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): July 25, 1994
CLARK EQUIPMENT COMPANY
(Exact name of registrant as specified in its charter)
Delaware 1-5646 38-0425350
(State or other juris- (Commission (IRS Employer
diction of incorporation) File Number) Identification Number)
100 North Michigan Street
P. O. Box 7008
South Bend, Indiana
(Address of principal 46634
executive offices) (Zip Code)
Registrant's telephone number (219) 239-0100
including area code
Total Number of Pages: 9
Exhibit Index at Page: 3
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ITEM 5. OTHER EVENTS
On July 25, 1994, Registrant issued a press release regarding its results
for the second quarter of 1994. A copy of this press release is attached
as Exhibit (99) and incorporated in this Item by reference. The press
release contains certain forward-looking statements about Registrant as
defined in paragraph (c) of Rule 3b-6, "Liability for Certain Statements
by Issuers" issued pursuant to the Securities Exchange Act of 1934. The
forward-looking statements of Registrant published in the press release
are reaffirmed hereby.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
Exhibit (99) - Registrant's press release regarding its results for the
second quarter of 1994 issued July 25, 1994.
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 hereunto duly authorized.
CLARK EQUIPMENT COMPANY
/s/ John J. Moran, Jr.
John J. Moran, Jr.
Assistant Secretary
Date: July 27, 1994
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EXHIBIT LIST AND INDEX
Filed Herewith Unless
Exhibit Description Otherwise Indicated
(99) Registrant's Press Release Page 4
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EXHIBIT (99)
Clark Equipment Company
100 North Michigan St.
P.O. Box 7008
South Bend, Indiana 46634
NEWS RELEASE
Contact: Joe Fimbianti Release Date: Immediate
219-239-0176
CLARK EQUIPMENT REPORTS SECOND QUARTER EARNINGS
SOUTH BEND, INDIANA, July 25, 1994 -- Clark Equipment Company today
announced second quarter net income of $62.5 million, or $3.59 per share,
which compares to second quarter 1993 net income of $10.8 million, or
$0.62 per share. Second quarter 1994 results include a $32.9 million gain
equal to $1.88 per share related to the initial public offering of CAPCO,
Clark's former Brazil-based automotive supply business. Excluding the
CAPCO gain, second quarter net income from continuing operations was $29.8
million, or $1.71 per share. The announcement was made by Leo J.
McKernan, Clark chairman and chief executive officer.
In announcing earnings, Mr. McKernan said, "Clark Equipment Company's
profits continued their strong upward trend in the second quarter 1994.
Income from consolidated operations was up sharply, benefiting from strong
North American markets for Bobcat skid-steer loaders, construction
machinery and a continued recovery in European markets." Referring to
VME, Clark's 50-percent-owned joint venture, Mr. McKernan added that
Clark's share of VME net income for second quarter 1994 was $15.5 million,
or $0.89 per share, a sharp improvement over the net income of $0.9
million recorded in second quarter 1993.
For the six months ended June 30, 1994, Clark net income from continuing
operations, excluding the CAPCO gain, was $55.2 million, or $3.17 per
share, compared to $11.0 million, or $0.63 per share for the first six
months of 1993. Clark consolidated revenues for the first half of 1994
were $447.7 million compared to $350.4 million in the first six months of
1993.
Commenting on the quarter's significant events, Mr. McKernan said that
Clark completed the divestiture of CAPCO (NYSE: CAB), through an initial
public offering of ten million shares at $12 per share on May 5, 1994.
Clark continues to hold one million CAPCO shares, which currently have a
market value of approximately $10 million. CAPCO operating results have
been removed from current and historical Clark operating data and are
reported as a discontinued operation.
Referring to Clark's May 13 acquisition of Blaw-Knox Construction
Equipment Corporation, Mr. McKernan said, "Blaw-Knox is a worldwide leader
in the asphalt paver business and has a dominant share of the U.S.
market." He added that Blaw-Knox annual sales are expected to be about
$100 million in 1994. Its operating results for June and half of May are
included in Clark's reported sales and earnings. The net effect of the
Blaw-Knox acquisition and the CAPCO divestiture had no material impact on
operating earnings for the second quarter 1994.
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Clark consolidated operations, which include Melroe Company, Clark-Hurth
Components and Blaw-Knox, generated net income of $14.3 million, or $0.82
per share, on sales of $242.5 million for second quarter 1994. These
results compare to Clark's consolidated net income of $8.4 million, or
$0.48 per share, on sales of $187.3 million in the same period of 1993.
Commenting on Clark consolidated operations, Mr. McKernan said, "Gross
margins and operating margins for the consolidated businesses improved in
the second quarter, compared to the second quarter 1993 and the first
quarter 1994." Sales and earnings of Blaw-Knox were not included in
second quarter 1993 results.
Clark new orders in the second quarter were $243.4 million, an increase of
approximately 28 percent, compared to orders of $190.4 million in the same
1993 period. First quarter 1994 orders were $247.5 million, driven by
record March orders at Melroe. Backlog at June 30, 1994, was $191.2
million, up sharply from $121.0 million in second quarter 1993 and $167.7
million recorded in first quarter 1994. Orders and backlogs in second
quarter 1994 include Blaw-Knox. Historical data does not include Blaw-
Knox or CAPCO.
Discussing the performance of Clark's Melroe Company, Mr. McKernan said,
"Melroe sales and earnings reached record levels in second quarter 1994.
Skid-steer industry retail sales in North America exceeded second quarter
1993 by more than 20 percent. Melroe 1994 skid-steer sales improved in
all North American geographic regions." He added that Bobcat mini-
excavator sales in North America also reached record levels in 1994, with
June year-to-date sales more than double the results in the first six
months of 1993. In Europe, Melroe's second quarter skid-steer sales were
up slightly compared to 1993. Weak sales in Germany were offset by
improved results in other markets, especially Italy and Scandinavia.
Mini-excavator sales in Europe also rose slightly from last year's level.
Discussing the performance of Clark's off-highway components manufacturing
business, Mr. McKernan said, "Clark-Hurth sales and earnings increased due
to continued strong momentum in North American and European construction
machinery markets. Total orders for the second quarter were more than 45
percent ahead of the same period in 1993. The biggest gains came from
Europe, where most major markets showed good year-to-year improvement."
He added that better plant capacity utilization combined with stringent
cost controls led to improved profits compared to first quarter 1994.
"At Blaw-Knox, sales and earnings also increased compared to 1993," said
Mr. McKernan, adding that North American shipments increased by more than
15 percent in second quarter 1994 compared to the same period in 1993.
"Improved paver and parts sales combined with cost reductions helped
increase margins from the second quarter 1993 level," said Mr. McKernan.
"Increased highway spending and a pick up in commercial paving activity
drove much of the increase. Export sales to the Mideast and the Far East
showed improvement," he said, noting that European markets remained
stagnant with no clear signs of recovery. However, European margins
improved on flat volumes due to continuing cost reduction efforts.
Discussing the performance of VME, Mr. McKernan said, "VME earnings
improvements were driven by higher sales volumes, improved price
realization, and lower interest costs due to declining debt levels. VME
North American markets continued to show strength in all product areas,
while most European economies continued their slow progress toward
economic recovery." VME earnings for the second quarter increased to
$15.5 million, or $0.89 per share, compared to $0.9 million, or $0.05 per
share, in the same 1993 period. Sales were $406.0 million, up 24 percent
from second
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quarter 1993 sales of $327.1 million and 24 percent above first quarter 1994.
Looking ahead, Mr. McKernan said, "We believe current results and order
rates provide an optimistic picture of business activity for the balance
of the year. Even though normal seasonal patterns in our continuing
businesses dictate that third quarter results will come in below the
seasonal peaks reached in the second quarter, we expect third quarter 1994
results to show a substantial improvement over Clark's 1993 performance."
Clark Equipment Company designs, manufactures and markets skid-steer
loaders, construction machinery, asphalt paving equipment, and axles and
transmissions for off-highway equipment.
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<TABLE>
CLARK EQUIPMENT COMPANY AND CONSOLIDATED SUBSIDIARIES
STATEMENT OF INCOME AND RETAINED EARNINGS (UNAUDITED)
<CAPTION>
For the Period Ended June 30,
(Amounts in Thousands, except per share data) Second Quarter Six Month
1994 1993* 1994 1993*
<S> <C> <C> <C> <C>
Net sales...........................................$242,525 $187,333 $447,688 $350,360
Operating costs and expenses:
Cost of goods sold............................... 190,035 147,038 352,122 276,261
Selling, general and
administrative expenses....................... 28,993 25,111 54,540 47,321
219,028 172,149 406,662 323,582
Operating income.................................... 23,497 15,184 41,026 26,778
Other income, net................................... 2,845 2,748 9,861 5,169
Interest expense.................................... (4,661) (5,693) (10,231) (10,592)
Pre-tax income from consolidated operations......... 21,681 12,239 40,656 21,355
Provision for income taxes.......................... 7,417 3,886 14,076 5,993
Income from consolidated operations................. 14,264 8,353 26,580 15,362
Equity in net income (loss)
of associated company............................ 15,488 888 28,637 (4,334)
Income from continuing operations................... 29,752 9,241 55,217 11,028
Discontinued operations:
Income (loss) from operations.................... (164) 1,558 1,275 2,375
Gain on sale..................................... 32,884 0 32,884 0
Income from discontinued operations................. 32,720 1,558 34,159 2,375
Income before effect of
change in accounting principle................... 62,472 10,799 89,376 13,403
Effect of accounting change--income taxes........... - - - 6,150
Net income.......................................... 62,472 10,799 89,376 19,553
Add: Income retained
at beginning of period........................... 119,612 53,551 92,708 44,869
Deduct: Excess cost of treasury shares issued over
the cost of certain employee benefits............ 0 4 0 76
Income retained at end of period....................$182,084 $ 64,346 $182,084 $ 64,346
Income per share:
From continuing operations.......................$ 1.71 $ .53$ 3.17 $ .63
From discontinued operations..................... 1.88 .09 1.96 .14
From effect of accounting change................. - - - .35
Net income.......................................$ 3.59 $ .62 $ 5.13 $ 1.12
Average number of shares............................ 17,399 17,438 17,424 17,418
Number of shares outstanding
at end of period................................. 17,394 17,368 17,394 17,368
<FN>
* Restated to reflect the deconsolidation of the automotive business.
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CLARK EQUIPMENT COMPANY AND CONSOLIDATED SUBSIDIARIES
CONDENSED BALANCE SHEET
(Amounts in Thousands)
Jun.30 Dec.31
1994 1993
ASSETS Unaudited Audited
Current Assets:
Cash, equivalents, and short-term investments.......$ 225,452 $ 235,828
Accounts and notes receivable....................... 113,272 77,103
Accounts receivable from associated companies....... 599 2,041
Refundable income taxes............................. 0 3,543
Inventories......................................... 116,724 108,620
Deferred tax assets--net............................ 28,321 29,202
Other current assets................................ 5,560 5,434
Total current assets............................. 489,928 461,771
Investments and advances............................... 164,271 122,106
Deferred tax assets--net .............................. 105,718 101,018
Property, plant and equipment--net..................... 177,460 201,924
Assets held for sale................................... 8,662 6,765
Goodwill............................................... 169,338 67,461
Other assets........................................... 33,219 40,890
Total assets.....................................$1,148,596 $1,001,935
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Notes payable.......................................$ 17,852 $ 22,512
Accounts payable and accrued liabilities............ 158,633 150,142
Income taxes payable................................ 12,078 4,139
Accrued postretirement benefits..................... 20,412 19,560
Deferred income taxes............................... 4,348 800
Current installments on long-term debt.............. 20,100 9,612
Total current liabilities........................ 233,423 206,765
Long-term borrowings................................... 194,657 204,770
Other non-current liabilities.......................... 95,474 74,686
Accrued postretirement benefits........................ 239,921 233,239
Deferred income taxes.................................. 15,986 14,322
Total liabilities................................ 779,461 733,782
Stockholders' Equity:
Capital stock....................................... 323,904 323,540
Retained earnings................................... 182,084 92,708
Cumulative translation and other adjustments........ (51,901) (67,083)
Common stock held in treasury at cost............... (53,668) (49,728)
Leveraged Employee Stock Ownership
Plan shares...................................... (31,284) (31,284)
Total stockholders' equity....................... 369,135 268,153
Total liabilities and stockholders' equity.......$1,148,596 $1,001,935
Debt/Capitalization Ratio.............................. 38.7% 46.9%
Year-to-date capital expenditures......................$ 18,121 $ 29,877
Year-to-date depreciation charges......................$ 17,881 $ 36,379
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</TABLE>
<TABLE>
CLARK EQUIPMENT COMPANY
STATEMENT OF INCOME
1993 Restated for deconsolidation of automotive business 1993
<CAPTION>
(Amounts in Thousands) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Full Year
<S> <C> <C> <C> <C> <C>
NET SALES $ 163,027 $ 187,333 $ 167,126 $ 174,536 $ 692,022
OPERATING COSTS AND EXPENSES;
Cost of goods sold 129,223 147,038 136,390 144,487 557,138
Selling, general and
administrative expenses 22,210 25,111 29,962 25,416 102,699
151,433 172,149 166,352 169,903 659,837
Operating income 11,594 15,184 774 4,633 32,185
Other income, net 2,421 2,748 4,959 4,888 15,016
Interest expense (4,899) (5,693) (5,388) (5,446) (21,426)
Pre-tax income from consolidated operations 9,116 12,239 345 4,075 25,775
Provision for income taxes 2,107 3,886 (1,054) (743) 4,196
Income from consolidated operations 7,009 8,353 1,399 4,818 21,579
Equity in net income of associated companies (5,222) 888 1,787 10,387 7,840
Income from continuing operations 1,787 9,241 3,186 15,205 29,419
Discontinued operations:
Income (loss) from operations 817 1,558 6,886 3,189 12,450
Gain on sale 0 0 0 0 0
Income (loss) before effect of change in
accounting principle 2,604 10,799 10,072 18,394 41,869
Effect of accounting change--income taxes 6,150 0 0 0 6,150
NET INCOME $ 8,754 $ 10,799 $ 10,072 $ 18,394 $ 48,019
Average number of shares 17,359 17,438 17,419 17,425 17,421
Earnings per share $ 0.50 $ 0.62 $ 0.58 $ 1.06 $ 2.76
Orders and backlog (Amounts in Millions):
Total orders 178.9 190.4 168.2 177.9
Backlog 117.9 121.0 122.1 125.4
</TABLE>
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