<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended 31 March 1999
-------------
or
( ) TRANSITION REPORT PURSUANT OT SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________ to _________
Commission File No. 1 - 1997
--------
THE MONARCH MACHINE TOOL COMPANY
--------------------------------
(Exact name of registrant as specified in its charter)
Ohio 34-43407810
- --------------------------- -----------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
2600 Kettering Tower, Dayton, Ohio 45423
----------------------------------------
(Address of principal executive offices, zip code)
(937) 910-9300
--------------
(Registrant's telephone number including area code)
N.A.
-------------------------------------------------------
(Former name, former address and former fiscal year, if changed
since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of 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
--- ---
The number of common shares outstanding as of May 5, 1999 was 3,782,817.
<PAGE> 2
THE MONARCH MACHINE TOOL COMPANY AND SUBSIDIARIES
INDEX TO FORM 10-Q
PAGE
NUMBER
------
PART 1. FINANCIAL INFORMATION:
ITEM 1. - Condensed Financial Statements:
Balance Sheets - 31 March 1999 and 31 December 1998 2
Statements of Operations and Comprehensive Income -
Quarter ended 31 March 1999 and 1998 3
Statements of Cash Flow - Quarter ended 31 March 1999
and 1998 4
Notes to Condensed Financial Statements 5-7
ITEM 2. - Management's Discussion and Analysis
of Financial Condition and Results of
Operations 8-9
ITEM 3. - Quantitative and Qualitative Disclosure
About Market Risk (inapplicable) 10
PART II. OTHER INFORMATION:
ITEM 1. Legal Proceedings 10
ITEM 2. Changes in Securities 10
ITEM 3-4. Inapplicable 10
ITEM 5. Other Information 10-11
ITEM 6. Exhibits and Reports on Form 8-K 11
1
<PAGE> 3
PART 1 - FINANCIAL INFORMATION
THE MONARCH MACHINE TOOL COMPANY AND SUBSIDIARIES
CONDENSED BALANCE SHEETS
(In thousands)
<TABLE>
<CAPTION>
31 March 31 December
1999 1998
---- ----
(Unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash $ 2,514 $ 1,733
Accounts receivable 21,945 23,893
Costs and estimated earnings in excess of
billings on uncompleted contracts 5,828 3,275
Inventories 9,323 10,486
Prepaid expenses 661 667
Deferred income taxes 1,933 1,874
-------- --------
Current assets 42,204 41,928
PROPERTY, PLANT & EQUIPMENT - NET 10,778 11,070
PREPAID PENSION COSTS 19,391 19,051
DEFERRED INCOME TAXES 1,242 1,631
GOODWILL 9,658 10,099
OTHER ASSETS 4,711 4,678
-------- --------
$ 87,984 $ 88,457
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Short-term borrowings $ $ 500
Accounts payable 6,265 8,930
Accrued liabilities 10,317 12,153
Billings in excess of costs and estimated
earnings on uncompleted contracts 9,764 5,517
-------- --------
Current liabilities 26,346 27,100
POSTRETIREMENT BENEFITS 1,376 1,450
LONG-TERM DEBT 16,497 16,497
OTHER LONG-TERM LIABILITIES 734 756
SHAREHOLDERS' EQUITY:
Preferred stock 14 14
Common stock 5,880 5,815
Unearned compensation, restricted stock (29) (37)
Retained earnings 37,435 37,042
Accumulated other comprehensive income (269) (180)
-------- --------
43,031 42,654
-------- --------
$ 87,984 $ 88,457
======== ========
</TABLE>
The accompanying notes are an integral part of the consolidated
financial statements.
2
<PAGE> 4
THE MONARCH MACHINE TOOL COMPANY AND SUBSIDIARIES
CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(In thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Quarter Ended 31 March
----------------------
1999 1998
---- ----
<S> <C> <C>
Net sales $ 23,009 $ 23,064
Operating costs and expenses:
Cost of sales 18,296 18,933
Selling, general and administrative 4,681 3,195
-------- --------
Operating earnings 32 936
Other income (expense):
Interest expense (328) (89)
Interest income 38 57
Other income (expense), net 1,175 (69)
-------- --------
Income before income taxes 917 835
Income tax provision 329 255
-------- --------
Net income 588 580
Other comprehensive income,
net of tax - foreign
currency translation
adjustments (59) (16)
-------- --------
Comprehensive income $ 529 $ 564
======== ========
Average common shares outstanding 3,776 3,766
======== ========
Net income per common share, $ .15 $ .15
======== ========
basic and diluted
Dividends per share:
Preferred $ .45 $ .45
Common $ .05 $ .05
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
3
<PAGE> 5
THE MONARCH MACHINE TOOL COMPANY AND SUBSIDIARIES
CONDENSED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
Quarter Ended 31 March
----------------------
1999 1998
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 588 $ 580
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
Depreciation and amortization 586 240
Pension income (323) (882)
Gain on sale of fixed assets (6)
Deferred tax provision 329 255
Changes in operating assets and liabilities:
Accounts receivable 1,947 (1,421)
Inventories 1,163 1,310
Accounts payable (2,692) (3,589)
Accrued liabilities (1,904) (993)
Billings in excess of costs and estimated earnings
on uncompleted contracts 1,694 (2,008)
------- -------
Net cash provided by (used in) operating activities 1,382 (6,508)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of fixed assets 13
Capital expenditures (168) (111)
Increase (decrease) in other assets 270 311
------- -------
Net cash provided by (used in) investing activities 115 200
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends (195) (195)
Issuance of common stock 65
Repayments of short-term borrowings (500)
Proceeds from long-term borrowings 1,000 5,000
Repayments of long-term borrowings (1,000) (4)
------- -------
Net cash provided by (used in) financing activities (630) 4,801
EFFECT OF EXCHANGE RATES ON CASH (86) (9)
------- -------
INCREASE (DECREASE) IN CASH 781 (1,516)
CASH - BEGINNING OF PERIOD 1,733 5,022
------- -------
CASH - END OF PERIOD $ 2,514 $ 3,506
======= =======
</TABLE>
The accompanying notes are an integral part of the consolidated
financial statements
4
<PAGE> 6
THE MONARCH MACHINE TOOL COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED FINANCIAL STATEMENTS
QUARTER ENDED 31 MARCH 1999 AND 1998
1. FINANCIAL STATEMENTS
--------------------
The balance sheet at 31 December 1998 presents condensed financial
information taken from the audited financial statements. The interim
financial statements are unaudited. In the first quarter of 1999 the
Company recorded an accrual for $350,000 as the estimated cost to
settle litigation. The Company has also recognized $1.1 million of
other income as a result of the reduction of amounts previously accrued
for an environmental liability. In the opinion of management, all other
adjustments, which consist of normal recurring adjustments necessary to
present fairly the financial position and results of operations for the
interim periods presented, have been made. The results shown for the
first quarter of 1999 are not necessarily indicative of the results
that may be expected for the entire year.
The Accounting Standards Executive Committee ("AcSEC") of the AICPA has
issued Statement of Position ("SOP") 98-1, "Accounting for the Costs of
Computer Software Developed or Obtained for Internal Use" effective for
financial statements for fiscal years beginning after December 15,
1998. SOP 98-1 provides guidance on accounting for the costs of
computer software developed or obtained for internal use. The Company
has chosen earlier application of SOP 98-1, effective for 1998, in
conjunction with the Company's implementation of its Enterprise
Resource Planning system.
In June 1998, the Financial Accounting Standards Board (the "FASB")
issued Statement of Financial Accounting Standards ("SFAS") No. 133,
"Accounting for Derivative Instruments and Hedging Activities". SFAS
No. 133 establishes standards for derivative instruments, including
certain derivative instruments imbedded in other contracts, and for
hedging activities. It requires that an entity recognizes all
derivatives as either assets or liabilities in the statement of
financial position and measures those instruments at fair value. This
statement is effective for all fiscal quarters of fiscal years
beginning after June 15, 1999. The Company does not expect the effect
of SFAS No. 133 on its financial statements to be significant.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. It is suggested
that these financial statements be read in conjunction with the
financial statements and notes thereto included in the Company's 31
December 1998 annual report to shareholders.
2. EARNINGS PER SHARE
------------------
Basic earnings per common share is computed by dividing net income
(loss), after adjustment for the preferred stock dividend requirement,
by the weighted average number of common shares outstanding during the
period. Diluted earnings per share is computed by adding the dilutive
effect of common stock equivalents, such as the convertible preferred
shares and any stock options outstanding, to the weighted average
number of common shares outstanding.
5
<PAGE> 7
THE MONARCH MACHINE TOOL COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED FINANCIAL STATEMENTS
QUARTER ENDED 31 MARCH 1999 AND 1998
3. INVENTORIES
-----------
The Company's inventories consist of the following balances (in
thousands):
<TABLE>
<CAPTION>
31 March 31 December
1999 1998
---- ----
<S> <C> <C>
Finished goods $ 2,285 $ 1,285
Work-in process and parts 10,519 12,967
Raw materials 1,024 739
Less LIFO reserve (4,505) (4,505)
-------- --------
Net inventories $ 9,323 $ 10,486
======== ========
</TABLE>
4. INDEBTEDNESS
------------
The Company has borrowed $16,497,000 under its $25,000,000 revolving
credit facility at a weighted average interest rate of 6.0%. The
Company also has a $2.5 million line of credit available at .5% below
prime rate, which was unused as of March 31, 1999.
5. SEGMENTS
--------
The Company operates in two primary reportable segments, coil
processing and machining centers. Business segment information is as
follows (in thousands):
<TABLE>
<CAPTION>
Quarter Ended 31 March
----------------------
1999 1998
---- ----
<S> <C> <C>
Sales:
Coil Processing $ 18,555 $ 13,525
Machining Centers 4,651 9,301
All other 833 242
Segment eliminations (1,030) (4)
-------- --------
Total $ 23,009 $ 23,064
======== ========
Operating Earnings:
Coil Processing $ 1,289 $ 1,117
Machining Centers (342) 462
All other (104) (221)
Corporate and eliminating (811) (422)
-------- --------
Total $ 32 $ 936
======== ========
</TABLE>
Included in the coil processing segment results for the quarter ended March 31,
1999 were sales of $5,038,000 and operating earnings of $268,000 from GFG
Corporation which was acquired by the Company on December 31, 1998.
6
<PAGE> 8
THE MONARCH MACHINE TOOL COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED FINANCIAL STATEMENTS
QUARTER ENDED 31 MARCH 1999 AND 1998
6. ACQUISITION OF GFG CORPORATION
------------------------------
In April 1999, the Company received $525,000 from the seller of GFG
Corporation ("GFG") as an adjustment to the purchase price related to
the net worth of GFG at acquisition date. This amount has been recorded
as an accounts receivable at March 31, 1999, with a corresponding
decrease in the goodwill recorded as a result of the purchase. The
Company could pay up to an additional $1,780,000 of purchase price in
2000 if GFG attains a certain level of earnings in 1999.
7. ENVIRONMENTAL LIABILITY
-----------------------
As discussed in the Company's 1998 10K filing, in 1998, a Consent
Decree was entered into among the EPA, several other potentially
responsible parties ("PRP's") and a group of ten other companies
("Defendants") related to the costs of remediation of the Rosen Site, a
former scrap yard in Cortland, New York. During April 1999, the Consent
Decree was approved by the Department of Justice and is in the process
of being formally approved by the U.S. District Court in New York.
Based on the fact that this Consent Decree substantially reduced the
Company's future liability for this matter, the accrual recorded at
December 31, 1998 was reduced by $1,100,000. The reduction in the
accrual is recorded in other income, net. The Company believes that the
remaining amount accrued of $200,000, is adequate to cover its share of
costs which may be incurred in this matter.
8. SUBSEQUENT EVENT
----------------
In May, 1999 the Company entered into an agreement to purchase
Herr-Voss Industries, Inc. ("Herr-Voss") from private investors for
approximately $55 million in cash, 500,000 shares of common stock, and
assumption of approximately $19 million in indebtedness. Herr-Voss
designs and manufactures coil processing lines, leveling rolls and
components and provides a full range of roll reconditioning to the flat
rolled metals industry. Herr-Voss reported revenues of $81 million for
fiscal year ended March 31, 1999.
Completion of the transaction is subject to regulatory clearance under
the Hart Scott Rodino Act and the Company completing financing for the
purchase. The Company is involved in discussions with potential lenders
to obtain financing for this transaction, although it has no assurance
that adequate financing would be available with acceptable terms. If
the Company is not able to obtain the necessary financing commitments
by May 31, 1999, or later under certain circumstances, the seller can
terminate the transaction and require the Company to pay a $250,000
termination fee.
7
<PAGE> 9
THE MONARCH MACHINE TOOL COMPANY AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
QUARTER ENDED 31 MARCH 1999 AND 1998
RESULTS OF OPERATIONS
---------------------
Net earnings for the first quarter of this year were $588,000 or $.15
per share (basic and diluted) compared to net earnings of $580,000 or
$.15 per share (basic and diluted) in the first quarter of 1998. During
the first quarter of 1999, the Company recorded $1.1 million of other
income as a result of a reversal of a previous accrual for an
environmental liability. The Company also recorded $350,000 of expense
related to settlement of litigation at its coil processing segment.
Excluding the aforementioned items, the 1999 net earnings were affected
by higher depreciation as a result of fixed asset additions, including
the new ERP system, higher interest expense due to increased borrowing
related to the GFG acquisition, and lower pension income in 1999 due to
the Company's 1998 decision to terminate two of its pension plans and
related changes in projected investment returns and the cost of
replacement plans. A discussion of results of operations on a segment
basis follows.
Coil Processing
---------------
Sales increased to $18.6 million in the first quarter of 1999 compared
to $13.5 million for the first quarter of 1998 with the addition of $5
million of sales from GFG, which was acquired on December 31, 1998.
Cost of sales as a percentage of sales has improved to 78.8% in the
first quarter of 1999 from 80.6% in the first quarter of 1998 as the
addition of GFG and improvements in the gross margins on orders
received in late 1998 have positively affected the cost of sales
percentage.
Operating earnings improved to $1.3 million in the first quarter of
1999 compared to $1.1 million in the first quarter of 1998 as a result
of the increase in sales and the addition of GFG which has historically
been profitable. This segment was negatively impacted by the recording
of $350,000 in expense related to settlement of litigation. Positively
impacting operating earnings was the addition of GFG which contributed
$268,000 of operating earnings in the first quarter of 1999.
Orders received during the first quarter of 1999 totaled $13.0 million,
including $8.6 million from by GFG, compared to $11.2 million for the
same period in 1998. Backlog at March 31, 1999 was $37.5 million,
including $9.3 million for GFG, compared to $26.7 million at March 31,
1998.
Machining Centers
-----------------
Sales declined to $4.7 million in the first quarter of 1999 compared to
$9.3 million in the first quarter of 1998 as a slow-down in domestic
capital goods orders and continued selling pressures from foreign,
particularly Asian, competitors negatively affected sales volume and
selling prices for this segment. Cost of sales as a percentage of sales
was 86.3% in the first quarter of 1999 compared to 84.5% in the first
quarter of 1998 due in part to fixed production costs being applied to
the lower sales volume in 1999. This segment took steps to control
manufacturing costs and to reduce labor force in late 1998 in
anticipation of the lower sales volume.
As a result of the lower sales volume and lower margins, this segment
reported an operating loss of $342,000 in the first quarter of 1999
compared to operating earnings of $462,000 for the same period in 1998.
Orders received during the first quarter of 1999 totaled $3.1 million
compared to $7.4 million during the same period last year. The
reduction in the level of orders booked was primarily due to foreign
competition and lower demand for this segments products. Backlog at the
end of the first quarter of this year was $2.9 million compared to $9.6
million at 31 March 1998.
8
<PAGE> 10
THE MONARCH MACHINE TOOL COMPANY AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
QUARTER ENDED 31 MARCH 1999 AND 1998
LIQUIDITY AND CAPITAL RESOURCES
-------------------------------
During the first quarter of 1999, the Company's operating activities
provided $1.4 million of cash, which was used to reduce accounts
payable ($2.7 million) and accrued liabilities ($1.9 million). In
addition, advance payments from customers net of costs incurred and
estimated earnings on contracts in process, decreases in accounts
receivable and decreases in inventory provided $1.7 million, $1.9
million, and $1.2 million in cash, respectively. The cash provided from
operations was used to repay short term debt, pay dividends and for
capital expenditures. The cash provided during the first quarter of
1999 was primarily due to the Company's ability to collect advance
payments from customers of its coil processing operation as a result of
new orders received in the last half of 1998. The Company forecasts
that its operating activities will provide cash during the remainder of
1998.
In May 1999 the Company entered into an agreement to purchase a company
from private investors for approximately $55 million in cash, 500,000
shares of common stock and the assumption of approximately $19 million
of indebtedness. The acquisition is anticipated to be completed by June
30, 1999. In addition to the amount borrowed under Company's existing
$25 million dollar revolver, additional financing would be required to
pay the acquisition purchase price and to repay the assumed
indebtedness. The Company is involved in discussions with potential
lenders to obtain financing for this transaction, although it has no
assurance that adequate financing would be available with acceptable
terms. If the Company is not able to obtain the necessary financing
commitments by May 31, 1999, or later under certain circumstances, the
seller can terminate the transaction and require the Company to pay a
$250,000 termination fee.
YEAR 2000
---------
Year 2000 issues arise because of the inability of many existing
computer systems and software, which utilize a two-digit conversion for
recording years, to properly recognize and process information relating
to Year 2000. In early 1998, the Company began a Company-wide program
to replace its internal information processing systems for reasons
unrelated to Year 2000 issues. It expects to complete this program
during the third quarter of 1999, which should result in its internal
information processing systems being Year 2000 compliant. The cost to
the Company to fully implement this new system is estimated at
approximately $2.5 million. During 1998, the Company spent $1.8 million
on this project. Funds for this program are expected to be available to
the Company from its internal operations and, if necessary, from its
line of credit. GFC Corporation, acquired by the Company in late 1998,
is also in the process of replacing its information processing system.
This process began in 1998 and is expected to be substantially
completed during the second quarter of 1999. The Company estimates the
cost of this process to be $325,000, of which $200,000 was expended in
1998. As part of a comprehensive Year 2000 compliance project, the
Company is also assessing other key aspects of its operating and
administrative processes which, if they would become inoperable due to
Year 2000 issues, would have a material impact on the Company's ability
to continue its normal operations. This program includes a plan to
identify the extent to which key vendors and consultants are addressing
this same issue and an assessment of the Company's products. The
Company will monitor and evaluate the progress of its vendors and
consultants on this matter. The Company is also reviewing its
non-information technology systems to determine the extent of any
changes that may be necessary and presently believes that there will be
minimal changes necessary for compliance. Although the Company cannot
assess the result of this evaluation until it has obtained further
information, based upon the work it has performed to date, it is not
presently aware of any Year 2000 issues which would have a disruptive
impact on its operations or a material adverse impact upon its
financial condition or results of operation. The Company believes it
is diligently addressing Year 2000 issues and that it will
satisfactorily resolve any significant Year 2000 problems. The Company
anticipates completing its Year 2000 projects during 1999, with major
completion milestones being targeted for the second and third quarters.
In the event the Company falls short of these milestones, additional
internal resources will be focused on completing these projects or
implementing contingency plans.
FORWARD LOOKING STATEMENTS
--------------------------
In addition to historical information, this document contains various
forward-looking statements which are subject to risks and uncertainties
that could cause actual results to differ materially from these
statements. These risks include, but are not limited to, changes in
economic conditions, interest rates, price and product offering
competition from domestic and foreign entities, customer purchasing
patterns, labor costs, product liability issues and other legal claims
and governmental regulatory issues. Words identifying forward-looking
statements include "plan", "believe", "expect", "anticipate",
"project", "intend", "estimate" and other expressions which are
predictions or indications of future events or trends which do not
relate to historical matters.
Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date the
statement is made. The Company undertakes no obligation to publicly
update or revise any forward-looking statements, whether as a result of
new information, future events or otherwise. Readers are urged to
carefully review and consider the various disclosures made by the
Company in this document and other reports filed with the Securities
and Exchange Commission that attempt to advise interested parties of
the risks and factors that may affect the Company's business.
9
<PAGE> 11
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings
As discussed in the Company's 1998 10K filing, in 1998, a Consent
Decree was entered into among the EPA, several other potentially
responsible parties ("PRP's") and a group of ten other companies
("Defendants") related to the costs of remediation of the Rosen Site, a
former scrap yard in Cortland, New York. During April 1999, the Consent
Decree was approved by the Department of Justice and is in the process
of being formally approved by the U.S. District Court in New York.
Based on the fact that this Consent Decree substantially reduced the
Company's future liability for this matter, the accrual recorded at
December 31, 1998 was reduced by $1,100,000. The reduction in the
accrual is recorded in other income, net. The Company believes that the
remaining amount accrued of $200,000, is adequate to cover its share of
costs which may be incurred in this matter.
Item 2 - Changes in Securities
(a) Inapplicable
(b) Inapplicable
(c) On February 12, 1999 the Company issued 9,966 shares of restricted
stock to certain officers in the Company under its 1998 management
incentive program. The shares were issued in reliance on the
exemption from registration under the Securities Act of 1933
contained at Section 4 (2) of such Act.
Item 3-4 - Inapplicable
Item 5 - Other Information
On May 14, 1999 the Company issued the following press release.
"The Monarch Machine Tool Company (NYSE:MMO) announced today that it
has entered into an agreement to purchase Herr-Voss Industries, Inc.
from a group of investors led by Three Cities Research, Inc. for
approximately $55 million in cash, 500,000 Monarch common shares, and
assumption of approximately $19 million in indebtedness.
Herr-Voss designs and manufactures coil processing lines, leveling
rolls and components, and also provides a full range of roll
reconditioning services to the flat rolled metals industry.
Headquartered in Callery, PA, Herr-Voss has six domestic manufacturing
locations and operations in the United Kingdom and Japan. Revenues for
its fiscal year ended March 31, 1999 were approximately $81 million.
Richard E. Clemens, President & CEO of Monarch, notes "The breadth of
capabilities offered by Herr-Voss, Stamco, and recently acquired GFG
Corporation, positions Monarch as a market leader in the coil
processing industry. Our focus has been to expand the Company's coil
processing operations while building a customer driven after-market
service organization. We will now have the unique capability to provide
total systems and services to our customers. Herr-Voss, Stamco and GFG
will each continue to serve their long standing customers throughout
the industry while combining their expertise where appropriate to
benefit customers worldwide."
10
<PAGE> 12
PART II - OTHER INFORMATION
Monarch expects the acquisition to be completed by the end of June
1999. Completion of the transaction is subject to regulatory clearance
under the Hart Scott Rodino Act and Monarch concluding acceptable
financing for the purchase."
Item 6 - Exhibits and Reports on Form 8-K
(a) Inapplicable
(b) On January 14, 1999 the Company filed an 8-K in conjunction with
its acquisition of GFG Corporation. On March 17, 1999 the Company
filed an 8-KA in which it provided financial statements and
exhibits and proforma financial information related to its
acquisition of GFG Corporation.
11
<PAGE> 13
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this quarterly report to be signed on
its behalf by the undersigned thereunto duly authorized.
THE MONARCH MACHINE TOOL COMPANY
(Registrant)
DATE: 17 May 1999 By /s/Karl A. Frydryk
--------------- ----------------------------------------
Karl A. Frydryk
Vice President & Chief Financial Officer
(principal financial officer)
12
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 2,514
<SECURITIES> 0
<RECEIVABLES> 23,294
<ALLOWANCES> 1,349
<INVENTORY> 9,323
<CURRENT-ASSETS> 42,389
<PP&E> 29,310
<DEPRECIATION> 18,532
<TOTAL-ASSETS> 87,984
<CURRENT-LIABILITIES> 26,346
<BONDS> 16,497
0
14
<COMMON> 5,880
<OTHER-SE> 37,137
<TOTAL-LIABILITY-AND-EQUITY> 87,984
<SALES> 23,009
<TOTAL-REVENUES> 23,009
<CGS> 18,296
<TOTAL-COSTS> 22,977
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 6
<INTEREST-EXPENSE> 328
<INCOME-PRETAX> 917
<INCOME-TAX> 329
<INCOME-CONTINUING> 588
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 588
<EPS-PRIMARY> .15
<EPS-DILUTED> .15
</TABLE>
