SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________________________
Form 10-Q
QUARTERLY REPORT
PURSUANT TO
SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended March 31, 1995
Commission File Number: 1-871
__________________________________________
BUCYRUS-ERIE COMPANY
DELAWARE 39-0188050
P. O. BOX 500
1100 MILWAUKEE AVENUE
SOUTH MILWAUKEE, WISCONSIN 53172
(414) 768-4000
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 by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
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 May 2, 1995
Common Stock, par value $.01 per share 10,170,417
<PAGE>
BUCYRUS-ERIE COMPANY AND SUBSIDIARIES
INDEX
Page No.
Part I. Financial Information:
Consolidated Condensed Balance Sheets -
March 31, 1995 and December 31, 1994 3-4
Consolidated Condensed Statements of Operations -
Quarters ended March 31, 1995 and 1994 5
Consolidated Condensed Statements of Cash Flows -
Quarters ended March 31, 1995 and 1994 6-7
Notes to Consolidated Condensed Financial Statements 8-9
Management's Discussion and Analysis of Financial
Condition and Results of Operations 10-13
Part II. Other Information 14
Signature Page 15
<PAGE>
<TABLE>
BUCYRUS-ERIE COMPANY AND SUBSIDIARIES
PART 1. FINANCIAL INFORMATION
CONSOLIDATED CONDENSED BALANCE SHEETS
<CAPTION>
March 31, December 31, March 31, December 31,
1995 1994 1995 1994
<S> <C> <C> <C> <C> <C>
ASSETS LIABILITIES AND SHAREHOLDERS' INVESTMENT
CURRENT ASSETS: CURRENT LIABILITIES:
Cash and cash Accounts payable and
equivalents $ 9,898,192 $ 16,208,579 accrued expenses $ 34,022,574 $ 31,703,558
Receivables 34,487,089 26,219,945 Liability to customers
Inventories 79,647,617 82,393,121 on uncompleted contracts
Prepaid expenses and and warranties 7,241,121 7,238,504
other assets 1,621,538 1,855,961 Income taxes 2,417,083 2,819,743
____________ ____________ Current maturities of
Total Current Assets 125,654,436 126,677,606 long-term debt 5,655,924 7,123,272
____________ ____________
OTHER ASSETS: Total Current
Restricted funds Liabilities 49,336,702 48,885,077
on deposit 3,674,862 3,674,764
Intangible assets - net 9,378,147 9,497,149 DEFERRED LIABILITIES:
Other assets 2,455,074 2,414,087 Income taxes 131,774 122,331
____________ ___________ Liability to customers on
15,508,083 15,586,000 uncompleted contracts
and warranties 3,260,673 3,260,815
PROPERTY, PLANT AND EQUIPMENT: Postretirement benefits 11,805,959 11,828,446
Cost 36,699,037 35,896,822 Deferred plant closing
Less accumulated expenses and other 6,672,045 7,070,734
depreciation (1,032,423) (206,457) ____________ ____________
____________ ____________ 21,870,451 22,282,326
35,666,614 35,690,365 LONG-TERM DEBT, less
current maturities 54,564,446 53,169,481
COMMON SHAREHOLDERS' INVESTMENT:
Common stock - par value
$.01 per share, authorized
20,000,000 shares, issued
and outstanding 10,170,417
shares 101,704 101,704
Additional paid-in capital $ 53,898,296 $ 53,898,296
Accumulated deficit (2,611,314) (552,390)
Cumulative foreign
currency translation
adjustments (331,152) 169,477
____________ ____________
51,057,534 53,617,087
____________ ____________ ____________ ____________
$176,829,133 $177,953,971 $176,829,133 $177,953,971
<FN>
See accompanying notes to consolidated condensed financial statements.
</TABLE>
<PAGE>
<TABLE>
BUCYRUS-ERIE COMPANY AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
<CAPTION>
Quarter Ended March 31,
1995 1994
(Predecessor
Company)
<S> <C> <C>
Revenues:
Net shipments $ 56,872,919 $ 43,355,100
Interest, royalties and
miscellaneous 330,304 350,740
____________ ____________
57,203,223 43,705,840
____________ ____________
Costs and Expenses:
Cost of products sold 49,725,981 36,564,733
Product development, selling,
administrative, and miscellaneous
expenses 7,705,814 7,522,344
Interest expense (Predecessor
Company contractual interest not
recognized in 1994 - $3,066,227) 1,507,214 6,212,564
Reorganization items - 2,936,964
____________ ____________
58,939,009 53,236,605
____________ ____________
Loss before income taxes (1,735,786) (9,530,765)
Income taxes 323,138 465,555
____________ ____________
Net loss (2,058,924) (9,996,320)
Redeemable preferred stock accretion - (105,548)
Redeemable preferred stock dividends - (40,453)
Redeemable preferred stock
reorganization item - (40,554,805)
____________ ____________
Net loss attributable to
common shareholders $ (2,058,924) $(50,697,126)
Weighted average number of
common shares outstanding 10,170,417 9,265,109
Net loss per share of common stock:
Net loss $ (.20) $ (1.08)
Redeemable preferred stock dividends,
accretion and reorganization item - (4.39)
________ ________
Net loss per share attributable to
common shareholders $ (.20) $ (5.47)
<FN>
See accompanying notes to consolidated condensed financial statements.
</TABLE>
<PAGE>
<TABLE>
BUCYRUS-ERIE COMPANY AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
<CAPTION>
Quarter Ended March 31,
1995 1994
(Predecessor
Company)
<S> <C> <C>
Cash Flows From Operating Activities
Net loss $ (2,058,924) $ (9,996,320)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation 894,437 2,021,109
Amortization of goodwill, intangible
assets and other items 298,510 1,025,345
Deferred rent (interest) on sale and
leaseback financing arrangement - 1,670,479
Payment in kind interest on the
Secured Notes due December 14, 1999 1,366,890 -
Amortization of debt discount - 71,179
Gain on sale of property,
plant and equipment (5,741) (515)
Non-cash reorganization items - 1,079,805
Changes in assets and liabilities:
Increase in receivables (8,428,941) (3,548,629)
Decrease (increase) in inventories 2,375,434 (2,369,754)
Decrease (increase) in other
current assets 211,527 (560,418)
Increase in other assets (38,580) (95,754)
Increase in current liabilities
other than income taxes
and current maturities
of long-term debt 2,404,737 10,849,004
(Decrease) increase in income taxes (374,609) 96,612
Decrease in deferred liabilities
other than income taxes (691,616) (288,655)
____________ ____________
Net cash used in operating activities (4,046,876) (46,512)
____________ ____________
Cash Flows From Investing Activities
(Increase) decrease in restricted
funds on deposit (98) 965,966
Purchases of property, plant
and equipment (762,212) (992,626)
Proceeds from sale of property, plant
and equipment 37,041 29,570
____________ ____________
Net cash provided by (used in)
investing activities (725,269) 2,910
____________ ____________
Cash Flows From Financing Activities
Proceeds from (payment of) other
obligations 48,638 (281,745)
Proceeds from exercise of warrants - 53
Proceeds from issuance of long-term
project financing obligations 879,792 2,669,741
Reduction of long-term project
financing obligations (2,425,533) -
____________ ____________
Net cash provided by (used in)
financing activities (1,497,103) 2,388,049
____________ ____________
Effect of exchange rate
changes on cash (41,139) (68,755)
____________ ____________
Net increase (decrease) in cash
and cash equivalents (6,310,387) 2,275,692
Cash and cash equivalents at
beginning of period 16,208,579 13,696,244
____________ ____________
Cash and cash equivalents at
end of period $ 9,898,192 $ 15,971,936
</TABLE>
<TABLE>
Supplemental Disclosures of Cash Flow Information
<CAPTION>
1995 1994
<S> <C> <C>
Cash paid (received) during
the period for:
Interest on long-term debt
and bank borrowings $ 38,924 $ 110,826
Reorganization items 142,591 2,155,900
Income taxes - net of refunds 532,316 (47,313)
</TABLE>
Supplemental Schedule of Non-Cash Investing and Financing Activities
Prior to February 18, 1994 (the "Petition Date"), the Predecessor Company
increased the carrying amount of the Series A redeemable preferred stock by
amounts representing the estimated fair value of the pre-petition dividends
not declared or paid, but which were payable under mandatory redemption
features. The Predecessor Company also recorded preferred stock discount
accretion on these securities prior to the Petition Date. As of the Petition
Date, the Predecessor Company increased the carrying amount of the Series A
redeemable preferred stock to the amount of the allowed claim in the Amended
Plan. The amounts as reflected in the consolidated condensed financial
statements were as follows:
1994
Redeemable preferred stock dividends at net book value $ 129,257
Redeemable preferred stock accretion 105,548
Write-up of redeemable preferred stock issued at a
discount to amount of allowed claim in the Amended Plan 40,554,805
____________
$ 40,789,610
See accompanying notes to consolidated condensed financial statements.
<PAGE>
BUCYRUS-ERIE COMPANY AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1. In the opinion of Bucyrus-Erie Company (the "Company"), the accompanying
consolidated condensed financial statements contain all adjustments
(consisting of normal recurring accruals and other adjustments as stated
in Note 3) necessary to present fairly the financial results for the
interim periods. Certain items are included in these statements based on
estimates for the entire year.
2. Certain notes and other information have been condensed or omitted from
these interim consolidated condensed financial statements. Therefore,
these statements should be read in conjunction with the Company's 1994
annual report on Form 10-K filed with the Securities and Exchange
Commission on April 17, 1995.
3. On February 18, 1994 (the "Petition Date"), B-E Holdings, Inc.
("Holdings" or "Predecessor Company") and the Company, which at such time
was a wholly-owned subsidiary of Holdings, commenced voluntary petitions
under chapter 11 of the Bankruptcy Code and filed a prepackaged joint
plan of reorganization in the United States Bankruptcy Court, Eastern
District of Wisconsin (the "Bankruptcy Court"). On December 1, 1994, the
Bankruptcy Court entered an order confirming the Second Amended Joint
Plan of Reorganization of Holdings and the Company as modified on
December 1, 1994 (the "Amended Plan"). The Amended Plan was effective on
December 14, 1994 (the "Effective Date") and on such date Holdings was
merged with and into the Company.
The Company and Holdings accounted for the reorganization by using the
principles of fresh start reporting as required by AICPA Statement of
Position 90-7, "Financial Reporting by Entities in Reorganization Under
the Bankruptcy Code". Accordingly, the consolidated financial statements
of the Company for periods subsequent to the Effective Date are not
comparable to the consolidated financial statements of prior periods.
The Predecessor Company consolidated financial statements are those of
Holdings which include the accounts and operating results of the Company.
The acquisition of the Company by the Predecessor Company on February 4,
1988 was accounted for as a purchase and, accordingly, the assets and
liabilities were recorded at their estimated fair values as of the
acquisition date. The excess of the related purchase cost over the fair
value of identifiable net assets was allocated to goodwill. The
Predecessor Company consolidated financial statements for periods
subsequent to the date of the acquisition included the related
depreciation and amortization charges associated with the fair value
adjustments.
Reorganization items included in the Consolidated Condensed Statements of
Operations for the quarter ended March 31, 1994 consist of the following:
Legal and professional fees $ 1,895,302
Net adjustment of debt to amount of allowed claim
in the Amended Plan (33,122)
Interest income (38,143)
Write-off previously recorded capitalized
financing costs 1,112,927
____________
$ 2,936,964
Write-up of redeemable preferred stock issued
at a discount to amount of allowed claim in
the Amended Plan $ 40,554,805
4. Inventories are summarized as follows:
<TABLE>
<CAPTION>
March 31, December 31,
1995 1994
<S> <C> <C>
Raw materials and parts $ 13,002,694 $ 13,528,834
Inventoried costs relating to
uncompleted contracts 6,425,931 6,525,606
Customers' advances offset
against costs incurred on
uncompleted contracts (1,556,897) (2,619,351)
Work in process 11,203,282 13,069,191
Finished products (primarily
replacement parts) 50,572,607 51,888,841
____________ ____________
$ 79,647,617 $ 82,393,121
</TABLE>
The remaining fair value adjustment included in inventory as of March 31,
1995 and December 31, 1994 was $7,260,389 and $10,065,253, respectively.
5. Net loss per share of common stock is based on the weighted average
number of common shares outstanding during the period. Net loss
attributable to common shareholders for the Predecessor Company includes
redeemable preferred stock dividends earned but not declared.
6. On March 7, 1995, Jackson National Life Insurance Company ("JNL"), the
holder of approximately 41.58% of the Company's common stock, amended a
complaint (the "JNL Complaint") previously filed in a civil action in the
United States District Court, Southern District of New York, to name as
defendants certain of the Company's current and/or former officers and
directors (the "Management Defendants") and others (collectively with the
Management Defendants, the "Defendants"). The JNL Complaint seeks
unspecified money damages and other equitable relief from the Management
Defendants in connection with (i) JNL's purchase of the Predecessor
Company's Resettable Senior Notes and (ii) certain of the Defendants'
alleged orchestration of a series of financings for the Predecessor
Company which are alleged to have had the effect of rendering the
Predecessor Company insolvent, incapable of competing in its markets and
unable to pay its creditors, including JNL. The Management Defendants
have rights to indemnification from the Company and for any costs and
expenses incurred by them in connection with the JNL Complaint pursuant
to the Amended Plan and the Company's Restated Bylaws. The Company has
been informed by counsel to the Management Defendants that in said
counsel's opinion it is probable that the Management Defendants have
meritorious defenses to all claims asserted in the JNL Complaint;
however, the ultimate outcome of this matter cannot presently be
determined. Accordingly, no provision for any loss that may result upon
resolution of this matter has been made in the accompanying consolidated
financial statements.
In addition, JNL has filed a claim against the Company for reimbursement
of approximately $3,300,000 for professional fees and disbursements
incurred in connection with the Company's Chapter 11 proceedings pursuant
to Section 503(b) of the Bankruptcy Code. JNL has publicly announced
that, if JNL's Section 503(b) claim were allowed by the Bankruptcy Court,
JNL would consider receiving shares of the Company's common stock from
the Company in lieu of requiring payment in cash. The Company has filed
an objection to the claim and has been advised by legal counsel that in
said counsel's opinion the JNL 503(b) claim is without merit; however,
the ultimate outcome of this matter cannot presently be determined.
Accordingly, no provision for any loss that may result upon resolution of
this matter has been made in the accompanying consolidated financial
statements.
<PAGE>
BUCYRUS-ERIE COMPANY AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION
Management's Discussion and Analysis of
Financial Condition and Results of Operations
The following information is provided to assist in the understanding of
Bucyrus-Erie Company's (the "Company") operations for the quarter ended
March 31, 1995.
The reorganization of the Company under chapter 11 of the Bankruptcy Code
was effective December 14, 1994 (the "Effective Date"). The reorganization
was accounted for using the principles of fresh start reporting, as required
by AICPA Statement of Position 90-7, "Financial Reporting by Entities in
Reorganization Under the Bankruptcy Code". Under the principles of fresh
start reporting, total assets were recorded at their assumed reorganization
value, with the reorganization value allocated to identifiable tangible and
intangible assets on the basis of their estimated fair value, and liabilities
were adjusted to the present values of amounts to be paid where appropriate.
The consolidated financial statements for periods subsequent to the Effective
Date include the related amortization charges associated with the fair value
adjustments.
As a result of the implementation of fresh start reporting, the
consolidated financial statements of the Company for periods subsequent to the
Effective Date are not comparable to the consolidated financial statements of
prior periods. The consolidated financial statements presented for prior
periods are not the Company's, but instead are those of B-E Holdings, Inc.
(the "Predecessor Company"), the former parent of the Company which was merged
with and into the Company on the Effective Date.
The acquisition of the Company by the Predecessor Company on February 4,
1988 was accounted for as a purchase and, accordingly, the assets and
liabilities were recorded at their estimated fair values as of the acquisition
date. The excess of the related purchase cost over the fair value of
identifiable net assets was allocated to goodwill. The Predecessor Company
consolidated financial statements for periods subsequent to the date of the
acquisition included the related depreciation and amortization charges
associated with the fair value adjustments.
Net Shipments and Net Loss
Net shipments for the first quarter of 1995 were $56,872,919 compared
with $43,355,100 for the first quarter of 1994. Shipments of repair parts and
services increased 17.9% from the first quarter of 1994 and machine shipments
increased 72.4%. The increase in repair parts and service shipments was
primarily in overseas markets. The increase in machine shipments was in
electric mining shovels and blast hole drills, primarily in coal and copper
markets. The pricing for machines and repair parts has continued to remain
steady with the changes primarily related to volume.
Net loss for the first quarter of 1995 was $2,058,924 compared with a net
loss of $9,996,320 for the first quarter of 1994. The decrease in net loss
was primarily due to increased sales volume, reduced interest expense of
$4,705,350 and reduced reorganization items of $2,936,964. Net loss for the
first quarter of 1995 includes $2,804,864 of the inventory fair value
adjustment which was charged to cost of products sold. Non-cash depreciation
and amortization charges included in the net loss for the first quarter of
1995 and 1994 were $1,192,947 and $3,046,454, respectively.
The Company's consolidated backlog on March 31, 1995 was $79,185,000
compared with $72,346,000 on December 31, 1994 and $84,160,000 on March 31,
1994. Machine backlog increased 22.1% from December 31, 1994 and increased
4.8% from March 31, 1994. The increase from December 31, 1994 was primarily
in blast hole drill volume. Repair parts and service backlog increased 2.5%
from December 31, 1994 and decreased 11.8% from March 31, 1994. The decrease
from March 31, 1994 was primarily at domestic locations.
New orders for the first quarter of 1995 increased 19.1% over the first
quarter of 1994. New machine orders increased 63.7%, primarily due to
increased blast hole drill volume. New repair parts and service orders
increased 2.4%. The Company believes expansion of coal and iron ore
production in China and coal production in India, new copper projects in South
America and replacement of old equipment in iron ore mines should provide near
term machine sales potential. Continued upgrading of existing machines along
with movement of existing large draglines by operators to new mine sites and
normal drill and shovel parts demand should result in steady shipments of
repair parts worldwide in the next twelve months. Although the movement and
upgrading of existing draglines should positively impact parts sales in 1995,
these options continue to further reduce the worldwide demand for new
draglines. In addition, the United States coal market continues to be
negatively impacted by the effects of The Clean Air Act.
Cost of Products Sold
Cost of products sold for the first quarter of 1995 was $49,725,981 or
87.4% of shipments compared with $36,564,733 or 84.3% of shipments for the
first quarter of 1994. Included in cost of products sold for the first
quarter of 1995 was $2,804,864 as a result of the fair value adjustment to
inventory. This adjustment was made in accordance with the principles of
fresh start reporting and is being charged to cost of products sold as the
inventory is sold. The Company expects the remaining adjustment of $7,260,389
to be charged to cost of products sold during the remainder of 1995.
Product Development, Selling, Administrative, and Miscellaneous Expenses
Product development, selling, administrative and miscellaneous expenses
for the first quarter of 1995 were $7,705,814 or 13.5% of shipments compared
with $7,522,344 or 17.4% of shipments for the first quarter of 1994. The
percentage decrease was primarily due to the increase in net shipments.
Interest Expense
Interest expense for the first quarter of 1995 was $1,507,214 compared
with $6,212,564 for the first quarter of 1994. The decrease was primarily due
to the exchange of unsecured debt securities of the Predecessor Company and
the Company for shares of the Company's common stock in connection with the
Company's reorganization pursuant to the Amended Plan.
Income Taxes
Income tax expense for the first quarter of 1995 and 1994 consists
primarily of the recognition of foreign tax expense at applicable statutory
rates. As a result of the Company's reorganization pursuant to the Amended
Plan, the Company's domestic federal net operating loss carryforward as of the
Effective Date is limited under Section 382 of the Internal Revenue Code to
$53,460,000, the annual use of which will be limited to $3,564,000 plus any
unused limitation amount from prior years. The Company's total available
domestic federal net operating loss carryforward as of March 31, 1995 was
approximately $54,000,000. This amount includes the domestic federal net
operating loss carryforward of approximately $540,000 which has been generated
since the Effective Date.
Capitalization
The long-term debt to equity ratio as of March 31, 1995 and December 31,
1994 was 1.1 to 1 and 1.0 to 1, respectively.
Liquidity and Capital Resources
Working capital and current ratio are two financial measurements which
provide an indication of the Company's ability to meet its short-term
obligations. These measurements at March 31, 1995 and December 31, 1994 were
as follows:
<TABLE>
<CAPTION>
March 31, December 31,
1995 1994
<S> <C> <C>
Working capital (in millions) $ 76.3 $ 77.8
Current ratio 2.5 to 1 2.6 to 1
</TABLE>
The table below summarizes the Company's cash position at March 31, 1995:
<TABLE>
<CAPTION>
Restricted Unrestricted
Location Cash Cash Total
<S> <C> <C> <C>
United States $ - $ 4,104,384 $ 4,104,384
Foreign Subsidiaries 18,996 4,933,436 4,952,432
Equipment Assurance Limited 3,655,866 860,372 4,516,238
___________ ___________ ___________
$ 3,674,862 $ 9,898,192 $13,573,054
</TABLE>
The Company's receivable balance at March 31, 1995 was $8,267,144 higher
than at December 31, 1994, primarily due to large machine invoices issued in
March. This timing situation has caused a temporary decrease in the Company's
cash balances.
Approximately $3,400,000 of cash is required for payment of expenses that
were incurred in connection with the reorganization (primarily legal and
professional fees) and approximately $2,700,000 is required to be refunded to
the Internal Revenue Service for an excess refund received in 1993. Both of
these amounts are expected to be paid in the second or third quarter of 1995.
A portion of the unrestricted cash at the foreign subsidiaries and Equipment
Assurance Limited ("EAL"), an off-shore insurance subsidiary of the Company,
is not readily repatriatable because it is required for working capital
purposes at these respective locations.
As required under various agreements, EAL has pledged $3,655,866 of its
cash to secure its reimbursement obligations for outstanding letters of credit
and an affiliate's bank debt at March 31, 1995. This collateral amount is
classified as Restricted Funds on Deposit in the Consolidated Condensed
Balance Sheets.
The following table reconciles Loss Before Income Taxes to earnings
before reorganization items, inventory fair value adjustment charged to cost
of products sold, interest, taxes, depreciation and amortization ("Adjusted
EBITDA"):
<TABLE>
<CAPTION>
Quarter Ended March 31,
1995 1994
(Predecessor
Company)
<S> <C> <C>
Loss before income taxes $ (1,735,786) $ (9,530,765)
Reorganization items - 2,936,964
Inventory fair value adjustment
charged to cost of products sold 2,804,864 -
Non-cash expenses:
Depreciation 894,437 2,021,109
Amortization of goodwill, intangible
assets and other items 298,510 1,025,345
Deferred rent (interest) on sale and
leaseback financing arrangement - 1,670,479
Payment in kind interest on the
Secured Notes due December 14, 1999 1,366,890 -
Amortization of debt discount - 71,179
____________ ____________
Cash available for use before non-cash
interest expense and income taxes 3,628,915 (1,805,689)
Cash interest expense (1) 140,324 4,470,906
____________ ____________
Adjusted EBITDA $ 3,769,239 $ 2,665,217
<FN>
(1) Cash interest expense for the Predecessor Company includes all
accrued but unpaid interest prior to the Petition Date. Contractual interest
of $3,066,227 on the unsecured debt of the Predecessor Company did not accrue
subsequent to the Petition Date. Excludes amortization of debt discount,
deferred rent (interest) on the sale and leaseback financing arrangement and
interest on the Secured Notes due December 14, 1999 that will be paid in kind.
</TABLE>
Pursuant to the Amended Plan, the Company entered into a Credit Agreement
dated as of December 14, 1994 (the "Credit Agreement"), with Bank One,
Milwaukee, National Association ("Bank One"). The Credit Agreement contains a
credit facility for working capital and general corporate purposes (the "Loan
Facility") and a letter of credit facility (the "L/C Facility"). Under the
Loan Facility, the Company may borrow up to $5,000,000 through December 31,
1995, and from January 1, 1996 through December 31, 1996, the Company may
borrow up to $2,500,000, provided that it meets certain earnings before
interest, taxes, depreciation and amortization tests, as defined. Borrowings
under the Loan Facility mature on December 31, 1996 and interest is payable at
the Company's option either at a rate equal to Bank One's reference rate plus
0.75% per annum or an adjusted LIBOR rate plus 2.75% per annum. Under the L/C
Facility, Bank One has agreed to issue letters of credit for the benefit of
the Company through December 31, 1996 in an aggregate amount not in excess of
$15,000,000 minus the then outstanding aggregate borrowings by the Company
under the Loan Facility, provided that no letter of credit may expire after
December 31, 1997. As of March 31, 1995, the Company did not have any
borrowings outstanding under the Loan Facility and $6,721,000 of the L/C
Facility was being used.
The agreements relating to the Secured Notes due December 14, 1999 and
the Credit Agreement permit project financing which enables the Company to
borrow money to pay costs associated with the manufacture of mining machinery
or other products pursuant to binding purchase contracts. Project financing
borrowings are secured by the inventory being financed and any accounts
receivable relating to such inventory. Project financing borrowings mature
not later than the date of the final payment by the customer under the
applicable purchase contract. As of March 31, 1995, the Company had
$4,691,290 of outstanding project financing borrowings.
The Company believes that, as a result of the reorganization, current and
projected levels of liquidity, together with funds generated by operations,
will be sufficient to permit the Company to satisfy its debt service
requirements and fund operating activities for the foreseeable future. The
Company is subject to significant business, economic and competitive
uncertainties that are beyond its control. Accordingly, there can be no
assurance that the Company's financial resources will be sufficient for the
Company to satisfy its debt service obligations and fund operating activities
under all circumstances.
At March 31, 1995, the Company had approximately $1,379,000 of open
approved capital appropriations. The Company does not anticipate any
substantial increase in the level of capital expenditures for the remainder of
1995.
<PAGE>
PART II
OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(b) Reports on Form 8-K:
No reports on Form 8-K were filed during the first quarter of
1995.
<PAGE>
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.
BUCYRUS-ERIE COMPANY
(Registrant)
Date May 8, 1995 Craig R. Mackus
Controller
Principal Accounting Officer
Date May 8, 1995 Phillip W. Mork
President
