During F2006, two unfavorable factors came into play ultimately reducing our EPS to 18 cents. Firstly, tractor sales declined by 20% as a result of the weakened tractor market. Secondly, the continuing devaluation of the US dollar has caused the profitability of our grain augers, front-end loaders, compact implements and other short line products to decrease. Inventory reduction efforts began earlier this year and despite decreased sales, management has been able to reduce inventory by $11 million over the past 6 months. Management is committed to further inventory reduction, favorably reducing both bank debt and interest expenses. We have streamlined several administrative areas and relocated our head office to the tractor factory in order to reduce costs and work more efficiently. Our industry is forecasted to experience flat or slightly decreased large tractor sales over the next 12 months. We anticipate that revenues from short line products will remain flat or slightly increased. In spite of the fragile North American market last year, we are confident that our new High Horsepower Tractor series and price competitive attachments will be attractive to the farmers. As well, we will continue to expand our Eastern European marketing efforts and maintain a healthy working capital in order to pursue accretive acquisition opportunities. We are determined to improve our financial performance and return to our traditional level of earnings in the foreseeable future.
| Year ending September 30, 2006 | Previous year | |
|---|---|---|
| Revenue | $175,067,000 |
$202,319,000 |
| Net profit | $4,584,000 |
$9,566,000 |
| Net profit / share | $0.18 | $0.38 |
| Shares issued (millions) | 25.0 | 25.0 |
Revenue for the year was $175.1 million compared to $202.3 million last year.
Earnings for the year ending September 30th, 2006 were $4.6 million compared with $9.6 million last year. Gross profit was $34.0 million (19.4% of sales) for 2006 compared to $37.0 million (18.3% of sales) last year. The number of shares outstanding at year-end was 25 million.
Following 13 consecutive years of dividend increases, the Company has decided to hold dividends at $0.15 per share, until the earnings return to normal. The dividend is payable January 16, 2007 to shareholders of record on December 4, 2006. This is the 14th consecutive annual dividend.
Craig Engel - President
Phone: (204) 228-6206
E-mail: cengel@buhler.com
Trading symbol: BUI