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 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. þ Yes o No

     Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o      Accelerated filer þ      Non-accelerated filer o

     Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). o Yes þ No

     As of July 31, 2007, 26,699,322 shares of the issuer’s Common Stock were issued and outstanding.

June 30, 2007

     A summary of the significant accounting policies consistently applied in the preparation of the accompanying unaudited, consolidated financial statements follows:

     The consolidated financial statements include the accounts of A.S.V., Inc. and our wholly-owned subsidiaries, collectively referred to herein as “ASV”, the “Company”, “we”, “us”, or “our.” All intercompany accounts and transactions have been eliminated in consolidation.

     ASV recognizes revenue on its product sales when persuasive evidence of an arrangement exists, product has shipped from our plant to the customer, the price is fixed or determinable and collectibility is reasonably assured. We obtain verbal or written purchase authorizations from customers for a specified amount of product at a specified price and consider delivery to have occurred at the time of shipment to the customer.

     All research and development costs are expensed as incurred.

     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.

     The balance sheet at December 31, 2006 has been derived from the audited financial statements at that date, but does not include all of the information and notes required by USGAAP for complete financial statements. For further information, refer to the consolidated financial statements and notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2006.

     We provide a limited warranty to our customers. Provision for estimated warranty costs is 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 our estimates, revision to the warranty liability may be required.

     Changes in our warranty liability are as follows:

Stock-Based Compensation

     We account for stock-based compensation in accordance with the fair value recognition provisions of SFAS No. 123 (Revised 2004), Share-Based Payment (SFAS 123(R)). Accordingly, compensation expense includes the estimated expense for stock options granted on, and subsequent to, January 1, 2006. Estimated expense recognized for the options granted prior to, but not vested as of January 1, 2006, was calculated based on the grant date fair value estimated in accordance with the provisions of SFAS No. 123, Accounting for Stock-Based Compensation (SFAS 123).

     The fair value of each option award is estimated on the date of grant using the Black-Scholes option pricing model. Expected volatilities are based on an historical measure of the volatility of our common stock. The risk-free rate for the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. We use historical data to estimate option exercise and employee termination activity within the valuation model. The expected term of stock options granted is based on historical data and represents the period of time that stock options granted are expected to be outstanding. The dividend yield is zero as we have not paid dividends and do not anticipate paying any dividends in the future. Forfeitures are estimated based on historical experience and current demographics. See Note 3 for additional information regarding stock-based compensation.

     Basic net earnings per common share is computed by dividing net earnings by the weighted average number of common shares outstanding. Diluted net earnings per share is computed by dividing net earnings by the weighted average number of common shares outstanding and common stock equivalents relating to stock options, when dilutive.

     Summarized below is the number of common stock equivalents that were included in the computation of diluted net earnings per share, along with the number of anti-dilutive options for the periods presented.

     Inventories consist of the following:

     At June 30, 2007, we had three stock-based compensation plans, all previously approved by our shareholders. Stock options granted under these plans generally vest ratably over four years of service, have a contractual life of five or seven years and provide for accelerated vesting if there is a change in control, as defined. At June 30, 2007, we had 3,114,000 shares available for future grant under our three stock option plans.

     We use the Black-Scholes option pricing model to determine the fair value of our options granted. The weighted average fair values of the options granted during the six months ended June 30, 2007 and 2006 were $5.10 and $10.32, respectively. The assumptions used to determine such values are indicated in the following table:

     The expected term of the options is based on evaluations of historical and expected future employee exercise behavior. The risk-free interest rate is based on the U.S. Treasury rate as of the date of grant with maturity dates approximately equal to the expected life at the grant date. Volatility is based on an historical measure of the volatility of our common stock. We have not historically issued any dividends and do not expect to do so in the future. In 2006, we reduced the contractual life of all newly granted stock options to our employees from seven years to five years.

     We recorded stock-based compensation expense of $1,369,000 and $1,423,000 for the six months ended June 30, 2007 and 2006, respectively.

     Option transactions under the plans during, 2007 are summarized as follows:

     The total intrinsic value of stock options exercised during the six months ended June 30, 2007 and 2006 was $796,000 and $3,177,000, respectively.

     In October 2006, our Board of Directors approved a $50 million stock buyback plan. Under this plan, we may repurchase up to $50 million of our common stock over a three year period beginning in October 2006. We anticipate that share purchases may be made from time to time, depending on market conditions and other factors. Shares may be purchased in the open market, including block purchases, or through privately negotiated transactions. We will not repurchase any shares from our directors, officers or affiliates. The buyback program does not obligate us to acquire any specific number of shares and may be discontinued at any time.

     We intend to fund the repurchases with available cash and investments, as well as cash generated from future operations. The repurchase program is expected to be in effect through October 31, 2009 or until $50 million of our stock is repurchased. For the six months ended June 30, 2007, we repurchased 100,000 shares of our common stock at an aggregate cost of $1.5 million.

     In July 2006, the Financial Accounting Standards Board (FASB) issued FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes—an interpretation of FASB Statement No. 109 (FIN 48) which clarified the accounting for uncertainty in tax positions. FIN 48 requires that we recognize in our financial statements the impact of a tax position, including interest and penalties, if that position is more likely than not to be sustained upon audit, based on the technical merits of the position. We adopted FIN 48 effective January 1, 2007, with the cumulative effect of the change in accounting principle recorded as an adjustment to opening retained earnings. Accordingly, we have recorded an increase in income taxes payable and a corresponding decrease to retained earnings at January 1, 2007 in the amount of $1,835,000. Included in income taxes payable is $397,000 of interest and penalties related to more likely than not uncertain tax positions.

     We file income tax returns in the U.S and various states, for which we are generally no longer subject to income tax examinations by tax authorities for years before 2003.

     In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, Fair Value Measurement (SFAS 157). This standard clarifies the principle that fair value should be based on the assumptions that market participants would use when pricing an asset or liability. Additionally, it establishes a fair value hierarchy that prioritizes the information used to develop those assumptions. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007. We have not yet determined the impact that the implementation of SFAS 157 will have on our results of operations or financial condition.

     In February 2007, the FASB issued Statement of Financial Accounting Standards No. 159, The Fair Value Option for Financial Assets and Financial Liabilities (SFAS 159). SFAS 159 allows entities the option to measure eligible financial instruments at fair value as of specified dates. Such election, which may be applied on an instrument by instrument basis, is typically irrevocable once elected. SFAS 159 is effective for fiscal years beginning after November 15, 2007, and early application is allowed under certain circumstances. We have not yet determined the impact that the implementation of SFAS 159 will have on our results of operations or financial condition.

     We design, manufacture and sell rubber track machines, related accessories, attachments and traction products. We also manufacture rubber track undercarriages, which are a primary component on Multi-Terrain Loaders (MTL) sold by Caterpillar Inc. (Caterpillar). Our products are able to traverse nearly any terrain with minimal damage to the ground, making them useful in industries such as construction, landscaping, rental, forestry and agriculture. We distribute our products through an independent dealer network in the United States, Canada, Australia, New Zealand and Kuwait. The undercarriages sold to Caterpillar are utilized by Caterpillar in its MTL products and are sold exclusively through the Caterpillar dealer network, primarily in North America. We also sell undercarriages to Vermeer Manufacturing Company (Vermeer) for use on certain Vermeer machines which are sold exclusively through the Vermeer dealer network. Our wholly-owned subsidiary Loegering Mfg. Inc. (Loegering) sells its products primarily through independent equipment dealers in North America.

     Six Month Overview

     Our overall sales decreased 29% for the six months ended June 30, 2007, compared to the same period in 2006. We believe this was due primarily to a decrease in domestic construction activity, primarily residential housing construction, along with increased competition as more equipment manufacturers offer rubber track products than in prior years. Included in our sales for the six months ended June 30, 2007 was a 53% reduction in the sale of original equipment manufacturer (OEM) undercarriages, primarily to Caterpillar, due to a decrease in construction activity and lower production schedules by Caterpillar in anticipation of model changeovers which began in the second quarter of 2007. We currently anticipate that our net sales for 2007 will be in the range of $220-240 million based on our current and projected level of orders for our machines, OEM undercarriages, Loegering products and expected future service parts demand.

     The following discussion and analysis of our financial condition and results of operations is based upon our 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, warranty obligations, income taxes and stock-based compensation. 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 as well as other outside sources and on various other factors that are believed to be reasonable under the circumstances. The factors listed above form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources and actual results may differ from these estimates under different assumptions or conditions.

     Management believes the following critical accounting policies, among others, affect our more significant judgments and estimates used in the preparation of our consolidated financial statements.

     Revenue Recognition and Accounts Receivable. ASV recognizes revenue on its product sales when persuasive evidence of an arrangement exists, product has shipped from our plant to the customer, the price is fixed or determinable and collectibility is reasonably assured. We have determined that the time of shipment is the most appropriate point to recognize revenue as the risk of loss passes to the customer when product is placed with a carrier for delivery (i.e., upon shipment). Any post-sale obligations on our part, consisting primarily of warranty obligations, are estimated and accrued for at the time of shipment. We obtain verbal or written purchase authorizations from customers for a specified amount of product at a specified price and consider delivery to have occurred at the time of shipment. We maintain an allowance for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments. If the financial condition of our 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. We do not believe that our inventories are subject to rapid obsolescence. We evaluate the adequacy of our inventories’ carrying value quarterly.

     Intangible Assets. Our intangible assets include patents granted, patent applications, trade name, trade dress and trademarks. All of the intangibles represent the value assigned to the respective assets from our 2004 acquisition of Loegering. Patents granted are being amortized over the remaining life of the patents. All other intangibles are not being amortized as they are believed to have an indefinite life.

     We periodically review the carrying value of our intangible assets to determine whether current events or circumstances indicate that such carrying value may not be recoverable. If the tests indicate that the carrying value of the asset is greater than the expected undiscounted cash flows to be generated by such asset, an impairment loss would be recognized. The impairment loss is determined by the amount by which the carrying value of such asset exceeds its fair value. We generally measure fair value by considering sale prices for similar assets or by discounting estimated future cash flows from such assets using an appropriate discount rate. Assets to be disposed of are carried at the lower of their carrying value or fair value, less costs to sell. Considerable management judgment is necessary to estimate the fair value of assets, and accordingly, actual results could vary significantly from such estimates.

     Goodwill. Goodwill represents the excess of the purchase price over the fair value of net assets acquired from Loegering. Goodwill is not amortized but is tested for impairment annually. Goodwill will be tested for impairment between annual tests if a triggering event occurs of circumstances change that would indicate the carrying amount may be impaired. An impairment loss generally would be recognized when the carrying amount of Loegering’s net assets exceeds their estimated fair value. The estimated fair value is determined by using a discounted cash flow analysis. We completed our annual goodwill impairment test most recently as of September 30, 2006.

     Warranties. We provide limited warranties to purchasers of our products which vary by product. Our 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 our products carry a pro-rated warranty up to 1,500 hours of usage. While we engage in extensive product quality programs and processes, including actively monitoring and evaluating the quality of our component suppliers, our 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 our estimates, revisions to the estimated warranty liability may be required.

     Income Taxes. We record deferred income taxes using the liability method whereby deferred tax assets are recognized for deductible temporary differences and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their income tax bases. Deferred tax assets are reduced by a valuation allowance when, in our opinion, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

     When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would ultimately be sustained. The outcome of a tax position is recognized in the financial statements in the period during which, based on all available evidence, we believe that it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more likely than not recognition threshold are measured as the largest amount of tax that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the tax associated with tax positions taken that exceeds the amount measured above is included in income taxes payable in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Such interest and penalties, if any, would be classified as additional income taxes in our statement of earnings.

     Stock-Based Compensation. We record stock-based compensation in accordance with the fair value recognition provisions of SFAS 123(R). Compensation expense for stock-based compensation includes the estimated expense for stock options granted on, and subsequent to, January 1, 2006. Estimated expense recognized for the options granted prior to, but not vested as of January 1, 2006, was calculated based on the grant date fair value estimated in accordance with the provisions of SFAS 123. At June 30, 2007, we had $4.9 million of unrecognized compensation costs related to non-vested stock options that are expected to be recognized over a weighted average period of 1.2 years.

     The fair value of each option award is estimated on the date of grant using the Black-Scholes option pricing model. Expected volatilities are based on an historical measure of the volatility of our common stock. The risk-free rate for the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. We use historical data to estimate option exercise and employee termination activity within the valuation model. The expected term of stock options granted is based on historical data and represents the period of time that stock options granted are expected to be outstanding. The dividend yield is zero as we have not paid dividends. Forfeitures are estimated based on historical experience and current demographics. In 2006, we reduced the contractual life of all newly granted stock options to our employees from seven years to five years.

     The following table sets forth certain Statement of Earnings data as a percentage of net sales:

     For the three months ended June 30, 2007 and 2006.

     Net Sales. For the three months ended June 30, 2007, net sales decreased 29% to $51.2 million, compared with $72.1 million for the same period in 2006. This decrease was primarily the result of a significantly weaker U.S. economic climate in 2007, particularly residential housing, which affected all four categories of our sales. First, sales of ASV machines decreased 26% and represented 56%, or $28.9 million, of our sales in the second quarter of 2007, compared with 54%, or $39.0 million, in the second quarter of 2006. Second, sales of OEM undercarriages decreased 48% in the second quarter of 2007 compared with the same period in 2006. This decrease was due primarily to significantly reduced orders for our undercarriages used on Caterpillar’s MTLs. In addition to the economic effects experienced in 2007, the reduced orders were also due in part to lower production schedules by Caterpillar in anticipation of model changeovers which began in the second quarter of 2007. Sales of OEM undercarriages represented 18%, or $9.1 million, of our sales in the second quarter of 2007, compared with 24%, or $17.5 million, in the second quarter of 2006. Third, sales of parts and other items decreased 15% to $7.2 million, or 14% of net sales, compared with $8.5 million, or 12% of net sales, for the same period in 2006. We believe this decrease was due to lower levels of machine usage in 2007 resulting from decreased activity. Fourth, sales of Loegering’s products totaled $6.1 million for the second quarter of 2007, or 12% of our net sales, compared with $7.1 million, or 10% of our net sales, for the second quarter of 2006. This change was due primarily to decreased demand for Loegering’s Versatile Track System (VTS) products, which are sold to the skid-steer market. We believe the skid-steer market continues to be impacted by the slumping U.S. housing market, as stated above.

     Gross Profit. Gross profit for the three months ended June 30, 2007 decreased to $11.7 million, compared with $17.0 million for the same period in 2006, and the gross profit percentage decreased to 22.8% in the second quarter of 2007 compared with 23.6% for the same period in 2006. The decrease in gross profit was due primarily to the decreased sales experienced during the second quarter of 2007. The decrease in gross profit percentage was due primarily to lower production throughput levels. Also impacting the Company’s gross margin were ASV’s efforts to stimulate sales through increased use of interest subsidies, which are recorded as a reduction of net sales.

     Selling, General and Administrative. Selling, general and administrative expenses increased from $5.2 million, or 7.2% of net sales, in the second quarter of 2006, to $6.3 million, or 12.3% of net sales, in the second quarter of 2007. The absolute dollar increase was due primarily to personnel additions made during 2006 and 2007 to support our strategic priorities, including increased marketing support, as well as our new Chief Executive Officer. The increase in percent was due to the combination of increased expenses and lower overall sales.

     Research and Development. Research and development expenses increased from $431,000 in the second quarter of 2006 to $578,000 in the second quarter of 2007. The increase was due to the addition of engineering and product testing personnel to enhance new product development and product quality.

     Other Income. For the three months ended June 30, 2007, other income (primarily interest income) was $459,000, compared with $432,000 for the second quarter of 2006. This increase was due primarily to greater interest income from higher short-term interest rates on investable cash balances during the second quarter of 2007 compared with the second quarter of 2006.

     Income Taxes. Our effective income tax rate was 37.4% for the three months ended June 30, 2007 compared to 35.6% for the same period in 2006. The increase was due to due to a combination of lower taxable income during 2007 and non-deductible expenses which occur evenly throughout the year.

     Net Earnings. For the second quarter of 2007, net earnings were $3.3 million, compared with net earnings of $7.6 million for the second quarter of 2006. The decrease was primarily a result of decreased sales with a decreased gross profit percentage, increased operating expenses and a higher effective income tax rate.

     For the six months ended June 30, 2007 and 2006.

     Net Sales. For the six months ended June 30, 2007, net sales decreased 29% to $97.5 million, compared with $137.0 million for the same period in 2006. This decrease was primarily the result of a significantly weaker U.S. economic climate in 2007, particularly residential housing, which affected all four categories of our sales. First, sales of ASV machines decreased 21% and represented 57%, or $55.9 million, of our sales in the first half of 2007, compared with 51%, or $70.4 million, in the first half of 2006. Second, sales of OEM undercarriages decreased 53% in the first half of 2007 compared with the same period in 2006. This decrease was due primarily to significantly reduced orders for our undercarriages used on Caterpillar’s MTLs. In addition to the economic effects experienced in 2007, the reduced orders were also due in part to lower production schedules by Caterpillar in anticipation of model changeovers which began in the second quarter of 2007. Sales of OEM undercarriages represented 18%, or $17.2 million, of our sales in the first half of 2007, compared with 27%, or $36.9 million, in the first half of 2006. Third, sales of parts and other items decreased 11% in the first half of 2007 to $12.5 million, or 13% of net sales, compared with $14.1 million, or 10% of net sales, for the same period in 2006. We believe this decrease was due to lower levels of machine usage in 2007 resulting from decreased activity. Fourth, sales of Loegering’s products totaled $11.9 million for the first half of 2007, or 12% of our net sales, compared with $15.6 million, or 11% of our net sales, for the first half of 2006. This change was due primarily to decreased demand for Loegering’s VTS products, which are sold to the skid-steer market. We believe the skid-steer market continues to be impacted by the slumping U.S. housing market as stated above.

     Gross Profit. Gross profit for the six months ended June 30, 2007 decreased to $21.2 million, compared with $33.3 million for the same period in 2006, and the gross profit percentage decreased to 21.8% in the first half of 2007 compared with 24.3% for the same period in 2006. The decrease in gross profit was due primarily to the decreased sales experienced during the first half of 2007. The decrease in gross profit percentage was due primarily to lower production throughput levels. Also impacting the Company’s gross margin were ASV’s efforts to stimulate sales through increased use of interest subsidies, which are recorded as a reduction of net sales. Based on our anticipated sales levels for 2007, we currently anticipate our gross profit percentage for fiscal 2007 to be in the range of 22.4-23.1%.

     Selling, General and Administrative. Selling, general and administrative expenses increased from $10.7 million, or 7.8% of net sales, in the first half of 2006, to $12.5 million, or 12.8% of net sales, in the first half of 2007. The increase was due primarily to personnel additions made during 2006 and 2007 to support our strategic priorities, including increased marketing support, as well as our new Chief Executive Officer. The increase in percent was due to the combination of increased expenses and lower overall sales. We currently anticipate our selling, general and administrative expenses will be in the range of 10.6-11.0% of net sales for fiscal 2007.

     Research and Development. Research and development expenses increased from $779,000 in the first half of 2006 to $1.1 million in the first half of 2007. The increase was due to the addition of engineering and product testing personnel to enhance new product development and product quality. We currently anticipate that our future spending on research and development activities will focus on additional product offerings and additional applications of its track technology and will approximate 1.0-1.1% of net sales for fiscal 2007.

     Other Income. For the six months ended June 30, 2007, other income (primarily interest income) was $884,000, compared with $913,000 for the first half of 2006. This decrease was due to lower interest income from lower investable cash balances primarily during the first quarter of 2007 compared with the balances in the comparable period in 2006, partially offset by increased interest income in the second quarter of 2007.

     Income Taxes. Our effective income tax rate was 37.5% for the six months ended June 30, 2007 compared to 35.9% for the same period in 2006. The increase was due to due to a combination of lower taxable income during 2007 and non-deductible expenses which occur evenly throughout the year.

     Net Earnings. For the six months ended June 30, 2007, net earnings were $5.3 million, compared with net earnings of $14.5 million for the same period in 2006. The decrease was primarily a result of decreased sales with a decreased gross profit percentage, increased operating expenses and a higher effective income tax rate. Based on our anticipated sales, gross profit and expense levels for 2007, we anticipate our diluted earnings per share will be in the range of $0.58-$0.68 for fiscal 2007.

     For the six months ended June 30, 2007, we generated $9.2 million of cash and cash equivalents compared with using $16.5 million of cash and cash equivalents for the six months ended June 30, 2006. During the first half of 2007, we generated $11.2 million of cash from operations, primarily from decreased inventory levels, profitability and non-cash expenses, offset in part by increased accounts receivable and decreased accounts payable. We used $1.1 million of cash in investing activities during 2007 to purchase equipment, part of our $3 million planned capital expenditures for fiscal 2007. Financing activities used $1.0 million of cash as we repurchased $1.5 million of our common stock during the first quarter of 2007, as part of our $50 million stock buyback program authorized in October 2006, offset in part by the exercise of employee stock options.

     Our accounts receivable increased from $44.2 million at December 31, 2006 to $49.5 at June 30, 2007. This increase was due primarily to the timing of shipments during the second quarter of 2007, as a greater percentage of our shipments occurred in the last month of the quarter. This was due in part to Caterpillar’s model changeover which began in the second quarter of 2007.

     Our inventory levels decreased from $71.4 million at December 31, 2006 to $62.5 million at June 30, 2007. The decrease in inventory during the quarter reflected our efforts to better align the incoming flow of materials with production levels that are in line with incoming orders. Our goal is to increase our inventory turns from 2.5 turns at June 30, 2007 to 3.5 turns at December 31, 2007 through better management of incoming raw materials and decreased finished goods levels, although our inventory levels may fluctuate during the balance of 2007 to meet expected production requirements.

     Our Board of Directors approved a $50 million stock buyback plan in October 2006. Under this plan, we may repurchase up to $50 million of our common stock over a three year period beginning in October 2006. We anticipate that we may repurchase $10-15 million of our common stock under this plan in 2007. We intend to fund the repurchases with available cash and investments, as well as cash generated from operations. For the six months ended June 30, 2007, we repurchased 100,000 shares of our common stock at an aggregate cost of $1.5 million.

     We have an agreement with Wells Fargo & Company (formerly CIT Group, Inc.) to operate ASV Capital, a private label finance program, to offer wholesale and retail financing options on the sale of our Posi-Track products. Under this agreement, representatives of ASV and Wells Fargo make joint credit decisions, with Wells Fargo retaining the risk of the credit portfolio. We have no ownership in ASV Capital and do not share in the profit or loss of ASV Capital. We also have a relationship with one other finance company that finances the sale of our products.

     By using these finance companies, we receive payment for our products shortly after their shipment. We pay 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. We are also providing twelve-month terms for one machine to be used for demonstration purposes for each qualifying dealer. In addition, we offer, from time to time, extended term financing on the sale of certain products to our dealers for periods ranging from 90 days to one year.

     Accounting for Uncertainty in Income Taxes: In July 2006, the FASB issued FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes—an interpretation of FASB Statement No. 109 (FIN 48) which clarified the accounting for uncertainty in tax positions. FIN 48 requires that we recognize in our financial statements the impact of a tax position if that position is more likely than not to be sustained upon audit, based on the technical merits of the position. We adopted FIN 48 effective January 1, 2007, with the cumulative effect of the change in accounting principle recorded as an adjustment to opening retained earnings. Accordingly, we have recorded an increase in income taxes payable and a corresponding decrease to retained earnings at January 1, 2007 in the amount of $1,835,000.

     See Note 6 to our consolidated financial statements for a discussion of new accounting pronouncements.

     We believe that the cash expected to be generated from operations, combined with our existing cash, cash equivalents and investments (which totaled $40.6 million at June 30, 2007), will satisfy our projected working capital needs, our plans for stock buyback, our plans for capital expenditures and other cash requirements for the next twelve months.

     Some of the statements set forth above under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this report including, among other things, the statements regarding the effect of new accounting pronouncements, our expectations regarding sales levels, gross profit percentage, expense levels, earnings per share, inventory levels and liquidity for fiscal 2007 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 the anticipated improvement in the U.S. construction markets, our ability to geographically expand our dealer network, our ability to successfully manufacture our machines and undercarriages, unanticipated delays, costs or other difficulties in the manufacture of the machines and undercarriages, unanticipated problems or delays experienced by Caterpillar relating to the manufacturing or marketing of their machines, market acceptance of the machines, unanticipated actions of competitors, deterioration of the general market and economic conditions, corporate developments at ASV or Caterpillar, our ability to realize the anticipated benefits from our relationship with Caterpillar and the other factors described in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2006. Any forward-looking statements provided from time-to-time by us represent only management’s then-best current estimate of future results or trends.

     We have no history of investing in derivative financial instruments, derivative commodity instruments or other such financial instruments, and do not anticipate making such investments in the future. Transactions with international customers are entered into in U.S. dollars, precluding the need for foreign currency hedges. Additionally, we invest in money market funds and fixed rate U.S. government and corporate obligations, which experience minimal volatility. Thus, the exposure to market risk is not material.

     Evaluation of Disclosure Controls and Procedures. As of the end of the period covered by this report (the Evaluation Date), we carried out an evaluation, under the supervision and with the participation of management, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) of the Securities Exchange Act of 1934, as amended (the 1934 Act). Based upon that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that, as of the Evaluation Date, our disclosure controls and procedures were effective to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in applicable rules and forms, and (ii) accumulated and communicated to our management, including our Chief Executive Officer and the Chief Financial Officer, to allow timely decisions regarding required disclosures.

     Changes in Internal Controls Over Financial Reporting. There were no changes in our internal control over financial reporting (as defined in Rule 13(a)-15(f) under the Exchange Act) during the second fiscal quarter of 2007, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

     None

     In addition to the other information set forth in this report and our other SEC filings, you should carefully consider the factors discussed in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2006, which could have a material impact on our business, financial condition or results of operations. The risks described in our Annual Report on Form 10-K are not the only risks we face. Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may also adversely affect our business, financial condition or results of operations.

     Our Board of Directors approved a $50 million stock buyback plan in October 2006. Under this plan, we may repurchase up to $50 million of our common stock over a three year period beginning in October 2006. We anticipate that we may repurchase $10-15 million of our common stock under this plan in 2007. We intend to fund the repurchases with available cash and investments, as well as cash generated from operations.

     We made no purchases of our common stock during the three months ended June 30, 2007. For the six months ended June 30, 2007, we repurchased 100,000 shares of our common stock at an aggregate cost of $1.5 million. As of June 30, 2007, we had remaining authorization of $48,512,000 for repurchasing our shares under our stock buyback plan.

               None

     The annual meeting of shareholders of A.S.V., Inc. was held on June 1, 2007. Matters submitted at the meeting for vote by the shareholders were as follows:

               None

     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.