Sales

Revenue for the quarter was $60.1 million, the fourth best in Company history, down $8.8 million from the prior year. As anticipated, the high inventory levels in North America, low commodity prices as well as the political uncertainty in Eastern Europe have led to a decline in sales.

1st Quarter Ending December 31, 2014

Net Earnings Down for the Quarter

Net earnings for the first quarter were $1.5 million, down from $4.7 million in the first quarter of the prior year. This was primarily due to decreased margins due to competitive pressures, increased selling and administration expenditures combined with foreign exchange losses. These items have been partially offset by a recovery of taxes for prior years. Earnings per share came in at $0.06 compared to $0.19 in the prior first quarter.

Looking Forward

The Company expects to see a continued decline in sales in 2015 due to lower commodity prices. Commodity prices have declined and based on the current trend will result in reduced farm income levels. Export sales to Eastern Europe have also dropped due to weaker commodity pricing and the political uncertainty in Russia and Ukraine. The Company continues to pursue new markets and products such as the new DeltaTrack tractors that have helped offset a softer machinery market. The Company has made workforce adjustments which will result in reduced production levels. In turn, reduced production levels will lead to improved cash flow as inventory levels are expected to decline throughout the year. The U.S. dollar has strengthened in 2015 and as a result, sales in US dollars are expected to have better margins and this will help offset some of the anticipated margin loss due to a higher level of competition for equipment sales.