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):
February 15, 1995
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)
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Item 7. Financial Statements and Exhibits.
(c) Exhibits.
(1) Press release, dated February 15, 1995,
regarding Figgie International Inc.'s 1994
after-tax loss, restructuring plan and 1995
forecasts.
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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.
By: /s/ L.A. Harthun
L.A. Harthun
Senior Vice President
Dated: March 31, 1995
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Exhibit Index
Exhibit
99.1 Press release, dated February 15, 1995
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Keith Mabee
(216)953-2810 FOR IMMEDIATE RELEASE
FIGGIE INTERNATIONAL LAUNCHES RESTRUCTURING PLAN;
REPORTS $167 MILLION 1994 LOSS, INCLUDING APPROXIMATELY $133
MILLION IN NON-RECURRING CHARGES; FORECASTS THIRD QUARTER PROFIT
AND APPROXIMATELY $250 MILLION PAYDOWN OF DEBT AND LEASES IN
1995
WILLOUGHBY, OH, Feb. 15, 1995 -- Figgie International Inc.
(NASDAQ/NMS:FIGIA and FIGI) today announced an after-tax loss of
$166.7 million, or $9.41 per share, for 1994. In addition, the
company launched a divestiture program designed to pay down
approximately $250 million of debt and operating leases. The
company said today's restructuring actions are designed to
return it to profitability by 1995's third quarter. The
restructuring program will involve the sale of businesses
accounting for more than half of Figgie's total sales, requiring
a restatement of all prior-period results to account for
discontinued operations.
Restructuring Plan
Figgie's Board of Directors late yesterday unanimously
approved a comprehensive plan for the restructuring of the
company's diverse businesses, which is intended to realize for
shareholders Figgie's inherent values. Under the plan, Figgie
will focus on its core technology-driven businesses: Scott
Aviation ($99 million in 1994 sales); Interstate Electronics
($113 million); Snorkel ($87 million) and Taylor Environmental
($20 million).
The businesses Figgie plans to sell under the restructuring
plan include: "Automatic" Sprinkler ($82 million in 1994
sales); Natural Resources ($8 million); SpaceGuard ($3 million);
Financial Services ($22 million); Power Systems ($19 million);
Fire Protection Systems ($66 million); Safway ($74 million);
SP/Sheffer ($8 million); Hartman Electrical ($20 million), and
several other residual business units. The company today
announced that it sold SpaceGuard earlier this week and has
signed letters of intent with undisclosed strategic buyers for
Power Systems, "Automatic" Sprinkler and Fire Protection
Systems.
The company will also continue to operate its Properties
management unit, and further evaluate its U.K.-based Material
Handling business in 1995 given both units' specific strategic
and financial roles in the company's overall transformation.
-more-
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In commenting on the restructuring actions, John P. "Jack"
Reilly, recently appointed Figgie International President and
CEO, said: "Our restructuring plan will eliminate the historic
overhang of excessive debt at Figgie. The company's goal going
forward is to return to profitability in 1995 and aggressively
grow our core businesses. These core operations have a history
of profitability, and are market and technological leaders in
their respective industries," he stated.
"Many of the discontinued businesses have been market
tested," noted Reilly. "We are confident that the divestitures
can be expeditiously concluded, and at a fair market value to
our shareholders. The Board acted after extensive consideration
of a wide range of strategic alternatives, including
comprehensive discussions with Smith Barney Inc., the company's
investment advisors," he added.
The company expects that the businesses designated for sale
could generate gross pre-tax proceeds of approximately $300
million.
1994 Results
The company reported a full-year 1994 after-tax loss from
continuing operations of $90.7 million, or $5.12 per share,
compared with a 1993 loss of $82.3 million, or $4.63 per share.
These results of operations reflect $56.9 million in
restructuring and refinancing charges, as well as high interest
expense and sales and general administrative costs -- the latter
two are expected to be reduced significantly as 1995 progresses.
Revenues, which now exclude discontinued operations, were
$319.4 million in 1994, compared with 1993 revenues of $287.2
million. The after-tax loss from discontinued operations for
the full year 1994 was $76 million, or $4.29 per share, compared
with a 1993 loss from discontinued operations of $103.3 million,
or $5.81 per share. The 1993 full year results include a
benefit of $5.8 million for a change in accounting for income
taxes, and a non-recurring pre-tax charge of $17.6 million for
restructuring and $33.9 million charge due to a change in
accounting estimate.
Fourth Quarter Results
The fourth quarter 1994 after-tax loss of $112.7 million,
or $6.42 per share, represents a $53.5 million after-tax loss
from continuing operations and a $59.2 million after-tax loss
from discontinued operations. Included in the after-tax loss
for continuing operations in the fourth quarter are non-
recurring pre-tax charges of $39.7 million for restructuring and
refinancing costs. The company noted that the divestiture plan
will affect earlier reported 1994 quarterly results. The after-
tax loss for 1993's fourth quarter of $171.1 million, or $9.52
per share, represents a $66.1 million after tax loss from
continuing operations and a $105 million after-tax loss from
discontinued operations. Included in fourth quarter 1993
continuing operations is a pre-tax restructuring charge of $17.6
million and $27.2 million charge due to a change in accounting
estimate.
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Comments on Results
"During 1994, the company sold seven divisions, reduced
company-wide headcount from 12,600 to 6,000 and paid down $110
million in lender debt and $65 million in operating leases,"
stated Reilly. "Our fourth quarter results reflect our final
restructuring actions, purge the past and clean up the balance
sheet. In sum, we moved aggressively to transform Figgie into a
new company poised for renewed growth and profitability by
1995's second half. There were approximately $133 million of
unusual items that can be categorized as one-time charges in
1994," he said.
The company said that total debt stood at $413.3 million at
year's end 1994 and that interest expense was $45.8 million for
the period. Cash and securities totaled $47.3 million at
year's end.
1995 Outlook
"The new company that we are launching today has a much
tighter operating focus revolving around the four core
businesses -- Scott Aviation, Interstate Electronics, Snorkel
and Taylor Environmental," noted Reilly. "Each is a leading
niche marketer and manufacturer possessing exceptional growth
opportunities, particularly in international markets. They all
embody strong technologies and innovative management teams who
are bottom-line driven and have demonstrated consistent
profitability, with gross margins in the 20-35 percent range.
"We are targeting a return to profitability in 1995's third
quarter, and currently expect a quarterly earnings per share
range of 20-25 cents in both the third and fourth quarters,"
noted Reilly. "The full year results should approach breakeven
following a substantial paydown of debt in the first half, and
significantly reduced corporate expenses as the year progresses.
Those expense reduction programs coupled with improved operating
results in 1995 should strongly position the new company for
1996 and beyond. Our goal is to double the revenues of the core
operations by the year 2000," he added.
The company had announced in January a 52 percent reduction
in corporate headquarters staff from 135 to 65.
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<TABLE> FIGGIE INTERNATIONAL INC.
FINANCIAL DATA
For the Periods Ended December 31, 1994 and 1993
(In thousands of dollars except per share data)
<CAPTION>
For the Three Months Ended December 31 For the Twelve Months Ended December 31
1994 1993 1994 1993
Continuing Operations
<S> <C> <C> <C> <C>
Net Sales $86,487 $74,093 $319,420 $287,153
Pretax Loss (66,451) (80,104) (113,673) (101,825)
Income Tax Benefit 12,933 14,060 22,986 19,480
Net Loss before Discontinued Operations and Change
in Accounting (53,518) (66,044) (90,687) (82,345)
Discontinued Operations, net of tax (59,161) (105,040) (76,043) (103,269)
Loss before Change in Accounting (112,679) (171,084) (166,730) (185,614)
Cumulative Effect of Change in Accounting for
Income Taxes --- --- --- 5,839
Net Loss ($112,679) ($171,084) ($166,730) ($179,775)
Weighted Average Shares 17,551 17,963 17,723 17,775
Earnings per Share
Continuing Operations ($3.05) ($3.68) ($5.12) ($4.63)
Loss on Discontinued Operations ($3.37) ($5.84) ($4.29) ($5.81)
Cumulative Effect of Change in Accounting for
Income Taxes --- --- --- $0.33
Net Loss ($6.42) ($9.52) ($9.41) ($10.11)
</TABLE>
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<TABLE>
Figgie International
Consolidated Balance Sheet
(Amounts in Thousands)
<CAPTION>
December 31, 1994
<S> <C>
Current Assets
Cash and Marketable Securities $ 47,327
Accounts Receivable - net 44,994
Inventory - net 38,845
Prepaid Expenses 3,225
Refundable Income Taxes 8,108
Net Assets of Discontinued Operations 317,601
460,100
Property, Plant & Equipment - net 106,083
Other Assets
Goodwill 20,244
Prepaid Pension Costs 9,821
Other 48,216
78,281
Total Assets $644,464
Current Liabilities
Notes Payable $ 64,412
Current Maturity of Long-Term Debt 111,908
Accounts Payable 55,398
Accrued Expenses 81,595
313,313
Long-Term Debt 236,991
Other Long Term Liabilities 28,938
Total Liabilities 579,242
Stockholders' Equity 65,222
Total Liabilities & Equity $644,464
</TABLE>
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