<PAGE>
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1998
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the Transition period from to
COMMISSION FILE NO. 333-43523
ELGIN NATIONAL INDUSTRIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 36-3908410
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
2001 BUTTERFIELD ROAD, SUITE 1020, DOWNERS GROVE, ILLINOIS 60515-1050
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
TELEPHONE NUMBER: 630-434-7243
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
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. [X] Yes [_] No
As of July 31, 1998, there were outstanding 6,408.3 shares of Class A Common
Stock and 19,951.7 shares of Preferred Stock.
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ELGIN NATIONAL INDUSTRIES, INC.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PART I--FINANCIAL INFORMATION
ITEM 1--Financial Statements
Consolidated Balance Sheets as of June 30, 1998 and December 31, 1997.. 3
Consolidated Statements of Income for the Six Months Ended June 30,
1998 and June 30, 1997, and for the Three Months Ended June 30, 1998
and June 30, 1997..................................................... 4
Consolidated Statements of Changes in Stockholder's Deficit for the Six
Months Ended June 30, 1998............................................ 5
Condensed Consolidated Statements of Cash Flows for the Six Months
Ended June 30, 1998 and June 30, 1997................................. 6
Notes to Condensed Consolidated Financial Statements................... 7
ITEM 2--Management's Discussion and Analysis of Financial Condition and
Results of Operations................................................... 8
ITEM 3--Quantitative and Qualitative Disclosures about Market Risk....... 10
PART II--OTHER INFORMATION
ITEM 1--Legal Proceedings................................................ 11
ITEM 6--Exhibits and Reports on Form 8-K................................. 11
SIGNATURES................................................................. 12
EXHIBIT INDEX.............................................................. 13
EXHIBIT 27................................................................. 14
</TABLE>
2
<PAGE>
PART I
ITEM 1. FINANCIAL STATEMENTS
ELGIN NATIONAL INDUSTRIES, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS EXCEPT SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1998 1997
-------- ------------
ASSETS
------
<S> <C> <C>
Current assets:
Cash and cash equivalents............................. $ 10,712 $ 9,337
Accounts receivable, net.............................. 29,573 27,355
Inventories, net...................................... 14,204 13,497
Prepaid expenses and other assets..................... 2,261 1,728
Deferred income tax................................... 1,102 1,596
-------- --------
Total current assets................................ 57,852 53,513
Property, plant and equipment, net...................... 13,753 13,582
Other assets............................................ 23,743 23,334
Goodwill and intangibles................................ 11,479 12,450
-------- --------
Total assets........................................ $106,827 $102,879
======== ========
<CAPTION>
LIABILITIES AND STOCKHOLDER'S DEFICIT
-------------------------------------
<S> <C> <C>
Current liabilities:
Current portion of long-term debt..................... $ 320 $ 311
Accounts payable & accrued expenses................... 33,247 29,967
-------- --------
Total current liabilities........................... 33,567 30,278
Long-term debt less current portion..................... 85,277 85,440
Other liabilities....................................... 1,482 1,410
Deferred income tax..................................... 4,059 4,385
-------- --------
Total liabilities................................... 124,385 121,513
-------- --------
Redeemable preferred stock units........................ 10,740 10,379
-------- --------
Redeemable preferred stock.............................. 2,946 2,847
-------- --------
Stockholder's deficit:
Common stock, (Class A) (par value $.01 per share;
authorized 23,678 shares; 6,408 issued and
outstanding)
Retained deficit...................................... (31,244) (31,860)
-------- --------
Total stockholder's deficit......................... (31,244) (31,860)
-------- --------
Total liabilities and stockholder's deficit......... $106,827 $102,879
======== ========
</TABLE>
The accompanying notes are an integral part of the condensed consolidated
financial statements
3
<PAGE>
ELGIN NATIONAL INDUSTRIES, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE SIX MONTHS FOR THE THREE MONTHS
ENDED JUNE 30, ENDED JUNE 30,
------------------- ---------------------
1998 1997 1998 1997
--------- --------- ---------- ----------
<S> <C> <C> <C> <C>
Sales, net........................... $ 76,434 $ 71,157 $ 42,542 $ 36,264
Cost of sales........................ 58,658 53,013 33,412 26,509
--------- --------- ---------- ----------
Gross profit....................... 17,776 18,144 9,130 9,755
Selling, general and administrative
expenses............................ 10,957 10,644 5,450 5,413
Amortization expense................. 1,362 1,557 680 790
--------- --------- ---------- ----------
Operating income................... 5,457 5,943 3,000 3,552
Other expenses.......................
Interest expense, net.............. 4,040 1,176 1,914 574
--------- --------- ---------- ----------
Income before income taxes........... 1,417 4,767 1,086 2,978
Provision for income taxes........... 528 2,059 412 1,255
--------- --------- ---------- ----------
Net income........................... $ 889 $ 2,708 $ 674 $ 1,723
========= ========= ========== ==========
</TABLE>
The accompanying notes are an integral part of the condensed consolidated
financial statements
4
<PAGE>
ELGIN NATIONAL INDUSTRIES, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER'S DEFICIT
FOR THE SIX MONTHS ENDED JUNE 30, 1998
(IN THOUSANDS EXCEPT SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
TOTAL
COMMON RETAINED SHAREHOLDER'S
STOCK (DEFICIT) DEFICIT
------- --------- -------------
<S> <C> <C> <C>
Balance as of December 31, 1997................. $ $(31,860) $(31,860)
Net income for the six months ended June 30,
1998......................................... 889 889
Redeemable preferred stock unit dividends, net
of tax....................................... (174) (174)
Redeemable preferred stock dividends ($4.96
per share)................................... (99) (99)
------- -------- --------
Balance as of June 30, 1998..................... $ $(31,244) $(31,244)
======= ======== ========
</TABLE>
The accompanying notes are an integral part of the condensed consolidated
financial statements
5
<PAGE>
ELGIN NATIONAL INDUSTRIES, INC. AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED JUNE 30,
----------------
1998 1997
------- -------
<S> <C> <C>
Net cash provided (used) by operating activities............. $ 2,918 $(3,012)
Cash flows from investing activities:
Purchase of property, plant and equipment.................. (1,389) (336)
------- -------
Net cash used by investing activities...................... (1,389) (336)
Cash flows from financing activities:
Repayments of long-term debt............................... (154) (6,145)
------- -------
Net cash used by financing activities...................... (154) (6,145)
Net increase (decrease) in cash.............................. 1,375 (9,493)
Cash and cash equivalents at beginning of period............. 9,337 10,991
------- -------
Cash and cash equivalents at end of period................... $10,712 $ 1,498
======= =======
</TABLE>
The accompanying notes are an integral part of the condensed consolidated
financial statements
6
<PAGE>
ELGIN NATIONAL INDUSTRIES, INC. AND SUBSIDIARY COMPANIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. ADOPTION OF ACCOUNTING PRINCIPLES
Elgin National Industries, Inc. ("the Company" or "Elgin") has implemented
the provisions of Statement of Accounting Standard No. 130, "Reporting
Comprehensive Income" (SFAS No. 130), which is effective for interim and
annual financial statements issued for periods beginning after December 15,
1997. SFAS No. 130 establishes standards for reporting and display of
comprehensive income and its components in a full set of general purpose
financial statements. The Company does not have any components of other
comprehensive income as outlined in SFAS No. 130 and has therefore not changed
its financial reporting format.
The Company will implement the provisions of Statement of Accounting
Standards No. 132, "Employers' Disclosures about Pensions and Other
Postretirement Benefits" (SFAS No. 132), which will be effective for fiscal
years beginning after December 15, 1997. SFAS No. 132 standardizes the
disclosure requirements for pensions and other postretirement benefits,
requires additional information on changes in the benefit obligation and fair
values of plan assets and eliminates certain disclosures that are no longer
useful. Management believes the adoption of SFAS No. 132 is solely a reporting
requirement and therefore will not have an effect on the Company's financial
position or results of operations.
The Company will implement the provisions of Statement of Accounting
Standards No. 133, "Accounting for Derivative Instruments and Hedging
Activities" (SFAS No. 133), which will be effective for fiscal years beginning
after June 15, 1999. SFAS No. 133 requires all derivatives to be recognized in
the statement of financial position as either assets or liabilities and
measured at fair value. In addition, all hedging relationships must be
designated, reassessed and documented pursuant to the provisions of SFAS No.
133. Management believes the adoption of SFAS No. 133 will not have a material
effect on the Company.
2. INVENTORIES
Inventories consist of:
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1998 1997
-------- ------------
(IN THOUSANDS)
<S> <C> <C>
Finished goods...................................... $ 8,491 $ 8,073
Work-in-process..................................... 1,529 1,524
Raw materials....................................... 6,087 5,501
-------- -------
16,107 15,098
Less excess and obsolete reserve.................... 1,903 1,601
-------- -------
$ 14,204 $13,497
======== =======
</TABLE>
3. CONTINGENCIES
The Company has claims against others, and there are claims by others
against it, in a variety of matters arising out of the conduct of the
Company's business. The ultimate resolution of all such claims would not, in
the opinion of management, have a material effect on the Company's financial
position, cash flows or results of operations.
4. REPORT PREPARATION
The accompanying consolidated financial statements, which have not been
audited by independent certified public accountants, were prepared in
conformity with generally accepted accounting principles and such principles
were applied on a basis consistent with the preparation of the audited
consolidated financial statements
7
<PAGE>
included in the Company's December 31, 1997 10-K filed with the Securities and
Exchange Commission. The financial information furnished includes all normal
recurring accrual adjustments which are, in the opinion of Management,
necessary for a fair statement of results for the interim period. Results for
the first six months of 1998 are not necessarily indicative of the results to
be expected for the full year.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Three Months Ended June 30, 1998 Compared to Three Months Ended June 30, 1997
Net Sales: Net sales for the quarter ended June 30, 1998 increased $6.2
million, or 17.3%, to $42.5 million from $36.3 million for the corresponding
period in 1997 primarily due to the timing and size of engineering services
projects in process. For the three months ended June 30, 1997 the Company had
four larger projects with sales in excess of $1.0 million, totalling $8.2
million in sales, compared to four such projects totalling $12.9 million in
sales for the three months ended June 30, 1998.
Gross Profit: Gross profit for the quarter ended June 30, 1998 decreased
$0.7 million, or 6.4%, to $9.1 million from $9.8 million for the corresponding
period in 1997. As a percentage of net sales, the gross profit decreased to
21.5% for the quarter ended June 30, 1998 from 26.9% for the corresponding
period in 1997. The decrease was primarily due to a higher percentage of sales
related to larger projects involving procurement and construction management
service. Such larger projects typically earn a lower profit margin than
smaller engineering services projects, including engineering only projects.
Selling, General and Administrative Expenses: Selling, general and
administrative expenses of the Company for the quarter ended June 30, 1998 of
$5.4 million approximated the selling and administrative expenses for the
corresponding period in 1997. As a percentage of net sales, selling, general
and administrative expenses decreased from 14.9% for the quarter ended June
30, 1997 to 12.8% for the quarter ended June 30, 1998 due primarily to
increased sales.
Amortization Expense: Amortization expense of the Company for the quarter
ended June 30, 1998 decreased $0.1 million or 13.9%, to $0.7 million from $0.8
million for the corresponding period in 1997. The decrease was attributable to
decreased amortization expense related to acquisition and finance costs.
Interest Expense, Net: Net interest expense of the Company for the quarter
ended June 30, 1998 equaled $1.9 million and represented a $1.3 million, or
233.4% increase from the prior year's corresponding quarter of $0.6 million.
The increased net interest expense was due to the issuance of the $85.0
million of 11.0% Senior Notes in November, 1997. The increased net interest
expense was partially offset by a reduction in the interest rate due to the
repayment of $20.0 million of senior subordinated notes in November, 1997, as
well as by debt reduction from March, 1997 through November, 1997 of an
aggregate $5.5 million. Net interest expense was further reduced through an
increase in interest income resulting from a higher balance of interest
bearing deposits.
Provision for Income Taxes: Provision for income taxes of the Company for
the quarter ended June 30, 1998 decreased $0.9 million, or 67.2% to $0.4
million from $1.3 million for the corresponding period ended June 30, 1997.
The decrease in the provision for income taxes was due primarily to lower
earnings before income taxes.
Net Income: The net income for the Company for the three months ended June
30, 1998 decreased $1.0 million, or 60.9%, to $0.7 million from $1.7 million
for the quarter ended June 30, 1997 for the reasons discussed above. Net
income as a percentage of net sales decreased to 1.6% for the quarter ended
June 30, 1998 from 4.8% for the corresponding quarter in 1997.
8
<PAGE>
Six Months Ended June 30, 1998 Compared to Six Months Ended June 30, 1997
Net Sales: Net sales for the six months ended June 30, 1998 increased $5.2
million, or 7.4% to $76.4 million from $71.2 million for the corresponding
period in 1997 primarily due to the timing and size of engineering services
projects in process. For the six months ended June 30, 1998 the Company had
six projects with sales in excess of $1.0 million, totalling $23.0 million in
sales, compared to nine such projects totalling $21.9 million in sales for the
six months ended June 30, 1997. For the six months ended June 30, 1998, there
were also six engineering services projects in process with sales between
$500,000 and $1.0 million totalling $4.2 million. For the same period during
1997, there were three such projects totalling $1.7 million in process.
Gross Profit: Gross profit for the six months ended June 30, 1998 decreased
$0.3 million, or 2.0%, to $17.8 million from $18.1 million for the
corresponding period in 1997. As a percentage of net sales, the gross profit
decreased to 23.3% for the six months ended June 30, 1998 from 25.5% for the
corresponding period in 1997. The decrease was primarily due to a higher
percentage of sales related to larger projects involving procurement and
construction management service, which typically earn a lower profit margin
relative to smaller engineering services projects, including engineering only
projects.
Selling, General and Administrative Expenses: Selling, general and
administrative expenses of the Company for the six months ended June 30, 1998
of $11.0 million represented an increase of $0.3 million or 2.9%, from $10.7
million for the corresponding period in 1997. Selling, general and
administrative expenses as a percentage of net sales decreased from 15.0% for
the six months ended June 30, 1997 to 14.3% for the corresponding period in
1998 due primarily to increased sales.
Amortization Expense: Amortization expense of the Company for the six months
ended June 30, 1998 decreased $0.2 million or 12.5%, to $1.4 million from $1.6
million for the corresponding period in 1997. The decrease was attributable to
lower amortization expense related to acquisition and finance costs.
Interest Expense, Net: Net interest expense of the Company for the six
months ended June 30, 1998 equaled $4.0 million and represented a 243.5%
increase from the prior year's corresponding six months of $1.2 million. The
increased net interest expense was due to the issuance of the $85.0 million of
11.0% Senior Notes in November, 1997. The increased net interest expense was
partially offset by a reduction in the interest rate due to the repayment of
$20.0 million of senior subordinated notes in November, 1997, as well as by
debt reduction from March, 1997 through November, 1997 of an aggregate $5.5
million. Net interest expense was further reduced through an increase in
interest income resulting from a higher balance of interest bearing deposits.
Provision for Income Taxes: Provision for income taxes of the Company for
the six months ended June 30, 1998 decreased $1.6 million, or 74.4% to $0.5
million from $2.1 million for the corresponding period in 1997. The decrease
in the provision for income taxes was due primarily to lower earnings before
income taxes.
Net Income: The net income for the Company for the six months ended June 30,
1998 decreased $1.8 million, or 67.2%, to $0.9 million from $2.7 million for
the six months ended June 30, 1997 for the reasons discussed above. Net income
as a percentage of net sales decreased to 1.2% for the six months ended June
30, 1998 from 3.8% for the corresponding six month period in 1997.
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities for the six months ended June 30,
1998 of $2.9 million was generated from increased accounts payables, and cash
generated from net income and non-cash charges, partially offset by cash used
to increase net inventories, accounts receivable and other assets. The Company
used $3.0 million in cash in operating activities for the six months ended
June 30, 1997 to increase accounts receivables, net inventories and other
assets, and to decrease accounts payable. Those cash expenditures were
partially offset by cash generated from net income and non-cash charges. Cash
flows from operations for any specific period are often materially affected by
the timing and amounts of cash receipts and cash disbursements related to
engineering services projects.
9
<PAGE>
Cash used in investing activities for the six months ended June 30, 1998 of
$1.4 million compared to $0.3 million for the six months ended June 30, 1997.
For the six months ended June 30, 1998 and June 30, 1997, the Company used
$0.4 million and $0.3 million, respectively, for capital expenditures
resulting from the Company's regular practice of upgrading and maintaining its
equipment base and facilities. The Company has identified certain of its
operations where production cost reductions or sales increases can be achieved
through the purchase of new facilities, expansion of existing facilities and
equipment modernization. The cost of these special facility projects is
expected to exceed the cost of the Company's regular practice of upgrading and
maintaining its equipment base and facilities by approximately $2.5 million,
of which $1.0 million was completed within the first six months of 1998. The
remainder is expected to be completed over the remainder of the year.
Cash used in financing activities for the six months ended June 30, 1998
totalled $0.2 million, and was attributable to the scheduled repayment of
notes payable. Cash used in financing activities for the six months ended June
30, 1997 totalled $6.1 million and resulted primarily from repayments made on
the Company's term loan and note payable.
The Company's liquidity requirements, both long term (over one year) and
short term, are for working capital, capital expenditures and debt service.
The primary source for meeting these needs has been funds provided by
operations. Based on current and planned operations, the Company believes that
funds provided from operations, along with cash on hand, will be adequate to
meet its anticipated debt service requirements, working capital needs and
capital expenditures. The Company has a credit facility to provide a $20.0
million revolving line of credit, subject to borrowing base limitations. The
term of this facility expires in November, 2000. At June 30, 1998, there were
no borrowings under the Senior Credit Facility (excluding $5.1 million in
outstanding letters of credit). Another use for the Company's liquidity is the
acquisition of a business or product line through a strategic acquisition. As
part of its overall business strategy the Company regularly evaluates
potential acquisition candidates.
BACKLOG
The Company's backlog consists primarily of that portion of engineering
services contracts that have been awarded but not performed and also includes
open manufacturing orders. Backlog at June 30, 1998 had decreased $25.5
million, or 29.5%, to $60.8 million from $86.3 million at December 31, 1997. A
substantial majority of current backlog is expected to be realized in the next
twelve months.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company continues to use its reputation in the United States to expand
into international markets. In the six months ended June 30, 1998
approximately 25% of the Company's net sales were attributable to services
provided or products sold for use outside the United States, primarily from
Venezuela and Trinidad. A portion of these net sales and cost of sales is
derived from international operations which are conducted in foreign
currencies. Changes in the value of these foreign currencies relative to the
U.S. dollar could adversely affect the Company's business, financial
condition, results of operation and debt service capability. The majority of
the Company's foreign sales and costs are denominated in U.S. dollars. With
respect to transactions denominated in foreign currencies, the Company
attempts to mitigate foreign exchange risk by contractually shifting the
burden of the risk of currency fluctuations to the other party to the
transactions. It has been the Company's historic practice to conduct
international sales in accordance with the foregoing. There can be no
assurance that the Company's strategies will ensure that the Company will be
fully protected from foreign exchange risk. Foreign sales, particularly
construction management projects undertaken at foreign locations, are subject
to various risks, including exposure to currency fluctuations, political,
religious and economic instability, local labor market conditions, the
imposition of foreign tariffs and other trade barriers, and changes in
governmental policies. There can be no assurance that the Company's foreign
operations, or expansion thereof, would not have a material adverse effect on
the Company's business, financial condition, results of operations and debt
service capability.
10
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PART II
ITEM 1. LEGAL PROCEEDINGS
The Company and its subsidiaries are involved in legal proceedings from time
to time in the ordinary course of its business. As of the date of this filing,
neither the Company nor any of its subsidiaries are a party to any lawsuit or
proceeding which, individually or in the aggregate, in the opinion of
management, is reasonably likely to have a material adverse effect on the
financial condition, results of operation or cash flow of the Company.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
<TABLE>
<S> <C>
27.0-Financial Data Schedule
</TABLE>
(b) Reports on Form 8-K
None
11
<PAGE>
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.
Elgin National Industries, Inc.
/s/ Wayne J. Conner
By: _________________________________
Name: Wayne J. Conner
Vice President, Treasurer, and Chief
Title: Financial Officer
(Duly Authorized Officer and
Principal
Financial Officer)
Dated: August 13, 1998
12
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT FOOTNOTE
NUMBER DOCUMENT DESCRIPTION REFERENCE
------- -------------------- ---------
<C> <S> <C>
3.1 Certificate of Incorporation of Elgin National Indus-
tries, Inc. (3)
3.2 Bylaws of Elgin National Industries, Inc. (3)
4.1 Indenture dated November 5, 1997, between Elgin National
Industries, Inc., subsidiaries and Norwest Bank Minneso-
ta, as Trustee. (2)
4.2 Form of 11% Senior Note due 2007 (included in Exhibit
4.1). (2)
4.3 Registration Rights Agreement dated November 5, 1997, by
and among Elgin National Industries, Inc., certain of
its subsidiaries, and BancAmerica Robertson Stephens and
CIBC Wood Gundy Securities Corp. (3)
4.4 Form of Subsidiary Guaranty (included in Exhibit 4.1). (2)
10.1 Credit Agreement dated as of September 24, 1993, as
Amended and Restated as of November 5, 1997, by and
among Elgin National Industries, Inc., various financial
institutions, and Bank of America National Trust and
Savings Association, individually and as agent. (2)
10.2 Employment and Non-Competition Agreement dated as of No-
vember 5, 1997, between Elgin National Industries, Inc.
and Fred C. Schulte.* (2)
10.3 Employment and Non-Competition Agreement dated as of No-
vember 5, 1997, between Elgin National Industries, Inc.
and Charles D. Hall.* (2)
10.4 Employment and Non-Competition Agreement dated as of No-
vember 5, 1997, between Elgin National Industries, Inc.
and Wayne J. Conner.* (2)
10.5 The Elgin National Industries, Inc. Supplemental Retire-
ment Plan dated as of 1995, and effective January 1,
1995.* (3)
27 Financial Data Schedule (1)
</TABLE>
- --------
(1) Filed herewith.
(2) Incorporated by reference to Form S-4 Registration Statement of the Company
(File No. 333-43523) filed with the Commission on December 30, 1997.
(3) Incorporated by reference to Amendment No. 1 to Form S-4 Registration
Statement of the Company (File No. 333-43523) filed with the Commission on
January 23, 1998.
* Management contract or compensatory plan or arrangement.
13
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 6-MOS
<FISCAL-YEAR-END> DEC-31-1998 DEC-31-1998
<PERIOD-START> APR-01-1998 JAN-01-1998
<PERIOD-END> JUN-30-1998 JUN-30-1998
<CASH> 10,712 10,712
<SECURITIES> 0 0
<RECEIVABLES> 30,178 30,178
<ALLOWANCES> 605 605
<INVENTORY> 14,204 14,204
<CURRENT-ASSETS> 57,852 57,852
<PP&E> 24,123 24,123
<DEPRECIATION> 10,370 10,370
<TOTAL-ASSETS> 106,827 106,827
<CURRENT-LIABILITIES> 33,567 33,567
<BONDS> 85,277 85,277
13,686<F2> 13,686<F2>
0 0
<COMMON> (31,244) (31,244)
<OTHER-SE> 0 0
<TOTAL-LIABILITY-AND-EQUITY> 106,827 106,827
<SALES> 42,542 76,434
<TOTAL-REVENUES> 42,542 76,434
<CGS> 33,412 58,658
<TOTAL-COSTS> 33,412 58,658
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 283 305
<INTEREST-EXPENSE> 1,914 4,040
<INCOME-PRETAX> 1,086 1,417
<INCOME-TAX> 412 528
<INCOME-CONTINUING> 674 889
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 674 889
<EPS-PRIMARY> 0<F1> 0<F1>
<EPS-DILUTED> 0<F1> 0<F1>
<FN>
<F1> Earnings per share is not calculated in accordance with FAS No. 128.
<F2> Preferred stock-mandatory includes preferred stock units.
</FN>
</TABLE>
