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TWST: We would like to begin with a brief historical sketch of ASV and a
picture of the things you are doing now.
Mr. Karges: ASV stands for all-season vehicles, and we manufacture and
sell rubber-tracked loaders. These machines are sold into the
construction, landscape, agricultural, forestry, homeowner, and rental
markets, and they are really beginning to displace the wheeled loader
machines that are currently in that product space. Our company started
in 1983. We came out with our first track product in 1984, we moved into
the construction equipment area in the early 1990s, and since then, the
progression path has been quite large. The company became affiliated
with Caterpillar in 1998. Caterpillar is our largest shareholder and
largest customer at this point ' they own about 23% of our shares. The
market for rubber-tracked vehicles has exploded in the last few years.
We've gone from $10 million in total revenues market-wide in 1995 to an
estimated $800 million in 2005. All major manufacturers have moved into
this space, with ASV being the first to market. TWST: What is it that makes the rubber-tracked superior to the wheeled
machines?
Mr. Karges: When you have a rubber-tracked machine, you are displacing
the weight of the vehicle over a very wide footprint. For instance, a
typical wheeled machine will observe ground pressure in the neighborhood
of 35 pounds per square inch on the surfaces that it operates on. In
comparison, ASV's rubber-tracked machine operates at about three pounds
per square inch. A human being standing on the surface would exert about
six pounds per square inch. So by having the ability to displace the
weight of the machine over such a wide footprint, you get very low
ground compaction and you do very little damage to the turf. For
instance, if you are operating in a landscape environment, you can work
in very muddy and wet, slippery conditions because you have incredible
traction. You've got great floatation as you move across the surface,
and that gives you more mobility to work in areas where you probably
can't put a wheeled machine. We are also replacing a lot of hand labor
because these machines can go in areas that a wheeled machine could
never go.
Tickers included in this excerpt: ASVI
For more information call (212) 952 7433. The
Wall Street Transcript does not endorse any of the comments made by interviewees, and does
not make stock recommendations.
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