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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2005 Commission file number: 0-25620 A.S.V., Inc.  Minnesota
    
    41-1459569State or other jurisdiction of
incorporation or organization
    
    I.R.S. Employer Identification No.
 840 Lily LaneP.O. Box 5160Grand Rapids, MN 55744
    
    (218) 327-3434Address of principal executive offices,
including zip code
    
    Registrants telephone number,
including area code
 Not Applicable   Check 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 for 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
þ No o Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule
12b-2 of the Exchange Act). Yes
þ No o As of April 29, 2005, 13,391,314 shares of the issuers Common Stock were issued and
outstanding.




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TABLE OF CONTENTS  PART I - FINANCIAL INFORMATIONITEM 1 - FINANCIAL STATEMENTSITEM 2  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSITEM 4. CONTROLS AND PROCEDURESPART II - OTHER INFORMATIONITEM 1. LEGAL PROCEEDINGSITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDSITEM 3. DEFAULTS UPON SENIOR SECURITIESITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERSITEM 5. OTHER INFORMATIONITEM 6. EXHIBITSSIGNATURESEXHIBIT INDEXStatement re: Computation of Per Share EarningsCertification of CEO Pursuant to Section 302Certification of CFO Pursuant to Section 302Certification of CEO Pursuant to Section 906Certification of CFO Pursuant to Section 906    Table of Contents  
 PART I - FINANCIAL INFORMATION 
 ITEM 1 - FINANCIAL STATEMENTS A.S.V., Inc.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED) March 31,
    
    
    December 31,2005
    
    
    2004ASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    36,579,266
    
    
    $
    27,437,885Short-term investments
    
    
    1,209,960
    
    
    
    9,562,744Accounts receivable, netTrade
    
    
    28,518,607
    
    
    
    20,408,436Caterpillar Inc.
    
    
    8,113,000
    
    
    
    16,023,338Inventories
    
    
    46,065,551
    
    
    
    34,832,868Deferred income taxes
    
    
    1,600,000
    
    
    
    1,175,000Other current assets
    
    
    866,224
    
    
    
    1,062,096Total current assets
    
    
    122,952,608
    
    
    
    110,502,367PROPERTY AND EQUIPMENT, net
    
    
    11,722,282
    
    
    
    11,108,132LONG-TERM INVESTMENTS
    
    
    5,917,691
    
    
    
    5,912,747OTHER NON-CURRENT ASSET
    
    
    664,445
    
    
    
    703,445INTANGIBLES, net
    
    
    7,976,502
    
    
    
    8,002,251GOODWILL
    
    
    8,385,827
    
    
    
    8,385,827$
    157,619,355
    
    
    $
    144,614,769LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIESCurrent portion of long-term liabilities
    
    $
    191,563
    
    
    $
    189,656Accounts payable
    
    
    14,344,415
    
    
    
    11,452,026Accrued liabilitiesWarranties
    
    
    3,006,222
    
    
    
    2,587,282Other
    
    
    2,072,688
    
    
    
    1,907,240Income taxes payable
    
    
    3,340,443
    
    
    
    533,995Total current liabilities
    
    
    22,955,331
    
    
    
    16,670,199LONG-TERM LIABILITIES, less current portion
    
    
    1,829,715
    
    
    
    1,873,768COMMITMENTS AND CONTINGENCIES
    
    
    
    
    
    
    SHAREHOLDERS EQUITYCapital stock, $.01 par value:Preferred stock, 11,250,000 shares authorized; no shares issued or outstanding
    
    
    
    
    
    
    Common stock, 33,750,000 shares authorized; shares issued
and outstanding  13,387,614 in 2005; 13,336,657 in 2004
    
    
    133,876
    
    
    
    133,367Additional paid-in capital
    
    
    89,565,047
    
    
    
    88,345,024Retained earnings
    
    
    43,135,386
    
    
    
    37,592,411132,834,309
    
    
    
    126,070,802$
    157,619,355
    
    
    $
    144,614,769
 See notes to consolidated financial statements. 2




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A.S.V., INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED) Three months ended March 31, 2005
    
    
    2004Net salesTrade
    
    $
    30,242,365
    
    
    $
    19,397,904Caterpillar Inc.
    
    
    22,937,477
    
    
    
    13,655,867Total net sales
    
    
    53,179,842
    
    
    
    33,053,771Cost of goods sold
    
    
    40,420,654
    
    
    
    25,483,569Gross profit
    
    
    12,759,188
    
    
    
    7,570,202Operating expensesSelling, general and administrative
    
    
    3,783,571
    
    
    
    1,900,522Research and development
    
    
    428,140
    
    
    
    155,555Operating income
    
    
    8,547,477
    
    
    
    5,514,125Other income (expense)Interest income
    
    
    303,243
    
    
    
    177,887Interest expense
    
    
    (28,176
    )
    
    
    (28,609
    )Other, net
    
    
    45,431
    
    
    
    1,630Income before income taxes
    
    
    8,867,975
    
    
    
    5,665,033Provision for income taxes
    
    
    3,325,000
    
    
    
    2,070,000NET EARNINGS
    
    $
    5,542,975
    
    
    $
    3,595,033Net earnings per common share:Basic
    
    $
    .41
    
    
    $
    .29Diluted
    
    $
    .40
    
    
    $
    .26Weighted average number of common shares outstanding:Basic
    
    
    13,363,538
    
    
    
    12,464,518Diluted
    
    
    13,820,897
    
    
    
    13,706,606
 See notes to consolidated financial statements. 3




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A.S.V., INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Three months ended March 31, 2005
    
    
    2004Cash flows from operating activities:Net earnings
    
    $
    5,542,975
    
    
    $
    3,595,033Adjustments to reconcile net earnings to netcash provided by (used in) operating activities:Depreciation
    
    
    418,611
    
    
    
    205,704Amortization
    
    
    25,749
    
    
    
    Deferred income taxes
    
    
    (425,000
    )
    
    
    1,160,000Tax benefit from stock option exercises
    
    
    500,000
    
    
    
    485,000Changes in assets and liabilitiesAccounts receivable
    
    
    (199,833
    )
    
    
    (9,791,828
    )Inventories
    
    
    (11,232,683
    )
    
    
    (2,520,113
    )Other assets
    
    
    234,872
    
    
    
    1,903,332Accounts payable
    
    
    2,892,389
    
    
    
    2,851,491Accrued liabilities
    
    
    584,388
    
    
    
    413,625Income taxes payable
    
    
    2,806,448
    
    
    
    346,105Net cash provided by (used in)
operating activities
    
    
    1,147,916
    
    
    
    (1,351,651
    )Cash flows from investing activities:Purchase of property and equipment
    
    
    (1,032,761
    )
    
    
    (1,508,463
    )Purchase of short-term investments
    
    
    (108,446
    )
    
    
    (211,230
    )Purchase of long-term investments
    
    
    (4,944
    )
    
    
    Redemption of short-term investments
    
    
    8,461,230
    
    
    
    205,894Net cash provided by (used in) investing activities
    
    
    7,315,079
    
    
    
    (1,513,799
    )Cash flows provided by financing activities:Principal payments on long-term liabilities
    
    
    (42,146
    )
    
    
    (33,195
    )Proceeds (costs) from issuance of common stock, net
    
    
    (23,165
    )
    
    
    21,826,431Proceeds from exercise of stock options, net
    
    
    853,806
    
    
    
    920,592Retirement of common stock and warrant
    
    
    (110,109
    )
    
    
    (7,925,954
    )Net cash provided by financing activities
    
    
    678,386
    
    
    
    14,787,874Net increase in cash and cash equivalents
    
    
    9,141,381
    
    
    
    11,922,424Cash and cash equivalents at beginning of period
    
    
    27,437,885
    
    
    
    29,402,756Cash and cash equivalents at end of period
    
    $
    36,579,266
    
    
    $
    41,325,180Supplemental disclosure of cash flow information:Cash paid for interest
    
    $
    28,333
    
    
    $
    28,756Cash paid for income taxes
    
    $
    491,513
    
    
    $
    85
 See notes to consolidated financial statements. 4




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A.S.V., INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) March 31, 2005 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A summary of the significant accounting policies consistently applied in the preparation of
the accompanying unaudited, consolidated financial statements follows: Principles of Consolidation The consolidated financial statements include the accounts of A.S.V., Inc. (ASV or the
Company) and its wholly-owned subsidiaries. All intercompany accounts and transactions have been
eliminated in consolidation. Revenue Recognition ASV generally recognizes revenue on its product sales when persuasive evidence of an
arrangement exists, delivery has occurred, the price is fixed or determinable and collectibility is
reasonable assured. The Company considers delivery to have occurred at the time of shipment. Research and Development All research and development costs are expensed as incurred. Interim Financial Information The accompanying unaudited, consolidated financial statements have been prepared in accordance
with accounting principles generally accepted in the United States of America (US GAAP) for interim
financial information. Accordingly, they do not include all of the footnotes required by US GAAP
for complete financial statements. In the opinion of management, all adjustments (consisting of
normal, recurring adjustments) considered necessary for a fair presentation have been included.
Results for the interim periods are not necessarily indicative of the results for an entire year. Warranties The Company provides a limited warranty to its customers. Provision for estimated warranty
costs are recorded when revenue is recognized based on estimated product failure rates, material
usage and service delivery costs incurred in correcting a product failure. Should actual failure
rates, material usage or service delivery costs differ from the Companys estimates, revision to
the warranty liability may be required. Changes in the Companys warranty liability are as follows: March 31,2005
    
    
    2004Balance, beginning of period
    
    $
    2,587,282
    
    
    $
    850,000Expense for new warranties issued
    
    
    981,533
    
    
    
    627,165Warranty claims
    
    
    (562,593
    )
    
    
    (327,165
    )Balance, end of period
    
    $
    3,006,222
    
    
    $
    1,150,000
 5




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A.S.V., INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(UNAUDITED) NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued) Stock-Based Compensation At March 31, 2005, the Company had three stock-based compensation plans. The Company accounts
for those plans under the recognition and measurement principles of APB Opinion No. 25, Accounting
for Stock Issued to Employees,and related Interpretations. No stock-based employee compensation
cost is reflected in net earnings, as all options granted under those plans had an exercise price
equal to the market value of the underlying common stock on the date of grant. The following table illustrates the effect on net earnings and earnings per share if the
Company had applied the fair value recognition provisions of FASB Statement No. 123, Accounting for
Stock-Based Compensation,using the following assumptions. The weighted average fair values of the
options granted during 2005 and 2004 were $16.94 and $18.34. The fair value of each option grant
is estimated on the date of grant using the Black-Scholes options-pricing model with the following
weighted-average assumptions used for all grants in 2005 and 2004, respectively: zero dividend
yield; expected volatility of 39.45% and 52.3%, risk-free interest
rate of 4.11% and 3.64% and
expected lives of 6.10 and 6.90 years. Three Months Ended March 31,2005
    
    
    2004Net earnings, as reported
    
    $
    5,542,975
    
    
    $
    3,595,033Less total stock-based employee
compensation determined under
fair value methods for all awards,
net of income taxes
    
    
    (401,275
    )
    
    
    (332,408
    )Pro forma net earnings
    
    $
    5,141,700
    
    
    $
    3,262,625Earnings per share:Basic - as reported
    
    $
    .41
    
    
    $
    .29Basic - pro forma
    
    $
    .38
    
    
    $
    .26Diluted - as reported
    
    $
    .40
    
    
    $
    .26Diluted - pro forma
    
    $
    .37
    
    
    $
    .24
 NOTE 2. INVENTORIES Inventories consist of the following: March 31,
    
    
    December 31,2005
    
    
    2004Raw materials, service parts
and work-in-process
    
    $
    35,046,673
    
    
    $
    23,630,644Finished goods
    
    
    9,663,184
    
    
    
    9,647,769Used equipment held for resale
    
    
    1,355,694
    
    
    
    1,554,455$
    46,065,551
    
    
    $
    34,832,868
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A.S.V., INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(UNAUDITED) NOTE 3. NEW ACCOUNTING PRONOUNCEMENTS SFAS 123 (Revised 2004), Share-Based Payment This revision to Statement No. 123, Accounting for Stock-Based Compensation, requires the fair
value of all share-based payment transactions be recognized in the financial statements. SFAS 123
(Revised 2004) establishes fair value as the measurement objective in accounting for share-based
payment arrangements and requires all entities to apply a fair-value-based measurement method in
accounting for share-based payment transactions with employees, except for equity instruments held
by employee share ownership plans. This Statement is effective for the Company beginning January
1, 2006. The Company anticipates the effect of adopting this Statement could be material, but the
impact on its diluted earnings per share for the year ended December 31, 2006 for those share-based
payment transactions in existence as of April 29, 2005 cannot currently be calculated. SFAS 151, Inventory Costs This Statement requires the accounting for idle facility expense, freight, handling costs and
wasted material be recognized as current period charges. This Statement also requires that
allocation of fixed production overheads to the costs of conversion be based on the normal capacity
of the production facilities. This Statement is effective for the Company beginning January 1,
2006. Management does not believe the adoption of this pronouncement will have a material effect
on the Company. NOTE 4. INCOME TAXES On October 22, 2004, congress passed the American Jobs Creation Act of 2004 (the Act). The
Act provides a deduction for income from qualified domestic production activities, which will be
phased in from 2005 through 2010, as well as other tax implications. The domestic production
deduction will be accounted for as a special deduction, and as such, will have no effect on
deferred tax assets and liabilities existing at the date of enactment. It is not currently
possible to predict what impact this Act will have on future earnings, as final implementation
information is not expected to be available until later in 2005. 7




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ITEM 2 - MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Overview ASV designs, manufactures and sells rubber-tracked, all-purpose crawlers and related
accessories and attachments. ASV also manufactures rubber-tracked undercarriages, which are a
primary component on Caterpillar Inc.s (Caterpillar) Multi Terrain Loaders (MTL). ASVs products
are able to traverse nearly any terrain with minimal damage to the ground, making it effective in
industries such as construction, landscaping and agriculture. ASV distributes its products through
an independent dealer network in the United States, Canada, Australia, New Zealand and Portugal.
The undercarriages sold to Caterpillar are incorporated by Caterpillar in their MTL products and
sold exclusively through the Caterpillar dealer network, primarily in North America. ASV experienced a significant increase in sales in the first quarter of 2005 due to several
reasons as explained below:  
    The Company believes there is a greater acceptance of rubber track machines in
the marketplace as users experience the benefits that a rubber track machine can
provide over a standard wheeled machine.
    The number of companies entering into the rubber track machine market has
increased in the last few years, thereby contributing to the increased awareness
and market acceptance of the products.
    ASV has increased its number of product offerings over the past few years
thereby making it easier to attract prospective dealers to carry the R-Series
Posi-Track product line. In addition, the number of dealers selling the Companys
R-Series Posi-Track product line has increased over the past few years.
    The current low interest rate environment has provided for easier financing by
end users.
    The Companys results of operations for the three months ended March 31, 2005
include sales of $6.4 million from Loegering Mfg. Inc. (Loegering). On October 4,
2004, ASV closed on its acquisition of Loegering of Casselton, North Dakota in a
merger transaction. Loegering is a manufacturer of over-the-tire steel tracks for
wheeled skid-steers and also provides attachments for the skid-steer market.
Following completion of the transaction, Loegering became a wholly owned subsidiary
of ASV. Critical Accounting Policies The following discussion and analysis of the Companys financial condition and results of
operations is based
upon its consolidated financial statements, which have been prepared
in accordance with US GAAP. The
preparation of these financial statements requires management to make estimates and judgments that
affect the reported amounts of assets, liabilities and expenses, and related disclosures. On an
on-going basis, management evaluates its estimates and judgments, including those related to
accounts receivable, inventories and warranty obligations. By their nature, these estimates and
judgments are subject to an inherent degree of uncertainty. Management bases its estimates and
judgments on historical experience, observance of trends in the industry, information provided by
customers and other outside sources and on various other factors 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. Management believes the following critical accounting policies, among others, affect its more
significant judgments and estimates used in the preparation of the Companys consolidated financial
statements. Revenue Recognition and Accounts Receivable.Revenue is recognized when persuasive evidence of
an arrangement exists, delivery has occurred, the price is fixed or determinable and collectibility
is reasonably assured. The Company has determined that the time of shipment is the most appropriate
point to recognize revenue as the risk of loss passes to the customer when placed with a carrier
for delivery (i.e., upon shipment). Any post-sale obligations on the part of ASV, consisting
primarily of warranty obligations, are estimated and accrued for at the time 8




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of shipment. The Company generally obtains oral or written purchase authorizations from customers for a specified
amount of product at a specified price and considers delivery to have occurred at the time of
shipment. ASV maintains an allowance for doubtful accounts for estimated losses resulting from the
inability of its customers to make required payments. If the financial condition of ASVs customers
were to deteriorate, resulting in an impairment of their ability to make payments, additional
allowances may be required. Inventories.Inventories are stated at the lower of cost or market, cost being determined on
the first-in, first-out method. Adjustments to slow moving and obsolete inventories to the lower of
cost or market are provided based on historical experience and current product demand. The Company
does not believe its inventories are subject to rapid obsolescence. The Company evaluates the
adequacy of the inventories carrying value quarterly. Warranties.The Company provides limited warranties to purchasers of its products which vary
by product. The warranties generally cover defects in materials and workmanship for one year from
the delivery date to the first end user. The rubber tracks used on the Companys products carry a
pro-rated warranty up to 1,500 hours of usage. While ASV engages in extensive product quality
programs and processes, including actively monitoring and evaluating the quality of its component
suppliers, ASVs warranty obligation is affected by product failure rates, material usage and
service delivery costs incurred in correcting a product failure. Should actual product failure
rates, material usage or service delivery costs differ from ASVs estimates, revisions to the
estimated warranty liability may be required. Income Taxes. The Company records income taxes using an asset and liability approach that
requires the recognition of deferred tax assets and liabilities for the expected future tax
consequences of events that have been recognized in the Companys financial statements or tax
returns. A valuation allowance is established when management determines it is more likely than not
that a deferred tax asset is not realizable in the foreseeable future. Stock-Based Compensation.The Company accounts for employee stock-based compensation under the
intrinsic value method prescribed in Accounting Principles Board (APB) Opinion No. 25, Accounting
for Stock Issued to Employees, and related interpretations, as opposed to the fair value method
prescribed by Statement of Financial Accounting Standards (SFAS) No. 123, Accounting for
Stock-Based Compensation. Pursuant to the provisions of APB 25, the Company generally does not
record an expense for the value of stock-based awards granted to employees. The FASB issued an amendment to SFAS No. 123, Share-Based Payment, (SFAS No. 123R), which
will be effective for public companies in periods beginning after December 15, 2005. We are
required to implement the proposed standard no later than the quarter that begins January 1, 2006.
SFAS No. 123R eliminates the ability to account for share-based compensation transactions using APB
Opinion No. 25, and generally would require instead that such transactions be accounted for using a
fair-value-based method. Companies are required to recognize an expense for compensation cost
related to share-based payment arrangements including stock options and employee stock purchase
plans. The Company anticipates the effect of adopting this Statement could be material, but the
impact on its diluted earnings per share for the year ended December 31, 2006 for those share-based
payment transactions in existence as of April 29, 2005 cannot currently be calculated. Results of Operations The following table sets forth certain Statements of Earnings data as a percentage of net
sales: Three Months Ended March 31,2005
    
    
    2004Net sales
    
    
    100.0
    %
    
    
    100.0
    %Gross profit
    
    
    24.0
    
    
    
    22.9Selling, general and administrative
    
    
    7.1
    
    
    
    5.7Research and development
    
    
    0.8
    
    
    
    0.5Operating income
    
    
    16.1
    
    
    
    16.7Net earnings
    
    
    10.4
    
    
    
    10.9
 9




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Net Sales.For the three months ended March 31, 2005, net sales increased 61% to $53.2
million, compared with $33.1 million for the same period in 2004. This increase was primarily the
result of four factors. First, sales of the Companys R-Series products increased 23% due to a
greater number of R-Series dealers in 2005 and a full quarter of sales of the RC-60 and RC-85 in
the first quarter of 2005 versus a partial quarter in 2004. Sales of R-Series products represented
41%, or $21.6 million, of the Companys sales in the first quarter of 2005, compared with 53%, or
$17.5 million, in the first quarter of 2004. Second, sales of the Companys undercarriages to
Caterpillar for use on their Multi-Terrain Loaders (MTLs) increased 55% in the first quarter of
2005 compared with the same period in 2004. This increase was a result of Caterpillar changing
over its production of MTLs to a newer series in the first half of 2004, for which production was
less in the first half of 2004. No such changeover occurred in 2005. Sales of undercarriages
represented 33%, or $17.5 million, of the Companys sales in the first quarter of 2005, compared
with 34%, or $11.2 million, in the first quarter of 2004. Third, sales from Loegering, acquired in
October 2004, totaled $6.4 million for the first quarter of 2005, compared to none in the first
quarter of 2004. Lastly, sales of service parts increased 77% during the first quarter of 2005
compared with the first quarter of 2004 due to a greater number of machines and undercarriages in
service. The Company anticipates its net sales for 2005 will be in the range of $220-230 million
based on its current and projected level of orders for its R-Series Posi-Track products and MTL
undercarriages, projected future service parts demand and a full year of sales from Loegering. Gross Profit.Gross profit for the three months ended March 31, 2005 increased to $12.8
million, compared with $7.6 million for the same period in 2004, and the gross profit percentage
increased to 24.0% in 2005 compared with 22.9% in 2004. The increase in gross profit was due
primarily to the increased sales experienced during the first quarter of 2005. The increase in
gross profit percentage was due primarily to a shift in the mix of products sold as the Company had
increased sales of R-Series Posi-Track products in the first quarter of 2005 over the first quarter
of 2004. R-Series products generally carry a higher gross profit percentage than MTL
undercarriages. The Company also believes its raw material unit cost reduction project initiated in
the first quarter of 2004 as well as operational efficiencies obtained from higher production
volumes helped increase the gross profit percentage in 2005. In addition, the inclusion of
Loegerings sales for the first quarter of 2005 helped increase the overall gross profit percentage
as Loegerings products carry a higher gross profit percentage, on average, when compared with
ASVs products. Offsetting these increases were steel surcharges of $1.0 million in the first
quarter of 2005, compared with $75,000 in the first quarter of 2004. The Company anticipates its
gross profit percentage for 2005 will be in the range of 23.5-24.5% based on the anticipated sales
mix for 2005. Selling, General and Administrative.Selling, general and administrative expenses increased
from $1.9 million, or 5.7% of net sales in the first quarter of 2004, to $3.8 million, or 7.1% of
net sales in the first quarter of 2005. The increase was due primarily to the inclusion of
Loegering, which does not yet enjoy the same degree of leverage that ASV does. In addition, the
Company had increased advertising and promotion costs to promote the technology benefits of the
Companys products, increased sales commissions from increased sales of the Companys R-Series
products and the overall increase in the volume of the Companys business. Research and Development.Research and development expenses increased from $156,000 in the
first quarter of 2004 to $428,000 in the first quarter of 2005. The increase was due to the
on-going development of new products, including the Companys newest R-Series product, the RCV,
which went into production in April 2005, and additional applications of its track technology. The
Company also began the development of a smaller version of the Loegering Versatile Track System
product, which is expected to be available in the third quarter of 2005. The Company anticipates
its future spending on research and development activities will focus on additional product
offerings and additional applications of its track technology. Other Income (Expense).For the three months ended March 31, 2005, other income was $320,000,
compared with $151,000 for the first quarter of 2004. This increase was due primarily to increased
interest income from greater funds available for investment in 2005. Funds increased in 2005 due to
proceeds received from the sale of common stock to Caterpillar in January 2004, proceeds received
from the exercise of employee stock options and net earnings generated in the first quarter of 2005
and the twelve months ended December 31, 2004. Net Earnings.For the first quarter of 2005, net earnings were $5.5 million, compared with
net earnings of $3.6 million for the first quarter of 2004. The increase was primarily a result of
increased sales with an increased gross profit percentage, offset in part by increased operating
expenses and a higher effective income tax rate. 10




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Liquidity and Capital Resources For the quarter ended March 31, 2005, the Company generated $9.1 million of cash and cash
equivalents, compared with generating $12 million of cash and cash equivalents for the quarter
ended March 31, 2004. During the first quarter of 2005, the Company generated $1.1 million of cash
from operations, due primarily to increased profitability and increased payables, offset in part by
increased raw material levels to facilitate expected increased production for the remainder of
2005. The Company generated $7.3 million of cash during the three months ended March 31, 2005,
primarily from the redemption of certain short-term investments. In 2005, the Company chose to
eliminate the use of auction-rate securities from its investment portfolio, which were classified
as short-term investments, and replaced them with short-term tax-exempt investments, which are
classified as cash equivalents. Financing activities generated an additional $0.7 million due
primarily to the exercise of employee and director stock options. Caterpillar Revenue Recognition/Gross Profit The Company recognizes as sales its cost for the MTL undercarriages, as defined in the
Commercial Alliance Agreement between the Company and Caterpillar, plus a portion of the
anticipated gross profit that Caterpillar expects to recognize upon sale of the MTLs to Caterpillar
dealers, when the Company ships undercarriages to Caterpillar. The gross profit percentage that we
receive for two of the three undercarriages we currently sell to Caterpillar was reduced by 33% on
January 1, 2005, with the overall gross profit percentage on the sale of all three undercarriages
expected to exceed 20% for 2005. The gross profit percentage that we expect to receive for the
third undercarriage sold to Caterpillar will also be reduced by 33% effective January 1, 2006. Both
of these reductions would reduce the amount of gross profit we will recognize on the sale of these
undercarriages to Caterpillar if the level of net sales in 2005 and 2006 were to be the same as in
2004. The Companys current Commercial Alliance Agreement with Caterpillar is in effect through
October 31, 2005. The Company believes it has a very strong business relationship with Caterpillar
and believes the current MTL agreement and product line have served both parties well. The Company
believes the existing contract needs to be updated to reflect additional products and new
generation undercarriage designs. The Company and Caterpillar are currently working on the details
and expect to have a new multi-year agreement completed in the next sixty to ninety days. Customer Note Receivable Included in accounts receivable at March 31, 2005 is a note receivable for $805,000 from a
customer. The note bears interest at 6% and is due in 60 monthly installments beginning February
2004. As of April 29, 2005, the customer is current on all amounts owed the Company under this
note. Off-Balance Sheet Arrangements The Company has guaranteed the repayment of a note made by a customer to a non-affiliated
finance company in payment of amounts owed to the Company by this customer. To determine the value
of the financing guarantee, the lending institution provided us with the cost of the financing both
with and without the guarantee. This differential was used to determine the amount of the
financing guarantee of $35,000. This amount was recorded as a reduction of net sales for the year
ended December 31, 2003, when the note and guarantee were entered into. A similar amount has been
included in other accrued liabilities at March 31, 2005 and December 31, 2004. The balance of this
note at April 29, 2005 was $393,000. As of April 29, 2005, the customer is current on all amounts
owed the finance company under this note. Relationship with Finance Companies The Company has affiliated itself with several finance companies that finance the sale of the
Companys products. By using these finance companies, the Company receives payment for its
products shortly after their shipment. The Company pays a portion of the interest cost associated
with financing these shipments that would normally be paid by the customer, over a period generally
ranging from three to twelve months, depending on the amount of down payment made by the customer.
The Company is also providing twelve-month terms for one
machine to be used for demonstration purposes for each qualifying dealer. In addition, the Company
does, from time to time, offer extended term financing on the sale of certain products to its
dealers for periods ranging from 90 days to two years. 11




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New Accounting Pronouncements SFAS 123 (Revised 2004) Share-Based Payment. This revision to Statement No. 123, Accounting
for Stock-Based Compensation, requires the fair value from all share-based payment transactions be
recognized in the financial statements. SFAS 123 (Revised 2004) establishes fair value as the
measurement objective in accounting for share-based payment arrangements and requires all entities
to apply a fair-value-based measurement method in accounting for share-based payment transactions
with employees, except for equity instruments held by employee share ownership plans. This
Statement is effective for the Company beginning January 1, 2006. The Company anticipates the
effect of adopting this Statement could be material, but the impact on its diluted earnings per
share for the year ended December 31, 2006 for those share-based payment transactions in existence
as of April 29, 2005 cannot currently be calculated. SFAS 151 Inventory Costs. This Statement requires the accounting for idle facility expense,
freight, handling costs and wasted material be recognized as current period charges. This Statement
also requires that allocation of fixed production overheads to the costs of conversion be based on
the normal capacity of the production facilities. This Statement is effective for the Company
beginning January 1, 2006. Management does not believe the adoption of this pronouncement will
have a material effect on the Company. Cash Requirements The Company believes cash expected to be generated from operations and its existing cash, cash
equivalents and investments will satisfy the Companys projected working capital needs and other
cash requirements for the next twelve months and the foreseeable future. Forward-Looking Statements The statements set forth above under Results of Operations and elsewhere in this Form 10-Q
regarding ASVs future sales levels, gross profit percentage, product mix, profitability, expense
levels, liquidity and future agreements with Caterpillar are forward-looking statements based on
current expectations and assumptions, and entail various risks and uncertainties that could cause
actual results to differ materially from those expressed in such forward-looking statements.
Certain factors may affect whether these anticipated events occur, including ASVs ability to
successfully manufacture the machines, unanticipated delays, costs or other difficulties in the
development and manufacture of the machines, market acceptance of the machines, general market
conditions, corporate developments at ASV or Caterpillar, and ASVs ability to realize the
anticipated benefits from its alliances with Caterpillar. Any forward-looking statements provided
from time-to-time by the Company represent only managements then-best current estimate of future
results or trends. Risk Factors Our revenue and business would be harmed if Caterpillar ceased manufacturing and marketing
products under our Loader Alliance Agreement. Under the terms of the Alliance Agreement we entered into with Caterpillar Inc. in October
2000, we agreed with Caterpillar to jointly develop and manufacture a five-model line of
Caterpillar branded rubber tracked skid steer loaders called Multi-Terrain Loaders (the Alliance
Machines). The term of the Alliance Agreement expires October 31, 2005. These new loaders utilize
Caterpillars skid steer technology and our rubber track undercarriage technology. All five models
have been developed and are available to all Caterpillar dealers. The Alliance Machines are
assembled in Sanford, North Carolina, at Caterpillars skid steer loader facility. The
undercarriages are manufactured at our facility in Cohasset, Minnesota. The successful manufacturing and marketing of the Alliance Machines entail significant risks
as described below:  
    The development and introduction of the Alliance Machines were scheduled on an
aggressive timetable and there exists the possibility this time table may not have
detected all potential issues regarding the production or function of the machines.
For example, in 2002, Caterpillar experienced production issues which caused them to
stop production of the Alliance Machines. As a result, we did 12




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not ship undercarriages
to Caterpillar while the production issues were resolved, resulting in decreased
revenue to us. Additional production or other issues may be experienced by Caterpillar
or us in the future, which could cause our sales of undercarriages to Caterpillar to
decrease or terminate while the issues are resolved.  
    The overall market for rubber track machines is relatively new and the benefits of
rubber track machines are not currently widely known. Caterpillar and ASV believe the
market potential for rubber track machines justifies the necessary investment in the
Alliance Machines. However, there is no assurance the Alliance Machines will attract
sufficient demand to warrant their continued production and produce the returns
anticipated by us and Caterpillar.
    We will be relying significantly on Caterpillar for their continued interest in
manufacturing and marketing the Alliance Machines. In 2004, total sales to Caterpillar
accounted for 40% of our net sales. If Caterpillar stopped manufacturing the Alliance
Machines, or stopped marketing the Alliance Machines to its dealers or Caterpillar
dealers did not adequately promote the sale of the Alliance Machines, our revenue would
be decreased and our business would be harmed.
    As part of the Alliance Agreement, we agreed not to manufacture machines that are
similar to and would compete with the Alliance Machines. Also, we may not knowingly
sell our undercarriages to any party who shall manufacture, or resell an undercarriage
to a party who shall manufacture, a machine that substantially competes with the
Alliance Machines. We may, however, continue to manufacture our own models that do not
substantially compete with the Alliance Machines.
    The Alliance Agreement calls for us to receive a portion of the gross profit on the
sale of the Alliance Machines to Caterpillar dealers. Therefore, a portion of our
future revenue will be dependent on the success of Caterpillar in selling the Alliance
Machines to Caterpillar dealers. In addition, the gross profit percentage that we
receive for two of the three undercarriages we currently sell to Caterpillar was
reduced by 33% on January 1, 2005, with the overall gross profit percentage on the sale
of all three undercarriages expected to exceed 20% for 2005. The gross profit
percentage that we expect to receive for the third undercarriage sold to Caterpillar
will also be reduced by 33% effective January 1, 2006. Both of these reductions would
reduce the amount of gross profit we will recognize on the sale of these undercarriages
to Caterpillar if the level of net sales in 2005 and 2006 were to be the same as in
2004.
    The Companys existing Alliance Agreement continues through October 31, 2005. The
Company has had on-going discussions with Caterpillar to negotiate a new multi-year
agreement and expects to have a new multi-year agreement completed in the next sixty to
ninety days. If a new agreement is not able to be negotiated, our revenue would be
decreased and our business would be harmed. Our business could be materially harmed if Caterpillar did not actively support and
cooperate with us to provide us with various commercial services. As a result of our transactions with Caterpillar, we may rely on commercial services provided
by or through Caterpillar for the operation of our business, including marketing, development,
warranty and parts services. As a result, to the extent we avail ourselves of these services, we
may become dependent upon the cooperation of Caterpillar for the operation of our business. In connection with Caterpillars purchase of shares of our common stock and a warrant to
purchase shares of our common stock in January 1999, we entered into several agreements with
Caterpillar, including a Commercial Alliance Agreement, a Marketing Agreement and a Management
Services Agreement. These agreements contemplate that we would also enter into several additional
agreements with Caterpillar, including a Trademark and Trade Dress License Agreement, Supply
Agreements, a Services Agreement, a Technology License Agreement and a
Joint Venture Agreement (which agreements, together with the Commercial Alliance Agreement,
the Marketing Agreement and the Management Services Agreement, we collectively refer to as the
Commercial Agreements). Although Caterpillar is obligated under the terms of the Commercial Agreements to provide
various services to us, including marketing, development, warranty and parts services, the specific
obligations of Caterpillar under those agreements are not explicitly defined. Therefore, if
Caterpillar chose not to cooperate with us in providing these services, it may be impractical for
us to require Caterpillar to provide any such services to the extent necessary to be beneficial to us. If Caterpillar were to decide
not to actively support and cooperate with us to provide
us with these services, our business could be materially harmed. 13




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Caterpillar has the ability to influence or control us, which could negatively affect other
shareholders and could discourage offers by third parties to acquire us. Caterpillar owns approximately 23.4% of the outstanding shares of our Common Stock.
Accordingly, Caterpillar has the ability to influence our business and operations to a certain
extent. In addition to its rights as a shareholder to influence us, Caterpillar has the right to
designate directors for election to the Board of Directors under the Securities Purchase Agreement
between us and Caterpillar dated October 14, 1998, proportionate to its stock ownership interest,
which increases Caterpillars ability to influence us. Currently, one of our nine directors has
been designated by Caterpillar, despite the fact that Caterpillar would be entitled to designate
two directors, assuming a board comprised of nine directors. If Caterpillar were to exercise its
right to designate an additional director, based on its current stock ownership interest, we
anticipate that, assuming there were no vacancies on our board, we would expand the size of our
board and elect an additional director designated by Caterpillar. Given the significant percentage of the outstanding shares of our Common Stock owned by
Caterpillar, third parties also may be discouraged from making an offer to acquire control or
ownership of us. If Caterpillar begins selling, or is perceived to be selling, its shares of our common
stock, the market price of our common stock may fall. Caterpillar owns approximately 23.4% of the outstanding shares of our common stock. Under our
agreements with Caterpillar, Caterpillar has agreed not to sell any shares of our Common Stock for
so long as the Alliance Agreement, as it may be amended, modified or supplemented from time to
time, remains in effect. However, sales by Caterpillar of substantial amounts of our common stock,
or the perception that such sales could take place, could negatively affect the market price of our
common stock. If this happens, then stockholders may face difficulty in selling their shares and
the price at which they sell their shares may be reduced. If we are unable to manage growth effectively, our business, results of operations and
financial condition would be materially adversely affected. Our management has had limited experience in managing companies experiencing growth like ours.
Further growth and expansion of our business will place additional demands upon our current
management and other resources. We believe that future growth and success depends to a significant
extent on our ability to be able to effectively manage our growth in several areas, including, but
not limited to: (i) production facility expansion/construction; (ii) entrance to new geographic
and use markets; (iii) international sales, service and production; and (iv) employee and
management development. No assurance can be given that our business will grow in the future and
that we will be able to effectively manage such growth. If we are unable to manage growth
effectively, our business, results of operations and financial condition would be materially
adversely affected. A disruption or termination of our relationships with certain suppliers could have a
material adverse effect on our operations. Certain of the components included in our products are obtained from a limited number of
suppliers, including the rubber track component used on our products. Disruption or termination of
supplier relationships could have a material adverse effect on our operations. We believe that
alternative sources could be obtained, if necessary, but the inability to obtain sufficient
quantities of the components or the need to develop alternative
sources, if and as required in the future, could result in delays or reductions in product
shipments which in turn may have an adverse effect on our operating results and customer
relationships. A number of our competitors have more resources and more established reputations than us.
If we do not compete effectively, our business will be harmed. 14




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Companies
whose products compete in the same markets as the
Posi-Track have substantially more financial, production and other resources
than us, as well as established reputations within
the industry and more extensive dealer networks. For 2004, sales of Posi-Track products accounted for
approximately 40% of our net sales. Also, the growth potential of the markets being pursued by us
could attract more competitors. There can be no assurance that we will be able to compete
effectively in the marketplace or that we will be able to establish a significantly dominant
position in the marketplace before our potential competitors are able to develop similar products. If our rubber track vehicles do not continue to receive market acceptance, our operating
results will be harmed. Our success is dependent upon increasing market acceptance of rubber track vehicles in the
markets in which our products compete. Most small to medium sized tractor-type vehicles in
competition with the Posi-Track are wheeled vehicles and most track-driven vehicles are designed
for specific limited tasks. The market for rubber track vehicles is relatively new and there can
be no assurance that our products will gain sufficient market acceptance to enable us to sustain
profitable operations. If we are not able to manage and integrate the operations of Loegering Mfg. Inc., our
operating results will be harmed. In October 2004, we acquired all the outstanding common stock of Loegering Mfg. Inc.
(Loegering) of Casselton, North Dakota for a combination of cash and shares of our Common Stock.
We have not previously been involved in an acquisition of this nature, and there can be no
assurance that we will be able to successfully manage and integrate the operations of Loegering. The process of integrating Loegering may be a difficult and time-consuming process. In
particular, the process of combining sales and marketing forces, consolidating administrative
functions, and coordinating product offerings can take longer, cost more, and provide fewer
benefits than initially anticipated. Management may face difficulties, delays and costs as it
works to retain customers, to minimize the risk of loss or reduction of customer orders due to the
potential for market confusion, hesitation and delay, to coordinate infrastructure operations in an
effective and efficient manner and to combine certain operations and functions using common
information and communication systems, operating procedures, financial controls and human resource
practices. To the extent any of these events occurs, the benefits of the transaction may be
reduced, at least for a period of time. Our business may be adversely affected if we are unable to successfully develop new products
or if new products developed are unable to gain market acceptance. We intend to increase our market penetration by developing and marketing new rubber-tracked
vehicles and other new products. There can be no assurance that we will be able to successfully
develop the new products, or that any new products developed by us will gain market acceptance. One of the expected benefits of the Loegering acquisition is future sales of its proprietary
Versatile Track Systemâ (VTS), which we expect to account for a majority of net
sales of Loegering products in 2005. If we are unable to achieve our anticipated timing of
introduction and sales of the VTS product, or if adequate quantities of raw materials to meet the
expected demand for this product in 2005 are not available, the benefits of the transaction may be
reduced or delayed for a period of time. Our business may also be adversely affected if the VTS
product does not gain market acceptance as quickly as we anticipate or at all. A cyclical, economic downturn in the construction and farm equipment industries could
materially harm our business. The construction and farm equipment industries, in which the Posi-Track competes, have
historically been cyclical. Sales of construction and agricultural equipment are generally
affected by the level of activity in the construction and agricultural industries, including farm
production and demand, weather conditions, interest rates and construction levels (especially
housing starts). In addition, the demand for our products may be affected by the seasonal nature
of the activities in which they are used and by overall economic conditions in general. Therefore,
an economic downturn in the construction and farm equipment industries, which could result in part
based upon seasonal factors, could materially harm our business. 15




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The loss of the services of any key member of our management could have a material adverse
effect on our ability to achieve our objectives. Our future success depends to a significant extent upon the continued service of certain key
personnel, including our CEO, Gary Lemke. We have key-person life insurance on the life of Mr.
Lemke, but we do not have an employment agreement with Mr. Lemke. The loss of the services of any
key member of our management could have a material adverse effect on our ability to achieve our
objectives. We may face product liability claims, which could result in losses in excess of our
insurance coverage or in our inability to obtain adequate insurance coverage in the future. Like most manufacturing companies, we may be subject to significant claims for product
liability and may have difficulty in obtaining product liability insurance or be forced to pay high
premiums. We currently have product liability insurance and have not been subject to material
claims for product liability. However, there can be no assurance that we will be able to obtain
adequate insurance in the future or that our present or future insurance would prove adequate to
cover potential product claims. Our business would be adversely affected if we are not able to protect our intellectual
property rights or if we get involved in litigation relating to our intellectual property
rights. We currently hold four patents on certain aspects of the suspension and drive mechanisms used
in certain of our products. We have also filed additional patent applications. There can be no
assurance that the patents will be granted or that patents under any future applications will be
issued, or that the scope of the current or any future patent will exclude competitors or provide
competitive advantages to us, that any of our patents will be held valid if subsequently challenged
or that others will not claim rights in or ownership to the patents and other proprietary rights
held by us. Furthermore, there can be no assurance that others have not developed or will not
develop similar products, duplicate any of our products or design around such patents. Litigation,
which could result in substantial cost to and diversion of effort by us, may be necessary to
enforce patents issued to us, to defend us against claimed infringement of the rights of others or
to determine the ownership, scope or validity of our and others proprietary rights. We may be unable to manufacture our products if either of our manufacturing facilities is
damaged, destroyed or becomes otherwise inoperable. Our products are manufactured exclusively at our two manufacturing facilities in Grand Rapids
and Cohasset, Minnesota and at our Loegering facility in Casselton, North Dakota. In the event
that any of these manufacturing facilities were to be damaged or destroyed or become otherwise
inoperable, we may be unable to manufacture our products for sale until the facility is either
repaired or replaced, either of which could take a considerable period of time. Although we
maintain business interruption insurance, there can be no assurance that such insurance would
adequately compensate us for the losses we would sustain in the event that our manufacturing
facilities were unavailable for any reason. We are subject to extensive governmental regulations which are costly. Our operations, products and properties are subject to environmental and safety regulations by
governmental authorities. We may be liable under environmental laws for waste disposal and
releases into the environment. In addition, our products are subject to regulations regarding
emissions and other environmental and safety requirements. While we believe that compliance with
existing and proposed environmental and safety regulations will not have a material adverse effect
on our financial condition or results of operations, there can be no assurance that future
regulations or the cost of complying with existing regulations will not exceed current estimates. Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Companys interest income on cash equivalents and long-term investments is affected by
changes in interest rates in the United States. Cash equivalents include money market funds and
7-day variable rate demand notes which are highly liquid instruments with interest rates set 16




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every
7 days that can be tendered to the remarketer upon 7 days notice for payment of principal and
accrued interest amounts. The 7-day tender feature of these variable rate demand notes is further
supported by irrevocable letters of credit from banks. To the extent a bond is not remarketed at
par plus accrued interest, the difference is drawn from the banks letter of credit. The Companys
cash and cash equivalents are held primarily in money market mutual funds and variable rate demand
notes. The Companys long-term investments consist of highly-rated securities, including U.S.
Treasury and tax-exempt municipal obligations. Changes in interest rates have not had a material
effect on the Company, and the Company does not anticipate that future exposure to interest rate
market risk will be material. The Company has no history of, and does not anticipate in the future, investing in
derivative financial instruments. Most transactions with international customers are entered into
in U.S. dollars, precluding the need for foreign currency cash flow hedges. 
 ITEM 4. CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures. Under the supervision and with the
participation of the Companys management, including the Companys Chief Executive Officer and
Chief Financial Officer, the Company evaluated the effectiveness of the design and operation of its
disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities and Exchange
Act of 1934, as amended (the Exchange Act)). Based upon that evaluation, the Chief Executive
Officer and Chief Financial Officer concluded that, as of the end of the period covered by this
report, the Companys disclosure controls and procedures were effective. Changes in Internal Control Over Financial Reporting. During the first fiscal quarter, there
has been no change in the Companys internal control over financial reporting (as defined in Rule
13(a)-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to
materially affect, our internal control over financial reporting. 
 PART II - OTHER INFORMATION 
 ITEM 1. LEGAL PROCEEDINGS None 
 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS The following table provides information about repurchases by the Company of
the Companys Common Stock during the quarter ended March 31, 2005. Total Number of
    
    
    Approximate DollarShares Purchased as
    
    
    Value of SharesTotal Number of
    
    
    
    
    
    
    Part of Publicly
    
    
    that May Yet BeShares Purchased
    
    
    Average Price Paid
    
    
    Announced Plans or
    
    
    Purchased Under thePeriod
    
    (1)
    
    
    per Share
    
    
    Programs (2)
    
    
    Plans or Programs1/1/05 - 1/31/05
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2/1/05 - 2/28/05
    
    
    449
    
    
    $
    44.79
    
    
    
    
    
    
    
    3/1/05 - 3/31/05
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    449
    
    
    $
    44.79
    
    
    
    
    
    
    
    
  (1)
    
    The total number of shares purchased represents previously owned shares
tendered by an option holder in payment of the exercise price of an
option.(2)
    
    The Company does not currently have a repurchase program. 
 ITEM 3. DEFAULTS UPON SENIOR SECURITIES None 
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None 
 ITEM 5. OTHER INFORMATION None 17




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##### Table of Contents



ITEM 6. EXHIBITS ExhibitNumber
    
    Description3.1
    
    Second Restated Articles of Incorporation of the Company (a)3.1a
    
    Amendment to Second Restated Articles of Incorporation of the Company filed
January 6, 1997 (b)3.1b
    
    Amendment to Second Restated Articles of Incorporation of the Company filed May
4, 1998 (c)3.2
    
    Bylaws of the Company (a)3.3
    
    Amendment to Bylaws of the Company adopted April 13, 1999 (d)4.1
    
    Specimen form of the Companys Common Stock Certificate (a)11
    
    Statement re: Computation of Per Share Earnings31.1
    
    Certification of the Chief Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 200231.2
    
    Certification of the Chief Financial Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 200232.1
    
    Certification of the Chief Executive Officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 200232.2
    
    Certification of the Chief Financial Officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
   (a)
    
    Incorporated by reference to the Companys Registration Statement on Form
SB-2 (File No. 33-61284C) filed July 7, 1994.(b)
    
    Incorporated by reference to the Companys Annual Report on
Form 10-KSB for the year ended December 31, 1996 (File No. 0-25620) filed
electronically March 28, 1997.(c)
    
    Incorporated by reference to the Companys Quarterly Report on
Form 10-Q for the quarter ended June 30, 1998 (File No. 0-25620) filed
electronically August 12, 1998.(d)
    
    Incorporated by reference to the Companys Quarterly Report on
Form   10-Q for  the  quarter  ended
 September 30, 1999 (File No. 0-25620) filed
electronically November 12, 1999. 18




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##### Table of Contents



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. A.S.V., Inc.Dated: May 10, 2005
    
    By
    
    /s/ Gary LemkeGary LemkeChief Executive Officer(duly authorized officer)Dated: May 10, 2005
    
    By
    
    /s/ Thomas R. KargesThomas R. KargesChief Financial Officer(principal financial and accounting officer)
 19




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##### Table of Contents



EXHIBIT INDEX Exhibit
    
    Description3.1
    
    Second Restated Articles of Incorporation of the Company (a)3.1a
    
    Amendment to Second Restated Articles of Incorporation of the Company filed
January 6, 1997 (b)3.1b
    
    Amendment to Second Restated Articles of Incorporation of the Company filed May
4, 1998 (c)3.3
    
    Bylaws of the Company (a)3.3
    
    Amendment to Bylaws of the Company adopted April 13, 1999 (d)4.2
    
    Specimen form of the Companys Common Stock Certificate (a)11
    
    Statement re: Computation of Per Share Earnings31.1
    
    Certification of the Chief Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 200231.2
    
    Certification of the Chief Financial Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 200232.1
    
    Certification of the Chief Executive Officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 200232.2
    
    Certification of the Chief Financial Officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
   (a)
    
    Incorporated by reference to the Companys Registration Statement on Form
SB-2 (File No. 33-61284C) filed July 7, 1994.(b)
    
    Incorporated by reference to the Companys Annual Report on
Form 10-KSB for the year ended December 31, 1996 (File No. 0-25620) filed
electronically March 28, 1997.(c)
    
    Incorporated by reference to the Companys Quarterly Report on
Form 10-Q for the quarter ended June 30, 1998 (File No. 0-25620) filed
electronically August 12, 1998.(d)
    
    Incorporated by reference to the Companys Quarterly Report on
Form 10-Q   for  the  quarter ended
September 30, 1999 (File No.0-25620) filed
electronically November 12, 1999. 20