares outstanding, respectively 640 621 620 Preferred stock, $.10 par value, 2,000,000 shares authorized, 250,000 shares designated as Series A Preferred Stock, no shares issued - - - Capital in excess of par 27,670 26,319 26,212 Retained earnings 62,565 50,633 47,928 ----------- ---------- ----------- Total Shareholders' Equity 90,875 77,573 74,760 ----------- ---------- ----------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 183,322 $ 176,223 $ 129,926 =========== ========== ===========
The accompanying notes are an integral part of the financial statements. GEHL COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands; unaudited) Nine Months Ended September 26, September 27, 1998 1997 CASH FLOWS FROM OPERATING ACTIVITIES: Net Income $ 11,932 $ 9,867 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 3,734 2,087 Proceeds from sales of finance contracts 38,668 25,462 Increase in finance contracts receivable (40,485) (28,693) Cost of sales of finance contracts 868 981 Net change in working capital items 5,771 1,641 ------------ ------------ Net cash provided by operating activities 20,488 11,345 ------------ ------------ CASH FLOWS FROM INVESTING ACTIVITIES: Property, plant and equipment additions, net (2,225) (5,519) Other (301) 144 ------------ ------------ Net cash used for investing activities (2,526) (5,375) ------------ ------------ CASH FLOWS FROM FINANCING ACTIVITIES: Increase in long-term debt obligations 4 128 Increase (decrease) in long-term liabilities 124 (132) Repayments of credit facility (15,774) (7,031) Proceeds from issuance of common stock 1,370 254 Purchase of warrant - (193) ------------ ------------ Net cash used for financing activities (14,276) (6,974) ------------ ------------ Net increase (decrease) in cash 3,686 (1,004) Cash, beginning of period 1,239 4,208 ------------ ------------ Cash, end of period $ 4,925 $ 3,204 ============ ============ Supplemental disclosure of cash flow information: Cash paid for the following: Interest $ 3,346 $ 1,319 Income taxes $ 4,884 $ 3,820
The accompanying notes are an integral part of the financial statements. GEHL COMPANY AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 26, 1998 (Unaudited) NOTE 1 - BASIS OF PRESENTATION The condensed consolidated financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although management believes that the disclosures are adequate to make the information presented not misleading. In the opinion of management, the information furnished for the three- and nine-month periods ended September 26, 1998 and September 27, 1997 includes all adjustments, consisting only of normal recurring accruals, necessary for a fair presentation of the results of operations and financial position of the Company. The results of operations for the nine months ended September 26, 1998 are not necessarily indicative of the results to be expected for the entire year due, in part, to the seasonal nature of the Company's operation. It is suggested that these interim financial statements be read in conjunction with the financial statements and notes thereto, included in the Company's Annual Report on Form 10-K for the year ended December 31, 1997 as filed with the Securities and Exchange Commission. NOTE 2 - INCOME TAXES The income tax provision is determined by applying an estimated annual effective income tax rate to income before income taxes. The estimated annual effective income tax rate is based on the most recent annualized forecast of pretax income, permanent book/tax differences and tax credits. NOTE 3 - INVENTORIES If all of the Company's inventories had been valued on a current cost basis, which approximated FIFO value, estimated inventories by major classification would have been as follows (in thousands): September 26, December 31, September 27, 1998 1997 1997 ------------- ------------ ------------- Raw materials and supplies $ 14,226 $ 14,830 $ 9,273 Work-in process 5,349 5,182 3,838 Finished machines and parts 28,305 29,578 22,561 ------------- ------------ -------------- Total current cost value 47,880 49,590 35,672 Adjustment to LIFO basis (19,250) (19,250) (18,795) ------------- ------------ -------------- $ 28,630 $ 30,340 $ 16,877 ============= ============ ============== NOTE 4 - ACCOUNTING PRONOUNCEMENTS The Financial Accounting Standards Board (FASB) has issued Statement of Financial Accounting Standards ("SFAS") No. 133 "Accounting for Derivative Instruments and Hedging Activities" which is effective for fiscal quarters of fiscal years beginning after June 15, 1999. Due to the Company's current limited use of derivative instruments, the adoption of this statement is not expected to affect the Company's financial condition or results of operations. SFAS No. 132, "Employers' Disclosures about Pensions and Other Postretirement Benefits: an amendment of FASB Statements No. 87, 88 and 106" was adopted January 1, 1998. This statement revises disclosure requirements for pension and other postretirement benefit plans. The revised rules are intended to improve the understandability of benefit disclosures, to eliminate certain requirements that the FASB believes are no longer necessary, and to standardize footnote disclosures. None of the SFAS No. 132 changes affect the measurement or the recognition of benefit costs. The appropriate footnote disclosures will be incorporated into the Company's Form 10-K filing for the year ending December 31, 1998. Effective January 1, 1998, the Company adopted SFAS No. 130 "Reporting Comprehensive Income", the effect of which was immaterial to the financial statements. SFAS No. 131, "Disclosures about Segments of an Enterprise and Related Information", was adopted effective January 1, 1998. This statement establishes standards for the way that business enterprises report information, financial and descriptive, about operating segments in annual financial statements and requires that those enterprises report selected information about operating segments in interim financial reports issued to shareholders. It also establishes standards for related disclosures about products and services, geographic areas and major customers. The appropriate footnote disclosures will be incorporated into the Company's Form 10-K filing for the year ending December 31, 1998 as required. NOTE 5 - EARNINGS PER SHARE Basic net income per common share is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted net income per common share is computed by dividing net income by the weighted average number of common shares, and if applicable, common stock equivalents which would arise from the exercise of stock options and warrants. A reconciliation of the shares used in the computation of earnings per share follows (in thousands): For the third quarter ended: September 26, 1998 September 27, 1997 ------------------ ------------------ Basic shares 6,406 6,198 Effect of warrants and options 252 429 ----- ----- Diluted shares 6,658 6,627 ===== ===== For the nine months ended: September 26, 1998 September 27, 1997 ------------------ ------------------ Basic shares 6,359 6,191 Effect of warrants and options 312 313 ----- ----- Diluted shares 6,671 6,504 ===== ===== Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION Results of Operations Three Months Ended September 26, 1998 Compared to Three Months Ended September 27, 1997 Net sales for the third quarter of 1998 of $63.5 million were 32% higher than the $48.1 million of net sales in the comparable period of 1997. The increase was due, in part, to the shipment of Mustang skid loaders in 1998 as a result of the fourth quarter 1997 acquisition of this product line, as well as increased demand for existing products and sales of products introduced during 1998. Construction equipment net sales increased 60% to $38.8 million in the third quarter of 1998 from $24.2 million in the third quarter of 1997. The Construction equipment increase resulted from continued strong demand for telescopic handlers and the aforementioned Mustang skid loader shipments. Agriculture equipment net sales increased 3% to $24.7 million in the third quarter of 1998 from $23.9 million in the third quarter of 1997. Of the Company's total net sales reported for the third quarter of 1998, $10.2 million represented sales made outside the United States compared with $7.3 million in the comparable period of 1997. The increase was due primarily to the addition of Mustang product sales. Gross profit increased $3.0 million, or 20%, during the third quarter of 1998 versus the comparable period of 1997, due primarily to increased sales volume. Gross profit as a percent of net sales decreased to 28.1% for the third quarter of 1998 from 30.8% in the comparable period of 1997. Gross profit as a percent of net sales for Construction equipment decreased to 26.2% in the third quarter of 1998 from 31.3% in the third quarter of 1997. This decrease was due primarily to: 1) shipments of Mustang skid loaders which have lower gross margins than other Company sales of Construction equipment; and 2) competitive pressures restricting price increases to lower levels than the cost increases incurred by the Company. Gross profit as a percent of net sales for Agriculture equipment increased to 31.1% in the third quarter of 1998 from 30.2% in the comparable period of 1997. The primary reason for the increase was the impact of a change in the mix of products shipped in the third quarter of 1998 versus products shipped in comparable 1997. Selling, general and administrative expenses increased $1.8 million, or 21%, during the third quarter of 1998 versus the comparable period of 1997, due primarily to operating costs related to the Mustang skid loader operations. As a percent of net sales, selling, general and administrative expenses decreased to 16.9% during the third quarter of 1998 versus 18.5% in the comparable period of 1997. Income from operations in the third quarter of 1998 was $7.1 million versus $5.9 million in the third quarter of 1997. Interest expense increased $513,000 to $925,000 in the third quarter of 1998 from $412,000 in the third quarter of 1997. This resulted from an increase in average debt outstanding to $41.4 million in the third quarter of 1998 versus $18.5 million in the third quarter of 1997, offset by a decrease in the average rate of interest paid by the Company to 7.9% in the third quarter of 1998 versus 8.1% in the comparable period of 1997. The increase in the average debt outstanding was primarily the result of indebtedness related to the Mustang acquisition. Nine Months Ended September 26, 1998 Compared to Nine Months Ended September 27, 1997 Net sales for the first nine months of 1998 of $200.0 million were $56.6 million, or 39%, higher than the $143.4 million of net sales in the comparable period of 1997. Construction equipment net sales increased 68% to $118.3 million in the first nine months of 1998 from $70.4 million in the first nine months of 1997. The Construction equipment increase resulted from continued strong demand for telescopic handlers and Mustang skid loader shipments. Agriculture equipment net sales increased 12% to $81.7 million in the first nine months of 1998 from $73.0 million in the first nine months of 1997. The increase was due primarily to the introduction of new product offerings, including a forage harvester with a crop processing attachment and a wider model disc mower conditioner. In addition, increased skid loader shipments offset reduced levels of shipments of other forage harvesting equipment, hay tools and feedmaking equipment. Of the Company's total net sales reported for the first nine months of 1998, $32.4 million represented sales made outside the United States compared with $23.7 million in the comparative period of 1997. The increase is due primarily to the addition of Mustang product sales. As the Company has increased its sale of Construction equipment products, the Company has been successful in reducing the seasonality of its sales. However, some sales seasonality still remains, primarily in the Company's second quarter which historically has tended to be its strongest quarter for sales, while sales levels have historically tended to be lower in the first and fourth quarters. Gross profit increased $11.5 million, or 27%, in the first nine months of 1998 versus the comparable period of 1997, due primarily to increased sales volume. Gross profit as a percent of net sales decreased to 27.4% for the first nine months of 1998 from 30.2% in the comparable period of 1997. Gross profit as a percent of net sales for Construction equipment decreased to 25.7% in the first nine months of 1998 from 31.4% in the first nine months of 1997. This decrease was due primarily to: 1) shipments of Mustang skid loaders which have lower gross margins than other Company sales of Construction equipment; and 2) competitive pressures restricting price increases to lower levels than the cost increases incurred by the Company. Gross profit as a percent of net sales for Agriculture equipment increased to 29.9% for the first nine months of 1998 from 29.0% for the first nine months of 1997. The primary reason for the improvement was the impact of a change in the mix of products shipped in the first nine months of 1998 versus products shipped in comparable 1997. Selling, general and administrative expenses increased $6.6 million, or 25%, during the first nine months of 1998 versus the comparable period of 1997 primarily due to operating costs related to Mustang skid loader operations. As a percent of net sales, selling, general and administrative expenses decreased to 16.6% during the first nine months of 1998 versus 18.6% in the comparable period of 1997. Income from operations in the first nine months of 1998 of $21.6 million was 29% higher than the $16.7 million for the comparable period of 1997. Interest expense increased $2.0 million to $3.3 million in the first nine months of 1998 from $1.3 million in the first nine months of 1997. The increase was a result of an increase in average debt outstanding to $52.1 million in the first nine months of 1998 versus $21.5 million in the comparable period of 1997. The increase in the average debt outstanding was primarily the result of indebtedness related to the Mustang acquisition. Financial Condition The Company's working capital was $72.1 million at September 26, 1998, as compared to $73.5 million at December 31, 1997 and $56.3 million at September 27, 1997. The increase since September 27, 1997 was due primarily to the working capital associated with the Mustang acquisition. The Company's cash flow provided by operating activities in the first nine months of 1998 was $20.5 million versus $11.3 million in comparable 1997. The third quarter 1998 cash flow provided by operations was $13.4 million compared to 1997's third quarter of $6.9 million provided by operations. This increase was due primarily to a larger reduction in accounts receivable in the third quarter of 1998. Capital expenditures for property, plant and equipment during the first nine months of 1998 were approximately $2.2 million. The Company expects to make approximately $3.5 million of capital expenditures during 1998. Outstanding commitments as of September 26, 1998 totaled approximately $386,000. As of September 26, 1998, the weighted average interest rate paid by the Company on outstanding borrowings under its line of credit facility was 7.4%. The Company had available unused borrowing capacity of $49.2 million, $28.3 million and $59.8 million under the line of credit facility at September 26, 1998, December 31, 1997 and September 27, 1997, respectively. At September 26, 1998, December 31, 1997 and September 27,1997, the borrowings outstanding under the line of credit facility were $23.6 million, $39.4 million and $3.4 million, respectively. The sale of finance contracts is an important component of the Company's overall liquidity. Gehl has arrangements with several financial institutions and finance service companies to sell, with recourse, its finance contracts receivable. The Company continues to service substantially all contracts whether or not sold. At September 26, 1998, Gehl serviced $78.1 million of such contracts, of which $65.9 million were owned by other parties. The Company believes that it has sufficient capacity to sell its retail finance contracts for the foreseeable future. Shareholders' equity at September 26, 1998 was $90.9 million. This amount was $16.1 million higher than the $74.8 million of shareholders' equity at September 27, 1997, due primarily to income earned from September 28, 1997 through September 26, 1998. Accounting Pronouncements The Financial Accounting Standards Board (FASB) has issued Statement of Financial Accounting Standards ("SFAS") No. 133 "Accounting for Derivative Instruments and Hedging Activities" which is effective for fiscal quarters of fiscal years beginning after June 15, 1999. Due to the Company's current limited use of derivative instruments, the adoption of this statement is not expected to effect the Company's financial condition or results of operations. SFAS No. 132, "Employers' Disclosures about Pensions and Other Postretirement Benefits: an amendment of FASB Statements No. 87, 88 and 106" was adopted January 1, 1998. This statement revises disclosure requirements for pension and other postretirement benefit plans. The revised rules are intended to improve the understandability of benefit disclosures, to eliminate certain requirements that the FASB believes are no longer necessary, and to standardize footnote disclosures. None of the SFAS No. 132 changes affect the measurement or the recognition of benefit costs. The appropriate footnote disclosures will be incorporated into the Company's Form 10-K filing for the year ending December 31, 1998. Effective January 1, 1998, the Company adopted SFAS No. 130 "Reporting Comprehensive Income", the effect of which was immaterial to the financial statements. SFAS No. 131, "Disclosures about Segments of an Enterprise and Related Information", was adopted effective January 1, 1998. This statement establishes standards for the way that business enterprises report information, financial and descriptive, about operating segments in annual financial statements and requires that those enterprises report selected information about operating segments in interim financial reports issued to shareholders. It also establishes standards for related disclosures about products and services, geographic areas and major customers. The appropriate footnote disclosures will be incorporated into the Company's Form 10-K filing for the year ending December 31, 1998 as required. Year 2000 The Year 2000 issue refers to computer systems which use two digits rather than four to define a given year and which therefore might read a date using "00" as the year 1900 rather than the Year 2000. As the Year 2000 approaches, such systems may be unable to process certain date-based information. This could result in system failure or miscalculations causing disruptions of operations and the potential inability to engage in normal business activities. In 1995, a Company-wide program was initiated to prepare its Information Technology ("IT") systems and applications for the Year 2000. The initial focus of the Company's program contained the following steps: assessment of the relevant issues; planning the conversion; implementing the conversion; and testing. Those systems determined to be at risk were prioritized and plans were put in place to upgrade systems by remediation, replacement or outsourcing. Through September 1998, the assessment and planning phases have been completed for all IT systems and applications. The Company's objective is to become Year 2000 compliant with its mission critical IT activities and systems by December 1998, allowing substantial time for further testing, verification and the final completion of less important systems by the second quarter of 1999. In addition to the IT systems review noted above, the Company has initiated processes to review and to modify, where appropriate, other areas impacted by Year 2000. These areas include, but are not limited to, personal computer hardware and software, remote location access to IT systems, facility management and certain non- IT issues, such as the extent to which embedded chips are used in machinery and equipment used in operations. The Company has completed assessments in all of the above areas and testing in all of these areas, except the testing of personal computer hardware and software, which is expected to be completed by the second quarter of 1999. The Company is in the process of communicating with its significant vendors to determine the extent to which the Company is vulnerable to those third parties' failure to remediate their own Year 2000 compliance issues. The Company expects to complete this evaluation by the second quarter of 1999. The Company can not guarantee that the failure of another company to be Year 2000 compliant will not have an adverse effect on the Company. The Company believes that it has no exposure to contingencies related to the Year 2000 issue for products it has sold. The Company has evaluated its major customers and believes that the failure of these Company's to adequately prepare for Year 2000 issues will not have a material adverse effect on the Company. The Company expects to incur consulting and other expenses related to its Year 2000 program. The cost of testing and conversion of existing and replacement system applications are not expected to exceed $400,000, the majority of which have already been incurred. These costs will be treated as period costs and expensed as incurred. Based upon the progress to date, the Company does not believe that either future costs of modifications or the consequences of any unsuccessful modifications being implemented by the Company will have a material adverse effect on it's financial position or results of operations. Nevertheless, since it is not possible to anticipate all possible future situations, especially when third parties are involved, the Company believes that the most reasonably likely worse case Year 2000 scenario could result in circumstances in which the Company may be unable to take customer orders, manufacture and ship products, invoice customers or collect payments. A contingency plan has not been developed for dealing with the most reasonably likely worst case Year 2000 scenario, as such scenario has not yet been clearly identified. Therefore, no assurances can be given that the Company's ultimate Year 2000 compliance, particularly as it relates to third parties, will not have any material adverse effect on the Company's financial position or results of operations. Forward-Looking Statements Certain matters discussed in this Quarterly Report on Form 10-Q are "forward-looking statements" intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements can generally be identified as such because the context of the statement will include such words as the Company "believes," "anticipates" or "expects," or words of similar import. Similarly, statements that describe the Company's future plans, objectives or goals are also forward-looking statements. The forward-looking statements are subject to certain risks and uncertainties which could cause actual results to differ materially from those currently anticipated. Such risks and uncertainties include competitive conditions in the markets served by the Company, changes in the Company's plans regarding capital expenditures, general economic conditions, unanticipated events related to resolving the Year 2000 issue, interest and foreign currency fluctuations, and the ability of the Company to successfully integrate the Mustang operations. Shareholders, potential investors and other readers are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. Item 3. Quantitative and Qualitative Disclosures about Market Risk Not Applicable PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits 4.1 Seventh Amendment to Amended and Restated Loan and Security Agreement by and between Deutsche Financial Services Corporation, f/k/a ITT Commercial Finance Corp., Deutsche Financial Services, a division of Deutsche Bank Canada and Gehl Company and its Subsidiaries, dated as of September 1, 1998. 4.2 Loan Agreement by and between the City of Madison, a political subdivision of the State of South Dakota and Gehl Company, dated September 8, 1998. 4.3 Promissory Note signed by Gehl Company payable to the City of Madison, a political subdivision of the State of South Dakota, dated September 8, 1998. 4.4 Mortgage by and between Gehl Company and the City of Madison, a political subdivision of the State of South Dakota, dated September 8, 1998. 27 Financial Data Schedule [EDGAR version only] (b) Reports on Form 8-K No reports on Form 8-K were filed by the Company during the quarter ended September 26, 1998. SIGNATURES Pursuant to the requirements 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. GEHL COMPANY Date: November 10, 1998 By: /s/ William D. Gehl William D. Gehl Chairman of the Board, President and Chief Executive Officer Date: November 10, 1998 By: /s/ Kenneth P. Hahn Kenneth P. Hahn Vice President of Finance and Treasurer(Principal Financial and Accounting Officer) GEHL COMPANY FORM 10-Q September 26, 1998 EXHIBIT INDEX Exhibit Number Document Description 4.1 Seventh Amendment to Amended and Restated Loan and Security Agreement by and between Deutsche Financial Services Corporation, f/k/a ITT Commercial Finance Corp., Deutsche Financial Services, a division of Deutsche Bank Canada and Gehl Company and its Subsidiaries, dated as of September 1, 1998. 4.2 Loan Agreement by and between the City of Madison, a political subdivision of the State of South Dakota and Gehl Company, dated September 8, 1998. 4.3 Promissory Note signed by Gehl Company payable to the City of Madison, a political subdivision of the State of South Dakota, dated September 8, 1998. 4.4 Mortgage by and between Gehl Company and the City of Madison, a political subdivision of the State of South Dakota, dated September 8, 1998. 27 Financial Data Schedule [EDGAR version only] EX-4 2 SEVENTH AMENDMENT TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT This Seventh Amendment is made to that certain Amended and Restated Loan and Security Agreement executed as of October 1, 1994 by and between Deutsche Financial Services Corporation, f/k/a ITT Commercial Finance Corp. ("ITT), "("DFS"), Deutsche Financial Services, a division of Deutsche Bank Canada, successor-in-interest to ITT Commercial Finance, a division of ITT Industries of Canada Ltd., ("DFSC") (DFS and DFSC are hereinafter collectively referred to as "DFS"), and Gehl Company ("Gehl") and its subsidiaries, including, but not limited to, Hedlund Martin Inc., Gehl Power Products, Inc., Mustang Manufacturing Company, Inc. and Mustang Finance, Inc. (collectively "Gehl Company") as amended ("Agreement"). FOR GOOD AND VALUABLE CONSIDERATION, the receipt and sufficiency of which is acknowledged, DFS and Gehl Company agree to amend the Agreement as follows: Section 3.2 of the Agreement, Available Credit, is deleted in its entirety and restated as follows: "Available Credit . On receipt of each Schedule, or as otherwise requested by Gehl Company, DFS will credit Gehl Company with (a) Eighty percent (80.0%) of the net amount of the Eligible Accounts listed in such Schedule, excluding Net Accounts, and (b) Fifty percent (50%)of the net amount of Net Accounts listed in such Schedule, and remit to Gehl Company, in immediately available funds, an amount equal to Gehl Company's Loan request up to the Maximum Line of Credit, in accordance with the electronic transfer instructions contained in Section 8.16 of this Agreement; provided however, that the outstanding principal balance of all advances or loans made on Net Accounts will at no time exceed Five Million Dollars ($5,000,000.00), and the outstanding principal balance of all loans made on foreign Accounts which are insured by a policy in form and substance and issued by an insurer acceptable to DFS will at no time exceed Five Million Dollars ($5,000,000.00). DFS will loan Gehl Company, on request, such amounts so credited or a part thereof as requested provided that at no time will such outstanding loans exceed Gehl Company's Maximum Line of Credit. No advances or loans need be made by DFS if Gehl Company is in Default. Gehl Company acknowledges that any advances or loans made on Net Accounts or foreign Accounts will be deemed made under the U.S. Line." 2. Section 3.3(1)of the Agreement is deleted in its entirety and restated as follows: "for Accounts in excess of $750,000.00 and not specifically approved by DFS in writing, which approval will not be unreasonably witheld, all amounts in excess of $750,000.00;" 3. All other terms and provisions of the Agreement remain unchanged and in full force and effect. IN WITNESS WHEREOF the dully authorized representatives of DFS, DFSC, and Gehl Company have executed this Seventh Amendment to Amended and Restated Loan and Security Agreement as of this 1st day of September, 1998. GEHL COMPANY HEDLUND MARTIN, INC. By: /s/ W.D. Gehl By: /s/ W.D. Gehl Title: President Title: President GEHL POWER PRODUCTS, INC. MUSTANG MANUFACTURING COMPANY, INC. By: /s/ W.D. Gehl By: /s/ W.D. Gehl Title: President Title: President MUSTANG FINANCE, INC. By: /s/ W.D. Gehl Title: President DEUTSCHE FINANCIAL SERVICES DEUTSCHE FINANCIAL SERVICES, CORPORATION a division of Deutsche Bank Canada By: /s/ Kenneth C. MacDonell By: /s/ Bill Blight Title: Vice President Title: Vice President By: /s/ Joe Conte Title: Vice President EX-4 3 LOAN AGREEMENT WHEREAS, the CITY of Madison, a political subdivision of the State of South Dakota, hereinafter referred to as the CITY, and Gehl Company, a Wisconsin corporation, hereinafter referred to as Gehl, have entered into an agreement by which the CITY is providing a loan for the improvement of real property described as: Lots One (1), Two (2), Three (3) and Four (4) in Madison Industrial Park, ; and the North 334.4 Feet of Lot Nine (9) except the East 177.4 Feet thereof; and the North 334.4 Feet of the West Half (W1/2) of Lot Ten (10), and the North 334.4 Feet of the East Half (E1/2) of Lot Ten (10), all in County Auditor's Fourth Addition to Madison, Lake County, South Dakota It is covenanted and agreed by and between the parties the following terms and conditions shall be the basis for the loan from the CITY to Gehl. 1.) Gehl shall receive a Two Hundred Fifty Five Thousand and no/100 ($255,000.00) Dollar loan from the CITY of Madison to be evidenced by a Promissory Note in the principal sum of Two Hundred Fifty Five Thousand and no/100 ($255,000.00) Dollars secured by a shared first mortgage with the South Dakota Board of Economic Development on a pro rated basis as set forth in a separate Mortgage Subordination and Parity Agreement. 2.) The loan in the sum of $255,000.00 with interest thereon at the rate of three per cent (3%) per annum with a blended monthly payment of principal and interest based upon a 20 year amortization with fifty nine (59) monthly payments of $1,414.23 and a balloon payment to be paid at the expiration of five (5) years payable on or before September 1, 2003. If payment is not made by the due date of each payment a late fee in the sum of $63.00 per day shall be assessed. Payment shall first be applied to any late fees and interest outstanding and then to principal. Adjustments to the interest rate based upon the number of jobs as set forth in this agreement may be made after year one of this agreement on a yearly basis if the required F.T.E. is not met pursuant to Section 4 below. 3.) The building presently on the real property has been modified by an addition partially financed through the funds received from the CITY and South Dakota Board of Economic Development on the shared mortgage as hereinbefore set forth, and all monies will be used for the purpose of expanding an existing industry in the Lake County area. This expanded industry will create eight (8) new jobs by May 31, 1998, and an additional forty three (43) F.T.E. jobs will be created by May 31, 2000, (8 + 43 = 51). These numbers shall continue for the remainder of the loan. 4.) It is further agreed that in the event the number of new employees does not reach the full time employment (F.T.E.) levels identified in Section 3.) above, the interest rate identified on the aforesaid Promissory Note shall increase by one half of one percent (1/2%) for each six month period during which the required F.T.E. is not met, the initial six month period to begin on the first day of the month following the failure of Gehl to achieve the required F.T.E. goal after the first anniversary date of the Loan Agreement. In the event Gehl does not achieve the required F.T.E. goal during the initial six month period following the failure of Gehl to achieve the required F.T.E. goal, the interest rate applicable to the aforementioned Promissory Note shall increase by one half of one percent (1/2%) for each successive six (6) month period during which the F.T.E. goal is not achieved; provided, however the maximum interest applicable to the Promissory Note shall not exceed one percent (1%) less than the prime rate charged by First Bank of Minneapolis, N.A. as its base rate on corporate loans, determined as of the date Gehl fails to meet the F.T.E. goal. In the event Gehl does meet the required F.T.E. goal, the interest rate applicable to the Promissory Note shall revert to three percent (3%) as of the date Gehl does meet the required F.T.E. goal, provided Gehl submits to the CITY satisfactory documentation that the F.T.E. goal was attained. 5.) On the date of closing, Gehl shall provide the CITY a Promissory Note and Mortgage in the principal sum of $255,000.00 with the terms as hereinbefore described (hereinafter collectively referred to as Loan Documents). 6.) Gehl will reimburse the CITY for the cost of any obligations incurred by the CITY in connection with this loan which shall include legal fees not to exceed $2,000.00 plus costs of transfer fees, filing fees including but not limited to title insurance or abstracting. 7.) Gehl shall abide with all Federal, State, and Municipal laws, regulations, and rules concerning zoning, use and land use, building code, fire, environmental, and any reporting required by any governmental entity. 8.) Gehl will provide to the CITY the information set forth on attached Exhibit "A" every six (6) months; said information to be provided as long as there is an outstanding loan from the CITY to Gehl; and said information will be used by the CITY for the purposes of determining whether or not the requirements of F.T.E. have been met in conformity with paragraph (4) of this agreement. 9.) Gehl agrees to indemnify and hold harmless the CITY, it's agents or employees from any and all losses, expenses, damages, demands and claims in connection with or arising out of any injury or alleged injury of any persons (including death) or damage or alleged damage to personal or real property, sustained or alleged to have been sustained in connection with or to have arisen out of Gehl interest in or use of the real property hereinbefore described, and Gehl agrees to defend any suit or action brought against the CITY it's agent, employees or any of them based on such injury or damage and to pay all damages, costs and expenses including attorney fees in connection herewith or resulting therefrom. 10.) Gehl shall have the right to prepay under this Loan Agreement in any amount without penalty during the term of this Loan Agreement. Further, in the event the F.T.E. does not meet the requirements set forth in paragraph 4, then Gehl shall have the right to prepay on the loan in full without penalty. 11.) That failure to comply with any of the provisions of this agreement shall be deemed to be a breach of the terms and conditions of the loan. In the event any breach shall occur the CITY may demand payment of the note in full. 12.) This agreement is legally binding upon the legal heirs, executors, administrators, successors, and assigns of the respective parties. 13.) Any required or permitted notice or other communication under this Loan Agreement shall be in writing and addressed as follows: If to City: Finance Officer, City of Madison PO Box 308 Madison, South Dakota 57042 If to Gehl: General Counsel, Gehl Company 143 Water Street West Bend, Wisconsin 53095 Any such notice or other communication, if mailed, shall be sent by registered or certified mail, return receipt requested. Notices or communications to or between the parties shall be deemed sufficiently served or given for all purposes hereunder on the first to occur of the receipt of such notice or other communication or the fifth day after the time the same shall be deposited in the mail or, if personally delivered when received by such party. 14.) This Loan Agreement and the Loan Documents may not be amended except in writing, which writing shall be expressly identified as a part hereof or thereof, and which writing will be signed by an authorized representative of each of the parties. Dated this 9th day of September, l998. CITY OF MADISON /s/ Royce D. Hueners Mayor ATTEST /s/Jeff Heinemeyer CITY Finance Officer GEHL COMPANY /s/Kenneth P. Hahn It's Vice President ATTEST: /s/ M. J. Mulcahy It's Secretary STATE OF SOUTH DAKOTA ) : SS COUNTY OF LAKE ) On this the 9th day of September, l998, before me, Claudea DeRungs, the undersigned officer personally appeared Royce D. Hueners and Jeff Heinemeyer, who acknowledged themselves to be the Mayor and Finance Officer respectively, of the City of Madison, a municipal corporation, and that they, as such Mayor and Finance Office being so authorized to do, executed the foregoing instrument by signing the name of the City of Madison by themselves as Mayor and Finance Officer thereof. In witness whereof I hereunto set my hand and official seal. Claudia DeRungs Notary Public, South Dakota My commission expires: 9-29-2001 STATE OF WISCONSIN ) : SS COUNTY OF WASHINGTON ) On this the 8th day of September, l998, before me, Laurence Schwartz, the undersigned officer personally appeared Kenneth P. Hahn and Michael J. Mulcahy, who acknowledged themselves to be the Vice President and Secretary of Gehl Company respectively, and that they, as such President and Secretary being so authorized to do, executed the foregoing instrument by signing the name of Gehl Company by themselves as Vice President and Secretary thereof. In witness whereof I hereunto set my hand and official seal. /s/Laurence Schwartz Notary Public, Wisconsin My commission expires: Permanent EX-4 4 PROMISSORY NOTE $255,000.00 Madison, South Dakota Dated: September 8, 1998 After date, for value received, the undersigned promises to pay to the order of THE CITY OF MADISON, a political subdivision of the State of South Dakota, at their address, Madison, South Dakota, the principal sum of TWO HUNDRED FIFTY FIVE THOUSAND DOLLARS ($255,000.00) Dollars, together with interest thereon at the rate of three per cent (3%) per annum, payable as follows: The sum of $1,414.23 per month commencing October 1, 1998, and on the first day of each and every month thereafter. Such payment being a blended payment of principal and interest with interest being at the rate of three per cent (3%) per annum commencing as of September 1, 1998, with a balloon payment in the amount of $206,216.01 due on or before September 1, 2003; such payments being made according to the attached amortization schedule; This Promissory Note is subject to a change in interest rate as further described in paragraph 4) of the Loan Agreement dated September 8, 1998 which paragraph is incorporated hereby as if fully set forth herein. All payments on account of the indebtedness evidenced by this Note shall be first applied to interest and the remainder to principal. In the event payment is not made by the due date, a late payment fee of ($63.00) Dollars per day shall be assessed. The undersigned, for itself, its successors and assigns, reserves the privilege of prepaying without penalty the entire unpaid principal balance, provided there shall also be paid with such prepayment all accrued interest on the unpaid principal balance. This note is secured, by and entitled to the benefits of a Mortgage of even date herewith executed by Gehl Company, a Wisconsin corporation, and any and all instruments and documents supplemental thereto which instruments are herein referred to as Loan Agreement and Mortgage and any documents referred to therein which shall collectively be referred to as "Loan Documents". Reference is hereby made to said Loan Documents for a description of the property covered thereby and the nature and extent of the security. In the event of default by Gehl Company, on this Note, Mortgage or as described in the Loan Agreement, the principal of this Note, together with all accrued interest thereon, may, at the option of the City of Madison, immediately become due and payable on demand. All notices, demands and requests required or desired to be given hereunder shall be in writing and shall be delivered in person or by United States registered or certified mail, return receipt requested, postage prepaid, if given to the undersigned addressed to the undersigned at: General Counsel Gehl Company 143 Water Street West Bend, Wisconsin 53095-0179 or at such changed address as may from time to time be designated by the party to be addressed, by written notice to the other in the manner herein provided. Notices, demands and requests given by mail in the manner aforesaid shall be deemed sufficiently served or given for all purposes hereunder on the first to occur of the receipt of such notice, demand or request, or the fifth day after the time the same shall be deposited in the mail. In the event of default in the payment of the Promissory Note, and if the same is collected by an attorney at law, the Borrower agrees to pay all costs of collection, including reasonable attorney's fees. The Borrower, maker and endorsers hereby waives presentment for payment, demand, notice of nonpayment, protest, notice of protest, notice of dishonor, trial by jury and the right to interpose any defense, set off, counterclaim or any litigation arising out of this promissory note. Gehl Company, for itself their successors, transferees and assigns and all guarantors, hereby agrees that this Note and any payment coming due hereunder may be extended from time to time without in any way affecting its liability hereunder. This Note shall be governed by the laws of the State of South Dakota, which laws shall also cover and control the construction, enforceability, validity and interpretation of this Note. GEHL COMPANY By /s/Kenneth P. Hahn(SEAL) Its Vice President (CORPORATE SEAL) ATTEST M. J. Mulcahy(SEAL) Secretary CITY OF MADISON GEHL SEPTEMBER 1, 1998 $255,000.00 ORIGINAL BALANCE . . . . . . . . . . . $255,000.00 ANNUAL INTEREST RATE . . . . . . . . . 3 % PAYMENT . . . . . . . . . . . . . . . $1,414.23 TOTAL NUMBER OF PAYMENTS . . . . . . . 240 PAYMENT FREQUENCY . . . . . . . . . . MONTHLY DATE OF LOAN INCEPTION . . . . . . . . 9 / 1 / 98 DATE OF FIRST PAYMENT . . . . . . . . 10 / 1 / 98 BALLOON PAYMENT . . . . . . . . . . . REMAINING BALANCE PAY. NO. 60 *** INTEREST CALCULATION BASED ON NO. OF DAYS IN THE PAYMENT PERIOD *** PAY- MENT TOTAL APPLIED TO APPLIED TO REMAINING NO. DUE DATE PAYMENT INTEREST PRINCIPAL BALANCE $255,000.00 1 10/ 1/98 $ 1,414.23 $ 628.77 $ 785.45 254,214.55 2 11/ 1/98 1,414.23 635.54 778.68 253,435.87 3 12/ 1/98 1,414.23 633.59 780.63 252,655.24 ANNUAL TOTAL $ 4,242.69 $ 1,897.90 $ 2,344.76 4 1/ 1/99 $ 1,414.23 $ 631.64 $ 782.58 $251,872.65 5 2/ 1/99 1,414.23 629.68 784.54 251,088.12 6 3/ 1/99 1,414.23 627.72 786.50 250,301.62 7 4/ 1/99 1,414.23 625.75 788.47 249,513.15 8 5/ 1/99 1,414.23 623.78 790.44 248,722.71 9 6/ 1/99 1,414.23 621.81 792.41 247,930.30 10 7/ 1/99 1,414.23 619.83 794.39 247,135.91 11 8/ 1/99 1,414.23 617.84 796.38 246,339.53 12 9/ 1/99 1,414.23 615.85 798.37 245,541.16 13 10/ 1/99 1,414.23 613.85 800.37 244,740.79 14 11/ 1/99 1,414.23 611.85 802.37 243,938.42 15 12/ 1/99 1,414.23 609.85 804.37 243,134.05 ANNUAL TOTAL $ 16,970.76 $ 7,449.45 $ 9,521.19 16 1/ 1/ 0 $ 1,414.23 $ 607.84 $ 806.38 $242,327.67 17 2/ 1/ 0 1,414.23 605.82 808.40 241,519.27 18 3/ 1/ 0 1,414.23 603.80 810.42 240,708.85 19 4/ 1/ 0 1,414.23 601.77 812.45 239,896.40 20 5/ 1/ 0 1,414.23 599.74 814.48 239,081.92 21 6/ 1/ 0 1,414.23 597.70 816.52 238,265.40 22 7/ 1/ 0 1,414.23 595.66 818.56 237,446.84 23 8/ 1/ 0 1,414.23 593.62 820.60 236,626.24 24 9/ 1/ 0 1,414.23 591.57 822.65 235,803.59 25 10/ 1/ 0 1,414.23 589.51 824.71 234,978.88 26 11/ 1/ 0 1,414.23 587.45 826.77 234,152.11 27 12/ 1/ 0 1,414.23 585.38 828.84 233,323.27 ANNUAL TOTAL $ 16,970.76 $ 7,159.86 $ 9,810.78 28 1/ 1/ 1 $ 1,414.23 $ 583.31 $ 830.91 $232,492.36 29 2/ 1/ 1 1,414.23 581.23 832.99 231,659.37 30 3/ 1/ 1 1,414.23 579.15 835.07 230,824.30 31 4/ 1/ 1 1,414.23 577.06 837.16 229,987.14 32 5/ 1/ 1 1,414.23 574.97 839.25 229,147.89 33 6/ 1/ 1 1,414.23 572.87 841.35 228,306.54 34 7/ 1/ 1 1,414.23 570.77 843.45 227,463.09 35 8/ 1/ 1 1,414.23 568.66 845.56 226,617.53 36 9/ 1/ 1 1,414.23 566.54 847.68 225,769.85 37 10/ 1/ 1 1,414.23 564.42 849.80 224,920.05 38 11/ 1/ 1 1,414.23 562.30 851.92 224,068.13 39 12/ 1/ 1 1,414.23 560.17 854.05 223,214.08 ANNUAL TOTAL $ 16,970.76 $ 6,861.45 $ 10,109.19 40 1/ 1/ 2 $ 1,414.23 $ 558.04 $ 856.18 $222,357.90 41 2/ 1/ 2 1,414.23 555.89 858.33 221,499.57 42 3/ 1/ 2 1,414.23 553.75 860.47 220,639.10 43 4/ 1/ 2 1,414.23 551.60 862.62 219,776.48 44 5/ 1/ 2 1,414.23 549.44 864.78 218,911.70 45 6/ 1/ 2 1,414.23 547.28 866.94 218,044.76 46 7/ 1/ 2 1,414.23 545.11 869.11 217,175.65 47 8/ 1/ 2 1,414.23 542.94 871.28 216,304.37 48 9/ 1/ 2 1,414.23 540.76 873.46 215,430.91 49 10/ 1/ 2 1,414.23 538.58 875.64 214,555.27 50 11/ 1/ 2 1,414.23 536.39 877.83 213,677.44 51 12/ 1/ 2 1,414.23 534.19 880.03 212,797.41 ANNUAL TOTAL $ 16,970.76 $ 6,553.97 $ 10,416.67 52 1/ 1/ 3 $ 1,414.23 $ 531.99 $ 882.23 $211,915.18 53 2/ 1/ 3 1,414.23 529.79 884.43 211,030.75 54 3/ 1/ 3 1,414.23 527.58 886.64 210,144.11 55 4/ 1/ 3 1,414.23 525.36 888.86 209,255.25 56 5/ 1/ 3 1,414.23 523.14 891.08 208,364.17 57 6/ 1/ 3 1,414.23 520.91 893.31 207,470.86 58 7/ 1/ 3 1,414.23 518.68 895.54 206,575.32 59 8/ 1/ 3 1,414.23 516.44 897.78 205,677.54 60 9/ 1/ 3 206,191.74 514.19 205,677.54 0.00 ANNUAL TOTAL $217,505.58 $ 4,708.08 $212,797.41 GRAND TOTAL $289,631.31 $34,630.71 $255,000.00
EX-4 5 MORTGAGE - ONE HUNDRED EIGHTY DAY REDEMPTION THIS MORTGAGE, is made this 8th day of September, l998, by GEHL COMPANY, a Wisconsin corporation, of 143 Water Street, West Bend, Wisconsin 53095- 0179,("MORTGAGOR") for a project at 915 S.W. 7th Street, Madison, Lake County, South Dakota, to the CITY OF MADISON, a political subdivision of the State of South Dakota, of P.O. Box 308, Madison, South Dakota, 57042, ("MORTGAGEE"); WITNESSETH, that in consideration of the advance of the principal sum as stated herein, plus all future and additional advances together with interest thereon, and in consideration of any future and additional advances made to the Mortgagor at Mortgagee's option, Mortgagor does hereby mortgage, grant, bargain, release, assign, transfer and convey to Mortgagee the real property and premises together with all buildings and improvements now or thereafter erected thereon, all hereditaments and appurtenances, and all rights and interests thereunto belonging or appertaining, including rights of homestead, and all contingent rights and estates of the Mortgagor in and to said Premises, it being the intention of Mortgagor to mortgage an absolute title in fee in and to said Premises in favor of the Mortgagee, to include all of the right, title and interest of Mortgagor in said property now owned or hereafter acquired, all easements and servient estates appurtenant thereto, rents, issues, uses, profits and right to possession, and all crops raised or placed thereon in the following described Premises situated in the County of Lake and State of South Dakota, ("Premises") to-wit: Lots One (1), Two (2), Three (3), and Four (4), in Madison Industrial Park, Madison, Lake County, South Dakota; and the North 334.4 Feet of Lot Nine (9), and the North 334.4 Feet except the East 177.4 Feet of the West Half (W1/2) of Lot Ten (10), and the North 334.4 Feet of the East Half (E1/2) of Lot Ten (10), all in County Auditor's Fourth Addition to Madison, Lake County, South Dakota Mortgagor warrants that Mortgagor is the owner in fee and is lawfully seized of said Premises; that the Premises are free and clear from all encumbrances and liens whatsoever with the exception of the mortgage to the South Dakota Board of Economic Development dated May 26, 1998 and recorded on June 17, 1998 in Book 334 Page 127 in the office of Register of Deeds, Lake County, South Dakota. Mortgagor hereby covenants to warrant and defend the title to said Premises against any and all claims and demands of all persons whomsoever. Mortgagor hereby relinquishes and waives all rights of homestead in the Premises. THE PARTIES AGREE THAT THE PROVISIONS OF THE ONE HUNDRED EIGHTY DAY REDEMPTION MORTGAGE ACT GOVERN THIS MORTGAGE. In the event Mortgagee elects to foreclose by action in state court, the holder of the certificate of sale may apply to the court for a reduction of the 180 day redemption period if the property has been abandoned by the Mortgagor. If, after notice to the parties as the court directs, the court finds the property has been abandoned, the redemption period may be reduced. The redemption period may not be reduced to less than sixty (60) days from the date of recording the certificate of sale. There is hereby granted to Mortgagee a power of sale for the purposes of SDCL 21-49. The foregoing shall not be deemed to be a waiver of Mortgagee's right to foreclose this Mortgage in federal court and seek extinguishment of all rights of redemption. This Mortgage is given by the Morgagor as security for the following: A. Payment by Mortgagor to the Mortgagee of the principal sum of Two Hundred Fifty Five Thousand and no/l00 ($255,000.00) Dollars, together with interest thereon, according to the terms of a certain Promissory Note dated the date hereof, given by Mortgagor to Mortgagee, and any other Loan Documents or other instruments executed in refinancing, extending or renewing said indebtedness or any part thereof, all payable according to the terms of said Promissory Note, Loan Documents and other instruments; B. The repayment in full by Mortgagor of any and all future and additional advances which may be made by Mortgagee at its option, at the request of and to or for the account of Mortgagor, for any purposes, whether or not the obligation created by such future advances related to the transaction evidenced by the Promissory Note or Loan Documents and whether or not such an advance is presently contemplated by the parties; repayment to be made as provided in the Promissory Note, Loan Documents or in such other instruments; provided, further, that THIS PARAGRAPH SHALL NOT CONSTITUTE A COMMITMENT TO MAKE FURTHER OR ADDITIONAL ADVANCES IN ANY AMOUNT; C. The repayment in full by Mortgagor of all amounts advanced by Mortgagee, at its option, to or on behalf of Mortgagor as protective disbursements, as authorized in this Mortgage or in the Loan Agreement, or any other Loan Document, together with interest on all such advances, all payable as provided in this Mortgage, the Promissory Note, or other Loan Document or other instrument which may be taken to evidence such advance (s) or any part thereof; D. The payment by Mortgagor of all other present or future, debts and liabilities of Mortgagor to Mortgagee of any nature whatsoever. Mortgagor covenants and agrees with the Mortgagee as follows: A. To pay all taxes, assessments, rents, or governmental or municipal charges levied, imposed, or charged against the Premises or the project, before the same shall become delinquent, and to pay when due all liens, judgments, or other assessments which may lawfully be assessed against the property herein mortgaged, and the rental charges upon any leases assigned as additional security. B. To insure and keep insured building and other improvements now or which may hereafter be placed on said Premises, if any, for the benefit of the Mortgagee, against loss by fire, wind, and other hazards, casualties and contingencies, with such insurers licensed to do business in the State, in such amounts, and against such risks as are customary in the State for entities of the same and similar size and type as the Mortgagor, and similarly situated with Premises and facilities of the Project's type, and provide proof of such coverage to the Mortgagee. Each policy must provide that such insurance will be payable to Mortgagee as its interest may appear. Each policy must provide that it cannot be canceled without 30 days prior written notice of cancellation. In the event of cancellation the Mortgagor will promptly obtain replacement insurance with the same or substantially similar coverage and provide proof of such coverage to the Mortgagee. In the event of renewal, replacement or changes in coverage, the Mortgagor will promptly provide written notice of such changes to the Mortgagee. In the event of loss, the proceeds received by Mortgagee may, at Mortgagee's option be used for the reconstruction of the destroyed or damaged improvements or, if not so applied, may, at the option of the Mortgagee, be applied to the payment of any indebtedness matured or unmatured, secured by this Mortgage. C. To keep the Premises in good condition and repair, as the same may now, or may hereafter, be placed, ordinary wear and tear excepted; to permit no mechanic's or other lien or encumbrance thereon; or to commit or permit no impairment of the value of this security. Mortgagor shall not commit or suffer waste on the Premises, and in event of such waste the Mortgagee, in addition to any other available remedy, shall be entitled immediately to restrain the same by injunction or other appropriate proceeding. Mortgagor warrants that the Premises will not be used for any unlawful purpose or permitted to become a nuisance; not to cut or remove, or permit to be cut or removed, any wood or timber from said real property; to continuously practice approved methods of farming on said Premises, to prevent erosion, and to prevent the spread of noxious or damaging weeds, and to preserve the fertility of the soil. D. That no structure, or improvement of any kind whatsoever, now or hereafter in or on the mortgaged Premises, shall be removed, replaced, or substantially altered without the Mortgagee's written consent, except for that property which in the good faith opinion of the Mortgagor is obsolete, outdated, worn out, is being replaced, or otherwise is not needed for the operation of the Project. If at any time all or any portion of the above described Premises shall be taken or damaged by condemnation proceedings under the power of eminent domain, all compensation awarded shall be paid directly to Mortgagee and, at Mortgagee's option, applied to the indebtedness hereby secured. E. That in the event Mortgagor fails to pay when due any taxes, rental charges upon any leases assigned as additional security for this Mortgage, liens, judgments, or assessments lawfully assessed against the Premises hereby mortgaged, or governmental or municipal charges, fines, rates, fees or charges levied, imposed, or charged against the Premises before the same become delinquent, or fails to maintain insurance as hereinabove provided, Mortgagee may do so, at its sole option, and without the obligation to do so, as a protective disbursement and the amount so paid, together with interest at the current rate of the Mortgagee at the time the Mortgagee makes such payment, shall, from the date of payment be added to and deemed a part of the indebtedness secured hereby, and shall be due and payable on demand by the Mortgagee, provided, however, that the advancement by Mortgagee of any sum pursuant to this paragraph shall in no manner relieve Mortgagor of any obligations incurred under this Mortgage nor limit the right of Mortgagee to declare a default by Mortgagor and to exercise all rights and remedies as set forth herein in the event of default. F. In the case of default by the Mortgagor in the payment of the principal sum, or any part thereof, or interest thereon at the time or times as specified for the payments hereof, or in the case of any breach of any covenant or agreement contained in this Mortgage, the Loan Documents, or the Promissory Note, or related mortgages, documents and notes, or in the event of the failure of the Mortgagor to promptly pay, when due, any taxes, charges, liens, assessments, or encumbrances, or in the event of the insolvency of the Mortgagor, the Mortgagee may at its option declare this Mortgage to be in default and shall provide Mortgagor with written notice of such default. If such default has not been cured within fifteen (15) days of Mortgagor's receipt of writen notice thereof, Mortgagee at its sole option, may accelerate the payment of the outstanding debt and may declare the entire unpaid principal sum including interest due thereon immediately due and payable, and if not paid within 10 days thereof this Mortgage may be foreclosed by action, or by advertisement as provided by statute or the rules or powers relating thereto, including any amendments thereof, and this paragraph shall be deemed as authorizing and constituting a power of sale as mentioned in said statutes or rules or any amendments thereof. In addition, Mortgagee may exercise any remedy set forth in any of the Loan Documents or other agreements between the parties made in connection with this Mortgage. G. To the extent permitted by law, Mortgagor agrees that in case of any action, or in any proceedings in any court, to collect any sums payable under or secured by this Mortgage, or to protect the lien or title herein of the Mortgagee, or in any other case permitted by law, including foreclosure by action or by advertisement, in which attorney fees may be collected from Mortgagor or charged upon the above described property, to pay Mortgagee's reasonable attorney fees and actual disbursements necessarily incurred in the course of said action. H. That in the event the mortgaged Premises or any portion thereof are sold, divested, transferred, relinquished, or in the event the Mortgagor should lose their right, title or interest in the security herein described, or any portion thereof during the term of this Mortgage, whether voluntarily or by operation of law, without the prior written consent of the Mortgagee, the entire indebtedness remaining unpaid and owing together with interest thereon, including advances for any purpose may at the option of the Mortgagee, be declared immediately due and payable and this Mortgage may then be foreclosed by action or by advertisement, as provided by statute or the rules or powers relating thereto. I. In the event of default in the payment of any of the obligations described in this Mortgage, Mortgagor hereby assigns to Mortgagee all of Mortgagor's interest in and to all rents, issues, uses, growing crops, profits, royalties, or lease payments due to Mortgagor from use or occupancy of any part of the Premises secured by this Mortgage; this assignment shall also pertain to all royalties, rents, or profits, due to Mortgagor for any oil, gas, mineral, or other subsurface interest in and to the above described Premises; all rents profits, lease payments, or royalties received by Morrgagee hereunder shall be applied to the indebtedness secured by this Mortgage. J. In the case of foreclosure of this Mortgage, at any time after the commencement of an action of foreclosure or at any time after the commencement of foreclosure by advertisement, or during any period of redemption, Mortgagee is authorized to appoint a receiver to take possession of the Premises if the Premises have been abandoned, or to have a receiver appointed by the court upon other sufficient proof being established therefore, said receiver to take immediate possession of the above described property, and of all the rents or profits accruing therefrom and to rent or cultivate the same as the receiver may deem best for the interest of all parties concerned, and be liable to account to Mortgagor only for the net profits, after application of rents, issues and profits upon the expenses and costs of the receivership and foreclosure and upon the indebtedness, costs and expenses hereby secured or herein mentioned. K. Further, in the event of any action by Mortgagee to enforce collection of the mortgage debt, Mortgagor agrees that any expense incurred to procure or extend an abstract of title, policy of title insurance or other lien search, shall, when paid by Mortgagee, become a part of the debt secured hereby, and shall be paid by Mortgagor together with all taxable costs of such action. L. In the case of any default the Mortgagee shall have the privilege, without declaring the whole indebtedness due and payable, to foreclosure on account of such specific default for such sums as are in default and such foreclosure proceedings may be had and the Premises described herein may be sold, subject to the unpaid indebtedness hereby secured, and this Mortgage shall continue as a lien for any unpaid balance. If the Mortgageee waives the right to accelerate, or any other right hereunder, such a waiver shall not constitute a waiver of the right to rescind, or any other remedy available to the Mortgagee, nor shall it be construed as a waiver of such rights in the event of subsequent defaults. No remedy herein conferred upon or reserved to the Mortgagee is intended to be exclusive of any other available remedy, but each and every remedy shall be cumulative and in addition to every other remedy given under this Mortgage and the Loan Agreement, or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed as a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. In the event that any breach by the Mortgagor is specifically waived in writing by the Mortgagee, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other or subsequent breach. M. Any moneys collected by the Mortgagee pursuant to foreclosure under this Mortgage shall be applied first to pay Mortgagee's attorney's fees and other expenses of collection; second to any interest and penalties on the Loan; third to pay principal due on the Loan; fourth to pay any other amounts due under this Mortgage, the Loan Agreement, the Promissory Notes or the Loan Documents; and fifth to pay principal and interest on the Loan, and other amounts not yet due hereunder, as they become due, such to be made in the same order as set forth in this section. Mortgagor will comply with all statutes, ordinances, and governmental regulation affecting the Premises, and if Mortgagor neglects or refuses to so comply, and such failure or refusal has not been corrected within 15 days of receipt of written notice, the entire balance of the principal sum secured hereby, together with all accrued interest thereon, will, at Mortgagee's sole option, immediately become due and payable. This Mortgage shall be governed by and construed in accordance with the laws of the State of South Dakota. Terms used herein and defined in the Loan Agreement shall have the same meaning as set forth in the Loan Agreement unless the context clearly required otherwise. This Mortgage may not be modified or amended except by mutual consent expressed in writing, which writing shall be expressly identified as a part hereof, and which writing shall be signed by an authorized representative of each of the parties hereto. Any notice provided for herein shall be deemed given when transmitted as provided in Section 13 of the Loan Agreement. The covenants in this Mortgage shall be deemed to be severable; in the event that any portion of this Mortgage is determined to be void or unenforceable, that determination shall not affect the validity of the remaining portions of the Mortgage. IN WITNESS WHEREOF, this instrument has been executed the day and year first above written. GEHL COMPANY By: /s/Kenneth P. Hahn It's Vice President ATTEST By: M.J. Mulcahy (SEAL) It's Secretary STATE OF Wisconsin ) : SS COUNTY OF Washington ) On this the 8th day of September, l998, before me, Laurence Schwartz, the undersigned officer, personally appeared Kenneth P. Hahn and Michael J. Mulcahy, who acknowledged themselves to be the Vice President and Secretary, respectively, of Gehl Company, a Wisconsin corporation, and that they, as such Vice President and Secretary, being authorized so to do, executed the same for the purposes therein contained by signing the name of the corporation by themselves as Vice President and Secretary thereof. In witness whereof I hereunto set my hand and official seal. Laurence Schwartz Notary Public My commission expires: Permanent Prepared by: ERICSSON, ERICSSON & LEIBEL PO Box 406 Madison, SD 57042 (605) 256-4597 EX-27 6
5 This schedule contains summary financial information extracted from Gehl Company's consolidated balance sheet at September 26, 1998 and consolidated statements of income for the nine month period ended September 26, 1998 and is qualified in its entirety by reference to such financial statements. 1000 9-MOS DEC-31-1998 JAN-1-1998 SEP-26-1998 4925 0 86867 0 28630 125881 74888 40787 183322 53738 33309 640 0 0 90235 183322 199971 199971 145111 145111 0 0 3352 18499 6567 11932 0 0 0 11932 1.88 1.79 Company presents receivables on a net basis in compliance with Article 10 of Regulation S-X. Includes all non-current portion of debt obligations. The EPS under the "EPS-Primary" tag represents Basic Earnings Per Share.
-----END PRIVACY-ENHANCED MESSAGE-----