<PAGE>
======================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------
FORM 10-Q
(Mark one)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1998
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
-------- --------
Commission file number 1-7955
-------------
INTERNATIONAL COMFORT PRODUCTS CORPORATION
-----------------------------------------------------
(Exact name of registrant as specified in its charter)
Canada 98-004520009
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
501 Corporate Centre Drive, Suite 200,
Franklin, Tennessee 37067
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (615) 771-0200
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 12 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
---- ----
As of April 27, 1998, there were 39,898,175 shares of International
Comfort Products Corporation Ordinary Shares outstanding.
======================================================================<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
INDEX TO FINANCIAL STATEMENTS INCLUDED IN THIS
QUARTERLY REPORT ON FORM 10-Q
INTERNATIONAL COMFORT PRODUCTS CORPORATION
AND SUBSIDIARIES
(Unaudited)
Page
----
Consolidated Statements of Income:
(Three months ended 3/31/98 and 3/31/97) 3
Consolidated Balance Sheets (3/31/98, 3/31/97 and 12/31/97) 4 - 5
Consolidated Statements of Changes in Financial Position
(Three months ended 3/31/98 and 3/31/97) 6
Notes to Consolidated Financial Statements 7 - 9
-2-
<PAGE>
INTERNATIONAL COMFORT PRODUCTS CORPORATION
Consolidated Statements of Income
For the Three Months Ended March 31, 1998 and 1997 - UNAUDITED
(In Millions of U.S. Dollars) - Canadian GAAP
<TABLE>
<CAPTION>
1998 1997
- ----------------------------------------------------------------------------
<S> <C> <C>
Net Sales $ 132.8 $ 136.6
Cost of Sales 104.3 108.7
- ----------------------------------------------------------------------------
Gross Profit 28.5 27.9
Selling, General and Administrative Expenses 20.2 21.5
- ----------------------------------------------------------------------------
Operating Profit 8.3 6.4
- ----------------------------------------------------------------------------
Financial Expenses
Interest expense 4.5 4.7
Amortization of debt issuance costs .3 .3
- ----------------------------------------------------------------------------
4.8 5.0
- ----------------------------------------------------------------------------
Net Income $ 3.5 $ 1.4
============================================================================
Average number of shares (in millions) 39.9 39.4
============================================================================
Earnings per Ordinary Share $ 0.09 $ 0.04
============================================================================
</TABLE>
See accompanying notes
-3-
<PAGE>
INTERNATIONAL COMFORT PRODUCTS CORPORATION
Consolidated Balance Sheets
(In Millions of U.S. Dollars) - Canadian GAAP
<TABLE>
<CAPTION>
March 31 December 31
------------------ ------------
1998 1997 1997
- ----------------------------------------------------------------------------
UNAUDITED
<S> <C> <C> <C>
ASSETS
Current Assets
Cash and short-term deposits $ 10.1 $ 10.6 $ 31.0
Accounts receivable 102.3 102.7 96.5
Note receivable - - 7.7
Inventories 125.4 126.9 94.5
Prepaid expenses and other 5.6 10.8 7.6
- -----------------------------------------------------------------------------
243.4 251.0 237.3
- -----------------------------------------------------------------------------
Fixed Assets
Property, plant and equipment 222.6 211.6 214.3
Accumulated depreciation 124.5 115.9 120.7
- -----------------------------------------------------------------------------
98.1 95.7 93.6
- -----------------------------------------------------------------------------
Intangible Assets, net 26.7 9.1 11.0
Other Assets, net 10.6 12.8 10.1
- -----------------------------------------------------------------------------
$ 378.8 $ 368.6 $ 352.0
=============================================================================
</TABLE>
See accompanying notes
-4-
<PAGE>
INTERNATIONAL COMFORT PRODUCTS CORPORATION
Consolidated Balance Sheets
(In Millions of U.S. Dollars) - Canadian GAAP
<TABLE>
<CAPTION>
March 31 December 31
------------------ ------------
1998 1997 1997
- ----------------------------------------------------------------------------
UNAUDITED
<S> <C> <C> <C>
LIABILITIES
Current Liabilities
Short-term borrowings $ 37.4 $ 59.3 $ 19.7
Accounts payable 51.0 47.4 44.8
Accrued liabilities 28.2 22.7 26.5
Product warranty 9.5 8.7 9.5
Current portion of long-term debt .2 - .2
- -----------------------------------------------------------------------------
126.3 138.1 100.7
Long-Term Debt 165.6 165.0 165.6
Product Warranty 14.6 17.1 16.2
Other Long-Term Liabilities 16.9 17.3 18.0
- -----------------------------------------------------------------------------
323.4 337.5 300.5
- -----------------------------------------------------------------------------
SHAREHOLDERS' EQUITY
Ordinary Shares 171.5 170.5 171.2
Deficit (113.0) (137.1) (116.4)
Foreign Currency
Translation Adjustment (3.1) (2.3) (3.3)
- -----------------------------------------------------------------------------
55.4 31.1 51.5
- -----------------------------------------------------------------------------
$ 378.8 $ 368.6 $ 352.0
=============================================================================
</TABLE>
See accompanying notes
-5-
<PAGE>
INTERNATIONAL COMFORT PRODUCTS CORPORATION
Consolidated Statements of Changes In Financial Position
For the Three Months Ended March 31, 1998 and 1997 - UNAUDITED
(In Millions of U.S. Dollars) - Canadian GAAP
<TABLE>
<CAPTION>
Cash Provided By (Used for) 1998 1997
- -----------------------------------------------------------------------------
<S> <C> <C>
OPERATIONS
Net income $ 3.5 $ 1.4
Items not involving current cash flows
Depreciation and amortization 4.4 4.2
Changes in working capital
Accounts receivable 6.0 (29.9)
Inventories (25.5) (28.3)
Prepaid expenses and other 1.0 ( 5.5)
Accounts payable, accrued liabilities,
and product warranty .4 7.0
- -----------------------------------------------------------------------------
(10.2) (51.1)
- -----------------------------------------------------------------------------
INVESTING
Property, plant and equipment ( 3.2) ( .6)
Acquisition of United Electric Company (25.6) -
Proceeds from sale of Coastline and
factory branches - 23.1
- -----------------------------------------------------------------------------
(28.8) 22.5
- -----------------------------------------------------------------------------
FINANCING
Ordinary shares issued .3 1.3
- -----------------------------------------------------------------------------
Increase in Borrowings (38.7) (27.3)
Net Cash (Borrowings) -
Beginning of the period 11.4 (21.4)
- -----------------------------------------------------------------------------
Net Borrowings - End of the period $ (27.3) $ (48.7)
=============================================================================
Represented by
Short-term borrowings $ (37.4) $ (59.3)
Less: Cash and short-term deposits 10.1 10.6
- -----------------------------------------------------------------------------
$ (27.3) $ (48.7)
=============================================================================
</TABLE>
See accompanying notes
-6-
<PAGE>
INTERNATIONAL COMFORT PRODUCTS CORPORATION
Notes to Consolidated Financial Statements
For the Three Months Ended March 31, 1998 and 1997 - UNAUDITED
(In Millions of Dollars) - Canadian GAAP
- ----------------------------------------------------------------------------
1. Reference should be made to the consolidated financial statements for
the year ended December 31, 1997 included in Form 10-K filed on March
31, 1998, for details of significant accounting policies. Certain
comparative figures have been reclassified to conform with current
financial statement presentation.
2. In the opinion of the Company, the accompanying unaudited consolidated
financial statements contain all adjustments (consisting of only
normal recurring accruals) necessary to present fairly the financial
position as of March 31, 1998 and 1997, the results of operations
and changes in financial position for the three months then ended.
The interim results are not necessarily indicative of the results to
be expected for the full year.
3. Details of inventories are as follows:
<TABLE>
<CAPTION>
March 31 December 31
---------------- ------------
1998 1997 1997
- ----------------------------------------------------------------------------
UNAUDITED
<S> <C> <C> <C>
Finished goods $ 87.2 $ 95.3 $ 58.8
Raw materials and work in process 15.9 11.4 13.4
Service parts 22.3 20.2 22.3
- ----------------------------------------------------------------------------
$ 125.4 $ 126.9 $ 94.5
============================================================================
</TABLE>
-7-
<PAGE>
INTERNATIONAL COMFORT PRODUCTS CORPORATION
Notes to Consolidated Financial Statements
For the Three Months Ended March 31, 1998 and 1997 - UNAUDITED
(In Millions of Dollars) - Canadian GAAP
- ----------------------------------------------------------------------------
4. Significant Differences Between Canadian and U.S. Accounting
Practices
Accounting principles adopted by the Company as reflected in
these consolidated financial statements are generally consistent
with accounting principles accepted in the United States ("U.S.
GAAP"). The following reconciliations reflect the approximate
differences in these accounting principles where applicable to
the Company. If accounting principles generally accepted in the
United States were followed, the effect on the consolidated
financial statements would be:
<TABLE>
<CAPTION>
Three Months Ended
March 31
--------------------
1998 1997
<S> <C> <C>
Net income (as reported) $ 3.5 $ 1.4
Accounting for income taxes (.2) (.2)
Post-retirement benefits (.7) (.5)
--------------------
Net income under U.S. GAAP $ 2.6 $ 0.7
====================
Weighted average number of
ordinary shares outstanding
during the period under
U.S. GAAP (millions)
Basic 39.9 39.4
Diluted 41.8 40.5
Net income per share under
U.S. GAAP (in dollars)
Basic $ 0.07 $ 0.02
Diluted $ 0.06 $ 0.02
</TABLE>
-8-
<PAGE>
INTERNATIONAL COMFORT PRODUCTS CORPORATION
Notes to Consolidated Financial Statements
For the Three Months Ended March 31, 1998 and 1997 - UNAUDITED
(In Millions of Dollars) - Canadian GAAP
- ----------------------------------------------------------------------------
4. Significant Differences Between Canadian and U.S. Accounting
Practices (Continued)
Consolidated Balance Sheets
<TABLE>
<CAPTION>
March 31 December 31
----------------- -------------
1998 1997 1997
----------------------------------------
<S> <C> <C> <C>
Total assets (as reported) $ 378.8 $ 368.6 $ 352.0
Items increasing reported total assets
Deferred income taxes 3.8 3.9 3.4
Post-retirement and pension benefits 4.7 4.1 3.9
---------------------------------------
Total assets - U.S. GAAP $ 387.3 $ 376.6 $ 359.3
=======================================
Shareholders' equity (as reported) $ 55.4 $ 31.1 $ 51.5
Items increasing (decreasing)
reported shareholders' equity
Deferred income taxes 3.8 3.9 3.4
Post-retirement and pension benefits (5.2) (5.5) (5.2)
---------------------------------------
Shareholders' equity - U.S. GAAP $ 54.0 $ 29.5 $ 49.7
=======================================
</TABLE>
-9-
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
- ----------------------------------------------------------------------------
FINANCIAL RESULTS
For the first quarter ended March 31, 1998, net income was $3.5 million or
nine cents per share, compared with $1.4 million or four cents per share for
the corresponding period in 1997.
Effective January 31, 1998, the Company acquired United Electric Company
("United Electric") located in Wichita Falls, Texas for proceeds of
approximately $25.6 million. United Electric is engaged principally in
the manufacture of components for commercial heating, ventilation and air
conditioning ("HVAC") systems. United Electric had 1997 sales of
approximately $25.0 million. The results of operations of United Electric
are included in the consolidated statement of income of the Company since
the date of acquisition.
The following table sets forth, for the first quarters presented, certain
information relating to the operations of the Company, expressed as a
percentage of net sales.
<TABLE>
<CAPTION>
1998 1997
-------------------------------------------------------------
<S> <C> <C>
Net sales 100.0% 100.0%
Cost of sales 78.5 79.6
Gross profit 21.5 20.4
Selling, general and administrative expenses 15.2 15.7
Operating profit 6.3 4.7
Financial expenses 3.7 3.7
Net income 2.6 1.0
-------------------------------------------------------------
</TABLE>
NET SALES
In the first quarter of 1998, net sales were $132.8 million compared to
$136.6 million for the corresponding quarter of 1997, a decrease of $3.8
million or 2.8%. In 1997, the Company sold its distribution outlets in
the U.S. southeast and midwest. Excluding sales from these divested
operations and the acquisition of United Electric in 1998, the Company's
net sales declined slightly to $128.6 million in 1998 compared to $129.7
million in 1997. The decrease in net sales from the Company's residential
HVAC products were partially offset by higher international, commercial
and Canadian revenues.
GROSS PROFIT
For the three months ended March 31, 1998, gross profit was $28.5 million
or 21.5% of net sales, compared with $27.9 million or 20.4% in the same
period of 1997. The increase in gross profit percentage was primarily
due to continuous cost savings and manufacturing efficiencies achieved at
the Lewisburg, Tennessee manufacturing facility.
-10-
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
- ----------------------------------------------------------------------------
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative ("SG&A") expenses amounted to $20.2
million in 1998 or 15.2% of net sales, compared with $21.5 million or 15.7%
for the first quarter of 1997. The decline in SG&A expenses reflects the
divestiture of Company-owned distribution outlets sold in 1997, partially
offset by the expansion of the Company's international and Canadian
distribution businesses.
OPERATING PROFIT
Operating profit was $8.3 million or 6.3% of net sales for the three months
ended March 31, 1998, compared with $6.4 million or 4.7% in the corresponding
period in 1997. EBITDA (earnings before interest, taxes, depreciation and
amortization) was $12.4 million for the first quarter of 1998 compared with
$10.3 million in the three month period in 1997.
INCOME TAXES
The Company is currently not recording income taxes as a result of
accumulated tax losses from prior years.
NET INCOME
For the first quarter ended March 31, 1998, net income was $3.5 million
or 9 cents per share, compared with $1.4 million or 4 cents per share,
in the first quarter in 1997.
LIQUIDITY AND CAPITAL RESOURCES
For the three months ended March 31, 1998, free cash flow (cash from
operations adjusted for cash received from or utilized in investing
activities) was negative $39.0 million compared to negative $28.6
million for the same period in 1997, a reduction of $10.4 million. In
1998, investing activities included the acquisition of United Electric
of $25.6 million, whereas in the corresponding period in 1997, investing
activities included the proceeds from sale of Coastline Distribution Inc.
and four factory branches totaling $23.1 million. Excluding the
acquisition and divestiture, free cash flow is $38.3 million higher in
1998 compared to 1997. As of March 31, 1998, working capital was $117.1
million compared to $112.9 million a year earlier.
-11-
<PAGE>
PART II- OTHER INFORMATION.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) In accordance with the provisions of Item 601 of Regulation
S-K, the following have been furnished as Exhibits to this Quarterly
Report on Form 10-Q:
Exhibit No. Description
----------- ------------
3(i), 4.1 Articles of Incorporation of International Comfort
Products Corporation filed as Exhibit 3(i)/4.1 to
the Company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1997 filed with the
Commission on November 14, 1997, and incorporated herein
by this reference.
3(ii), 4.2 Bylaws of International Comfort Products Corporation
filed as Exhibit 1.2 to the Company's Annual Report on
Form 20-F for the year ended December 31, 1993 filed
with the Commission on June 29, 1994, and incorporated
herein by this reference.
4.3 Indenture dated as of March 1, 1993 between International
Comfort Products Corporation (USA) (f/k/a Inter-City
Products Corporation (USA)) ("ICP-USA") and United States
Trust Company of New York, as trustee (and correlative form
of Certificate, form of Mortgage, form of Pledge and
Security Agreement and form of Intellectual Property
Security Agreement) relating to ICP-USA's 9 3/4% Senior
Secured Notes due 2000, filed as Exhibit 4.1 to Amendment
No. 3 to ICP-USA's Registration Statement on Form S-1
filed with the Commission on March 2, 1993, and
incorporated herein by this reference.
4.4 Master Trust Pooling and Service Agreement, dated as of
July 25, 1996 among Inter-City Products Receivables
Company, L.P.("ICP-Receivables"), ICP-USA and LaSalle
National Bank, as Trustee filed as Exhibit 4.4 to the
Company's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1997 filed with the Commission on
November 14, 1997, and incorporated herein by this
reference.
4.5 Series 1996-1 Supplement to Master Trust Pooling and
Service Agreement, dated as of July 25, 1996 among
ICP-Receivables, ICP-USA and LaSalle National Bank, as
Trustee (and correlative form of Class A (Series 1996-1)
Certificate and form of Class B (Series 1996-1)
Certificate, and form of Guaranty from ICP-USA filed as
Exhibit 4.5 to the Company's Quarterly Report on Form
10-Q for the quarter ended September 30, 1997 filed
with the Commission on November 14, 1997, and incorporated
herein by this reference.
-12-
<PAGE>
4.6 Receivables Purchase Agreement dated as of July 25, 1996
among ICP-USA, Inter-City Products Partner Corporation
("ICP-Partner") and ICP-Receivables filed as Exhibit 4.6
to the Company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1997 filed with the Commission
on November 14, 1997, and incorporated herein by this
reference.
4.7 Certificate Purchase Agreement (Series 1996-1, Class A)
dated as of July 25, 1996 among ICP-Receivables, ICP-USA,
the Purchasers named therein and The Chicago Corporation,
as Agent filed as Exhibit 4.7 to the Company's Quarterly
Report on Form 10-Q for the quarter ended September 30,
1997 filed with the Commission on November 14, 1997, and
incorporated herein by this reference.
4.8 Certificate Purchase Agreement (Series 1996-1, Class B)
dated as of July 25, 1996 among ICP-Receivables, ICP-USA
and Argos Funding Corp. filed as Exhibit 4.8 to the
Company's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1997 filed with the Commission on
November 14, 1997, and incorporated herein by this
reference.
4.9 First Amendment to Certificate Purchase Agreement (Series
1996-1, Class A) dated as of December 1, 1996 among
ICP-Receivables, ICP-USA, the Purchasers named therein
and The Chicago Corporation, as Agent filed as Exhibit 4.9
to the Company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1997 filed with the Commission
on November 14, 1997, and incorporated herein by this
reference.
4.10 First Amendment to Receivables Purchase Agreement and
Second Amendment to Certificate Purchase Agreement (Series
1996-1, Class A) dated as of January 27, 1997 among
ICP-USA, ICP-Partner, General Heating and Cooling Company,
Coastline Distribution, Inc., ICP-Receivables, Anagram
Funding Corp. and ABN AMRO Chicago Corporation filed as
Exhibit 4.10 to the Company's Quarterly Report on Form
10-Q for the quarter ended September 30, 1997 filed with
the Commission on November 14, 1997, and incorporated
herein by this reference.
4.11 Second Amendment to Receivables Purchase Agreement as of
September 30, 1997 among ICP-USA, ICP-Partner, General
Heating and Cooling Company, ICP-Receivables, Anagram
Funding Corp. and ABN AMRO Chicago Corporation filed as
Exhibit 4.11 to the Company's Quarterly Report on Form
10-Q for the quarter ended September 30, 1997 filed with
the Commission on November 14, 1997, and incorporated
herein by this reference.
-13-
<PAGE>
27 Financial Data Schedule.
99.1 Unaudited interim consolidated financial statements
of ICP-USA for the three months ended March 31, 1998
and 1997.
(b) During the quarter ended March 31, 1998, there were no
Current Reports on Form 8-K filed by the Company.
-14-
<PAGE>
SIGNATURE
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 both on
behalf of the registrant and in his capacity as principal financial
officer of the registrant.
Date: May 11, 1998 INTERNATIONAL COMFORT PRODUCTS CORPORATION
By:/s/ S. Clanton
---------------------------
Stephen L. Clanton
Senior Vice President
and Chief Financial Officer
(Principal Financial and
Chief Accounting Officer)
-15-
<PAGE>
EXHIBIT INDEX
Sequential
Exhibit No. Description Page Number
- ---------- ---------------------------------- -----------
3(i), 4.1 Articles of Incorporation of International Comfort
Products Corporation filed as Exhibit 3(i)/4.1 to
the Company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1997 filed with the
Commission on November 14, 1997, and incorporated herein
by this reference
3(ii), 4.2 Bylaws of International Comfort Products Corporation
filed as Exhibit 1.2 to the Company's Annual Report on
Form 20-F for the year ended December 31, 1993 filed
with the Commission on June 29, 1994, and incorporated
herein by this reference
4.3 Indenture dated as of March 1, 1993 between International
Comfort Products Corporation (USA) (f/k/a Inter-City
Products Corporation (USA)) ("ICP-USA") and United States
Trust Company of New York, as trustee (and correlative form
of Certificate, form of Mortgage, form of Pledge and
Security Agreement and form of Intellectual Property
Security Agreement) relating to ICP-USA's 9 3/4% Senior
Secured Notes due 2000, filed as Exhibit 4.1 to Amendment
No. 3 to ICP-USA's Registration Statement on Form S-1
filed with the Commission on March 2, 1993, and
incorporated herein by this reference
4.4 Master Trust Pooling and Service Agreement, dated as of
July 25, 1996 among Inter-City Products Receivables
Company, L.P.("ICP-Receivables"), ICP-USA and LaSalle
National Bank, as Trustee filed as Exhibit 4.4 to the
Company's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1997 filed with the Commission on
November 14, 1997, and incorporated herein by this
reference
4.5 Series 1996-1 Supplement to Master Trust Pooling and
Service Agreement, dated as of July 25, 1996 among
ICP-Receivables, ICP-USA and LaSalle National Bank, as
Trustee (and correlative form of Class A (Series 1996-1)
Certificate and form of Class B (Series 1996-1)
Certificate, and form of Guaranty from ICP-USA filed as
Exhibit 4.5 to the Company's Quarterly Report on Form
10-Q for the quarter ended September 30, 1997 filed
with the Commission on November 14, 1997, and incorporated
herein by this reference
4.6 Receivables Purchase Agreement dated as of July 25, 1996
among ICP-USA, Inter-City Products Partner Corporation
("ICP-Partner") and ICP-Receivables filed as Exhibit 4.6
to the Company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1997 filed with the Commission
on November 14, 1997, and incorporated herein by this
reference
<PAGE>
Sequential
Exhibit No. Description Page Number
- ---------- ---------------------------------- -----------
4.7 Certificate Purchase Agreement (Series 1996-1, Class A)
dated as of July 25, 1996 among ICP-Receivables, ICP-USA,
the Purchasers named therein and The Chicago Corporation,
as Agent filed as Exhibit 4.7 to the Company's Quarterly
Report on Form 10-Q for the quarter ended September 30,
1997 filed with the Commission on November 14, 1997, and
incorporated herein by this reference
4.8 Certificate Purchase Agreement (Series 1996-1, Class B)
dated as of July 25, 1996 among ICP-Receivables, ICP-USA
and Argos Funding Corp. filed as Exhibit 4.8 to the
Company's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1997 filed with the Commission on
November 14, 1997, and incorporated herein by this
reference
4.9 First Amendment to Certificate Purchase Agreement (Series
1996-1, Class A) dated as of December 1, 1996 among
ICP-Receivables, ICP-USA, the Purchasers named therein
and The Chicago Corporation, as Agent filed as Exhibit 4.9
to the Company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1997 filed with the Commission
on November 14, 1997, and incorporated herein by this
reference
4.10 First Amendment to Receivables Purchase Agreement and
Second Amendment to Certificate Purchase Agreement (Series
1996-1, Class A) dated as of January 27, 1997 among
ICP-USA, ICP-Partner, General Heating and Cooling Company,
Coastline Distribution, Inc., ICP-Receivables, Anagram
Funding Corp. and ABN AMRO Chicago Corporation filed as
Exhibit 4.10 to the Company's Quarterly Report on Form
10-Q for the quarter ended September 30, 1997 filed with
the Commission on November 14, 1997, and incorporated
herein by this reference
4.11 Second Amendment to Receivables Purchase Agreement as of
September 30, 1997 among ICP-USA, ICP-Partner, General
Heating and Cooling Company, ICP-Receivables, Anagram
Funding Corp. and ABN AMRO Chicago Corporation filed as
Exhibit 4.11 to the Company's Quarterly Report on Form
10-Q for the quarter ended September 30, 1997 filed with
the Commission on November 14, 1997, and incorporated
herein by this reference
27 Financial Data Schedule
99.1 Unaudited interim consolidated financial statements
of ICP-USA for the three months ended March 31, 1998
and 1997
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND> THIS SCHEDULE CONTAINS
SUMMARY FINANCIAL INFORMATION
EXTRACTED FROM THE FINANCIAL
STATEMENTS OF INTERNATIONAL
COMFORT PRODUCTS CORPORATION
FOR THE PERIOD ENDED MARCH 31,
1998 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS
</LEGEND>
<MULTIPLIER> 1,000
<PERIOD-START> JAN-01-1998
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 10,100
<SECURITIES> 0
<RECEIVABLES> 102,300
<ALLOWANCES> 0
<INVENTORY> 125,400
<CURRENT-ASSETS> 243,400
<PP&E> 222,600
<DEPRECIATION> 124,500
<TOTAL-ASSETS> 378,800
<CURRENT-LIABILITIES> 126,300
<BONDS> 165,600
<COMMON> 171,500
0
0
<OTHER-SE> (113,000)
<TOTAL-LIABILITY-AND-EQUITY> 378,800
<SALES> 0
<TOTAL-REVENUES> 132,800
<CGS> 104,300
<TOTAL-COSTS> 20,200
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,500
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 3,500
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,500
<EPS-PRIMARY> 0.09
<EPS-DILUTED> 0
</TABLE>
<PAGE>
INTERNATIONAL COMFORT PRODUCTS CORPORATION (USA)
- ------------------------------------------------------------------------
CONSOLIDATED FINANCIAL STATEMENTS
(In Millions of U.S. Dollars) - U.S. GAAP
(Unaudited)
Page
----
Consolidated Statements of Income - Three Months Ended
March 31, 1997 and 1998 2
Consolidated Balance Sheets - March 31, 1997 and 1998
and December 31, 1997 3 - 4
Consolidated Statements of Cash Flows - Three Months Ended
March 31, 1997 and 1998 5
<PAGE>
INTERNATIONAL COMFORT PRODUCTS CORPORATION (USA)
Consolidated Statements of Income
For the Three Months Ended March 31, 1997 and 1998 - UNAUDITED
(In Millions of U.S. Dollars) - U.S. GAAP
- ----------------------------------------------------------------------------
<TABLE>
<CAPTION>
1997 1998
- ----------------------------------------------------------------------------
<S> <C> <C>
Net Sales $ 126.1 $ 123.4
Cost of Sales 100.4 98.2
- ----------------------------------------------------------------------------
Gross Profit 25.7 25.2
Selling, General and Administrative Expenses 19.3 16.9
- ----------------------------------------------------------------------------
Operating Profit 6.4 8.3
- ----------------------------------------------------------------------------
Financial Expenses
Interest expense 4.1 3.9
Amortization of debt issuance costs .3 .3
- ----------------------------------------------------------------------------
4.4 4.2
- ----------------------------------------------------------------------------
Net Income $ 2.0 $ 4.1
============================================================================
</TABLE>
-2-
<PAGE>
INTERNATIONAL COMFORT PRODUCTS CORPORATION (USA)
Consolidated Balance Sheets
(In Millions of U.S. Dollars) - U.S. GAAP
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
March 31 December 31
------------------ ------------
1998 1997 1997
- ---------------------------------------------------------------------------
UNAUDITED
<S> <C> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $ 4.3 $ 3.3 $ 24.6
Accounts receivable 98.6 103.3 97.1
Note receivable - - 7.7
Inventories 101.0 99.3 69.9
Prepaid expenses and other 9.5 4.2 4.6
- -----------------------------------------------------------------------------
213.4 210.1 203.9
- -----------------------------------------------------------------------------
Fixed Assets
Property, plant and equipment 198.8 207.9 199.9
Accumulated depreciation and
amortization 104.7 113.0 109.3
- -----------------------------------------------------------------------------
94.1 94.9 90.6
- -----------------------------------------------------------------------------
Intangible and Other Assets, Net 18.2 33.4 17.3
- -----------------------------------------------------------------------------
$ 325.7 $ 338.4 $ 311.8
=============================================================================
</TABLE>
-3-
<PAGE>
INTERNATIONAL COMFORT PRODUCTS CORPORATION (USA)
Consolidated Balance Sheets
(In Millions of U.S. Dollars) - U.S. GAAP
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
March 31 December 31
------------------ ------------
1997 1998 1997
- ---------------------------------------------------------------------------
UNAUDITED
<S> <C> <C> <C>
LIABILITIES
Current Liabilities
Checks outstanding in excess
of bank balance $ 13.2 $ 7.8 $ 6.9
Short-term borrowings 48.0 25.7 10.8
Accounts payable 31.2 44.1 37.7
Accrued liabilities 22.6 23.7 21.4
Product warranty 7.8 8.6 8.6
- -----------------------------------------------------------------------------
122.8 109.9 85.4
Long-Term Debt 140.0 140.0 140.0
Product Warranty 15.9 13.5 15.0
Deferred Income 1.9 2.3 2.2
Environmental Liability 2.8 2.1 2.7
Accrued Retiree Medical 4.9 8.1 8.1
- -----------------------------------------------------------------------------
288.3 275.9 253.4
- -----------------------------------------------------------------------------
STOCKHOLDER'S EQUITY
Capital stock 13.0 13.0 13.0
Additional paid-in capital 99.7 99.7 99.7
Deficit (61.3) (36.2) (40.3)
Advances to parent (14.0) (14.0) (14.0)
- -----------------------------------------------------------------------------
37.4 62.5 58.4
- -----------------------------------------------------------------------------
$ 325.7 $ 338.4 $ 311.8
=============================================================================
</TABLE>
-4-
<PAGE>
INTERNATIONAL COMFORT PRODUCTS CORPORATION (USA)
Consolidated Statements of Cash Flows
For the Three Months Ended March 31, 1997 and 1998 - UNAUDITED
(In Millions of U.S. Dollars) - U.S. GAAP
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1997 1998
- -----------------------------------------------------------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 2.0 $ 4.1
Adjustments to reconcile net income to
net cash used in operating activities
Depreciation and amortization 4.4 4.4
Changes in operating assets and liabilities:
Accounts receivable (31.1) 4.9
Inventories (27.0) (25.3)
Accounts payable, accrued liabilities,
and product warranty (2.0) 3.6
Other (5.7) (.3)
- -----------------------------------------------------------------------------
(59.4) (8.6)
- -----------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant and equipment ( .4) (2.9)
Acquisition of United Electric Company - (25.6)
Sale of Coastline and factory branches 23.1 -
- -----------------------------------------------------------------------------
22.7 (28.5)
- -----------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds on short-term
borrowings 21.0 14.9
Checks outstanding in excess of bank
balance 8.1 .9
- -----------------------------------------------------------------------------
29.1 15.8
- -----------------------------------------------------------------------------
Net Decrease in Cash and Cash Equivalents (7.6) (21.3)
Cash and Cash Equivalents -
Beginning of the period 11.9 24.6
- -----------------------------------------------------------------------------
Cash and Cash Equivalents -
End of the period $ 4.3 $ 3.3
=============================================================================
</TABLE>
-5-
