SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 24, 1998
ALLIED PRODUCTS CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 1-5530 38-0292230
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
10 South Riverside Plaza
Chicago, Illinois 60606
(Address of principal executive offices)
(Zip Code)
(312) 454-1020
(Registrant's telephone number, including area code)
Not applicable
(Former name or former address, if changed since last report)
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Item 5. Other Events
See Exhibit 20, a press release dated September 24, 1998, reporting that the
Registrant would record a pretax charge of approximately $16 million in the
third quarter of 1998.
Item 7. Financial Statements and Exhibits
(c). Exhibit 20 - Press release dated September 24, 1998.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
Registrant has duly caused the report to be signed on its behalf by the
undersigned hereunto duly authorized.
ALLIED PRODUCTS CORPORATION
(Registrant)
By: /s/Robert J. Fleck
-----------------------------------------
Robert J. Fleck
Vice President-Accounting, Chief Accounting
and Administrative Officer
October 6, 1998
Exhibit 20
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Contact: Dan L. Drexler
(312) 454-1020
ALLIED PRODUCTS TAKES THIRD QUARTER CHARGE DUE TO
INCREASED COSTS AT VERSON
-------------------------
CHICAGO, IL -- September 24, 1998 -- Allied Products Corporation
[NYSE/ADP] announced that it will record a pretax charge of approximately $16
million in the third quarter.
This charge stems primarily from revised cost estimates for several
newly designed, automated, multi-station stamping presses currently in
production at its Verson division. The need for the revised cost estimates were
identified late in the third quarter and reflect the impact of production
bottlenecks in the assembly process, as well as greater than anticipated
increases in subcontracting costs.
In addition to the current charge, the revised estimates are expected
to result in lower margins at the Verson division, until the presses currently
in production are completed. Third quarter results will be released on October
22, and as previously disclosed, will be lower than the corresponding 1997
period and current analysts' estimates.
The Company, as part of the estimate revision process, has reviewed all
work currently in progress, all committed press orders and all future business
currently being quoted. Based on this review, Allied Products management is
confident that the scope of the problem has been identified and that appropriate
corrective actions are being implemented aggressively.
Commenting on the situation, Richard A. Drexler, Chairman, President
and Chief Executive Officer of Allied Products, stated: "Strong demand for
Verson equipment has generated record bookings and backlog, and that in turn has
placed severe pressures on our existing resources. Significant growth is often
accompanied by equally significant challenges, and we will be proactive in
addressing these issues."
Last year, Allied Products embarked on a major expansion program for
Verson's assembly area and an upgrading of its machine shop capabilities. The
expansion adds substantial productive capacity to Verson's Chicago facility,
including 117,800 square feet of new manufacturing area.
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Verson's additional physical capacity will be augmented by the
implementation of a new "focused factory" press assembly process. This process
involves the use of dedicated work cells, each with its own tooling and staff,
for each major press component. Together they are expected to improve Verson's
operations on future projects by reducing production cycle time and costs. These
programs are expected to further enhance Verson's ability to compete globally in
the growing market for large automated stamping equipment. The Company will
continue to actively pursue these markets.
Allied Products Corporation is a manufacturer of specialized machinery,
primarily large metal- stamping presses, agricultural equipment and landscape
and turf maintenance equipment. Through this core business, Allied Products
provides technologically advanced, cost-effective solutions to the needs of a
wide range of industrial and agricultural markets.
This release is covered under the "Safe Harbor" provisions under the
Private Securities Litigation Reform Act of 1995. Certain information covered in
this release is not historical facts but consists of forward looking statements
that involve a number of known and unknown risks and uncertainties, including
but not limited to, competitive activities in the industries served, overall
economic conditions, labor relations, capacity and supply constraints and other
risks and uncertainties. The Company's outlook is based on assumptions relating
to the factors discussed above.
