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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): October 27, 1998
RDO EQUIPMENT CO.
(Exact name of registrant as specified in its charter)
DELAWARE 1-12641 45-0306084
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
2829 SOUTH UNIVERSITY DRIVE
FARGO, NORTH DAKOTA 58103
(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code: (701) 297-4288
NOT APPLICABLE
(Former name or former address, if changed since last report)
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) EXHIBITS.
The exhibit is listed in the Exhibit Index at the bottom of
this page.
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.
RDO EQUIPMENT CO.
(Registrant)
Dated: October 27, 1998 By: /s/ Allan F. Knoll
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Allan F. Knoll
Chief Financial Officer and Secretary
EXHIBIT INDEX
ITEM NO. ITEM PAGE OF THIS REPORT
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99 News release issued October 27, 1998 3
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Exhibit 99
Contact: Richard J. Moen
701/297-4288
[email protected]
FOR IMMEDIATE RELEASE
RDO EQUIPMENT ANNOUNCES INITIATIVES
TO SUPPORT FUTURE GROWTH
ACTIONS INCLUDE INVENTORY WRITEDOWNS
AND RESERVES AND ONE-TIME CHARGES
OFFUTT AND OTHER INSIDERS INFORM COMPANY
OF INTENT TO PURCHASE STOCK
FARGO, N.D. - (BUSINESS WIRE) - October 27, 1998 - RDO Equipment Co.
(NYSE: RDO) today announced that it will undertake a number of corporate actions
designed to generate cash and fund future growth opportunities and to
discontinue non-strategic operations and achieve more cost efficient operations.
"We have carefully assessed current industry and financial market conditions, as
well as conditions that are projected to impact our business over the next six
to 18 months," stated Ronald D. Offutt, Chairman and Chief Executive Officer.
"The farm economies served by our agricultural equipment dealerships have
experienced severe financial problems due to recurring excess moisture and plant
disease in the Midwest, reduced exports of food products to Asia, and continuing
erosion of many crop prices worldwide. We have also reviewed industry outlooks
from manufacturers, forecasts and surveys by economists, investment analysts and
governmental units, and the status of capital markets for raising equity and
debt."
"Based on this assessment, we are taking various actions which we believe will
position RDO Equipment to take advantage of opportunities to expand market
share, enlarge our existing business platforms, and effect strategic
acquisitions in new markets," added Offutt. "The most significant action relates
to a new and more aggressive pricing strategy with respect to wholegoods in our
agricultural equipment segment. We believe this new pricing strategy will
stimulate sales, thereby reducing inventory levels and generating liquidity to
continue to fund growth initiatives. Further, this action is expected to
solidify our agricultural customer base during these trying times."
Offutt went on to state that inventory writedowns and reserves related to these
actions will total approximately $15 million and will be reflected in the
Company's financial statements for its fiscal third quarter ending October 31,
1998. Further, Offutt stated that the Company anticipates taking one-time
charges of approximately $2.2 million in the third quarter primarily in
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connection with asset writedowns and severance costs, which include exiting the
agricultural irrigation equipment business.
"Based on recent economic forecasts and industry outlooks, we believe that
long-term fundamentals are solid, but that the current slowdown is likely to
worsen in the short-term," stated Offutt. "By taking these actions now, we
believe that the Company will be well positioned to meet any challenges next
year while being aggressive in pursuing growth opportunities. In this difficult
environment, our preliminary outlook for fiscal year ending January 31, 2000 is
for Company earnings from existing operations to be near Company earnings for
fiscal 1999 which are expected to be approximately $12 million, or $0.90 per
share, before accounting for these actions."
In other news, the Company announced that it has been informed by Company
founder and Chief Executive Officer, Ronald D. Offutt, and by other officers and
directors of the Company, of their intent to purchase shares of the Company's
Class A Common Stock, subject to market conditions and pricing restrictions. The
shares may be purchased from time to time in the open market, through block or
privately negotiated transactions or otherwise. The Company has outstanding
approximately 5.73 million shares of its Class A Common Stock and 7.45 million
shares of its Class B Common Stock. The Class A Common Stock is listed on the
New York Stock Exchange. Offutt is the only holder of the Company's Class B
Common Stock.
RDO Equipment Co. is one of the leading and fastest growing companies engaged in
the restructuring and consolidation of the equipment and truck retail industries
in the United States. It operates 64 retail stores in ten states, specializing
in the distribution, sale, service, rental and finance of equipment and trucks
to the agricultural, construction, manufacturing, transportation and warehousing
industries, as well as to public service entities, government agencies and
utilities.
The future results of the Company, including results related to forward-looking
information in this release, involve a number of risks and uncertainties.
Important factors (such as customer confidence, weather, interest rates and
worldwide and local economic conditions) that will affect future results of the
Company, including factors that could cause actual results to differ materially
from those indicated by forward-looking statements, are discussed in the
Company's Current Report on Form 8-K dated April 24, 1998, and other filings
with the Securities and Exchange Commission. The Company makes no commitment to
revise forward-looking statements, or to disclose subsequent facts, events or
circumstances that may bear upon forward-looking statements.
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