FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1994
Commission file number 1-924
TRINOVA CORPORATION
(Exact name of registrant as specified in its charter)
Ohio 34-4288310
(State of Incorporation) (I.R.S. Employer
Identification No.)
3000 Strayer, Maumee, OH 43537-0050
(Address of principal executive office)
Registrant's telephone number, including area code: (419) 867-2200
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, and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
The number of Common Shares, $5 Par Value, outstanding as of July 29, 1994,
was 28,767,149.
This document, including exhibits, contains 22 pages.
The cover page consists of 1 page.
The Exhibit Index is located on page 18.
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
FORM 10-Q
FOR QUARTER ENDED JUNE 30, 1994
INDEX TO INFORMATION IN REPORT
TRINOVA CORPORATION
Page
Number
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Statement of Financial Position -
June 30, 1994 and December 31, 1993 3
Condensed Statement of Operations -
Three Months and Six Months Ended
June 30, 1994 and 1993 4
Condensed Statement of Cash Flows -
Six Months Ended June 30, 1994 and 1993 5
Notes to Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 7
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 13
Item 6. Exhibits and Reports on Form 8-K 14
SIGNATURES 17
EXHIBIT INDEX 18
EXHIBIT 11 - STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS 22
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<PAGE>
<TABLE>
PART I - FINANCIAL INFORMATION
Item 1. - Financial Statements
STATEMENT OF FINANCIAL POSITION
TRINOVA CORPORATION
(Dollars in thousands, except per share data)
<CAPTION>
June 30 December 31
1994 1993
---------- ----------
(Unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash $ 12,996 $ 20,534
Receivables 242,411 200,340
Inventories:
In-process and finished products 166,817 172,964
Raw materials and manufacturing supplies 42,477 39,382
---------- ----------
209,294 212,346
Other current assets 48,012 54,011
---------- ----------
TOTAL CURRENT ASSETS 512,713 487,231
Plants and properties 852,525 826,100
Less accumulated depreciation 468,824 439,281
---------- ----------
383,701 386,819
Other assets 102,123 98,151
---------- ----------
TOTAL ASSETS $ 998,537 $ 972,201
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable $ 15,049 $ 60,539
Accounts payable 96,978 81,133
Income taxes 34,891 27,364
Other current liabilities 151,436 151,469
Current maturities of long-term debt 13,472 4,257
---------- ----------
TOTAL CURRENT LIABILITIES 311,826 324,762
Long-term debt 236,207 246,214
Postretirement benefits other than pensions 121,670 120,058
Deferred credits and other liabilities 26,290 22,558
Deferred income taxes 5,927 5,377
SHAREHOLDERS' EQUITY
Common stock; par value $5 a share
Authorized - 100,000,000 shares
Outstanding - 28,752,149 and 28,405,880 shares,
respectively (after deducting 5,457,747 and
5,804,016 shares, respectively, in treasury) 143,760 142,029
Additional paid-in capital 9,407 2,157
Retained earnings 161,461 138,628
Currency translation adjustments (18,011) (29,582)
---------- ----------
TOTAL SHAREHOLDERS' EQUITY 296,617 253,232
---------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 998,537 $ 972,201
========== ==========
<FN>
The Notes to Financial Statements are an integral part of this statement.
</TABLE>
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<PAGE>
<TABLE>
CONDENSED STATEMENT OF OPERATIONS
TRINOVA CORPORATION
(In thousands, except per share data)
(Unaudited)
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
------------------------ ------------------------
1994 1993 1994 1993
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net sales $ 460,863 $ 419,748 $ 900,694 $ 848,917
Cost of products sold 345,437 317,829 676,803 648,767
---------- ---------- ---------- ----------
MANUFACTURING INCOME 115,426 101,919 223,891 200,150
Selling and general admin. expenses 62,195 62,742 124,242 127,414
Engineering, research and development
expenses 13,740 13,740 27,766 28,793
Special charge - 26,000 - 26,000
---------- ---------- ---------- ----------
OPERATING INCOME (LOSS) 39,491 (563) 71,883 17,943
Interest expense (5,475) (6,729) (11,216) (13,459)
Other-net (4,292) (3,629) (10,469) (6,071)
---------- ---------- ---------- ----------
INCOME (LOSS) BEFORE INCOME TAXES
AND CUMULATIVE EFFECT OF ACCOUNTING
CHANGE 29,724 (10,921) 50,198 (1,587)
Income taxes (credit) 10,400 (1,800) 17,600 1,900
---------- ---------- ---------- ----------
INCOME (LOSS) BEFORE CUMULATIVE
EFFECT OF ACCOUNTING CHANGE 19,324 (9,121) 32,598 (3,487)
Cumulative effect to January 1, 1993,
of accounting change, net of income
tax benefit - - - (70,229)
---------- ---------- ---------- ----------
NET INCOME (LOSS) $ 19,324 $ (9,121) $ 32,598 $ (73,716)
========== ========== ========== ==========
INCOME (LOSS) PER SHARE
Income (loss) before cumulative
effect of accounting change $ .66 $ (.32) $ 1.12 $ (.12)
Cumulative effect of accounting
change, net of income tax benefit - - - (2.48)
---------- ---------- ---------- ----------
NET INCOME (LOSS) PER SHARE $ .66 $ (.32) $ 1.12 $ (2.60)
========== ========== ========== ==========
Cash dividends per common share $ .17 $ .17 $ .34 $ .34
========== ========== ========== ==========
Average shares outstanding 30,866 28,345 30,780 28,326
========== ========== ========== ==========
<FN>
The Notes to Financial Statements are an integral part of this statement.
</TABLE>
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<PAGE>
<TABLE>
CONDENSED STATEMENT OF CASH FLOWS
TRINOVA CORPORATION
(In thousands)
(Unaudited)
<CAPTION>
Six Months Ended
June 30
--------------------
1994 1993
---------- ----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ 32,598 $ (73,716)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Cumulative effect of accounting change net
of income tax benefit - 70,229
Special charge - 26,000
Depreciation 30,287 30,884
Changes in working capital elements,
other than debt (374) (1,004)
Restructuring payments (1,908) (10,660)
Other 6,138 9,163
---------- ----------
NET CASH PROVIDED BY OPERATING ACTIVITIES 66,741 50,896
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (26,617) (26,313)
Other 1,149 298
---------- ----------
NET CASH USED BY INVESTING ACTIVITIES (25,468) (26,015)
CASH FLOWS FROM FINANCING ACTIVITIES
Net decrease in short-and long-term debt (45,696) (17,876)
Cash dividends (9,765) (9,607)
Stock issuance 8,981 1,173
---------- ----------
NET CASH USED BY FINANCING ACTIVITIES (46,480) (26,310)
Effect of exchange rate changes on cash (2,331) (3,438)
---------- ----------
DECREASE IN CASH (7,538) (4,867)
Cash at beginning of period 20,534 26,269
---------- ----------
CASH AT END OF PERIOD $ 12,996 $ 21,402
========== ==========
<FN>
The Notes to Financial Statements are an integral part of this statement.
</TABLE>
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<PAGE>
NOTES TO FINANCIAL STATEMENTS
TRINOVA CORPORATION
Note 1 - Basis of Presentation
The accompanying financial statements for the interim periods are unaudited.
In the opinion of management, all adjustments necessary for a fair statement
of the results for the interim periods included herein have been made. It is
suggested that these financial statements be read in conjunction with the
audited 1993 financial statements and notes thereto included in TRINOVA
Corporation's most recent annual report.
Note 2 - Special Charge
In the 1993 second quarter, the Company recorded a $26 million provision
before income taxes for the estimated costs for severance and other personnel-
related costs associated with worldwide work force reductions, primarily
focusing on the Company's industrial operations in Europe. This charge
reduced net income for the 1993 second quarter and income before cumulative
effect of accounting change for the 1993 six-month period by $18.2 million, or
$.64 per share.
Note 3 - Postretirement Benefits Other than Pensions
The Company adopted Statement of Financial Accounting Standards No. 106,
"Employers' Accounting for Postretirement Benefits Other than Pensions," in
the 1993 first quarter and recognized the transition obligation as the
cumulative effect of a change in accounting principle resulting in a non-cash
charge to income of $113.2 million pretax, $70.2 million after tax, or $2.48
per share.
Note 4 - Income (Loss) per Share
Income (loss) per share is computed using the average number of common shares
outstanding, including common stock equivalents. The assumed conversion of
the Company's 6 percent convertible debentures was included in average shares
outstanding for the three- and six-month periods ended June 30, 1994,
increasing the average number of shares outstanding by 1,904,762 shares. For
purposes of computing net income per share for the three- and six-month
periods ended June 30, 1994, net income was increased for the after-tax
equivalent of interest expense on the 6 percent convertible debentures. The
assumed conversion of the 6 percent convertible debentures was not included in
average shares outstanding for the three- and six-month periods ended June 30,
1993, because the effect of the inclusion would have been anti-dilutive.
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<PAGE>
<TABLE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
FINANCIAL REVIEW AND ANALYSIS OF OPERATIONS
Analysis of Operations
Second Quarter 1994 Compared with Second Quarter 1993
The following data provide highlights for the 1994 second quarter compared
with the 1993 second quarter.
<CAPTION>
Percent
(dollars in thousands, Second Quarter Increase
except per share data) 1994 1993 (Decrease)
<S> <C> <C> <C>
CONSOLIDATED
Net sales $ 460,863 $ 419,748 9.8%
Manufacturing income 115,426 101,919 13.3
Manufacturing margin 25.0% 24.3%
Special charge - 26,000
Operating income (loss) 39,491 (563)*
Operating margin 8.6% - *
Net income (loss) 19,324 (9,121)*
Net income (loss) per share .66 (.32)*
INDUSTRIAL
Net sales 247,474 222,189 11.4
Special charge - 19,200
Operating income (loss) 24,939 (9,351)*
Operating margin 10.1% - *
Order backlog at June 30 179,397 149,757 19.8
AUTOMOTIVE
Net sales 135,058 114,781 17.7
Special charge - 2,600
Operating income 14,144 9,845 * 43.7
Operating margin 10.5% 8.6% *
AEROSPACE & DEFENSE
Net sales 78,331 82,778 (5.4)
Special charge - 3,600
Operating income 6,120 4,194 * 45.9
Operating margin 7.8% 5.1% *
Order backlog at June 30 269,976 291,893 (7.5)
<FN>
* After deducting the special charge.
</TABLE>
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<PAGE>
Analysis of Operations - Continued
Second-quarter 1994 sales increased $41.1 million, or 9.8 percent, over the
1993 second quarter. Industrial and automotive sales increased 11.4 percent
and 17.7 percent, respectively, while aerospace & defense sales declined 5.4
percent. U.S. sales increased $30.6 million, and non-U.S. sales, principally
Europe, increased $10.5 million.
Industrial sales increased $25.3 million, or 11.4 percent, over the 1993
second quarter. U.S. industrial sales, which account for nearly two-thirds of
the Company's industrial sales, increased 15 percent over the 1993 second-
quarter sales. Marking a significant change in the trend of recent quarters
and principally the result of improving business conditions in Europe, non-
U.S. industrial sales exceeded 1993 second-quarter sales by nearly 6 percent.
Non-U.S. industrial sales include sales in Brazil, which were flat compared
with the prior year, and improved sales in the Asia/Pacific region. Second-
quarter 1994 industrial order intake in the U.S. and Europe continued to
strengthen, resulting in order backlog at June 30, 1994, of $179.4 million
which was $29.6 million, or 19.8 percent, greater than the prior year.
Second-quarter 1994 automotive sales increased $20.3 million, or 17.7 percent,
over the 1993 second quarter. Second-quarter 1994 sales to U.S. automotive
markets were flat compared with the 1994 first quarter but increased nearly 25
percent compared with the 1993 second quarter. The Company's second-quarter
1994 sales in the European automotive markets improved nearly 11 percent
compared with both the 1994 first quarter and the 1993 second quarter.
Aerospace & defense sales for the 1994 second quarter were at first-quarter
1994 levels but $4.5 million lower than the 1993 second quarter, reflecting
the continued depressed conditions in the worldwide aerospace and military
markets. Accordingly, order backlog of $270 million was $21.9 million, or 7.5
percent, lower than at June 30, 1993.
Consolidated manufacturing income and margin improved over the 1993 second
quarter. Manufacturing margin for the industrial and aerospace & defense
segments improved, while manufacturing margin for the automotive segment
declined slightly. As a result, consolidated manufacturing margin increased
to 25 percent in the 1994 second quarter compared with 24.3 percent in the
1993 second quarter. This margin improvement reflects the benefits of the
Company's continued commitment to cost reduction through improvements to
manufacturing and distribution processes and through reductions in personnel.
In addition, manufacturing margin benefited from increased sales, both from
higher volume and selective price increases. Liquidation of LIFO inventory
quantities increased manufacturing income, principally benefiting the
industrial segment, by $580,000 in the 1994 second quarter, compared with $2.3
million in the 1993 second quarter.
Selling and general administrative and engineering, research and development
expenses (operating expenses) were $547,000 lower in the 1994 second quarter
than in the 1993 second quarter. Operating expenses as a percent of sales
were 16.5 percent in the 1994 second quarter, compared with 18.2 percent in
the 1993 second quarter, reflecting the impact of increased volume and the
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<PAGE>
Analysis of Operations - Continued
benefits of initiatives which were aggressively pursued throughout 1993 and
the first half of 1994 to contain operating expenses. In the 1993 second
quarter, the Company recorded a $26 million provision for the estimated costs
for severance and other personnel-related costs resulting from planned work
force reductions, primarily focusing on the Company's industrial operations in
Europe. Operating income for the 1994 second quarter amounted to $39.5
million, compared with an operating loss in the 1993 second quarter of
$563,000. Before the special charge, operating income for the 1993 second
quarter amounted to $25.4 million.
Net income for the 1994 second quarter amounted to $19.3 million, or 66 cents
per share, compared with a net loss of $9.1 million, or 32 cents per share, in
the 1993 second quarter. Exclusive of the special charge which amounted to
$18.2 million after tax, or 64 cents per share, second-quarter 1993 net income
was $9.1 million, or 32 cents per share. The tax benefits associated with the
special charge were lower than the Company's normal rates primarily because
charges in certain non-U.S. locations were not subject to tax benefits due to
accumulated loss carry-forwards.
-9-
<PAGE>
<TABLE>
Analysis of Operations - Continued
Six Months 1994 Compared with Six Months 1993
The following data provide highlights for the first six months of 1994
compared with the first six months of 1993.
<CAPTION>
Six Months Ended Percent
(dollars in thousands, June 30 Increase
except per share data) 1994 1993 (Decrease)
<S> <C> <C> <C>
CONSOLIDATED
Net sales $ 900,694 $ 848,917 6.1%
Manufacturing income 223,891 200,150 11.9
Manufacturing margin 24.9% 23.6%
Special charge -- 26,000
Operating income 71,883 17,943 *
Operating margin 8.0% 2.1% *
Income (loss) before cumulative
effect of accounting change 32,598 (3,487)*
Cumulative effect to January 1, 1993,
of accounting change, net of income
tax benefit -- (70,229)
Net income (loss) 32,598 (73,716) *
Income (Loss) per Share
Income (loss) before cumulative
effect of accounting change 1.12 (.12)*
Cumulative effect of accounting
change, net of income tax benefit -- (2.48)
Net income (loss) per share 1.12 (2.60))*
INDUSTRIAL
Net sales 480,242 443,959 8.2
Special charge -- 19,200
Operating income (loss) 41,711 (4,997)*
Operating margin 8.7% -- *
Order backlog at June 30 179,397 149,757 19.8
AUTOMOTIVE
Net sales 263,622 232,387 13.4
Special charge -- 2,600
Operating income 28,089 21,681 * 29.6
Operating margin 10.7% 9.3% *
AEROSPACE & DEFENSE
Net sales 156,830 172,571 (9.1)
Special charge -- 3,600
Operating income 12,621 11,200 * 12.7
Operating margin 8.0% 6.5% *
Order backlog at June 30 269,976 291,893 (7.5)
<FN>
* After deducting the special charge.
</TABLE>
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<PAGE>
Analysis of Operations - Continued
Sales for the first six months of 1994 increased $51.8 million, or 6.1
percent, over the first six months of 1993. U.S. sales increased $49.5
million, or 9.2 percent, over the comparable 1993 period, while non-U.S.
sales, which included flat European sales, increased $2.3 million. The
effects of exchange rate changes and dispositions of certain product lines
reduced sales for the first six months of 1994 by nearly $16.3 million.
Industrial sales in 1994 were $36.3 million, or 8.2 percent, higher than the
comparable 1993 period. Industrial sales in the U.S., Brazil and Asia/Pacific
region showed good growth while European sales for the 1994 six-month period
were 4 percent lower than the 1993 six-month period. The effects of exchange
rate changes and dispositions of certain product lines reduced the industrial
segment sales by $8.6 million. The Company expects the trend of industrial
sales and orders to continue to improve for the remainder of the year compared
with the prior year, although the annual seasonal shutdowns that occur in the
third quarter in Europe may affect comparisons with the first half of 1994.
Automotive sales increased $31.2 million, or 13.4 percent, over the comparable
1993 period. Strong sales of light trucks, vans and small cars have driven
improved sales for the North American car manufacturers and contributed to the
Company's higher U.S. sales in these markets during the first six months of
1994. European sales increased $3.0 million for the six-month period and are
net of the effects of exchange rate changes which lowered sales by $3.3
million. Automotive sales are expected to be lower in the last half of 1994
compared with the first half of the year due to seasonality and the phase out
of certain contracts.
Aerospace & defense sales for the first six months of 1994 were $15.7 million,
or 9.1 percent, lower than the comparable 1993 period. Sales in both the
first and second quarters of 1994 were below the comparable 1993 periods,
reflecting the continued depressed condition of worldwide aerospace and
defense markets. Dispositions and the effects of exchange rate changes
reduced 1994 aerospace & defense sales by $4.4 million, compared with 1993.
Consolidated manufacturing income and manufacturing margin improved over the
1993 first six-month period. Manufacturing margins for the industrial and
aerospace & defense segments improved, while manufacturing margin for the
automotive segment nearly equaled that of the prior year. Liquidation of LIFO
inventory quantities increased manufacturing income in the 1994 six-month
period by $1.3 million, while liquidation of LIFO inventories in the 1993 six-
month period increased manufacturing income by $4.2 million.
Selling and general administrative and engineering, research and development
expenses were $4.2 million lower than in the first six months of 1993.
Overhead expenses as a percent of sales were 16.9 percent for 1994, compared
with 18.4 percent in the first six months of 1993. Operating income amounted
to $71.9 million for the 1994 six-month period, compared with $17.9 million
for the comparable 1993 period. Before the $26 million special charge,
operating income for the 1993 period was $43.9 million.
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<PAGE>
Analysis of Operations - Continued
Interest expense in 1994 was $2.2 million lower than in the first six months
of 1993, reflecting the effect of lower average debt levels in 1994. Other-
net deductions were $4.4 million higher in 1994 due, in part, to higher
exchange losses and minority interest in earnings adjustment for a
consolidated affiliate.
Net income for the first six months of 1994 amounted to $32.6 million, or
$1.12 per share. The Company adopted Statement of Financial Accounting
Standards No. 106, "Employers' Accounting for Postretirement Benefits Other
than Pensions," in the 1993 first quarter and recognized the transition
obligation as the cumulative effect of a change in accounting principle,
resulting in a charge to income of $113.2 million pretax, $70.2 million after
tax, or $2.48 per share. As a result, the net loss for the first six months
of 1993 amounted to $73.7 million, or $2.60 per share. Before the special
charge and cumulative effect adjustment, net income for the first six months
of 1993 amounted to $14.7 million.
Liquidity, Working Capital and Capital Investment
Cash provided by operating activities for the first six months of 1994 totaled
$66.7 million, compared with $50.9 million for the six months ended June 30,
1993. The increased cash flow was principally the result of stronger earnings
in 1994. Net working capital requirements for the two periods were nearly the
same, but with significantly different components. The increase in
receivables was greater in 1994, while 1993 inventory reductions were greater
than in 1994. Conversely, increased payables, taxes and other accruals
required less working capital in 1994. Net restructuring payments included
proceeds from the 1994 first-quarter sales of businesses totaling $9 million.
Dividend payments in the 1994 second quarter remained unchanged at 17 cents
per share for the quarter. Debt payments totaled $45.7 million for the 1994
six-month period, contributing to the improvement in the debt-to-
capitalization ratio (debt divided by debt plus equity) which was reduced from
55.1 percent at December 31, 1993, to 47.2 percent at June 30, 1994.
Under terms of its revolving credit agreements with several U.S. and non-U.S.
banks, the Company may borrow up to $155 million. These agreements are
renewable annually, are intended to support the Company's commercial paper
borrowings and, to the extent not so utilized, provide domestic borrowings.
The remaining borrowing capacity under these arrangements at June 30, 1994,
was $145 million. In addition, the Company has uncommitted arrangements with
various banks to provide short-term financing as necessary. The Company
expects that cash flow from operating activities and available short-term
financing arrangements will be sufficient to meet normal operating
requirements over the near term.
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<PAGE>
PART II - OTHER INFORMATION
TRINOVA CORPORATION
Item 1. Legal Proceedings.
As previously reported, on March 26, 1992, the United States
Environmental Protection Agency ("USEPA") issued an Administrative
Order ("Order") under Section 106 of the Comprehensive Environmental
Response, Compensation, and Liability Act ("CERCLA") to TRINOVA's
subsidiary, Aeroquip Corporation ("Aeroquip"), and five other
Potentially Responsible Parties ("PRPs") relative to the San Fernando
Valley Burbank Operable Unit ("BOU"), involving groundwater
contamination. (Reference is made to Part I, Item 3, of TRINOVA's
Annual Report on Form 10-K for the year ended December 31, 1993.) The
Order requires the six PRPs to design and construct a water blending
facility at a cost now estimated to be approximately $4.8 million.
TRINOVA's portion of any such cost is estimated to be 18.33 percent
based on a cost-sharing agreement among the six PRPs which was
executed by TRINOVA on July 6, 1992.
Also related to the BOU, on May 15, 1994, USEPA issued to Lockheed
Corporation ("Lockheed"), Aeroquip and other PRPs a Special Notice of
Liability under CERCLA for the remaining eighteen years of operation
and maintenance (O&M) costs associated with the blending facility, as
well as a water treatment facility constructed by Lockheed under its
BOU Consent Decree with USEPA. The Special Notice of Liability also
covers USEPA's past response costs. The cost of the O&M phase which
the USEPA is seeking to recover from the PRPs is not known at this
time; USEPA past costs claimed against the PRPs are estimated at $12
million for the entire San Fernando Site, which includes other
operable units in addition to the BOU. Negotiations are under way
among PRPs and USEPA to arrive at an equitable and reasonable
allocation of shares with respect to the foregoing costs. On April
26, 1994, Lockheed filed a complaint against Aeroquip and 105 other
PRPs seeking contribution toward costs Lockheed incurred to construct
the water treatment facility. Aeroquip has not been served with the
complaint. Aeroquip intends to vigorously defend this action.
Recovery by Lockheed, if any, against Aeroquip is not expected to be
significant.
TRINOVA and certain subsidiaries are defendants in various lawsuits.
While the ultimate outcome of these lawsuits and the above
environmental matter cannot now be predicted, management is of the
opinion, based on the facts now known to it, that the liability, if
any, in these lawsuits (to the extent not provided for by insurance or
otherwise) and the above environmental matter will not have a material
adverse effect upon TRINOVA's consolidated financial position.
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<PAGE>
Item 6. Exhibits and Reports on Form 8-K
(a) The following exhibit is filed as part of Part I:
Exhibit (11) - Statement re: Computation of Per Share Earnings
The following exhibits are filed as part of Part II and are incorporated
by reference hereunder:
Exhibit (4)-1 First Supplemental Indenture, dated as of May 4,
1992, between TRINOVA Corporation and NBD Bank,
N.A., with respect to the issuance of $75,000,000
aggregate principal amount of TRINOVA Corporation
7.95% Notes Due 1997, filed as Exhibit (4)-1 to Form
SE filed on May 6, 1992
Exhibit (4)-2 7.95% Notes Due 1997, issued pursuant to the
Indenture, dated as of January 28, 1988, between
TRINOVA Corporation and NBD Bank, N.A. (formerly
National Bank of Detroit), as supplemented by the
First Supplemental Indenture, dated as of May 4,
1992, between TRINOVA Corporation and NBD Bank,
N.A., filed as Exhibit (4)-2 to Form SE filed on May
6, 1992
Exhibit (4)-3 Officers' Certificate of TRINOVA Corporation, dated
May 4, 1992, pursuant to Section 2.01 of the
Indenture, dated as of January 28, 1988, between
TRINOVA Corporation and NBD Bank, N.A. (formerly
National Bank of Detroit), as supplemented by the
First Supplemental Indenture, dated as of May 4,
1992, between TRINOVA Corporation and NBD Bank,
N.A., filed as Exhibit (4)-3 to Form SE filed on May
6, 1992
Exhibit (4)-4 Rights Agreement, dated January 26, 1989, between
TRINOVA Corporation and First Chicago Trust Company
of New York filed as Exhibit (2) to Form 8-A filed
on January 27, 1989, as amended by the First
Amendment to Rights Agreement filed as Exhibit (5)
to Form 8 filed on July 1, 1992
Exhibit (4)-5 Form of Share Certificate for Common Shares, $5 par
value, of TRINOVA Corporation, filed as Exhibit (4)-
2 to Form SE filed on July 1, 1992
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<PAGE>
Item 6. Exhibits and Reports on Form 8-K - Continued
Exhibit (4)-6 Fiscal Agency Agreement, dated as of October 26,
1987, between TRINOVA Corporation, as Issuer, and
Bankers Trust Company, as Fiscal Agent, with respect
to $100,000,000 aggregate principal amount of
TRINOVA Corporation 6% Convertible Subordinated
Debentures Due 2002, filed as Exhibit (4)-1 to Form
SE filed on March 18, 1993
Exhibit (4)-7 Indenture, dated as of January 28, 1988, between
TRINOVA Corporation and NBD Bank, N.A. (formerly
National Bank of Detroit), with respect to the
issuance of $50,000,000 aggregate principal amount
of TRINOVA Corporation 9.55% Senior Sinking Fund
Debentures Due 2018, and the issuance of $75,000,000
aggregate principal amount of TRINOVA Corporation
7.95% Notes Due 1997, filed as Exhibit (4)-2 to Form
SE filed on March 18, 1993
Exhibit (10)-1 TRINOVA Corporation Plan for Optional Deferment of
Directors' Fees (Restated January 25, 1990), filed
as Exhibit (10)-2 to Form SE filed on March 20, 1990
Exhibit (10)-2 TRINOVA Corporation Directors' Retirement Plan
(Restated January 1, 1990), filed as Exhibit (10)-3
to Form SE filed on March 20, 1990
Exhibit (10)-3 Aeroquip Corporation Incentive Compensation Plan,
filed as Exhibit (10)-4 to Form SE filed on March
20, 1990
Exhibit (10)-4 Vickers, Incorporated Incentive Compensation Plan,
filed as Exhibit (10)-5 to Form SE filed on March
20, 1990
Exhibit (10)-5 TRINOVA Corporation Supplemental Benefit Plan
(Restated January 1, 1989), filed as Exhibit (19)-1
to Form SE filed on November 6, 1992
Exhibit (10)-6 TRINOVA Corporation 1982 Stock Option Plan, filed as
Exhibit (10)-1 to Form SE filed on March 18, 1993
Exhibit (10)-7 TRINOVA Corporation 1984 Incentive Compensation
Plan, filed as Exhibit (10)-2 to Form SE filed on
March 18, 1993
Exhibit (10)-8 TRINOVA Corporation 1987 Stock Option Plan, filed as
Exhibit (10)-3 to Form SE filed on March 18, 1993
-15-
<PAGE>
Item 6. Exhibits and Reports on Form 8-K - Continued
Exhibit (10)-9 Change in Control Agreement for Officers, filed as
Exhibit (10)-4 to Form SE filed on March 18, 1993
(the Agreements executed by the Company and various
executive officers of the Company are identical in
all respects to the form of Agreement filed as an
Exhibit to Form SE except as to differences in the
identity of the officers and the dates of execution,
and as to other variations directly necessitated by
said differences)
Exhibit (10)-10 Change in Control Agreement for Non-officers, filed
as Exhibit (10)-5 to Form SE filed on March 18, 1993
(the Agreements executed by the Company and various
non-officer employees of the Company are identical
in all respects to the form of Agreement filed as an
Exhibit to Form SE except as to differences in the
identity of the employees and the dates of
execution, and as to other variations directly
necessitated by said differences)
Exhibit (10)-11 TRINOVA Corporation 1994 Stock Incentive Plan, filed
as Appendix A to the proxy statement for the annual
meeting held on April 21, 1994
Exhibit (10)-12 TRINOVA Corporation 1989 Non-Employee Directors'
Equity Plan, filed as Exhibit (10)-12 to Form 10-K
filed on March 18, 1994
Exhibit (99(i))-1 Revolving Credit Agreements, dated as of September
30, 1992, between TRINOVA Corporation and The Bank
of Tokyo Trust Company, Chemical Bank, Citicorp
U.S.A, Dresdner Bank AG, The First National Bank of
Chicago, Morgan Guaranty Trust Company of New York,
J. P. Morgan Delaware, NBD Bank, N.A. and Union Bank
of Switzerland, filed as Exhibit (4)-1 to Form SE
filed on November 6, 1992 (The Agreements executed
by the Company and the various banks are identical
in all respects to the form of Agreement filed as an
Exhibit to Form SE except as to differences in the
identity of the bank and the amount of the
commitment [each as indicated in Exhibit A to the
Agreement filed with Form SE] and other variations
directly necessitated by said differences)
Exhibit (99(i))-2 TRINOVA Corporation Directors' Charitable Award
Program, filed as Exhibit (99(i))-2 to Form 10-K
filed on March 18, 1994
(b) There were no reports on Form 8-K filed for the quarter ended
June 30, 1994.
-16-
<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.
TRINOVA CORPORATION
By /S/ DARRYL F. ALLEN
-----------------------------------------
August 4, 1994 Darryl F. Allen
Chairman, President and
Chief Executive Officer
(Principal Executive Officer)
By /S/ DAVID M. RISLEY
August 4, 1994 -----------------------------------------
David M. Risley
Vice President - Finance and
Chief Financial Officer
(Principal Financial Officer)
-17-
EXHIBIT INDEX
Exhibit No. Page No.
(4)-1 First Supplemental Indenture, dated as of May 4, Incorporated
1992, between TRINOVA Corporation and NBD Bank, by Reference
N.A., with respect to the issuance of
$75,000,000 aggregate principal amount of
TRINOVA Corporation 7.95% Notes Due 1997, filed
as Exhibit (4)-1 to Form SE filed on May 6, 1992
(4)-2 7.95% Notes Due 1997, issued pursuant to the Incorporated
Indenture, dated as of January 28, 1988, between by Reference
TRINOVA Corporation and NBD Bank, N.A. (formerly
National Bank of Detroit), as supplemented by
the First Supplemental Indenture, dated as of
May 4, 1992, between TRINOVA Corporation and NBD
Bank, N.A., filed as Exhibit (4)-2 to Form SE
filed on May 6, 1992
(4)-3 Officers' Certificate of TRINOVA Corporation, Incorporated
dated May 4, 1992, pursuant to Section 2.01 of by Reference
the Indenture, dated as of January 28, 1988,
between TRINOVA Corporation and NBD Bank, N.A.
(formerly National Bank of Detroit), as
supplemented by the First Supplemental
Indenture, dated as of May 4, 1992, between
TRINOVA Corporation and NBD Bank, N.A., filed as
Exhibit (4)-3 to Form SE filed on May 6, 1992
(4)-4 Rights Agreement, dated January 26, 1989, Incorporated
between TRINOVA Corporation and First Chicago by Reference
Trust Company of New York filed as Exhibit (2)
to Form 8-A filed on January 27, 1989, as
amended by the First Amendment to Rights
Agreement filed as Exhibit (5) to Form 8 filed
on July 1, 1992
(4)-5 Form of Share Certificate for Common Shares, $5 Incorporated
par value, of TRINOVA Corporation, filed as by Reference
Exhibit (4)-2 to Form SE filed on July 1, 1992
(4)-6 Fiscal Agency Agreement, dated as of October 26, Incorporated
1987, between TRINOVA Corporation, as Issuer, by Reference
and Bankers Trust Company, as Fiscal Agent, with
respect to $100,000,000 aggregate principal
amount of TRINOVA Corporation 6% Convertible
Subordinated Debentures Due 2002, filed as
Exhibit (4)-1 to Form SE filed on March 18, 1993
-18-
<PAGE>
EXHIBIT INDEX - Continued
Exhibit No. Page No.
(4)-7 Indenture, dated as of January 28, 1988, between Incorporated
TRINOVA Corporation and NBD Bank, N.A. (formerly by Reference
National Bank of Detroit), with respect to the
issuance of $50,000,000 aggregate principal
amount of TRINOVA Corporation 9.55% Senior
Sinking Fund Debentures Due 2018, and the
issuance of $75,000,000 aggregate principal
amount of TRINOVA Corporation 7.95% Notes Due
1997, filed as Exhibit (4)-2 to Form SE filed
on March 18, 1993
(10)-1 TRINOVA Corporation Plan for Optional Deferment Incorporated
of Directors' Fees (Restated January 25, 1990), by Reference
filed as Exhibit (10)-2 to Form SE filed on
March 20, 1990
(10)-2 TRINOVA Corporation Directors' Retirement Plan Incorporated
(Restated January 1, 1990), filed as Exhibit by Reference
(10)-3 to Form SE filed on March 20, 1990
(10)-3 Aeroquip Corporation Incentive Compensation Incorporated
Plan, filed as Exhibit (10)-4 to Form SE filed by Reference
on March 20, 1990
(10)-4 Vickers, Incorporated Incentive Compensation Incorporated
Plan, filed as Exhibit (10)-5 to Form SE filed by Reference
on March 20, 1990
(10)-5 TRINOVA Corporation Supplemental Benefit Plan Incorporated
(Restated January 1, 1989), filed as Exhibit by Reference
(19)-1 to Form SE filed on November 6, 1992
(10)-6 TRINOVA Corporation 1982 Stock Option Plan, Incorporated
filed as Exhibit (10)-1 to Form SE filed on by Reference
March 18, 1993
(10)-7 TRINOVA Corporation 1984 Incentive Compensation Incorporated
Plan, filed as Exhibit (10)-2 to Form SE filed by Reference
on March 18, 1993
(10)-8 TRINOVA Corporation 1987 Stock Option Plan, Incorporated
filed as Exhibit (10)-3 to Form SE filed on by Reference
March 18, 1993
-19-
<PAGE>
EXHIBIT INDEX - Continued
Exhibit No. Page No.
(10)-9 Change in Control Agreement for Officers, Incorporated
filed as Exhibit (10)-4 to Form SE filed on by Reference
March 18, 1993 (the Agreements executed by the
Company and various executive officers of the
Company are identical in all respects to the
form of Agreement filed as an Exhibit to Form SE
except as to differences in the identity of the
officers and the dates of execution, and as to
other variations directly necessitated by said
differences)
(10)-10 Change in Control Agreement for Non-officers, Incorporated
filed as Exhibit (10)-5 to Form SE filed on by Reference
March 18, 1993 (the Agreements executed by the
Company and various non-officer employees of
the Company are identical in all respects to
the form of Agreement filed as an Exhibit to
Form SE except as to differences in the identity
of the employees and the dates of execution, and
as to other variations directly necessitated by
said differences)
(10)-11 TRINOVA Corporation 1994 Stock Incentive Plan, Incorporated
filed as Appendix A to the proxy statement for by Reference
the annual meeting held on April 21, 1994
(10)-12 TRINOVA Corporation 1989 Non-Employee Directors' Incorporated
Equity Plan, filed as Exhibit (10)-12 to by Reference
Form 10-K filed on March 18, 1994
(11) Statement re: Computation of Per Share Earnings 22
(99(i))-1 Revolving Credit Agreements, dated as of Incorporated
September 30, 1992, between TRINOVA Corporation by Reference
and The Bank of Tokyo Trust Company, Chemical
Bank, Citicorp U.S.A, Dresdner Bank AG, The First
National Bank of Chicago, Morgan Guaranty Trust
Company of New York, J. P. Morgan Delaware, NBD
Bank, N.A. and Union Bank of Switzerland, filed
as Exhibit (4)-1 to Form SE filed on November 6,
1992 (The Agreements executed by the Company and
the various banks are identical in all respects
to the form of Agreement filed as an Exhibit to
Form SE except as to differences in the identity
of the bank and the amount of the commitment
[each as indicated in Exhibit A to the Agreement
filed with Form SE] and other variations directly
necessitated by said differences)
-20-
<PAGE>
EXHIBIT INDEX - Continued
Exhibit No. Page No.
(99(i))-2 TRINOVA Corporation Directors' Charitable Award Incorporated
Program, filed as Exhibit (99(i))-2 to by Reference
Form 10-K filed on March 18, 1994
-21-
<TABLE>
EXHIBIT 11
STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS
TRINOVA CORPORATION
(In thousands, except per share data)
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
1994 1993 1994 1993
<S> <C> <C> <C> <C>
AVERAGE SHARES OF COMMON STOCK
AND COMMON STOCK EQUIVALENTS
OUTSTANDING (NOTE A)
Average shares outstanding 28,745 28,288 28,659 28,269
Assumed conversion of the 6 percent
convertible debentures 1,905 - 1,905 -
Net effect of dilutive stock
options based upon treasury stock
method using average market price 216 57 216 57
--------- ---------- ---------- ----------
Average shares of common stock
and common stock equivalents
outstanding 30,866 28,345 30,780 28,326
========== ========== ========== ==========
INCOME (LOSS) ATTRIBUTABLE TO COMMON
STOCK (NOTE A)
Income (loss) before cumulative effect
of change in accounting principle $ 19,324 $ (9,121) $ 32,598 $ (3,487)
After-tax equivalent of interest
expense on the 6 percent convertible
debentures 930 - 1,860 -
Cumulative effect of change in
accounting for postretirement
benefits other than pensions, net
of income tax benefit - - - (70,229)
---------- ---------- ---------- ----------
Income (loss) attributable to
common stock $ 20,254 $ (9,121) $ 34,458 $ (73,716)
========== ========== ========== ==========
Income (loss) per share
Income (loss) before cumulative effect
of change in accounting principle $ .66 $ (.32) $ 1.12 $ (.12)
Cumulative effect of change in
accounting for postretirement
benefits other than pensions - - - (2.48)
---------- ---------- ---------- ----------
Net Income (Loss) per Share $ .66 $ (.32) $ 1.12 $ (2.60)
========== ========== ========== ==========
<FN>
Note A - Net income (loss) per share was computed on the average number of common
shares outstanding, including common stock equivalents. In the 1994 second
quarter and six month period, common stock equivalents included the assumed
conversion of the Company's 6 percent convertible debentures and income used in
computing income per share was increased for the after-tax equivalent of interest
expense on the 6 percent convertible debentures. For the 1993 second quarter and
six month period, the assumed conversion of the 6 percent convertible debentures
was not included in average shares outstanding or in income used in computing
income per share because the effect of the inclusion would have been anti-
dilutive.
</TABLE>
-22-
