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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 17, 1994
FIGGIE INTERNATIONAL INC.
(Exact name of registrant specified in its charter)
Delaware 1-8591 52-1297376
(State or other (Commission File (I.R.S. Employer
jurisdiction of Number) Identification No.)
incorporation)
4420 Sherwin Road, Willoughby, Ohio 44094
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (216) 953-2700
(not applicable)
(Former name or former address, if changed since last report)
Page 1 of 9 pages
Exhibit Index is on page 4
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Item 7. Financial Statements and Exhibits.
(c) Exhibits.
(1) Press release, dated March 17, 1994, regarding Figgie
International Inc.'s 1993 after-tax loss.
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SIGNATURE
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 hereunto duly authorized.
FIGGIE INTERNATIONAL INC.
(Registrant)
By /s/ L.A. Harthun
L.A. Harthun
Senior Vice President
Dated: March 31, 1994
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Exhibit Index
Exhibit Page
99.1 Press release, dated March 17, 1994 5
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EXHIBIT 99.1
Keith Mabee
(216)953-2810 FOR IMMEDIATE
RELEASE
FIGGIE INTERNATIONAL REPORTS $180 MILLION 1993 LOSS;
ANNOUNCES FURTHER DIVESTITURE PLANS
WILLOUGHBY, OHIO -- March 17, 1994 -- Figgie International Inc.
(NASDAQ/NMS: FIGIA and FIGI) today announced an after-tax loss of $180
million for 1993 and further restructuring plans designed to restore
profitability by focusing primarily on the company's core industrial and
technical businesses. As part of these plans, the company intends to divest
businesses accounting for approximately a third of its total sales,
requiring a restatement of all prior period results to account for
discontinued operations.
1993 Results
The company reported a full-year 1993 after-tax loss from continuing
operations of $179 million, or $10.09 per share, compared with 1992
after-tax income from continuing operations of $19 million, or $1.07 per
share. Revenues, which now exclude discontinued operations, were $769
million in 1993, compared with 1992 revenues of $792 million. The after-tax
loss from discontinued operations for the full year 1993 was $6 million,
or $0.35 per share, compared with 1992 after-tax income from discontinued
operations of $9 million, or $0.54 per share.
Fourth Quarter Results
The fourth quarter 1993 after-tax loss of $181 million, or $10.07 per share,
represents a $172 million after-tax loss from continuing operations and a $9
million after-tax loss from discontinued operations. Included in the
after-tax loss for the fourth quarter is a non-recurring pretax charge of
$77 million for an accounting change and a
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pretax restructuring charge of $35 million. As previously disclosed, the
after-tax fourth quarter loss will likely affect earlier reported 1993 quarterly
results. After-tax earnings for 1992's fourth quarter were $10 million,
or $0.59 per share, which included a pretax restructuring charge of $11 million.
Revenues from continuing operations in 1993's fourth quarter were $194
million, compared with $200 million in the 1992 fourth quarter.
Comments on Results
Chairman and CEO Harry E. Figgie, Jr., said, "Regrettably, we have to report
the company's first annual loss in 30 years. We are committed to reconfiguring
the company to focus principally on core industrial and technical businesses
which will deliver strong cash flow and growth, require low working capital
levels, optimize our leading manufacturing technology, and provide the highest
level of product quality and customer service."
The company stated that the fourth quarter operating loss principally reflected
continuing depressed sales in divisions affected by weak industrial and
commercial construction markets; Midwest flood damage (a large portion of which
is expected to be recovered from business interruption insurance in 1994);
extraordinary losses at Fred Perry Sportswear (U.K.) and Hartman Electrical
Manufacturing; and high consolidation and conversion costs.
Discontinued Operations
Figgie International recently announced the divestiture of Advance Security
(security guards). It also plans to sell American LaFrance (fire truck parts
and service), Essick/Mayco (pumps and mixers), Rawlings Sporting Goods,
Safety Supply America (safety product distribution), Sherwood-Drolet Corp. Ltd.
(hockey equipment) and Waite Hill Holdings (insurance), which are now reported
as discontinued operations. Altogether those units represent sales of
$379 million, or one third of the company's total 1993 unadjusted sales.
Mr. Figgie noted that the company is utilizing the financial advisory firm of
Jay Alix & Associates to assist it with the ongoing implementation of a
comprehensive turnaround program, which will be carried out during the
remainder of 1994.
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Outlook
"Realistically, it will take some time for us to get all the elements of our
turnaround to take hold, and we currently anticipate continued losses for a few
quarters," Mr. Figgie said. "However, we are making good progress on our
divestiture program designed to pay down debt by more than $200 million
in 1994, and are continuing discussions with our lenders on a new
long-term financing package. I anticipate a marked improvement in profitability
by late 1994 and particularly in 1995."
Due to a number of factors which arose in 1993, including deteriorating
operating results, cash flow and financing difficulties, the company has changed
its method of accounting for certain costs, other than machinery and equipment,
associated with implementing its factory automation program. Under the new
method, these costs will be expensed as incurred rather than capitalized and
amortized over future periods. The non-recurring, pretax charge of $77 million
for the accounting change reflects the expensing of all previously
deferred costs of this kind.
The restructuring charge of $35 million includes costs associated with closing
and consolidating facilities and provision for losses on sales of surplus
real estate.
Figgie International Inc. is a major diversified Fortune 500 company serving
consumer, industrial, technical and service markets worldwide.
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FIGGIE INTERNATIONAL INC.
FINANCIAL DATA
For the Periods Ended December 31, 1993* and 1992
For the Three Months Ended December 31 For the Twelve Months Ended December 31
1993* 1992 1993* 1992
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Net Sales from Continuing Operations $ 194,257,000 $ 200,379,000 $ 768,642,000 $ 792,409,000
Pretax Operating Income (Loss) from
Continuing Operations $(239,056,000) $ 9,814,000 $ (250,529,000)$ 25,517,000
(Provision) Benefit for Taxes on Income
Before Discontinued Operations $ 66,645,000 $ (2,753,000) $ 71,195,000 $ (6,639,000)
Net Income (Loss) Before Discontinued
Operations and Effect of Change in
Accounting for Income Taxes $(172,411,000) $ 7,061,000 $ (179,334,000)$ 18,878,000
Net Income (Loss) from
Discontinued Operations $ (8,525,000) $ 3,251,000 $ (6,280,000)$ 9,421,000
Net Income (Loss) Before Cumulative
Effect of Change in Accounting for
Income Taxes $(180,936,000) $ 10,312,000 $ (185,614,000)$ 28,299,000
Cumulative Effect of Change in Accounting
for Income Taxes - - $ 5,839,000 -
Net Income (Loss) $(180,936,000) $ 10,312,000 $ (179,775,000)$ 28,299,000
Weighted Average Shares 17,963,355 17,538,107 17,774,900 17,539,472
Earnings per Common Share from
Continuing Operations $ (9.60) $ .40 $(10.09) $ 1.07
Earnings per Common Share from
Discontinued Operations $ (0.47) $ 0.19 $ (0.35) $ 0.54
Earnings per Common Share from
Change in Accounting for Income Taxes $ 0.00 $ 0.00 $ 0.33 $ 0.00
Earnings per Common Share on Net Income $(10.07) $ 0.59 $(10.11) $ 1.61
*See Note 1 and Note 2 following
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Note 1. Restructuring Costs: As part of its effort to reconfigure the company to focus principally on core
industrial and technical business units, the company incurred $35 million of restructuring charges,
including costs associated with the development of its strategic plans, consolidation of facilities, and
provision for anticipated losses on sales of surplus real estate.
Note 2. Factory Automation Costs: In connection with its factory automation project, the company has
incurred significant costs, including machinery and equipment, software, and outside consulting fees. These
project costs have historically been deferred and amortized over future periods commencing at the time the
equipment is placed into service. Due to a number of factors which arose in 1993, including deteriorating
operating results, cash flow and financing difficulties, the company adopted a change in accounting by
expensing all project costs other than machinery and equipment, as incurred. As required by generally
accepted accounting principles (GAAP), this accounting change, amounting to $77 million, has been recorded
as a change in estimate and reflected in the results of operations for the fourth quarter.
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