<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 quarterly period ended September 30, 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 0-822
-------------------------
THE OILGEAR COMPANY
-------------------
(Exact name of registrant as specified in its charter)
Wisconsin 39-0514580
- - --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2300 South 51st Street, Milwaukee, Wisconsin 53219
- - --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (414) 327-1700
NOT APPLICABLE
- - --------------------------------------------------------------------------------
(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
------- ------
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding September 30, 1998
- - --------------------------------------------------------------------------------
Common Stock, $1.00 Par Value 1,954,941
<PAGE> 2
PART I - FINANCIAL INFORMATION PAGE 2
ITEM 1. FINANCIAL STATEMENTS.
THE OILGEAR COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
ASSETS SEPTEMBER 30, 1998 December 31, 1997
- - --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 2,385,709 3,010,929
Trade accounts receivable less allowance for doubtful receivables
of $194,651 and $211,372 in 1998 and 1997, respectively 19,909,512 18,677,849
Inventories 31,020,622 26,396,825
Prepaid expenses 436,832 444,099
Other current assets 1,504,732 1,106,497
- - --------------------------------------------------------------------------------------------------------------
Total current assets 55,257,407 49,636,199
- - --------------------------------------------------------------------------------------------------------------
Property, plant and equipment, at cost
Land 1,124,068 1,072,366
Buildings 11,658,967 11,231,982
Machinery and equipment 49,748,961 46,628,669
Drawings, patterns and patents 3,437,457 3,280,865
- - --------------------------------------------------------------------------------------------------------------
65,969,453 62,213,882
Less accumulated depreciation and amortization (34,107,105) (30,834,701)
- - --------------------------------------------------------------------------------------------------------------
Net property, plant and equipment 31,862,348 31,379,181
Pension intangible 500,000 500,000
Other assets 6,096,636 7,681,978
- - --------------------------------------------------------------------------------------------------------------
$ 93,716,391 89,197,358
- - -------------------------------------------------------------------------------===============================
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY SEPTEMBER 30, 1998 December 31, 1997
- - --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Current liabilities:
Short-term borrowings $ 169,286 4,078,147
Current installments of long-term debt 2,498,583 1,488,301
Accounts payable 7,635,929 8,166,590
Customer deposits 2,802,477 2,396,477
Accrued compensation 2,085,707 2,546,207
Other accrued expenses and income taxes 4,188,475 3,535,224
- - --------------------------------------------------------------------------------------------------------------
Total current liabilities 19,380,457 22,210,946
- - --------------------------------------------------------------------------------------------------------------
- - --------------------------------------------------------------------
Long-term debt, less current installments 25,826,226 20,791,956
Unfunded employee retirement plan costs 1,700,000 1,700,000
Unfunded postretirement health care costs 10,970,000 10,970,000
Other noncurrent liabilities 1,316,808 1,194,928
- - --------------------------------------------------------------------------------------------------------------
Total liabilities 59,193,491 56,867,830
- - --------------------------------------------------------------------------------------------------------------
Minority interest in consolidated subsidiaries 551,047 501,965
- - --------------------------------------------------------------------
Shareholders' equity:
Common stock, par value $1 per share, authorized 4,000,000 shares;
issued 1,954,941 and 1,927,103 shares in 1998 and 1997, respectively 1,954,941 1,927,103
Capital in excess of par value 9,143,293 8,793,822
Retained earnings 23,845,834 22,999,174
- - --------------------------------------------------------------------------------------------------------------
34,944,068 33,720,099
Add (deduct):
Notes receivable from employees for purchase
of common stock of the Company (211,636) (182,221)
Other comprehensive income:
- - --------------------------------------------------------------------
Equity adjustments from foreign currency translations (40,579) (990,315)
Equity adjustments for pension liability (720,000) (720,000)
- - --------------------------------------------------------------------------------------------------------------
(760,579) (1,710,315)
-------------------------------
Total shareholders' equity 33,971,853 31,827,563
- - --------------------------------------------------------------------------------------------------------------
$ 93,716,391 89,197,358
- - -------------------------------------------------------------------------------===============================
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE> 3
PAGE 3
THE OILGEAR COMPANY
CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THREE MONTHS ENDED FOR NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
OPERATIONS 1998 1997 1998 1997
- - ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net sales $ 25,920,171 21,644,085 72,970,229 64,639,187
Cost of sales 19,481,851 14,630,809 53,001,964 43,647,343
- - ---------------------------------------------------------------------------------------------------------------------------
Gross profit 6,438,320 7,013,276 19,968,265 20,991,844
Selling, general and
administrative expenses 5,543,832 5,807,789 16,962,730 17,485,613
---------------------------------------------------------------------
Operating income 894,488 1,205,487 3,005,535 3,506,231
Interest expense (563,589) (404,128) (1,559,839) (1,199,346)
Other non-operating income (expense), net 91,600 120,773 363,797 126,810
- - ---------------------------------------------------------------------------------------------------------------------------
Income before income taxes and minority interest 422,499 922,132 1,809,493 2,433,695
Income tax expense 199,971 242,744 504,971 610,000
- - ---------------------------------------------------------------------------------------------------------------------------
Net earnings before minority interest 222,528 679,388 1,304,522 1,823,695
Net earnings (loss) from minority interest 53,600 (6,212) 48,799 34,490
- - ---------------------------------------------------------------------------------------------------------------------------
Net earnings $ 168,928 685,600 1,255,723 1,789,205
- - ------------------------------------------------------=====================================================================
Basic earnings per share of common stock 0.09 0.36 0.65 0.95
=====================================================================
Diluted earnings per share of common stock 0.09 0.36 0.64 0.94
- - ------------------------------------------------------=====================================================================
Dividend per share $ 0.07 0.07 0.21 0.21
- - ------------------------------------------------------=====================================================================
Basic weighted average outstanding shares 1,953,043 1,899,150 1,942,640 1,889,720
- - ------------------------------------------------------=====================================================================
Diluted weighted average outstanding shares 1,959,398 1,914,842 1,954,176 1,907,818
- - ------------------------------------------------------=====================================================================
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE> 4
THE OILGEAR COMPANY AND SUBSIDIARIES PAGE 4
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
1998 1997
- - -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 1,255,723 1,789,205
Adjustments to reconcile net earnings to net cash
provided (used) by operating activities:
Depreciation 2,855,136 2,860,182
Common stock issued in connection with:
Compensation element of sales to employees
and employee savings plan 102,342 129,121
Minority interest in consolidated subsidiaries 48,799 34,490
Change in assets and liabilities:
Trade accounts receivable (739,189) (3,832,332)
Inventories (4,274,348) (2,563,991)
Prepaid expenses 22,222 (23,584)
Accounts payable (690,365) 2,468,305
Customer deposits 323,795 756,565
Accrued compensation (533,553) 229,620
Other, net 629,748 (283,786)
- - -------------------------------------------------------------------------------------------------------------------------
Net cash provided (used) by operating activities (999,690) 1,563,796
- - -------------------------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
Capital expenditures (3,006,276) (4,967,759)
Investment in subsidiaries (259,158) (256,410)
- - -------------------------------------------------------------------------------------------------------------------------
Net cash used by investing activities (3,265,434) (5,224,169)
- - -------------------------------------------------------------------------------------------------------------------------
Cash flows from financing activities:
Net borrowings (repayments) under line-of-credit agreements (3,898,825) 54,436
Repayment of long-term debt (1,106,552) (1,874,251)
Proceeds from issuance of long-term debt 7,064,449 6,020,069
Capital expenditures funded by restricted cash 1,520,524 0
Dividends paid (409,064) (379,134)
Purchase of treasury stock 0 (47,975)
Proceeds from sale of treasury stock 0 48,909
Proceeds from sale of common stock 205,810 129,871
Payments received on notes receivable from employees 39,742 42,760
- - -------------------------------------------------------------------------------------------------------------------------
Net cash provided by financing activities 3,416,084 3,994,686
- - -------------------------------------------------------------------------------------------------------------------------
Effect of exchange rate changes on cash 223,822 (94,853)
- - -------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents (625,219) 239,460
Cash and cash equivalents:
At beginning of period 3,010,929 2,367,684
- - -------------------------------------------------------------------------------------------------------------------------
At end of period $ 2,385,709 2,607,144
- - ----------------------------------------------------------------------------------------=================================
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest $ 1,502,208 935,061
=================================
Income taxes $ 143,879 351,377
- - ----------------------------------------------------------------------------------------=================================
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE> 5
PAGE 5
THE OILGEAR COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
INVENTORIES
Inventories at September 30, 1998 and December 31, 1997 consist of the
following:
<TABLE>
<CAPTION>
9-30-98 12-31-97
- - --------------------------------------------------------------------------------
<S> <C> <C>
Raw materials $ 3,040,527 $ 1,740,946
Work in process 24,789,510 21,924,987
Finished goods 5,205,585 4,960,892
- - --------------------------------------------------------------------------------
33,035,622 28,626,825
- - --------------------------------------------------------------------------------
LIFO reserve (2,015,000) (2,230,000)
- - --------------------------------------------------------------------------------
Total $ 31,020,622 $ 26,396,825
- - --------------------------------------------------------------------------------
</TABLE>
Inventories stated on the last-in, last-out (LIFO) basis are valued at
$18,944,656 at September 30, 1998. If the first-in, first-out (FIFO) method of
inventory valuation had been used for such inventories, the inventories would
have been stated approximately $2,015,000 higher.
EARNINGS PER SHARE
Earnings per share is based upon weighted average outstanding shares.
RECLASSIFICATIONS
Certain 1997 engineering expenses have been reclassified from operating expenses
to cost of sales in the consolidated statements of earnings to conform with the
1998 presentation. The amounts reclassified for the three month period and the
nine month period ended September 30, 1997 were approximately $262,000 and
$828,000, respectively.
OTHER INFORMATION
The financial statements reflect all adjustments which are, in the opinion of
management, necessary for a fair statement of the results for the interim
period. All such adjustments are of a normal recurring nature. Management
assumes the reader will have access to the December 31, 1997 Annual Report, a
copy of which is available upon request. These notes should be read in
conjunction with the notes in the 1997 Annual Report.
OTHER COMPREHENSIVE INCOME
Effective January 1, 1998 the Company adopted Statement of Financial Accounting
Standards (SFAS) No. 130, Reporting Comprehensive Income. SFAS No. 130 requires
the reporting of comprehensive income in addition to net income from operations.
Comprehensive income is a more inclusive financial reporting methodology that
includes disclosure of certain financial information that historically has not
been recognized in the calculation of net income.
Comprehensive income (loss) and the components of other comprehensive income
(loss) for the three month period and nine month period ended September 30, 1998
and 1997 are as follows:
<TABLE>
<CAPTION>
Three months Nine months
1998 1997 1998 1997
- - ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net earnings $ 168,928 685,600 1,255,723 1,789,205
Other comprehensive income (loss) -
foreign currency translation 1,020,505 (317,497) 949,736 (1,172,439)
- - ----------------------------------------------------------------------------------------------------
Comprehensive income 1,189,433 368,103 2,205,459 616,766
</TABLE>
<PAGE> 6
PAGE 6
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FINANCIAL CONDITION
An increase in the volume of work in progress on system orders is the reason
inventories increased from the balance at December 31, 1997. Working capital
increased by approximately $8.3 million during the first nine months of 1998 due
to the increase in inventories and the refinancing of $4.0 million in short-term
loans.
The Company's management believes the Company has adequate means for meeting
future capital needs.
RESULTS OF OPERATIONS
Orders for the first nine months of 1998 increased by approximately 2% from the
first nine months of 1997. During the third quarter of 1998, orders decreased by
approximately 6% compared to the third quarter of 1997. This decline in orders,
combined with improved capability at the Fremont factory, resulted in reduced
product lead times and a reduction in the backlog of orders to approximately
$27.7 million from approximately $31.3 million at the end of the second quarter.
The backlog at the end of 1997 was approximately $24.0 million.
Net sales increased in the third quarter and the first nine months of 1998 by
19.8% and 12.9%, respectively. The improvements at Fremont, growth in systems
business and a strong performance in Europe were significant reasons for the
increase. A decrease in the after-market business, coupled with a less
profitable product mix, caused gross profit to decline and operating income to
decrease in the third quarter and in the first nine months of 1998 compared to
the same time periods of 1997.
The continuous improvement process helped operating expenses decrease in the
third quarter and the first nine months of 1998 by approximately 4.5% and 3.0%,
respectively. Interest expense has increased because interest bearing debt
increased.
Non-operating income (expense) consists of the following:
<TABLE>
<CAPTION>
FOR THREE MONTHS ENDED FOR NINE MONTHS ENDED
1998 1997 1998 1997
- - --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Interest income $ 91,852 32,224 187,755 85,992
Foreign currency exchange gain (loss) (78,696) 38,780 25,718 (85,347)
Miscellaneous, net 78,444 49,769 150,324 126,165
==================================================================================================
$ 91,600 120,773 363,797 126,810
==================================================================================================
</TABLE>
YEAR 2000
Some computer software and hardware identify dates by year but omit which
century the year falls into. These products may be unable to distinguish between
dates in the year 2000 and dates in the year 1900. That inability (referred to
as the "Year 2000 Issue"), if not addressed, could cause computer applications
or equipment using computer software or embedded chip technology to fail or
provide incorrect information when using dates after December 31, 1999.
YEAR 2000 ISSUE
The Company uses equipment with computer chips to run software programs in many
of its business application systems, including order entry, engineering,
production control, manufacturing, purchasing, accounting and communications.
The Company also manufactures products that incorporate components purchased
from other manufacturers that contain computer chips. If any hardware or
software items identified contain source code or computer chips that are unable
to distinguish the year 2000 from the year 1900, such software or hardware will
be modified or replaced.
STATE OF READINESS
The Company has undertaken various initiatives intended to ensure that its
computer equipment and software will function properly with respect to dates in
the Year 2000 and thereafter.
Information systems -- The Company is inspecting its computer hardware for the
Year 2000 Issue and will finish upgrading or replacing any equipment not Year
2000 compliant by March 1999. Since most of the Company's application system
software was written by programmers employed by the Company, that software is
being reviewed, updated and tested by our in-house programmers. This project
will be done by March 1999. Software purchased from outside vendors is being
upgraded or replaced where necessary.
Manufacturing and facilities -- The Company has performed an initial review and
testing of its machine controls which did not reveal any problem with the Year
2000 Issue. Machines that have electronic controls with embedded chip technology
are being verified with the machine manufacturers for Year 2000 issues. Security
systems and HVAC systems at Company facilities are being tested for the Year
2000 Issue.
Communications -- Telephone, fax, mailing equipment and e-mail systems are being
tested for the Year 2000 Issue and upgraded or replaced when not compliant with
the year 2000 issue. Most of these systems have been reviewed and are now Year
2000 compliant.
Third party relationships -- The Company has mailed letters to its significant
vendors and service providers and is communicating with strategic customers to
determine the extent to which interfaces with such entities are vulnerable to
Year 2000 Issues and whether the products and service purchased from or by such
entities are Year 2000 compliant. All of the vendors who replied to the letter
responded that they are addressing the Year 2000 Issue on a timely basis. A
follow-up letter is being mailed to vendors who did not reply.
Although the Company does not separately track the internal costs incurred for
the its efforts to address the Year 2000 Issue, costs incurred by the Company to
date are approximately $100,000. The future costs are estimated to be
approximately $50,000. These costs are expensed when incurred and are funded
from operating cash flows. The Company has not hired any outside consultants to
address the Year 2000 Issue.
RISKS AND CONTINGENCY PLANS
Although the Company believes its efforts will adequately address the Year 2000
Issue internally, it is possible that the Company will be adversely affected by
problems encountered by its vendors or suppliers. Despite any vendor's or
supplier's certification regarding Year 2000 compliance there can be no
assurance that the vendor's or supplier's ability to provide goods and services
will not be adversely affected by the Year 2000 Issue. The most likely worst
case scenario would be that a failure by the Company or one or more of its
vendors or suppliers to adequately and timely address the Year 2000 Issue would
interrupt manufacturing of the Company's products for an undeterminable period
of time. The Company has identified and will continue to identify alternative
vendors should a vendor's ability to meet the Company's raw material and supply
requirements be impacted by the Year 2000 Issue. While the Company believes it
can minimize the impact of such non-compliance through the use of these
alternative vendors, a disruption in production could have a material adverse
impact on the Company. The Company does not currently expect to develop a formal
contingency plan.
GENERAL
The costs of the Company's efforts to address the Year 2000 Issue and the dates
on which the Company believes it will complete such efforts are based upon
management's best estimates, which were derived using numerous assumptions
regarding future events. There can be no assurance that these estimates will
prove to be accurate and actual results could differ materially from those
currently anticipated. Specific factors that could cause such material
differences include, but are not limited to, the Company's ability to identify,
assess, remediate and test relevant computer codes and embedded technology, the
Company's reliance on third-party assurances and the variability of definitions
of "Year 2000 compliance" which may be used by such third parties, and similar
uncertainties. Statements that are not historical fact (including expectations
of future developments, results or scenarios and cost estimates) are
forward-looking statements, and actual results may differ due to factors
including those discussed above.
EURO CONVERSION
The Company has assessed the impact the Euro conversion will have on its
operations with regard to competition, currency risk, contracts, taxation and
information technology. Most of the software needed to properly process
transactions in the Euro has been upgraded and management expects the work to be
completed by December 31, 1998. The Company believes the conversion to the Euro
beginning in January 1999 will not have a material adverse effect to its
business or its financial condition. However, there can be no assurance that
unforeseen difficulties and costs may not arise.
Discussions in this Management's Discussion and Analysis that are not
statements of historical fact (including statements in the future tense or
which include terms such as "believe," "expect," "anticipate" or "may") are
forward-looking statements that involve risks and uncertainties, and the
Company's actual experiences and future results could materially differ from
those discussed. Factors that could cause or contribute to such differences
include, but are not limited to, general economic conditions, the health of
foreign markets, fluctuations in interest rates, foreign currency fluctuations,
unforeseen consequences of the Year 2000 Issue, unforeseen consequences of the
Euro conversion and those discussed in this Management's Discussion and
Analysis.
<PAGE> 7
PAGE 7
ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not applicable.
<PAGE> 8
PAGE 8
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits:
See Exhibit Index following the last page of this Form 10-Q which
Exhibit Index is incorporated herein by reference.
(b) Reports on Form 8-K:
No reports on Form 8-K have been filed during the quarter for which
this report is filed.
<PAGE> 9
Page 9
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.
11-13-98 THE OILGEAR COMPANY
- - --------------------------------------------------------------------------------
REGISTRANT
/s/ DAVID A. ZUEGE
- - --------------------------------------------------------------------------------
David A. Zuege
- - --------------------------------------------------------------------------------
PRESIDENT AND CEO
/s/ THOMAS J. PRICE
- - --------------------------------------------------------------------------------
Thomas J. Price
VP-FINANCE AND CORPORATE SECRETARY
<PAGE> 10
PAGE 10
THE OILGEAR COMPANY
COMMISSION FILE NUMBER 0-822
EXHIBIT INDEX
Quarterly Report on Form 10-Q
For the Quarter Ended September 30, 1998
Exhibit
Number
- - ------
27 (a) The Oilgear Company Financial Data Schedule for the nine months
ended September 30, 1998.
27 (b) The Oilgear Company Restated Financial Data Schedule for the nine
months ended September 30, 1997.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED FINANCIAL STATEMENTS OF THE OILGEAR COMPANY FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1998
<CASH> 2,385,709
<SECURITIES> 0
<RECEIVABLES> 20,104,163
<ALLOWANCES> 194,651
<INVENTORY> 30,914,103
<CURRENT-ASSETS> 55,150,888
<PP&E> 65,969,453
<DEPRECIATION> 34,107,105
<TOTAL-ASSETS> 93,609,872
<CURRENT-LIABILITIES> 19,380,457
<BONDS> 28,324,809
0
0
<COMMON> 11,098,234
<OTHER-SE> 22,767,100
<TOTAL-LIABILITY-AND-EQUITY> 93,609,872
<SALES> 72,970,229
<TOTAL-REVENUES> 72,970,229
<CGS> 53,001,964
<TOTAL-COSTS> 53,001,964
<OTHER-EXPENSES> 16,962,730
<LOSS-PROVISION> 6,913
<INTEREST-EXPENSE> 1,559,839
<INCOME-PRETAX> 1,809,493
<INCOME-TAX> 504,971
<INCOME-CONTINUING> 1,255,723
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,255,723
<EPS-PRIMARY> 0.65
<EPS-DILUTED> 0.64
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS RESTATED SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED FINANCIAL STATEMENTS OF THE OILGEAR COMPANY FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 2,607,143
<SECURITIES> 0
<RECEIVABLES> 18,352,454
<ALLOWANCES> 211,557
<INVENTORY> 28,299,466
<CURRENT-ASSETS> 50,189,563
<PP&E> 60,504,049
<DEPRECIATION> 30,110,379
<TOTAL-ASSETS> 85,013,294
<CURRENT-LIABILITIES> 17,203,209
<BONDS> 22,329,738
0
0
<COMMON> 10,618,088
<OTHER-SE> 17,239,367
<TOTAL-LIABILITY-AND-EQUITY> 85,013,294
<SALES> 64,639,187
<TOTAL-REVENUES> 64,639,187
<CGS> 42,819,679
<TOTAL-COSTS> 42,819,679
<OTHER-EXPENSES> 18,313,277
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,199,346
<INCOME-PRETAX> 2,433,695
<INCOME-TAX> 610,000
<INCOME-CONTINUING> 1,789,205
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,789,205
<EPS-PRIMARY> 0.95<F1>
<EPS-DILUTED> 0.94<F1>
<FN>
<F1>RESTATED FOR THE THREE-FOR-TWO STOCK SPLIT DECLARED ON DECEMBER 10, 1997
AND PAID ON JANUARY 20, 1998. UNLESS OTHERWISE INDICATED, PRIOR FINANCIAL
DATA SCHEDULES HAVE NOT BEEN RESTATED TO REFLECT THE STOCK SPLIT.
</FN>
</TABLE>
