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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): January 10, 1996
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ABS INDUSTRIES, INC.
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(Exact name of registrant as specified in its charter)
Delaware 0-9556 34-0074580
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(State or other (Commission (IRS Employer
jurisdiction of File No.) Identification No.)
incorporation)
Interstate Square I, Suite 300, Willoughby, Ohio 44094
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (216) 946-2274
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NONE
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(Former name or former address, if changed since last report)
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Item 5. OTHER EVENTS
On January 10, 1996, ABS Industries, Inc. (the "Company") issued a
press release which is attached hereto as Exhibit 99.1 and which is incorporated
herein by reference.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) EXHIBITS.
99.1 Press release of the Company, dated January 10, 1996.
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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.
ABS INDUSTRIES, INC.
By /s/ William J. McCarthy
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Name: William J. McCarthy
Title: President and
Chief Executive Officer
Date: January 11, 1996
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EXHIBIT INDEX
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Number Subject Matter
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99.1 Press release of the Company, dated January 10, 1996.
EXHIBIT 99.1
FOR IMMEDIATE RELEASE
Contact: William J. McCarthy
President and Chief Executive Officer
ABS INDUSTRIES, INC. REVISES HISTORICAL EARNINGS
DOWNWARD; FOURTH QUARTER LOSS
TO BE GREATER THAN PREVIOUSLY
ANTICIPATED; REPORTS NON-COMPLIANCE WITH
CERTAIN LOAN COVENANTS; ANNOUNCES NEED FOR CAPITAL
Willoughby, Ohio, January 10, 1996 ABS Industries, Inc. (NASDAQ:
ABSI) announced today that in connection with closing its books for the fiscal
year ended October 31, 1995, it has determined that previously reported sales
and results of operations for the first, second and third fiscal quarters of
1995 will require restatement because certain previously reported sales were
recognized prematurely as the criteria for revenue recognition had not been met.
ABS also stated that it is reviewing other matters with its independent auditors
that will likely result in further decreases of previously reported results of
operations for such quarters and that it expected its loss for the fourth fiscal
quarter of 1995 to be greater than the previously announced estimate of $2.5
million. Because ABS' review is ongoing, the Company stated that it is unable
to quantify at this time the amount of the downward adjustments of its results
of operations; however, it indicated that such adjustments may be material.
In addition, ABS indicated that it is currently unable to estimate when revised
financial information will be available.
ABS also announced that it will restate its financial statements for
the fiscal years ended October 31, 1994 and 1993 due to the reporting of the
prematurely recognized sales. For the fiscal year ended October 31, 1994, the
Company anticipates that reported Net Sales, Net Income and Earnings per Share
of $92.122 million, $4.855 million and $.96, will be revised downward to $89.162
million, $4.766 million and $.94, respectively. For the fiscal year ended
October 31, 1993, the Company anticipates that reported Net Sales, Net Income
and Earnings per Share of $72.360 million, $3.362 million and $.67, will be
revised downward to $70.857 million, $3.155 million and $.62, respectively. The
Company indicated that such decreases will not affect reported cash flows and
are not expected to have a material affect on ABS' shareholders' equity for such
periods.
In light of ABS' review of its financial and accounting
procedures, ABS stated that it had relieved its Corporate Controller
of his responsibilities and had placed him on limited assignment
pending completion of its review. The Company expects to identify
promptly an appropriate person to act as interim Corporate Controller.
The Company also announced that it had engaged Development Specialists,
Inc., based in Chicago, Illinois, to advise it in connection with
the financial issues it currently faces.
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ABS also announced that it is not in compliance with certain covenants
under its $40 million credit facility and a related $16.5 million working
capital facility. The lenders under the credit facility have agreed to forbear
in taking any action under such facility until January 16, 1996. The Company
indicated that the working capital facility is also due on such date and that it
is similarly in non-compliance with certain covenants relating to its $6.46
million state economic development revenue bond financing. William J. McCarthy,
President and Chief Executive Officer of ABS stated that "ABS is currently in
negotiations with its lenders under the credit and working capital facilities
both to increase the amounts available under such facilities and to extend their
terms, but there can be no assurances that such negotiations will be
successful." Mr. McCarthy also stated that the Company is seeking other
alternatives for financing its business, but did not believe that cash from
operations after committed expenditures for the first calendar quarter of 1996
would be sufficient to meet scheduled loan repayments and working capital needs
during such period.
ABS also announced that in light of the pending revision of its
historic financial information and the fact that its books and records for
fiscal 1995 have not been closed it had not filed proxy materials with the
Securities and Exchange Commission in connection with its previously announced
acquisition of Mercer Forge Corporation and A & M Machining Corporation.
Mr. McCarthy said that "ABS remains committed to the acquisition of Mercer and A
& M, but ABS, with the owners of Mercer and A & M, will have to reevaluate the
acquisition when ABS's audited 1995 financial statements are available." Mr.
McCarthy further noted that there could be no assurances that the Mercer and A &
M acquisitions will ultimately be consummated. The Company also stated, as
previously announced, that it had anticipated refinancing its senior
indebtedness with a third party lender in connection with the consummation of
the Mercer and A & M acquisitions, but that such refinancing would also have to
be reevaluated by ABS and such lender in light of recent events.
ABS, through its wholly-owned subsidiaries, Colfor, Inc. and Colmach,
Inc., operates exclusively in the cold and warm forging industry and the
machining of forged components.
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