UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the Quarterly Period Ended May 31, 1998.
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 1-8862
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MARK IV INDUSTRIES, INC.
- --------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Delaware 23-1733979
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
501 John James Audubon Parkway, P.O. Box 810, Amherst, New York 14226-0810
- --------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(716) 689-4972
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(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
--- ----
Number of shares outstanding of each class of the Registrant's common stock,
as of the latest practicable date:
Class Outstanding at June 30, 1998
- ------------ ----------------------------
Common stock $.01 par value 58,148,634
<PAGE>2
MARK IV INDUSTRIES, INC.
INDEX
Part I. Financial Information Page No.
- ------------------------------ --------
Consolidated Condensed Balance Sheets as of
May 31, 1998 and February 28, 1998 3
Consolidated Statements of Income
For the Three Month Periods Ended May 31, 1998 and 1997 4
Consolidated Statements of Cash Flows
For the Three Month Periods Ended May 31, 1998 and 1997 5
Consolidated Statements of Comprehensive Income and
Retained Earnings For the Three Month Periods Ended
May 31, 1998 and 1997 6
Notes to Consolidated Financial Statements 7
Management's Discussion and Analysis of Financial
Condition and Results of Operations 11
Part II. Other Information 16
- ---------------------------
Signature Page 17
Exhibit Index 18
<PAGE>3
MARK IV INDUSTRIES, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(Dollars in thousands)
May 31, February 28,
1998 1998
-------- -----------
ASSETS (Unaudited)
Current Assets:
Cash and short-term investments $ 1,300 $ 120,900
Accounts receivable 511,500 466,400
Inventories 394,600 393,400
Other current assets 114,400 105,600
---------- ----------
Total current assets 1,021,800 1,086,300
Pension and other non-current assets 232,500 226,600
Property, plant and equipment, net 670,700 668,400
Cost in excess of net assets acquired 436,000 439,200
---------- ----------
TOTAL ASSETS $2,361,000 $2,420,500
========== ==========
LIABILITIES & STOCKHOLDERS' EQUITY
Current Liabilities:
Notes payable and current maturities $ 88,000 $ 133,800
8-3/4% Notes, called for redemption - 73,100
Accounts payable 234,600 222,400
Compensation related liabilities 75,600 75,500
Accrued interest 11,900 28,600
Other current liabilities 97,000 94,500
---------- ----------
Total current liabilities 507,100 627,900
---------- ----------
Long-Term Debt:
Senior debt 121,400 21,400
Subordinated debentures 772,500 772,500
---------- ----------
Total long-term debt 893,900 793,900
---------- ----------
Other non-current liabilities 263,400 246,700
---------- ----------
Stockholders' Equity:
Preferred stock - -
Common stock 600 600
Additional paid-in capital 536,800 617,800
Retained earnings 188,500 167,100
Foreign currency translation adjustment (29,300) (33,500)
---------- ----------
Total stockholders' equity 696,600 752,000
---------- ----------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $2,361,000 $2,420,500
========== ==========
The accompanying notes are an integral part of these financial statements.
<PAGE>4
MARK IV INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
For the Three Month Periods Ended May 31, 1998, and 1997
(Amounts in thousands, except per share data)
1998 1997
---- ----
Net sales $604,500 $560,100
-------- --------
Operating costs:
Cost of products sold 413,600 376,800
Selling and administration 94,800 89,400
Research and development 14,700 11,800
Depreciation and amortization 23,900 18,500
-------- --------
Total operating costs 547,000 496,500
-------- --------
Operating income 57,500 63,600
Interest expense 15,600 14,300
-------- --------
Income before provision for taxes 41,900 49,300
Provision for income taxes 15,000 19,200
-------- --------
Income before extraordinary loss 26,900 30,100
Extraordinary loss from early extinguishment
of debt, net of tax benefits (2,600) -
-------- --------
Net income $ 24,300 $ 30,100
======== ========
Net income per share of common stock:
Basic:
Income before extraordinary loss $ .44 $ .46
Extraordinary loss (.04) -
-------- --------
Net income $ .40 $ .46
======== ========
Diluted:
Income before extraordinary loss $ .41 $ .46
Extraordinary loss (.04) -
-------- --------
Net income $ .37 $ .46
======== ========
Weighted average number of shares
outstanding:
Basic 61,500 65,500
======== ========
Diluted 70,300 66,000
======== ========
The accompanying notes are an integral part of these financial statements.
<PAGE>5
MARK IV INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
For the Three Month Periods Ended May 31, 1998 and 1997
(Dollars in thousands)
1998 1997
---- ----
Cash flows from operating activities:
Income before extraordinary loss $ 26,900 $ 30,100
Items not affecting cash:
Depreciation and amortization 23,900 18,500
Pension and compensation related items (5,700) (4,600)
Deferred income taxes 5,600 8,300
Changes in assets and liabilities, net of
effects of acquired and divested businesses:
Accounts receivable (40,300) (67,400)
Inventories (500) 1,500
Other assets (2,200) (20,000)
Accounts payable 8,900 8,400
Other liabilities (11,900) (21,400)
Net cash provided by (used in) operating -------- -------
activities, before extraordinary loss 4,700 (46,600)
Extraordinary loss before deferred charges (3,500) -
Net cash provided by (used in) -------- -------
operating activities 1,200 (46,600)
Cash flows from investing activities: -------- -------
Divestitures and asset sales - 35,500
Purchase of plant and equipment, net (19,600) (31,100)
-------- -------
Net cash provided by (used in)
investing activities (19,600) 4,400
Cash flows from financing activities: -------- -------
Credit agreement borrowings, net 80,000 100,000
Retirement of subordinated debt (73,100) -
Other changes in long-term debt, net 24,900 (600)
Changes in short-term bank borrowings (48,800) 6,400
Repurchase of common stock, net (81,300) (61,100)
Cash dividends paid (2,900) (2,500)
-------- -------
Net cash provided by (used in)
financing activities (101,200) 42,200
-------- -------
Net decrease in cash and
short-term investments (119,600) -
Cash and short-term investments:
Beginning of the period 120,900 1,300
-------- -------
End of the period $ 1,300 $ 1,300
======== =======
The accompanying notes are an integral part of these financial statements.
<PAGE>6
MARK IV INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME AND RETAINED EARNINGS
For the Three Month Periods Ended May 31, 1998 and 1997
(Dollars in thousands)
(Unaudited)
Comprehensive Income
- --------------------
1998 1997
-------- --------
Net income $ 24,300 $ 30,100
Balance sheet effect of foreign
currency translation adjustments 4,200 100
-------- --------
Comprehensive net income $ 28,500 $ 30,200
======== ========
Retained Earnings
- -----------------
Retained earnings at February 28, 1998 $167,100 $ 79,300
Net income 24,300 30,100
Cash dividends of $.05 and $.04 per
share (2,900) (2,500)
-------- --------
Retained earnings at end of period $188,500 $106,900
======== ========
The accompanying notes are an integral part of these financial statements.
<PAGE>7
MARK IV INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
1. Financial Statements
The unaudited consolidated financial statements include the accounts of
the Company and all of its subsidiaries. All significant intercompany
transactions have been eliminated. The unaudited consolidated financial
statements have been prepared in conformity with generally accepted
accounting principles, which requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities
as of the date of such financial statements, and the reported amounts of
revenues and expenses during the reporting periods. It should be
recognized that the actual results could differ from those estimates.
In the opinion of the Company's management, the accompanying unaudited
consolidated financial statements contain all adjustments necessary to
present fairly the financial position of the Company at May 31, 1998,
and the results of its operations and its cash flows for the periods
ended May 31, 1998 and 1997. Such results are not necessarily
indicative of the results to be expected for the full year.
2. Accounts Receivable and Inventories
Accounts receivable are presented net of allowances for doubtful
accounts of $12.4 million and $13.6 million at May 31, 1998 and
February 28, 1998, respectively.
Inventories consist of the following components (dollars in thousands):
May 31, February 28,
1998 1998
------- -----------
Raw materials $ 89,600 $ 86,200
Work-in-process 69,000 73,000
Finished goods 236,000 234,200
--------- ---------
Total $ 394,600 $ 393,400
========= =========
Since physical inventories taken during the year do not necessarily
coincide with the end of a quarter, management has estimated the
composition of inventories with respect to raw materials, work-in-
process and finished goods. It is management's opinion that this
estimate represents a reasonable approximation of the inventory
breakdown as of May 31, 1998. The amounts at February 28, 1998 are
based upon the audited balance sheet at that date.
<PAGE>8
MARK IV INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
3. Property, Plant and Equipment
Property, plant and equipment are stated at cost and consist of the
following components (dollars in thousands):
May 31, February 28,
1998 1998
------- -----------
Land and land improvements $ 26,000 $ 25,900
Buildings 180,300 179,900
Machinery and equipment 658,700 641,800
-------- --------
Total property, plant and equipment 865,000 847,600
Less accumulated depreciation 194,300 179,200
-------- --------
Property, plant and equipment, net $670,700 $668,400
======== ========
4. Long-term debt
Long-term debt consists of the following (dollars in thousands):
May 31, February 28,
1998 1998
Senior Debt: -------- ---------
Credit Agreement $ 80,000 $ -
Other borrowing arrangements 56,200 31,200
---------- ----------
Total 136,200 31,200
Less Current maturities (14,800) (9,800)
---------- ----------
Net senior debt 121,400 21,400
Subordinated Debt: ---------- ----------
7-3/4% Senior Subordinated Notes 248,700 248,700
7-1/4% Senior Subordinated Notes 248,800 248,800
4-3/4% Convertible Subordinated Notes 275,000 275,000
---------- ----------
Total subordinated debt 772,500 772,500
---------- ----------
Total long-term debt 893,900 793,900
Total stockholders' equity 696,600 752,000
---------- ----------
Total capitalization $1,590,500 $1,545,900
========== ==========
Long-term debt as a percentage
of total capitalization 56.2% 51.4%
========= =========
<PAGE>9
MARK IV INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
5. Cash Flow
For purposes of cash flows, the Company considers overnight investments
as cash equivalents. The Company made cash interest payments of
approximately $33.7 million and $24.1 million in the three month periods
ended May 31, 1998 and 1997, respectively. The Company also made cash
income tax payments of approximately $8.3 million and $6.5 million in
the three month periods ended May 31, 1998 and 1997, respectively.
6. Common Stock Repurchase
In May 1998, the Company announced completion of its 7.3 million share
repurchase program approved by the Board of Directors in March 1997.
The stock was purchased at an average price of $22.03 per share, for a
total cost of $160.8 million, with approximately 3.8 million shares
repurchased from March 1, 1998 at an average cost of $21.02 per share,
or approximately $80.4 million. Upon completion of this program the
Board of Directors approved the purchase of an additional ten million
shares. It is expected that such shares will be purchased in the open-
market, or through privately negotiated transactions at prices which the
Company considers to be attractive. Through June 30, 1998 the Company
acquired approximately 1.0 million shares, under the new repurchase
program, at an average cost of $22.00 per share, or a total cost of
approximately $22 million.
7. Senior Subordinated Notes Redemption
On April 2, 1998, the Company redeemed the remaining $73.1 million
principal balance of its 8-3/4% Senior Subordinated Notes due April 1,
2003. The Notes were redeemed at a price of $1,043.75 per $1,000
principal amounts of Notes plus accrued interest. The redemption
resulted in a one-time charge for early debt extinguishment of $2.6
million (net of tax) for the three month period ended May 31, 1998.
8. Comprehensive Income
In June 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 130, Reporting Comprehensive
Income ("FAS 130"). FAS 130 establishes standards for reporting and
measuring of all changes in equity that result from recognized
transactions and other economic events of the period other than
transactions with owners in their capacity as owners. The Company has
reported the change in foreign currency translation items as a component
of Comprehensive Income in the Statement of Comprehensive Income for the
periods ended May 31, 1998 and 1997, respectively. The accumulated
effect of foreign currency translation items at May 31, 1998 and
February 28, 1998, is reported in the Stockholders Equity section of the
Company's Consolidated Condensed Balance Sheets.
<PAGE>10
MARK IV INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
9. Net Income Per Share
Following is a reconciliation of net income and weighted average common
shares outstanding for purposes of computing basic and diluted net
income per share (amounts in thousands, except per share data):
May 31, May 31,
1998 1997
------- ------
Basic Net Income Per Share:
Net income $24,300 $30,100
======= =======
Weighted average number of
common shares outstanding 61,500 65,500
======= =======
Basic net income per share $ .40 $ .46
======= =======
Diluted Net Income Per Share:
Net income $24,300 $30,100
After-tax equivalent of interest
expense on 4-3/4% convertible
subordinated notes 2,000 -
------- -------
Income for purposes of computing
diluted net income per share $26,300 $30,100
======= =======
Weighted average common
shares outstanding 61,500 65,500
Dilutive stock options 400 500
Weighted average assumed
conversion of 4-3/4% convertible
subordinated notes 8,400 -
------- -------
Weighted average number of common shares
outstanding for purposes of
computing diluted net income
per share 70,300 66,000
======= =======
Diluted net income per share $ .37 $ .46
======= =======
<PAGE>11
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
- -------------------------------
The Company's working capital increased by $56.3 million (12%) during the
three month period ended May 31, 1998, reflecting the expected seasonal build
which occurs in the Automotive segment's aftermarket business and the
Industrial segment's consumer hose business. Such amount compares favorably
to an increase of $65.7 million (18%) in the corresponding period last year.
As a result of the Company's earnings performance in the current period,
coupled with the improvement in the working capital elements and other non-
current items, net cash provided by operating activities was $4.7 million for
the three month period ended May 31, 1998, a $51.3 million improvement in
comparison to the $46.6 million used in operating activities in the three
month period ended May 31, 1997. The improvement in the seasonal working
capital build-up is due in part to the increased levels required last year to
support the restructuring efforts. The improvement also reflects the
Company's success in reducing its working capital position as a result of its
increased emphasis on cash flow in the current fiscal year. The comparison
also reflects the one-time nature of the costs required to fund the Company's
restructuring efforts, which were more significant in the prior period.
Management anticipates that its working capital investment will be reduced
during the remainder of fiscal 1999 as a result of the completion of its
restructuring program, and its corporate-wide emphasis on increasing cash flow
and improving the Company's return on assets employed.
Capital expenditures for the three month period ended May 31, 1998 were
approximately $19.6 million, which was lower than depreciation and
amortization expense of $23.9 million for the same period, and reflects a
decrease in expenditures of approximately $11.9 million in comparison to the
three month period ended May 31, 1997. The decreased level of expenditures
relates primarily to the return to more normal levels of capital expenditure
requirements as the Company completes its restructuring plan and its European
and South American expansion efforts. Such activities resulted in above
normal capital expenditure requirements in the prior year period. Management
anticipates that the Company's capital expenditure requirements will continue
at its current level for the remainder of fiscal 1999.
In May 1997, the Company announced completion of its 7.3 million share
repurchase program approved by the Board of Directors in March 1997. The
stock was purchased at an average price of $22.03 per share, for a total cost
of $160.8 million, with approximately 3.8 million shares repurchased from
March 1, 1998 at an average cost of $21.02 per share, or approximately $80.4
million. Upon completion of this program the Board of Directors approved the
purchase of an additional ten million shares. It is expected that such shares
will be purchased in the open-market, or through privately negotiated
transactions at prices which the Company considers to be attractive. Through
June 30, 1998 the Company acquired approximately 1.0 million shares under the
new program at an average cost of $22.00 per share, or a total cost of
approximately $22 million.
<PAGE>12
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
On April 2, 1998, the Company redeemed the remaining $73.1 million principal
balance of its 8-3/4% Senior Subordinated Notes due April 1, 2003. The Notes
were redeemed at a price of $1,043.75 per $1,000 principal amounts of Notes
plus accrued interest through April 1, 1998. The redemption resulted in a
one-time charge for early debt extinguishment of approximately $2.6 million
(net of tax) for the three month period ended May 31, 1998.
The Company has borrowing availability under its primary credit agreements of
approximately $420.0 million, subject to certain covenants, and additional
availability under its various domestic and foreign demand lines of credit of
approximately $135.0 million as of May 31, 1998. Long-term debt at May 31,
1998 was $893.9 million, an increase of $100.0 million over the $793.9 million
that was outstanding as of February 28, 1998. The change primarily reflects
increased borrowings to fund the Company's stock repurchase program.
The Company's restructuring program is expected to be substantially completed
in its second fiscal quarter ending August 31, 1998, with net benefits
beginning to be recognized in the second half of the fiscal year. As
previously announced, management is currently developing a plan to reposition
its Automotive aftermarket operations to better align its assets with the
market's changing business conditions. The Company's aftermarket
repositioning is expected to include the elimination of low margin, slow
moving product lines, a reduction in inventory levels and rationalization of
the customer base. While the repositioning plan is still being finalized,
management's preliminary estimate is that it will result in a charge against
earnings in the range of $25.0 to $40.0 million, net of taxes, or $.37 to $.58
per diluted share.
Management believes cash generated from operations, as temporarily
supplemented by existing credit availability, should be sufficient to support
the Company's working capital requirements and anticipated capital expenditure
needs for the foreseeable future, including the costs associated with its
stock repurchase program, as well as its restructuring and repositioning
efforts.
Results of Operations
- ---------------------
The Company classifies its operations in two business segments: Automotive
and Industrial. The Company's current business strategy is focused upon the
enhancement of its business segments through internal growth, cost control and
quality improvement programs and selective, strategic acquisitions with an
emphasis on expanding each segment's international presence.
Net sales from continuing operations for the three month period ended May 31,
1998 increased by $44.4 million (8%) over the comparable period last year.
Excluding the effects of acquisitions in the latter part of fiscal 1998, net
sales for the three month period reflect an increase of approximately $18.0
million (3%) from internal sales growth over the comparable period last year.
In the Company's Automotive segment, net sales increased $32.0 million (11%)
for the three month period ended May 31, 1998 over the comparable period last
year. Excluding the effects of acquisitions in the latter part of fiscal
<PAGE>13
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
1998, internal growth in the Company's Automotive segment amounted to $9.0
million (3%) over the comparable period last year. This internal growth in
the Automotive segment was primarily generated by the segment's Automotive OEM
sector, which helped to offset the slightly reduced performance of the
Company's Automotive Aftermarket sector for the three month period ended May
31, 1998 in comparison to the prior year.
In the Company's Industrial segment, net sales increased $12.4 million (5%)
for the three month period ended May 31, 1998 over the comparable period last
year. Excluding the effects of acquisitions in the latter part of fiscal 1998,
internal growth in the Company's Industrial segment amounted to $9.0 million
(4%) over the comparable period last year. This internal growth was lead by
the segment's transportation sector which helped to offset flat sales in the
segment's general industrial sector.
The cost of products sold as a percentage of consolidated net sales increased
to 68.4% in the current period as compared to 67.3% in the comparable prior
year period. This increase is primarily attributable to the effects of
duplicative costs and inefficiencies incurred in the current period due to
additional time required to complete the restructuring program.
Selling and administration costs as a percentage of consolidated net sales
were 15.7% for the three month period ended May 31, 1998, as compared to 16.0%
for the three month period ended May 31, 1997. The slight reduction in the
level of costs indicates operating efficiencies achieved from the integration
of operations acquired, as well as the reorganization of the Company's
business segments. The lower level of costs also indicates the Company's
continued emphasis on cost control and cycle time reduction has been
successful in substantially offsetting the impact of inflation on such costs.
Research and development costs increased by $2.9 million (25%) for the three
month period ended May 31, 1998 as compared to the three month period ended
May 31, 1997. As a percentage of consolidated net sales, these expenses
increased to 2.4% for the three month period ended May 31, 1998 as compared to
2.1% for the comparable period last year. This significant increase is
primarily related to the Company's launching of a number of new product and
system initiatives, as well as bringing new technology to the North American
Automotive OEM market from acquisitions made in Europe in the latter part of
fiscal 1998.
Depreciation and amortization expense increased by $5.4 million (29%) for the
three month period ended May 31, 1998 as compared to the three month period
ended May 31, 1997. The increase is primarily attributable to the Company's
increased level of capital equipment expenditures in fiscal 1998 to support
the Company's restructuring efforts, as well as new facilities and equipment
required to support new products and markets in Europe and South America. To
a lesser extent, additional goodwill amortization related to acquisitions in
the latter part of fiscal 1998 has also contributed to the increase.
<PAGE>14
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Interest expense for the three month period ended May 31, 1998 increased $1.3
million (9%) from the level incurred in the three month period ended May 31,
1997. The increase is primarily due to borrowings incurred to finance the
Company's stock repurchase program and the acquisitions in the latter part of
fiscal 1998, as well as to support higher working capital levels. The
increase was substantially offset by the benefits of reduced rates on the
Company's domestic debt, primarily related to the issuance in the latter part
of fiscal 1998 of the 7-1/2% and 4-3/4% Notes, which refinanced higher rate
debt.
The effective tax rate as a percentage of pre-tax accounting income for the
three month periods ended May 31, 1998 and 1997 decreased to 35.8% from 39%,
respectively. The decrease in the effective tax rate in the three month
period ended May 31, 1998 as compared to the comparable period last year, is
primarily related to the benefit of increased domestic income resulting from
internal growth that outpaced income growth in international locations with
higher statutory tax rates than in the U.S.
As a result of all of the above, income before the extraordinary loss for the
three month period ended May 31, 1998 reflects a decrease of $3.2 million
(10.6%) as compared to the comparable period in the prior year. On a diluted
per share basis, such amount for the three month period ended May 31, 1998
represents a decrease of 10.9% over the comparable prior year period.
Net income decreased approximately $5.8 million (19%) for the three month
period ended May 31, 1998 as compared to the three month period ended May 31,
1997, with the current year period also including the $2.6 million
extraordinary loss from the early extinguishment of debt.
Impact of Inflation
- -------------------
Although the Company has experienced delays in its ability to pass on certain
inflation related cost increases, the Company does not expect that such delays
or the overall impact of inflation will have a material impact on the
Company's operations.
Forward-Looking Information
- ---------------------------
This Management's Discussion and Analysis and other sections of this Quarterly
Report contain forward-looking statements that are based on current
expectations, estimates and projections about the industries in which the
company operates, as well as management's beliefs and assumptions. Words such
as "expects", "anticipates", "intends", "plans", "believes", "seeks",
"estimates", variations of such words and similar expressions are intended to
identify such forward-looking statements. These statements are not guarantees
of future performance and involve certain risks, uncertainties and assumptions
("Future Factors") which are difficult to predict. Therefore, actual outcomes
and results may differ materially from what is expressed or forecasted in such
forward-looking statements. The Company undertakes no obligation to update
publicly any forward-looking statements, whether as a result of new
information, future events or otherwise.
<PAGE>15
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The Future Factors that may affect the operations, performance and results of
the Company's businesses include the following:
a. general economic and competitive conditions in the markets and
countries in which the Company operates, and the risks inherent in
international operations and joint ventures;
b. the Company's ability to continue to control and reduce its costs
of production;
c. the level of consumer demand for new vehicles equipped with the
Company's products;
d. the level of consumer demand for the Company's aftermarket
products, which varies based on such factors as the severity of
winter weather, the age of automobiles in the Company's markets
and the impact of improvements or changes in original equipment
products;
e. the effect of changes in the distribution channels for the
Company's aftermarket and industrial products; and,
f. the strength of the U.S. dollar against currencies of other
countries where the Company operates, as well as cross-currencies
between the Company's operations outside of the U.S. and other
countries with whom they transact business.
Should one or more of these risks or uncertainties materialize, or should
underlying assumptions prove incorrect, actual results may vary materially
from those described in the forward-looking statements. The Company does not
intend to update forward-looking statements.
<PAGE>16
Part II. OTHER INFORMATION
- ---------------------------
Items 1, 2, 3, 4 and 5 are inapplicable and have been omitted.
Item 6(a) - Exhibits
- --------------------
Exhibit No.
* 27 Financial Data Schedule
* Filed herewith by direct transmission pursuant to the EDGAR
Program
Item 6(b) Reports on Form 8-K
- -----------------------------
None
<PAGE>17
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.
MARK IV INDUSTRIES, INC.
Registrant
DATE: July 1, 1998 /s/ Sal H. Alfiero
------------ -----------------------
Sal H. Alfiero
Chairman of the Board
DATE: July 1, 1998 /s/ William P. Montague
------------ -----------------------
William P. Montague
President
DATE: July 1, 1998 /s/ John J. Byrne
------------ -----------------------
John J. Byrne
Vice President - Finance
and Chief Financial Officer
DATE: July 1, 1998 /s/ Richard L. Grenolds
------------ ------------------------
Richard L. Grenolds
Vice President and
Chief Accounting Officer
DATE: July 1, 1998 /s/ Clement R. Arrison
------------ ------------------------
Clement R. Arrison
Director
<PAGE>18
EXHIBIT INDEX
Description
- -----------
Page No.
* 27 Financial Data Schedule 19
* Filed herewith by direct transmission pursuant to the EDGAR
Program
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements of Mark IV Industries, Inc. 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> FEB-28-1999
<PERIOD-END> MAY-31-1998
<CASH> 1,300
<SECURITIES> 0
<RECEIVABLES> 523,900
<ALLOWANCES> 12,400
<INVENTORY> 394,600
<CURRENT-ASSETS> 1,021,800
<PP&E> 865,000
<DEPRECIATION> 194,300
<TOTAL-ASSETS> 2,361,000
<CURRENT-LIABILITIES> 507,100
<BONDS> 893,900
0
0
<COMMON> 600
<OTHER-SE> 696,000
<TOTAL-LIABILITY-AND-EQUITY> 2,361,000
<SALES> 604,500
<TOTAL-REVENUES> 604,500
<CGS> 413,600
<TOTAL-COSTS> 547,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 15,600
<INCOME-PRETAX> 41,900
<INCOME-TAX> 15,000
<INCOME-CONTINUING> 26,900
<DISCONTINUED> 0
<EXTRAORDINARY> 2,600
<CHANGES> 0
<NET-INCOME> 24,300
<EPS-PRIMARY> .40
<EPS-DILUTED> .37
</TABLE>
