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)
December 2, 1998
GROVE HOLDINGS LLC
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(Exact Name of Registrant as Specified in its Charter)
Delaware
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(State or other jurisdiction of incorporation)
333-57609 52-2089467
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(Commission File Number) (IRS Employer Identification Number)
1565 Buchanan Trail East, Shady Grove, PA 17256
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(Address of Principal Executive Offices)
(717) 597-8121
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(Registrant's Telephone Number, Including Area Code)
<PAGE>
Item 5. Other Events.
On December 2, 1998, Grove Holdings LLC (the "Company"), the parent
company of Grove Worldwide LLC, issued the press release attached hereto as
Exhibit 99.1 and incorporated herein by reference.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements of Businesses Acquired.
None.
(b) Pro Forma Financial Information.
None.
(c) Exhibits.
99.1 Press Release of the Company dated December 2, 1998.
SIGNATURES
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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 hereunto duly authorized.
Dated: December 2, 1998
GROVE HOLDINGS LLC
By: /s/ Salvatore J. Bonanno
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Salvatore J. Bonanno
Chairman and
Chief Executive Officer
<PAGE>
EXHIBIT INDEX
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Exhibit No. Description
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99.1 Press Release of the Company dated December 2, 1998.
GROVE HOLDINGS LLC REPORTS FOURTH QUARTER AND FULL YEAR
1998 RESULTS
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Grove Holdings LLC (the "Company") announced today a 7.2% increase in global net
sales for the fourth quarter of fiscal 1998 to $239.0 million from $223.0
million in the fourth quarter of fiscal 1997.
Gross profit decreased $22.9 million , or 40.0% from $57.2 million in the fiscal
1997 fourth quarter to $34.3 million in the fiscal fourth quarter of 1998. The
primary cause for the decrease was a $17.7 million write-off of amounts assigned
to inventory in excess of historical costs resulting from purchase accounting
adjustments. There was also a decrease in gross profit attributable to the
closure of the Company's Sunderland, U.K. facility which resulted in lower sales
volume relative to fixed overhead, as volume was moved to the Shady Grove
facility in anticipation of the closing. Gross profit at the Sunderland facility
declined by $2.7 million compared to the same quarter last fiscal year. The
remainder of the gross profit differential was caused by an extremely strong
product mix in the fourth quarter of 1997, as well as soft prices in the aerial
work platform business.
Selling, engineering, general, and administrative (SG&A) costs for the fourth
fiscal quarter of 1998 increased $2.5 million, or 7.1 %, from $34.8 million in
the fourth quarter of 1997 to $37.3 million in the fourth quarter of 1998. One
time transition costs related to the acquisition and hiring of the new
management team resulted in $2.2 million of the increase. Additionally, $1.8
million of the SG&A increase was attributable to amounts paid to the George
Group in connection with the Company's ongoing operational improvement
initiatives. These increases were partially offset by the Company's SG&A cost
reduction efforts and reduced goodwill amortization over the prior period.
EBITDA for the fourth quarter of fiscal 1998 was $3.0 million compared to EBITDA
of $26.8 million for the fourth quarter of fiscal 1997. Due to the acquisition
and for the reasons discussed above, several adjustments are outlined in Exhibit
II, which the Company believes better illustrate operational results and take
into account certain non-recurring and other items. Fourth quarter fiscal 1998
EBITDA, subject to the adjustments set forth in Exhibit II, was $30.2 million, a
1% increase over the comparable EBITDA for fiscal 1997 of $29.5 million.
Sales for fiscal 1998 were $870.0 million, up 1.5% over fiscal 1997 sales of
$856.8 million.
Gross profit decreased $45.8 million, or 22.5%, from $203.3 million in fiscal
1997 to $157.5 million in fiscal 1998. As with the fourth quarter, the majority
of the margin decline was caused by a $27.7 million write-off of amounts
assigned to inventory in excess of historical costs resulting from purchase
accounting adjustments. The decline in margin attributable to the Sunderland,
U.K. facility was $14.8 million. The balance of the gross profit differential is
attributable to price and mix shifts within the business.
<PAGE>
SG&A costs for fiscal 1998 were $140.9 million, compared to $135.4 million for
fiscal 1997. The full year one-time SG&A costs associated with the acquisition
and hiring of the new management team were $3.1 million. The George Group was
paid $2.7 million for the fiscal year in connection with the Company's ongoing
operational improvement initiatives. The Company's post-acquisition cost
reduction efforts and reduced goodwill amortization account for the balance of
the change in costs.
EBITDA for fiscal year 1998 was $36.3 million compared to EBITDA of $85.9
million for fiscal year 1997. As discussed above, several adjustments are
outlined in Exhibit II, which the Company believes better illustrate operational
results. Fiscal 1998 EBITDA, subject to the adjustments set forth in Exhibit II,
was $89.7 in comparison to $93.0 for fiscal 1997.
Amounts for the year ended October 3, 1998 are derived by adding results of the
Grove Companies for the seven months ended April 28, 1998 prior to the
acquisition by the Company with the results of the Company for the five months
ended October 3, 1998 following the acquisition. The amounts reported for the
full fiscal year include certain adjustments to previously reported results
principally related to amounts reported by the Grove Companies for the seven
months ended April 28, 1998.
In connection with the acquisition, the company was formed as a limited
liability company and its capital structure was changed significantly.
Accordingly, comparisons of interest, taxes, and net income for fiscal 1998 and
the fourth quarter of fiscal 1998 relative to prior periods would not be
meaningful and are therefore not presented.
Company Chairman and CEO, S.J. Bonanno stated "We continue to make excellent
progress in reducing costs, both through our operational improvement initiatives
and our cost controls in the SG&A area. We are also making progress towards
revitalizing our revenue growth by developing and commercializing new products
more quickly."
"Since the acquisition in late April of this year, a new management team has
been put in place, we have reduced our headcount by over 900 primarily through
the closure of our Sunderland UK facility, and reductions in our Corporate
staff. We have successfully completed the implementation of our new management
information systems project. This project, once we are through the learning
curve phase, should not only make us year 2000 compliant but also allow us to
continue to streamline our administrative processes. We expect to commercialize
18 new products in fiscal 1999, more than we have in the past several years. In
addition, by working more closely with our suppliers, we anticipate significant
savings in the area of purchased materials and components."
"We have accomplished a lot in such a short period of time, but we have much to
do in the areas of cost competitiveness and revenue generation."
<PAGE>
Grove Holdings LLC, with headquarters in Shady Grove, Pennsylvania, is a leader
in the design, manufacture, and marketing of mobile hydraulic cranes, self
propelled aerial work platforms, and truck mounted cranes. Its operating
businesses include Grove Crane, Grove Manlift, and National Crane with major
manufacturing facilities located in the U.S., Germany, and France.
SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS
Certain statements above constitute "forward looking statements" within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. Any statements that express, or involve
discussions as to, expectations, beliefs, plans, objectives, assumptions, or
future events or performance (often, but not always, through the use of words or
phrases such as "will likely result", "are expected to", "will continue",
"anticipates", "expects", "estimates", "intends" "plans", "projects" and
"outlook") are not historical facts and may be forward looking. Forward looking
statements involve known and unknown risks, uncertainties, and other factors
that may cause the actual results, levels of activities, cost savings,
performance or achievements of the Company, or industry results to be materially
different from any future results, levels of activity, cost savings, performance
or achievements expressed or implied by such forward looking statements. Such
factors include, among others, the following: i)substantial leverage and the
ability to service debt; ii) changing market trends in the mobile hydraulic
crane, aerial work platform and truck mounted crane industries; iii) general
economic and business conditions including a prolonged or substantial recession;
iv) the ability of the company to implement its business strategy and maintain
and enhance its competitive strengths; v) the ability of the Company to
implement its efficiency and cost savings program; vi) the ability of the
Company to obtain financing for general corporate purposes; vii) competition;
viii) availability of key personnel; ix) industry over capacity; and x) changes
in, or failure to comply with government regulations. As a result of the
foregoing and other factors, no assurance can be given as to future results,
levels of activity or achievements, and neither Grove Holdings LLC or any other
person assumes responsibility for the accuracy and completeness of these forward
looking statements. Any forward looking statement contained above speak solely
as of the date on which such statements are made, and Grove Holdings LLC
undertakes no obligation to update any forward looking statements to reflect
events or circumstances after the date on which such statements were made or to
reflect the occurrence of unanticipated events.
<PAGE>
Grove Holdings LLC
Exhibit I
(in thousands)
(Unaudited)
<TABLE>
<CAPTION>
---------------------------------------------------------------------------
Three months ended Twelve months ended
---------------------------------------------------------------------------
September 27, October 3, September 27, October 3,
1997 1998 1997 1998
----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Net sales $ 222,967 $ 239,000 $ 856,812 $ 869,979
Cost of goods sold 165,780 187,014 653,539 684,728
Write-off of amounts assigned to inventory in
excess of historical costs resulting from
purchase accounting adjustments - 17,707 - 27,707
----------------- ----------------- ----------------- -----------------
Gross profit 57,187 34,279 203,273 157,544
Selling, engineering, general, and administrative
expense 32,554 35,352 126,328 132,599
Amortization of goodwill 2,253 1,927 9,054 8,306
----------------- ----------------- ----------------- -----------------
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Earnings before interest and taxes (EBIT) 22,380 (3,000) 67,891 16,639
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Interest income/(expense) 981 (10,563) 43 (17,501)
Other income/(expense) 40 (532) 535 (10,069)
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Income before income taxes 23,401 (14,095) 68,469 (10,931)
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Other data
Capital expenditures 6,209 2,212 32,491 25,513
Cash interest expense incurred - 10,766 - 20,568
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</TABLE>
<PAGE>
Grove Holdings LLC
Exhibit II
(in thousands)
(Unaudited)
<TABLE>
<CAPTION>
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Three months ended Twelve months ended
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September 27, October 3, September 27, October 3,
1997 1998 1997 1998
----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C>
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EBIT $ 22,380 $ (3,000) $ 67,891 $ 16,639
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Depreciation & Amortization 4,425 5,981 17,985 19,613
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EBITDA 26,805 2,981 85,876 36,252
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Adjustments
Impact of units sold accounted as operating leases 1,174 1,079 2,555 2,677
Purchase accounting write-off of amount assigned
to inventory - 17,707 - 27,707
Inventory write-off - - - 1,329
Expenses associated with MIS installation 373 1,112 1,283 1,266
Restructuring charges/Management fees 544 - 4,136 162
One-time transition costs - 2,192 - 3,104
Sunderland (Gains)/Losses 626 3,350 (821) 14,538
George Group expenses - 1,759 - 2,697
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TOTAL 29,522 30,180 93,029 89,732
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</TABLE>
