ASV Third Quarter 2017 Highlights
- $30.6 million in net sales represented a year-over-year increase of 33 percent over $23 million in the third quarter of 2016.
- Machine sales revenues increased 60.1 percent to $19.8 million, led by an 88.7 percent increase in new machine sales through ASV’s growing distribution network.
- Net income increased $0.1 million to $0.5 million or five cents per share.
For the third quarter of 2017, ASV Holdings is posting a walloping 88.7 percent increase in new machine sales through its growing distribution network.
Machine sales revenues jumped 60 percent to $19.8 million, led by the nearly 89 percent increase through the company’s distribution network.
The company reported $30.6 million in net sales, a 33-percent year-over-year increase in net sales, at $30.6 million in the third quarter of 2017. That compares to $23 million for the same period in 2016.
Last week, in a nod to strong market conditions, the Minnesota-based maker of compact construction announced it had landed a new $2 million order from its largest rental customer for its RT30 and RT50 compact track loaders. It was second big order received from the customer, who wasn’t named, for delivery of equipment in 2017, and it doubled that customer’s most recent annual purchases of ASV machines.
The ASV machines supplied under that large order will be deployed across a number of additional rental locations, the company says.
Third quarter 2017 results reflect continued progress in the development of ASV as an independent company, says CEO Andrew Rooke. This effort is highlighted by 60 percent year-over-year growth from machine sales, a near-doubling in pre-tax earnings, and expansion in dealer location counts, he says.
“Year-to-date machine sales through our distribution in North America have completely replaced those previously made through the Terex construction group distribution, and the expansion of our ASV network continued through the quarter, with the addition of twenty-one locations and particularly strong sell-through in Australia, where we have also added six dealer locations this year,” Rooke says.
Improving margins, growth
Missi How, CFO, notes that gross and EBITDA margins are improving.
“We continue to focus on strengthening our balance sheet and have generated nearly $9 million in operating cash flow year-to-date, with roughly $3 million of that in the third quarter,” How says.
“Working capital is down by $3.4 million for the first nine months of 2017 and our total indebtedness is less than half of what it was at the end of 2016,” she explains.
“We expect to complete the re-financing of our remaining term debt in early 2018, which will further reduce our interest cost. Overall, we anticipate improvements in gross, pre-tax, and net margins as a result of strategic actions we’re taking, and look forward to a strong close to the year.”
Rooke adds that ASV’s “targeted penetration into the rental channel” was boosted by the $2 million order for fourth quarter 2017 delivery.
He says relocation of the aftermarket parts distribution center to Grand Rapids, Minnesota, is expected to reach completion in the second quarter of 2018.
“The markets we serve remain stable,” he says, “and we look forward to continuing to execute our plan to stimulate sales and achieve our EBITA margin and net income growth objectives throughout the year and beyond.”