# FORM 10-QUNITED STATES 
SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549

| | [X] | QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES EXCHANGE ACT OF 1934
| | --- | --------------------------------------------------------------------------------------

| | For
the Quarterly Period Ended June 30, 2007
| | --------------------------------------------

# OR

| | [ ] | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES EXCHANGE ACT OF 1934
| | --- | ---------------------------------------------------------------------------------------

| | For
the transition period from .............. to ..............
| | ---------------------------------------------------------------

Commission file number
0-18110

Gehl Company(Exact
name of registrant as specified in its charter)

|                                              |                                     
|--------------------------------------------- | ------------------------------------
|Wisconsin                                     | 39-0300430                          
|(State or other jurisdiction of incorporation | (I.R.S. Employer Identification No.)
|or organization)                              |                                     
|143 Water Street, West Bend, WI               | 53095                               
|(Address of principal executive office)       | (Zip code)                          

(262) 334-9461
(Registrants telephone number, including area code)

Indicate by check mark whether the
registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or such shorter period
that the registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

Yes X   
No _____

Indicate by check mark whether the
registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer.
See definition of accelerated filer and large accelerated filer in Rule 12b-2
of the Exchange Act.

Large accelerated filer _____     
Accelerated filer X     Non-accelerated filer _____

Indicate by check mark whether the
registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes _____          No
X

Indicate the number of shares
outstanding of each of the issuers classes of common stock, as of the latest
practicable date.

|                             |                             
|---------------------------- | ----------------------------
|Class                        | Outstanding at June 30, 2007
|Common Stock, $.10 Par Value | 12,245,780                  

---

# Gehl Company

# FORM 10-Q

# June 30, 2007

# Report Index



|           |                                                                                       | Page No.
|---------- | ------------------------------------------------------------------------------------- | --------
|PART I.    | Financial Information                                                                 |         
|Item 1.    | Financial Statements                                                                  |         
|           | Condensed Consolidated Statements of Operations for the Three and Six month Periods   |         
|           | Ended June 30, 2007 and 2006                                                          | 3       
|           | Condensed Consolidated Balance Sheets at June 30, 2007,                               |         
|           | December 31, 2006, and June 30, 2006                                                  | 4       
|           | Condensed Consolidated Statements of Cash Flows for the Six month Periods Ended      
|           | June 30, 2007 and 2006                                                                | 5       
|           | Notes to Condensed Consolidated Financial Statements                                  | 6       
|Item 2.    | Management's Discussion and Analysis of Financial Condition and Results of Operations | 15      
|Item 3.    | Quantitative and Qualitative Disclosures about Market Risk                            | 22      
|Item 4.    | Controls and Procedures                                                               | 22      
|PART II.   | Other Information                                                                     |         
|Item 1A.   | Risk Factors                                                                          | 23      
|Item 2.    | Unregistered Sales of Equity Securities and Use of Proceeds                           | 23      
|Item 4.    | Submission of Matters to a Vote of Security Holders                                   | 23      
|Item 6.    | Exhibits                                                                              | 24      
|Signatures |                                                                                       | 25      

-2-

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# PART I  Financial
Information

# Item 1. Financial
Statements

# Gehl Company and
SubsidiariesCondensed Consolidated Statements of Operations (unaudited and in
thousands, except per share data)

|                                                        | Three Months Ended | Six Months Ended
|------------------------------------------------------- | ------------------ | ----------------
|                                                        | June 30, 2007      | June 30, 2006   
|Net sales                                               |                    |                 
|Cost of goods sold                                      |                    |                 
|                                                        |                    |                 
|Gross profit                                            |                    |                 
|Selling, general and administrative expenses            |                    |                 
|                                                        |                    |                 
|Income from operations                                  |                    |                 
|Interest expense                                        |                    |                 
|Interest income                                         |                    |                 
|Other expense, net                                      |                    |                 
|                                                        |                    |                 
|Income from continuing operations before income taxes   |                    |                 
|Provision for income taxes                              |                    |                 
|                                                        |                    |                 
|Income from continuing operations                       |                    |                 
|(Loss) income from discontinued operations, net of tax  |                    |                 
|Loss on disposal of discontinued operations, net of tax |                    |                 
|                                                        |                    |                 
|Net income                                              |                    |                 
|                                                        |                    |                 
|Diluted net income (loss) per share:                    |                    |                 
|Continuing operations                                   |                    |                 
|Discontinued operations                                 |                    |                 
|                                                        |                    |                 
|Total diluted net income                                |                    |                 
|per share                                               |                    |                 
|                                                        |                    |                 
|Basic net income (loss) per share:                      |                    |                 
|Continuing operations                                   |                    |                 
|Discontinued operations                                 |                    |                 
|                                                        |                    |                 
|Total basic net income                                  |                    |                 
|per share                                               |                    |                 
|                                                        |                    |                 

The accompanying notes
are an integral part of the financial statements.

-3-

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# Gehl Company and
SubsidiariesCondensed Consolidated Balance Sheets (unaudited and in
thousands, except share data)

|                                                       | June 30, 2007 | December 31, 2006 | June 30, 2006
|------------------------------------------------------ | ------------- | ----------------- | -------------
|Assets                                                 |               |                   |              
|Cash                                                   |               |                   | $            
|Accounts receivable - net                              |               |                   |              
|Finance contracts receivable - net                     |               |                   |              
|Inventories                                            |               |                   |              
|Assets of discontinued operations - net (Note 3)       |               |                   |              
|Retained interest in sold finance contracts receivable |               |                   |              
|Deferred income tax assets                             |               |                   |              
|Prepaid expenses and other current assets              |               |                   |              
|                                                       |               |                   |              
|Total current assets                                   |               |                   |              
|                                                       |               |                   |              
|Property, plant and equipment - net                    |               |                   |              
|Goodwill                                               |               |                   |              
|Other assets                                           |               |                   |              
|                                                       |               |                   |              
|Total assets                                           |               |                   | $            
|                                                       |               |                   |              
|Liabilities and Shareholders' Equity                   |               |                  
|Current portion of long-term debt obligations          |               |                   | $            
|Short-term debt obligations                            |               |                   |              
|Accounts payable                                       |               |                   |              
|Liabilities of discontinued operations (Note 3)        |               |                   |              
|Accrued and other current liabilities                  |               |                   |              
|                                                       |               |                   |              
|Total current liabilities                              |               |                   |              
|                                                       |               |                   |              
|Long-term debt obligations                             |               |                   |              
|Other long-term liabilities                            |               |                   |              
|                                                       |               |                   |              
|Total long-term liabilities                            |               |                   |              
|                                                       |               |                   |              
|Common stock, $.10 par value, 25,000,000 shares        |               |                  
|authorized, 12,245,780, 12,197,037 and 12,154,909      |               |                  
|shares outstanding, respectively                       |               |                   |              
|Preferred stock, $.10 par value, 2,000,000 shares      |               |                  
|authorized, 250,000 shares designated as Series A      |               |                  
|preferred stock, no shares issued                      |               |                   |              
|Capital in excess of par                               |               |                   |              
|Retained earnings                                      |               |                   |              
|Accumulated other comprehensive loss                   |               |                   |              
|                                                       |               |                   |              
|Total shareholders' equity                             |               |                   |              
|                                                       |               |                   |              
|Total liabilities and shareholders' equity             |               |                   | $            
|                                                       |               |                   |              

The accompanying notes
are an integral part of the financial statements.

-4-

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# Gehl Company and
SubsidiariesCondensed Consolidated Statements of Cash Flows (unaudited and in
thousands)

|                                                         | Six Months Ended
|-------------------------------------------------------- | ----------------
|                                                         | June 30, 2007   
|Cash Flows from Operating Activities                     |                 
|Net income                                               |                 
|Adjustments to reconcile net income to net cash          |                 
|(used for) provided by operating activities:             |                 
|Loss on discontinued operations (non-cash), net of taxes |                 
|Depreciation and amortization                            |                 
|Compensation expense for share-based payments            |                 
|Cost of sales of finance contracts                       |                 
|Proceeds from sales of finance contracts                 |                 
|Increase in finance contracts receivable                 |                 
|Increase in retained interest in sold finance contracts  |                 
|(Decrease) increase in cash due to changes in:           |                 
|Accounts receivable - net                                |                 
|Inventories                                              |                 
|Accounts payable                                         |                 
|Remaining working capital items                          |                 
|                                                         |                 
|Net cash (used for) provided by operating activities     |                 
|                                                         |                 
|Cash Flows from Investing Activities                     |                 
|Property, plant and equipment additions                  |                 
|Proceeds from the sale of property, plant and equipment  |                 
|(Increase) decrease in other assets                      |                 
|                                                         |                 
|Net cash used for investing activities                   |                 
|                                                         |                 
|Cash Flows from Financing Activities                     |                 
|Repayments on revolving credit loans                     |                 
|Proceeds from (repayments on) short-term borrowings      |                 
|Repayments of other borrowings                           |                 
|Proceeds from exercise of stock options                  |                 
|                                                         |                 
|Net cash provided by (used for) financing activities     |                 
|                                                         |                 
|Net (decrease) increase in cash                          |                 
|Cash, beginning of period                                |                 
|                                                         |                 
|Cash, end of period                                      |                 
|                                                         |                 
|Supplemental disclosure of cash flow information:        |                 
|Cash paid for the following:                             |                 
|Interest                                                 |                 
|Income taxes                                             |                 

The accompanying notes
are an integral part of the financial statements.

-5-

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Gehl Company and
SubsidiariesNotes to Condensed Consolidated Financial Statements June 30, 2007
(Unaudited)

# Note 1  Basis of Presentation

The
condensed consolidated financial statements included herein have been prepared by the
Company, without audit, pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with accounting principles generally accepted
in the United States of America have been condensed or omitted pursuant to such rules and
regulations, although management believes that the disclosures are adequate to make the
information presented not misleading. The year-end condensed balance sheet data was
derived from audited financial statements, but does not include all disclosures required
by accounting principles generally accepted in the United States of America.

In
the opinion of management, the information furnished for the three and six month periods
ended June 30, 2007 and June 30, 2006 include all adjustments, consisting only of normal
recurring accruals, necessary for a fair presentation of the results of operations and
financial position of the Company. Certain prior year amounts have been reclassified to
conform to the current year presentation. Such reclassifications had no impact on
previously reported net income. Due, in part, to the seasonal nature of the Companys
business, the results of operations for the three and six month periods ended June 30,
2007 are not necessarily indicative of the results to be expected for the entire year.

It
is suggested that these interim financial statements be read in conjunction with the
financial statements and notes thereto included in the Companys Annual Report on
Form 10-K for the year ended December 31, 2006 as filed with the Securities and Exchange
Commission.

# Note 2 
Significant Accounting Policies

Accounting Pronouncements: In
July 2006, the Financial Accounting Standards Board (FASB) issued FASB
Interpretation No. 48, Accounting for Uncertainty in Income Taxes  an
interpretation of FASB Statement No. 109 (FIN 48), which prescribes a
recognition threshold and measurement process for recording, in the financial statements,
uncertain tax positions taken or expected to be taken in a tax return. In addition, FIN 48
provides guidance on the recognition, classification, accounting in interim periods and
disclosure requirements for uncertain tax positions. The Company adopted FIN 48 effective
January 1, 2007. The impact of the adoption on the Condensed Consolidated Financial
Statements as of January 1, 2007, was an increase in total assets of $0.4 million, an
increase in total liabilities of $0.9 million and a decrease in shareholders equity
of $0.5 million.

In
September 2006, the FASB issued Statement of Financial Accounting Standards No. 158,
Employers Accounting for Defined Benefit Plans and Other Postretirement
Plansan amendment of FASB Statements No. 87, 88, 106, and 132(R) (SFAS
No. 158), which requires employers to fully recognize the obligations associated
with single-employer defined benefit pension, retiree healthcare and other postretirement
plans in their financial statements.  In addition, SFAS No. 158 requires companies to
measure plan assets and liabilities as of the end of a fiscal year rather than a date
within 90 days of the end of the fiscal year.  The Company adopted SFAS No. 158
effective December 31, 2006, except for the change in measurement date provisions which
are not effective until 2008. The impact of the adoption at December 31, 2006, was a
decrease in total assets of $0.4 million, an increase in total liabilities of $5.3 million
and a decrease in shareholders equity, net of tax, of $3.7 million.

-6-

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# Note 3 
Discontinued Operations

During
March 2006, the Company decided to discontinue the manufacturing and distribution of
agricultural implement products. The agricultural implement business included one
manufacturing facility and related manufacturing machinery and equipment. The reduction in
headcount totaled 140 employees which included both manufacturing and administrative
positions related to the agricultural implements business. As a result of this action, the
Condensed Consolidated Financial Statements and related notes have been restated to
present the results of the agricultural implement business as a discontinued operation.

The
discontinuation of the agricultural implement business resulted in an after-tax charge to
the Companys earnings for the six month period ended June 30, 2006 of $9.0 million,
or $0.73 per diluted share. Of the $9.0 million charge, $8.9 million, or $0.72 per diluted
share, was recorded in the three month period ended March 31, 2006 and $0.1 million, or
$0.01 per diluted share, was recorded in the three month period ended June 30, 2006. The
after-tax charge is comprised of non-cash asset impairment charges of $7.1 million related
to agricultural implement field and factory inventory and certain property, plant and
equipment, and cash charges related to severance and other employee termination costs of
$1.9 million. There was no charge to the Companys earnings for the six months ended
June 30, 2007.

The following table summarizes the
pre-tax charge associated with the discontinued operation (in thousands):

|                             | Employee Severance
and Related Benefits | Asset
Impairment | Total
|---------------------------- | --------------------------------------- | ---------------- | -----
|                             |                                         |                  |      
|Pre-tax charge               |                                         |                  | $    
|Change in estimate           |                                         |                  |      
|Non-cash adjustments         |                                         |                  |      
|Cash payments                |                                         |                  |      
|                             |                                         |                  |      
|Balance at June 30, 2006     |                                         |                  |      
|                             |                                         |                  |      
|Pre-tax charge               |                                         |                  |      
|Non-cash adjustments         |                                         |                  |      
|Cash payments                |                                         |                  |      
|                             |                                         |                  |      
|Balance at December 31, 2006 |                                         |                  |      
|                             |                                         |                  |      
|Pre-tax charge               |                                         |                  |      
|Non-cash adjustments         |                                         |                  |      
|Cash payments                |                                         |                  |      
|                             |                                         |                  |      
|Balance at June 30, 2007     |                                         |                  | $    
|                             |                                         |                  |      

-7-

---

The
Company has reflected the results of its agricultural implements business as discontinued
operations in the Condensed Consolidated Statements of Operations. Summary results of
operations for the agricultural implements business were as follows (in thousands):

|                                      | For the Three Months Ended | For the Six Months Ended
|------------------------------------- | -------------------------- | ------------------------
|                                      | June 30, 2007              | June 30, 2006           
|Net sales                             |                            |                         
|Pretax (loss) income from             |                            |                         
|discontinued operations               |                            |                         
|Pretax loss on disposal of            |                            |                         
|discontinued operations               |                            |                         
|Income tax benefit                    |                            |                         
|                                      |                            |                         
|Net loss from discontinued operations |                            |                         
|                                      |                            |                         

The
assets of the agricultural implements business are reflected as net assets of discontinued
operations in the Condensed Consolidated Balance Sheets and were as follows (in
thousands):

|                                       | June 30, 2007 | December 31, 2006 | June 30, 2006
|-------------------------------------- | ------------- | ----------------- | -------------
|                                       |               |                   |              
|Accounts receivable, net               |               |                   | $            
|Inventories                            |               |                   |              
|Property, plant, and equipment, net    |               |                   |              
|                                       |               |                   |              
|Assets of discontinued operations, net |               |                   | $            
|                                       |               |                   |              

# Note 4  Income
Taxes

The
income tax provision is determined by applying an estimated annual effective income tax
rate to income before income taxes. The estimated annual effective income tax rate is
based on the most recent annualized forecast of pretax income, permanent book/tax
differences and tax credits.

The
Company and its subsidiaries file income tax returns in the U.S. Federal jurisdiction, and
various state and foreign jurisdictions. Effective January 1, 2007, the Company adopted
FIN 48. In accordance with FIN 48, the Company recognized a cumulative-effect adjustment
of $0.5 million, increasing its liability for unrecognized tax benefits along with related
interest and penalties, and reducing the January 1, 2007 balance of retained earnings.

At
January 1, 2007, the Company had $2.5 million in unrecognized tax benefits, the
recognition of which would have an effect of $2.5 million on the effective tax rate. At
June 30, 2007, the Company had unrecognized tax benefits of $2.8 million, which would have
an effect of $2.8 million on the effective tax rate. The Company does not believe it is
reasonably possible that its unrecognized tax benefits will significantly change within
the next twelve months.

The
Company recognizes accrued interest and penalties related to unrecognized tax benefits in
income tax expense. At January 1, 2007 and June 30, 2007, the Company had accrued $0.2
million and $0.3 million, respectively, for the potential payment of interest and $0.5
million for the potential payment of penalties.

-8-

---

As
of January 1, 2007 and June 30, 2007, the Company was subject to U.S. Federal income tax
examinations for the tax years 2005 through 2006, and to non-U.S. income tax examinations
for the tax years 2004 through 2006. In addition, the Company is subject to state and
local income tax examinations for the tax years 2001 through 2006.

# Note 5  Finance
Contracts Receivable Financing

In
March 2006, the Company entered into an asset securitization facility (the
Securitization Facility) with a financial institution (the
Purchaser) whereby the Company can sell, through a revolving securitization
facility, up to $300 million of retail and fleet installment sale contracts
(installment sale contracts or finance contracts receivable). The
Securitization Facility has a final maturity date in March 2009, subject to annual renewal
by the Purchaser. Under the Securitization Facility, the Company sells portfolios of its
finance contracts receivable to a wholly-owned, bankruptcy-remote special purpose
subsidiary (SPE) which, in turn, sells each such portfolio to a wholly-owned
bankruptcy-remote special purpose subsidiary of the SPE. The wholly-owned
bankruptcy-remote special purpose subsidiary of the SPE sells a participating interest in
each such portfolio of finance contracts receivable to the Purchaser (maximum 90% of the
discounted value of the finance contract receivable portfolio). The Purchaser has no
recourse against the Company for uncollectible finance contracts receivable, if any;
however, the Companys retained interest in the portfolio of finance contracts
receivable is subordinate to the Purchasers interest. The Company has retained
collection and administrative responsibilities for each sold portfolio of finance
contracts receivable. The Company incurred one-time transaction costs of $0.7 million in
2006 which were included in other expense in the accompanying Condensed Consolidated
Statement of Operations, related to the implementation of the Securitization Facility.

The
Securitization Facility replaced the previous $150 million revolving securitization
facility the Company terminated in February 2006. The participating interest in finance
contracts receivable that had been sold under the previous securitization facility was
purchased by the Purchaser in March 2006.

The
following summarizes the Companys sales of retail finance contracts receivable
through asset securitization facilities (in thousands):

|                                    | For the Six Months Ended
|----------------------------------- | ------------------------
|                                    | June 30, 2007           
|                                    |                         
|Value of contracts sold             |                         
|Cash received on sales of contracts |                         
|                                    |                         
|Retained interest in contracts sold |                         
|                                    |                         
|Cost of sales of finance contracts  |                         
|                                    |                         

The
Companys retained interest is recorded at fair value, which is calculated based on
the present value of estimated future cash flows and reflects prepayment and loss
assumptions, which are based on historical results. At June 30, 2007, the fair value of
the retained interest was calculated using an interpolated risk-free rate of return of
4.87% based on U.S. Treasury rates, an approximate 17 month weighted-average prepayable
portfolio life and an approximate 1.0% annual loss rate. Changes in any of these
assumptions could affect the calculated value of the retained interest. A 10% increase in
the discount rate would decrease the fair value of the retained interest by $0.3 million.
A 10% increase in the annual loss rate would decrease the fair value of the retained
interest by $0.9 million. Retained interest of $37.7 million, $20.3 million and $17.7
million was included in current assets at June 30, 2007, December 31, 2006 and June 30,
2006, respectively, and $17.8 million, $16.8 million and $10.9 million was included in
other assets in the accompanying Condensed Consolidated Balance Sheet at June 30, 2007,
December 31, 2006 and June 30, 2006, respectively.

-9-

---

The
total credit capacity under the 2006 Securitization Facility is $300 million, with an
outstanding note balance of $203.3 million at June 30, 2007. Finance contracts receivable
sold and being serviced by the Company totaled $259.5 million at June 30, 2007. Of the
$259.5 million in sold contracts receivable, $14.7 million were greater than 60 days past
due at June 30, 2007. There were no credit losses on contracts sold through the
Securitization Facility during the three and six month periods ended June 30, 2007. The
Company received $1.2 and $0.6 million in service fee income during the six months ended
June 30, 2007 and 2006, respectively.

In
addition to the sale of finance contracts receivable through the Securitization Facility,
the Company sold finance contracts through limited recourse arrangements during 2007 and
2006. Based on the terms of these sales, recourse to the Company is limited to 5% of the
sold portfolio of finance contracts receivable. Amounts to cover potential losses on these
sold finance contracts receivable are included in the allowance for doubtful accounts. The
following table summarizes the Companys sales of finance contracts receivable
through these arrangements for the six months ended June 30, 2007, and 2006 (in
thousands):

|                                    | 2007 | 2006
|----------------------------------- | ---- | ----
|                                    |      |     
|Value of contracts sold             |      |     
|Cash received on sales of contracts |      |     
|                                    |      |     
|Cost of sales of finance contracts  |      |     
|                                    |      |     

At
June 30, 2007, the Company serviced $375.5 million finance contracts receivable of which
$259.5 million, $77.6 million and $18.9 million were sold through the Securitization
Facility, limited recourse arrangements and full recourse arrangements, respectively.

The
finance contracts require periodic installments of principal and interest over periods of
up to 66 months, with interest rates based on market conditions. The Company has retained
the servicing of substantially all of these contracts which generally have maturities of
12 to 60 months.

The
sales of finance contracts receivable were accounted for as a sale in accordance with SFAS
No. 140 Accounting for Transfers and Servicing of Financial Assets and
Extinguishment of Liabilitiesa Replacement of FASB Statement No. 125. Sales of
finance contracts receivable are reflected as a reduction of finance contracts receivable
in the accompanying Condensed Consolidated Balance Sheets and the proceeds received are
included in cash flows from operating activities in the accompanying Condensed
Consolidated Statement of Cash Flows.

-10-

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# Note 6  Inventories

If
all of the Companys inventories had been valued on a current cost basis, which
approximated FIFO value, estimated inventories by major classification would have been as
follows (in thousands):

|                            | June 30, 2007 | December 31, 2006 | June 30, 2006
|--------------------------- | ------------- | ----------------- | -------------
|                            |               |                   |              
|Raw materials and supplies  |               |                   | $            
|Work-in-process             |               |                   |              
|Finished machines and parts |               |                   |              
|                            |               |                   |              
|Total current cost value    |               |                   |              
|Adjustment to LIFO basis    |               |                   |              
|                            |               |                   |              
|                            |               |                   | $            
|                            |               |                   |              

# Note 7  Product
Warranties and Other Guarantees

In
general, the Company provides warranty coverage on equipment for a period of up to twelve
months. The Companys reserve for warranty claims is established based on the best
estimate of the amounts necessary to settle future and existing claims on products sold as
of the balance sheet date. The Company records warranty expense as a component of selling,
general and administrative expense. While the Companys warranty costs have
historically been within its calculated estimates, it is possible that future warranty
costs could differ from those estimates. The changes in the carrying amount of the
Companys total product warranty liability for the six month periods ended June 30,
2007 and 2006 were as follows (in thousands):

|Six months ended                                        | June 30, 2007 | June 30, 2006
|------------------------------------------------------- | ------------- | -------------
|                                                        |               |              
|Beginning balance                                       |               |              
|Accruals for warranties issued during the period        |               |              
|Accruals related to pre-existing warranties             |               |              
|(including changes in estimates)                        |               |              
|Settlements made (in cash or in kind) during the period |               |              
|                                                        |               |              
|Ending balance                                          |               |              
|                                                        |               |              

# Note 8  Employee
Retirement Plans

The
Company sponsors two qualified defined benefit pension plans (pension plans)
for certain of its employees. The following table provides disclosure of the net periodic
benefit cost (in thousands):

|                                   | For the Three Months Ended | For the Six Months Ended
|---------------------------------- | -------------------------- | ------------------------
|                                   | June 30, 2007              | June 30, 2006           
|Service cost                       |                            |                         
|Interest cost                      |                            |                         
|Expected return on plan assets     |                            |                         
|Amortization of prior service cost |                            |                         
|Amortization of net loss           |                            |                         
|                                   |                            |                         
|Net periodic benefit cost          |                            |                         
|                                   |                            |                         

-11-

---

The
Company recorded a $0.7 million pension curtailment loss related to discontinued
operations in 2006 (see Note 3, Discontinued Operations). The Company
anticipates making $0.1 million of contributions to the pension plans during 2007. No
contributions were made during the three or six month periods ended June 30, 2007.

The
Company maintains an unfunded non-qualified supplemental retirement benefit plan for
certain management employees. The following table provides disclosure of the net periodic
benefit cost (in thousands):

|                                   | For the Three Months Ended | For the Six Months Ended
|---------------------------------- | -------------------------- | ------------------------
|                                   | June 30, 2007              | June 30, 2006           
|Service cost                       |                            |                         
|Interest cost                      |                            |                         
|Amortization of prior service cost |                            |                         
|Amortization of net loss           |                            |                         
|                                   |                            |                         
|Net periodic benefit cost          |                            |                         
|                                   |                            |                         

The
Company provides postemployment benefits to certain retirees, which includes subsidized
health insurance benefits for early retirees prior to their attaining age 65. The
following table provides disclosure of the net periodic benefit cost (in thousands):

|                                      | For the Three Months Ended | For the Six Months Ended
|------------------------------------- | -------------------------- | ------------------------
|                                      | June 30, 2007              | June 30, 2006           
|Service cost                          |                            |                         
|Interest cost                         |                            |                         
|Amortization of transition obligation |                            |                         
|Amortization of net loss              |                            |                         
|                                      |                            |                         
|Net periodic benefit cost             |                            |                         
|                                      |                            |                         

# Note 9 
Shareholders Equity

The
Company maintains equity incentive plans for certain of its directors, officers and key
employees. The Company currently has three primary equity incentive plans: the 2004 Equity
Incentive Plan, the 2000 Equity Incentive Plan and the 1995 Stock Option Plan. The 2004
Equity Incentive Plan, which was adopted in April 2004 and amended in April 2006,
authorizes the granting of awards with respect to up to 737,500 shares of the
Companys common stock. During April 2000, the 2000 Equity Incentive Plan was
adopted, which authorizes the granting of awards with respect to up to 812,771 shares of
the Companys common stock. An award is defined within the 2004 and 2000 Equity
Incentive Plan as a stock option, a stock appreciation right, restricted stock or a
performance share. In April 1996, the 1995 Stock Option Plan was adopted, which authorizes
the granting of options to purchase up to 726,627 shares of the Companys common
stock. These plans provide that options be granted at an exercise price not less than fair
market value on the date the options are granted and that the options generally vest
ratably over a period not exceeding three years after the grant date. The option period
may not be more than ten years after the grant date.

In
the three month period ended June 30, 2007, the Company awarded 21,000 stock options to
purchase common stock to directors. There were no options issued in the first quarter of
2007. In the three and six month periods ended June 30, 2006, the Company awarded 21,000
and 129,284 stock options, respectively, to purchase common stock to certain officers, key
employees and directors. Awards of stock options under the plans are subject to certain
vesting requirements and are accounted for using the fair value based method. In the six
months ended June 30, 2007, the Company awarded 132,087 stock appreciation rights to
certain key employees at the fair market value on the grant date. There were no stock
appreciation rights issued in the three months ended June 30, 2007, or the six months
ended June 30, 2006. The stock appreciation rights can only be settled in cash and are
subject to certain vesting requirements.

-12-

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In
2007 and 2006, the Company awarded restricted shares under the 2004 Equity Incentive Plan
to certain key employees. Awards of restricted stock under the plan are subject to certain
vesting requirements. There were 25,118 and 26,257 restricted shares awarded in the six
months ended June 30, 2007 and 2006, respectively, with an average fair market value of
$28.68 and $34.04 per share. Compensation expense related to restricted stock awards is
based upon the market price at the date of award and is charged to earnings over the
vesting period.

# Note 10  Net
Income Per Share and Comprehensive Income

Basic
net income per common share is computed by dividing net income by the weighted- average
number of common shares outstanding for the period. Diluted net income per common share is
computed by dividing net income by the weighted-average number of common shares and, if
applicable, common stock equivalents that would arise from the exercise of stock options.
A reconciliation of the shares used in the computation of earnings per share follows (in
thousands):

|                               | For the Three Months Ended | For the Six Months Ended
|------------------------------ | -------------------------- | ------------------------
|                               | June 30, 2007              | June 30, 2006           
|Basic shares                   |                            |                         
|Effect of options and unvested |                            |                         
|restricted stock               |                            |                         
|                               |                            |                         
|Diluted shares                 |                            |                         
|                               |                            |                         

For
the three and six months ended June 30, 2007, 146,284 options to purchase common shares
were antidilutive and, accordingly, excluded from the effect of options and unvested
restricted stock in the calculation of diluted earnings per share. For the three and six
months ended June 30, 2006, 129,284 options to purchase common shares were antidilutive.

The components of comprehensive
income are as follows (in thousands):

|                                           | Six Months Ended
|------------------------------------------ | ----------------
|                                           | June 30, 2007   
|Net income                                 |                 
|Foreign currency translation               |                 
|adjustments                                |                 
|Amortization of pension losses, net of tax |                 
|Unrealized gains (losses), net of tax      |                 
|                                           |                 
|Other comprehensive gain (loss)            |                 
|                                           |                 
|Comprehensive income                       |                 
|                                           |                 

# Note 11  Business
Segments

SFAS
No. 131, Disclosures about Segments of an Enterprise and Related Information,
establishes the standards for reporting information about operating segments in financial
statements.  Historically the Company had two operating and reportable segments,
construction equipment and agricultural equipment.  The products in the historical
agricultural equipment segment included material handling equipment (skid loaders,
telescopic handlers, compact excavators, compact track loaders and all-wheel-loaders) and
agricultural implement products for haymaking, forage harvesting, feedmaking and manure
handling.  In the first quarter of 2006, the Company re-evaluated its operating and
reportable segments in connection with the discontinuation of the manufacturing and
distribution of its agricultural implement business and determined that it now has only
one operating and reportable segment.  Sales of material handling equipment that were
previously included in the agricultural equipment segment and sales that were previously
included in the construction equipment segment are now combined for both internal and
external reporting purposes.

-13-

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# Note 12  Financial
Instruments

The
Company selectively uses interest rate swaps and foreign currency forward contracts to
reduce market risk associated with changes in interest rates and the value of the U.S
Dollar versus the Euro. The use of derivatives is restricted to those intended for hedging
purposes.

In
2005, the Company entered into an interest rate swap agreement with a third party
financial institution to exchange variable rate interest obligations for fixed rate
obligations without the exchange of the underlying principal amounts. Effective January
2006, under this agreement, the Companys variable to fixed rate obligations are an
aggregate swapped notional amount of $40 million through January 2008. The aggregate
notional amount of the swap decreases to $30 million effective January 2008, $20 million
effective January 2009, $10 million effective January 2010 and expires in January 2011.
The Company pays a 4.89% fixed interest rate under the swap agreement and receives a 30
day LIBOR variable rate. The referenced 30 day LIBOR rate was 5.32% at June 30, 2007. The
variable to fixed interest rate swap is an effective cash-flow hedge. The fair value of
the swap totaled $293,000 at June 30, 2007 and was recorded on the Condensed Consolidated
Balance Sheets, with changes in fair value included in other comprehensive income.

-14-

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# Item 2.
Managements Discussion and Analysis of Financial Condition and Results of
Operations

# Results of Operations

# Three Months Ended June
30, 2007 Compared to Three Months Ended June 30, 2006

# Net Sales

Net
sales in the three months ended June 30, 2007 (2007 second quarter) were
$135.3 million compared to $139.5 million in the three months ended June 30, 2006
(2006 second quarter), a decrease of $4.1 million, or 3%. Net sales remained
solid, impacted by increased international sales and telescopic handler market share
gains. International shipments of the Companys skid loaders, including shipments of
skid loaders by the Companys European subsidiary, Gehl Europe, increased 24% from
the 2006 second quarter. Shipments of all products from the Companys European
subsidiary, Gehl Europe, increased 27% in the second quarter of 2007. Along with the
increase in shipments noted above, net sales were impacted by approximately 4 percentage
points due to price increases during 2006 and 2007. These increases in shipments and
pricing were offset by a 30% and 11% reduction in shipments of compact track loaders and
North American skid loaders, respectively, during the 2007 second quarter as a result of
continued softness in the North American housing market.

Of
the Companys total net sales reported for the 2007 second quarter, $35.7 million
were made to customers residing outside of the United States compared with $29.3 million
in the 2006 second quarter. The increase in export sales was primarily due to increased
sales of skid loaders by the Companys European subsidiary, Gehl Europe. Skid loader
shipments outside of North America increased to 44% of total Company skid loader sales
versus 36% a year earlier.

# Gross Profit

Gross
profit was $29.5 million in the 2007 second quarter compared to $30.1 million in the 2006
second quarter, a decrease of $0.6 million, or 2%. Gross profit as a percentage of net
sales (gross margin) was 21.8% in the 2007 second quarter compared to 21.6% in
the 2006 second quarter. The increase in gross profit as a percentage of sales was
primarily driven by the favorable impact the Company continues to realize as a result of
its added supply chain resources and investments in state-of-the-art manufacturing
equipment.

# Selling, General and
Administrative Expenses

Selling,
general and administrative expenses were $15.7 million, or 11.6% of net sales, in the 2007
second quarter compared to $15.3 million, or 10.9% of net sales, in the 2006 second
quarter. The increase in selling, general and administrative expenses as a percentage of
net sales primarily reflects planned incremental investments in research and development
and information technology projects totaling $0.9 million in the 2007 second quarter.

# Income from Operations

Income
from operations in the 2007 second quarter was $13.8 million, or 10.2% of net sales,
compared to income from operations of $14.9 million, or 10.7% of net sales, in the 2006
second quarter, a decrease of $1.0 million, or 7%.

-15-

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# Interest Expense

Interest
expense was $1.2 million in the 2007 second quarter compared to $0.8 million in the 2006
second quarter, an increase of $0.4 million. The increase in interest expense was due to
an increase in the average outstanding debt during the 2007 second quarter compared to the
2006 second quarter (see Financial Condition below for discussion of changes
in outstanding debt).

# Interest Income

Interest
income was $1.1 million in the 2007 second quarter compared to $0.8 million in the 2006
second quarter, an increase of $0.3 million. This increase was primarily due to the
increase in average accounts receivable balances in the 2007 second quarter compared to
the 2006 second quarter.

# Net Other Expense

The
Company recorded net other expense of $0.3 million and $0.7 million in the 2007 second
quarter and 2006 second quarter, respectively. The change in net other expense was
primarily due to a $0.8 million reduction in the loss on sale of finance contracts
receivable in the 2007 second quarter compared to the 2006 second quarter. This decrease
was partially offset by foreign currency losses in the 2007 second quarter compared to
foreign currency gains in the 2006 second quarter.

# Income from Continuing
Operations

Income
from continuing operations in the 2007 second quarter was $8.8 million, or 6.5% of net
sales, compared to income from continuing operations of $9.4 million, or 6.7% of net
sales, in the 2006 second quarter, a decrease of $0.6 million, or 6%.

# (Loss) Income from
Discontinued Operations, Net of Tax

The
Company recorded a loss from discontinued operations, net of tax of $108,000 in the 2007
second quarter compared to income from discontinued operations, net of tax of $37,000 in
the 2006 second quarter.

# Loss on Disposal of
Discontinued Operations, Net of Tax

The
Company recorded an additional $112,000 loss on the disposal of discontinued operations,
net of tax in the 2006 second quarter. There was no loss on disposal of discontinued
operations for the 2007 second quarter.

# Net Income

The
Company recorded net income in the 2007 second quarter of $8.7 million compared to net
income of $9.3 million in the 2006 second quarter, a decrease of $0.6 million, or 6%.

-16-

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# Six Months Ended June
30, 2007 Compared to Six Months Ended June 30, 2006

# Net Sales

Net
sales in the six months ended June 30, 2007 (2007 six months) were $250.6
million compared to $261.6 million in the six months ended June 30, 2006 (2006 six
months), a decrease of $11.0 million, or 4%. Net sales, in general, were favorably
impacted by the continued strength of the Companys international markets and
telescopic handler market share gains. International shipments of the Companys skid
loaders, including shipments of skid loaders by the Companys European subsidiary,
Gehl Europe, increased 29% from the 2006 six months. Shipments of all products from the
Companys European subsidiary, Gehl Europe, increased 29% in the 2007 six months.
Along with the increase in shipments noted above, net sales were impacted by approximately
4 percentage points due to price increases during 2006 and 2007. These increases in
shipments and pricing were offset by a 28% and 14% reduction in shipments of compact track
loaders and North American skid loaders, respectively, during the 2007 six months as a
result of softness in the North American housing market.

Of
the Companys total net sales reported for the 2007 six months, $67.7 million were
made to customers residing outside of the United States compared with $52.9 million in the
2006 six months. The increase in export sales was primarily due to increased sales of skid
loaders by the Companys European subsidiary, Gehl Europe. Skid loader shipments
outside of North America increased to 45% of total Company skid loader sales versus 35% a
year earlier.

# Gross Profit

Gross
profit was $55.3 million in the 2007 six months compared to $56.4 million in the 2006 six
months, a decrease of $1.1 million, or 2%. Gross margin was 22.1% in the 2007 six months
compared to 21.6% in the 2006 six months. The increase in gross profit as a percentage of
sales was primarily driven by favorable product mix, as well as the favorable impact the
Company continues to realize as a result of its added supply chain resources and
investments in state-of-the-art manufacturing equipment.

# Selling, General and
Administrative Expenses

Selling,
general and administrative expenses were $30.7 million, or 12.2% of net sales, in the 2007
six months compared to $30.2 million, or 11.6% of net sales, in the 2006 six months. The
increase in selling, general and administrative expenses as a percentage of net sales
primarily reflects planned incremental investments in research and development and
information technology projects totaling $1.3 million in the 2007 six months.

# Income from Operations

Income
from operations in the 2007 six months was $24.6 million, or 9.8% of net sales, compared
to income from operations of $26.1 million, or 10.0% of net sales, in the 2006 six months,
a decrease of $1.5 million, or 6%.

# Interest Expense

Interest
expense was $2.1 million in the 2007 six months compared to $1.9 million in the 2006 six
months, an increase of $0.1 million. The increase in interest expense was due to an
increase in the average outstanding debt during the 2007 six months compared to the 2006
six months (see Financial Condition below for discussion of changes in
outstanding debt).

-17-

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# Interest Income

Interest
income was $2.1 million in the 2007 six months compared to $2.0 million in the 2006 six
months, an increase of $0.1 million. This increase was primarily due to the increase in
average accounts receivable balances in the 2007 six months compared to the 2006 six
months.

# Net Other Expense

The
Company recorded net other expense of $1.3 million and $2.2 million in the 2007 six months
and 2006 six months, respectively. The change in net other expense was primarily due to a
$1.1 million decrease in the loss on sale of finance contracts receivable in the 2007 six
months and $0.7 million in securitization facility structuring costs incurred during the
2006 six months. These decreases were partially offset by foreign currency losses recorded
in the 2007 six months of $0.4 million versus foreign currency gains in the 2006 six
months of $0.5 million.

# Income from Continuing
Operations

Income
from continuing operations in the 2007 six months was $15.3 million, or 6.1% of net sales,
compared to income from continuing operations of $15.8 million, or 6.0% of net sales, in
the 2006 six months, a decrease of $.5 million, or 3%.

# Loss from Discontinued
Operations, Net of Tax

The
Company recorded a loss from discontinued operations, net of tax of $268,000 in the 2007
six months compared to a loss from discontinued operations, net of tax of $79,000 in the
2006 six months.

# Loss on Disposal of
Discontinued Operations, Net of Tax

The
Company recorded a $9.0 million loss on the disposal of discontinued operations, net of
tax in the 2006 six months. There was no loss on disposal of discontinued operations for
the 2007 six months.

# Net Income

The
Company recorded net income in the 2007 six months of $15.0 million compared to net income
of $6.7 million in the 2006 six months. The 2006 six months net income included a $9.0
million loss on disposal of discontinued operations noted above.

# Financial Condition

# Working Capital

The
Companys working capital was $214.0 million at June 30, 2007 as compared to $201.5
million at December 31, 2006 and $217.7 million at June 30, 2006. The change in working
capital at June 30, 2007 from December 31, 2006 was primarily due to increases in accounts
receivable and the current portion of retained interest from the sale of finance
contracts. These increases in working capital were partially offset by an increase in
accounts payable. Accounts receivable increased from December 31, 2006 primarily due to
increased shipments during the 2007 six months to national account customers carrying
longer terms, which were primarily driven by continued market share gains in telehandlers.
The current portion of retained interest in sold finance contracts increased from December
31, 2006 due to an increase in the total portfolio balance of contracts in the
Securitization Facility. The increase in accounts payable was due to increased production
resulting from strong shipments.

-18-

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The
change in working capital at June 30, 2007 from June 30, 2006 was primarily due to an
increase in accounts receivable and the current portion of retained interest from the sale
of finance contracts. These increases were partially offset by a decrease in assets of
discontinued operations and an increase in short term debt obligations. Accounts
receivable increased from June 30, 2006 primarily due to increased shipments to national
account customers carrying longer terms, the addition of several new dealers in the period
and decreased retail demand in the North American construction market. The current portion
of retained interest from the sale of finance contracts increased from June 30, 2006 due
to an increase in the total portfolio balance of contracts in the Securitization Facility.
Assets of discontinued operations decreased from June 30, 2006 due to the continued
collection on accounts receivable and disposition of inventory and property, plant and
equipment related to the discontinued operations. Short term debt obligations increased
from June 30, 2006 as the Company began issuing commercial paper during the fourth quarter
of 2006. See Debt and Equity below for additional discussion.

# Capital Expenditures

Capital
expenditures for property, plant and equipment during the 2007 six months were
approximately $3.6 million. The Company plans to make up to $10.0 million of capital
expenditures in 2007, primarily to complete the Yankton, South Dakota manufacturing
facility expansion, enhance manufacturing and information technology capabilities and
maintain and upgrade machinery and equipment.

# Debt and Equity

The
Company maintains a $125 million revolving credit facility (the Facility) with
a syndicate of commercial bank lenders. The credit commitment under the facility is for a
five-year period expiring October 17, 2011. At any time during the term of the Facility,
the Company has the option to request an increase in the credit commitment under the
Facility to $175 million from the current syndicate of commercial bank lenders or any
other commercial bank lender(s) selected by the Company. Under the terms of the Facility,
the Company has pledged the capital stock of certain wholly-owned subsidiaries which are
all co-borrowers. The Company may borrow up to $25 million under the Facility in a
currency other than the U.S. Dollar. The Company may elect to pay interest on U.S. Dollar
borrowings under the Facility at a rate of either (1) the London Interbank Offered Rate
(LIBOR) plus 0.625% to 1.3750% or (2) a base rate defined as the prime
commercial rate less 0.125% to 1.125%. The Companys actual borrowing costs for LIBOR
or base rate borrowings is determined by reference to a pricing grid based on the
Companys ratio of funded debt to total capitalization. Interest on amounts borrowed
under the Facility in currencies other than the U.S. Dollar will be priced at a rate equal
to LIBOR plus 0.625% to 1.375%. As of June 30, 2007, the weighted average interest rate on
Company borrowings outstanding under the Facility was 6.06%.

The
Facility requires the Company to maintain compliance with certain financial covenants
related to total capitalization, interest expense coverage, tangible net worth, capital
expenditures and operating lease spending. The Company was in compliance with all
covenants as of June 30, 2007.

Borrowings
under the Facility were $23.4 million, $24.7 million and $46.3 million at June 30, 2007,
December 31, 2006 and June 30, 2006, respectively. Available unused borrowings under the
Facility were $51.5 million, $75.1 million and $78.7 million at June 30, 2007, December
31, 2006 and June 30, 2006, respectively. Available borrowings at June 30, 2007 and
December 31, 2006 were reduced by $50.0 million and $25.0 million, respectively, of
outstanding commercial paper.

-19-

---

During
the fourth quarter of 2006, the Company began to issue commercial paper through a
placement agent to fund a portion of its short term working capital needs. The Company had
the ability to sell up to $25.0 million in commercial paper under this arrangement. In
April 2007, this arrangement was expanded to give the Company the ability to sell up to
$50.0 million in commercial paper. The Companys commercial paper program is backed
by the credit commitment under the Companys revolving credit facility. At June 30,
2007, the Company had $50.0 million of short term commercial paper outstanding compared to
$25.0 million outstanding at December 31, 2006.

In
May 2006, the Company entered into a $10.0 million committed line of credit facility with
a commercial bank lender. Borrowings under this facility bear interest at 1.15% above the
LIBOR for 30 day deposits reset monthly and are secured by a first priority lien on an
assigned pool of retail finance contracts receivable. This facility expired on April 30,
2007. There were no borrowings outstanding under this facility at December 31, 2006 and
June 30, 2006.

In
addition, the Company has access to a 2.5 million committed foreign short-term
credit facility. There were no borrowings outstanding under this facility at June 30,
2007.

The
Company believes it has adequate capital resources and borrowing capacity to meet its
projected capital requirements for the foreseeable future. Requirements for working
capital, capital expenditures, pension fund contributions and debt maturities in fiscal
2007 will continue to be funded by operations and the Companys borrowing
arrangements.

At
June 30, 2007, shareholders equity had increased $28.8 million to $247.5 million
from $218.6 at June 30, 2006. This increase primarily reflects the impact of net income of
$27.9 million.

In
September 2001, the Companys Board of Directors authorized a stock repurchase plan
providing for the repurchase of up to 500,000 shares of the Companys outstanding
common stock. No shares were repurchased under this authorization during the 2007 six
months or 2006 six months. As of June 30, 2007, the Company has repurchased an aggregate
of 227,850 shares under this authorization. All treasury stock acquired by the Company has
been cancelled and returned to the status of authorized but unissued shares.

# Contractual Obligations

Other
than the changes in the outstanding borrowings, capital commitments and FIN 48
liabilities, as described above, there have been no material changes to the annual
maturities of debt obligations, future minimum, non-cancelable operating lease payments
and capital commitments as disclosed in Managements Discussion and Analysis of
Financial Condition and Results of Operations and Notes 8 and 15, respectively, of Notes
to Consolidated Financial Statements in the Companys Annual Report on Form 10-K for
the year ended December 31, 2006 as filed with the Securities and Exchange Commission.

-20-

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# Off-Balance Sheet
Arrangements  Sales of Finance Contracts Receivable

The
sale of finance contracts is an important component of the Companys overall
liquidity. In March 2006, the Company entered into an asset securitization facility
(the Securitization Facility) with a financial institution (the
Purchaser) whereby the Company can sell, through a revolving securitization
facility, up to $300 million of retail and fleet installment sale contracts
(installment sale contracts or finance contracts receivable). The
Securitization Facility has a final maturity date in March 2009, subject to annual renewal
by the Purchaser. Under the Securitization Facility, the Company sells portfolios of its
finance contracts receivable to a wholly owned, bankruptcy-remote special purpose
subsidiary (SPE) which, in turn, sells each such portfolio to a wholly owned
bankruptcy-remote special purpose subsidiary of the SPE. The wholly-owned
bankruptcy-remote special purpose subsidiary of the SPE sells a participating interest in
each such portfolio of finance contracts receivable to the Purchaser (approximately 90% of
the discounted value of the finance contract receivable portfolio). The Purchaser has no
recourse against the Company for uncollectible finance contracts receivable, if any;
however, the Companys retained interest in the portfolio of finance contracts
receivable is subordinate to the Purchasers interest. The Securitization Facility
replaced the previous $150 million revolving securitization facility the Company
terminated in February 2006. The participating interest in finance contracts receivable
that had been sold under the previous securitization facility was purchased by Purchaser
in March 2006. At June 30, 2007, the Company had available unused capacity of $96.7
million under the Securitization Facility.

In
addition to the Securitization Facility, the Company has arrangements with multiple
financial institutions to sell its finance contracts receivable with 5% limited recourse
on the sold portfolio of retail finance contracts. The Company continues to service
substantially all contracts, whether or not sold. At June 30, 2007, the Company serviced
$375.5 million finance contracts receivable of which $259.5 million, $77.6 million and
$18.9 million were sold through the Securitization Facility, limited recourse arrangements
and full recourse arrangements, respectively. It is the intention of the Company to
continue to sell substantially all of its existing as well as future finance contracts
through an asset securitization program or limited recourse arrangements. The Company
believes that it will be able to arrange sufficient capacity to sell its finance contracts
for the foreseeable future.

# Critical Accounting
Policies and Estimates

There
are no material changes to the information provided in response to this item as set forth
in the Companys Annual Report on Form 10-K for the year ended December 31, 2006 as
filed with the Securities and Exchange Commission.

# Forward-Looking
Statements

Certain
statements included in this filing are forward-looking statements intended to
qualify for the safe harbor from liability established by the Private Securities
Litigation Reform Act of 1995. All statements other than statements of historical fact are
forward-looking statements. When used in this filing, words such as the Company
believes, anticipates, expects, estimates
or projects or words of similar meaning are generally intended to identify
forward-looking statements. These forward-looking statements are not guarantees of future
performance and are subject to certain risks, uncertainties, assumptions and other
factors, some of which are beyond the Companys control, that could cause actual
results to differ materially from those anticipated as of the date of this filing. Factors
that could cause such a variance include, but are not limited to, those risk factors cited
in the Companys filings with the Securities and Exchange Commission, any adverse
change in general economic conditions, unanticipated changes in capital market conditions,
the Companys ability to implement successfully its strategic initiatives (including
cost reduction initiatives), unanticipated expenses associated with the discontinuance of
the Companys agricultural implement lines, market acceptance of newly introduced
products, unexpected issues related to the pricing and availability of raw materials
(including steel) and component parts, unanticipated difficulties in securing product from
third party manufacturing sources, the ability of the Company to increase its prices to
reflect higher prices for raw materials and component parts, the cyclical nature of the
Companys business, the Companys and its customers access to credit,
competitive pricing, product initiatives and other actions taken by competitors,
disruptions in production capacity, excess inventory levels, the effect of changes in laws
and regulations (including government subsidies and international trade regulations),
technological difficulties, changes in currency exchange rates or interest rates, the
Companys ability to secure sources of liquidity necessary to fund its operations,
changes in environmental laws, the impact of any strategic transactions effected by the
Company, and employee and labor relations. Shareholders, potential investors, and other
readers are urged to consider these factors in evaluating the forward-looking statements
and are cautioned not to place undue reliance on such forward-looking statements. The
forward-looking statements included in this filing are only made as of the date of this
filing, and the Company undertakes no obligation to publicly update such forward-looking
statements to reflect subsequent events or circumstances.

-21-

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# Item 3.  Quantitative and
Qualitative Disclosures about Market Risk

There
are no material changes to the information provided in response to this item as set forth
in the Companys Annual Report on Form 10-K for the year ended December 31, 2006 as
filed with the Securities and Exchange Commission.

# Item 4.  Controls and
Procedures

# Disclosure Controls and
Procedures

The
Companys management, with the participation of the Companys principal
executive officer and its principal financial officer, has evaluated the Companys
disclosure controls and procedures as of June 30, 2007. Based upon that evaluation, the
Companys principal executive officer and its principal financial officer have
concluded that the Companys disclosure controls and procedures were effective as of
June 30, 2007.

# Changes in Internal
Control Over Financial Reporting

There
was no change in the Companys internal control over financial reporting (as such
term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred
during the three months ended June 30, 2007, that has materially affected, or is
reasonably likely to materially affect, the Companys internal control over financial
reporting.

-22-

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# PART II  Other
Information

# Item 1A.  Risk Factors

There
has not been any material change in the risk factors previously disclosed in the
Companys 2006 Form 10-K for the fiscal year ended December 31, 2006.

# Item 2.  Unregistered
Sales of Equity Securities and Use of Proceeds

In
September 2001, the Companys Board of Directors authorized a stock repurchase plan
providing for the repurchase of up to 500,000 shares of the Companys outstanding
common stock in open market or privately negotiated transactions. The plan does not have
an expiration date. No shares were repurchased under the plan during the three and six
month periods ended June 30, 2007. As of June 30, 2007, the Company had authority to
repurchase 272,150 shares under the plan.

# Item 4.  Submission of
Matters to a Vote of Security Holders

At
the Companys 2007 annual meeting of shareholders held on April 27, 2007,
Marcel-Claude Braud, William D. Gehl and John W. Splude were re-elected as directors of
the Company for terms expiring at the 2010 annual meeting of shareholders:

|Name of Nominee     | Shares Voted For | Shares Withholding Authority
|------------------- | ---------------- | ----------------------------
|Marcel-Claude Braud | 10,480,402       | 353,201                     
|William D. Gehl     | 10,481,464       | 352,139                     
|John W. Splude      | 10,491,324       | 342,279                     

The
following table sets forth the other directors of the Company whose terms of office
continued after the 2007 annual meeting:

|Name of Director  | Year in Which Term Expires
|----------------- | --------------------------
|Thomas J. Boldt   | 2008                      
|Bruce D. Hertzke  | 2008                      
|John T. Byrnes    | 2009                      
|Richard J. Fotsch | 2009                      
|Dr. Herman Viets  | 2009                      

-23-

---

In
addition, at the 2007 annual meeting, shareholders approved the appointment of
PricewaterhouseCoopers LLP as the Companys independent registered public accounting
firm for fiscal year 2007. With respect to such approval, the number of shares voted for
and against were 10,807,210 and 11,768, respectively. The number of shares abstaining was
14,625.

# Item 6.  Exhibits

Exhibit
No.       Document Description

| | 3.1 | Articles
of Amendment Amending the Preferences, Limitations and Relative Rights of Series A
Preferred Stock [Incorporated by reference to Exhibit 3.1 of the Companys Current
Report on Form 8-K filed on May 25, 2007]
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 3.2 | Restated
Articles of Incorporation, as amended, of Gehl Company
| | --- | ---------------------------------------------------------------

| | 4.1 | Rights
Agreement, dated as of May 25, 2007, between Gehl Company and American Stock Transfer and
Trust Company (incorporated by reference to Exhibit 4.1 to the Registration Statement on
Form 8-A of Gehl Company, dated as of May 25, 2007 (Commission File No. 0-18110))
[Incorporated by reference to Exhibit 4.1 of the Companys Registration Statement on
Form 8-A filed on May 25, 2007]
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.1 | Amendment
to Retirement Income Plan [Incorporated by reference to Exhibit 10.1 of the Companys
Current Report on Form 8-K filed on April 27, 2007]
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------

| | 31.1 | Certification
of the Chief Executive Officer pursuant to section 302 of the
                       Sarbanes-Oxley Act of 2002.
| | ---- | ------------------------------------------------------------------------------------------------------------------------------

| | 31.2 | Certification
of the Chief Financial Officer pursuant to section 302 of the
                       Sarbanes-Oxley Act of 2002.
| | ---- | ------------------------------------------------------------------------------------------------------------------------------

| | 32.1 | Certification
of Periodic Financial Report by the Chief Executive Officer and Chief Financial Officer
pursuant to section 906 of the Sarbanes-Oxley Act of 2002.
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------

-24-

---

# SIGNATURES

Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned thereunto duly authorized.

|                      |                            
|--------------------- | ---------------------------
|                      | GEHL COMPANY               
|Date:  August 9, 2007 | By:  /s/ William D. Gehl   
|                      | William D. Gehl            
|                      | Chairman of the Board      
|                      | and Chief Executive Officer
|Date:  August 9, 2007 | By:  /s/ Thomas M. Rettler 
|                      | Thomas M. Rettler          
|                      | Vice President and         
|                      | Chief Financial Officer    
|                      | (Principal Financial and   
|                      | Accounting Officer)        

-25-

---

# GEHL COMPANY

# INDEX TO EXHIBITS

Exhibit
No.       Document Description

| | 3.1 | Articles
of Amendment Amending the Preferences, Limitations and Relative Rights of Series A
Preferred Stock [Incorporated by reference to Exhibit 3.1 of the Companys Current
Report on Form 8-K filed on May 25, 2007]
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 3.2 | Restated
Articles of Incorporation, as amended, of Gehl Company
| | --- | ---------------------------------------------------------------

| | 4.1 | Rights
Agreement, dated as of May 25, 2007, between Gehl Company and American Stock Transfer and
Trust Company (incorporated by reference to Exhibit 4.1 to the Registration Statement on
Form 8-A of Gehl Company, dated as of May 25, 2007 (Commission File No. 0-18110))
[Incorporated by reference to Exhibit 4.1 of the Companys Registration Statement on
Form 8-A filed on May 25, 2007]
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.1 | Amendment
to Retirement Income Plan [Incorporated by reference to Exhibit 10.1 of the Companys
Current Report on Form 8-K filed on April 27, 2007]
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------

| | 31.1 | Certification
of the Chief Executive Officer pursuant to section 302 of
                                the Sarbanes-Oxley Act of 2002.
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------

| | 31.2 | Certification
of the Chief Financial Officer pursuant to section 302 of
                                the Sarbanes-Oxley Act of 2002.
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------

| | 32.1 | Certification
of Periodic Financial Report by the Chief Executive Officer and Chief Financial Officer
pursuant to section 906 of the Sarbanes-Oxley Act of 2002.
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------

-26-