SECURITIES AND EXCHANGE COMMISSION
------------------------------------
Washington, D.C. 20549
FORM 10-Q
----------
(MARK ONE)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
_____ OF THE SECURITIES EXCHANGE ACT OF 1934
X FOR THE QUARTERLY PERIOD ENDED APRIL 30, 1995
- ----- ---------------
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 1-9299
-----------------------------
HARNISCHFEGER INDUSTRIES, INC.
(Exact name of registrant as specified in its
charter)
Delaware 39-1566457
- ---------------------------------------------
(State of incorporation) (I.R.S. Employer
Identification No.)
13400 Bishops Lane, Brookfield, Wisconsin 53005
- -----------------------------------------------
(414) 671-4400
- -----------------------------------------------
(Address & telephone number of principal executive
offices)
Indicate by checkmark 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, 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 at June 13,
1995
- --------------------------------------------------
- -
Common Stock, 47,978,048 shares
$1 par value
HARNISCHFEGER INDUSTRIES, INC.
FORM 10-Q
April 30, 1995
INDEX
Page No.
-----------
PART I. Financial Information:
Statement of Income - 1-2
Three and Six Months Ended
April 30, 1995 and 1994
Balance Sheet - 3-4
April 30, 1995 and
October 31, 1994
Statement of Cash Flows - 5-6
Six Months Ended
April 30, 1995 and 1994
Statement of Shareholders' Equity - 7
Six Months Ended
April 30, 1995 and 1994
Notes to Financial Statements 8-12
Management's Discussion and Analysis
of Results of Operations and Financial
Condition 13-19
PART II. Other Information 20
Signatures 21
Page No. 1
- ------------
PART I. FINANCIAL INFORMATION
- -------------------------------
<TABLE>
<CAPTION>
HARNISCHFEGER INDUSTRIES, INC.
- -------------------------------
STATEMENT OF INCOME
(Amounts in thousands except per share amounts)
(Unaudited)
Three Months Ended
April 30,
-----------------------------
1995* 1994**
----------- ---------
<S> <C> <C>
Revenues
Net Sales $541,013 $355,337
Other Income 10,652 10,720
------------ ----------
551,665 366,057
Cost of Sales 417,090 276,560
Product Development, Selling
and Administrative Expenses 86,852 69,708
---------- ----------
Operating Income 47,723 19,789
Interest Expense - Net (11,216) (11,018)
---------- ---------
Income Before Joy Merger Costs, Provision
For Income Taxes and Minority Interest 36,507 8,771
Joy Merger Costs - -
Provision for Income Taxes (including
credit of $6,075 relating to Joy merger
costs) (12,750) (3,627)
Minority Interest (2,712) (370)
---------- ---------
Income From Continuing Operations
(after deducting $11,384, net of
applicable income taxes, related
to Joy Merger costs) 21,045 4,774
Income (loss) from and (Net Loss) on Sale of
Discontinued Operations, net of
applicable income taxes (1,776) 331
Extraordinary Loss on Retirement of
Debt, net of applicable income taxes - -
Cumulative Effect of Accounting
Change, net of applicable income
taxes and minority interest - -
--------- --------
Net Income (Loss) $ 19,269 $ 5,105
--------- --------
Page No. 2
---------------
Earnings (Loss) Per Share
Income from continuing operations (after
deducting $0.24 per share related to Joy
merger costs) $0.46 $0.11
Income (loss) from and (net loss) on sale of
discontinued operation (0.04) 0.01
Extraordinary loss on retirement of debt - -
Cumulative effect of accounting change - -
------- --------
Net income (loss) $0.42 $0.12
===== =====
* FY 1995 amounts reflect Joy Environmental as a
discontinued operation.
** FY 1994 amounts are restated to include the results of
Joy Technologies Inc. and to reflect Joy Environmental as a
discontinued operation.
See accompanying notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
HARNISCHFEGER INDUSTRIES, INC.
- -------------------------------
STATEMENT OF INCOME
(Amounts in thousands except per share amounts)
(Unaudited)
Six Months Ended
April 30,
-----------------------------
1995* 1994**
----------- -----------
<S> <C> <C>
Net Sales $990,382 $696,241
Other Income 19,908 19,662
----------- -----------
1,010,290 715,903
Cost of Sales 768,713 541,885
Product Development, Selling
and Administrative Expenses 159,714 137,055
--------- -----------
Operating Income 81,863 36,963
Interest Expense - Net (22,708) (22,205)
---------- ----------
Income Before Joy Merger Costs, Provision
For Income Taxes and Minority Interest 59,155 14,758
Joy Merger Costs (17,459) -
Provision for Income Taxes (including
credit of $6,075 relating to Joy merger
costs) (14,600) (5,274)
Minority Interest (2,858) (698)
---------- ---------
Income From Continuing Operations
(after deducting $11,384, net of applicable
income taxes, related to
Joy Merger costs) 24,238 8,786
Income (loss) from and (Net Loss) on Sale of
Discontinued Operations, net of
applicable income taxes (24,410) 363
Extraordinary Loss on Retirement of
Debt, net of applicable income taxes (3,481) -
Cumulative Effect of Accounting
Change, net of applicable income
taxes and minority interest - (81,696)
---------- -----------
Net Income (Loss) $(3,653) $ (72,547)
========== ============
Earnings (Loss) Per Share
Income from continuing operations (after
deducting $0.24 per share related to Joy
merger costs) $ 0.53 $ 0.20
Income (loss) from and (net loss) on sale of
discontinued operation (0.53) 0.01
Extraordinary loss on retirement of debt (0.08) -
Cumulative effect of accounting change - (1.88)
-------- ---------
Net income (loss) $(0.08) $(1.67)
===== =====
* FY 1995 amounts are reclassified to reflect Joy
Environmental as a discontinued operation.
** FY 1994 amounts are restated to include the results of
Joy Technologies Inc. and to reflect Joy Environmental as a
discontinued operation.
See accompanying notes to financial statements.
</TABLE>
Page No.3
--------------
<TABLE>
<CAPTION>
HARNISCHFEGER INDUSTRIES, INC.
- -----------------------------------------------------
BALANCE SHEET
- ---------------------------
(Dollar amounts in thousands)
(Unaudited)
April 30,
1995
- -------------
<S> <C>
Assets
Current Assets:
Cash and cash equivalents $ 131,886
Accounts receivable 461,665
Allowance for doubtful accounts (7,521)
Inventories 415,732
Net current assets of discontinued operations -
Other current assets 60,324
- -------------
1,062,086
Property, Plant and Equipment:
Land and improvements 31,287
Buildings 233,031
Machinery and equipment 646,283
- ------------
910,601
Accumulated depreciation (433,304)
- ------------
477,297
Investments and Other Assets:
Investment in Measurex Corporation 29,402
Goodwill 146,866
Intangible assets 71,697
Noncurrent assets of discontinued operations -
Other assets 107,404
- --------------
355,369
- -------------
$1,894,752
==============
See accompanying notes to financial statements.
</TABLE>
Page No. 4
<TABLE>
<CAPTION>
HARNISCHFEGER INDUSTRIES, INC.
- -----------------------------------------------------
BALANCE SHEET
- ---------------------------
(Dollar amounts in thousands)
(Unaudited)
October 31,
1994
- ----------------
<S> <C>
Assets
Current Assets:
Cash and cash equivalents $ 196,455
Accounts receivable 429,101
Allowance for doubtful accounts (7,230)
Inventories 357,847
Net current assets of discontinued operations 20,047
Other current assets 47,181
- -------------
1,043,401
Property, Plant and Equipment:
Land and improvements 31,999
Buildings 235,708
Machinery and equipment 633,975
- ------------
901,682
Accumulated depreciation (411,445)
- ------------
490,237
Investments and Other Assets:
Investment in Measurex Corporation 66,347
Goodwill 143,899
Intangible assets 69,729
Noncurrent assets of discontinued operations 43,251
Other assets 125,089
- ------------
448,315
- ------------
$1,981,953
============
See accompanying notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
HARNISCHFEGER INDUSTRIES, INC.
- ----------------------------------------------------
BALANCE SHEET
- --------------------------
(Dollar amounts in thousands)
(Unaudited)
April 30,
1995
- -------------
<S> <C>
Liabilities and Shareholders' Equity
Current Liabilities:
Short-term notes payable, including current
portion of long-term obligations $ 19,987
Trade accounts payable 237,358
Employee compensation and benefits 82,010
Advance payments and progress billings 157,939
Accrued warranties 32,814
Other current liabilities 114,741
-----------
644,849
Long-term Obligations 460,400
Other Liabilities:
Liability for postretirement benefits 110,460
Accrued pension costs 53,207
Other liabilities 23,076
Deferred income taxes 19,440
- ------------
206,183
Minority Interest 88,629
Shareholders' Equity:
Common stock (issued 50,602,098 and
50,506,471 shares, respectively) 50,602
Capital in excess of par value 585,113
Retained earnings 2,170
Cumulative translation adjustments (43,294)
- ------------
594,591
Less:Stock Employee Compensation
Trust (1,521,439 and 2,150,416
shares, respectively) at market (44,882)
Treasury stock (2,962,604 and
2,852,604 shares, respectively)
at cost (55,018)
-------------
494,691
-------------
$1,894,752
=============
See accompanying notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
HARNISCHFEGER INDUSTRIES, INC.
- ----------------------------------------------------
BALANCE SHEET
- --------------------------
(Dollar amounts in thousands)
(Unaudited)
October 31,
1994
---------------
<S> <C>
Liabilities and Shareholders' Equity
Current Liabilities:
Short-term notes payable, including current
portion of long-term obligations $ 16,540
Trade accounts payable 237,618
Employee compensation and benefits 75,679
Advance payments and progress billings 121,212
Accrued warranties 33,529
Other current liabilities 127,498
------------
612,076
Long-term Obligations 568,933
Other Liabilities:
Liability for postretirement benefits 118,610
Accrued pension costs 55,409
Other liabilities 18,239
Deferred income taxes 20,751
------------
213,009
Minority Interest 85,570
Shareholders' Equity:
Common stock (issued 50,602,098 and
50,506,471 shares, respectively) 50,506
Capital in excess of par value 576,886
Retained earnings 19,936
Cumulative translation adjustments (39,194)
------------
608,134
Less:Stock Employee Compensation
Trust (1,521,439 and 2,150,416
shares, respectively) at market (53,760)
Treasury stock (2,962,604 and
2,852,604 shares, respectively)
at cost (52,009)
--------------
502,365
-------------
$1,981,953
==============
See accompanying notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
HARNISCHFEGER INDUSTRIES, INC. Page No. 5
STATEMENT OF CASH FLOWS
- ----------------------------------------------
(Dollar amounts in thousands)
(Unaudited)
Six Months Ended
April 30,
-----------
1995
----------
<S> <C>
Operating Activities
Net income (loss) $(3,653)
Add (deduct) - Items not affecting cash:
Income (loss) from and net loss on sale of
discontinued operations 24,410
Extraordinary loss on retirement of debt 3,481
Cumulative effect of accounting change --
Depreciation and amortization 36,757
Minority interest, net of dividends paid 2,412
Deferred income taxes - net 5,036
Other - net (3,136)
Changes in working capital
(Increase) decrease in accounts receivable - net (28,766)
(Increase) decrease in inventories (27,970)
(Increase) in other current assets (16,459)
(Decrease) in trade accounts payable (10,652)
(Decrease) in employee compensation and benefits (2,369)
Increase in advance payments and progress
billings 37,690
(Decrease) in other current liabilities (15,699)
----------
Net cash provided by (applied to)
operating activities 1,082
----------
Investment and Other Transactions
Sale of investment in Measurex Corporation 43,578
Sale of Syscon Corporation 45,000
Property, plant and equipment - net (24,800)
Other - net 1,210
------------
Net cash provided by (applied to) investment
and other transactions 64,988
Financing Activities
Dividends paid (9,195)
Exercise of stock options 5,744
Purchase of treasury stock (3,009)
Issuance of long-term obligations --
Redemption of long-term obligations (99,939)
(Decrease) increase in short-term notes payable (251)
------------
Net cash (applied to) financing activities (106,650)
------------
Page No. 6
---------------
Effect of Exchange Rate Changes on Cash and
Cash Equivalents (283)
-----------
(Decrease) in Cash and Cash Equivalents (40,863)
(Use) of Cash by Joy Technologies from
February 26, 1994 to October 31, 1994 (23,706)
Cash and Cash Equivalents at Beginning of Period 196,455
-----------
Cash and Cash Equivalents at End of Period $131,886
=======
See accompanying notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
HARNISCHFEGER INDUSTRIES, INC. Page No. 5
STATEMENT OF CASH FLOWS
- ----------------------------------------------
(Dollar amounts in thousands)
(Unaudited)
Six Months Ended
April 30
----------------
1994
-----------
<S> <C>
Operating Activities
Net income (loss) $ (72,547)
Add (deduct) - Items not affecting cash:
Income (loss) from and net loss on sale of
discontinued operations (363)
Extraordinary loss on retirement of debt --
Cumulative effect of accounting change 81,696
Depreciation and amortization 36,760
Minority interest, net of dividends paid 264
Deferred income taxes - net 1,895
Other - net (10,057)
Changes in working capital
(Increase) decrease in accounts receivable - net 6,170
(Increase) decrease in inventories 143
(Increase) in other current assets (5,984)
(Decrease) in trade accounts payable (729)
(Decrease) in employee compensation and benefits (4,413)
Increase in advance payments and progress
billings 12,156
(Decrease) in other current liabilities (49,114)
------------
Net cash provided by (applied to)
operating activities (4,123)
------------
Investment and Other Transactions
Sale of investment in Measurex Corporation --
Sale of Syscon Corporation --
Property, plant and equipment - net (17,754)
Other - net 3,181
------------
Net cash provided by (applied to) investment
and other transactions (14,573)
------------
Financing Activities
Dividends paid (5,133)
Exercise of stock options 1,160
Purchase of treasury stock (124)
Issuance of long-term obligations 2,729
Redemption of long-term obligations (16,802)
(Decrease) increase in short-term notes payable 5,483
------------
Net cash (applied to) financing activities (12,687)
------------
Page No. 6
---------------
Effect of Exchange Rate Changes on Cash and
Cash Equivalents 489
-----------
(Decrease) in Cash and Cash Equivalents (30,894)
(Use) of Cash by Joy Technologies from
February 26, 1994 to October 31, 1994 --
Cash and Cash Equivalents at Beginning of Period 165,074
----------
Cash and Cash Equivalents at End of Period $134,180
===========
See accompanying notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
HARNISCHFEGER INDUSTRIES, INC. Page No. 7
- ---------------------------------------------------
STATEMENT OF SHAREHOLDERS' EQUITY
- ---------------------------------------------------
(Dollar amounts in thousands)
(Unaudited)
Capital in
Common Excess of Retained
Stock Par Value Earnings
------------ --------------- ------------
<S> <C> <C> <C>
Six Months Ended April 30, 1995
- --------------------------------------------
Balance at October 31, 1994 $50,506 $576,886 $19,936
Adjustment related to Joy Technologies from
February 26, 1994 - October 31, 1994 13 182 (4,575)
------------ -------------------------
Adjusted Balance at November 1, 1994 50,519577,068 15,361
Net loss (3,653)
Translation adjustments
Exercise of 290,029 stock options83 (117)
Dividends paid ($.20 per share) (9,538)
Dividends on shares held by SECT 343
Adjust SECT shares to market value 7,819
110,000 shares acquired as treasury stock
422,240 shares purchased by employee
benefit plans
---------- ------------ ----------
Balance at April 30, 1995 $50,602 $585,113 $2,170
====== ======= ======
Six Months Ended April 30, 1994
- --------------------------------------------
Balance at October 31, 1993 $50,575 $560,178 $85,227
Net loss (72,547)
Translation adjustments
Exercise of 68,100 stock options (407)
Issuance of restricted stock (120)
4,875 shares acquired as
treasury stock
Dividends paid ($.20 per share) (5,590)
Dividends on shares held by SECT 457
Adjust SECT shares to market value (2,504)
194,379 shares purchased by
employee benefit plans
Joy Technologies Inc. pre-merger activity (59)
---------- ------------ ---------
Balance at April 30, 1994 $50,575 $557,545 $7,090
====== ======= ======
See accompanying notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
HARNISCHFEGER INDUSTRIES, INC. Page No. 7
- --------------------------------------------------------
STATEMENT OF SHAREHOLDERS' EQUITY
- ----------------------------------------------------------------
(Dollar amounts in thousands)
(Unaudited)
Cumulative
Translation Treasury
Adjustments SECT Stock
------------ --------------- ------------
<S> <C> <C> <C>
Six Months Ended April 30, 1995
- --------------------------------------------
Balance at October 31, 1994 $(39,194) $(53,760) $(52,009)
Adjustment related to Joy Technologies
from February 26, 1994 -
October 31, 1994 1,742 - -
----------- ------------- ------------
Adjusted Balance at November 1, 1994 (37,452)(53,760) (52,009)
Net loss
Translation adjustments (5,842)
Exercise of 290,029 stock options 5,778
Dividends paid ($.20 per share)
Dividends on shares held by SECT
Adjust SECT shares to market value (7,819)
110,000 shares acquired as treasury
stock (3,009)
422,240 shares purchased by employee
benefit plans 10,919
---------- ------------ ----------
Balance at April 30, 1995 $(43,294) $(44,882) $(55,018)
======= ======= =======
Six Months Ended April 30, 1994
- --------------------------------------------
Balance at October 31, 1993 $(40,566) $(55,900) $(88,345)
Net loss
Translation adjustments (1,614)
Exercise of 68,100 stock options 1,567
Issuance of restricted stock 262
4,875 shares acquired as
treasury stock (124)
Dividends paid ($.20 per share)
Dividends on shares held by SECT
Adjust SECT shares to market value 2,504
194,379 shares purchased by
employee benefit plans 4,250
Joy Technologies Inc. pre-merger
activity
--------- -------- -------
Balance at April 30, 1994 $(42,180) $(47,317) $(88,469)
========= ======= =======
See accompanying notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
HARNISCHFEGER INDUSTRIES, INC. Page No. 7
- --------------------------------------------------------
STATEMENT OF SHAREHOLDERS' EQUITY
- ----------------------------------------------------------------
(Dollar amounts in thousands)
(Unaudited)
Total
------------
<S> <C>
Six Months Ended April 30, 1995
- --------------------------------------------
Balance at October 31, 1994 $502,365
Adjustment related to Joy Technologies from
February 26, 1994 - October 31, 1994 (2,638)
------------
Adjusted Balance at November 1, 1994 499,727
Net loss (3,653)
Translation adjustments (5,842)
Exercise of 290,029 stock options 5,744
Dividends paid ($.20 per share) (9,538)
Dividends on shares held by SECT 343
Adjust SECT shares to market value --
110,000 shares acquired as treasury stock (3,009)
422,240 shares purchased by employee
benefit plans 10,919
------------
Balance at April 30, 1995 $494,691
============
Six Months Ended April 30, 1994
- --------------------------------------------
Balance at October 31, 1993 $511,169
Net loss (72,547)
Translation adjustments (1,614)
Exercise of 68,100 stock options 1,160
Issuance of restricted stock 142
4,875 shares acquired as
treasury stock (124)
Dividends paid ($.20 per share) (5,590)
Dividends on shares held by SECT 457
Adjust SECT shares to market value -
194,379 shares purchased by
employee benefit plans 4,250
Joy Technologies Inc. pre-merger activity (59)
---------
Balance at April 30, 1994 $437,244
=========
See accompanying notes to financial statements.
</TABLE>
Page No. 8
- ---------------
HARNISCHFEGER INDUSTRIES, INC.
- --------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------
April 30, 1995
(Amounts in thousands unless indicated)
(a) Basis of Presentation
-----------------------------
The consolidated financial statements and related notes give
retroactive effect to the mergeron November 29, 1994 (the
"Merger") with Joy Technologies Inc. ("Joy") for all periods
presented, accounted for as a pooling of interests. The
consolidated balance sheets as of April 30, 1995 and October
31, 1994 include the accounts of Joy as of April 30, 1995
and February 25, 1994, respectively. The consolidated
statements of income as of April 30, 1995 and April 30, 1994
include the accounts of Joy for the three and six month
periods ended April 30, 1995 and August 27, 1993,
respectively. The consolidated statements of cash flows for
the six month periods ended April 30, 1995 and 1994 include
the cash flows of Joy for the six month periods ended April
30, 1995 and August 27, 1993, respectively. See Note (b) -
Acquisition of Joy Technologies Inc. The consolidated
statement of income for the three month period and six month
periods ended April 30, 1995 and April 30, 1994 have also
been restated to reflect the Company's proposed divestiture
of Joy Environmental Technologies ("JET") announced April
12, 1995 and accounted for as a discontinued operation. See
Note (c) - Divestitures and Discontinued Operations. The
term "Company" as used in these consolidated financial
statements refers to Harnischfeger Industries, Inc. and its
subsidiaries, including Joy.
In the opinion of management, all adjustments necessary for
the fair presentation of the results of operations for the
three and six months ended April 30, 1995 and 1994, cash
flows for the six months ended April 30, 1995 and 1994, and
the financial position at April 30, 1995 have been made. All
adjustments made are of a normal recurring nature. The Joy
merger costs, discontinued operations and extraordinary loss
on retirement of debt, are discussed in Notes b, c, and g,
respectively.
These financial statements should be read in conjunction
with the financial statements and the notes thereto included
in the Harnischfeger Industries, Inc. Annual Report on Form
10-K for 1994 and in conjunction with the 1994 financial
statements and notes thereto restated to give effect to the
Merger, filed on a Current Report on Form 8-K dated March
13, 1995.
The results of operations for any interim period are not
necessarily indicative of the results to be expected for the
full year.
(b) Acquisition of Joy Technologies Inc.
- ------------------------------------------------
On November 29, 1994, the Company completed the acquisition
of Joy Technologies Inc. ("Joy") through a stock-for-stock
merger following approval of the merger by shareholders of
each company. Under the terms of the acquisition, accounted
for as a pooling of interests, the Company exchanged
17,720,750 shares of common stock for all of Joy's
31,353,000 outstanding shares of common stock at an exchange
ratio of .5652 of a share of the Company's common stock for
each share of Joy common stock.
Effective November 1, 1994, the fiscal year of Joy was
conformed to the Company's fiscal year. All periods
presented have been retroactively restated (See Note (a) -
Basis of
Page No. 9
--------------
Presentation). Amounts related to Joy in fiscal 1994 have
been retroactively adjusted to reflect the adoption of
Statement of Financial Accounting Standards ("SFAS") No.
106, "Employers' Accounting for Postretirement Benefits
Other Than Pensions," through the immediate recognition of
the obligation as of November 1, 1993 to conform with the
Company's adoption.
Joy's operating results for the period February 26, 1994 to
October 31, 1994, a net loss of $(4,575) on net sales of
$372,304, have been reflected as an adjustment to the
combined Company's retained earnings on November 1, 1994.
Transaction costs related to the merger of $17,459 ($11,384
net of tax or $0.24 per share) were charged to income during
the first quarter and consisted primarily of investment
banker, attorney and accountant fees, severance and related
benefits and printing, mailing and registration expenses.
(c) Divestitures and Discontinued Operations
-------------------------------------------------------
In the second quarter of fiscal 1994, the Company announced
its decision to divest itself of Syscon Corporation
("Syscon"), the remaining unit in the Company's Systems
Group. Accordingly, the assets and liabilities and
operating results of Syscon were segregated in the
consolidated financial statements and were reflected as net
assets and results of discontinued operations in the Balance
Sheet and Statement of Income, respectively. The Company
pursued several alternatives, including a plan providing for
the future spin-off of Syscon through a dividend of Syscon
stock to the shareholders of HII, and other divestiture
alternatives. On February 16, 1995, the Company completed
the sale of Syscon to Logicon, Inc. for a cash price of
$45,000. In connection with this sale, the Company recorded
a loss on sale of discontinued operations of $(21,948) or
$(0.48) per share, net of applicable income taxes, in the
first quarter of 1995.
On April 12, 1995, the Company announced that it had signed
a letter of intent relating to the proposed divestiture of
Joy Environmental Technologies ("JET"), a supplier of air
pollution and ash handling equipment for electric utilities
and other industrial operations, to Babcock & Wilcox, an
operating unit of McDermott International. Accordingly, the
operating results of JET were segregated and reflected in
the Consolidated Statement of Income as a discontinued
operation. As a result, the Statement of Income reflects an
estimated loss from discontinued operations of $(1,776) or
$(.04) per share and $(2,462) or $(.05) per share for the
three months and six months ended April 30, 1995,
respectively. Prior comparative periods have also been
restated to reflect JET as a discontinued operation. The
Company expects the transaction to be completed by the end
of the year.
(d)Inventories
- ----------------
<TABLE>
<CAPTION>
Consolidated inventories consisted of the following:
April 30, October 31,
1995 1994
------------- ---------------
<S> <C> <C>
Finished goods $201,751 $ 182,084
Work in process and purchased parts 197,782 158,038
Raw materials 83,812 79,766
------------ -------------
483,345 419,888
Less excess of current cost over stated
LIFO value (67,613) (62,041)
------------ -------------
$415,732 $357,847
============ ============
</TABLE>
Page No. 10
---------------
Inventories valued using the LIFO method represented
approximately 84% and 81% of consolidated inventories at
April 30, 1995 and October 31, 1994, respectively.
The Company has reduced inventory by $6,317 and $3,739 at
April 30, 1995 and October 31, 1994, respectively, for
progress payments received on contracts accounted for on the
completed contract method.
(e)Research and Development Expense
- -------------------------------------------------
Research and development costs are expensed as incurred.
Such costs incurred in the development of new products or
significant improvements to existing products amounted to
$7,868 and $6,966 for the three months and $14,834 and
$15,016 for the six months ended April 30, 1995 and 1994,
respectively. Certain capital expenditures used in research
activities, such as the construction of the new pilot paper
machine to be used in research and for customer tests, are
capitalized and depreciated over their expected useful
lives.
(f)Interest Expense - Net
- ------------------------------
<TABLE>
<CAPTION>
Net interest expense consisted of the following:
Three Months Ended
April 30,
----------------------------
1995 1994
---------------------------
<S> <C> <C>
Interest income $ 2,100 $ 2,143
Interest expense (13,316) (13,161)
------------- -------------
Interest expense - net $(11,216) $(11,018)
------------ -------------
</TABLE>
<TABLE>
<CAPTION>
Net interest expense consisted of the following:
Six Months Ended
April 30,
------------------------
1995 1994
-----------------------
<S> <C> <C>
Interest Income $ 3,766 $ 3,928
Interest expense (26,474) (26,133)
---------- -----------
Interest expense - net $ (22,708) $(22,205)
---------- -----------
</TABLE>
(g)Long-Term Obligations
- -------------------------------
<TABLE>
<CAPTION>
Long-term obligations at April 30, 1995 and October 31, 1994 consisted of the following:
April 30, October 31,
1995 1994
------------- ---------------
<S> <C> <C>
10 1/4% Senior Notes due 2003 $188,380 $200,000
Bank Facility - 90,785
8.9% Debentures, due 2022 75,000 75,000
8.7% Debentures, due 2022 75,000 75,000
Senior Notes, Series A through D, at
interest rates of between 8.9% and
9.1%, due 1996 to 2006 75,000 75,000
Industrial Revenue Bonds, at interest
rates of between 5.9% and 8.8%
due 1995 to 2017 32,428 32,632
Other 16,650 22,637
----------- -----------
462,458 571,054
Less: Amounts payable within one year 2,058 2,121
---------- ----------
$460,400 $568,933
========== =========
</TABLE>
The $90,785 Tranche B term loan, the remaining borrowings
outstanding under the Joy Bank Facility, was repaid in full
on November 29, 1994 upon the consummation of the Company's
Page No. 11
merger with Joy. The Bank Facility agreement, including its
revolving credit agreement, was terminated following the
merger. In addition, under Joy's 10 1/4% Senior Notes
Indenture, Joy was required upon a change in control to make
an offer to purchase the outstanding Senior Notes at 101% of
the principal amount thereof plus accrued interest. On
December 29, 1994, Joy issued an offer to purchase for cash
any and all of its outstanding 10 1/4% Notes. This offer
expired on February 10, 1995 with $270 being redeemed under
the offer. Prior to this tender offer, the Company had
purchased $11,350 of outstanding 10 1/4% Senior Notes in
unsolicited open market transactions. As a result of the
Bank Facility and 10 1/4% Senior Note redemptions, the
Company recorded an extraordinary loss on debt retirement,
net of applicable income taxes, of $(3,481) or $(0.08) per
share in the first quarter, consisting primarily of
unamortized financing costs and redemption premiums.
In November, 1993, the Company entered into a four-year
Revolving Credit Facility Agreement with certain domestic
and foreign financial institutions that allowed for
borrowings of up to $150,000 at rates expressed in relation
to LIBOR and other rates. In November, 1994, the facility
was increased to $240,000 and was extended to November,
1998. A facility fee is payable on the Revolving Credit
Facility. At April 30, 1995, there were no outstanding
borrowings related to the Revolving Credit Facility.
(h)Contingent Liabilities
- -----------------------------
At April 30, 1995, the Company was contingently liable to
banks, financial institutions, and others for approximately
$130,700 for outstanding letters of credit securing
performance of sales contracts and other guarantees in the
ordinary course of business, excluding the HEI back-up bond
guarantee facility. The Company may also guarantee
performance of its equipment at levels specified in sales
contracts without the requirement for letters of credit. One
such guarantee may require repayment of a loan to the
customer approximating the value of the related paper
machine in the event certain performance tests are not
achieved. Performance guarantees are a normal part of the
Company's business and have not resulted in significant cash
outlays.
The Company is a party to litigation matters and claims
which are normal in the course of its operations and, while
the results of litigation and claims cannot be predicted
with certainty, management believes that the final outcome
of such matters will not have a materially adverse effect on
the Company's consolidated financial position or results of
operations.
The Company is also involved in a number of proceedings and
potential proceedings relating to environmental matters.
Although it is difficult to estimate the potential exposure
to the Company related to these environmental matters, the
Company believes that these matters will not have a
materially adverse effect on its consolidated financial
position or results of operations.
Page No. 12
- ------------
In addition, in accordance with the terms of the agreement
between the Company and H-K Systems, Inc., formally
Harnischfeger Engineers, Inc, the Company has made available
a back-up bonding guarantee facility for certain bid,
performance and other contract bonds issued by H-K Systems,
Inc. The amount of guarantees outstanding cannot exceed
$90,000 during fiscal 1995, with the maximum amount
decreasing to zero by November, 1998. Outstanding contract
bonds under the guarantee arrangement totalled approximately
$75,000 at April 30, 1995; H-K Systems, Inc. typically
requires similar bonds from its major subcontractors. Such
guarantees have been part of H-K Systems, Inc.'s business
in the past and have not resulted in significant cash
outlays. The back-up facility may not be used for new types
of business or for projects outside of North America, nor
does it permit exposure to consequential damages on
commercial contracts.
(i) U.S. Patent Infringement Case Jury Awards
- ----------------------------------------------
On November 23, 1994, a Federal court jury in Madison,
Wisconsin returned a verdict finding that Valmet Corporation
of Finland infringed a patent on Bel-Champ(TM) paper machine
drying technology. In connection with this suit, the jury
awarded Beloit $7,875 in damages. The verdict in this case
has been appealed by Valmet. In addition, on June 9, 1995, a
Federal court jury returned a verdict finding that J.M. Voith
GmbH of Heidenheim, Germany and Voith, Inc. of Appleton,
Wisconsin infringed two patents on the same Bel-Champ
technology. The jury awarded damages to Beloit in the amount
of $6,000. It is expected that this verdict will be appealed.
The awards have not been recorded in the Company's financial
statements.
(j)Sale of Measurex Stock
- -------------------------
On December 29, 1994, Measurex Corporation repurchased for
$21.50 per share approximately 2,000 shares of its stock which
had been purchased by the Company. The transaction reduced
the Company's interest in Measurex from 20% to 10%. The
Company recorded a gain in Other Income in the first quarter
of fiscal 1995 in connection with the sale of Measurex shares.
Measurex continues to have cooperative agreements with the
Company's Beloit Corporation subsidiary and the sale of these
shares had no impact on the agreements.
Page No. 13
----------------
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
THREE AND SIX MONTHS ENDED APRIL 30, 1995 AND 1994
- ----------------------------------------------------
(Amounts in thousands unless indicated)
Net income (loss) for the three and six months ended April 30,
1995 amounted to $19,269, or $.42 per share, and $(3,653), or
$(.08) per share, as compared to net income of $5,105, or $.12
per share, for the three months and $(72,547), or $(1.67) per
share for the six months ended April 30, 1994. Income from
continuing operations amounted to $21,045, or $.46 per share,
for the three months and $24,238, or $.53 per share, for the
six months ended April 30, 1995 as compared to income of
$4,774, or $.11 per share, for the three months and $8,786, or
$.20 per share, for the six months ended April 30, 1994. Net
results for the three and six month periods ended April 30,
1995 included a loss for the Company's discontinued
environmental segment of $(1,776), or $(.04) per share, and
$(2,462), or $(.05) per share, respectively. Results for the
six month period ended April 30, 1995 were also reduced by a
charge of $(21,948), or $(.48) per share, to record a loss on
the sale of the discontinued operation, Syscon, and for a
charge of $(3,481), or $(.08) per share, for the extraordinary
loss on retirement of debt related to the Joy Tranche B term
loan and some Joy 10 1/4% Senior Notes. Net results for the
three and six month periods ended April 30, 1994 included
income from the Company's discontinued operation, Syscon, of
$473, or $.01 per share, and $904, or $.02 per share,
respectively, and a loss from the Company's discontinued
environmental segment of $(142), or $(.00) per share, and
$(541), or $(.01) per share, respectively.
Net results for the first six months ended April 30, 1994 were
reduced by $(81,696) or $(1.88) per share to record the
cumulative effect of the accounting change related to the
adoption of FAS 106 ("Employers' Accounting for
Postretirement Benefits Other Than Pensions").
Per share calculations for the first six months of 1995 and
1994 were based on 45,868 and 43,398 average shares
outstanding, respectively. The increase in average shares
outstanding reflects the September 1994 sale of 2,000 shares
of Common Stock in a private transaction. This sale of stock
satisfied the requirements under pooling of interests
accounting rules to replace shares repurchased during the two
years prior to the announcement of the Company's merger with
Joy. The shares were sold from treasury stock.
Significant factors contributing to the $15,452 increase in
income from continuing operations for the first six months of
1995 as compared to 1994 included: (1) a $44,900 increase in
operating income as described in the Segment Information
section which follows, offset by (2) a $503 increase in
interest expense resulting from higher interest rates on
certain Joy debt as compared to the 1994 period, (3) a $9,326
increase in the provision for income taxes due to higher pre-
tax income, (4) a $2,160 increase in minority interest due to
higher after-tax results of certain operations owned in part
by other entities, and (5) Joy merger transaction costs of
$17,459 consisting primarily of investment banker, attorney
and accountant fees, severance and related benefits and
printing, mailing and registration expenses.
The Company announced its decision in the second quarter of
fiscal 1994 to divest itself of the Systems Group's remaining
subsidiary, Syscon Corporation. The assets and liabilities
and operating results of Syscon were segregated in the
consolidated financial statements and were reflected as net
assets and results of discontinued operations in the Balance
Sheet and Statement of Income, respectively. On February 16,
1995, the Company completed the sale of Syscon to Logicon,
Inc. for a cash price of $45,000. In the first quarter of
fiscal 1995, in connection with
Page No. 14
----------------
this sale, the Company recorded a loss on sale of discontinued
operation of $(21,948), or $(0.48) per share, net of
applicable income taxes.
On April 12, 1995, the Company announced that it had signed a
letter of intent relating to the proposed divestiture of Joy
Environmental Technologies ("JET"), a supplier of air
pollution and ash handling equipment for electric utilities
and other industrial operations, to Babcock & Wilcox, an
operating unit of McDermott International. Accordingly, the
operating results of JET were segregated and reflected in the
Consolidated Statement of Income as a discontinued operation.
As a result, the Statement of Income reflects an estimated
loss on sale of discontinued operations of $(1,776) or $(.04)
per share and $(2,462) or $(.05) per share for the three
months and six months ended April 30, 1995, respectively.
Prior comparative periods have also been restated to reflect
JET as a discontinued operation. The Company expects the
transaction to be completed by the end of the year.
Page No. 15
- ------------
Segment Information
- -----------------------------
<TABLE>
<CAPTION>
Operating results of the Company's business segments for the second quarter and first six months
of 1995 and 1994 are summarized as follows:
Second Quarter Net Sales Operating Income
- ------------------------- -------------------------- -------------------------
1995* 1994** 1995* 1994**
- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Papermaking Machinery and
Systems $225,579 $164,553 $ 12,311 $6,528
Mining Equipment 253,141163,442 34,207 16,293
Material Handling Equipment 62,293 27,342 6,227 3,430
- ----------- --------- -----------------
Total Business Segments $541,013 $355,337 52,745 26,251
======= =======----------------
Corporate Administration (5,022) (6,462)
-----------------
Operating Income $47,723 $19,789
======== =======
Six Months Net Sales Operating Income
- ---------------------- -------------------------- -------------------------
1995* 1994** 1995* 1994**
- ---------- ----------- ---------- ----------
Papermaking Machinery and
Systems $427,911 $311,529 $25,146 $13,064
Mining Equipment 452,223333,310 56,876 29,693
Material Handling Equipment 110,248 51,402 9,549 5,214
- ----------- ----------------- -------
Total Business Segments $990,382 $696,241 91,571 47,97
====== =======
Corporate Administration (9,708) (11,008)
--------- -------
Operating Income $81,863 $36,963
========= =======
* FY 1995 amounts reflect Joy Environmental as a discontinued operation.
** FY 1994 amounts are restated to include the results of Joy Technologies Inc. and to reflect Joy
Environmental as a discontinued operation.
</TABLE>
<TABLE>
<CAPTION>
Second Quarter Orders Booked Backlog at
- ------------------------- --------------------- ----------------------
1995* 1994** 4/95* 1/95*
- ---------- -------------------------
<S> <C> <C> <C> <C>
Papermaking Machinery and
Systems $247,591 $194,233 $700,105 $678,093
Mining Equipment 232,375162,894 172,344 193,110
Material Handling Equipment 66,213 28,101 112,566 108,646
- ----------- ---------------- -------
Total Business Segments $546,179 $385,228 $985,015 $979,849
========= ======= ======= =======
Six Months Orders Booked Backlog at
- ---------------------- ----------------------- ---------------------
1995* 1994** 4/95* 10/94**
- ------------ ----------- ------------ ---------
Papermaking Machinery and
Systems $494,246 $344,544 $700,105 $633,770
Mining Equipment 433,667316,964 172,344 190,900
Material Handling Equipment 115,702 51,955 112,566 107,112
- ------------- -------- -----------------
Total Business Segments $1,043,615 $713,463 $985,015 $931,782
======== =============== =======
* FY 1995 amounts reflect Joy Environmental as a discontinued operation.
** FY 1994 amounts are restated to include the results of Joy Technologies Inc. and to reflect Joy
Environmental as a discontinued operation.
</TABLE>
Page No. 16
- ----------------
Segment Information - Continuing Operations
- -------------------------------------------------------------
The Papermaking Machinery and Systems segment contributed
sales and operating profit of $427,911 and $25,146,
respectively, for the first six months of 1995, as compared to
net sales of $311,529 and operating profit of $13,064 for the
corresponding period in 1994. Sales increased 37% in 1995 due
to a cyclical upturn in the industry, with second quarter
sales growing 11% over first quarter sales. Operating profit
for the first six months included the gain from the sale of
Measurex stock. Operating profit in 1994 includes income
realized from a favorable settlement of Canadian patent
litigation. Bookings for the first six months of 1995
amounted to $494,246 as compared to $344,544 for the same
period in 1994.
Net sales of the Mining Equipment segment amounted to $452,223
and $333,310 for the first six months of 1995 and 1994,
respectively, representing a 36% increase in 1995 as compared
to 1994. The sales increase is primarily due to the Joy
Mining Machinery's increase in both original equipment and
aftermarket and service activity. P&H(TM) Mining Machinery
experienced increased sales primarily due to machine sale
increases. Operating profit increased to $56,876 for the
first six months of 1995 as compared to $29,693 in 1994. The
increase in operating profit is primarily due to increased
aftermarket business and reduced manufacturing variances.
Bookings for the first six months of 1994 amounted to $433,667
as compared to $316,964 for the same period in 1994. The
increase is due to U.S. surface mining equipment increases,
Joy aftermarket booking increases in the U.S., U.K., and
Australia and increased Joy original equipment bookings in
South Africa.
The Material Handling Equipment segment contributed sales and
operating profit of $110,248 and $9,549, respectively, for the
first six months of 1995, as compared to sales of $51,402 and
operating profit of $5,214 for the comparable period in 1994.
Sales, profitability and bookings increased during the first
six months of 1995 compared to 1994 due to the acquisition of
Morris Mechanical Handling Limited in September 1994 as well
as overall improving results from the segment's other
companies. Bookings for the first six months of 1995 and 1994
amounted to $115,702 and $51,955, respectively, up primarily
due to the addition of Morris Mechanical Handling Limited.
Segment Information - Divestitures and Discontinued Operations
- --------------------------------------------------------------
In the second quarter of fiscal 1994, the Company announced
its decision to divest itself of Syscon Corporation, the
remaining unit in the Systems Group. On February 16, 1995,
the Company completed the sale of Syscon to Logicon, Inc. for
a cash price of $45,000. In connection with this sale, the
Company recorded a loss on sale of discontinued operations of
$(21,948) or $(0.48) per share, net of applicable income
taxes, in the first quarter of fiscal 1995.
On April 12, 1995, the Company announced that it had signed a
letter of intent relating to the proposed divestiture of JET
to Babcock & Wilcox, an operating unit of McDermott
International. Accordingly, the operating results were
segregated and reflected in the Consolidated Statement of
Income as an estimated loss on discontinued operations of
$(1,776) or $(.04) per share and $(2,462) or $(.05) per share
for the three months and six months ended April 30, 1995,
respectively.
Page No. 17
- ---------------
Income Taxes
- -------------------
The Company's estimated annual effective tax rate for
continuing operations for the first six months of 1995 was 35%
compared to a 35% federal statutory tax rate.
Postretirement Benefits Other Than Pensions
- ------------------------------------------------------------
During the first quarter of fiscal 1994, the Company adopted
SFAS No. 106, "Employers' Accounting for Postretirement
Benefits Other Than Pensions" (SFAS 106), through the
immediate recognition of the obligation. Under SFAS 106, the
costs of retiree health care and life insurance benefits are
accrued over relevant employee service periods. Previously,
these costs were charged to expense as claims were paid. The
cumulative effect of the accounting change required by
adoption of this standard was a one-time pre-tax charge of
$(136,291) ($(81,696) or $(1.88) per share after taxes and
minority interest).
In 1993, the Board of Directors of the Company approved a
general approach that would culminate in the elimination of
all Company contributions towards postretirement health care
benefits. Increases in costs paid by the Company were capped
for certain plans beginning in 1994 extending through 1998,
and Company contributions will be eliminated on January 1,
1999 for most employee groups, excluding Joy. For Joy, based
upon existing plan terms, future eligible retirees will
participate in a premium cost-sharing arrangement which is
based upon age as of March 1, 1993 and position at the time of
retirement. Active Joy employees under age 45 as of March 1,
1993 and any new hires after April 1, 1993 will be required to
pay 100% of the applicable premium.
The initial one-time pre-tax charge reflected all plan terms
and amendments in place on November 1, 1993. Negative plan
amendments made subsequent to November 1, 1993 are being
amortized from the date of amendment to January 1, 1999.
The Financial Accounting Standards Board has issued SFAS No.
112 "Employers' Accounting for Postemployment Benefits" (SFAS
112) which was implemented by the Company in the first quarter
of fiscal 1995. The impact upon adoption of SFAS 112 on the
Company's results of operations and financial position was not
material.
Page No. 18
- ---------------
Liquidity and Cash Flows
- -----------------------------------
<TABLE>
<CAPTION>
The Company's capital structure at April 30, 1995 and October
31, 1994 was as follows:
April 30,
1995
- ---------------
<S> <C>
Short-term notes payable $ 17,929
Long-term obligations, including current portion 462,458
- --------------
480,387
Minority interest 88,629
Shareholders' equity, excluding SECT 539,573
- -------------
Total capitalization $1,108,589
========
Debt to capitalization ratio 43.3%
========
</TABLE>
<TABLE>
<CAPTION>
The Company's capital structure at April 30, 1995 and October 31, 1994 was as follows:
October 31,
1994
- ---------------
<S> <C>
Short-term notes payable $ 14,419
Long-term obligations, including current portion 571,054
- ---------------
585,473
Minority interest 85,570
Shareholders' equity, excluding SECT 556,125
- ---------------
Total capitalization $1,227,168
==============
Debt to capitalization ratio 47.7%
========
</TABLE>
Cash Flow from Operating Activities
- -------------------------------------------------
Cash flow provided by operating activities was $1,082 for the
six months ended April 30, 1995 compared to cash flows used by
operating activities of $4,123 for the comparable period in
1994. The increase in cash flow between the periods is
primarily a result of increased receipts of advance payments
on new contracts offset by increased worldwide inventories and
accounts receivable resulting from the worldwide increased
sales activity.
Cash Flow from Investment Activities
- ---------------------------------------------------
On December 29, 1994, Measurex Corporation repurchased
approximately 2,000 shares of its stock from the Company
resulting in an increase in cash flows from investing
activities of $43,578. On February 16, 1995, the Company
completed the sale of Syscon to Logicon, Inc. resulting in an
increase in cash flows from investing activities of $45,000,
the cash price of the sale. Net capital expenditures for
Property, Plant and Equipment for the six months ended April
30, 1995 were $24,800 compared with $17,754 in 1994, primarily
for machinery and equipment in both periods.
Cash Flow for Financing Activities
- ----------------------------------------------
The primary elements of the $106,650 use of cash for
financing activities in the first six months of fiscal 1995
was the $95,458 payment for redemption of Joy's Tranche B term
loan and partial redemption of Joy 10 1/4% Senior Notes, the
payment of two quarterly dividends and the purchase of
treasury stock offset by the exercise of stock options.
Financing activities for the second quarter of fiscal 1994
used cash of $12,687 for the redemption
Page No. 19
- ----------------
of the remaining mortgage balance related to certain U.S.
facilities and the payment of two quarterly dividends, offset
by an increase in short-term domestic borrowings.
Total obligations outstanding at April 30, 1995 were $105,086
lower than at October 31, 1994, primarily due to the
redemption of certain Joy debt in the first quarter of fiscal
1995 as discussed above.
The Statement of Cash Flows for the six month period ended
April 30, 1995 has been adjusted to reflect the $23,706 use
of cash by Joy from the period February 26, 1994 to October
31, 1994.
The Company maintains the ability to expand its borrowings in
several ways, including the following:
(1)A shelf registration with the Securities and Exchange
Commission for the proposed sale of up to $150,000 of debt
securities. To date, no securities have been issued under
this registration.
(2)A four-year Revolving Credit Financing Facility Agreement
between the Company and certain domestic and foreign financial
institutions that allows for borrowing of up to $240,000 at
rates expressed in relation to LIBOR and other rates.
(3)Short-term bank credit lines of foreign subsidiaries of
approximately $87,447, of which approximately $17,929 was
outstanding at April 30, 1995.
The Company believes its available cash and borrowing capacity
provide adequate liquidity to meet its short-term and long-
term obligations.
The Company has no significant capital commitments as of April
30, 1995; any future capital commitments are expected to be
funded through cash flow from operations and, if necessary,
available lines of credit.
The Company intends to continue to expand its businesses, both
internally and through acquisitions. It is expected that new
acquisitions would be financed primarily by internally
generated funds or additional borrowings.
Agreement with Jagenberg AG
- ------------------------------------------
Pursuant to a cooperation agreement entered into in August
1994, Beloit Corporation and Jagenberg AG would cooperate in
the sale of complete systems of paper manufacturing equipment
worldwide. The agreement calls for cross shareholding
arrangements between certain subsidiaries of Beloit and
Jagenberg involved in the winder business. Closing of the
transactions contemplated by the cooperation agreement is
scheduled to occur in fiscal 1995, subject to the satisfaction
of certain conditions.
Page No. 20
- -----------------
PART II. OTHER INFORMATION
--------------------------------------------------
Item 4 Submission of Matters to a Vote of Security Holders
- ----------------------------------------------------------
The information called for by this Item was previously
reported in response to Item 4 of Harnischfeger's report on
Form 10-Q for the quarterly period ending January 31, 1995.
Item 6 Exhibits and Reports on Form 8-K
---------------------------------------------
(a) Exhibits:
11 Statement re: Calculation of Earnings Per Share
(b) Reports on Form 8-K
(1) Current Report on Form 8-K dated February 17,
1995 announcing that Harnischfeger Industries, Inc.
had completed its sale of Syscon Corporation to Logicon, Inc.
(2) Current Report on Form 8-K dated March 13, 1995
relating to the restatement of financial statements
for the year ended October 31, 1994 due to the Joy
business combination accounted for as a pooling of
interests.
(3) Current Report on Form 8-K dated March 14, 1995
relating to the restated 1994 quarterly income
statements and 1994 quarterly segment information for
the Joy business combination accounted for as a
pooling of interests.
(4) Current Report on Form 8-K dated June 9, 1995
relating to the restated 1994 quarterly income
statements and 1994 quarterly segment information accounting
for Joy Environmental as a discontinued operation.
Page No. 21
- ---------------
FORM 10-Q
- ----------------
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.
HARNISCHFEGER INDUSTRIES, INC.
----------------------------------------------------
(Registrant)
/s/Francis M. Corby, Jr.
-------------------------------
Francis M. Corby, Jr.
Executive Vice President For Finance
Date June 14, 1995 and Administration and Chief Financial
- ------------------ Officer
/s/James C. Benjamin
-------------------------------------
James C. Benjamin
Vice President and Controller
Date June 14, 1995 and Chief Accounting Officer
- ------------------
<TABLE>
<CAPTION> Exhibit 11
HARNISCHFEGER INDUSTRIES, INC.
- ---------------------------------------------------------
CALCULATION OF EARNINGS PER SHARE
- -----------------------------------------------------------------
(Amounts in thousands except per share amounts)
Three Months Ended
April 30,
-----------------------------
1995* 1994**
---------- ----------
<S> <C> <C>
Average Shares Outstanding 46,045 43,450
====== ======
Income from Continuing Operations $21,045 $4,774
Income (loss) from and Net Loss on Sale of
Discontinued Operation,
net of applicable income taxes (1,776) 331
Extraordinary Loss on Retirement of Debt,
net of applicable income taxes - -
Cumulative Effect of Accounting
Change, net of applicable income
taxes and minority interest - -
---------- ---------
Net Income (Loss) $19,269 $5,105
====== ======
Earnings (Loss) Per Share
Income from continuing operations $0.46 $0.11
Income (loss) from and (net loss) on sale
of discontinued operation (0.04) 0.01
Extraordinary loss on retirement of debt - -
Cumulative effect of accounting change - -
-------- -------
Net income (loss) $0.42 $0.12
===== ====
* FY 1995 amounts reflect Joy Environmental as a discontinued operation.
**FY 1994 amounts are restated to include the results of Joy Technologies Inc. and to reflect Joy
Environmental as a discontinued operation.
See accompanying notes to the financial statements
</TABLE>
<TABLE>
<CAPTION>
Exhibit 11
HARNISCHFEGER INDUSTRIES, INC.
- ---------------------------------------------------------
CALCULATION OF EARNINGS PER SHARE
- -----------------------------------------------------------------
(Amounts in thousands except per share amounts)
Six Months Ended
April 30,
---------------------------
1995* 1994**
--------- ----------
<S> <C> <C>
Average Shares Outstanding 45,868 43,398
====== =====
Income from Continuing Operations $24,238 $ 8,786
Income (loss) from and Net Loss on Sale of
Discontinued Operation,
net of applicable income taxes (24,410) 363
Extraordinary Loss on Retirement of Debt,
net of applicable income taxes (3,481) -
Cumulative Effect of Accounting
Change, net of applicable income
taxes and minority interest - (81,696)
----------- ------------
Net Income (Loss) $(3,653)$(72,547)
====== =======
Earnings (Loss) Per Share
Income from continuing operations $0.53 $0.20
Income (loss) from and (net loss) on sale
of discontinued operation (0.53) 0.01
Extraordinary loss on retirement of debt (0.08) -
Cumulative effect of accounting change - (1.88)
-------- -------
Net income (loss) $(0.08) $(1.67)
===== =====
* FY 1995 amounts reflect Joy Environmental as a discontinued operation.
**FY 1994 amounts are restated to include the results of Joy Technologies Inc. and to reflect Joy
Environmental as a discontinued operation.
See accompanying notes to the financial statements
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-END> APR-30-1995
<CASH> 131,886
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0
0
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<OTHER-EXPENSES> 17,459
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<INCOME-TAX> 14,600
<INCOME-CONTINUING> 24,238
<DISCONTINUED> (24,410)
<EXTRAORDINARY> (3,481)
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<NET-INCOME> (3,653)
<EPS-PRIMARY> (0.08)
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</TABLE>
