<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
---------
Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the Quarterly Period Ended September 30, 2000
Commission File No. 333-27665
CONTINENTAL GLOBAL GROUP, INC.
------------------------------
(Exact Name of Registrant as Specified in its Charter)
<TABLE>
<CAPTION>
<S> <C> <C>
DELAWARE 31-1506889
-------- ----------
(State or other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
CO-REGISTRANTS AND SUBSIDIARY GUARANTORS
Continental Conveyor & Equipment Company Delaware 34-1603197
Goodman Conveyor Company Delaware 34-1603196
Continental Conveyor &
Continental Global Group, Inc. Equipment Company Goodman Conveyor Company
438 Industrial Drive 438 Industrial Drive Route 178 South
Winfield, Alabama 35594 Winfield, Alabama 35594 Belton, South Carolina 29627
(205) 487-6492 (205) 487-6492 (864) 338-7793
</TABLE>
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
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 twelve 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.
Yes ( x ) No ( )
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practical date.
As of October 31, 2000, there were 100 shares of the registrant's common stock
outstanding.
<PAGE> 2
INDEX
CONTINENTAL GLOBAL GROUP, INC.
<TABLE>
<CAPTION>
Page
Part I Financial Information Number
<S> <C>
Item 1 Financial Statements (Unaudited) 1
Condensed Consolidated Balance Sheets
September 30, 2000 and December 31, 1999 2
Condensed Consolidated Statements of Operations
Three Months and Nine Months ended September 30, 2000 and 1999 3
Condensed Consolidated Statements of Cash Flows
Nine Months ended September 30, 2000 and 1999 4
Notes to Condensed Consolidated Financial Statements 5-15
Item 2 Management's Discussion and Analysis of Financial Condition and Results of
Operations 16-19
Item 3 Quantitative and Qualitative Disclosures about Market Risk 20
Part II Other Information
Item 6 Exhibits and Reports on Form 8-K 21
Signatures 22
</TABLE>
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
1
<PAGE> 4
Continental Global Group, Inc.
Condensed Consolidated Balance Sheets
<TABLE>
<CAPTION>
September 30 December 31
2000 1999
-------------------- --------------------
(Unaudited) (Audited)
<S> <C> <C>
ASSETS:
Current assets:
Cash and cash equivalents $ 17,977,494 $ 18,299,610
Accounts receivable, net 25,895,401 30,469,614
Inventories 31,392,896 31,327,817
Other current assets 1,340,271 1,940,793
-------------------- --------------------
Total current assets 76,606,062 82,037,834
Property, plant and equipment 25,930,046 27,007,610
Less accumulated depreciation 10,915,593 10,305,220
-------------------- --------------------
15,014,453 16,702,390
Goodwill, net 17,866,743 19,642,467
Deferred financing costs 3,379,365 3,769,291
Other assets 695,008 750,845
-------------------- --------------------
$ 113,561,631 $ 122,902,827
==================== ====================
LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT):
Current liabilities:
Notes payable $ 13,718,469 $ 8,600,499
Trade accounts payable 17,733,913 21,506,028
Accrued compensation and employee benefits 4,651,126 5,090,694
Accrued interest on senior notes 6,600,000 3,300,000
Other accrued liabilities 2,705,566 4,255,416
Current maturities of long-term obligations 2,015,281 3,140,588
-------------------- --------------------
Total current liabilities 47,424,355 45,893,225
Senior notes 120,000,000 120,000,000
Other long-term obligations, less current maturities 2,987,511 2,887,477
Stockholder's equity (deficit):
As of September 30, 2000 - common stock, $0.01 par value,
authorized 5,000,000 shares, issued and outstanding 100
shares; As of December 31, 1999 - common stock, no par
value, authorized 1,500 shares, issued and outstanding
100 shares at stated value of $5 per share 1 500
Paid-in capital 1,993,687 1,993,188
Accumulated deficit (53,693,024) (45,081,586)
Accumulated other comprehensive loss (5,150,899) (2,789,977)
-------------------- --------------------
(56,850,235) (45,877,875)
-------------------- --------------------
$ 113,561,631 $ 122,902,827
==================== ====================
</TABLE>
See notes to condensed consolidated financial statements.
2
<PAGE> 5
Continental Global Group, Inc.
Condensed Consolidated Statements of Operations
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30 September 30
2000 1999 2000 1999
----------------------------------- -----------------------------------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Net sales $ 40,645,830 $ 46,710,752 $ 122,925,199 $ 162,245,125
Cost of products sold 33,705,446 39,338,980 103,046,550 138,365,542
----------------------------------- -----------------------------------
Gross profit 6,940,384 7,371,772 19,878,649 23,879,583
Operating expenses:
Selling and engineering 3,113,329 3,478,933 9,668,617 11,488,357
General and administrative 2,069,216 2,218,236 6,844,525 7,009,354
Management fee 119,148 100,733 252,080 335,749
Amortization expense 151,824 155,581 461,705 464,289
Restructuring charges 1,129 375,908 211,522 820,896
----------------------------------- -----------------------------------
Total operating expenses 5,454,646 6,329,391 17,438,449 20,118,645
----------------------------------- -----------------------------------
Operating income 1,485,738 1,042,381 2,440,200 3,760,938
Other expenses:
Interest expense 3,965,712 3,941,012 11,831,211 11,286,718
Interest income (264,493) (225,833) (762,493) (670,649)
Miscellaneous, net 31,824 (164,823) (17,080) (55,789)
----------------------------------- -----------------------------------
Total other expenses 3,733,043 3,550,356 11,051,638 10,560,280
----------------------------------- -----------------------------------
Net loss $ (2,247,305) $ (2,507,975) $ (8,611,438) $ (6,799,342)
=================================== ===================================
</TABLE>
See notes to condensed consolidated financial statements.
3
<PAGE> 6
Continental Global Group, Inc.
Condensed Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
Nine months ended September 30
2000 1999
---------------------- ---------------------
(Unaudited)
<S> <C> <C>
Operating activities:
Net loss $ (8,611,438) $ (6,799,342)
Adjustments to reconcile net loss to net cash used in
operating activities:
Provision for depreciation and amortization 2,334,490 2,618,288
Amortization of deferred financing costs 389,926 389,927
Loss (gain) on disposal of assets 21,113 (149,036)
Changes in operating assets and liabilities 1,868,910 (3,820,884)
---------------------- ---------------------
Net cash used in operating activities (3,996,999) (7,761,047)
---------------------- ---------------------
Investing activities:
Purchases of property, plant, and equipment (1,457,485) (3,677,215)
Proceeds from sale of property, plant, and equipment 118,271 369,007
---------------------- ---------------------
Net cash used in investing activities (1,339,214) (3,308,208)
---------------------- ---------------------
Financing activities:
Net increase in borrowings on notes payable 5,553,382 6,974,313
Proceeds from long-term obligations 775,887 5,321,346
Principal payments on long-term obligations (1,323,750) (2,707,433)
Distributions for income taxes - (1,426,193)
---------------------- ---------------------
Net cash provided by financing activities 5,005,519 8,162,033
Effect of exchange rate changes on cash 8,578 238,338
---------------------- ---------------------
Decrease in cash and cash equivalents (322,116) (2,668,884)
Cash and cash equivalents at beginning of period 18,299,610 26,350,700
---------------------- ---------------------
Cash and cash equivalents at end of period $ 17,977,494 $ 23,681,816
====================== =====================
</TABLE>
See notes to condensed consolidated financial statements.
4
<PAGE> 7
Continental Global Group, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
September 30, 2000
A. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three and nine month periods ended
September 30, 2000 are not necessarily indicative of the results that may be
expected for the year ending December 31, 2000. For further information, refer
to the consolidated financial statements and footnotes of Continental Global
Group, Inc. and subsidiaries for the year ended December 31, 1999, included in
the Form 10-K filed by the Company on March 30, 2000.
B. USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
C. INVENTORIES
Inventories, which consist of raw materials, manufactured and purchased parts,
and work in process, are stated at the lower of cost or market. Since inventory
records are maintained on a job order basis, it is not practical to segregate
inventories into their major classes. The cost for approximately 67% and 62% of
inventories at September 30, 2000 and December 31, 1999, respectively, is
determined using the last-in, first-out (LIFO) method with the remainder
determined using the first-in, first-out (FIFO) method. Had the FIFO method of
inventory (which approximates replacement cost) been used to cost all
inventories, inventories would have increased by approximately $1,527,000 at
September 30, 2000 and December 31, 1999.
D. STOCKHOLDER'S EQUITY
In the third quarter of 2000, the Board of Directors approved an amendment to
the certificate of incorporation which increased the number of shares which the
Company is authorized to issue to 5,000,000 shares with a par value of $0.01. At
September 30, 2000, the Company had issued and outstanding 100 shares.
5
<PAGE> 8
Continental Global Group, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
September 30, 2000
E. RESTRUCTURING CHARGES
The Company incurred restructuring charges of approximately $212,000 and
$821,000 in the first nine months of 2000 and 1999, respectively, related to its
Australian and United Kingdom subsidiaries. Total restructuring charges incurred
to date total approximately $2,445,000. In 1998, the Company executed a plan to
close certain Australian manufacturing facilities and merge the operations with
other existing facilities; in 1999 and 2000, the Company made further reductions
in office staff and facilities. In the United Kingdom, following the acquisition
of Huwood International (Huwood) in August 1998, the Company consolidated its
existing operations and facilities into the Huwood operations. These
restructuring charges consist primarily of severance costs for approximately 220
employees and relocation costs. As of September 30, 2000, the Company's
Australian and United Kingdom subsidiaries have paid all of the charges incurred
to date.
F. COMPREHENSIVE LOSS
The components of comprehensive loss for the three and nine month periods ended
September 30, 2000 and 1999 are as follows:
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30 September 30
2000 1999 2000 1999
---------------------------------- ---------------------------------
<S> <C> <C> <C> <C>
Net loss $ (2,247,305) $ (2,507,975) $ (8,611,438) $ (6,799,342)
Other comprehensive income (loss):
Foreign currency translation
adjustment (1,048,208) (144,852) (2,360,922) 574,183
---------------------------------- ---------------------------------
Comprehensive loss $ (3,295,513) $ (2,652,827) $(10,972,360) $ (6,225,159)
================================== =================================
</TABLE>
G. INCOME TAXES
The Company and its domestic subsidiaries are Subchapter S Corporations for
United States income tax purposes. Accordingly, the Company's United States
income is included in the income tax returns of the stockholder. Under the terms
of the Tax Payment Agreement, the Company makes distributions to the stockholder
for payment of income taxes.
Effective October 6, 2000, the Company elected C Corporation status for United
States income tax purposes, which election will have no impact on cash flow,
taxable income or existing deferred tax assets and liabilities of the Company.
Tax distributions previously due to the stockholder (along with historical net
deferred tax liabilities of approximately $1.5 million) under the terms of the
Tax Payment Agreement will now be reflected in the financial statements of the
Company in future periods. The Company's United States income will now be
subject to tax at the corporate level and income tax payments will be made
directly to taxing authorities.
6
<PAGE> 9
Continental Global Group, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
September 30, 2000
The Company has subsidiaries located in Australia, the United Kingdom, and South
Africa, which are subject to income taxes in their respective countries.
7
<PAGE> 10
Continental Global Group, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
September 30, 2000
SEGMENT INFORMATION
While the Company primarily manages its operations on a geographical basis, the
Company operates in two principal business segments: conveyor equipment and
manufactured housing products. The conveyor equipment business markets its
products in four main business areas. The mining equipment business area
includes the design, manufacture and testing (and, outside the United States,
installation, monitoring and maintenance) of complete belt conveyor systems and
components for mining application primarily in the coal industry. The conveyor
components business area manufactures and sells components for conveyor systems
primarily for resale through distributor networks. The engineered systems
business area uses specialized project management and engineering skills to
combine mining equipment products, purchased equipment, steel fabrication and
other outside services for sale as complete conveyor equipment systems that meet
specific customer requirements. The bulk conveyor equipment business area
designs and manufactures a complete range of conveyor equipment sold to
transport bulk materials, such as cement, lime, food products and industrial
waste.
The Company's manufactured housing products business manufactures and/or
refurbishes axle components sold directly to the manufactured housing industry.
As part of this segment the Company also sells mounted tires and rims to the
manufactured housing industry. Included in the other category is primarily the
manufacture and sale of air filtration equipment for use in enclosed
environments, principally in the textile industry. The manufacturing
requirements for these products are generally compatible with conveyor equipment
production and thus maximize utilization of the Company's manufacturing
facilities for its primary products.
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30 September 30
2000 1999 2000 1999
-------------------------------------------------------------------
(in thousands) (in thousands)
<S> <C> <C> <C> <C>
Net sales:
Conveyor equipment $ 36,260 $ 39,299 $ 105,759 $ 136,720
Manufactured housing products 3,768 6,864 15,373 23,786
Other 618 548 1,793 1,739
-------------------------------------------------------------------
Total net sales $ 40,646 $ 46,711 $ 122,925 $ 162,245
===================================================================
Segment operating income:
Conveyor equipment $ 2,131 $ 1,749 $ 4,250 $ 5,595
Manufactured housing products (163) 24 (135) 137
Other 72 28 158 34
-------------------------------------------------------------------
Total segment operating income 2,040 1,801 4,273 5,766
Management fee 119 101 252 336
Amortization expense 152 156 462 464
Restructuring charges 1 376 212 821
Corporate expense 282 126 907 384
-------------------------------------------------------------------
Total operating income 1,486 1,042 2,440 3,761
Interest expense 3,966 3,941 11,831 11,287
Interest income (265) (226) (763) (671)
Miscellaneous, net 32 (165) (17) (56)
-------------------------------------------------------------------
Net loss $ (2,247) $ (2,508) $ (8,611) $ (6,799)
===================================================================
</TABLE>
8
<PAGE> 11
Continental Global Group, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
September 30, 2000
I. GUARANTOR AND NON-GUARANTOR SUBSIDIARIES
The Company's domestic subsidiaries, Continental Conveyor & Equipment Company
(CCE) and Goodman Conveyor Company (GCC), and certain of its Australian
subsidiaries, all of which are wholly owned, are the guarantors of the $120
million Senior Notes. The guarantees are full, unconditional, and joint and
several. Separate financial statements of these guarantor subsidiaries are not
presented as management has determined that they would not be material to
investors. The Company's United Kingdom and South African subsidiaries are not
guarantors of the Senior Notes. The Australian subsidiaries became guarantors of
the Senior Notes effective September 23, 1999. Prior to this date, CCE and GCC
were the only guarantors of the Senior Notes. The 1999 operations and cash flows
of the Company's guarantor Australian subsidiaries are included in the "Combined
Guarantor Subsidiaries" column in the following consolidating financial
statements.
Summarized consolidating balance sheets as of September 30, 2000 and December
31, 1999 for the Company, the guarantor subsidiaries, and the non-guarantor
subsidiaries are as follows (in thousands):
<TABLE>
<CAPTION>
Combined Combined
Guarantor Non-Guarantor
The Company Subsidiaries Subsidiaries Eliminations Total
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
September 30, 2000:
Current assets:
Cash and cash equivalents $ 16,597 $ 1,159 $ 221 $ - $ 17,977
Accounts receivable, net - 21,517 4,426 (47) 25,896
Inventories - 27,772 3,621 - 31,393
Other current assets 77 1,086 177 - 1,340
-------------------------------------------------------------------------------
Total current assets 16,674 51,534 8,445 (47) 76,606
Property, plant, and
equipment, net - 10,535 4,480 - 15,015
Goodwill, net - 17,141 726 - 17,867
Investment in subsidiaries 60,009 17,102 - (77,111) -
Deferred financing costs 3,379 - - - 3,379
Other assets 104 2,396 385 (2,190) 695
-------------------------------------------------------------------------------
Total assets $ 80,166 $ 98,708 $ 14,036 $ (79,348) $ 113,562
===============================================================================
Current liabilities:
Notes payable $ - $ 11,727 $ 2,709 $ (718) $ 13,718
Trade accounts payable 385 12,535 5,173 (359) 17,734
Accrued compensation and
employee benefits - 4,052 599 - 4,651
Accrued interest 6,600 - - - 6,600
Other accrued liabilities 356 3,120 310 (1,080) 2,706
Current maturities of
long-term obligations - 2,006 9 - 2,015
-------------------------------------------------------------------------------
Total current liabilities 7,341 33,440 8,800 (2,157) 47,424
Senior notes 120,000 - - - 120,000
Other long-term obligations - 2,840 148 - 2,988
Stockholder's equity
(deficit) (47,175) 62,428 5,088 (77,191) (56,850)
-------------------------------------------------------------------------------
Total liabilities and
stockholder's equity
(deficit) $ 80,166 $ 98,708 $ 14,036 $ (79,348) $ 113,562
===============================================================================
</TABLE>
9
<PAGE> 12
Continental Global Group, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
September 30, 2000
I. GUARANTOR AND NON-GUARANTOR SUBSIDIARIES (CONTINUED)
<TABLE>
<CAPTION>
Combined Combined
Guarantor Non-Guarantor
The Company Subsidiaries Subsidiaries Eliminations Total
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
December 31, 1999:
Current assets:
Cash and cash equivalents $ 17,244 $ 955 $ 101 $ - 4 18,300
Accounts receivable, net 2,039 24,797 5,759 (2,126) 30,469
Inventories - 27,578 3,750 - 31,328
Other current assets 36 1,544 361 - 1,941
-------------------------------------------------------------------------------
Total current assets 19,319 54,874 9,971 (2,126) 82,038
Property, plant, and
equipment, net - 11,259 5,443 - 16,702
Goodwill, net - 18,736 907 - 19,643
Investment in subsidiaries 60,009 19,800 - (79,809) -
Deferred financing costs 3,769 - - - 3,769
Other assets 141 31 1,099 (520) 751
-------------------------------------------------------------------------------
Total assets $ 83,238 $ 104,700 $ 17,420 $ (82,455) $ 122,903
===============================================================================
Current liabilities:
Notes payable $ - $ 6,779 $ 2,311 $ (489) $ 8,601
Trade accounts payable 387 17,022 6,242 (2,145) 21,506
Accrued compensation and
employee benefits - 4,553 538 - 5,091
Accrued interest 3,300 - - - 3,300
Other accrued liabilities 171 3,949 136 (1) 4,255
Current maturities of
long-term obligations - 3,120 21 - 3,141
-------------------------------------------------------------------------------
Total current liabilities 3,858 35,423 9,248 (2,635) 45,894
Senior notes 120,000 - - - 120,000
Other long-term obligations - 2,675 212 - 2,887
Stockholder's equity
(deficit) (40,620) 66,602 7,960 (79,820) (45,878)
-------------------------------------------------------------------------------
Total liabilities and
stockholder's equity
(deficit) $ 83,238 $ 104,700 $ 17,420 $ (82,455) $ 122,903
===============================================================================
</TABLE>
10
<PAGE> 13
Continental Global Group, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
September 30, 2000
I. GUARANTOR AND NON-GUARANTOR SUBSIDIARIES (CONTINUED)
Summarized consolidating statements of operations for the three months and nine
months ended September 30, 2000 and 1999, respectively, for the Company, the
guarantor subsidiaries, and the non-guarantor subsidiaries are as follows (in
thousands):
<TABLE>
<CAPTION>
Combined Combined
Guarantor Non-Guarantor
The Company Subsidiaries Subsidiaries Eliminations Total
------------- ------------- --------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Three months ended September 30, 2000:
Net sales $ - $ 35,166 $ 5,480 $ - $ 40,646
Cost of products sold - 28,691 5,015 - 33,706
------------- ------------- --------------- ------------- -------------
Gross profit 6,475 465 - 6,940
Total operating expenses 294 4,356 804 - 5,454
------------- ------------- --------------- ------------- -------------
Operating income (loss) (294) 2,119 (339) - 1,486
Interest expense 3,442 475 49 - 3,966
Interest income (265) - - - (265)
Miscellaneous, net - 35 (3) - 32
------------- ------------- --------------- ------------- -------------
Net income (loss) $ (3,471) $ 1,609 $ (385) $ - $ (2,247)
============= ============= =============== ============= =============
</TABLE>
<TABLE>
<CAPTION>
Combined Combined
Guarantor Non-Guarantor
The Company Subsidiaries Subsidiaries Eliminations Total
------------- ------------- --------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Three months ended September 30, 1999:
Net sales $ - $ 40,638 $ 6,073 $ - $ 46,711
Cost of products sold - 33,867 5,472 - 39,339
------------- ------------- --------------- ------------- -------------
Gross profit 6,771 601 - 7,372
Total operating expenses 144 4,960 1,226 - 6,330
------------- ------------- --------------- ------------- -------------
Operating income (loss) (144) 1,811 (625) - 1,042
Interest expense 3,441 458 42 - 3,941
Interest income (226) - - - (226)
Miscellaneous, net - (147) (18) - (165)
------------- ------------- --------------- ------------- -------------
Net income (loss) $ (3,359) $ 1,500 $ (649) $ - $ (2,508)
============= ============= =============== ============= =============
</TABLE>
11
<PAGE> 14
Continental Global Group, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
September 30, 2000
I. GUARANTOR AND NON-GUARANTOR SUBSIDIARIES (CONTINUED)
<TABLE>
<CAPTION>
Combined Combined
Guarantor Non-Guarantor
The Company Subsidiaries Subsidiaries Eliminations Total
------------- ------------- --------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Nine months ended September 30, 2000:
Net sales $ - $ 106,156 $ 16,770 $ (1) $ 122,925
Cost of products sold - 87,468 15,580 (1) 103,047
------------- ------------- --------------- ------------- -------------
Gross profit - 18,688 1,190 - 19,878
Total operating expenses 945 13,809 2,684 - 17,438
------------- ------------- --------------- ------------- -------------
Operating income (loss) (945) 4,879 (1,494) - 2,440
Interest expense 10,326 1,324 181 - 11,831
Interest income (763) - - - (763)
Miscellaneous, net - (6) (11) - (17)
------------- ------------- --------------- ------------- -------------
Net income (loss) $ (10,508) $ 3,561 $ (1,664) $ - $ (8,611)
============= ============= =============== ============= =============
</TABLE>
<TABLE>
<CAPTION>
Combined Combined
Guarantor Non-Guarantor
The Company Subsidiaries Subsidiaries Eliminations Total
------------- ------------- --------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Nine months ended September 30, 1999:
Net sales $ - $ 143,562 $ 18,683 $ - $ 162,245
Cost of products sold - 121,451 16,914 - 138,365
------------- ------------- --------------- ------------- -------------
Gross profit - 22,111 1,769 - 23,880
Total operating expenses 422 16,073 3,624 - 20,119
------------- ------------- --------------- ------------- -------------
Operating income (loss) (422) 6,038 (1,855) - 3,761
Interest expense 10,328 828 131 - 11,287
Interest income (671) - - - (671)
Miscellaneous, net - (52) (4) - (56)
------------- ------------- --------------- ------------- -------------
Net income (loss) $ (10,079) $ 5,262 $ (1,982) $ - $ (6,799)
============= ============= =============== ============= =============
</TABLE>
12
<PAGE> 15
Continental Global Group, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
September 30, 2000
I. GUARANTOR AND NON-GUARANTOR SUBSIDIARIES (CONTINUED)
Summarized consolidating cash flow statements for the nine months ended
September 30, 2000 and 1999, respectively, for the Company, the guarantor
subsidiaries, and the non-guarantor subsidiaries are as follows (in thousands):
<TABLE>
<CAPTION>
Combined Combined
Guarantor Non-Guarantor
The Company Subsidiaries Subsidiaries Eliminations Total
------------- ------------- --------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Nine months ended September 30, 2000:
Net cash provided by (used in)
operating activities $ (6,659) $ 4,334 $ (1,676) $ 4 $ (3,997)
Investing activities:
Purchases of property, plant, and
equipment - (1,242) (215) - (1,457)
Proceeds from sale of property,
plant, and equipment - 95 23 - 118
------------- ------------- --------------- ------------- -------------
Net cash used in investing activities - (1,147) (192) - (1,339)
------------- ------------- --------------- ------------- -------------
Financing activities:
Net increase in borrowings on notes
payable - 5,209 344 - 5,553
Proceeds from long-term obligations - 776 - - 776
Principal payments on long-term
obligations - (1,283) (41) - (1,324)
Distributions for interest on
senior notes 6,012 (6,012) - - -
Intercompany loan activity - (1,698) 1,698 - -
------------- ------------- --------------- ------------- -------------
Net cash provided by (used in)
financing activities 6,012 (3,008) 2,001 - 5,005
Exchange rate changes on cash - 25 (13) (4) 8
------------- ------------- --------------- ------------- -------------
Increase (decrease) in cash and cash
equivalents (647) 204 120 - (323)
Cash and cash equivalents at beginning
of period 17,244 955 101 - 18,300
------------- ------------- --------------- ------------- -------------
Cash and cash equivalents at end of
period $ 16,597 $ 1,159 $ 221 $ - $ 17,977
============= ============= =============== ============= =============
</TABLE>
13
<PAGE> 16
Continental Global Group, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
September 30, 2000
I. GUARANTOR AND NON-GUARANTOR SUBSIDIARIES (CONTINUED)
<TABLE>
<CAPTION>
Combined Combined
Guarantor Non-Guarantor
The Company Subsidiaries Subsidiaries Eliminations Total
------------- ------------- --------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Nine months ended September 30, 1999:
Net cash provided by (used in)
operating activities $ (6,095) $ 626 $ (1,642) $ (650) $ (7,761)
Investing activities:
Purchases of property, plant, and
equipment - (3,457) (220) - (3,677)
Proceeds from sale of property,
plant, and equipment - 39 330 - 369
Investment in subsidiaries (1,300) 1,300 - - -
------------- ------------- --------------- ------------- -------------
Net cash provided by (used in)
investing activities (1,300) (2,118) 110 - (3,308)
------------- ------------- --------------- ------------- -------------
Financing activities:
Net increase in borrowings on notes
payable - 6,830 (163) 307 6,974
Proceeds from long-term obligations - 5,321 - - 5,321
Principal payments on long-term
obligations - (2,672) (35) - (2,707)
Distributions for income taxes - (1,426) - - (1,426)
Distributions for interest on
senior notes 9,900 (9,900) - - -
Intercompany loan activity - (2,918) 2,568 350 -
------------- ------------- --------------- ------------- -------------
Net cash provided by (used in)
financing activities 9,900 (4,765) 2,370 657 8,162
Effect of exchange rate changes on cash - 291 (46) (7) 238
------------- ------------- --------------- ------------- -------------
Increase (decrease) in cash and cash
equivalents 2,505 (5,966) 792 - (2,669)
Cash and cash equivalents at beginning
of period 19,969 6,976 (594) - 26,351
------------- ------------- --------------- ------------- -------------
Cash and cash equivalents at end of
period $ 22,474 $ 1,010 $ 198 $ - $ 23,682
============= ============= =============== ============= =============
</TABLE>
J. NEW ACCOUNTING PRONOUNCEMENTS
In December 1999, the Securities and Exchange Commission issued Staff Accounting
Bulletin (SAB) 101, "Revenue Recognition in Financial Statements," which
summarizes the staff's views regarding the application of generally accepted
accounting principles to selected revenue recognition issues and is effective
for the fourth quarter of 2000. The Company is currently evaluating the impact
SAB 101 may have on the Company's results of operations but does not anticipate
it will have a material effect on earnings or the financial position of the
Company.
In June 1998, the FASB issued Statement 133, "Accounting for Derivative
Instruments and Hedging Activities" which, as amended by FASB Statement 137, is
required to be adopted no later than January 1, 2001. Statement 133 requires all
derivatives to be recognized as either assets or liabilities in the balance
sheet and be measured at fair value. The Company is currently evaluating
Statement 133 and because the Company expects to have a minimal use of
derivatives, management
14
<PAGE> 17
Continental Global Group, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
September 30, 2000
does not anticipate that the adoption of the new Statement will have a material
effect on earnings or the financial position of the Company.
15
<PAGE> 18
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion should be read in conjunction with the Consolidated
Financial Statements and related notes included in the Company's Form 10-K dated
March 30, 2000.
GENERAL
The Company believes it is a leading international manufacturer and supplier of
conveyor equipment for use in the coal mining industry. The Company estimates it
has the largest share of the United States market for idlers used in above
ground conveyor equipment and a significant share of the United States
underground coal mining conveyor equipment market. The Company is an
international conveyor equipment manufacturer and in addition to operations in
the United States has manufacturing operations in Australia, the United Kingdom,
and South Africa.
RESULTS OF OPERATIONS
The following table sets forth, on a comparative basis, selected income
statement data as a percentage of net sales for the three months and nine months
ended September 30, 2000 and 1999.
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30 September 30
-------------------------- -------------------------
2000 1999 2000 1999
<S> <C> <C> <C> <C>
Net sales 100.0% 100.0% 100.0% 100.0%
Cost of products sold 82.9 84.2 83.8 85.3
Gross profit 17.1 15.8 16.2 14.7
SG&A expenses 12.7 12.2 13.4 11.4
Management fee 0.3 0.2 0.2 0.2
Amortization expense 0.4 0.3 0.4 0.3
Restructuring charges - 0.9 0.2 0.5
Operating income 3.7 2.2 2.0 2.3
</TABLE>
THREE MONTHS ENDED SEPTEMBER 30, 2000, COMPARED TO THREE MONTHS ENDED SEPTEMBER
30, 1999:
NET SALES
Net sales for the quarter decreased $6.1 million, or 13%, from $46.7 million in
1999 to $40.6 million in 2000. Net sales in the Company's domestic operations
decreased $2.3 million due to the decrease in the Company's manufactured housing
products segment of $3.1 million, offset by increases in the conveyor equipment
segment of $0.7 million and other segment of $0.1 million. Net sales in the
manufactured housing products segment decreased due to the decrease by its
customers in the production and shipment of manufactured homes caused by the
excess finished home inventory and the tight credit market. Net sales in the
foreign operations of the conveyor equipment segment decreased $3.8 million due
to a decrease of $3.2 million from the Australian subsidiary caused by the
completion of major projects in 1999 that were not repeated in 2000 and a
decrease of $0.6 million from the Company's United Kingdom and South Africa
subsidiaries. While net sales in the Australian subsidiary decreased year over
year, net sales for the quarter ending September 30, 2000 was the third
consecutive quarter of increased sales.
GROSS PROFIT
16
<PAGE> 19
Gross profit decreased $0.4 million, or 5%, from $7.3 million in 1999 to $6.9
million in 2000. Gross profit in the Company's domestic operations of the
conveyor equipment segment and the South African subsidiary decreased $0.6 and
$0.1 million, respectively due to reduced sales volume. Despite a decrease in
net sales of $3.2 million by the Company's Australian subsidiary, gross profit
increased $0.5 million due to improved margins. Gross profit in the Company's
manufactured housing products segment decreased $0.2 Million due to reduced
sales volume.
Overall gross profit as a percentage of sales increased from 15.8% in 1999 to
17.1% in 2000. This increase is primarily due to a favorable change in the
mixture of domestic and foreign sales combined with the increase, in gross
profit as a percent of sales, in the foreign operations. Domestic sales, which
had a higher gross profit percentage than foreign sales, were 73% of total sales
in 2000 as compared to 68% in 1999. The gross profit margin on domestic sales
remained substantially the same period over period while the gross profit
percent in the foreign operations increased from 7.2% in 1999 to 12.5% in 2000
due to the reduction in low margin project business in Australia.
SG&A EXPENSES
SG&A expenses decreased $0.5 million, or 9%, from $5.7 million in 1999 to $5.2
million in 2000. The decease primarily occurred in the Company's conveyor
equipment segment due to the favorable impact of the restructuring initiatives
in the foreign subsidiaries
OPERATING INCOME
Operating income increased $0.5 million, or 50%, from $1.0 million in 1999 to
$1.5 million in 2000. This improvement in operating income is the result of the
$0.5 million reduction in SG&A expenses and a $0.4 million decrease in
restructuring charges offset by the $0.4 million decrease in gross profit.
NINE MONTHS ENDED SEPTEMBER 30, 2000, COMPARED TO NINE MONTHS ENDED SEPTEMBER
30, 1999:
NET SALES
Net sales decreased $39.3 million, or 24%, from $162.2 million in 1999 to $122.9
million in 2000. The Company's domestic operations of the conveyor equipment
segment accounted for $7.6 million of the decrease due to the lower capital
spending by the Company's major customers in the coal industry. Net sales in the
foreign operations of the conveyor equipment segment deceased $23.3 million,
primarily due to a decrease in sales of $21.4 million at the Company's
Australian subsidiary. This decrease was primarily due to the completion of
major projects in 1999 that were not repeated in 2000, combined with the soft
market in the coal industry. Net sales in the Company's manufactured housing
products segment decreased $8.4 million due to the decrease by its customers
in the production and shipment of manufacturedm homes. This decrease in the
production and shipment of manufactured homes is primarily the result of
excess finished home inventory and the negative impact the tight credit market
has had on the purchase of new manufactured homes. The Company does not expect
sales in the manufactured housing products segment to improve in 2001.
GROSS PROFIT
Gross profit decreased $4.0 million, or 17%, from $23.9 million in 1999 to $19.9
million in 2000. Gross profit in the Company's domestic conveyor equipment
segment decreased $3.9 million due to lower sales volume. Gross profit in the
United Kingdom and South Africa operations decreased $0.6 million due to lower
sales volumes and lower margins on project contracts. This decrease was
favorably offset by a $0.8 million increase in gross profit in the Australian
operations due to improved margins with the completion to the major projects in
1999. Gross profit in the manufactured housing products segment decreased $0.3
million due to the lower sales volume.
17
<PAGE> 20
Gross profit as a percentage of sales increased from 14.7% in 1999 to 16.2% in
2000. This increase is primarily due a favorable change in the mixture of
domestic and foreign sales. Domestic sales, which had a higher gross profit
percentage than foreign sales, were 76% of total sales in 2000 as compared to
67% in 1999.
SG&A EXPENSES
SG&A expenses decreased $2.0 million, or 11%, from $18.5 million in 1999 to
$16.5 million in 2000. The decrease primarily occurred in the Company's conveyor
equipment segment due to the favorable impact of the restructuring initiatives
in the foreign subsidiaries and the reduction in domestic manpower that occurred
in the third quarter of 1999.
OPERATING INCOME
Operating income decreased $1.3 million, or 35%, from $3.7 million in 1999 to
$2.4 million in 2000. The decrease is the result of the $4.0 million decrease in
gross profit, offset by the $2.0 million decrease in SG&A expenses, a $0.1
million decrease in management fees, and a $0.6 million decrease in
restructuring charges.
RESTRUCTURING CHARGES
The Company incurred restructuring charges of approximately $0.2 million and
$0.8 million in the first nine months of 2000 and 1999, respectively, related to
its Australian and United Kingdom subsidiaries. Total restructuring charges
incurred to date total approximately $2.4 million. In 1998, the Company executed
a plan to close certain Australian manufacturing facilities and merge the
operations with other existing facilities; in 1999 and 2000, the Company made
further reductions in office staff and facilities. In the United Kingdom,
following the acquisition of Huwood International (Huwood) in August 1998, the
Company consolidated its existing operations and facilities into the Huwood
operations. These restructuring charges consist primarily of severance costs for
approximately 220 employees and relocation costs. As of September 30, 2000, the
Company's Australian and United Kingdom subsidiaries have paid all of the
charges incurred to date.
BACKLOG
Backlog at September 30, 2000 was $43.7 million, an increase of $14.0 million,
or 47%, from $29.7 million at December 31, 1999. The increase is attributable to
a $6.9 million increase in the Company's domestic operations of the conveyor
equipment segment, a $3.3 million increase at the Company's Australian
subsidiary, and a $3.8 million increase at the Company's United Kingdom
subsidiary. Management believes that approximately 64% of the backlog will be
shipped in 2000.
LIQUIDITY AND CAPITAL RESOURCES
Net cash used in operating activities was $4.0 million and $7.8 million for the
nine months ending September 30, 2000 and 1999, respectively. Net cash used in
operating activities in 2000 resulted primarily from a net loss of $8.6 million,
offset by a net decrease in operating assets of $1.9 million and depreciation
and amortization of $2.7 million. Net cash used in operating activities in 1999
is primarily attributable to a net loss of $6.8 million and a net increase in
operating assets of $3.8 million, offset by depreciation and amortization of
$3.0 million.
Net cash used in investing activities was $1.3 million and $3.3 million for the
nine months ending September 30, 2000 and 1999, respectively. The net cash used
in investing activities represents net purchases of property, plant, and
equipment for both years.
Net cash provided by financing activities was $5.0 million and $8.2 million for
the nine months ending September 30, 2000 and 1999, respectively. Net cash
provided by financing activities in
18
<PAGE> 21
2000 resulted from a net increase in borrowings on notes payable of $5.5 million
and proceeds from long-term obligations of $0.8 million, offset by principal
payments on long-term obligations of $1.3 million. The increase in borrowings on
notes payable is due to an increase of $4.2 million at the Company's domestic
operations and an increase of $1.3 million at the Company's foreign operations.
The proceeds from long-term obligations completed the financing for the new
idler line at the Company's domestic operations which began in 1999. Net cash
provided by financing activities in 1999 represents a net increase in borrowings
on notes payable of $7.0 million and proceeds from long-term obligations of $5.3
million, offset by principal payments on long-term obligations of $2.7 million
and distributions of $1.4 million for the payment of income taxes, $1.2 million
of which was for the payment of 1998 income taxes. The proceeds from long-term
obligations include $1.6 million which was used for the purchase of a previously
leased manufacturing facility in Colorado.
The Company's primary capital requirements consist of capital expenditures and
debt service. The Company expects current financial resources (working capital)
and funds from operations to be adequate to meet anticipated cash requirements.
At September 30, 2000, the Company had cash and cash equivalents of $18.0
million and a domestic credit facility line with $15.1 million available for
use. The Company's $4.9 million (US dollars based upon exchange rate of .5427 to
1.00) Australian credit facility, of which $4.5 million is currently being
utilized, will expire on November 30, 2000. The Company is currently negotiating
to refinance the outstanding amount under this facility.
INTERNATIONAL OPERATIONS
The Company transacts business in a number of countries throughout the world and
has facilities in the United States, Australia, the United Kingdom, and South
Africa. As a result, the Company is subject to business risks inherent in
non-U.S. operations, including political and economic uncertainty, import and
export limitations, exchange controls and currency fluctuations. The Company
believes that the risks related to its foreign operations are mitigated by the
relative political and economic stability of the countries in which its largest
foreign operations are located. As the U.S. dollar strengthens and weakens
against foreign currencies in which the Company transacts business, its
financial results will be affected. The principal foreign currencies in which
the Company transacts business are the Australian dollar, the British pound
sterling, and the South African rand. The fluctuation of the U.S. dollar versus
other currencies resulted in increases (decreases) to stockholder's equity of
approximately $(2.4) million and $0.6 million for the nine months ended
September 30, 2000 and 1999, respectively.
CAUTIONARY STATEMENT FOR SAFE HARBOR PURPOSES
This Management's Discussion and Analysis of Financial Condition and Results of
Operations (MD&A) contains forward-looking statements within the meaning of the
federal securities laws. As a general matter, forward-looking statements are
those focused upon future plans, objectives or performance as opposed to
historical items and include statements of anticipated events or trends and
expectations and beliefs relating to matters that are not historical in nature.
Such forward looking statements are subject to uncertainties and factors
relating to the Company's operations and business environment, all of which are
difficult to predict and many of which are beyond the control of the Company,
that could cause actual results of the Company to differ materially from those
matters expressed in or implied by such forward-looking statements.
19
<PAGE> 22
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The following table provides information about the Company's Senior Notes. The
table presents principal cash flows and interest rate by expected maturity date.
Interest Rate Sensitivity
Principal Amount by Expected Maturity
Average Interest Rate
<TABLE>
<CAPTION>
Fair
Value,
(dollars in thousands) 2000 2001 2002 2003 2004 Thereafter Total 9/30/00
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Long-Term Obligations,
including current
portion
Fixed Rate $ - $ - $ - $ - $ - $ 120,000 $ 120,000 $ 39,600
Average interest rate 11% 11% 11% 11% 11% 11%
</TABLE>
The Company's interest income and expense are most sensitive to changes in the
general level of U.S. interest rates. In this regard, changes in U.S. interest
rates affect the interest earned on the Company's cash equivalents as well as
interest paid on its debt. To mitigate the impact of fluctuations in U.S.
interest rates, the Company generally borrows on a long-term basis to maintain a
debt structure that is fixed rate in nature.
A portion of the Company's operations consists of manufacturing and sales
activities in foreign jurisdictions. The Company manufactures and sells its
products in the United States, Australia, the United Kingdom, and South Africa.
As a result, the Company's financial results could be significantly affected by
factors such as changes in foreign currency exchange rates or weak economic
conditions in the foreign markets in which the Company distributes its products.
The Company's operating results are exposed to changes in exchange rates between
the U.S. dollar and the Australian dollar, the British pound sterling, and the
South African rand.
20
<PAGE> 23
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits: Refer to the index of exhibits.
(b) No reports on Form 8-K were filed during the quarter ended
September 30, 2000.
21
<PAGE> 24
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.
CONTINENTAL GLOBAL GROUP, INC.
By: /s/ Jimmy L. Dickinson
----------------------
Jimmy L. Dickinson
Vice President and Chief Financial
Officer (As duly authorized
representative and as Principal
Financial and Accounting Officer)
CONTINENTAL CONVEYOR & EQUIPMENT COMPANY
By: /s/ Jimmy L. Dickinson
----------------------
Jimmy L. Dickinson
Vice President - Finance (As duly
authorized representative and as
Principal Financial and Accounting
Officer)
GOODMAN CONVEYOR COMPANY
By: /s/ Lawrence Kukulski
---------------------
Lawrence Kukulski
Vice President - Finance and
Administration (As duly authorized
representative and as Principal
Financial and Accounting Officer)
Date: November 13, 2000
22
<PAGE> 25
Continental Global Group, Inc.
Form 10-Q
Index of Exhibits
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit
------ ----------------------
<S> <C> <C>
3.1
(a) Certificate of Incorporation of Continental Global Group, Inc., as currently in effect. *
(b) Certificate of Amendment of Certificate of Incorporation of Continental Global Group,
Inc.
3.2 By-Laws of Continental Global Group, Inc., as currently in effect. *
3.3 Certificate of Incorporation of Continental Conveyor & Equipment Company, as currently *
in effect.
3.4 By-Laws of Continental Conveyor & Equipment Company, as currently in effect. *
3.5 Certificate of Incorporation of Goodman Conveyor Company, as currently in effect. *
3.6 By-Laws of Goodman Conveyor Company, as currently in effect. *
4.1 Indenture, dated as of April 1, 1997, among Continental Global Group, Inc., Continental *
Conveyor & Equipment Company, Goodman Conveyor Company, and the Trustee (containing, as
exhibits, specimens of the Series A Notes and the Series B Notes).
10.1
(a) Revolving Credit Facility, dated as of September 14, 1992, as amended by Amendments I, *
II, and III, among Continental Conveyor & Equipment Company, Goodman Conveyor Company,
and Bank One, Cleveland, NA.
(b) Amendment IV, dated as of December 31, 1998, to the Revolving Credit Facility, dated as
of September 14, 1992, among Continental Conveyor & Equipment Company, Goodman Conveyor
Company, and Bank One, Cleveland, NA. (Filed as Exhibit 10.1 (b) to the Company's Form
10-Q for the quarter ended March 31, 1999, and is incorporated herein by reference.)
(c) Letter of Amendment, dated as of July 26, 1999, to the Revolving Credit Facility, dated as
of September 14, 1992, among Continental Conveyor & Equipment Company, Goodman Conveyor
Company, and Bank One, Cleveland, NA. (Filed as Exhibit 10.1 (c) to the Company's Form
10-Q for the quarter ended June 30, 1999, and is incorporated herein by reference.)
(d) Letter of Amendment, dated as of November 4, 1999, to the Revolving Credit Facility, dated
as of September 14, 1992, among Continental Conveyor & Equipment Company, Goodman
Conveyor Company, and Bank One, Cleveland, NA. (Filed as Exhibit 10.1 (d) to the
Company's Form 10-Q for the quarter ended September 30, 1999, and is incorporated herein
by reference.)
(e) Amendment VI, dated as of March 28, 2000, to the Revolving Credit Facility, dated as of
September 14, 1992, among Continental Conveyor & Equipment Company, Goodman Conveyor
Company, and Bank One, Cleveland, NA. (Filed as Exhibit 10.1 (e) to the Company's Form
10-K for the year ended December 31, 1999, and is incorporated herein by reference.)
10.2 Management Agreement, dated as of April 1, 1997, between Continental Global Group, Inc. *
and Nesco, Inc.
</TABLE>
<PAGE> 26
Continental Global Group, Inc.
Form 10-Q
Index of Exhibits (Continued)
<TABLE>
<CAPTION>
<S> <C> <C>
10.3 Tax Payment Agreement, dated as of April 1, 1997, among Continental Global Group, Inc., *
Continental Conveyor & Equipment Company, Goodman Conveyor Company, and NES Group, Inc.
10.4 World Wide Purchase and Sale Agreement dated as of October 17, 1997, by and among
Continental Conveyor International Inc., Joy Technologies, Inc., and certain affiliates
of Joy Technologies Inc. (The "Purchase Agreement"). (All exhibits to the Purchase
Agreement have been omitted, and Registrant will furnish supplementally to the
Commission, upon request, a copy of any omitted exhibit.) (Filed as Exhibit 2.0 to Form
8-K filed November 3, 1997, and is incorporated herein by reference.)
10.5 Credit Facility, dated as of July 18, 1999, among Continental Conveyor & Equipment Pty.
Ltd. and its subsidiaries and the National Australia Bank Limited. (Filed as Exhibit
10.6 to the Company's Form 10-K for the year ended December 31, 1999, and is
incorporated herein by reference.)
27 Financial Data Schedule (filed electronically only)
</TABLE>
* Incorporated by reference from Form S-4 Registration Number 333-27665 filed
under the Securities Act of 1933.
