# FORM 10-Q

# SECURITIES AND
EXCHANGE COMMISSION  Washington, D.C. 20549

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

# For the Quarterly Period Ended
April 2, 2005

# OR

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

# For the transition
period from ______________ to  ______________

Commission file number
0-18110

|Gehl Company
|------------

|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 an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

Yes  X   No

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 April 2, 2005
|---------------------------- | ----------------------------
|Common Stock, $.10 Par Value | 6,762,153                   

---

# Gehl Company

# FORM 10-Q

# April 2, 2005

# Report Index

|           |                                                                                  
|---------- | ---------------------------------------------------------------------------------
|PART I. -  | Financial Information                                                            
|Item 1.    | Financial Statements                                                             
|           | Condensed Consolidated Statements of Income for the Three-Month Periods Ended    
|           | April 2, 2005 and March 27, 2004                                                 
|           | Condensed Consolidated Balance Sheets at April 2, 2005,                          
|           | December 31, 2004, and March 27, 2004                                            
|           | Condensed Consolidated Statements of Cash Flows for the Three-Month Periods Ended
|           | April 2, 2005 and March 27, 2004                                                 
|           | Notes to Condensed Consolidated Financial Statements                             
|Item 2.    | Management's Discussion and Analysis of Results of                               
|           | Operations and Financial Condition                                               
|Item 3.    | Quantitative and Qualitative Disclosures about Market Risk                       
|Item 4.    | Controls and Procedures                                                          
|PART II. - | Other Information                                                                
|Item 2.    | Unregistered Sales of Equity Securities and Use of Proceeds                      
|Item 6.    | Exhibits                                                                         
|Signatures |                                                                                  

-2-

---

# PART I  Financial
Information

# Item 1. Financial
Statements

# Gehl Company and
Subsidiaries  Condensed Consolidated Statements of Income  (unaudited and in thousands,
except per share data)

|                                            
|--------------------------------------------
|March 27, 2004                              
|Net sales                                   
|Cost of goods sold                          
|                                            
|Gross profit                                
|Selling, general and administrative expenses
|                                            
|Income from operations                      
|Interest expense                            
|Interest income                             
|Other expense, net                          
|                                            
|Income before income taxes                  
|Provision for income taxes                  
|                                            
|Net income                                  
|                                            
|Net income per share:                       
|Diluted                                     
|                                            
|Basic                                       
|                                            

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

-3-

---

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

|                                                  | April 2, 2005
|------------------------------------------------- | -------------
|Assets                                            |              
|Cash                                              |              
|Accounts receivable - net                         |              
|Finance contracts receivable - net                |              
|Inventories                                       |              
|Deferred income tax assets                        |              
|Prepaid expenses and other current assets         |              
|                                                  |              
|Total current assets                              |              
|                                                  |              
|Property, plant and equipment - net               |              
|Finance contracts receivable - net, non-current   |              
|Goodwill                                          |              
|Other assets                                      |              
|                                                  |              
|Total assets                                      |              
|                                                  |              
|Liabilities and Shareholders' Equity              |              
|Current portion of long-term debt obligations     |              
|Short-term debt obligations                       |              
|Accounts payable                                  |              
|Accrued and other current liabilities             |              
|                                                  |              
|Total current liabilities                         |              
|                                                  |              
|Line of credit facility                           |              
|Long-term debt obligations                        |              
|Deferred income tax liabilities                   |              
|Other long-term liabilities                       |              
|                                                  |              
|Total long-term liabilities                       |              
|                                                  |              
|Common stock, $.10 par value, 25,000,000 shares   |              
|authorized, 6,762,153, 6,621,215 and 5,410,937    |              
|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-

---

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

|                                                         
|---------------------------------------------------------
|March 27, 2004                                           
|Cash Flows from Operating Activities                     
|Net income                                               
|Adjustments to reconcile net income to net cash          
|used for operating activities:                           
|Depreciation and amortization                            
|Compensation expense for long-term incentive stock grants
|Cost of sales of finance contracts                       
|Proceeds from sales of finance contracts                 
|Increase in finance contracts receivable                 
|Net changes in remaining working capital items           
|                                                         
|Net cash used for operating activities                   
|                                                         
|Cash Flows from Investing Activities                     
|Property, plant and equipment additions                  
|Proceeds from the sale of property, plant and equipment  
|Decrease in other assets                                 
|                                                         
|Net cash used for investing activities                   
|                                                         
|Cash Flows from Financing Activities                     
|Proceeds from revolving credit loans                     
|Proceeds from short-term borrowings                      
|Repayments of short-term borrowings                      
|Repayments of other borrowings                           
|Proceeds from exercise of stock options                  
|                                                         
|Net cash provided by financing activities                
|                                                         
|Net increase (decrease) 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-

---

Gehl Company and
Subsidiaries Notes to Condensed Consolidated Financial Statements  April 2, 2005
 (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.

In
the opinion of management, the information furnished for the three-month periods ended
April 2, 2005 and March 27, 2004 includes 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-month period ended April 2, 2005 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, 2004 as filed with the Securities and Exchange
Commission.

# Note 2  Stock
Based Compensation

The
Company maintains stock option plans for certain of its directors, officers and key
employees and accounts for these plans under the recognition and measurement principles of
Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to
Employees. No compensation expense has been recognized for options granted under
these plans as the option price was equal to the market value of the Companys common
stock on the date of grant.

The
effect on net income and net income per share had the Company applied the fair value
recognition provisions of Statement of Financial Accounting Standards (SFAS) No. 123,
Accounting for Stock-Based Compensation, is presented below (in thousands,
except per share data):

|                                                           | April 2, 2005
|---------------------------------------------------------- | -------------
|Net income, as reported                                    |              
|Less: stock-based compensation expense determined based on |              
|fair value method, net of tax                              |              
|                                                           |              
|Pro forma net income                                       |              
|                                                           |              
|Diluted net income per share:                              |              
|As reported                                                |              
|Pro forma                                                  |              
|Basic net income per share:                                |              
|As reported                                                |              
|Pro forma                                                  |              

-6-

---

# Note 3  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.

# Note 4  Finance
Contracts Receivable Financing

In
February 2005, the Company entered into an asset securitization program with a financial
institution (the Purchaser) whereby the Company can sell, through a revolving
securitization facility, up to $150 million of retail installment sale contracts
(retail installment sale contracts or finance contracts
receivable). 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 (QSPE) of the SPE. The QSPE, in turn, sells a participating
interest in each such portfolio of finance contracts receivable to the Purchaser. The
Purchaser receives a security interest in each such portfolio of finance contracts
receivable. The Company has retained collection and administrative responsibilities for
each such portfolio of finance contracts receivable. 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, which
represents 9.5% of the principal balance of the finance contracts receivable sold, is
subordinate to the Purchasers interest. 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 April 2, 2005, the fair value of the retained interest was calculated using an
interpolated risk-free rate of return of 3.6% based on U.S. Treasury rates, an 18.5 month
weighted-average prepayable portfolio life and a 0.5% annual loss rate. The retained
interest recorded at April 2, 2005 is $14.8 million and is included in other assets in the
accompanying Condensed Consolidated Balance Sheet.

The
securitization program has a final maturity in February 2008, subject to annual renewal by
the Purchaser. The total credit capacity under the program is $150 million, with finance
contracts receivable sold and being serviced by the Company totaling $49.4 million at
April 2, 2005.

During
the three-month period ended April 2, 2005, the Company received proceeds from the sale of
finance contracts receivable of $46.6 million and recorded a loss on sale of $0.3 million.
The loss on sale was more than offset by a $1.1 million unrealized gain on interest rate
swaps that were put in place to hedge gains / losses on the sale of finance contracts
receivable (see note 11). The Company did not receive any service fee income or cash flows
related to the retained interest during the three-month period ended April 2, 2005.

The
securitization program is 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 Sheet and the proceeds received are included
in cash flows from operating activities in the accompanying Condensed Consolidated
Statements of Cash Flows.

-7-

---

The
Company incurred one-time transaction costs of $1.1 million, which are included in other
expense in the accompanying Condensed Consolidated Statement of Income, related to the
implementation of the asset securitization program during the three-month period ended
April 2, 2005.

# Note 5  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):

|                            | April 2, 2005
|--------------------------- | -------------
|Raw materials and supplies  |              
|Work-in-process             |              
|Finished machines and parts |              
|                            |              
|Total current cost value    |              
|Adjustment to LIFO basis    |              
|                            |              
|                            |              
|                            |              

# Note 6  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. 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 three-month period ended April 2, 2005 were as follows
(in thousands):

|                                                        | 
|------------------------------------------------------- | 
|Balance as of December 31, 2004                         | 
|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 | 
|                                                        | 
|Balance as of April 2, 2005                             | 
|                                                        | 

-8-

---

# Note 7  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):

|April 2, 2005                     
|----------------------------------
|Service cost                      
|Interest cost                     
|Expected return on plan assets    
|Amortization of prior service cost
|Amortization of net loss          
|                                  
|Net periodic benefit              
|                                  

The
Company anticipates making $1.8 million of contributions to the pension plans during 2005.
No contributions were made during the three-month period ended April 2, 2005.

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):

|April 2, 2005                     
|----------------------------------
|Service cost                      
|Interest cost                     
|Amortization of prior service cost
|Amortization of net loss          
|                                  
|Net periodic benefit              
|                                  

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):

|April 2, 2005                        
|-------------------------------------
|Service cost                         
|Interest cost                        
|Amortization of transition obligation
|Amortization of net loss             
|                                     
|Net periodic benefit                 
|                                     

# Note 8  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.

-9-

---

A
reconciliation of the shares used in the computation of earnings per share follows (in
thousands):

|April 2, 2005    
|-----------------
|Basic shares     
|Effect of options
|                 
|Diluted shares   
|                 

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

|                            
|----------------------------
|March 27, 2004              
|Net income (loss)           
|Foreign currency translation
|adjustments                 
|Unrealized losses           
|                            
|Other comprehensive loss    
|                            
|Comprehensive income (loss) 
|                            

# Note 9  Business
Segments

The Company has two segments,
construction equipment and agricultural equipment, as the long-term financial performance
of these segments is affected by separate economic conditions and cycles. Segment net
sales and income from operations tend to be aligned with the distribution networks of the
Company, and correlate with the manner in which the Company evaluates performance.

|                       
|-----------------------
|March 27, 2004         
|Net sales:             
|Construction           
|Agricultural           
|                       
|Consolidated           
|                       
|Income from operations:
|Construction           
|Agricultural           
|                       
|Consolidated           
|                       

# Note 10  Stock
Repurchases

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 under this authorization were repurchased during the three-month
period ended April 2, 2005 nor the three-month period ended March 27, 2004. As of April 2,
2005, the Company has repurchased an aggregate of 151,900 shares under this authorization.
All treasury stock acquired by the Company has been cancelled and returned to the status
of authorized but unissued shares.

-10-

---

# Note 11  Financial
Instruments

The
Company selectively uses interest rate swaps to reduce market risk associated with changes
in interest rates. The use of derivatives is restricted to those intended for hedging
purposes.

The
Company is a party to three interest rate swap agreements (swaps). The swaps,
which expire in five years, are hedges protecting against underlying changes in interest
rates and their impact on the gains / losses incurred upon the sale of finance contracts
receivable. Accordingly, the implied gains / losses associated with the fair values of
interest rate swaps would be offset by gains / losses on the sale of the underlying retail
finance contracts. Under the swaps, the Company receives interest on a variable London
Interbank Offered Rate for one-month deposits and pays on a fixed rate ranging from of
3.18% to 3.41%.

The
Companys derivative instruments are recorded at fair value in the Condensed
Consolidated Balance Sheet. At April 2, 2005, the notional amount of the swaps totaled
$61.3 million and fair value adjustments of $1.2 million were recorded as a current asset.
Under the provisions of SFAS No. 133, Accounting for Derivative Instruments and
Hedging Activities, the swaps were deemed ineffective as of April 2, 2005 as the
finance contracts that were owned by the Company at the inception of the swaps had been
sold during the three-month period ended April 2, 2005. As a result, the Company recorded
$1.1 million of other income in the three-month period ended April 2, 2005, which more
than offset the $0.3 million loss incurred on the sale of finance contracts during the
period (see footnote 4). Changes, if any, in the fair value of the swaps from April 2,
2005 to the time the Company terminates the swaps will be recorded as other income or
expense. The Company did not terminate the swaps during the three-month period ended April
2, 2005 because the swaps continue to provide an economic hedge for the finance contracts
still owned by the Company for future sales. The Company intends to terminate the swaps
during the second quarter of 2005.

# Note 12 
Accounting Pronouncements

During
December 2004, the Financial Accounting Standards Board issued SFAS
No. 123R, Share-Based Payment (SFAS 123R), which requires companies to
measure and recognize compensation expense for all stock-based payments at fair value.
Stock-based payments include stock option grants and other transactions under Company
stock plans. The Company grants options to purchase common stock to some of its employees
and directors under various plans at prices equal to the market value of the stock on the
dates the options were granted. The Company is required to adopt SFAS 123R by the first
quarter of fiscal 2006. The Company is currently evaluating the impact that the adoption
of SFAS 123R will have on its consolidated financial position, results of operations and
cash flows.

-11-

---

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

# Results of Operations

# Three Months Ended April
2, 2005 Compared to Three Months Ended March 27, 2004

# Net Sales

Net
sales in the three months ended April 2, 2005 (2005 first quarter) were $119.0
million compared to $84.7 million in the three months ended March 27, 2004 (2004
first quarter), an increase of $34.4 million, or 41%.

Construction
equipment segment net sales were $84.0 million in the 2005 first quarter compared to $54.4
million in the 2004 first quarter, an increase of $29.6 million, or 54%. 2005 first
quarter construction segment net sales were favorably impacted by the overall economic
expansion and continued strength of the construction markets during the period. Demand for
the Companys skid loaders remained strong as shipments increased nearly 30% from the
2004 first quarter. Telescopic handler shipments in the 2005 first quarter doubled from
the 2004 first quarter as demand from larger rental customers continued to strengthen in
the 2005 first quarter. Demand for compact track loaders, a product introduced in
mid-2002, continued to grow and resulted in 2005 first quarter shipments which were up
over 20% from the 2004 first quarter. The Companys European subsidiary, Gehl Europe,
also posted strong sales during the 2005 first quarter as sales increased over 50% from
the 2004 first quarter.

Agricultural
equipment segment net sales were $35.0 million in the 2005 first quarter, compared to
$30.3 million in the 2004 first quarter, an increase of $4.8 million, or 16%. 2005 first
quarter agricultural equipment segment net sales were favorably impacted by the overall
economic expansion and the continued strength of milk prices paid to dairy farmers. Skid
loader shipments to agricultural dealers during the 2005 first quarter were up nearly 20%
from the 2004 first quarter and shipments of agricultural implements in the 2005 first
quarter increased nearly 10% from the 2004 first quarter.

Of
the Companys total net sales reported for the 2005 first quarter, $16.9 million were
made to customers residing outside of the United States compared with $14.9 million in the
2004 first quarter. The increase in export sales was primarily due to increased sales in
Europe.

# Gross Profit

Gross
profit was $23.5 million in the 2005 first quarter compared to $17.4 million for the 2004
first quarter, an increase of $6.1 million, or 35%. Gross profit as a percent of net sales
(gross margin) was 19.8% for the 2005 first quarter compared to 20.5% for the 2004 first
quarter. The reduction in the 2005 first quarter margin was primarily due to higher steel
and component parts costs. These cost increases, which adversely impacted the 2005 first
quarter margin by approximately 6.0%, were partially offset by selective selling price
increases in the first, third and fourth quarters of 2004, as well as lower levels of
discounts and sales incentives, which increased the gross margin by approximately 5.3%.

-12-

---

Gross
margin for the construction equipment segment was 20.5% for the 2005 first quarter
compared to 22.6% for the 2004 first quarter. The unfavorable impact of the cost issues
noted above reduced the gross margin by approximately 6.4%. This was partially offset by
the favorable impact of the selective price increases, which increased the gross margin by
approximately 4.3%.

Gross
margin for the agricultural equipment segment was 18.1% for the 2005 first quarter
compared to 16.9 % for the 2004 first quarter. The favorable impact of the selective price
increases and lower levels of discounts and incentives increased the gross margin by
approximately 6.9%. This was partially offset by the adverse impact of the cost issues
noted above, which reduced margins by approximately 5.7%.

# Selling, General and
Administrative Expenses

Selling,
general and administrative expenses were $15.1 million, or 12.7% of net sales, for the
2005 first quarter compared to $12.8 million, or 15.1% of net sales, for the 2004 first
quarter. The increase in spending is primarily the result of items that vary with sales
levels; however, selling, general and administrative expenses as a percentage of net sales
improved as the growth in net sales exceeded expense increases.

# Income from Operations

Income
from operations for the 2005 first quarter was $8.4 million, or 7.1% of net sales,
compared to income from operations of 4.6 million, or 5.4% of net sales, for the 2004
first quarter, an increase of $3.8 million.

# Interest Expense

Interest
expense was $1.4 million for the 2005 first quarter compared to $0.6 million for the 2004
first quarter, an increase of $0.9 million. The increase in interest expense was due to an
increase in the average outstanding debt and an increase in borrowing costs as the London
Interbank Offered Rate for one-month deposits increased from the 2004 first quarter to the
2005 first quarter. See Financial Condition section below for discussion of
changes in outstanding debt.

# Interest Income

Interest
income was $1.1 million for the 2005 first quarter compared to $0.4 million for the 2004
first quarter, an increase of $0.7 million. The increase in interest income is primarily
due to the interest earned on the increased balance of finance contracts as the Company
was retaining finance contracts for sale under an asset securitization program. See
Financial Condition section below for discussion of the asset securitization
program.

# Net Other Expense

The
Company recorded net other expense of $0.7 million and $0.1 million in the 2005 first
quarter and 2004 first quarter, respectively. The increase in net other expense was
primarily due to $1.2 million of one time and other costs incurred with the asset
securitization program and a $0.3 million loss on the sale of finance contracts, which was
partially offset by a $1.1 million unrealized gain on swap contracts the Company put in
place to hedge the gain / loss on sale of finance contracts.

-13-

---

# Net Income

Net
income was $4.9 million in the 2005 first quarter, or 4.1% of net sales, compared to net
income of $2.9 million in the 2004 first quarter, or 3.4% of net sales, an increase of
$2.0 million.

# Financial Condition

The
Companys working capital was $174.0 million at April 2, 2005, as compared to $162.8
million at December 31, 2004, and $101.4 million at March 27, 2004. The increase since
March 27, 2004 was primarily due to increases in cash ($23.4 million), accounts receivable
($35.6 million) and finance contracts receivable ($35.7 million) offset, in part, by
short-term borrowings ($29.0 million). The increase in cash was due to the timing of funds
received from a sale of finance contracts on April 1, 2005. The cash was used to pay down
long-term debt on April 4, 2005. The increase in accounts receivable was due to strong
shipments, which were primarily driven by strong demand for skid loaders, telescopic
handlers and compact track loaders. Finance contracts receivable increased as the Company
had been holding finance contracts for a sale under an asset securitization program.
During the 2005 first quarter, the Company sold a portion of these contracts through the
asset securitization program (see additional discussion below). At April 2, 2005, the
Company had borrowed $28.9 million on a term basis, secured by a first priority lien on an
assigned pool of finance contracts receivable, from a commercial bank lender.

The
increase in working capital from December 31, 2004 was primarily due to increases in cash
($20.9 million) and accounts receivable ($34.9 million) offset, in part, by a decrease in
finance contracts receivable ($32.7 million) and an increase in short-term borrowings
($8.7 million). See the previous paragraph for discussion of the increase in cash and
accounts receivable. At December 31, 2004, the Company was holding finance contracts for a
sale under an asset securitization program. During the 2005 first quarter, the Company
sold a portion of the finance contracts under this program resulting in the decrease in
finance contracts receivable. The increase in short-term borrowings was due to additional
borrowing to support working capital requirements.

Capital
expenditures for property, plant and equipment during the 2005 first quarter were
approximately $2.1 million. During 2005, the Company anticipates making an aggregate of up
to $16.7 million in capital expenditures. The Company has outstanding commitments for
capital expenditures at April 2, 2005 of approximately $5.0 million. The Company believes
that its present manufacturing facilities, with the in-progress capacity expansion at its
Yankton, SD facility, will be sufficient to provide adequate capacity for its operations
through the foreseeable future.

The
Company maintains a $75 million line of credit facility (the Facility) which
expires December 31, 2007, and is subject to a borrowing base related to the
Companys accounts receivable, unassigned finance contracts receivable and
inventories. Under the terms of the Facility, the line of credit is increased to $90
million each year for the time period March 1 to July 15. Amendments to the Facility in
September and December of 2004 extended the $90 million line of credit through December
31, 2004 and February 28, 2005, respectively. The Company had available unused borrowing
capacity of $1.0 million, $19.3 million and $46.5 million under the Facility at April 2,
2005, December 31, 2004, and March 27, 2004, respectively. At April 2, 2005, December 31,
2004, and March 27, 2004, the Companys outstanding borrowings under the Facility
were $87.5 million, $69.0 million and $42.1 million, respectively. On April 4, 2005, the
Company used $23.4 million in proceeds from an April 1, 2005 sale of finance contracts to
reduce its borrowings under the Facility to $64.1 million and increase availability under
the facility to $24.4 million. As of April 2, 2005, the weighted-average interest rate
paid by the Company on outstanding borrowings under its Facility was 5.5%.

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In
December 2004 the Company entered into a term basis borrowing arrangement with a
commercial bank lender. Borrowings under this arrangement were $28.9 million and $20.2
million at April 2, 2005 and December 31, 2004, respectively and are classified as
short-term borrowings in accompanying Condensed Consolidated Balance Sheets. Borrowings
are secured by a first priority lien on an assigned pool of finance contracts receivable.
As of April 2, 2005, the weighted-average interest rate paid by the Company on outstanding
borrowings under this arrangement was 5.3%.

The
changes in total borrowings from March 27, 2004 and December 31, 2004 to April 2, 2005
were primarily due to increases in working capital requirements as discussed above.

The
Company believes it has access to adequate capital resources and borrowing arrangements to
meet its projected capital requirements for the foreseeable future. Requirements for
working capital, capital expenditures, pension fund contributions and debt maturities in
fiscal 2005 will continue to be funded by operations and the Companys borrowing
arrangements.

The
sale of finance contracts is an important component of the Companys overall
liquidity. In February 2005, the Company entered into an asset securitization program with
a financial institution (the Purchaser) whereby the Company can sell, through
a revolving securitization facility, up to $150 million of retail installment sale
contracts (retail installment sale contracts or finance contracts
receivable). 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 (QSPE) of the SPE. The QSPE, in turn, sells a participating
interest in each such portfolio of finance contracts receivable to the Purchaser. The
Purchaser receives a security interest in each such portfolio of finance contracts
receivable. 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, which represents 9.5% of the principal balance
of the finance contracts receivable sold, is subordinate to the Purchasers interest.
At April 2, 2005, the Company had available unused borrowing capacity of $100.6 million
under this facility. It is the intention of the Company to continue to sell substantially
all of its existing as well as future finance contracts through this asset securitization
program or similar asset securitization programs. In addition to the asset securitization
program, the Company has arrangements with several financial institutions and financial
service companies to sell, with recourse, its finance contracts receivable. The Company
continues to service substantially all contracts, whether or not sold. At April 2, 2005,
the Company serviced $234.9 million of such contracts, of which $191.8 million were owned
by other parties. Of the $191.8 million sold finance contracts owned by other parties,
$49.4 million were sold through the asset securitization program.

At
April 2, 2005, shareholders equity had increased $41.5 million to $143.1 million
from $101.5 million at March 27, 2004. This increase was due to the net income earned from
March 27, 2004 to April 2, 2005, $19.8 million in proceeds from the sale of 961,768 shares
of common stock in July 2004, exercise of stock options, currency translation adjustments
and the minimum pension liability adjustment recorded in 2004.

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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 three-month
period ended April 2, 2005 nor the three-month period ended March 27, 2004. As of April 2,
2005, the Company has repurchased an aggregate of 151,900 shares under this authorization.
All treasury stock acquired by the Company has been cancelled and returned to the status
of authorized but unissued shares.

Other
than the changes in the outstanding borrowings and capital commitments, 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 Results of Operations and
Financial Condition and Notes 7 and 14, respectively, of Notes to Consolidated Financial
Statements in the Companys Annual Report on Form 10-K for the year ended December
31, 2004 as filed with the Securities and Exchange Commission.

# Accounting Pronouncements

During
December 2004, the Financial Accounting Standards Board issued SFAS
No. 123R, Share-Based Payment (SFAS 123R), which requires companies to
measure and recognize compensation expense for all stock-based payments at fair value.
Stock-based payments include stock option grants and other transactions under Company
stock plans. The Company grants options to purchase common stock to some of its employees
and directors under various plans at prices equal to the market value of the stock on the
dates the options were granted. The Company is required to adopt SFAS 123R by the first
quarter of fiscal 2006. The Company is currently evaluating the impact that the adoption
of SFAS 123R will have on its consolidated financial position, results of operations and
cash flows.

# Critical Accounting
Policies and Estimates

The
preparation of the Companys condensed consolidated financial statements requires the
Company to make estimates and judgments that affect the reported amounts of assets,
liabilities, net sales and expenses. The Company bases its estimates on historical
experience and on various other assumptions that are believed to be reasonable under the
circumstances, the results of which form the basis for making judgments about the carrying
values of assets and liabilities that are not readily apparent from other sources. Actual
results may differ from these estimates under different assumptions or conditions and
materially impact the carrying value of the assets and liabilities. The Company believes
the following accounting policies are critical to the Companys business operations
and the understanding of the Companys results of operations and financial condition.

Allowance for Doubtful Accounts

The
Companys accounts receivable are reduced by an allowance for amounts that may be
uncollectible in the future. In circumstances where the Company is aware of a specific
customers inability to meet its financial obligations, a specific reserve for bad
debts is recorded against the accounts receivable balance to reduce the amount due to the
net amount reasonably expected to be collected. Additionally, a general percentage of past
due receivables is reserved, based on the Companys past experience of
collectibility. If circumstances change (i.e., higher than expected defaults or an
unexpected material adverse change in a major customers ability to meet its
financial obligations), estimates of the recoverability of amounts due could be reduced by
a material amount.

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Inventories

Inventories
are valued at the lower of cost or market value. Cost is determined using the last-in,
first-out (LIFO) method for the majority of the Companys inventories. In valuing
inventory, management is required to make assumptions regarding the level of reserves
required to value potentially obsolete or slow moving items to the lower of cost or market
value. Inventory reserves are established taking into account inventory age and frequency
of use or sale. While calculations are made involving these factors, significant
management judgment regarding expectations for future events is involved. Future events
that could significantly influence managements judgment and related estimates
include general economic conditions in markets where the Companys products are sold,
as well as new products and design changes introduced by the Company.

Accrued Warranty

The
Company establishes reserves related to the warranties provided on its products. Specific
reserves are maintained for programs related to known machine safety and reliability
issues. When establishing specific reserves, estimates are made regarding the size of the
population, the type of program, costs to be incurred and estimated participation.
Additionally, general reserves are maintained based on the historical percentage
relationships of warranty costs to machine sales and applied to current equipment sales.
If these estimates and related assumptions change, reserve levels may require adjustment.

Accrued Product Liability

The
Company records a general reserve for potential product liability claims based on the
Companys prior claim experience and specific reserves for known product liability
claims. Specific reserves for known claims are valued based upon the Companys prior
claims experience, including consideration of the jurisdiction, circumstances of the
accident, type of loss or injury, identity of plaintiff, other potential responsible
parties, analysis of outside counsel, and analysis of internal product liability counsel.
Actual product liability costs could be different due to a number of variables, including
decisions of juries or judges.

Goodwill Impairment

In
connection with SFAS No. 142, Goodwill and Other Intangible Assets, the
Company is required to perform goodwill impairment reviews, at least annually, using a
fair-value-based approach. The Company performs its annual impairment review as of
December 31. As part of the annual impairment review, an estimate of the fair value of the
Companys construction equipment segment (the entire carrying amount of goodwill is
allocated to the construction segment), primarily by using a discounted cash flow
analysis, is performed. Significant assumptions used in this analysis include: expected
future revenue growth rates, operating profit margins, working capital levels and a
weighted average cost of capital. Changes in assumptions could significantly impact the
estimate of the fair value of the construction equipment segment, which could result in a
goodwill impairment charge and could have a significant impact on the results of the
construction equipment segment and the consolidated financial statements.

Pension and Postemployment
Benefits

Pension
and postemployment benefit costs and obligations are dependent on assumptions used in
calculation of these amounts. These assumptions, used by actuaries, include discount
rates, expected return on plan assets for funded plans, rate of salary increases, health
care cost trend rates, mortality rates and other factors. In accordance with accounting
principles generally accepted in the United States, actual results that differ from the
actuarial assumptions are accumulated and amortized to future periods and therefore affect
recognized expense and recorded obligations in future periods. While the Company believes
that the assumptions used are appropriate, differences in actual experience or changes in
assumptions may materially effect its financial position or results of operations.

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# Outlook

On
April 2, 2005, the Company raised both its net sales and earnings per share outlook for
the year. The Company now expects 2005 net sales in the range of $440 million to $460
million and earnings of between $2.70 and $2.80 per diluted share.

The
Companys first quarter results and current order backlog have exceeded the initial
2005 forecast and confirm the strength of the markets the Company serves. The Company
anticipates the additional sales growth and cost control efforts to drive increased
earnings for the remainder of the year. Although steel prices have begun to moderate, the
Company does expect other supplier cost increases to continue and put downward pressure on
the Companys gross margin rate.

# 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,
including the statements in the section entitled Full Year Outlook, 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, any adverse change in
general economic conditions, unanticipated changes in capital market conditions, the
Companys ability to implement successfully its strategic initiatives, 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. In addition, the Companys expectations for fiscal year 2005 are based
in part on certain assumptions made by the Company, including those relating to
commodities prices, which are strongly affected by weather and other factors and can
fluctuate significantly, housing starts and other construction activities, which are
sensitive to, among other things, interest rates and government spending, and the
performance of the U.S. economy generally. The accuracy of these or other assumptions
could have a material effect on the Companys ability to achieve its expectations.

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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, 2004 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 April 2, 2005. 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
April 2, 2005.

# 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 April 2, 2005, that has materially affected, or is reasonably likely to materially
affect, the Companys internal control over financial reporting.

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# PART II  Other
Information

# 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-month
period ended April 2, 2005. As of April 2, 2005, the Company had authority to repurchase
348,100 shares under the plan.

# Item 6. Exhibits

| | Exhibit No. | Document Description
| | ----------- | --------------------

| | 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.
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------

# 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:  May 11, 2005 | By:  /s/ William D. Gehl   
|                    | William D. Gehl            
|                    | Chairman of the Board      
|                    | and Chief Executive Officer
|Date:  May 11, 2005 | By:  /s/ Thomas M. Rettler 
|                    | Thomas M. Rettler          
|                    | Vice President and         
|                    | Chief Financial Officer    
|                    | (Principal Financial and   
|                    | Accounting Officer)        

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# GEHL COMPANY

# INDEX TO EXHIBITS

|Exhibit No. | Document Description
|----------- | --------------------

|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.
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------

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