Name: JLG Industries Inc. (JLG)
Web Site: http://www.jlg.com
Brief Description: JLG Industries, Inc. provides access equipment and highway-speed telescopic hydraulic excavators. The company operates through three segments: Machinery, Equipment Services, and Access Financial Solutions. The Machinery segment designs, manufactures, and sells aerial work platforms, telehandlers, telescoping hydraulic excavators, and trailers, as well as complementary accessories of these products. The Equipment Services segment provides after-sales service and support activities, such as parts sales and equipment rentals, as well as used and remanufactured, or reconditioned equipment sales. It also resells used equipment of other manufacturers. The Access Financial Solutions segment provides financing and leasing solutions. Its financing solutions include installment sale contracts, capital leases, operating leases, and rental purchase guarantees. The company markets its products to equipment rental companies, construction contractors, manufacturing companies, home improvement centers, the U.S. military, state and local municipalities, and equipment distributors that resell its equipment worldwide. JLG Industries was founded in 1969 and is based in McConnellsburg, Pennsylvania.

JLG's stock price jumped by 184.3% since we had assigned Buy rating less than one year ago.

JLG reported a revenue growth of 55.8% yoy for Q1FY06 and 45.3% yoy for FY05. The revenue was driven by strong demand for all product lines of JLG, primarily resulting from general economic growth in North America, Europe and Australia. Additionally, the revenue surge was associated by steady improvements in margins.

Since breakeven in FY03, JLG doubled the net income two straight years - FY04 and FY05. Robust operating cash flows helped JLG to reduce significantly its debt during the past couple of years. Q1FY06 has been also marked by solid bottom line - JLG reported $27.8 Mn net income for Q1FY06 while it incurred losses of $8.7 Mn in Q1FY05.

After strong Q1FY06, JLG management raised 2006 EPS outlook by about 10% and FY06 revenue growth to 20..25% from a prior range of 15..20%.

Despite the excellent recent performance, we assign a Neutral rating to JLG. We believe the current stock price already reflects the turnaround JLG executed over the last 2-3 years and expect future upside potential to be limited.

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