# FORM 10-Q

# 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 July
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                                          
|------------------------------------------------------
|(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 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 July 2, 2005
|---------------------------- | ---------------------------
|Common Stock, $.10 Par Value | 6,825,901                  

---

# Gehl Company

# FORM 10-Q

# July 2, 2005

# Report Index

|                                |                                                                                
|------------------------------- | -------------------------------------------------------------------------------
|                                |                                                                                
|PART I. - Financial Information
|Item 1.                         | Financial Statements                                                           
|                                | Condensed Consolidated Statements of Income for the Three-and Six-month Periods
|                                | Ended July 2, 2005 and June 26, 2004                                           
|                                | Condensed Consolidated Balance Sheets at July 2, 2005,                         
|                                | December 31, 2004, and June 26, 2004                                           
|                                | Condensed Consolidated Statements of Cash Flows for the Six-month Periods Ended
|                                | July 2, 2005 and June 26, 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 4.                         | Submission of Matters to a Vote of Security Holders                            
|Item 6.                         | Exhibits                                                                       
|Signatures                      |                                                                                

-2-

---

# PART I  Financial
Information

# Item 1. Financial
Statements

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

|                          
|--------------------------
|June 26, 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
SubsidiariesCondensed Consolidated Balance Sheets  (unaudited and in thousands, except
share data)

|                                                  | July 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                         |             
|                                                  |             
|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, 6,825,901, 6,621,215 and 5,482,018    |             
|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
SubsidiariesCondensed Consolidated Statements of Cash Flows  (unaudited and in thousands)

|                                                         
|---------------------------------------------------------
|June 26, 2004                                            
|Cash Flows from Operating Activities                     
|Net income                                               
|Adjustments to reconcile net income to net cash          
|provided by (used for) operating activities:             
|Depreciation and amortization                            
|Compensation expense for long-term incentive stock grants
|Gain on sale of property, plant and equipment            
|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 provided by (used for) operating activities     
|                                                         
|Cash Flows from Investing Activities                     
|Property, plant and equipment additions                  
|Proceeds from the sale of property, plant and equipment  
|Other assets                                             
|                                                         
|Net cash used for investing activities                   
|                                                         
|Cash Flows from Financing Activities                     
|Proceeds from revolving credit loans                     
|Proceeds from short-term borrowings                      
|Repayment of short-term borrowings                       
|Proceeds from (Repayments of) other borrowings - net     
|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 StatementsJuly 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- and six-month periods
ended July 2, 2005 and June 26, 2004 includes all adjustments, consisting only of normal
recurring accruals, necessary for a fair statement 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 period ended July 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.

-6-

---

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):

|                                      
|--------------------------------------
|June 26, 2004                         
|Net income, as reported               
|Less: stock-based compensation expense
|determined based on the 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                             

# 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
(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 qualified 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 July 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. Changes in any of these assumptions could affect the calculated
value of the retained interest. The retained interest recorded at July 2, 2005 is $14.8
million and is included in other assets in the accompanying Condensed Consolidated Balance
Sheet.

-7-

---

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 $84.2 million at July
2, 2005. Of the $84.2 million in sold contracts receivable, $2.2 million were greater than
60 days past due and deemed ineligible under the program. Credit losses on contracts sold
under the program were $0.2 million as of July 2, 2005.

During
the six-month period ended July 2, 2005, the Company received proceeds from the sale of
finance contracts receivable of $74.6 million and recorded a loss on sale of $0.9 million.
The loss on sale was partially offset by a $0.4 million realized gain on the termination
of interest rate swap contracts that were put in place to hedge gains / losses on the sale
of finance contracts receivable (see note 12). The Company received $0.1 million in
service fee income during the six-month period ended July 2, 2005. The Company did not
receive any cash flows related to the retained interest during the six-month period ended
July 2, 2005.

The
Company incurred one-time transaction costs of $1.4 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 six-month period ended July 2, 2005, the Company sold $28.0 million of retail finance
contracts to a financial institution on a limited recourse basis. The Company incurred a
$0.5 million loss on the sale of these retail finance contracts.

These
sales 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 Sheet and the proceeds received are included in cash flows from
operating activities in the accompanying Condensed Consolidated Statements of Cash Flows.

# 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):

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

-8-

---

# 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 six-month periods ended July 2, 2005 and June 26, 2004
were as follows (in thousands):

|                                                       
|-------------------------------------------------------
|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                                         
|                                                       

During
the three-month period ended July 2, 2005, the Company recorded a $2.3 million warranty
reserve associated with purchased components that the Company incorporated into one of its
product lines. The Company anticipates recovering a substantial portion of its costs
associated with the warranty charge from its suppliers. In accordance with applicable
accounting standards, the Company expects to record recoveries from its suppliers in
subsequent periods.

# Note 7  Debt
Obligations

On
June 3, 2005, the Company entered into 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 June 3, 2010. At the Companys
election, the credit commitment can be increased to $175 million at any time during the
Facilitys term. Borrowings under the Facility are secured by the Companys
accounts receivable, inventory and the capital stock of certain wholly-owned subsidiaries.
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 .75% to 1.50% or (2) a base rate defined as the prime commercial rate less 0.0% to
1.0%. 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 0.75% to 1.5%. As
of July 2, 2005, the weighted average interest rate on Company borrowings outstanding
under the Facility was 4.63%.

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 July 2, 2005.

Amounts
borrowed under the Facility were used to repay, in full, the Companys asset-based
senior secured debt and other short-term borrowings. Borrowings under the Facility were
$95.0 million at July 2, 2005. Available unused borrowings under the Facility were $30.0
million at July 2, 2005.

-9-

---

# 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):

|                                  
|----------------------------------
|June 26, 2004                     
|Service cost                      
|Interest cost                     
|Expected return on plan assets    
|Amortization of prior service cost
|Amortization of net loss          
|                                  
|Net periodic benefit cost         
|                                  

The
Company anticipates making $1.8 million of contributions to the pension plans during 2005.
The Company made contributions totaling $0.6 million during the six-month period ended
July 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):

|                                  
|----------------------------------
|June 26, 2004                     
|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):

|                                     
|-------------------------------------
|June 26, 2004                        
|Service cost                         
|Interest cost                        
|Amortization of transition obligation
|Amortization of net loss             
|                                     
|Net periodic benefit cost            
|                                     

-10-

---

# Note 9  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):

|                 
|-----------------
|June 26, 2004    
|Basic shares     
|Effect of options
|                 
|Diluted shares   
|                 
|                 
|Six Months Ended 
|June 26, 2004    
|Basic shares     
|Effect of options
|                 
|Diluted shares   
|                 

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

|                               
|-------------------------------
|June 26, 2004                  
|Net income (loss)              
|Foreign currency translation   
|adjustments                    
|Unrealized losses, net of taxes
|                               
|Other comprehensive loss       
|                               
|Comprehensive income (loss)    
|                               

-11-

---

# Note 10  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.

|                       
|-----------------------
|June 26, 2004          
|Net Sales:             
|Construction           
|Agricultural           
|                       
|Consolidated           
|                       
|Income from Operations:
|Construction           
|Agricultural           
|                       
|Consolidated           
|                       

# Note 11  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 six-month
period ended July 2, 2005 nor the six-month period ended June 26, 2004. As of July 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.

# 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.

The
Company was party to three interest rate swap agreements (swaps) that were put
in place as 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 received interest on a variable LIBOR for
one-month deposits and paid on a fixed rate ranging from of 3.18% to 3.41%. Although the
Company continued to own finance contracts during the term of the swaps, 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. The Company
terminated the swaps during the three-month period ended July 2, 2005 and recorded $0.7
million of other expense during such period. The Company realized a net gain of $0.4
million on these swaps for the six-month period ended July 2, 2005.

-12-

---

The
Company has purchase commitments to pay certain suppliers in Euros. In May 2005, the
Company entered into a series of forward currency contracts (forward
contracts) to hedge a portion of the Companys exposure to changes in the value
of the U.S Dollar versus the Euro as a result of the Euro purchase commitments. The
forward contracts expire between July 29, 2005 and December 31, 2005 and have a notional
amount of 4.8 million ($6.1 million) and contract rates ranging from
1.0:$1.2686 to 1.0:$1.2755. As the contracts are deemed ineffective under the
provisions of SFAS No. 133, Accounting for Derivative Instruments and Hedging
Activities, the Company recorded a current liability and cost of goods sold of $0.3
million during the six-month period ended July 2, 2005.

# Note 13 
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.

# Note 14 
Subsequent Event

On
July 22, 2005, the Companys Board of Directors approved a three-for-two stock split
of the Companys common stock, to be effected in the form of a 50 percent stock
dividend. On August 24, 2005, the Company will distribute one share of Company common
stock for every two shares of common stock held by shareholders of record as of August 10,
2005. Fractional shares arising from the stock dividend will be settled in cash.

-13-

---

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

# Results of Operations

# Three Months Ended July
2, 2005 Compared to Three Months Ended June 26, 2004

# Net Sales

Net
sales in the three months ended July 2, 2005 (2005 second quarter) were $138.2
million compared to $95.5 million in the three months ended June 26, 2004 (2004
second quarter), an increase of $42.7 million, or 45%.

Construction
equipment segment net sales were $97.8 million in the 2005 second quarter compared to
$61.6 million in the 2004 second quarter, an increase of $36.3 million, or 59%. 2005
second quarter construction segment net sales were favorably impacted by the continued
strength of the construction markets during the period. Demand for the Companys skid
loaders remained strong as shipments increased over 38% from the 2004 second quarter.
Telescopic handler shipments in the 2005 second quarter increased over 65% from the 2004
second quarter as demand from larger rental customers was strong in the 2005 second
quarter. Demand for compact track loaders and compact excavators resulted in sales more
than doubling from the 2004 second quarter. The Companys European subsidiary, Gehl
Europe, also posted strong sales during the 2005 second quarter as sales increased over
55% from the 2004 second quarter due to continued strength in certain European markets. In
addition to the shipment increases noted above, over 6 percentage points of the net sales
increase was due to 2004 third and fourth quarter price increases.

Agricultural
equipment segment net sales were $40.4 million in the 2005 second quarter, compared to
$33.9 million in the 2004 second quarter, an increase of $6.4 million, or 19%. The
increase in shipments was primarily due to demand for skid loaders and compact track
loaders as shipments increased over 20% and 100%, respectively. In addition to the
shipment increases noted above, over 5 percentage points of the net sales increase was due
to 2004 third and fourth quarter price increases. These increases in shipments were
partially offset by a 15% reduction in the shipment of agricultural implements in the
period, primarily due to overall declines in market demand for certain products.

Of
the Companys total net sales reported for the 2005 second quarter, $22.5 million
were made to customers residing outside of the United States compared with $16.7 million
in the 2004 second quarter. The increase in export sales was primarily due to increased
sales in Europe.

# Gross Profit

Gross
profit was $26.9 million in the 2005 second quarter compared to $19.0 million for the 2004
second quarter, an increase of $7.9 million, or 42%. Gross profit as a percent of net
sales (gross margin) was 19.5% for the 2005 second quarter compared to 19.9% for the 2004
second quarter. The reduction in the 2005 second quarter margin was primarily due to
higher steel and component parts costs, which adversely impacted the 2005 second quarter
margin by approximately 5.2 percentage points. In addition, the 2005 second quarter gross
margin was reduced by approximately 0.4 percentage points due to a temporary shutdown of
the Companys West Bend manufacturing facility. These reductions in gross margin were
largely offset by selective selling price increases in the third and fourth quarters of
2004, as well as lower levels of discounts and sales incentives, which increased the gross
margin by approximately 5.2 percentage points.

-14-

---

Gross
margin for the construction equipment segment was 20.9% for the 2005 second quarter
compared to 21.3% for the 2004 second quarter. The unfavorable impact of the cost issues
noted above reduced the gross margin by approximately 5.7 percentage points. This was
largely offset by the favorable impact of the selective price increases and lower levels
of discounts and incentives, which increased the gross margin by approximately 5.3
percentage points.

Gross
margin for the agricultural equipment segment was 16.2% for the 2005 second quarter
compared to 17.5 % for the 2004 second quarter. The adverse impact of the cost issues and
the West Bend manufacturing facility shutdown noted above reduced margins by approximately
5.1 and 1.3 percentage points, respectively. These margin reductions were partially offset
by the favorable impact of the selective price increases and lower levels of discounts and
incentives, which increased the gross margin by approximately 5.1 percentage points.

# Selling, General and
Administrative Expenses

Selling,
general and administrative expenses were $15.7 million, or 11.4% of net sales, for the
2005 second quarter compared to $12.2 million, or 12.7% of net sales, for the 2004 second
quarter. Selling, general and administrative expenses in the 2005 second quarter were
adversely impacted by a $2.3 million, or 1.7% of net sales, warranty charge associated
with purchased components that the Company incorporated into one of its product lines. The
Company anticipates recovering a substantial portion of its costs associated with the
warranty charge from its suppliers. In accordance with applicable accounting standards,
the Company expects to record recoveries from its suppliers in subsequent periods. The
increase in spending, excluding the warranty charge, is primarily the result of items that
vary with sales levels. 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 second quarter was $11.2 million, or 8.1% of net sales,
compared to income from operations of $6.7 million, or 7.1% of net sales, for the 2004
second quarter, an increase of $4.5 million, or 67%. The 2005 second quarter income from
operations includes the previously discussed warranty charge of $2.3 million, or 1.7% of
net sales, and the temporary West Bend facility shutdown costs of $0.5 million, or 0.4% of
sales.

# Interest Expense

Interest
expense was $1.6 million for the 2005 second quarter compared to $0.7 million for the 2004
second 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 the Companys average
borrowing costs as the LIBOR for one-month deposits increased from the 2004 second quarter
to the 2005 second quarter. See Financial Condition section below for
discussion of changes in outstanding debt.

-15-

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# Interest Income

Interest
income was $1.1 million for the 2005 second quarter compared to $0.5 million for the 2004
second quarter, an increase of $0.6 million. The increase in interest income is primarily
due to the interest earned on the increased balance of finance contracts. See
Financial Condition section below for discussion of the changes in the balance
of finance contracts and the asset securitization program.

# Net Other Expense

The
Company recorded net other expense of $2.2 million and $0.7 million in the 2005 second
quarter and 2004 second quarter, respectively. The increase in net other expense was
primarily due to a $1.2 million increase in the cost of selling finance contracts, which
included a $0.7 million unrealized loss on the termination of interest rate swap contracts
the Company had previously put in place to hedge the gain/loss on sale of finance
contracts (see notes 4 and 12 in Notes to Condensed Consolidated Financial
Statements). The increase in the loss on sale of finance contracts was also due to
the sale of $57.3 million of contracts during the 2005 second quarter compared to $34.4
million during the 2004 second quarter. In addition to the increase in the loss on sale of
finance contracts, unrealized foreign currency losses, primarily related to the Euro,
increased by approximately $0.3 million from the 2004 second quarter.

# Net Income

Net
income was $5.6 million, or 4.1% of net sales, in the 2005 second quarter compared to net
income of $3.9 million, or 4.1% of net sales, in the 2004 second quarter, an increase of
$1.7 million, or 44%. The 2005 second quarter net income includes the previously discussed
after-tax warranty charge of $1.5 million, or 1.1% of net sales, and the temporary West
Bend facility shutdown after-tax costs of $0.3 million, or 0.2% of sales.

# Six Months Ended July 2,
2005 Compared to Six Months Ended June 26, 2004

# Net Sales

Net
sales in the six months ended July 2, 2005 (2005 six months) were $257.2
million compared to $180.2 million in the six months ended June 26, 2004 (2004 six
months), an increase of $77.1 million, or 43%.

Construction
equipment segment net sales were $181.8 million in the 2005 six months compared to $116.0
million in the 2004 six months, an increase of $65.9 million, or 57%. 2005 six months
construction segment net sales were favorably impacted by the continued strength of the
construction markets during the period. Demand for the Companys skid loaders was
strong as shipments increased over 30% from the 2004 six months. Telescopic handler
shipments in the 2005 six months increased over 80% from the 2004 six months as demand
from larger rental customers was strong in the 2005 six months. Demand for compact track
loaders and compact excavators resulted in sales increases from the 2004 six months of
over 59% and 144%, respectively. The Companys European subsidiary, Gehl Europe, also
posted strong sales during the 2005 six months as sales increased over 55% from the 2004
six months due to continued strength in certain European markets. In addition to the
shipment increases noted above, nearly 8 percentage points of the net sales increase was
due to 2004 third and fourth quarter price increases.

-16-

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Agricultural
equipment segment net sales were $75.4 million in the 2005 six months, compared to $64.2
million in the 2004 six months, an increase of $11.2 million, or 17%. The increase in
shipments was primarily due to demand for skid loaders and compact track loaders as
shipments increased over 20% and 39%, respectively. In addition to the shipment increases
noted above, over 6 percentage points of the net sales increase was due to 2004 third and
fourth quarter price increases. These increases in shipments were partially offset by a 4%
reduction in the shipment of agricultural implements in the period, primarily due to
overall declines in market demand for certain products during the second quarter of 2005.

Of
the Companys total net sales reported for the 2005 six months, $39.4 million were
made to customers residing outside of the United States compared with $29.6 million in the
2004 six months. The increase in export sales was primarily due to increased sales in
Europe.

# Gross Profit

Gross
profit was $50.5 million in the 2005 six months compared to $36.4 million for the 2004 six
months, an increase of $14.1 million, or 39%. Gross margin was 19.6% for the 2005 six
months compared to 20.2% for the 2004 six months. The reduction in the 2005 six months
margin was primarily due to higher steel and component parts costs, which adversely
impacted the 2005 six months margin by approximately 5.7 percentage points. In addition,
the 2005 six months gross margin was reduced by approximately 0.2 percentage points due to
a temporary shutdown of the Companys West Bend manufacturing facility. These factors
that negatively impacted gross margin were largely offset by selective selling price
increases in the 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 percentage
points.

Gross
margin for the construction equipment segment was 20.7% for the 2005 six months compared
to 21.9% for the 2004 six months. The unfavorable impact of the cost issues noted above
reduced the gross margin by approximately 6.2 percentage points. This was partially offset
by the favorable impact of the selective price increases and lower levels of discounts and
incentives, which increased the gross margin by approximately 5.0 percentage points.

Gross
margin for the agricultural equipment segment was 17.1% for the 2005 six months compared
to 17.2 % for the 2004 six months. The adverse impact of the cost issues and the West Bend
manufacturing facility shutdown noted above reduced margins by approximately 5.6 and 0.7
percentage points, respectively. These margin reductions were largely offset by the
favorable impact of the selective price increases and lower levels of discounts and
incentives, which increased the gross margin by approximately 6.2 percentage points.

# Selling, General and
Administrative Expenses

Selling,
general and administrative expenses were $30.8 million, or 12.0% of net sales, for the
2005 six months compared to $25.1 million, or 13.9% of net sales, for the 2004 six months.
Selling, general and administrative expenses in the 2005 six months were adversely
impacted by a $2.3 million, or 0.9% of net sales, warranty charge recorded by the Company
in the 2005 second quarter associated with purchased components that the Company
incorporated into one of its product lines. The Company anticipates recovering a
substantial portion of its costs associated with the warranty charge from its suppliers.
In accordance with applicable accounting standards, the Company expects to record
recoveries from its suppliers in subsequent periods. The increase in spending, excluding
the warranty charge, is primarily the result of items that vary with sales levels.
Selling, general and administrative expenses as a percentage of net sales improved as the
growth in net sales exceeded expense increases.

-17-

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# Income from Operations

Income
from operations for the 2005 six months was $19.7 million, or 7.6% of net sales, compared
to income from operations of $11.4 million, or 6.3% of net sales, for the 2004 six months,
an increase of $8.3 million, or 73%. The 2005 six months income from operations includes
the previously discussed warranty charge of $2.3 million, or 0.9% of net sales, and the
temporary West Bend facility shutdown costs of $0.5 million, or 0.2% of sales.

# Interest Expense

Interest
expense was $3.0 million for the 2005 six months compared to $1.2 million for the 2004 six
months, an increase of $1.8 million. The increase in interest expense was due to an
increase in the average outstanding debt and an increase in borrowing costs as the LIBOR
for one-month deposits increased from the 2004 six months to the 2005 six months. See
Financial Condition section below for discussion of changes in outstanding
debt.

# Interest Income

Interest
income was $2.2 million for the 2005 six months compared to $0.9 million for the 2004 six
months, an increase of $1.3 million. The increase in interest income is primarily due to
the interest earned on the increased balance of finance contracts. See Financial
Condition section below for discussion of the changes in the balance of finance
contracts and the asset securitization program.

# Net Other Expense

The
Company recorded net other expense of $2.9 million and $0.9 million in the 2005 six months
and 2004 six months, respectively. The increase in net other expense was primarily due to
$1.4 million of one time and other costs incurred with the asset securitization program
during the 2005 first quarter and a $0.7 million increase in the cost of selling finance
contracts, which included a $0.4 million realized gain on the termination of interest rate
swap contracts the Company had previously put in place to hedge the gain/loss on sale of
finance contracts (see notes 4 and 12 in Notes to Condensed Consolidated Financial
Statements). The increase in the loss on sale of finance contracts was primarily due
to the sale of $120.6 million of contracts during the 2005 six months compared to $57.6
million during the 2004 six months.

# Net Income

Net
income was $10.5 million in the 2005 six months, or 4.1% of net sales, compared to net
income of $6.8 million in the 2004 six months, or 3.8% of net sales, an increase of $3.7
million, or 55%. The 2005 six months net income includes the previously discussed
after-tax warranty charge of $1.5 million, or 0.6% of net sales, and the temporary West
Bend facility shutdown after-tax costs of $0.3 million, or 0.1% of sales.

-18-

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# Financial Condition

The
Companys working capital was $185.0 million at July 2, 2005, as compared to $162.8
million at December 31, 2004, and $112.5 million at June 26, 2004. The increase since June
26, 2004 was primarily due to increases in accounts receivable ($57.6 million) and finance
contracts receivable ($17.4 million). The increase in accounts receivable was due to
increased shipments, which were primarily driven by strong demand for skid loaders,
telescopic handlers, compact track loaders and compact excavators. Finance contracts
receivable increased as the Company had been holding finance contracts for a sale under an
asset securitization program from the third quarter of 2004 through February 2005. Upon
finalizing the asset securitization program in February 2005, the Company began selling
the held contracts, as well as contracts originated after the inception of the program,
through the asset securitization program. Not all contracts had been sold as of July 2,
2005, which resulted in an increase in the balance of finance contracts receivable from
June 26, 2004 (see additional discussion below).

The
increase in working capital from December 31, 2004 was primarily due to increases in
accounts receivable ($66.4 million) offset, in part, by a decrease in finance contracts
receivable ($46.6 million). The increase in accounts receivable was due to increased
shipments, which were primarily driven by strong demand for skid loaders, telescopic
handlers, compact track loaders and compact excavators. At December 31, 2004, the Company
was holding finance contracts for sale under an asset securitization program. Upon
finalizing the asset securitization program in February 2005, the Company began selling
the held contracts, as well as contracts originated after the inception of the program,
through the asset securitization program.

Capital
expenditures for property, plant and equipment during the 2005 six months were
approximately $6.5 million. During 2005, the Company anticipates making an aggregate of up
to $13.5 million in capital expenditures. The Company has outstanding commitments for
capital expenditures at July 2, 2005 of approximately $3.1 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
for the foreseeable future.

On
June 3, 2005, the Company entered into 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 June 3, 2010. At the Companys
election, the credit commitment can be increased to $175 million at any time during the
Facilitys term. Borrowings under the Facility are secured by the Companys
accounts receivable, inventory and the capital stock of certain wholly-owned subsidiaries.
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) LIBOR plus .75% to 1.50% or (2) a base rate defined as
the prime commercial rate less 0.0% to 1.0%. 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 0.75% to 1.5%. As of July 2, 2005, the weighted average interest rate on
Company borrowings outstanding under the Facility was 4.63%.

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 July 2, 2005.

-19-

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Amounts
borrowed under the Facility were used to repay, in full, the Companys asset-based
senior secured debt facility and other short-term borrowings. Borrowings under the
Facility and the previous asset-based senior secured debt facility were $95.0 million,
$69.0 million and $46.4 million at July 2, 2005, December 31, 2004 and June 26, 2004,
respectively. Available unused borrowings under the Facility and the previous asset-based
senior secured debt facility were $30.0 million, $19.3 million and $42.4 million at July
2, 2005, December 31, 2004 and June 26, 2004, respectively.

On
July 1, 2005, the Company filed a Form S-3 Registration Statement under the Securities Act
of 1933 (Registration Statement), using the SECs shelf
registration process. The Registration Statement, when made effective, will allow the
Company to sell a variety of securities, including equity and debt securities, in one or
more offerings with a maximum aggregate offering price of up to $75 million.

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.
The retained interest recorded at July 2, 2005 is $14.8 million and is included in other
assets in the accompanying Condensed Consolidated Balance Sheet. At July 2, 2005, the
Company had available unused capacity of $77.1 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
its finance contracts receivable, with recourse and, in certain cases, limited recourse.
The Company continues to service substantially all contracts, whether or not sold. At July
2, 2005, the Company serviced $256.3 million of such contracts, of which $223.2 million
were owned by other parties. Of the $223.2 million sold finance contracts owned by other
parties, $111.4 million were sold through the asset securitization program and other
limited recourse arrangements.

At
July 2, 2005, shareholders equity had increased $42.6 million to $148.8 million from
$106.2 million at June 26, 2004. This increase was primarily due to the net income earned
from June 26, 2004 to July 2, 2005, $19.8 million in proceeds from the sale of 961,768
shares of common stock in July 2004 and the exercise of stock options.

-20-

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On
July 22, 2005, the Companys Board of Directors approved a three-for-two stock split
of the Companys common stock, to be effected in the form of a 50 percent stock
dividend. On August 24, 2005, the Company will distribute one share of Company common
stock for every two shares of common stock held by shareholders of record as of August 10,
2005. Fractional shares arising from the stock dividend will be settled in cash.

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 six-month
period ended July 2, 2005 nor the six-month period ended June 26, 2004. As of July 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.

-21-

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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.

-22-

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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.

# Outlook

On
July 25, 2005, the Company raised its net sales outlook for the year. It is now expecting
2005 net sales in the range of $465 million to $475 million. The Company also reaffirmed
its prior earnings guidance of between $2.70 and $2.80 per diluted share, before giving
effect to the stock split approved by the Companys Board of Directors on July 22,
2005. This guidance reflects the adverse impact of the $.21 per share warranty charge
taken in the second quarter of 2005.

# 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 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 ability of the Company to recover from its suppliers costs related to
the one-time warranty charge for defective parts incurred in the second quarter of 2005,
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 or capital markets 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.

-23-

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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 July 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
July 2, 2005.

# Changes in Internal
Control Over Financial Reporting

During
the period covered by this report, the Company implemented a new software system to
account for and service all sold and unsold finance contracts (refer to Financial
Condition in Managements Discussion and Analysis of Results of Operations and
Financial Condition for discussion of finance contracts). The implementation was completed
in May 2005. This new software system was not implemented in response to any deficiency in
internal control over financial reporting. Other than the new software system discussed
above, 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 Securities Exchange
Act of 1934) that occurred during the three- months ended July 2, 2005, that has
materially affected, or is reasonably likely to materially affect, the Companys
internal control over financial reporting.

-24-

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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 July 2, 2005. As of July 2, 2005, the Company had authority to repurchase
348,100 shares under the plan.

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

At
the Companys 2005 annual meeting of shareholders held on April 22, 2005,
Marcel-Claude Braud was elected as a director of the Company for a term expiring at the
2007 annual meeting of shareholders and Nicholas C. Babson, Thomas J. Boldt and Hans
Neunteufel were re-elected as directors of the Company for terms expiring at the 2008
annual meeting of shareholders:

|Name of Nominee     | Shares Voted For | Shares Withholding Authority
|------------------- | ---------------- | ----------------------------
|Marcel-Claude Braud | 5,895,553        | 140,696                     
|Nicholas C. Babson  | 5,896,572        | 139,677                     
|Thomas J. Boldt     | 5,896,881        | 139,368                     
|Hans Neunteufel     | 5,895,546        | 140,703                     

The
following table sets forth the other directors of the Company whose terms of office
continued after the 2005 annual meeting:

|Name of Director  | Year in Which Term Expires
|----------------- | --------------------------
|John T. Byrnes    | 2006                      
|Richard J. Fotsch | 2006                      
|Dr. Hermann Viets | 2006                      
|William D. Gehl   | 2007                      
|John W. Splude    | 2007                      

In
addition, at the 2005 annual meeting, shareholders approved the appointment of
PricewaterhouseCoopers LLP as the Companys independent registered public accounting
firm for fiscal year 2005. With respect to such approval, the number of shares voted for
and against were 5,997,767 and 28,421, respectively. The number of shares abstaining was
10,061.

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---

# Item 6. Exhibits

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

|10.1 | Credit
Agreement by and among Gehl Company, Compact Equipment Attachments Inc., Gehl
                  Power Products, Inc., Mustang Manufacturing Company, Inc., Harris N.A.,
JPMorgan Chase                   Bank, N.A., LaSalle Bank National Association, Wells
Fargo Bank, National Association                   and M&I Marshall & Ilsley Bank, dated
June 3, 2005. [Incorporated by reference to                   Exhibit 10.1 to the
Company's Current Report on Form 8-K filed on June 9, 2005.]
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.2 | Security
Agreement by and among Gehl Company, Compact Equipment Attachments Inc., Gehl
                  Power Products, Inc., Mustang Manufacturing Company, Inc. and Harris
N.A., as agent,                   dated June 3, 2005. [Incorporated by reference to
Exhibit 10.2 to the Company's Current                   Report on Form 8-K filed on June
9, 2005.]
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|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:  August 10, 2005 | By:  /s/ William D. Gehl   
|                       | William D. Gehl            
|                       | Chairman of the Board      
|                       | and Chief Executive Officer
|Date:  August 10, 2005 | By:  /s/ Thomas M. Rettiler
|                       | Thomas M. Rettler          
|                       | Vice President and         
|                       | Chief Financial Officer    
|                       | (Principal Financial and   
|                       | Accounting Officer)        

-26-

---

# GEHL COMPANY

# INDEX TO EXHIBITS

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

|10.1 | Credit
Agreement by and among Gehl Company, Compact Equipment
                                      Attachments Inc., Gehl Power Products, Inc.,
Mustang Manufacturing                                       Company, Inc., Harris N.A.,
JPMorgan Chase Bank, N.A., LaSalle Bank                                       National
Association, Wells Fargo Bank, National Association and
                                      M&I Marshall & Ilsley Bank, dated June 3, 2005.
[Incorporated by                                       reference to Exhibit 10.1 to the
Company's Current Report on Form                                       8-K filed on June
9, 2005.]
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.2 | Security
Agreement by and among Gehl Company, Compact Equipment
                                      Attachments Inc., Gehl Power Products, Inc.,
Mustang Manufacturing                                       Company, Inc. and Harris
N.A., as agent, dated June 3, 2005.                                       [Incorporated
by reference to Exhibit 10.2 to the Company's Current
                                      Report on Form 8-K filed on June 9, 2005.]
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|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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