ASV Facility Expansion

In March, ASV announced plans to expand its Grand Rapids, Minn.,
manufacturing facility. Under the plan, ASV intends to approximately double the
size of its current machine production facility with a 120,000-sq ft addition.  

“2005 has been a very strong year for both ASV and the rubber track loader
market,” said Gary Lemke, ASV chairman and CEO. “In anticipation of future
growth, and recognizing the lead times necessary to complete such an expansion,
we have begun the design and planning process to significantly increase our
manufacturing capacity. Once completed, we feel this new addition will improve
the overall flow of our current production processes and provide the capacity
needed to support our growth in the future.”

Construction began in the second quarter of 2006, with completion targeted
for late 2006. The estimated cost to construct and equip the facility addition
is expected to be in the range of $5 million to $5.5 million. 

The expansion at ASV is expected to help improve many aspects of the
company’s Posi-Track assembly, including material storage, logistics, increased
efficiency at the assembly lines and better quality assurance. The expansion
also increases production capabilities and makes room for new product assembly
lines for its upcoming rubber-tracked Scout utility vehicle.