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 September 30, 1995
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 October 31, 1995,
was 28,993,887.
This document, including exhibits, contains 21 pages.
The cover page consists of 1 page.
The Exhibit Index is located on page 17.
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
FORM 10-Q
FOR QUARTER ENDED SEPTEMBER 30, 1995
INDEX TO INFORMATION IN REPORT
TRINOVA CORPORATION
Page
Number
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Statement of Financial Position -
September 30, 1995 and December 31, 1994 3
Condensed Statement of Income -
Three Months and Nine Months Ended
September 30, 1995 and 1994 4
Condensed Statement of Cash Flows -
Nine Months Ended September 30, 1995 and 1994 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 6. Exhibits and Reports on Form 8-K 13
SIGNATURES 16
EXHIBIT INDEX 17
EXHIBIT 11 - STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS 20
EXHIBIT 27 - FINANCIAL DATA SCHEDULE 21
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<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. - Financial Statements
<TABLE>
STATEMENT OF FINANCIAL POSITION
TRINOVA CORPORATION
(Dollars in thousands, except per share data)
(Unaudited)
<CAPTION>
September 30 December 31
ASSETS 1995 1994
CURRENT ASSETS ---------- -----------
<S> <C> <C>
Cash and cash equivalents $ 14,374 $ 27,928
Receivables 309,249 247,531
Inventories:
In-process and finished products 187,265 171,555
Raw materials and manufacturing supplies 50,680 45,761
---------- ----------
237,945 217,316
Other current assets 40,580 47,618
---------- ----------
TOTAL CURRENT ASSETS 602,148 540,393
Plants and properties 932,765 869,831
Less accumulated depreciation 533,645 490,025
---------- ----------
399,120 379,806
Other assets 94,122 80,835
---------- ----------
TOTAL ASSETS $1,095,390 $1,001,034
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable $ 3,674 $ 1,755
Accounts payable 98,671 96,587
Income taxes 47,303 31,621
Other current liabilities 167,840 158,501
Current maturities of long-term debt 419 930
---------- ----------
TOTAL CURRENT LIABILITIES 317,907 289,394
Long-term debt 227,800 234,914
Postretirement benefits other than pensions 120,218 120,848
Other liabilities 30,455 28,150
Deferred income taxes 7,632 7,682
SHAREHOLDERS' EQUITY
Common stock; par value $5 a share
Authorized - 100,000,000 shares
Outstanding - 28,993,887 and 28,795,909 shares,
respectively (after deducting 5,216,009 and
5,413,987 shares, respectively, in treasury) 144,969 143,979
Additional paid-in capital 16,972 12,511
Retained earnings 244,216 184,930
Currency translation adjustments (14,779) (21,374)
---------- ----------
TOTAL SHAREHOLDERS' EQUITY 391,378 320,046
---------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $1,095,390 $1,001,034
========== ==========
<FN>
The Notes to Financial Statements are an integral part of this statement.
</FN>
</TABLE>
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<PAGE>
<TABLE>
CONDENSED STATEMENT OF INCOME
TRINOVA CORPORATION
(In thousands, except per share data)
(Unaudited)
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
------------------------ ------------------------
1995 1994 1995 1994
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net sales $ 441,445 $ 437,587 $1,441,697 $1,338,281
Cost of products sold 330,489 331,106 1,077,378 1,007,909
---------- ---------- ---------- ----------
MANUFACTURING INCOME 110,956 106,481 364,319 330,372
Selling and general administrative
expenses 61,034 58,983 191,846 183,225
Engineering, research and development
expenses 15,516 13,775 46,347 41,541
---------- ---------- ---------- ----------
OPERATING INCOME 34,406 33,723 126,126 105,606
Interest expense (4,612) (5,044) (14,518) (16,260)
Other expenses-net (4,095) (5,448) (10,441) (15,917)
---------- ---------- ---------- ----------
INCOME BEFORE INCOME TAXES 25,699 23,231 101,167 73,429
Income taxes 6,700 8,100 26,300 25,700
---------- ---------- ---------- ----------
NET INCOME $ 18,999 $ 15,131 $ 74,867 $ 47,729
========== ========== ========== ==========
NET INCOME PER SHARE $ .64 $ .52 $ 2.52 $ 1.64
========== ========== ========== ==========
Cash dividends per common share $ .18 $ .17 $ .54 $ .51
========== ========== ========== ==========
Average shares outstanding 30,924 30,903 30,865 30,823
========== ========== ========== ==========
<FN>
The Notes to Financial Statements are an integral part of this statement.
</FN>
</TABLE>
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<PAGE>
<TABLE>
CONDENSED STATEMENT OF CASH FLOWS
TRINOVA CORPORATION
(In thousands)
(Unaudited)
<CAPTION>
Nine Months Ended
September 30
--------------------
1995 1994
---------- ----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 74,867 $ 47,729
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation 47,038 45,498
Changes in working capital elements,
other than debt (43,371) 1,790
Other (9,022) 2,234
---------- ----------
NET CASH PROVIDED BY OPERATING ACTIVITIES 69,512 97,251
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (67,696) (37,892)
Other 339 1,409
---------- ----------
NET CASH USED BY INVESTING ACTIVITIES (67,357) (36,483)
CASH FLOWS FROM FINANCING ACTIVITIES
Net decrease in short-and long-term debt (6,567) (62,680)
Cash dividends (15,581) (14,658)
Stock issuance under stock plans 5,040 10,163
---------- ----------
NET CASH USED BY FINANCING ACTIVITIES (17,108) (67,175)
Effect of exchange rate changes on cash 1,399 (1,834)
---------- ----------
DECREASE IN CASH AND CASH EQUIVALENTS (13,554) (8,241)
Cash and cash equivalents at beginning of period 27,928 20,534
---------- ----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 14,374 $ 12,293
========== ==========
<FN>
The Notes to Financial Statements are an integral part of this statement.
</FN>
</TABLE>
-5-
<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 (consisting of normal recurring
accruals) necessary for a fair statement of the results for the interim
periods included herein have been made. Operating results for the nine months
ended September 30, 1995 are not necessarily indicative of the results that
may be expected for the year ended December 31, 1995. It is suggested that
these financial statements be read in conjunction with the audited 1994
financial statements and notes thereto included in TRINOVA Corporation's most
recent annual report.
Note 2 - Income Taxes
The estimated annual effective income tax rate for 1995 is 26% compared with
35% for 1994. The lower annual effective income tax rate in 1995 is
attributable to several factors, including the effects of higher projected
earnings in lower-tax-rate countries, higher after-tax earnings of investments
in unconsolidated affiliates and greater utilization of tax loss carryforwards
outside the U.S. for which deferred tax valuation allowances had previously
been provided. The Company expects the effective income tax rate for years
subsequent to 1995 to return to rates more comparable to the 35% rate that was
reported for 1994.
Note 3 - Accounts Receivable Sold
"Changes in working capital elements, other than debt" in the 1995 Condensed
Statement of Cash Flows includes a $50 million increase in working capital
resulting from termination of the Company's program for the sale of accounts
receivable.
Note 4 - Net Income per Share
Net income per share is computed using the average number of common shares
outstanding, including common stock equivalents. The assumed conversion of
the Company's 6% convertible debentures was included in average shares
outstanding, increasing the average number of shares outstanding by 1,904,762
shares. For purposes of computing net income per share, net income was
increased for the after-tax equivalent of interest expense on the 6%
convertible debentures.
-6-
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
FINANCIAL REVIEW AND ANALYSIS OF OPERATIONS
Analysis of Operations
Third Quarter 1995 Compared with Third Quarter 1994
The following data provide highlights for the third quarter 1995 compared with
the third quarter 1994.
Third Quarter Percent
(dollars in thousands, ------------------- Increase
except per share data) 1995 1994 (Decrease)
---- ---- ----------
CONSOLIDATED
Net sales $441,445 $437,587 .9%
Manufacturing income 110,956 106,481 4.2
Manufacturing margin (%) 25.1 24.3
Operating income 34,406 33,723 2.0
Operating margin (%) 7.8 7.7
Net income 18,999 15,131 25.6
Net income per share .64 .52 23.1
INDUSTRIAL
Net sales 246,911 241,669 2.2
Operating income 27,084 25,445 6.4
Operating margin (%) 11.0 10.5
Order intake 237,396 246,562 (3.7)
Order backlog at September 30 178,826 179,922 (.6)
AUTOMOTIVE
Net sales 105,614 119,184 (11.4)
Operating income 1,537 8,214 (81.3)
Operating margin (%) 1.5 6.9
AEROSPACE & DEFENSE
Net sales 88,920 76,734 15.9
Operating income 11,635 6,188 88.0
Operating margin (%) 13.1 8.1
Order intake 97,429 80,864 20.5
Order backlog at September 30 265,335 275,705 (3.8)
-7-
<PAGE>
Analysis of Operations - Continued
Third-quarter 1995 sales increased $3.9 million over the 1994 third quarter.
Industrial and aerospace & defense sales increased 2.2% and 15.9%,
respectively, while automotive sales declined 11.4%. Consolidated U.S. sales
declined $7.4 million due to lower U.S. automotive sales. Consolidated non-
U.S. sales, principally in Europe, increased $11.3 million. Approximately 50%
of the non-U.S. sales increase was the result of changes in currency exchange
rates.
Industrial sales increased $5.2 million, or 2.2%, over the 1994 third quarter.
U.S. industrial sales were $1 million lower than in the 1994 third quarter,
but non-U.S. sales increased $6.2 million, or 7.3%. The non-U.S. sales
increase is the net of a 12% increase in Europe, a 7% increase in Asia and a
21% decline in Brazil. Changes in currency exchange rates accounted for $2
million of the non-U.S. sales increase. Third-quarter order intake declined
$9.2 million, or 3.7%, from the prior year. Order intake in Europe increased
nearly 4% over the prior year, but orders in the U.S., Asia and Brazil
declined from the 1994 third quarter. Order backlog of $178.8 million was
$1.1 million lower than at September 30, 1994.
Third-quarter 1995 automotive sales declined $13.6 million, or 11.4%, from the
prior year. Third-quarter European automotive sales increased $4.1 million,
or 7.5%, over the prior year, due primarily to continued strength in the air
conditioning/power steering connectors business. The U.S. automotive
business, however, felt the full effects of seasonal industry shutdowns, model
changeovers and the conclusion of certain of the Company's contract programs,
which contributed to a $17.6 million, or 27%, reduction in U.S. automotive
sales from the 1994 third quarter.
Third-quarter 1995 aerospace & defense sales increased $12.2 million, or
15.9%, over the prior year. This increase was principally attributable to
U.S. business with only a modest increase in European sales. Third-quarter
1995 aerospace & defense sales were at their highest level since the first
quarter of 1993. Order intake, likewise, increased $16.6 million, or 20.5%,
as the Company continued to increase penetration of major new aerospace and
defense programs and replace competitors to gain share of ongoing aerospace
programs. Order backlog of $265.3 million was $10.4 million, or 3.8%, lower
than at September 30, 1994.
The third quarter is traditionally the slowest quarter of the year for the
Company. Consequently, sales, operating income and operating margin are
generally lower in the third quarter than in other periods during the year.
However, compared with the 1994 third quarter, consolidated manufacturing
income and margin for the 1995 third quarter improved, principally the result
of moderate sales growth in certain segments and process improvements giving
rise to cost reductions. Manufacturing income increased $4.5 million, or
4.2%, and manufacturing margin improved from 24.3% in the 1994 third quarter
to 25.1% in the 1995 third quarter. Manufacturing income and margin for the
industrial segment improved over the comparable 1994 quarter, reflecting the
benefit of both increased sales and continuing initiatives to improve
manufacturing and distribution processes. Manufacturing income and margin for
the automotive segment declined from the 1994 third quarter due to the effects
-8-
<PAGE>
Analysis of Operations - Continued
of lower sales in the U.S., the phase-out of certain high-margin programs, and
manufacturing inefficiencies in certain of the U.S. automotive plastics
operations. Higher sales and continued cost-containment efforts in the
aerospace & defense segment generated third-quarter 1995 manufacturing income
and margin exceeding that of the 1994 third quarter.
Selling and general administrative and engineering, research and development
expenses (operating expenses) were $3.8 million higher than in the 1994 third
quarter. As a percent of sales, operating expenses were 17.3% in the 1995
third quarter compared with 16.6% in the 1994 third quarter. Increased costs
in the 1995 third quarter principally relate to changes in currency exchange
rates and provisions for performance based compensation and profit sharing
associated with the higher earnings level.
Interest expense in the 1995 third quarter was $432,000 lower than in the 1994
third quarter due to lower average debt levels in 1995. Other expenses - net
were $1.4 million lower in the 1995 third quarter than in the 1994 third
quarter, primarily due to lower exchange losses, reduced costs related to the
program for the sale of accounts receivable, which was terminated in the first
quarter, and higher income from unconsolidated affiliates. In the 1995 third
quarter, the Company retired $8 million of its 9.55% senior sinking fund
debentures. The loss amounting to $660,000 from early extinguishment of debt
was charged to Other expenses - net.
Net income for the 1995 third quarter amounted to $19.0 million, or 64 cents
per share, compared with $15.1 million, or 52 cents per share, in the 1994
third quarter. The estimated effective income tax rate for the 1995 third
quarter was 26%, compared with 35% for the 1994 third quarter. The lower
effective income tax rate in 1995 is attributable to several factors,
including the effect of higher projected earnings in lower-tax-rate countries,
higher after-tax earnings of investments in unconsolidated affiliates and
greater utilization of tax loss carryforwards outside the U.S. for which
deferred tax valuation allowances had previously been provided. The Company
expects the effective income tax rate for years subsequent to 1995 to return
to rates more comparable to the 35% rate that was reported for 1994.
-9-
<PAGE>
Analysis of Operations - Continued
Nine Months 1995 Compared with Nine Months 1994
The following data provide highlights for the first nine months of 1995
compared with the first nine months of 1994.
Nine Months Ended
September 30 Percent
(dollars in thousands, ------------------- Increase
except per share data) 1995 1994 (Decrease)
---- ---- ----------
CONSOLIDATED
Net sales $1,441,697 $1,338,281 7.7%
Manufacturing income 364,319 330,372 10.3
Manufacturing margin (%) 25.3 24.7
Operating income 126,126 105,606 19.4
Operating margin (%) 8.7 7.9
Net income 74,867 47,729 56.9
Net income per share 2.52 1.64 53.7
INDUSTRIAL
Net sales 806,018 721,911 11.7
Operating income 96,174 67,156 43.2
Operating margin (%) 11.9 9.3
Order intake 808,377 764,530 5.7
Order backlog at September 30 178,826 179,922 (.6)
AUTOMOTIVE
Net sales 379,535 382,806 (.9)
Operating income 21,255 36,303 (41.5)
Operating margin (%) 5.6 9.5
AEROSPACE & DEFENSE
Net sales 256,144 233,564 9.7
Operating income 27,276 18,809 45.0
Operating margin (%) 10.6 8.1
Order intake 253,518 235,717 7.6
Order backlog at September 30 265,335 275,705 (3.8)
Sales for the first nine months of 1995 increased $103.4 million, or 7.7%,
over the first nine months of 1994. U.S. sales increased $26.5 million, or
3%, while non-U.S. sales, principally in Europe, increased $76.9 million, or
16.6%. Nearly $38 million of the non-U.S. sales increase was due to changes
in currency exchange rates.
Industrial sales were $84.1 million, or 11.7%, higher than in the 1994 nine-
month period. Most sectors of the business showed good growth with U.S.
industrial sales up 8%, Europe up 21% and Asia up 15%, while Brazil's sales
were flat year-over-year. Changes in currency exchange rates accounted for
approximately $14 million of the sales increase.
-10-
<PAGE>
Analysis of Operations - Continued
Automotive sales declined $3.3 million, or .9%, from the 1994 nine-month
period. U.S. automotive sales declined $34.4 million, or 16.5%, from the
comparable 1994 period. This lower U.S. automotive segment sales volume was
the result of third-quarter seasonal industry shutdowns, model changeovers,
the conclusion of certain of the Company's contract programs and declining
auto industry production compared with the prior year. European automotive
segment sales, conversely, increased $31.1 million, or nearly 18%. Nearly 65%
of this increase was due to changes in currency exchange rates.
Aerospace & defense sales increased $22.6 million, or 9.7%, over the 1994
nine-month period. This increase was principally attributable to sales in the
U.S.
Manufacturing income and margin for the first nine months of 1995 improved
over the comparable 1994 period, due to the factors described for the third
quarter. Manufacturing margin for the industrial and aerospace & defense
segments increased over 1994, while manufacturing margin for the automotive
segment declined.
Although lower as a percent of sales, overhead expenses for the 1995 nine-
month period were $13.4 million, or 6%, higher than in the comparable 1994
period. Overhead expenses were greater for the industrial and aerospace &
defense segments in 1995, while overhead expenses for the automotive segment
were lower. Nearly half of the increase in overhead expenses for the nine-
month period was attributable to changes in currency exchange rates.
Interest expense for the 1995 nine-month period was $1.7 million lower than in
the first nine months of 1994, reflecting the effect of lower debt levels in
1995. Other expenses - net were $5.5 million lower in 1995 due, in part, to
lower exchange losses (principally in Brazil), reduced costs related to the
program for the sale of accounts receivable that was terminated in the first
quarter and higher income from unconsolidated affiliates.
Net income for the first nine months of 1995 amounting to $74.9 million, or
$2.52 per share, was a record for the Company and was $27.1 million, or 88
cents per share, greater than net income for the 1994 first nine months. The
annual effective income tax rate for 1995 was 26% compared with 35% in 1994.
Liquidity, Working Capital and Capital Investment
Cash provided by operating activities for the first nine months of 1995
totaled $69.5 million and is after the effect of a $50 million increase in
working capital resulting from the termination of the Company's program for
the sale of accounts receivable. Cash provided from operations in 1994
totaled $97.3 million.
Quarterly dividend payments were increased to 18 cents per share in 1995 from
17 cents per share in 1994. Dividends totaling $15.6 million have been paid
in 1995, compared with $14.7 million in the first nine months of 1994. Net
-11-
<PAGE>
Liquidity, Working Capital and Capital Investment - Continued
decrease in short- and long-term debt for the first nine months of 1995
amounted to $6.6 million and included retirement of $8 million of the
Company's 9.55% senior sinking fund debentures. The debt-to-capitalization
ratio (debt divided by debt plus equity) declined from 42.6% at December 31,
1994, to 37.2% at September 30, 1995.
Under terms of a revolving credit agreement with a consortium of U.S. and non-
U.S. banks, the Company may borrow up to $175 million. The agreement is
intended to support the Company's commercial paper borrowings and, to the
extent not so utilized, provide domestic borrowing capacity. The remaining
borrowing capacity under this agreement at September 30, 1995, was $173.4
million. In addition to this agreement, the Company has uncommitted
arrangements with various banks to provide short-term financing as necessary.
During the third quarter, the Company announced its intent to acquire the
Electronic Systems Division (ESD) of Cincinnati Milacron Inc. for $105
million, an acquisition that would significantly increase the Company's
ability to offer electric and electronic solutions to customers in addition to
present hydraulic solutions. The Company intends to finance this acquisition
through internal cash generation and available borrowing arrangements.
The Company believes that cash flow from operations and available borrowing
arrangements will be sufficient to meet operating requirements over the near
term, including financing the ESD acquisition.
-12-
<PAGE>
TRINOVA CORPORATION
Item 6. Exhibits and Reports on Form 8-K
(a) The following exhibit is filed hereunder as part of Part I:
Exhibit (11) Statement re: Computation of Per Share Earnings
(b) The following exhibit is filed as part of Part II:
Exhibit (27) Financial Data Schedule
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, 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 (formerly National
Bank of Detroit), as supplemented by the First
Supplemental Indenture, dated as of May 4, 1992,
between TRINOVA Corporation and NBD Bank, 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 (formerly National
Bank of Detroit), as supplemented by the First
Supplemental Indenture, dated as of May 4, 1992,
between TRINOVA Corporation and NBD Bank, 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
-13-
<PAGE>
Item 6. Exhibits and Reports on Form 8-K - Continued
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
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 (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 1982 Stock Option Plan, filed as
Exhibit (10)-1 to Form SE filed on March 18, 1993
Exhibit (10)-2 TRINOVA Corporation 1984 Incentive Compensation
Plan, filed as Exhibit (10)-2 to Form SE filed on
March 18, 1993
Exhibit (10)-3 TRINOVA Corporation 1987 Stock Option Plan, filed as
Exhibit (10)-3 to Form SE filed on March 18, 1993
Exhibit (10)-4 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)-5 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)
-14-
<PAGE>
Item 6. Exhibits and Reports on Form 8-K - Continued
Exhibit (10)-6 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)-7 TRINOVA Corporation 1989 Non-Employee Directors'
Equity Plan, filed as Exhibit (10)-12 to Form 10-K
filed on March 18, 1994
Exhibit (10)-8 TRINOVA Corporation Plan for Optional Deferment of
Directors' Fees (amended and restated effective
April 1, 1995) filed as Exhibit (10)-8 to Form 10-K
filed on March 20, 1995
Exhibit (10)-9 TRINOVA Corporation Directors' Retirement Plan
(amended and restated effective January 1, 1990),
filed as Exhibit (10)-9 to Form 10-K filed on March
20, 1995
Exhibit (10)-10 TRINOVA Corporation Voluntary Deferred Compensation
Plan (effective April 1, 1995), filed as Exhibit
(10)-11 to Form 10-K filed on March 20, 1995
Exhibit (10)-11 TRINOVA Corporation Supplemental Benefit Plan
(amended and restated July 18, 1995, but effective
January 1, 1995), filed as Exhibit (10)-11 to Form
10-Q filed on August 10, 1995.
Exhibit (99(i))-1 TRINOVA Corporation Directors' Charitable Award
Program, filed as Exhibit (99(i))-2 to Form 10-K
filed on March 18, 1994
Exhibit (99(i))-2 Credit Agreement, dated as of August 31, 1994, among
TRINOVA Corporation (borrower) and The Bank of Tokyo
Trust Company; Chemical Bank; Citibank, N.A;
Dresdner Bank AG, New York and Grand Cayman
branches; The First National Bank of Chicago; Morgan
Guaranty Trust Company of New York; NBD Bank; and
Union Bank of Switzerland, Chicago branches (banks)
and Citibank, N.A. (administrative agent), filed as
Exhibit (99(i))-2 to Form 10-Q filed on November 3,
1994
(b) There were no reports on Form 8-K filed for the quarter ended
September 30, 1995.
-15-
<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
-----------------------------------------
November 9, 1995 Darryl F. Allen
Chairman, President and
Chief Executive Officer
(Principal Executive Officer)
By /S/ DAVID M. RISLEY
November 9, 1995 -----------------------------------------
David M. Risley
Vice President - Finance and
Chief Financial Officer
(Principal Financial Officer)
-16-
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
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 (formerly
National Bank of Detroit), as supplemented by
the First Supplemental Indenture, dated as of
May 4, 1992, between TRINOVA Corporation and NBD
Bank, 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
(formerly National Bank of Detroit), as
supplemented by the First Supplemental
Indenture, dated as of May 4, 1992, between
TRINOVA Corporation and NBD Bank, 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
-17-
<PAGE>
EXHIBIT INDEX - Continued
Exhibit No. Page No.
(4)-7 Indenture, dated as of January 28, 1988, between Incorporated
TRINOVA Corporation and NBD Bank (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 1982 Stock Option Plan, Incorporated
filed as Exhibit (10)-1 to Form SE filed on by Reference
March 18, 1993
(10)-2 TRINOVA Corporation 1984 Incentive Compensation Incorporated
Plan, filed as Exhibit (10)-2 to Form SE filed by Reference
on March 18, 1993
(10)-3 TRINOVA Corporation 1987 Stock Option Plan, Incorporated
filed as Exhibit (10)-3 to Form SE filed on by Reference
March 18, 1993
(10)-4 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)-5 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)-6 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
-18-
<PAGE>
EXHIBIT INDEX - Continued
Exhibit No. Page No.
(10)-7 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
(10)-8 TRINOVA Corporation Plan for Optional Deferment Incorporated
of Directors' Fees (amended and restated by Reference
effective April 1, 1995) filed as Exhibit (10)-8
to Form 10-K filed on March 20, 1995
(10)-9 TRINOVA Corporation Directors' Retirement Plan Incorporated
(amended and restated effective January 1, 1990) by Reference
filed as Exhibit (10)-9 to Form 10-K filed on
March 20, 1995
(10)-10 TRINOVA Corporation Voluntary Deferred Compensation Incorporated
Plan (effective April 1, 1995), filed as Exhibit by Reference
(10)-11 to Form 10-K filed on March 20, 1995
(10)-11 TRINOVA Corporation Supplemental Benefit Plan Incorporated
(amended and restated July 18, 1995, but effective by Reference
January 1, 1995), filed as Exhibit (10)-11 to Form
10-Q filed on August 10, 1995
(11) Statement re: Computation of Per Share Earnings 20
(27) Financial Data Schedule 21
(99(i))-1 TRINOVA Corporation Directors' Charitable Award Incorporated
Program, filed as Exhibit (99(i))-2 to by Reference
Form 10-K filed on March 18, 1994
(99(i))-2 Credit Agreement, dated as of August 31, 1994, Incorporated
among TRINOVA Corporation (borrower) and The Bank by Reference
of Tokyo Trust Company; Chemical Bank; Citibank,
N.A.; Dresdner Bank AG, New York and Grand Cayman
branches; The First National Bank of Chicago;
Morgan Guaranty Trust Company of New York; NBD
Bank; and Union Bank of Switzerland, Chicago
branches (banks) and Citibank, N.A. (administrative
agent), filed as Exhibit (99(i))-2 to Form 10-Q
filed on November 3, 1994
-19-
<TABLE>
EXHIBIT 11
STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS
TRINOVA CORPORATION
(In thousands, except per share data)
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
------------------ -------------------
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
AVERAGE SHARES OF COMMON STOCK
AND COMMON STOCK EQUIVALENTS
OUTSTANDING (NOTE A)
Average shares outstanding 28,909 28,775 28,850 28,695
Assumed conversion of the 6%
convertible debentures 1,905 1,905 1,905 1,905
Net effect of dilutive stock
options based upon treasury stock
method using average market price 110 223 110 223
--------- ---------- ---------- ----------
Average shares of common stock
and common stock equivalents
outstanding 30,924 30,903 30,865 30,823
========== ========== ========== ==========
INCOME ATTRIBUTABLE TO COMMON STOCK (NOTE A)
Net income $ 18,999 $ 15,131 $ 74,867 $ 47,729
After-tax equivalent of interest
expense on the 6% convertible
debentures 930 930 2,790 2,790
---------- ---------- ---------- ----------
Income attributable to common stock $ 19,929 $ 16,061 $ 77,657 $ 50,519
========== ========== ========== ==========
Net Income per Share $ .64 $ .52 $ 2.52 $ 1.64
========== ========== ========== ==========
<FN>
Note A - Net income per share is computed using the average number of common
shares outstanding, including common stock equivalents. The assumed
conversion of the Company's 6% convertible debentures was included in average
shares outstanding, increasing the average number of shares outstanding by
1,904,762 shares. For purposes of computing net income per share, net income
was increased for the after-tax equivalent of interest expense on the 6%
convertible debentures.
</FN>
</TABLE>
-20-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
STATEMENT OF FINANCIAL POSITION AND THE CONDENSED STATEMENT OF OPERATIONS AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 14,374
<SECURITIES> 0
<RECEIVABLES> 324,313
<ALLOWANCES> 15,064
<INVENTORY> 237,945
<CURRENT-ASSETS> 602,148
<PP&E> 932,765
<DEPRECIATION> 533,645
<TOTAL-ASSETS> 1,095,390
<CURRENT-LIABILITIES> 317,907
<BONDS> 227,800
<COMMON> 144,969
0
0
<OTHER-SE> 246,409
<TOTAL-LIABILITY-AND-EQUITY> 1,095,390
<SALES> 1,441,697
<TOTAL-REVENUES> 1,441,697
<CGS> 1,077,378
<TOTAL-COSTS> 1,077,378
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 14,518
<INCOME-PRETAX> 101,167
<INCOME-TAX> 26,300
<INCOME-CONTINUING> 74,867
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 74,867
<EPS-PRIMARY> 2.52
<EPS-DILUTED> 2.52
</TABLE>
