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 JULY 31, 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 September 5 , 1995
- ---------------------- --------------------------------------
Common Stock, $1 par value 48,592,629 shares
HARNISCHFEGER INDUSTRIES, INC.
- -----------------------------------------------------
FORM 10-Q
July 31, 1995
INDEX
Page No.
----------
PART I. Financial Information:
Statement of Income - 1-2
Three and Nine Months Ended
July 31, 1995 and 1994
Balance Sheet - 3-4
July 31, 1995 and
October 31, 1994
Statement of Cash Flows - 5-6
Nine Months Ended
July 31, 1995 and 1994
Statement of Shareholders' Equity - 7
Nine Months Ended
July 31, 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
July 31,
-----------------------------
1995* 1994**
--------- -----------
<S><C> <C>
Revenues
Net Sales $547,676 $391,079
Other Income 32,704 (877)
----------- -----------
580,380 390,202
Cost of Sales 428,144 303,086
Product Development, Selling
and Administrative Expenses 82,622 63,265
---------- ----------
Operating Income 69,614 23,851
Interest Expense - Net (9,238) (12,400)
---------- -----------
Income Before Joy Merger Costs, Provision
For Income Taxes and Minority Interest 60,376 11,451
Joy Merger Costs - -
Provision for Income Taxes (including
credit of $6,075 relating to Joy merger
costs) (21,100) (3,114)
Minority Interest (1,664) (325)
---------- ---------
Income from Continuing Operations
(after deducting $11,384, net of applicable
income taxes, related to Joy merger costs) 37,612 8,012
Income (Loss) from and (Net Loss) on Sale of
Discontinued Operations, net of
applicable income taxes - (200)
Extraordinary Loss on Retirement of
Debt, net of applicable income taxes - (4,827)
Cumulative Effect of Accounting
Change, net of applicable income
taxes and minority interest - -
------------ -----------
Net Income (Loss) $ 37,612 $ 2,985
======= ======
Page No. 2
---------------
Earnings (Loss) Per Share
Income from continuing operations (after
deducting $0.24 per share related to Joy
merger costs) $0.81 $0.18
Income (loss) from and (net loss) on sale of
discontinued operation - -
Extraordinary loss on retirement of debt - (0.11)
Cumulative effect of accounting change - -
------- -------
Net income (loss) $0.81 $0.07
===== =====
* 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>
See accompanying notes to financial statements.
Page No. 1
---------------------
PART I. FINANCIAL INFORMATION
- -----------------------------------------------------
<TABLE>
<CAPTION>
HARNISCHFEGER INDUSTRIES, INC.
- -----------------------------------------------------
STATEMENT OF INCOME
- -------------------------------------
(Amounts in thousands except per share amounts)
(Unaudited)
Nine Months Ended
July 31,
-----------------------------
1995* 1994**
----------- ------------
<S><C> <C>
Revenues
Net Sales $1,538,058 $1,087,320
Other Income 52,612 18,785
-------------- --------------
1,590,670 1,106,105
Cost of Sales 1,196,857 844,971
Product Development, Selling
and Administrative Expenses 242,336 200,320
------------ -------------
Operating Income 151,477 60,814
Interest Expense - Net (31,946) (34,605)
------------ -------------
Income Before Joy Merger Costs, Provision
For Income Taxes and Minority Interest 119,531 26,209
Joy Merger Costs (17,459) -
Provision for Income Taxes (including
credit of $6,075 relating to Joy merger
costs) (35,700) (8,388)
Minority Interest (4,522) (1,023)
---------- ----------
Income from Continuing Operations
(after deducting $11,384, net of applicable
income taxes, related to Joy merger costs) 61,850 16,798
Income (Loss) from and (Net Loss) on Sale of
Discontinued Operations, net of
applicable income taxes (24,410) 163
Extraordinary Loss on Retirement of
Debt, net of applicable income taxes(3,481) (4,827)
Cumulative Effect of Accounting
Change, net of applicable income
taxes and minority interest - (81,696)
----------- -------------
Net Income (Loss) $33,959 $ (69,562)
====== =======
Page No. 2
---------------
Earnings (Loss) Per Share
Income from continuing operations (after
deducting $0.24 per share related to Joy
merger costs) $ 1.34 $ 0.39
Income (loss) from and (net loss) on sale of
discontinued operation (0.53) -
Extraordinary loss on retirement of debt (0.08) (0.11)
Cumulative effect of accounting change - (1.88)
------- ---------
Net income (loss) $0.73 $(1.60)
===== ======
* 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>
See accompanying notes to financial statements.
Page No.3
--------------
<TABLE>
<CAPTION>
HARNISCHFEGER INDUSTRIES, INC.
--------------------------------------------------
BALANCE SHEET
-------------------------
(Dollar amounts in thousands)
(Unaudited)
July 31,
1995
- ------------
<S> <C>
Assets
Current Assets:
Cash and cash equivalents $ 182,374
Accounts receivable 459,387
Allowance for doubtful accounts (7,367)
Inventories 410,218
Net current assets of discontinued operation -
Other current assets 67,778
- --------------
1,112,390
Property, Plant and Equipment:
Land and improvements 31,251
Buildings 233,578
Machinery and equipment 662,055
-------------
926,884
Accumulated depreciation (446,996)
- ------------
479,888
Investments and Other Assets:
Investment in Measurex Corporation -
Goodwill 146,601
Intangible assets 72,171
Noncurrent assets of discontinued operation -
Other assets 106,968
- -------------
325,740
-------------
$1,918,018
========
</TABLE>
See accompanying notes to financial statements.
Page No.3
--------------
<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 operation 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 operation 43,251
Other assets 125,089
- --------------
448,315
--------------
$1,981,953
========
</TABLE>
See accompanying notes to financial statements.
Page No. 4
- ---------------
<TABLE>
<CAPTION>
HARNISCHFEGER INDUSTRIES, INC.
----------------------------------------------------
BALANCE SHEET
--------------------------
(Dollar amounts in thousands)
(Unaudited)
July 31,
1995
- -----------
<S> <C>
Liabilities and Shareholders' Equity
Current Liabilities:
Short-term notes payable, including current
portion of long-term obligations $ 19,841
Trade accounts payable 231,723
Employee compensation and benefits 85,791
Advance payments and progress billings 122,313
Accrued warranties 38,506
Other current liabilities 117,277
------------
615,451
Long-term Obligations 467,296
Other Liabilities:
Liability for postretirement benefits 105,150
Accrued pension costs 51,607
Other liabilities 21,532
Deferred income taxes 26,949
------------
205,238
Minority Interest 90,012
Shareholders' Equity:
Common stock (issued 51,087,550 and
50,506,471 shares, respectively) 51,088
Capital in excess of par value 614,445
Retained earnings 34,976
Cumulative translation adjustments (41,971)
- ------------
658,538
Less: Stock Employee Compensation
Trust (1,920,100 and 2,150,416
shares, respectively) at market (72,004)
Treasury stock (2,504,613 and
2,852,604 shares, respectively)
at cost (46,513)
-------------
540,021
--------------
$1,918,018
========
</TABLE>
See accompanying notes to financial statements.
Page No. 4
- ---------------
<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 51,087,550 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 (1,920,100 and 2,150,416
shares, respectively) at market (53,760)
Treasury stock (2,504,613 and
2,852,604 shares, respectively)
at cost (52,009)
-------------
502,365
--------------
$1,981,953
========
</TABLE>
See accompanying notes to financial statements.
Page No. 5
- ---------------
<TABLE>
<CAPTION>
HARNISCHFEGER INDUSTRIES, INC.
- ---------------------------------------------------
STATEMENT OF CASH FLOWS
(Dollar amounts in thousands)
(Unaudited)
Nine Months Ended
July 31,
-------------------------------------
1995
--------
<S> <C>
Operating Activities
Net income (loss) $33,959
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 --
Gain on sale of investment in Measurex
Corporation-net (18,684)
Depreciation and amortization 54,305
Minority interest, net of dividends paid 3,580
Deferred income taxes - net 18,371
Other - net 11,054
Changes in working capital
(Increase) in accounts receivable - net (25,261)
(Increase) decrease in inventories (22,250)
(Increase) in other current assets (20,269)
(Decrease) increase in trade accounts payable (16,576)
(Decrease) in employee compensation and benefits (855)
Increase in advance payments and progress
billings 1,727
(Decrease) in other current liabilities (24,696)
------------
Net cash provided by operating activities 22,296
-----------
Investment and Other Transactions
Sale of investment in Measurex Corporation 96,004
Sale of Syscon Corporation 45,000
Property, plant and equipment - net (41,391)
Investments and related costs (22,836)
Other - net 3,953
------------
Net cash provided by (applied to) investment
and other transactions 80,730
-----------
Financing Activities
Dividends paid (13,855)
Exercise of stock options 16,684
Purchase of treasury stock (3,009)
Issuance of long-term obligations --
Redemption of long-term obligations (93,147)
Extraordinary items relating to refinancing-net --
Capitalized financing costs --
(Decrease) increase in short-term notes payable (326)
-----------
Net cash (applied to) provided by financing activities (93,653)
-----------
Page No. 6
- --------------
Effect of Exchange Rate Changes on Cash and
Cash Equivalents 252
-----------
Increase (Decrease) in Cash and Cash Equivalents 9,625
(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 $182,374
=======
</TABLE>
See accompanying notes to financial statements.
Page No. 5
- ---------------
<TABLE>
<CAPTION>
HARNISCHFEGER INDUSTRIES, INC.
- ---------------------------------------------------
STATEMENT OF CASH FLOWS
(Dollar amounts in thousands)
(Unaudited)
Nine Months Ended
July 31,
-------------------------------------
1994
--------
<S> <C>
Operating Activities
Net income (loss) $ (69,562)
Add (deduct) - Items not affecting cash:
Income (loss) from and net loss on sale of
discontinued operations (163)
Extraordinary loss on retirement of debt 4,827
Cumulative effect of accounting change 81,696
Gain on sale of investment in Measurex
Corporation-net --
Depreciation and amortization 54,550
Minority interest, net of dividends paid 204
Deferred income taxes - net (7,673)
Other - net (7,258)
Changes in working capital
(Increase) in accounts receivable - net (28,590)
(Increase) decrease in inventories 10,329
(Increase) in other current assets (3,672)
(Decrease) increase in trade accounts payable 17,460
(Decrease) in employee compensation and benefits (1,190)
Increase in advance payments and progress
billings 14,764
(Decrease) in other current liabilities (61,028)
-----------
Net cash provided by operating activities 4,694
----------
Investment and Other Transactions
Sale of investment in Measurex Corporation --
Sale of Syscon Corporation --
Property, plant and equipment - net (21,932)
Investments and related costs (2,589)
Other - net 3,072
------------
Net cash provided by (applied to) investment
and other transactions (21,449)
------------
Financing Activities
Dividends paid (7,703)
Exercise of stock options 1,210
Purchase of treasury stock (124)
Issuance of long-term obligations 202,729
Redemption of long-term obligations (193,656)
Extraordinary items relating to refinancing-net (2,138)
Capitalized financing costs (6,026)
(Decrease) increase in short-term notes payable 18,009
------------
Net cash (applied to) provided by financing activities 12,301
------------
Page No. 6
- ---------------
Effect of Exchange Rate Changes on Cash and
Cash Equivalents 1,049
------------
Increase (Decrease) in Cash and Cash Equivalents (3,405)
(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 $161,669
=======
</TABLE>
See accompanying notes to financial statements.
<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>
Nine Months Ended July 31, 1995
- ---------------------------------------------
Balance at October 31, 1994 $50,506 $576,886 $19,936
Adjustment related to Joy Technologies from
February 26, 1994 - October 31, 1994 13 182 (4,575)
-------------------- -----------
Adjusted balance at November 1, 1994 50,519577,068 15,361
Net income 33,959
Translation adjustments
Exercise of 831,706 stock options 569 8,536
Dividends paid ($.30 per share) (14,344)
Dividends on shares held by SECT 489
Adjust SECT shares to market value 28,352
110,000 shares acquired as treasury stock
425,345 shares purchased by employee
benefit plans
457,991 shares transferred from treasury
stock to SECT
---------- ------------ -----------
Balance at July 31, 1995 $51,088 $614,445 $34,976
====== ======= ======
Nine Months Ended July 31, 1994
- ---------------------------------------------
Balance at October 31, 1993 $50,575 $560,178 $85,227
Net loss (69,562)
Translation adjustments
Exercise of 71,225 stock options (420)
Issuance of restricted stock (120)
4,875 shares acquired as treasury stock
Dividends paid ($.30 per share) (8,385)
Dividends on shares held by SECT 682
Adjust SECT shares to market value (3,355)
199,080 shares purchased by
employee benefit plans
Joy Technologies Inc. pre-merger activity (59)
---------- ------------ ---------
Balance at July 31, 1994 $50,575 $556,906 $7,280
====== ======= =====
</TABLE>
See accompanying notes to financial statements.
<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>
Nine Months Ended July 31, 1995
- ---------------------------------------------
Balance at October 31, 1994 $(39,194) $(53,760) $(52,009)
Adjustment related to Joy Technologies from
February 26, 1994 - October 31, 1994 1,742 - -
----------- ------------ ------------
Adjusted balance at November 1, 1994 (37,452)(53,760) (52,009)
Net income
Translation adjustments (4,519)
Exercise of 831,706 stock options 7,579
Dividends paid ($.30 per share)
Dividends on shares held by SECT
Adjust SECT shares to market value (28,352)
110,000 shares acquired as treasury stock (3,009)
425,345 shares purchased by employee
benefit plans 11,034
457,991 shares transferred from treasury
stock to SECT (8,505) 8,505
------------ ------------ ------------
Balance at July 31, 1995 $(41,971) $(72,004) $(46,513)
======= ======= =======
Nine Months Ended July 31, 1994
- ---------------------------------------------
Balance at October 31, 1993 $(40,566) $(55,900) $(88,345)
Net loss
Translation adjustments (922)
Exercise of 71,225 stock options 1,630
Issuance of restricted stock 262
4,875 shares acquired as treasury stock (124)
Dividends paid ($.30 per share)
Dividends on shares held by SECT
Adjust SECT shares to market value 3,355
199,080 shares purchased by
employee benefit plans 4,342
Joy Technologies Inc. pre-merger activity
----------------------- -----------
Balance at July 31, 1994 $(41,488) $(46,311) $(88,469)
======= ======= =======
</TABLE>
See accompanying notes to financial statements.
<TABLE>
<CAPTION>
HARNISCHFEGER INDUSTRIES, INC. Page No. 7
- ---------------------------------------------------- --------------------
STATEMENT OF SHAREHOLDERS' EQUITY
- ---------------------------------------------------------------
(Dollar amounts in thousands)
(Unaudited)
Total
-----------
<S> <C>
Nine Months Ended July 31, 1995
- ---------------------------------------------
Balance at October 31, 1994 $502,365
Adjustment related to Joy Technologies from
February 26, 1994 - October 31, 1994 (2,638)
-------------
Adjusted balance at November 1, 1994 499,727
Net income 33,959
Translation adjustments (4,519)
Exercise of 831,706 stock options 16,684
Dividends paid ($.30 per share) (14,344)
Dividends on shares held by SECT 489
Adjust SECT shares to market value --
110,000 shares acquired as treasury stock (3,009)
425,345 shares purchased by employee
benefit plans 11,034
457,991 shares transferred from treasury
stock to SECT --
------------
Balance at July 31, 1995 $540,021
=======
Nine Months Ended July 31, 1994
- ---------------------------------------------
Balance at October 31, 1993$511,169
Net loss (69,562)
Translation adjustments (922)
Exercise of 71,225 stock options 1,210
Issuance of restricted stock 142
4,875 shares acquired as treasury stock (124)
Dividends paid ($.30 per share) (8,385)
Dividends on shares held by SECT 682
Adjust SECT shares to market value -
199,080 shares purchased by
employee benefit plans 4,342
Joy Technologies Inc. pre-merger activity (59)
------------
Balance at July 31, 1994 $438,493
=======
</TABLE>
See accompanying notes to financial statements.
<PAGE>
Page No. 8
- ---------------
HARNISCHFEGER INDUSTRIES, INC.
- ------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------
July 31, 1995
----------------------
(Amounts in thousands unless indicated)
(a) Basis of Presentation
------------------------------
The consolidated financial statements and related notes give
retroactive effect to the merger on 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 July 31, 1995 and October 31, 1994 include the accounts
of Joy as of July 31, 1995 and February 25, 1994, respectively. The
consolidated statements of income as of July 31, 1995 and July 31,
1994 include the accounts of Joy for the three and nine month periods
ended July 31, 1995 and November 26, 1993, respectively. The
consolidated statements of cash flows for the nine month periods
ended July 31, 1995 and July 31, 1994 include the cash flows of Joy
for the nine month periods ended July 31, 1995 and November 26,
1993, respectively. See Note (b) - Acquisition of Joy Technologies
Inc. The consolidated statements of income for the three month
period and nine month period ended July 31, 1995 and July 31, 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 nine months
ended July 31, 1995 and 1994, cash flows for the nine months ended
July 31, 1995 and 1994, and the financial position at July 31, 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. 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") to Babcock & Wilcox, an operating unit of
McDermott International. Although discussions are continuing with
Babcock & Wilcox concerning a sale, the period of exclusivity in the
letter of intent has expired and other interested parties are considering
the purchase of the business. 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
$(2,462) or $(.05) per share for the nine months ended July 31, 1995.
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:
July 31, October 31,
1995 1994
---------- --------------
<S> <C> <C>
Finished goods $208,397 $ 182,084
Work in process and purchased parts 175,401 158,038
Raw materials 96,123 79,766
------------- -------------
479,921 419,888
Less excess of current cost over stated
LIFO value (69,703) (62,041)
------------ ------------
$410,218 $357,847
======= =======
</TABLE>
Page No. 10
- ---------------
Inventories valued using the LIFO method represented approximately 84%
and 81% of consolidated inventories at July 31, 1995 and October 31,
1994, respectively.
The Company has reduced inventory by $5,883 and $3,739 at July 31,
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 $7,914 and $7,680 for
the three months and $22,748 and $22,696 for the nine months ended
July 31, 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 Nine Months Ended
July 31, July 31,
---------------------------- ------------------------
1995 1994 1995 1994
-------- --------- ------- -----------
<S><C> <C> <C> <C>
Interest income $ 2,967 $ 1,403 $ 6,733 $ 5,331
Interest expense (12,205) (13,803) (38,679) (39,936)
----------- --------------- ----------- -----------
Interest expense - net $ (9,238) $(12,400) $ (31,946) $(34,605)
====== ======= ======= ======
</TABLE>
(g) Long-Term Obligations
--------------------------------
<TABLE>
<CAPTION>
Long-term obligations at July 31, 1995 and October 31, 1994 consisted of the following:
July 31, 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 23,517 22,637
------------ ------------
469,325 571,054
Less: Amounts payable within one year 2,029 2,121
--------- ----------
$467,296 $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
July 31, 1995, there were no outstanding borrowings related to the
Revolving Credit Facility.
(h) Contingent Liabilities
-----------------------------
At July 31, 1995, the Company was contingently liable to banks,
financial institutions, and others for approximately $155,000 for
outstanding letters of credit securing performance of sales contracts
and other guarantees in the ordinary course of business, excluding the
H-K Systems, Inc. back-up bond guarantee facility discussed below.
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.
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
$ 77,000 at July 31, 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
Page No. 12
----------------
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.
J.M. Voith GmbH of Heidenheim, Germany, Voith, Inc. of Appleton,
Wisconsin and Beloit have reached an understanding concerning
settlement of their outstanding patent litigation.
The patent awards with Valmet and Voith 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 2,027 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. On June 23, 1995, Measurex Corporation
repurchased for $32.50 per share the remaining 1,613 shares of its
stock. Harnischfeger recorded a gain in Other Income in the third
quarter for this transaction. 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.
(j) Discussions with Dobson Park
-----------------------------------------
On September 1, 1995, the Company announced that it has held
discussions with Dobson Park Industries plc ("Dobson") concerning
the possible acquisition of Dobson's outstanding shares. The
Company stated that it was seeking further discussions with Dobson
and a recommendation from the Dobson board of directors for a share
acquisition.
Dobson, based in the United Kingdom, is a diversified manufacturer
with interests in mining equipment, industrial electronic control
systems, toys and plastics. Its subsidiary, Longwall International
Limited, is engaged in the manufacture and sale of roof supports and
face conveyors for longwall mining applications.
While we are hopeful of consummating this transaction, there is no
assurance at this time that one will be completed.
Page No. 13
-----------------
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
THREE AND NINE MONTHS ENDED JULY 31, 1995 AND 1994
- --------------------------------------------------------------------------
(Amounts in thousands unless indicated)
Net income for the three and nine months ended July 31, 1995 amounted
to $37,612, or $.81 per share, and $33,959, or $.73 per share, as compared
to net income of $2,985, or $.07 per share, for the three months and net
loss of $(69,562), or $(1.60) per share for the nine months ended July 31,
1994. Income from continuing operations amounted to $37,612, or $.81 per
share, for the three months and $61,850, or $1.34 per share ($73,234 or
$1.58 per share before Joy merger costs), for the nine months ended July
31, 1995 as compared to income of $8,012, or $.18 per share, for the three
months and $16,798, or $.39 per share, for the nine months ended July 31,
1994. Net results for the three month period ended July 31, 1995 included
a $.31 per share gain from the sale of the remaining Measurex Corporation
investment. Results for the nine month period ended July 31, 1995
included a loss for the Company's discontinued environmental segment of
$(2,462), or $(.05) per share, a charge of $(21,948), or $(.48) per share, for
the loss on the sale of the discontinued operation, Syscon, and 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 nine month periods ended July 31,
1994 included income from the Company's discontinued operation, Syscon,
of $99 and $1,003, respectively, a loss from the Company's discontinued
environmental segment of $(299) and $(840), respectively and an
extraordinary charge of $(4,827) for the early retirement of Joy's Tranche
A term loan and all of Joy's Junior Subordinated Notes.
Net results for the first nine months ended July 31, 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 nine months of 1995 and 1994 were
based on 46,064 and 43,404 average shares outstanding, respectively. The
increase in average shares outstanding is primarily due to 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 $45,052 increase in income from
continuing operations for the first nine months of 1995 as compared to
1994 included: (1) a $90,663 increase in operating income as described
in the Segment Information section which follows, and (2) a $2,659
decrease in net interest expense principally from increased interest income,
offset by (3) a $27,312 increase in the provision for income taxes due to
higher pre-tax income, (4) a $3,499 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
Page No. 14
-----------------
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 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"), to Babcock & Wilcox, an operating unit of
McDermott International. Although discussions are continuing with
Babcock & Wilcox concerning a sale, the period of exclusivity in the letter
of intent has expired and other interested parties are considering the
purchase of the business. 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 $(2,462) or $(.05) per
share for the nine months ended July 31, 1995. 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>
Page No. 15
- ----------------
<TABLE>
<CAPTION>
Segment Information
- -----------------------------
Operating results of the Company's business segments for the third quarter and first nine months of 1995 and 1994 are
summarized as follows:
Third Quarter Net Sales Operating Income
- ------------------------- ------------------------- -------------------------
1995* 1994** 1995* 1994**
- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Papermaking Machinery and
Systems $253,377 $189,183 $ 38,276 $ 6,455
Mining Equipment 233,115 177,399 29,629 21,261
Material Handling 61,184 24,497 5,997 3,040
- ------------ ----------- ---------- ----------
Total Business Segments $547,676 $391,079 73,902 30,756
======= =======
Corporate Administration (4,288) (6,905)
----------- ------------
Operating Income $ 69,614 $23,851
====== =======
Nine Months Net Sales Operating Income
- -------------------------------------- ----------------------- ----------------------
1995* 1994** 1995* 1994**
------- ----------- ----------- -----------
Papermaking Machinery and
Systems $ 681,288 $ 500,712 $ 63,422 $19,519
Mining Equipment 685,338 510,709 86,505 50,954
Material Handling 171,432 75,899 15,546 8,254
------------- ------------- ---------- -----------
Total Business Segments$1,538,058 $1,087,320 165,473 78,727
======== ========
Corporate Administration (13,996) (17,913)
------------ ------------
Operating Income $151,477 $60,814
======= =======
* 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. 15
- ----------------
<TABLE>
<CAPTION>
Segment Information
- -----------------------------
Operating results of the Company's business segments for the third quarter and first nine months of 1995 and 1994 are
summarized as follows:
Backlog at
Third Quarter Orders Booked End of Period
- ------------------------- --------------------------- ------------------------------
1995* 1994** 7/95* 4/95*
- ----------- ---------- ------------ -----------
<S> <C> <C> <C> <C>
Papermaking Machinery and
Systems $255,043 $220,669 $701,771 $700,105
Mining Equipment 246,274 186,260 185,503 172,344
Material Handling 53,794 24,694 105,176 112,566
- ------------ ------------ ------------- ------------
Total Business Segments $555,111$431,623$992,450$985,015
======= ======= ======= =======
Backlog at
Nine Months Orders Booked End of Period
- -------------------------------------- --------------------------- ---------------------------------
1995* 1994** 7/95* 10/94**
- ---------- ------------ ------------ -----------
Papermaking Machinery and
Systems $ 749,289 $ 565,213 $701,771$633,770
Mining Equipment 679,941 503,224 185,503 190,900
Material Handling 169,496 76,649 105,176 107,112
- -------------- -------------- ------------ -----------
Total Business Segments$1,598,726 $1,145,086$992,450 $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
- ----------------------------
The Papermaking Machinery and Systems segment contributed sales and
operating profit of $681,288 and $63,422, respectively, for the first nine
months of 1995, as compared to net sales of $500,712 and operating profit
of $19,519 for the corresponding period in 1994. Sales increased 36% in
1995 due to a cyclical upturn in the industry, with stronger third quarter
sales than in either the first or second quarters. Operating profit for the
first nine months included stronger gross margins due to stronger sales,
improved absorption of manufacturing overhead and the gain from the sale
of the Measurex Corporation investment. Operating profit in 1994
included income realized from a favorable settlement of Canadian patent
litigation. Bookings for the first nine months of 1995 amounted to
$749,289 as compared to $565,213 for the same period in 1994 resulting
from growth in both original equipment and aftermarket products and
services.
Net sales of the Mining Equipment segment amounted to $685,338 and
$510,709 for the first nine months of 1995 and 1994, respectively,
representing a 34% increase in 1995 as compared to 1994. The sales
increase is due to increases in both original equipment and aftermarket
activity for both the surface and underground mining operations.
Operating profit increased to $86,505 for the first nine months of 1995 as
compared to $50,954 in 1994. The increase in operating profit is primarily
due to increased sales, improved manufacturing absorption and reduced
manufacturing variances. Bookings for the first nine months of 1995
amounted to $679,941 as compared to $503,224 for the same period in
1994.
The Material Handling Equipment segment contributed sales and operating
profit of $171,432 and $15,546 respectively, for the first nine months of
1995, as compared to sales of $75,899 and operating profit of $8,254 for
the comparable period in 1994. Sales, profitability and bookings increased
during the first nine 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 existing product lines. Bookings for
the first nine months of 1995 and 1994 amounted to $169,496 and
$76,649, respectively, up due to the addition of Morris Mechanical
Handling Limited and to increased original equipment and aftermarket
bookings in the United States.
Income Taxes
- -------------------
The Company's estimated effective tax rate for continuing operations for
the first nine 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).
Page No. 17
-----------------
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.
Liquidity and Cash Flows
- -----------------------------------
<TABLE>
<CAPTION>
The Company's capital structure at July 31, 1995 and October 31, 1994
was as follows:
July 31,
1995
- --------------
<S> <C>
Short-term notes payable $ 17,812
Long-term obligations, including current portion 469,325
------------
487,137
Minority interest 90,012
Shareholders' equity, excluding SECT 612,025
- --------------
Total capitalization $1,189,174
=========
Debt to capitalization ratio 41.0%
======
</TABLE>
<TABLE>
<CAPTION>
The Company's capital structure at July 31, 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 $22,296 for the nine
months ended July 31, 1995 compared to cash flows provided by operating
activities of $4,694 for the comparable period in 1994. The increase in
cash flow between the periods is primarily the result of increased operating
income offset by higher working capital requirements, principally
receivables and inventories.
Page No. 18
------------------
Cash Flow from Investment Activities
- ---------------------------------------------------
In fiscal 1995, Measurex Corporation repurchased its stock from the
Company resulting in an increase in cash flows from investing activities
of $96,004.
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 nine
months ended July 31, 1995 were $41,391 compared with $21,932 in 1994,
primarily for machinery and equipment in both periods. The Company
also had cash outflows of $22,836 from other investment transactions and
related costs.
Cash Flow for Financing Activities
- -----------------------------------------------
The primary elements of the $93,653 use of cash for financing activities
in the first nine months of fiscal 1995 were 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 three quarterly dividends and the
purchase of treasury stock offset by the exercise of stock options.
Financing activities for the first nine months of fiscal 1994 provided cash
of $12,301 from the increase in short-term domestic borrowings offset by
the redemption of the remaining mortgage balance related to certain U.S.
facilities and the payment of three quarterly dividends. Additionally, cash
was provided through the issuance of the Joy 10 1/4% ten-year Senior
Notes. This cash was primarily utilized to redeem a portion of the Joy
Tranche A term loan and all of the Joy Junior Subordinated Notes.
Total obligations outstanding at July 31, 1995 were $98,336 lower than at
October 31, 1994, primarily due to the redemption of certain Joy debt.
The Statement of Cash Flows for the nine month period ended July 31,
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 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
$96,764, of which approximately $17,812 was outstanding at July
31, 1995.
Page No. 19
----------------
The Company believes its available cash and borrowing capacity provide
adequate liquidity to meet its short-term and long-term obligations.
The Company had no significant capital commitments as of July 31, 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.
Discussions with Dobson Park
- -----------------------------------------
On September 1, 1995, the Company announced that it has held
discussions with Dobson Park Industries plc ("Dobson") concerning the
possible acquisition of Dobson's outstanding shares. The Company stated
that it was seeking further discussions with Dobson and a recommendation
from the Dobson board of directors for a share acquisition.
Dobson, based in the United Kingdom, is a diversified manufacturer with
interests in mining equipment, industrial electronic control systems, toys
and plastics. Its subsidiary, Longwall International Limited, is engaged in
the manufacture and sale of roof supports and face conveyors for longwall
mining applications.
While we are hopeful of consummating this transaction, there is no
assurance at this time that one will be completed.
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 June 9, 1995
relating to the restated 1994 quarterly income statements
and 1994 quarterly segment information accounting for
Joy Environmental as a discontinued operation.
(2) Current Report on Form 8-K dated September 1, 1995
relating to the Company's discussions with Dobson Park
Industries plc concerning the possible acquisition of
Dobson's outstanding shares.
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 September 5, 1995 and Administration and Chief Financial
Officer
/s/James C. Benjamin
------------------------------
James C. Benjamin
Vice President and Controller
Date September 5, 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
July 31,
-----------------------------
1995* 1994**
--------- ----------
<S><C> <C>
Average Shares Outstanding 46,456 43,417
====== ======
Income from Continuing Operations $37,612 $8,012
Income (Loss) from and (Net Loss) on Sale of
Discontinued Operations,
net of applicable income taxes - (200)
Extraordinary Loss on Retirement of Debt,
net of applicable income taxes - (4,827)
Cumulative Effect of Accounting
Change, net of applicable income
taxes and minority interest - -
----------- ----------
Net Income (Loss) $37,612 $2,985
====== ======
Earnings (Loss) Per Share
Income from continuing operations $0.81 $0.18
Income (loss) from and (net loss) on sale
of discontinued operations - -
Extraordinary loss on retirement of debt - (0.11)
Cumulative effect of accounting change - -
------- ---------
Net income (loss) per share $0.81 $0.07
==== =====
* 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>
Exhibit 11
------------
HARNISCHFEGER INDUSTRIES, INC.
- ------------------------------------------------------
CALCULATION OF EARNINGS PER SHARE
- -------------------------------------------------------------------
(Amounts in thousands except per share amounts)
Nine Months Ended
July 31,
-----------------------------
1995* 1994**
--------- ----------
<S><C> <C>
Average Shares Outstanding 46,064 43,404
====== =======
Income from Continuing Operations $61,850 $ 16,798
Income (Loss) from and (Net Loss) on Sale of
Discontinued Operations,
net of applicable income taxes (24,410) 163
Extraordinary Loss on Retirement of Debt,
net of applicable income taxes (3,481) (4,827)
Cumulative Effect of Accounting
Change, net of applicable income
taxes and minority interest - (81,696)
----------- ------------
Net Income (Loss) $33,959 $(69,562)
====== =======
Earnings (Loss) Per Share
Income from continuing operations $1.34 $0.39
Income (loss) from and (net loss) on sale
of discontinued operations (0.53) -
Extraordinary loss on retirement of debt (0.08) (0.11)
Cumulative effect of accounting change - (1.88)
-------- ---------
Net income (loss) per share $0.73 $(1.60)
===== =====
* 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> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
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0
0
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</TABLE>
