<PAGE>
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 September 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
incorporation or organization) Identification No.)
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 November 6, 1998, there were outstanding 6,408.3 shares of Class A
Common Stock and 19,951.7 shares of Preferred Stock.
<PAGE>
ELGIN NATIONAL INDUSTRIES, INC.
TABLE OF CONTENTS
Page
----
PART I--FINANCIAL INFORMATION
ITEM 1--Financial Statements
Consolidated Balance Sheets as of September 30, 1998 and December
31, 1997............................................................. 3
Consolidated Statements of Income for the Nine Months Ended September
30, 1998 and September 30, 1997, and for the Three Months Ended
September 30, 1998 and September 30, 1997............................ 4
Consolidated Statements of Changes in Stockholder's Deficit for the
Nine Months Ended September 30, 1998................................. 5
Condensed Consolidated Statements of Cash Flows for the Nine Months
Ended September 30, 1998 and September 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........ 11
PART II--OTHER INFORMATION
ITEM 1--Legal Proceedings................................................. 11
ITEM 6--Exhibits and Reports on Form 8-K.................................. 12
SIGNATURES.................................................................. 12
EXHIBIT INDEX............................................................... 13
EXHIBIT 27.................................................................. 14
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>
September 30, December 31,
1998 1997
------- --------
<S> <C> <C>
ASSETS
----------------------------------------------------------
Current assets:
Cash and cash equivalents............................................... $ 14,520 $ 9,337
Accounts receivable, net................................................ 31,524 27,355
Inventories, net........................................................ 13,435 13,497
Prepaid expenses and other assets....................................... 2,560 1,728
Deferred income tax..................................................... 760 1,596
-------- --------
Total current assets.................................................. 62,799 53,513
Property, plant and equipment, net........................................ 14,212 13,582
Other assets.............................................................. 23,985 23,334
Goodwill and intangibles.................................................. 11,049 12,450
-------- --------
Total assets.......................................................... $112,045 $102,879
======== ========
LIABILITIES AND STOCKHOLDER'S DEFICIT
----------------------------------------------------------
Current liabilities:
Current portion of long-term debt....................................... $ 325 $ 311
Accounts payable & accrued expenses..................................... 37,920 29,967
-------- --------
Total current liabilities............................................. 38,245 30,278
Long-term debt less current portion....................................... 85,194 85,440
Other liabilities......................................................... 1,544 1,410
Deferred income tax....................................................... 3,896 4,385
-------- --------
Total liabilities..................................................... 128,879 121,513
-------- --------
Redeemable preferred stock units.......................................... 10,923 10,379
-------- --------
Redeemable preferred stock................................................ 2,996 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......................................................... (30,753) (31,860)
-------- --------
Total stockholder's deficit........................................... (30,753) (31,860)
-------- --------
Total liabilities and stockholder's deficit........................... $112,045 $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 Nine Months For the Three Months
Ended September 30, Ended September 30,
--------------------- --------------------
1998 1997 1998 1997
------ ------ ----- ------
<S> <C> <C> <C> <C>
Sales, net..................................... $119,174 $104,510 $42,740 $33,353
Cost of sales.................................. 91,902 77,471 33,244 24,458
-------- -------- ------- -------
Gross profit................................. 27,272 27,039 9,496 8,895
Selling, general and administrative expenses... 16,833 15,735 5,876 5,091
Amortization expense........................... 1,893 2,336 531 779
-------- -------- ------- -------
Operating income............................. 8,546 8,968 3,089 3,025
Other expenses.................................
Interest expense, net........................ 6,111 1,536 2,071 360
-------- -------- ------- -------
Income before income taxes..................... 2,435 7,432 1,018 2,665
Provision for income taxes..................... 915 3,238 387 1,179
-------- -------- ------- -------
Net income..................................... $ 1,520 $ 4,194 $ 631 $ 1,486
======== ======== ======= =======
</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 Nine Months Ended September 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 nine months ended September 30, 1998............. - 1,520 1,520
Redeemable preferred stock unit dividends, net of tax............... - (264) (264)
Redeemable preferred stock dividends ($7.48 per share).............. - (149) (149)
---------- -------- --------
Balance as of September 30, 1998...................................... $ - $(30,753) $(30,753)
========== ======== ========
</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)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
-------------
1998 1997
---- ----
<S> <C> <C>
Net cash provided (used) by operating activities.... $ 7,666 $ (355)
------- -------
Cash flows from investing activities:
Proceeds from sale of assets...................... 271 -
Purchase of property, plant and equipment......... (2,522) (969)
------- -------
Net cash used by investing activities............. (2,251) (969)
------- -------
Cash flows from financing activities:
Repayments of long-term debt...................... (232) (6,218)
------- -------
Net cash used by financing activities............. (232) (6,218)
------- -------
Net increase (decrease) in cash..................... 5,183 (7,542)
Cash and cash equivalents at beginning of period.... 9,337 10,991
------- -------
Cash and cash equivalents at end of period.......... $14,520 $ 3,449
======= =======
</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
Standard 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. 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
Standard 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>
September 30, December 31,
------------- ------------
1998 1997
---- ----
(in thousands)
<S> <C> <C>
Finished goods........................... $ 7,890 $ 8,073
Work-in-process.......................... 1,883 1,524
Raw materials............................ 5,651 5,501
------- -------
15,424 15,098
Less excess and obsolete reserve......... 1,989 1,601
------- -------
$13,435 $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.
7
<PAGE>
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 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 nine 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 September 30, 1998 Compared to Three Months Ended September
30, 1997
Net Sales: Net sales for the quarter ended September 30, 1998 increased
$9.3 million, or 28.1%, to $42.7 million from $33.4 million for the
corresponding period in 1997 primarily due to the size of engineering services
projects in process. For the three months ended September 30, 1998 the Company
had six larger projects with sales in excess of $1.0 million, totalling $12.7
million in sales, compared to three such projects totalling $3.7 million in
sales for the corresponding period in 1997.
Gross Profit: Gross profit for the quarter ended September 30, 1998
increased $0.6 million, or 6.8%, to $9.5 million from $8.9 million for the
corresponding period in 1997. As a percentage of net sales, the gross profit
decreased to 22.2% for the quarter ended September 30, 1998 from 26.7% 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 September 30, 1998
of $5.9 million were $0.8 million, or 15.4%, higher than the selling, general
and administrative expenses for the corresponding period in 1997 mainly due to
increased selling costs associated with obtaining the higher sales level. As a
percentage of net sales, selling, general and administrative expenses decreased
from 15.3% for the quarter ended September 30, 1997 to 13.7% for the quarter
ended September 30, 1998. Selling, general and administrative expenses decreased
as a percentage of sales due to the increased sales level.
Amortization Expense: Amortization expense of the Company for the quarter
ended September 30, 1998 decreased $0.3 million, or 31.8%, to $0.5 million from
$0.8 million for the corresponding period in 1997. The decrease was attributable
to decreased amortization expense related to non-compete, acquisition and
finance costs.
Interest Expense, Net: Net interest expense of the Company for the quarter
ended September 30, 1998 equaled $2.1 million and represented a $1.7 million, or
a 475.3%, increase from the prior year's corresponding quarter of $0.4 million.
The increased net interest expense was due to the issuance of the $85.0 million
in 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 in senior subordinated notes in November, 1997.
Provision for Income Taxes: Provision for income taxes of the Company for
the quarter ended September 30, 1998 decreased $0.8 million, or 67.2%, to $0.4
million from $1.2 million for the corresponding period ended September 30, 1997.
The decrease in the provision for income taxes was due primarily to lower
earnings before income taxes.
8
<PAGE>
Net Income: The net income for the Company for the three months ended
September 30, 1998 decreased $0.9 million, or 57.5%, to $0.6 million from $1.5
million for the quarter ended September 30, 1997 for the reasons discussed
above. Net income as a percentage of net sales decreased to 1.5% for the quarter
ended September 30, 1998 from 4.5% for the corresponding quarter in 1997.
Nine months Ended September 30, 1998 Compared to Nine months Ended September 30,
1997
Net Sales: Net sales for the nine months ended September 30, 1998 increased
$14.7 million, or 14.0%, to $119.2 million from $104.5 million for the
corresponding period in 1997 primarily due to the size of the engineering
services projects in process. For the nine months ended September 30 1998, the
Company had eleven projects with sales in excess of $1.0 million, totalling
$41.5 million in sales, compared with ten such projects totalling $28.7 million
in sales for the nine months ended September 30, 1997.
Gross Profit: Gross profit for the nine months ended September 30, 1998
increased $0.3 million, or 0.9%, to $27.3 million from $27.0 million, for the
corresponding period in 1997. As a percentage of net sales, the gross profit
decreased to 22.9% for the nine months ended September 30, 1998 from 25.9% 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, 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 nine months ended September 30,
1998 of $16.8 million represented an increase of $1.1 million, or 7.0%, from
$15.7 million for the corresponding period in 1997. Selling general and
administrative expenses as a percentage of net sales decreased from 15.1% for
the nine months ended September 30, 1997 to 14.1% for the corresponding period
in 1998 due primarily to increased sales.
Amortization Expense: Amortization expense of the Company for the nine
months ended September 30, 1998 decreased $0.4 million, or 19.0%, to $1.9
million from $2.3 million for the corresponding period in 1997. The decrease was
attributable to lower amortization expense related to non-compete, acquisition
and finance costs.
Interest Expense, Net: Net interest expense of the Company for the nine
months ended September 30, 1998 equaled $6.1 million and represented a 297.9%
increase from the prior year's corresponding nine months of $1.5 million. The
increased net interest expense was due to the issuance of the $85.0 million in
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 in senior subordinated notes in November, 1997, as well as by
other 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 nine months ended September 30, 1998 decreased $2.3 million, or 71.7%, to
$0.9 million from $3.2 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 nine months ended
September 30, 1998 decreased $2.7 million, or 63.8%, to $1.5 million from $4.2
million for the nine months ended September 30, 1997 for the reasons discussed
above. Net income as a percentage of net sales decreased to 1.3% for the nine
months ended September 30, 1998 from 4.0% for the corresponding nine months
period in 1997.
Liquidity and Capital Resources
Net cash provided by operating activities for the nine months ended
September 30, 1998 of $7.7 million was generated from increased accounts
payables, and cash generated from net income and non-cash charges, partially
offset by cash used to increase accounts receivable and other assets. For the
nine months ended September 30, 1997, $0.4 million in cash was used in
9
<PAGE>
operating activities to increase accounts receivables, net inventories and other
assets and to decrease accounts payable. 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.
Cash was used in investing activities for the nine months ended September
30, 1998 of $2.3 million compared with $1.0 million for the nine months ended
September 30, 1997. For the nine months ended September 30, 1998 and September
30, 1997, the Company used $0.9 million and $1.0 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 Company's customary upgrade and maintenance
cost by approximately $2.5 million. $1.6 million in specialty facility projects
was completed within the first nine months of 1998. The remainder is expected to
be completed by year end. In the nine months ended September 30, 1998 the
Company received proceeds of $0.3 million from the sale of a building.
Cash used in financing activities for the nine months ended September 30,
1998 totaled $0.2 million, and was attributable to the scheduled repayment of
notes payable. Cash used in financing activities for the nine months ended
September 30, 1997 totaled $6.2 million and resulted primarily from repayments
made on the Company's term loan and notes 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 September 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 September 30, 1998 had decreased $12.8
million, or 14.8%, to $73.5 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.
Year 2000
The Year 2000 ("Y2K") issue is the result of computer programs using a two-digit
format, as opposed to four digits, to indicate the year. Such computer systems
will be unable to interpret dates beyond the year 1999, which could cause a
system failure or other computer errors, leading to disruptions in operations.
The Company has developed a three-phase program of Y2K information systems
readiness. Phase I is to identify those systems with which the Company has
exposure to Y2K issues. Phase II is the development and implementation of action
plans to be Y2K ready in each major area. Phase III is the final testing of each
major area to exposure to ensure readiness. The Company has identified three
major areas determined to be critical for successful Y2K readiness: (1)
financial and informational system applications, (2) manufacturing applications
and (3) third-party relationships.
10
<PAGE>
The Company, in accordance with Phase I of the program, has conducted an
internal review of systems and has contacted software suppliers to determine
major areas of exposure to Y2K issues. In the financial and information system
area, a number of applications have been identified as being Y2K ready. We are
working with other vendors to implement upgrades to their software to become Y2K
ready. All upgrades are scheduled for implementation by end of the third quarter
of 1999. In the manufacturing applications area, the Company is in the process
of identifying areas of exposure. In the third-party area, the Company is in the
process of contacting most of its major third parties to determine their Y2K
readiness.
The Company has not yet quantified the cost to upgrade the core financial and
reporting systems. The upgrades of the current systems are part of our normal
process of maintaining current data processing systems, and therefore the
Company does not expect the upgrades to have a material effect on our operating
results. The Company has not yet determined what costs will be incurred in
connection with the manufacturing area and the third party relationship area.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company continues to use its United States reputation to expand into
international markets. In the nine months ended September 30, 1998 approximately
30% of the Company's net sales were attributable to services provided or
products sold for use outside the United States, primarily to 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.
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
11
<PAGE>
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
27.0 Financial Data Schedule
(b) Reports on Form 8-K
A Form 8-K was filed on October 23, 1998 listing Item 4 - changes
in Registrant's certifying accountants. There were no financial
statements filed with this report.
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.
By /s/ Wayne J. Conner
--------------------------------------
Name: Wayne J. Conner
Title: Vice President, Treasurer, and
Chief Financial Officer
(Duly Authorized Officer and Principal
Financial Officer)
Dated: November 9, 1998
12
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Footnote
- ------- --------
Number Document Description Reference
- ------ -------------------- ---------
<C> <S> <C>
3.1 Certificate of Incorporation of Elgin National Industries, 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 Minnesota, 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 November 5, 1997, between Elgin
National Industries, Inc. and Fred C. Schulte.* (2)
10.3 Employment and Non-Competition Agreement dated as of November 5, 1997, between Elgin
National Industries, Inc. and Charles D. Hall.* (2)
10.4 Employment and Non-Competition Agreement dated as of November 5, 1997, between Elgin
National Industries, Inc. and Wayne J. Conner.* (2)
10.5 The Elgin National Industries, Inc. Supplemental Retirement 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 9-MOS
<FISCAL-YEAR-END> DEC-31-1998 DEC-31-1998
<PERIOD-START> JUL-01-1998 JAN-01-1998
<PERIOD-END> SEP-30-1998 SEP-30-1998
<CASH> 14,520 14,520
<SECURITIES> 0 0
<RECEIVABLES> 32,137 32,137
<ALLOWANCES> 613 613
<INVENTORY> 13,435 13,435
<CURRENT-ASSETS> 62,799 62,799
<PP&E> 25,132 25,132
<DEPRECIATION> 10,920 10,920
<TOTAL-ASSETS> 112,045 112,045
<CURRENT-LIABILITIES> 38,245 38,245
<BONDS> 85,194 85,194
13,919<F2> 13,919<F2>
0 0
<COMMON> (30,753) (30,753)
<OTHER-SE> 0 0
<TOTAL-LIABILITY-AND-EQUITY> 112,045 112,045
<SALES> 42,740 119,174
<TOTAL-REVENUES> 42,740 119,174
<CGS> 33,244 91,902
<TOTAL-COSTS> 33,244 91,902
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 22 95
<INTEREST-EXPENSE> 2,071 6,111
<INCOME-PRETAX> 1,018 2,435
<INCOME-TAX> 387 915
<INCOME-CONTINUING> 631 1,520
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 631 1,520
<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>
