July 28, 2003 – Finance Digest

ASV added to Russell Index
ASV, Inc. (Nasdaq:ASVI), Grand Rapids, Minn., was added to the Russell 3000 Index when the broad-market index was reconstituted June 30. Index membership was
effective July 1 and will remain in place for one year. As part of its membership in the Russell 3000, ASV was included in the small-cap Russell 2000 Index which measures the performance of the 2,000 smallest companies in the Russell 3000 Index; the companies represent approximately 8% of the total market capitalization of the Russell 3000 Index.
Meanwhile, ASV said it increased its outlook for expected sales and earnings for fiscal 2003. ASV said it expects sales to be in the range of $65 million to $72 million for the 12 months ended Dec. 31, 2003. ASV also raised its expected earnings to the range of 43 cents to 49 cents per diluted share for that period. ASV’s previously announced ranges for net sales had been $57 million to $65 million for fiscal 2003 and earnings per share of 33 cents to 43 cents per diluted share for fiscal 2003.
Membership in Russell’s 21 U.S. equity indexes is determined primarily by market capitalization rankings and style attributes. Russell indexes are widely used by managers for index funds and as benchmarks for both passive and active investment strategies. About $250 billion is invested in index funds based on Russell’s indexes.
Annual updating of the Russell indexes lists the 3,000 largest U.S. stocks as of the end of May, ranking them by total market capitalization to create the Russell 3000. The largest 1,000 companies in the ranking comprise the Russell 1000 Index while the remaining 2,000 companies become the widely used Russell 2000 Index. Russell is a subsidiary of Northwestern Mutual and is headquartered in Tacoma, Wash.
ASV designs, manufactures and sells all-purpose crawlers and related accessories and attachments. For more information, visit ASV’s website at www.asvi.com.

Value investor takes stake in Harley
Value investor Bill Nygren, who searches for fallen growth stocks, has revved up his portfolio with a new stock pick: motorcycle maker Harley-Davidson Inc.Nygren, a portfolio manager at Chicago-based Harris Associates, added Harley shares to the large-company value-focused Oakmark Fund during the second quarter, according to a shareholder letter posted on the fund’s Web site.
In explaining the Harley-Davidson purchase, Nygren and co-manager Kevin Grant told shareholders that while the weak economy has caused a shorter waiting list for new bike purchases, the company’s earnings growth remains strong, according to a report by Reuters News Service.
“Now priced at about 15 times our earnings estimate for next year, HDI is being treated like a below-average business,” they wrote.
The roughly $4 billion fund is up about 13.1% so far this year. Over the trailing three-year period, the fund ranks in the top 2% of its peers, according to researcher Morningstar.

ArvinMeritor goes after Dana
ArvinMeritor, Inc. (NYSE:ARM), Troy, Mich., is making a cash tender offer for all of the outstanding common shares of Dana Corporation (NYSE:DCN) common stock for $15.00 net per share. Following completion of the tender offer, ArvinMeritor intends to begin a second step merger in which all remaining Dana shareholders will receive the same cash price paid in the tender offer .
ArvinMeritor owns RydeFX High Performance Shocks and is a leading OE supplier to snowmobile and ATV manufacturers such as Arctic Cat, Bombardier, Honda and Polaris.
ArvinMeritor’s offer represents a premium of 56% over Dana’s closing stock price on June 3, 2003, the last trading day before ArvinMeritor submitted its first proposal to Dana in writing, a premium of 39% over Dana’s average closing stock price for the last 30 trading days, and a premium of 25% over Dana’s closing stock price on July 7, 2003, the last trading day before ArvinMeritor publicly announced its intention to commence a tender offer.
The proposed transaction has a total equity value of approximately $2.2 billion assuming 148.6 million shares of Dana outstanding. Addition of Dana’s net debt and other considerations bring the total to approximately $4.4 billion.
The tender offer and withdrawal rights are scheduled to expire on Aug. 28, 2003, unless extended. ArvinMeritor currently owns 1,085,300 shares of Dana’s common stock.
Meanwhile, Dana Corporation (NYSE:DCN), based in Toledo, Ohio, said it is evaluating ArvinMeritor’s tender offer and is telling its shareholders to defer making a determination whether to accept or reject ArvinMeritor’s offer until Dana formulates position on the offer.
Copies of the solicitation/recommendation statement will be available free of charge at the SECs web site at www.sec.gov, or at the Dana web site at www.dana.com.
Dana reported 2002 sales of $9.5 billion and ArvinMeritor posted 2002 sales of $6.9 billion.

Oakley director resigns
President and chief executive officer of Starbucks Corporation, has resigned as a director of Oakley, Inc., (NYSE:OO) Foothills Ranch, Calif. Smith said the change was necessary due to his increased duties and responsibilities at Starbucks.
Smith’s departure reduces the number of Oakley directors to five. The company said it plans to fill Smith’s board seat with another independent director as soon as practicable.

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