<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2000
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 1-5530
ALLIED PRODUCTS CORPORATION
------------------------------------------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 38-0292230
- - - - - - - - ------------------------------- -----------------------------------
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION
INCORPORATION OR ORGANIZATION) NUMBER)
10 SOUTH RIVERSIDE PLAZA, CHICAGO, ILLINOIS 60606
- - - - - - - - --------------------------------------------------------------------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (312) 454-1020
NOT APPLICABLE
----------------------------------------------
(FORMER NAME, FORMER ADDRESS AND FORMER FISCAL
YEAR, IF CHANGED SINCE LAST REPORT)
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS REQUIRED
TO BE FILED BY SECTION 13 OR 15(d) OF 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 REQUIREMENT FOR
THE PAST 90 DAYS. YES X NO
--- ---
INDICATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE ISSUER'S CLASSES OF
COMMON STOCK, AS OF THE LATEST PRACTICABLE DATE: 11,859,664 COMMON SHARES, $.01
PAR VALUE, AS OF APRIL 28, 2000.
<PAGE>
ALLIED PRODUCTS CORPORATION AND CONSOLIDATED SUBSIDIARIES
INDEX
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
INTRODUCTION
CONDENSED CONSOLIDATED BALANCE SHEETS-
March 31, 2000 and December 31, 1999
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
Three Months Ended March 31, 2000 and 1999
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS-
Three Months Ended March 31, 2000 and 1999
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
PART II. OTHER INFORMATION
ITEM 1. NOT APPLICABLE
ITEM 2. NOT APPLICABLE
ITEM 3. NOT APPLICABLE
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
ITEM 5. NOT APPLICABLE
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
SIGNATURES
EXHIBIT INDEX
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ALLIED PRODUCTS CORPORATION AND CONSOLIDATED SUBSIDIARIES
INTRODUCTION
The condensed consolidated financial statements included herein (as of
March 31, 2000 and for the three months ended March 31, 2000 and 1999) have been
prepared by the Company, without audit, pursuant to the rules and regulations of
the Securities and Exchange Commission and reflect all adjustments which are, in
the opinion of management, necessary to present fairly the condensed
consolidated financial information required therein. All such adjustments are of
a normal, recurring nature. The information as of December 31, 1999 is derived
from the audited year end balance sheet for that year. Certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted pursuant to such rules and regulations, although the Company believes
that the disclosures are adequate to make the information presented not
misleading. It is suggested that these financial statements be read in
conjunction with the financial statements and the notes thereto included in the
Company's latest annual report on Form 10-K.
The results of operations for the three month periods ended March 31, 2000
and 1999 are not necessarily indicative of the results to be expected for the
full year.
<PAGE>
ALLIED PRODUCTS CORPORATION AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
ASSETS
<TABLE>
<CAPTION>
MARCH 31, 2000 DECEMBER 31, 1999
-------------- -----------------
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 12,109,000 $ 1,054,000
------------ ------------
Notes and accounts receivable, less allowances of
$1,064,000 and $1,130,000, respectively $ 24,720,000 $ 20,460,000
------------ ------------
Inventories:
Raw materials $ 3,342,000 $ 3,571,000
Work in process 24,213,000 43,094,000
------------ ------------
$ 27,555,000 $ 46,665,000
------------ ------------
Deferred tax asset $ 3,400,000 $ 8,995,000
------------ ------------
Prepaid expenses $ 1,731,000 $ 228,000
------------ ------------
Current assets associated with discontinued operations $ 17,532,000 $ 84,073,000
------------ ------------
Total current assets $ 87,047,000 $161,475,000
------------ ------------
Plant and Equipment, at cost:
Land $ 1,691,000 $ 1,671,000
Building and improvements 52,461,000 52,435,000
Machinery and equipment 37,135,000 36,603,000
------------ ------------
$ 91,287,000 $ 90,709,000
Less-Accumulated depreciation and amortization 33,355,000 32,023,000
------------ ------------
$ 57,932,000 $ 58,686,000
------------ ------------
Other Assets:
Deferred tax asset $ 4,256,000 $ 4,165,000
Deferred charges (goodwill), net of amortization 1,090,000 1,134,000
Other 3,211,000 2,853,000
Noncurrent assets associated with discontinued operations -- 28,298,000
------------ ------------
$ 8,557,000 $ 36,450,000
------------ ------------
$153,536,000 $256,611,000
============ ============
</TABLE>
The accompanying notes to condensed consolidated financial statements are an
integral part of these statements.
<PAGE>
ALLIED PRODUCTS CORPORATION AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
LIABILITIES AND SHAREHOLDERS' INVESTMENT
<TABLE>
<CAPTION>
MARCH 31, 2000 DECEMBER 31, 1999
-------------- -----------------
<S> <C> <C>
Current Liabilities:
Revolving credit agreements $ 9,710,000 $130,700,000
Current portion of long-term debt 18,323,000 1,023,000
Accounts payable 27,624,000 32,659,000
Accrued expenses 22,258,000 22,648,000
Current liabilities associated with discontinued operations -- 17,877,000
------------ ------------
Total current liabilities $ 77,915,000 $204,907,000
------------ ------------
Long-term debt, less current portion shown above $ 297,000 $ 378,000
------------ ------------
Other long-term liabilities $ 5,363,000 $ 5,442,000
------------ ------------
Noncurrent liabilities associated with discontinued operations $ -- $ 2,814,000
------------ ------------
Commitments and Contingencies
Shareholders' Investment:
Preferred stock:
Undesignated-authorized 2,000,000 shares at March 31,
2000 and December 31, 1999; none issued $ -- $ --
Common Stock, par value $.01 per share; authorized
25,000,000 shares; issued 14,047,249 shares at
March 31, 2000 and December 31, 1999 140,000 140,000
Additional paid-in capital 97,836,000 97,971,000
Retained earnings (deficit) 14,285,000 (12,524,000)
------------ ------------
$112,261,000 $ 85,587,000
Less: Treasury stock, at cost: 2,187,585 and 2,200,203
shares at March 31, 2000 and December 31, 1999,
respectively (42,300,000) (42,517,000)
------------ ------------
Total shareholder's equity $ 69,961,000 $ 43,070,000
------------ ------------
$153,536,000 $256,611,000
============ ============
</TABLE>
The accompanying notes to condensed consolidated financial statements are an
integral part of these statements.
<PAGE>
ALLIED PRODUCTS CORPORATION AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
--------------------------------
2000 1999
------------ ------------
<S> <C> <C>
Net sales from continuing operations $ 19,016,000 $ 45,338,000
Cost of products sold 18,946,000 54,819,000
------------ ------------
Gross profit (loss) $ 70,000 $ (9,481,000)
------------ ------------
Other costs and expenses:
Selling and administrative expense $ 5,269,000 $ 5,867,000
Interest expense 1,680,000 1,163,000
Other (income) expense, net 447,000 (505,000)
------------ ------------
$ 7,396,000 $ 6,525,000
------------ ------------
(Loss) before taxes from continuing operations $ (7,326,000) $(16,006,000)
Provision for income taxes:
Current -- --
Deferred 5,650,000 --
------------ ------------
(Loss) from continuing operations $(12,976,000) $(16,006,000)
------------ ------------
Discontinued operations (net of tax):
Income from operations $ 1,687,000 $ 3,340,000
Gain on disposition of discontinued operations 38,098,000 --
------------ ------------
Income from discontinued operations $ 39,785,000 $ 3,340,000
------------ ------------
Net income (loss) $ 26,809,000 $(12,666,000)
============ ============
Earning (loss) per common share:
Basic:
Continuing operations $ (1.09) $ (1.35)
Discontinued operations 3.35 0.28
------------ ------------
Income (loss) per common share $ 2.26 $ (1.07)
============ ============
Diluted:
Continuing operations $ (1.09) $ (1.35)
Discontinued operations 3.35 0.28
------------ ------------
Income (loss) per common share $ 2.26 $ (1.07)
============ ============
Weighted average shares outstanding:
Basic 11,851,000 11,819,000
============ ============
Diluted 11,857,000 11,819,000
============ ============
Dividends per common share $ -- $ 0.04
============ ============
</TABLE>
The accompanying notes to condensed consolidated financial statements are an
integral part of these statements.
<PAGE>
ALLIED PRODUCTS CORPORATION AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
-------------------------------
2000 1999
------------ ------------
<S> <C> <C>
Cash Flows from Operating Activities:
(Loss) from continuing operations $ (12,976,000) $ (16,006,000)
Income from discontinued operations 39,785,000 3,340,000
------------- -------------
Net income (loss) $ 26,809,000 $ (12,666,000)
Adjustments to reconcile (loss) from continuing operations
to cash provided from (used for) operating activities:
Gains on sales of assets/business, net of tax (38,866,000) (82,000)
Depreciation and amortization 1,333,000 1,203,000
Amortization of deferred charges 44,000 44,000
Deferred income tax provision 5,650,000 --
Provision for inventory valuation -- 6,926,000
Changes in noncash assets and liabilities, net of
businesses sold and noncash transactions:
(Increase) decrease in accounts receivable (4,461,000) 2,404,000
Decrease in inventories 19,110,000 12,552,000
(Increase) decrease in prepaid expenses (1,503,000) 92,000
Increase (decrease) in accounts payable and accrued expenses (5,954,000) 7,201,000
Other, net 3,346,000 (1,160,000)
Adjustment to reconcile income from discontinued operations
to cash provided from (used for) discontinued operations (16,326,000) (13,532,000)
------------- -------------
Net cash provided from (used for) operating activities $ (10,818,000) $ 2,982,000
------------- -------------
Cash Flows from Investing Activities:
Additions to plant and equipment $ (582,000) $ (3,999,000)
Proceeds from sale of business 126,494,000 --
Proceeds from sales of plant and equipment 2,000 6,000
Net cash used in discontinued operations (270,000) (487,000)
------------- -------------
Net cash provided from (used for) investing activities $ 125,644,000 $ (4,480,000)
------------- -------------
Cash Flows from Financing Activities:
Borrowings under revolving credit agreements $ 18,100,000 $ 49,000,000
Proceeds from issuance of debt 27,710,000 --
Payments under revolving credit agreements (148,800,000) (47,100,000)
Payments of short and long-term debt (781,000) (56,000)
Dividends paid -- (469,000)
Net cash used in discontinued operations -- (191,000)
------------- -------------
Net cash provided from (used for) financing activities $(103,771,000) $ 1,184,000
------------- -------------
Net increase (decrease) in cash and cash equivalents $ 11,055,000 $ (314,000)
Cash and cash equivalents at beginning of year 1,054,000 727,000
------------- -------------
Cash and cash equivalents at end of period $ 12,109,000 $ 413,000
============= =============
</TABLE>
The accompanying notes to condensed consolidated financial statements are an
integral part of these statements.
<PAGE>
ALLIED PRODUCTS CORPORATION AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(1) DISCONTINUED OPERATIONS
On March 7, 2000, the Company's shareholders approved the Limited
Liability Company Interest Purchase and Asset Contribution Agreement
("Purchase Agreement") by and among the Company , Bush Hog, L.L.C., a
Delaware limited liability company ("New Bush Hog") and Bush Hog
Investors, L.L.C., a Delaware limited liability company ("Bush Hog
Investors").
Pursuant to the Purchase Agreement, the Company agreed (i) to
transfer to New Bush Hog substantially all of the assets and certain
liabilities of the Bush Hog and Great Bend divisions constituting the
Agricultural Products Group in exchange for all of the outstanding
membership interests of New Bush Hog and (ii) to sell to Bush Hog
Investors membership interests representing 80.1% of the total outstanding
membership interests of New Bush Hog for a purchase price of $126,494,000,
subject to post-closing adjustments. This sale was consummated on March 7,
2000. Upon consummation of the joint venture, New Bush Hog owns
substantially all of the assets of the Agricultural Products Group subject
to some of its liabilities, the Company significantly reduced its bank
indebtedness, Bush Hog Investors became the owner of 80.1% of the
outstanding membership interests of New Bush Hog and the Company owned
19.9% of the outstanding membership interests of New Bush Hog.
The Company retained all liabilities and obligations for claims made
with respect to events or injuries occurring before the closing including
product liability, workers' compensation and environmental claims and
claims regarding employment practices. The liabilities retained by the
Company include liabilities under existing product liability claims, any
additional claims, including product liability claims, arising out of
events associated with operations of the Agricultural Product Group before
the closing, and workers' compensation claims, for which the Company has
provided reserves of approximately $5,600,000. The Company also remains
responsible for monetary liabilities, if any, under a race discrimination
class action suit brought by seven former or present employees of the
Company's Bush Hog division - see Note 10 of Notes to Consolidated
Financial Statements in the Company's 1999 Annual Report on Form 10-K for
a further discussion of this claim. The Company also retains the
obligation to make future contributions, if any, required to fund
obligations under the Bush Hog Salaried Pension Plan. Benefits under the
Plan were frozen as of the closing. The Company recorded a $2,578,000
pension curtailment gain when the Company assumed the pension plan
obligations and assets related to this plan. Certain of these obligations,
which are contingent, may effect future results of operations if and when
such obligations become probable and estimable. In addition, the Company
retains
<PAGE>
liabilities for taxes and other governmental charges relating to
operations before the closing and liabilities under employee benefit
plans, which plans, other than the Bush Hog Salaried Pension Plan, were
discontinued at closing.
The Company applied the net proceeds from the sale to repay existing
indebtedness. Based on a selling price of $126,494,000, the Company has
recorded in the first quarter of 2000 an estimated gain on the disposition
of discontinued operations of $38,098,000, net of taxes, subject to final
adjustment.
Following completion of the transaction, the Company retained a
minority interest in New Bush Hog, which was recorded on a cost basis
($21,114,000), and has no ability to control the direction and development
of New Bush Hog. Under the cost method of accounting, the investment in
New Bush Hog is reflected in the Company's balance sheet at cost, and
dividends from New Bush Hog will be taken into income as they are received
to the extent distributions are not a return of capital. New Bush Hog is
obligated to pay quarterly dividends approximately equal to quarterly
income, subject to certain conditions contained in the Limited Liability
Company Agreement.
Following the completion of the sale, the Company received a
distribution of $3,582,000 from New Bush Hog, which the Company recorded
as a return of capital , reducing the cost basis of its 19.9% interest in
New Bush Hog to $17,532,000. On March 24, 2000, the Company signed a
definitive agreement to sell its remaining 19.9% interest in New Bush Hog
to Bush Hog Investors for a purchase price of approximately $27,800,000
plus its pro rata share of New Bush Hog's undistributed earnings, subject
to post-closing adjustments. The sale, which is expected to close prior to
the end of the second quarter of 2000, is expected to result in a pretax
gain of approximately $10,200,000 subject to final adjustment.
The Company has included the operations of the Agricultural Products
Group, an allocation of all direct financing, administrative, other
expenses and income taxes and a pro rata allocation of interest expense
(based upon the group's proportionate share of consolidated invested
capital) under the caption "Discontinued operations, income from
operations" in the accompanying Condensed Consolidated Statements of
Income (Loss). Previously issued Condensed Consolidated Statements of
Income (Loss) have been revised to reflect the effect of the discontinued
operations. In addition, current and noncurrent assets and liabilities
associated with the above noted discontinued operations have been
reclassified in the accompanying balance sheets.
<PAGE>
Summarized operating results of discontinued operations for the
three months ended March 31, 2000 and 1999, are as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
----------------------------
2000 1999
----------- -----------
<S> <C> <C>
Net sales $28,608,000 $36,902,000
=========== ===========
Income before taxes $ 1,687,000 $ 3,340,000
Provision (benefit) for income taxes -- --
----------- -----------
Discontinued operations - income
from operations $ 1,687,000 $ 3,340,000
=========== ===========
</TABLE>
Allocated interest expense was $1,078,000 and $1,190,000 for the
three months ended March 31, 2000 and 1999, respectively.
(2) ACCRUED EXPENSES
The Company's accrued expenses consist of the following:
<TABLE>
<CAPTION>
3/31/00 12/31/99
----------- -----------
<S> <C> <C>
Salaries and wages $ 1,829,000 $ 1,943,000
Warranty 5,217,000 5,563,000
Self insurance accruals 2,791,000 2,871,000
Pensions, including retiree health 2,849,000 5,362,000
Taxes, other than income taxes 1,529,000 949,000
Environmental matters 2,376,000 2,376,000
Other 5,667,000 3,584,000
----------- -----------
$22,258,000 $22,648,000
=========== ===========
</TABLE>
(3) EARNINGS PER COMMON SHARE
Basic earnings per common share is based on the average number of
common shares outstanding - 11,851,000 and 11,819,000 for the three months
ended March 31, 2000 and 1999, respectively. Diluted earnings per common
share is based on the average number of common shares outstanding, as
noted above, increased by the dilutive effect of outstanding stock
options- 6,000 for the three months ended March 31, 2000. For the quarter
ended March 31, 1999, dilutive securities were excluded from the
calculation of diluted loss per share as their effect would have been
antidilutive.
(4) FINANCIAL ARRANGEMENTS
As of December 31, 1999, the Second Amended and Restated Credit
Agreement ("Credit Agreement"), as amended, provided for up to
$135,000,000 of borrowings and/or letters of credit at either a floating
prime (prime plus 250 basis points) or fixed LIBOR (LIBOR plus 400 basis
points) rate. The Company granted a lien upon and security interests in
all of the assets (except real estate) of the Company and its subsidiaries
to the lenders and was required to meet certain periodic financial tests.
Effective February 11, 2000, the
<PAGE>
Company entered into a Fifth Amendment and Consent to the Credit
Agreement. The amended agreement provided for up to $138,000,000 of
borrowings and/or letters of credit and extended the termination date of
the agreement to March 7, 2000.
In contemplation of the sale of an 80.1% interest in the
Agricultural Products Group and to help finance the build up of
receivables and inventories within this group during December and the
first quarter of 2000, an affiliate of Bush Hog Investors agreed, under
the Loan and Security Agreement ("Bush Hog Investors Loan") dated as of
December 16, 1999, to loan the Company up to $5,000,000, secured by the
group's real property in Selma, Alabama. During the first quarter of 2000,
the Company borrowed the maximum amount available under this agreement at
an interest rate of prime plus 400 basis points.
On March 7, 2000, the Company entered into a Loan and Security
Agreement with LaSalle Bank National Association ("LaSalle"). Under the
terms of the agreement, the Company may borrow up to $18,000,000 at a
floating prime (prime less 100 basis points) rate within three months
after the closing of the agreement. Amounts outstanding under the
agreement are due 30 months after closing. Prepayment is allowed without
penalty. The loan is secured by a first lien on the Company's 19.9%
interest in New Bush Hog. The Company has borrowed the maximum amount
available under the agreement. These proceeds, combined with the proceeds
received from the sale of an 80.1% interest in New Bush Hog, were applied
to repay the Company's indebtedness outstanding under the Second Amended
and Restated Credit Agreement, the Company's indebtedness outstanding
under the Bush Hog Investors Loan and to costs associated with the sale.
The Company also entered into a new credit facility with Foothill
Capital Corporation ("Foothill") effective March 29, 2000. The new credit
facility has a three year term, maturing in March 2003, and consists of a
term loan of $10,600,000 and a revolving credit facility which may be
drawn upon from time to time up to the lower of $19,400,000 or an amount
based upon a percentage of eligible accounts receivable and eligible
inventories relating to presses which are within sixty (60) days of
shipment, as determined by Foothill, subject to reserves as determined by
Foothill (the "Borrowing Base"). The amount available under the term loan
sub-line is reduced by $176,667 monthly commencing in September 2000. The
maximum remaining amount due at maturity in March 2003 is $5,123,323.
Interest is payable monthly at a floating prime rate (prime plus 200 basis
points on the term loan and prime plus 125 basis points on the revolver).
In the event of a default, the interest rate increases by 300 basis
points. Foothill received a closing fee of $300,000 and will receive a
monthly fee of $50,000 for each month a balance is outstanding under the
revolving credit facility. With certain exceptions, the penalty for
prepayment is $900,000 (3% of the maximum credit available) in the first
year, declining to 2% and 1% in the second
<PAGE>
and third years. Certain portions of the Borrowing Base will be determined
in June, following Foothill's review and determination of eligible
receivables.
In connection with the Foothill loan, the Company granted a lien
upon and security interests in substantially all of its assets (except its
membership interest in New Bush Hog). The loan agreement requires that the
Company sell its remaining interest in New Bush Hog on or before June 30,
2000. Restrictions in the Foothill loan agreement include, among other
things, limitations on capital expenditures, restrictions on liens and the
making of guarantees, and restrictions on acquisitions and investments.
The loan agreement prohibits the payment of cash dividends. Additionally,
Foothill can accelerate repayment in the event of a material adverse
change in the business, as defined in the agreement. Financial covenants
include a covenant that earnings before interest, taxes, depreciation and
amortization ("EBITDA"), exclusive of extraordinary gains, exceed the
amounts listed below as of the dates and for the periods indicated:
<TABLE>
<S> <C> <C>
June 30, 2000 ......................... last three months $(1,300,000)
September 30, 2000 .................... last six months $(3,500,000)
December 31, 2000 ..................... last nine months $(4,600,000)
March 31, 2001 ........................ last twelve months $(3,900,000)
June 30, 2001 ......................... last twelve months $(3,000,000)
September 30, 2001 .................... last twelve months $ 1,300,000
December 31, 2001 ..................... last twelve months $ 7,600,000
</TABLE>
Because the borrowing base is limited solely to a percentage of
eligible accounts receivable and eligible inventories relating to presses
which are within sixty (60) days of shipment (and not to a percentage of
total inventories as well), the credit facility is not a source of
financing for the substantial work in process inventories frequently
required in the Company's business. This will limit the Company's ability
to accept press orders which do not include customer deposits.
Since the Company's estimated EBITDA for future periods is
predicated, among other things, upon projections of the receipt of new
press orders in appropriate sequences and bearing appropriate margins, the
Company cannot predict EBITDA with a reasonable degree of certainty. The
rate of new orders is currently lagging behind the projections on which
the EBITDA covenants were based. Therefore, it is possible that the
Company will be unable to comply with the EBITDA covenants. If the Company
is not in compliance with the covenants, the rate of interest on the
Company 's indebtedness will increase by 3% per annum and the Company will
be required either to attempt to negotiate a waiver or amendment of its
agreement with Foothill or to pursue alternative financing sources. A
failure to obtain a revised agreement with Foothill or alternative
financing could result in a cancellation of the last two presses on the
General Motors order - see Note 5.
<PAGE>
Reference is made to Note 14 of Notes to Consolidated Financial
Statements in the Company's 1999 Annual Report on Form 10-K for a
discussion of the challenges facing the Company.
(5) CONTINGENT LIABILITY
In May 1999 and June 1999, the Company was served with two
complaints purporting to be class action lawsuits on behalf of
shareholders who purchased the Company's common stock between February 6,
1997 and March 11, 1999. The complaints, which were filed in the United
States District Court for the Northern District of Illinois, were
virtually identical. They alleged various violations of the federal
securities laws, including misrepresentations or failure to disclose
material information about the Company's results of operations, financial
condition, weakness in its financial internal controls, accounting for
long-term construction contracts and employee stock option compensation
expense. In August 1999, the District Court ordered that the two cases be
consolidated for all purposes. A Consolidated Amended Complaint was filed
on October 12, 1999. The Company filed a Motion to Dismiss on December 13,
1999. The action was dismissed, without prejudice, by order dated March
13, 2000, with leave to amend the complaint. On April 27, 2000, a Second
Consolidated Amended Complaint was filed. No estimate can currently be
made as to the claim. The Company intends to file a Motion to Dismiss the
Second Consolidated Amended Complaint. However, should the Second
Consolidated Amended Complaint survive the Company's motion to dismiss,
such claim could have a material adverse effect on the financial position
and results of operations in the near term if an unfavorable outcome were
to occur.
The Company is involved in a number of other legal proceedings as a
defending party, including product liability claims for which additional
liability is reasonably possible. It is the Company's policy to reserve on
a non-discounted basis for all known and estimated unreported product
liability claims. The products to which the claims primarily relate are
products currently manufactured by the Company's Industrial Products Group
and products related to discontinued operations for which the Company
contractually retained certain product liability claims generally arising
prior to the sale of the related business. For one product liability claim
the amount of damages claimed against all defendants exceeds the Company's
liability insurance limits. Although there is no guarantee that the
ultimate outcome of this claim against the Company will not exceed such
limits, the Company currently believes that the ultimate outcome of this
claim will not exceed its insurance coverage. However, changes in the
estimate in the near term could be material to the financial position and
results of operations if an unfavorable outcome were to occur. For all
other matters, after consideration of relevant data, including insurance
coverage and accruals, management believes that the eventual outcome of
these matters will not have a material
<PAGE>
adverse effect on the Company's financial position or its ongoing results
of operations.
In response to General Motors' concerns that the Company's cash flow
problems would further delay or preclude the Company from completing four
presses that were in various stages of production, the Company entered
into amendments to purchase orders with General Motors during the fourth
quarter of 1999 and first quarter of 2000. The aggregate sales price of
the presses covered by these purchase orders exceeds $75,000,000. Under
the terms of the amendments, the Company and General Motors agreed to
revised shipping, payment and testing schedules that allow the Company to
ship components of, and receive payments for, the first two of the four
presses earlier than it would have been able to under the terms of the
original purchase orders. Payment terms for the third and fourth presses
were largely unchanged from the original order (i.e., 90% upon completion,
testing and shipment), however, delivery dates (and related payments) have
been extended so that the last press will not be shipped until the first
quarter of 2001 and final payment will not be received until the first
quarter of 2002. Upon fulfillment of certain conditions set forth in the
amendments, General Motors will waive and release the Company from all
claims arising from or attributable to the Company's alleged late delivery
defaults on all presses and will accept delivery of the last two (2)
presses covered by this order. Until such time as these conditions are
satisfied, General Motors reserves the right to cancel the purchase orders
associated with the third and fourth presses until the Company has
demonstrated that it has the financial ability to complete these presses
on a timely basis. Such cancellation could have a material adverse effect
on the financial position and results of operations in the near term.
On certain presses recently delivered the Verson division
experienced difficulty meeting delivery schedules. The purchasers of these
presses may seek damages for alleged breach of contract by the Company.
The damages the purchasers seek could include damages for lost production,
lost sales and lost profit. The Company cannot at this time determine the
amount of any potential claim that may be asserted due to late delivery,
however, such claims could have a material adverse effect on the financial
position and results of operations in the near term, if an unfavorable
outcome were to occur.
At March 31, 2000, the Company was contingently liable for
approximately $1,358,000 primarily relating to outstanding letters of
credit.
(6) INCOME TAXES
No tax benefit was recorded with respect to operating losses
associated with continuing operations in the first quarter of 2000 and
1999 as a 100% valuation allowance has been provided on the related
benefit. The provision for deferred income taxes
<PAGE>
($5,650,000) in the first quarter of 2000 related to certain temporary
differences associated with continuing operations. This charge is for a
valuation allowance for certain temporary differences that are expected to
reverse and become, in the near term, net operating loss carryforwards
subject to expiration. The valuation allowance was based on management's
belief that unless the Industrial Products Group is able to reduce
production costs and return to profit levels experienced prior to 1997,
the sale of the Agricultural Products Group will further decrease the
likelihood of the Company being able to utilize all of its remaining tax
loss carryforwards.
The provision for income taxes ($5,054,000) related to the gain on
the disposition of discontinued operations in the first quarter of 2000
was based on the application of the Alternative Minimum Tax rate for the
current tax provision ($768,000) and the reversal of deferred tax assets
($4,286,000) specifically associated with the sale of 80.1% of the total
outstanding membership interest of New Bush Hog- see Note 1. There was no
current tax associated with the income from discontinued operations of
$1,687,000 and $3,340,000 in the three month periods ended March 31, 2000
and 1999, respectively. See Note 4 of Notes to Consolidated Financial
Statements in the Company's 1999 Annual Report on Form 10-K for a further
discussion related to income taxes.
(7) SUMMARY OF OTHER (INCOME) EXPENSES
Other (income) expense for the three month period ended March 31,
2000 and 1999 consists of the following:
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED,
---------------------------
3/31/00 3/31/99
--------- ---------
<S> <C> <C>
Interest income $ (45,000) $ (26,000)
Goodwill amortization 45,000 45,000
Net (gain) on sales of operating and
nonoperating assets -- (81,000)
Idle facility (income) expense 136,000 (109,000)
Loan cost expenses/amortization 324,000 48,000
Legal settlement -- (389,000)
Other miscellaneous (13,000) 7,000
--------- ---------
$ 447,000 $(505,000)
========= =========
</TABLE>
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
OPERATING RESULTS
Net sales from continuing operations decreased to $19,016,000 in the first
quarter of 2000 compared to net sales from continuing operations of $45,338,000
in the first quarter of 1999. The loss from continuing operations in the first
quarter of 2000 was $12,976,000 (including a charge to deferred taxes of
$5,650,000) compared to a loss from continuing operations of $16,006,000 for the
first quarter of 1999. Income from discontinued operations for the first quarter
of 2000 was $39,785,000 compared to $3,340,000 for the first quarter of 1999.
Income from discontinued operations includes an estimated gain of $38,098,000
from the sale of an 80.1% interest in Bush Hog, L.L.C. (the transferee owner of
the former Agricultural Products Group.) Net income for the first quarter of
2000 was $26,809,000 ($2.26 per common share-diluted) compared to a net loss of
$12,666,000 ($1.07 per common share-diluted) in the first quarter of 1999.
CONTINUING OPERATIONS
The decrease in net sales from continuing operations in the first quarter
of 2000 reflected a significant decline in presses in production. In the first
quarter of 2000, the Company continued work on three large transfer presses as
well as several other smaller presses. The Company was working on orders for
eight large transfer presses and a substantial number of other smaller presses
during the first quarter of 1999. Revenues from parts sales, press rebuilds and
field service increased slightly in the first quarter of 2000, but represented a
much higher percentage of the reduced level of total sales: 19.9% in the first
quarter of 2000 compared to 8% in the first quarter of 1999.
Gross profits were $70,000 in the first quarter of 2000 (.37% of sales).
In the first quarter of 1999, costs exceeded sales by $9,481,000 (21% of sales).
The improvement in gross margins reflects the lessening impact of the backlog of
loss jobs and low margin jobs on which work began in 1998 and prior years.
Approximately 40% of the Company's press production during the first quarter of
2000 represented work on jobs on which the Company had previously established
reserves for losses. The Company recorded additional losses of $609,000 and no
gross margins during the quarter on these jobs. In the first quarter of 1999,
the Company's press production involved relatively more work on loss jobs and
low margin jobs. The Company revised its cost estimates in 1999 on certain loss
jobs during the quarter and the increase in the reserves for future losses on
those jobs ($7,515,000) was a major factor in the quarter's negative gross
margins.
Two other factors significantly affected margins in the first quarter of
2000. The Company continued to report no gross profit during the quarter with
respect to production on any press which had not reached a point in production
when all manufacturing costs could be reasonably estimated. A relatively large
portion of total press production in the first quarter of 2000 represented work
on presses on which no gross profits were reported for this reason. Gross
profits may vary significantly from quarter to quarter, depending upon whether a
relatively smaller or larger portion of production represents work on presses
which have reached the stage when manufacturing costs can be reasonably
estimated and gross profits are recorded.
Second, because of the lower level of production in the quarter, gross
profit margins were also adversely affected by the underabsorption of
manufacturing overhead ($1,053,000). The Company anticipates that
underabsorption will continue to affect gross profit margins adversely as long
as production remains at current levels.
Interest expense in the first quarter of 2000 related to continuing
operations was $1,680,000 compared to interest expense of $1,163,000 related to
continuing operations reported in the first
<PAGE>
quarter of 1999. The increase was attributable to a combination of increased
borrowings prior to the sale of an 80.1% interest in the Agricultural Products
Group on March 7, 2000 and an increase in average interest rates.
Selling and administrative expense in the first quarter of 2000 declined
by $598,000, but represented a significantly higher percentage of the reduced
level of total sales: 27.7% compared to 13%. The reduction in these costs was
primarily associated with decreased employee benefit costs (pensions, taxes,
etc.) related to lower employment levels. Professional fees (principally outside
legal and accounting/auditing costs) also decreased in the first quarter of 2000
as many of these activities were related to the sale of an 80.1% interest in the
Agricultural Products Group and were recorded as a reduction in the gain on the
sale of these operations.
Other expense was $447,000 in the first quarter of 2000 compared to other
income of $505,000 in the first quarter of 1999. Reference is made to Note 7 of
Notes to Condensed Consolidated Financial Statements for an analysis of other
(income) expense.
No tax benefit was recorded with respect to operating losses associated
with continuing operations in the first quarter of 2000 and 1999 as a 100%
valuation allowance has been provided on the related benefit. The provision for
deferred income taxes ($5,650,000) in the first quarter of 2000 related to
certain temporary differences associated with continuing operations. This charge
is for a valuation allowance for certain temporary differences that are expected
to reverse and become, in the near term, net operating loss carryforwards
subject to expiration. The valuation allowance was based on management's belief
that unless the Industrial Products Group is able to reduce production costs and
return to profit levels experienced prior to 1997, the sale of the Agricultural
Products Group will further decrease the likelihood of the Company being able to
utilize all of its remaining tax loss carryforwards.
The provision for income taxes ($5,054,000) related to the gain on the
disposition of discontinued operations in the first quarter of 2000 was based on
the application of the Alternative Minimum Tax rate for the current tax
provision ($768,000) and the reversal of deferred tax assets ($4,286,000)
specifically associated with the sale of 80.1% of the total outstanding
membership interest of New Bush Hog - see Note 1 of Notes to Condensed
Consolidated Financial Statements. There was no current tax associated with the
income from discontinued operations of $1,687,000 and $3,340,000 in the three
month periods ended March 31, 2000 and 1999, respectively.
The sales backlog at March 31, 2000 was $39,000,000, which compares to
$130,360,000 a year earlier. The Company recognizes that the delays in press
shipments and installations during 1998 and 1999 have caused its relations with
major customers to become strained. The Company is working to regain the
confidence of its customers. The Company has reduced employment levels from
approximately 800 on January 1, 2000 to approximately 675 on April 30, 2000. The
Company anticipates that additional reductions in other costs as well as
employment levels will be required. The Company will begin negotiations of a new
labor agreement during the second quarter of 2000. The existing agreement
expires on June 18, 2000.
<PAGE>
DISCONTINUED OPERATIONS
Discontinued operations for the first quarter of 2000 and 1999 include the
operations of the Agricultural Products Group, an allocation of all direct
financing, administrative and other expenses, income taxes and a pro rata
allocation of interest expense. Net sales associated with discontinued
operations for the 66 days from January 1 through the sale of an 80.1% interest
in Bush Hog, L.L.C. (the transferee owner of the Agricultural Products Group) on
March 7, 2000 totaled $28,608,000 ($429,000 per day), compared to net sales of
$36,902,000 in the first quarter of 1999 ($410,000 per day).
Income net of taxes associated with discontinued operations through the
date of this sale in 2000 totaled $1,687,000, compared to $3,340,000 for the
first quarter of 1999. The Company recorded an estimated gain of $38,098,000 net
of tax, subject to post-closing adjustments on the sale of an 80.1% interest in
Bush Hog, L.L.C. on March 7, 2000.
On March 23, 2000, the Company agreed to sell its remaining 19.9% interest
in Bush Hog, L.L.C. on or before June 30, 2000 for a purchase price which the
Company anticipates will be approximately $27,800,000 plus the Company's pro
rata share of undistributed income of Bush Hog, L.L.C. through the closing. The
Company's cost basis at March 31, 2000 (adjusted for the receipt of a
distribution of $3,582,000 from Bush Hog, L.L.C. treated as a return of capital)
was $17,532,000. $4,000,000 of the sales proceeds will be escrowed as security
for the Company's indemnification obligations under the initial sale agreement
and $18,000,000 will be applied to discharge the Company's indebtedness to
LaSalle Bank, N.A. ("LaSalle").
FINANCIAL CONDITION AND LIQUIDITY
Working capital at March 31, 2000 was $9,132,000 and the current ratio was
1.12 to 1.00 compared to working capital of ($43,432,000) and a current ratio of
.79 to 1.00 at December 31, 1999. Working capital at March 31, 2000 includes
$17,532,000 related to the Company's 19.9% interest in New Bush Hog. On March
24, 2000, the Company signed a definitive agreement to sell its 19.9% interest
in New Bush Hog to Bush Hog Investors. The sale is expected to close prior to
the end of the second quarter of 2000 - see Note 1 of Notes to Condensed
Consolidated Financial Statements. Working capital at March 31, 2000 also
reflects the inclusion of the Company's indebtedness to LaSalle as a current
liability since the Company anticipates that it will discharge the indebtedness
by June 30, 2000. The improvement in working capital is attributable to the
application of the net proceeds of the sale of an 80.1% interest in the
Agricultural Products Group to reduce short term indebtedness. An increase of
$4,260,000 in net accounts receivable is attributable largely to the shipment of
six presses during the quarter. A decrease of $19,110,000 in inventory levels
during the first quarter of 2000 is attributable in part to the press shipments
referred to above and in part to a larger amount of customer progress payments
accounted for as a reduction of inventories ($6,490,000).
Fixed asset additions attributable to continuing operations totaled
$582,000 including approximately $473,000 associated with a horizontal boring
mill which is in the process of being installed. There were no major fixed asset
dispositions in the first quarter of 2000.
The net decrease in accounts payable ($5,035,000) is attributable to a
reduction in customer deposits or progress payments which are initially
accounted for as accounts payable. As production continues on an order the
customer deposit is eliminated as an account payable and is accounted for as a
credit against inventories. Accounts payable exclusive of customer deposits
remained at approximately the same level during the first quarter of 2000, as
did accrued expenses.
Net cash generated by the operating activities related to the Company's
continuing operations totaled $4,589,000 in the first quarter of 2000, compared
to $13,174,000 in the first quarter of 1999. The decrease in inventory levels
during the first quarter of 2000 more than offset increases in net accounts
receivable and prepaid expenses and a decrease in accounts payable and accrued
expenses, resulting in positive cash flow for the quarter. The positive cash
flow in the first quarter of 1999 was the result of a decrease in accounts
receivable, inventories and prepaid expenses and an increase in accounts
payable and accrued expenses.
During the first quarter of 2000 the Company repaid all of its then
outstanding bank
<PAGE>
indebtedness, borrowed $18,000,000 from LaSalle and entered into a new credit
facility with Foothill Capital Corporation ("Foothill") effective March 29,
2000. The Company is required to pay off its outstanding indebtedness to LaSalle
on the sale of its remaining 19.9% in the former Agricultural Products Group
during the second quarter. Reference is made to Note 4 of Notes to Condensed
Consolidated Financial Statements and to "Management's Discussion and Analysis
of Financial Condition and Results of Operation" in the Company's 1999 Annual
Report on Form 10-K for a description of the terms of the LaSalle loan and the
Foothill credit facility.
As of March 31, 2000, the Company had cash and cash equivalents of
$12,109,000, reflecting in part an initial borrowing of $9,710,000 under the
Foothill credit facility. As presses in progress near completion and as Foothill
completes its assessment of the amount of eligible receivables and inventories
constituting the Company's borrowing base under the credit facility, additional
amounts may become available under the Foothill credit facility. The
availability of borrowing under the Foothill credit facility is conditioned upon
the Company's compliance with financial covenants including a covenant that
cumulative earnings before interest, taxes, depreciation and amortization
(EBITDA), exclusive of extraordinary gains, exceed specified amounts as of the
end of each of the next seven calendar quarters. Since the Company's estimated
EBITDA for future periods is predicated, among other things, upon projections of
the receipt of new press orders in appropriate sequences and bearing appropriate
margins, the Company cannot predict EBITDA with a reasonable degree of
certainty. The rate of new orders is currently lagging behind the projections on
which the EBITDA covenants were based. Therefore it is possible that the Company
will be unable to comply with the EBITDA covenants. If the Company is not in
compliance with the covenants, the rate of interest on the Company's
indebtedness will increase by 3% per annum and the Company will be required
either to attempt to negotiate a waiver or amendment of its agreement with
Foothill or to pursue alternative financing sources. A failure to obtain a
revised agreement with Foothill or alternative financing could result in a
cancellation of the last two presses on the General Motors order. See Note 5 of
Notes to Condensed Consolidated Financial Statements.
Reference is made to "Management's Discussion and Analysis of Financial
Condition and Results of Operation: Outlook" in the Company's 1999 Annual Report
on Form 10-K for a discussion of the challenges facing the Company.
MARKET RISK
The Company's market risk is the exposure to adverse changes in interest
rates. At March 31, 2000, the Company's total debt outstanding (including
capitalized leases) totaled $28,330,000. Capitalized lease debt ($620,000) was
represented by fixed rate financing and was not subject to market rate
fluctuations. The remaining portion of the Company's debt at March 31, 2000
($27,710,000) was subject to interest rates at a floating prime rate (prime less
100 basis points under the LaSalle loan and prime plus 200 basis points on the
term loan portion of the Foothill credit facility). The balance outstanding at
March 31, 2000 approximated fair market value. A hypothetical immediate 1%
increase in interest rates would adversely affect 2000 earnings and cash flow by
approximately $277,100 based on the composition of debt levels at March 31,
2000.
SAFE HARBOR STATEMENT
Statements contained in the Management Discussion and Analysis of
Financial Conditions and Results of Operations that relate to future operating
periods are subject to risks and uncertainties that could cause actual results
to differ from management's projections. The Company's outlook is based upon
assumptions relating to the factors discussed below.
The Company's principal continuing business involves designing,
manufacturing, marketing and servicing complex medium and large metal forming
presses. Significant periods of time are
<PAGE>
necessary to plan, design and build these complex machines. With respect to new
presses, there are risks of customer acceptances and start-up or performance
problems. Large amounts of capital are required to be devoted by the Company's
customers to purchase and install these presses. The installation of the press
may be an integral part of a customer's program for the introduction and
manufacture of a new model of an automobile or appliance. The Company's success
in obtaining and managing a relatively small number of sales opportunities,
including the Company's success in securing progress payments for such sales and
meeting the requirements of warranties and guarantees associated with such
sales, can affect the Company's financial performance.
Other factors that could cause actual results to differ materially from
those contemplated include:
- - - - - - - - - Factors relating to the Company's ability to obtain financing and
refinancing, to comply with covenants in its loan agreements and to
maintain a satisfactory credit standing with its suppliers.
- - - - - - - - - Factors affecting customers' purchases of new equipment, rebuilds, parts
and services such as: the restructuring and automation of customer
manufacturing processes, the cash flows of customers; consolidations in
the automobile industry; work stoppages at customers; and the timing,
severity and duration of automotive customer buying cycles.
- - - - - - - - - Factors affecting the Company's ability to capture available sales
opportunities, including: customers' perceptions of the quality and value
of the Company's products as compared to competitors' products; customers'
perceptions of the advantages of dealing with a single press manufacturer;
whether the Company has successful reference installations to demonstrate
the speed, efficiency and reliability of new presses to customers;
customers' perceptions of the health and stability of the Company as
compared to its competitors; the availability of manufacturing capacity at
the Company's factory and changes in the value of the dollar relative to
German and Japanese currencies.
- - - - - - - - - Factors affecting the Company's ability to successfully manage sales it
obtains, such as: the accuracy of the Company's cost and time estimates
for major projects; the adequacy of the Company's systems to manage major
projects and its success in completing projects on time and within budget;
the Company's success in recruiting and retaining managers and key
employees; wage stability and cooperative labor relations; renegotiation
of a collective bargaining agreement and plant capacity and utilization.
- - - - - - - - - Factors affecting the Company's general business, such as: unforeseen
patent, tax, product, environmental, employee health or benefit, or
contractual liabilities; nonrecurring restructuring and other special
charges; changes in accounting or tax rules or regulations; reassessments
of asset valuations for such assets as receivables , inventories, fixed
assets and intangible assets; and leverage and debt service.
Reference is made to Note 14 of Notes to Consolidated Financial Statements
in the Company's 1999 Annual Report on Form 10-K.
<PAGE>
PART II - OTHER INFORMATION
Item 4 SUBMISSION OF MATTERS TO A VOTES OF SECURITY HOLDERS
On March 7, 2000 the Registrant held a special meeting of its
shareholders. Copies of the related proxy statement have been previously
filed with the Securities and Exchange Commission. The following item was
voted on by the Company's shareholders:
The approval of the Limited Liability Company Interest Purchase and
Asset Contribution Agreement by and among the Company, Bush Hog, L.L.C., a
Delaware limited liability company ("New Bush Hog") and Bush Hog
Investors, L.L.C., a Delaware limited liability company, which
contemplated (a) the transfer from the Company to New Bush Hog of
substantially all of the operating assets and some of the liabilities
associated with the Company's Agricultural Products Group in exchange
for all of the outstanding membership interests of New Bush Hog and (b)
the sale of membership interests representing 80.1% of the outstanding
membership interest of Bush Hog to Bush Hog Investors for a purchase price
of $112,076,041, subject to post-closing adjustments. Proxies for the
meeting were solicited pursuant to Regulation 14A. The proposition
received the following number of votes:
FOR- 8,370,750; AGAINST- 206,390; ABSTAIN - 22,525
Approximately 212,000 shares held by brokers and nominees were not
voted to approve the transaction.
2001 ANNUAL MEETING. After January 2, 2001, notice to the
Company of a Shareholder proposal submitted for consideration at the 2001
Annual Meeting of Shareholders which is not submitted for inclusion in the
Company's proxy statement and form of proxy, will be considered untimely and the
persons named in the proxies solicited by the Company may exercise discretionary
voting power with respect to any such proposal.
Item 6. EXHIBIT AND REPORTS ON FORM 8-K
(a) Exhibits - See Exhibit Index included herein.
(b) Reports on Form 8-K - there were no reports on Form 8-K for the
three months ended March 31, 2000.
<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.
ALLIED PRODUCTS CORPORATION
---------------------------
(REGISTRANT)
MAY 22, 2000 /s/ Robert J. Fleck
- - - - - - - - ------------ --------------------------------------------------
Robert J. Fleck
Vice President- Accounting and Chief Accounting
& Administrative Officer
MAY 22, 2000 /s/ Mark C. Standefer
- - - - - - - - ------------ --------------------------------------------------
Mark C. Standefer
Vice President, General Counsel & Secretary
<PAGE>
ALLIED PRODUCTS CORPORATION
INDEX TO EXHIBITS
The following exhibit is attached to the copies of this report filed with
the Securities and Exchange Commission:
EXHIBIT NO. DESCRIPTION OF EXHIBITS
- - - - - - - - ----------- -----------------------
27.1 Financial Data Schedule
27.2 Financial Data Schedule
The following exhibits are incorporated by reference as noted below:
99(a) The Registrant's Notification of
Late Filing as it relates to the
Registrant's Annual Report on Form
10-K for the year ended December 31,
1999 is Incorporated by reference to
Registrant's Form 12b- 25 dated
March 31, 2000 (File No. 1-5530)
99(b) The Registrant's Notification of
Late Filing as it relates to the
Registrant's Quarterly Report on
Form 10-Q for the period ended March
31, 2000 is Incorporated by
reference to Registrant's Form 12b-
25 dated May 15, 2000 (File No.
1-5530)
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AT MARCH 31, 2000 AND THE CONSOLIDATED STATEMENT
OF INCOME AND THE CONSOLIDATED STATEMENT OF CASH FLOW FOR THE THREE MONTHS
ENDED MARCH 31, 2000 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 12,109
<SECURITIES> 0
<RECEIVABLES> 25,784
<ALLOWANCES> 1,064
<INVENTORY> 27,555
<CURRENT-ASSETS> 87,047
<PP&E> 91,287
<DEPRECIATION> 33,355
<TOTAL-ASSETS> 153,536
<CURRENT-LIABILITIES> 77,915
<BONDS> 297
0
0
<COMMON> 140
<OTHER-SE> 69,821
<TOTAL-LIABILITY-AND-EQUITY> 153,536
<SALES> 19,016
<TOTAL-REVENUES> 19,016
<CGS> 18,946
<TOTAL-COSTS> 18,946
<OTHER-EXPENSES> 7,396
<LOSS-PROVISION> 201
<INTEREST-EXPENSE> 1,680
<INCOME-PRETAX> (7,326)
<INCOME-TAX> 0
<INCOME-CONTINUING> (12,976)
<DISCONTINUED> 39,785
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 26,809
<EPS-BASIC> 2.26
<EPS-DILUTED> 2.26
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CONSOLIDATED
BALANCE SHEET AT MARCH 31, 1999 AND THE CONSOLIDATED STATEMENT OF INCOME AND THE
CONSOLIDATED STATEMENT OF CASH FLOW FOR THE THREE MONTHS ENDED MARCH 31, 1999
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 413
<SECURITIES> 0
<RECEIVABLES> 23,550
<ALLOWANCES> 550
<INVENTORY> 47,729
<CURRENT-ASSETS> 175,412
<PP&E> 87,379
<DEPRECIATION> 27,986
<TOTAL-ASSETS> 273,071
<CURRENT-LIABILITIES> 207,432
<BONDS> 2,051
0
0
<COMMON> 140
<OTHER-SE> 58,455
<TOTAL-LIABILITY-AND-EQUITY> 273,071
<SALES> 45,338
<TOTAL-REVENUES> 45,338
<CGS> 54,819
<TOTAL-COSTS> 54,819
<OTHER-EXPENSES> 6,525
<LOSS-PROVISION> 296
<INTEREST-EXPENSE> 1,163
<INCOME-PRETAX> (16,006)
<INCOME-TAX> 0
<INCOME-CONTINUING> (16,006)
<DISCONTINUED> 3,340
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (12,666)
<EPS-BASIC> (1.07)
<EPS-DILUTED> (1.07)
</TABLE>
