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, 1996
- ---- ---------------
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, 1996
- -------------------------- -----------------------------
Common Stock, $1 par value 49,111,287 shares
HARNISCHFEGER INDUSTRIES, INC.
----------------------------------------------------
FORM 10-Q
---------
April 30, 1996
--------------
INDEX
Page No.
--------
PART I. Financial Information:
Statement of Income - 1-2
Three and Six Months Ended
April 30, 1996 and 1995
Balance Sheet - 3-4
April 30, 1996 and
October 31, 1995
Statement of Cash Flows - 5-6
Six Months Ended
April 30, 1996 and 1995
Statement of Shareholders' Equity - 7
Six Months Ended
April 30, 1996 and 1995
Notes to Financial Statements 8-12
Management's Discussion and Analysis
of Results of Operations and Financial
Condition 13-18
PART II. Other Information 18-20
Signatures 21
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,
---------------------
1996 1995
--------- ---------
<S> <C> <C>
Revenues
Net Sales $739,509 $541,013
Other Income 2,337 10,652
--------- --------
741,846 551,665
Cost of Sales 560,820 417,090
Product Development, Selling
and Administrative Expenses 108,377 86,852
--------- --------
Operating Income 72,649 47,723
Interest Expense - Net (15,800) (11,216)
---------- --------
Income Before JOY Merger Costs,
Provision For Income Taxes
and Minority Interest 56,849 36,507
JOY Merger Costs - -
Provision for Income Taxes
(including credit of $6,075
in 1995 relating to JOY
merger costs) (20,475) (12,750)
Minority Interest (2,819) (2,712)
------- -------
Income From Continuing Operations
(after deducting $11,384 in 1995, net
of applicable income taxes, related
to JOY merger costs) 33,555 21,045
Loss from and Net Loss on Sale of
Discontinued Operation, net of
applicable income taxes - (1,776)
Extraordinary Loss on Retirement of
Debt, net of applicable
income taxes - -
--------- --------
Net Income (Loss) $ 33,555 $19,269
========= =========
Earnings (Loss) Per Share
Income from continuing
operations (after deducting
$0.24 per share in 1995 related
to JOY merger costs) $ 0.71 $0.46
Loss from and net loss on sale of
discontinued operation - (0.04)
Extraordinary loss on
retirement of debt - -
------ -----
Net income (loss) $0.71 $0.42
====== =====
</TABLE>
See accompanying notes to financial statements.
PART I. FINANCIAL INFORMATION
- ------------------------------
<TABLE>
<CAPTION>
HARNISCHFEGER INDUSTRIES, INC.
- ------------------------------
STATEMENT OF INCOME
- -------------------
(Amounts in thousands except per share amounts)
(Unaudited)
Six Months Ended
April 30,
-----------------------
1996 1995
------------- --------
<S> <C> <C>
Revenues
Net Sales $1,372,193 $ 990,382
Other Income 13,219 19,908
------------- --------
1,385,412 1,010,290
Cost of Sales 1,052,352 768,713
Product Development, Selling
and Administrative Expenses 207,233 159,714
Operating Income 125,827 81,863
Interest Expense - Net (29,037) (22,708)
----------- --------
Income Before JOY Merger
Costs, Provision For Income
Taxes and Minority Interest 96,790 59,155
JOY Merger Costs - (17,459)
Provision for Income Taxes
(including credit of $6,075
in 1995 relating to JOY
merger costs) (34,850) (14,600)
Minority Interest (5,194) (2,858)
---------- --------
Income From Continuing Operations
(after deducting $11,384 in
1995, net of applicable
income taxes, related
to JOY merger costs) 56,746 24,238
Loss from and Net Loss on Sale of
Discontinued Operation, net of
applicable income taxes - (24,410)
Extraordinary Loss on Retirement
of Debt, net of
applicable income taxes - (3,481)
-------- --------
Net Income (Loss) $56,746 $ (3,653)
======== ========
Earnings (Loss) Per Share
Income from continuing
operations (after
deducting $0.24 per share
in 1995 related
to JOY merger costs) $1.21 $ 0.53
Loss from and net loss on sale of
discontinued operation - (0.53)
Extraordinary loss on
retirement of debt - (0.08)
------- ------
Net income (loss) $1.21 $(0.08)
====== =======
</TABLE>
See accompanying notes to financial statements.
<TABLE>
<CAPTION>
HARNISCHFEGER INDUSTRIES, INC.
- -------------------------------
BALANCE SHEET
- --------------
(Dollar amounts in thousands)
April 30, October 31,
1996 1995
------------ ------------
(Unaudited)
Assets
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 43,844 $ 239,043
Accounts receivable-net 657,360 499,953
Inventories 587,983 416,395
Other current assets 110,364 57,999
Businesses held for sale 47,024 -
--------- ----------
1,446,575 1,213,390
Property, Plant and Equipment:
Land and improvements 45,217 31,571
Buildings 285,749 233,788
Machinery and equipment 764,947 676,546
---------- ----------
1,095,913 941,905
Accumulated depreciation (475,607) (454,249)
----------- ----------
620,306 487,656
Investments and Other Assets:
Goodwill 478,001 147,943
Intangible assets 41,978 66,796
Other assets 106,243 124,982
----------- ---------
626,222 339,721
----------- ---------
$2,693,103 $2,040,767
============ ==========
</TABLE>
See accompanying notes to financial statements.
<TABLE>
<CAPTION>
HARNISCHFEGER INDUSTRIES, INC.
- ------------------------------
BALANCE SHEET
- -------------
(Dollar amounts in thousands)
April 30, October 31,
1996 1995
---------- ----------
(Unaudited)
<S> <C> <C>
Liabilities and Shareholders' Equity
Current Liabilities:
Short-term notes payable,
including current
portion of long-term obligations $ 141,246 $ 22,802
Trade accounts payable 323,036 263,750
Employee compensation and benefits 140,190 100,041
Advance payments and
progress billings 202,045 154,401
Accrued warranties 51,702 43,801
Other current liabilities 286,942 138,508
--------- --------
1,145,161 723,303
Long-term Obligations 676,203 459,110
Other Liabilities:
Liability for postretirement
benefits 92,886 101,605
Accrued pension costs 34,592 52,237
Other liabilities 20,176 20,820
Deferred income taxes 25,823 34,805
---------- --------
173,477 209,467
Minority Interest 95,142 89,611
Shareholders' Equity:
Common stock (51,347,823 and
51,117,774 shares issued,
respectively) 51,348 51,118
Capital in excess of par value 628,830 603,712
Retained earnings 100,527 53,560
Cumulative translation adjustments (57,579) (42,118)
---------- ---------
723,126 666,272
Less: Stock Employee Compensation
Trust (1,920,100 and 1,920,100
shares, respectively)
at market (77,764) (60,483)
Treasury stock (2,274,613 and
2,504,613 shares, respectively)
at cost (42,242) (46,513)
---------- ---------
603,120 559,276
----------- ----------
$2,693,103 $2,040,767
=========== ============
</TABLE>
See accompanying notes to financial statements.
<TABLE>
<CAPTION>
HARNISCHFEGER INDUSTRIES, INC.
- ----------------------------------
STATEMENT OF CASH FLOWS
- ----------------------------------
(Dollar amounts in thousands)
(Unaudited)
Six Months Ended
April 30,
----------------------
1996 1995
------- ---------
<S> <C> <C>
Operating Activities
Net income (loss) $ 56,746 $ (3,653)
Add (deduct) - Items not affecting cash:
Net loss on sale of discontinued operation - 24,410
Extraordinary loss on retirement of debt - 3,481
Depreciation and amortization 42,685 36,757
Minority interest, net of dividends paid 5,194 2,412
Other - net 4,540 1,900
Changes in working capital
(Increase) in accounts receivable - net (65,997) (28,766)
(Increase) in inventories (74,228) (27,970)
(Increase) in other current assets (5,705) (16,459)
(Decrease) in trade accounts payable (3,441) (10,652)
(Decrease) in employee compensation
and benefits (14,812) (2,369)
Increase in advance payments and progress
billings 1,409 37,690
Increase (decrease) in other
current liabilities 21,334 (15,699)
--------- -------------
Net cash (applied to) provided
by operating activities (32,275) 1,082
--------- ---------
Investment and Other Transactions
Purchase of Dobson Park Industries plc,
net of
cash acquired of $4,631 (325,369) -
Purchase of the Pulp Machinery Division
of Ingersoll-Rand Company, net
of cash acquired of $3,962 (120,838) -
Net proceeds from sale of businesses 50,601 -
Sale of Joy Environmental Technologies 11,651 -
Proceeds from sale of investment
in Measurex Corporation - 43,578
Sale of Syscon - 45,000
Property, plant and equipment - net (29,702) (24,800)
Other - net (7,139) 1,210
---------- ----------
Net cash (applied to)
provided by investment
and other transactions (420,796) 64,988
---------- ----------
Financing Activities
Dividends paid (9,395) (9,195)
Exercise of stock options 4,624 5,744
Purchase of treasury stock - (3,009)
Issuance of long-term obligations 211,587 -
Redemption of long-term obligations (397) (99,939)
Increase (decrease) in short-term
notes payable 50,498 (251)
---------- ---------
Net cash provided by
(applied to) financing activities 256,917 (106,650)
---------- ---------
Effect of Exchange Rate Changes on Cash and
Cash Equivalents 955 (283)
--------- ---------
(Decrease) in Cash and Cash Equivalents (195,199) (40,863)
(Use) of Cash by Joy Technologies from
February 26, 1994 to November 1, 1994 - (23,706)
Cash and Cash Equivalents at Beginning of Period 239,043 196,455
---------- ----------
Cash and Cash Equivalents at End of Period $ 43,844 $131,886
========== ==========
</TABLE>
See accompanying notes to financial statements.
<TABLE>
<CAPTION>
HARNISCHFEGER INDUSTRIES, INC.
STATEMENT OF SHAREHOLDERS' EQUITY
(Dollar amounts in thousands)
(Unaudited)
Capital in
Common Excess of
Stock Par Value
-------- ----------
<S> <C> <C>
Six Months Ended April 30, 1996
- -------------------------------
Balance at October 31, 1995 $51,118 $603,712
Net income
Translation adjustments
Exercise of 222,799 stock options 223 4,401
Dividends paid ($.20 per share)
Dividends on shares held by SECT 384
Adjust SECT shares to market value 17,281
230,000 shares purchased by employee
benefit plans 2,964
Issuance of restricted stock 7 88
------- --------
Balance at April 30, 1996 $51,348 $628,830
======= ========
Six Months Ended April 30, 1995
- --------------------------------
Balance at October 31, 1994 $50,506 $576,886
Adjustment related to
Joy Technologies
from February 26, 1994 to
November 1, 1994 13 182
------ --------
Adjusted Balance
at November 1, 1994 50,519 577,068
Net loss
Translation adjustments
Exercise of 290,029 stock options 83 (117)
Dividends paid ($.20 per share)
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
======= ========
</TABLE>
See accompanying notes to financial statements.
<TABLE>
<CAPTION>
HARNISCHFEGER INDUSTRIES, INC.
- -----------------------------------
STATEMENT OF SHAREHOLDERS' EQUITY
(Dollar amounts in thousands)
(Unaudited)
Cumulative
Retained Translation
Earnings Adjustments
----------- ---------
<S> <C> <C>
Six Months Ended April 30, 1996
- ---------------------------------
Balance at October 31, 1995 $53,560 $(42,118)
Net income 56,746
Translation adjustments (15,461)
Exercise of 222,799 stock options
Dividends paid ($.20 per share) (9,779)
Dividends on shares held by SECT
Adjust SECT shares to market value
230,000 shares purchased by employee
benefit plans
Issuance of restricted stock
----------- -----------
Balance at April 30, 1996 $100,527 $(57,579)
======= =======
Six Months Ended April 30, 1995
- --------------------------------
Balance at October 31, 1994 $19,936 $(39,194)
Adjustment related to Joy
Technologies
from February 26, 1994 to
November 1, 1994 (4,575) 1,742
-------- ---------
Adjusted Balance at
November 1, 1994 15,361 (37,452)
Net loss (3,653)
Translation adjustments (5,842)
Exercise of 290,029 stock options
Dividends paid ($.20 per share) (9,538)
Dividends on shares held by SECT
Adjust SECT shares to market value
110,000 shares acquired as
treasury stock
422,240 shares purchased by
employee benefit plans
--------- -----------
Balance at April 30, 1995 $2,170 $(43,294)
====== =======
See accompanying notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
HARNISCHFEGER INDUSTRIES, INC.
- ---------------------------------
STATEMENT OF SHAREHOLDERS' EQUITY
(Dollar amounts in thousands)
(Unaudited)
Treasury
SECT Stock
--------- ----------
<S> <C> <C>
Six Months Ended April 30, 1996
- -------------------------------
Balance at October 31, 1995 $(60,483) $(46,513)
Net income
Translation adjustments
Exercise of 222,799 stock options
Dividends paid ($.20 per share)
Dividends on shares held by SECT
Adjust SECT shares to
market value (17,281)
230,000 shares purchased
by employee
benefit plans 4,271
Issuance of restricted stock
--------- ---------
Balance at April 30, 1996 $(77,764) $(42,242)
========= =========
Six Months Ended April 30, 1995
Balance at October 31, 1994 $(53,760) $(52,009)
Adjustment related to
Joy Technologies
from February 26, 1994 to
November 1, 1994
---------- ---------
Adjusted Balance at
November 1, 1994 (53,760) (52,009)
Net loss
Translation adjustments
Exercise of 290,029 stock
options 5,778
Dividends paid ($.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 $(44,882) $(55,018)
========= =========
</TABLE>
See accompanying notes to financial statements.
<TABLE>
<CAPTION>
HARNISCHFEGER INDUSTRIES, INC.
- ----------------------------------
STATEMENT OF SHAREHOLDERS' EQUITY
(Dollar amounts in thousands)
(Unaudited)
Total
----------
<S> <C>
Six Months Ended April 30, 1996
- -------------------------------
Balance at October 31, 1995 $559,276
Net income 56,746
Translation adjustments (15,461)
Exercise of 222,799 stock options 4,624
Dividends paid ($.20 per share) (9,779)
Dividends on shares held by SECT 384
Adjust SECT shares to market value -
230,000 shares purchased by employee
benefit plans 7,235
Issuance of restricted stock 95
--------
Balance at April 30, 1996 $603,120
=========
Six Months Ended April 30, 1995
- --------------------------------
Balance at October 31, 1994 $502,365
Adjustment related to Joy Technologies
from February 26, 1994 to
November 1, 1994 (2,638)
---------
Adjusted Balance at November 1, 1994 499,727
Net loss (3,653)
Translation adjustments (5,842)
Exercise of 290,029 stock options 5,744
Dividends paid ($.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
========
</TABLE>
See accompanying notes to financial statements.
HARNISCHFEGER INDUSTRIES, INC.
- -----------------------------
NOTES TO FINANCIAL STATEMENTS
- -----------------------------
April 30, 1996
- --------------
(Amounts in thousands unless indicated)
(a) Basis of Presentation
---------------------
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, 1996 and
1995, cash flows for the six months ended April 30, 1996
and 1995, and financial position at April 30, 1996 have
been made. All adjustments made are of a normal recurring
nature. See notes (b), (c), and (g) for discussions
regarding acquisitions, divestiture of discontinued
operations and the fiscal 1995 extraordinary loss on
retirement of debt.
These financial statements should be read in conjunction
with the financial statements and the notes thereto
included in the Company's Current Report on Form 8-K
filed December 8, 1995, which is incorporated by
reference in the Company's Annual Report on Form 10-K for
the year ended October 31, 1995.
The results of operations for any interim period are not
necessarily indicative of the results to be expected for
the full year.
(b) Acquisitions
-------------
In early fiscal 1996, the Company completed the
acquisition of Dobson Park Industries plc ("Dobson") for
a purchase price of approximately $330, 000 including
acquisition costs, plus the assumption of debt of
approximately $75,300. The acquisition was accounted for
as a purchase transaction with the purchase price
allocated to specific assets acquired and liabilities
assumed. This allocation was based on preliminary
estimates and may be revised at a later date. Resultant
goodwill is being amortized over 40 years.
Dobson, headquartered in the United Kingdom, is an
industrial engineering group with interests in
underground mining equipment, industrial electronic
control systems, toys and plastics. Longwall
International ("Longwall"), one of the main subsidiaries
of Dobson, is engaged in the manufacture, sale and
service of underground mining equipment for the
international coal mining industry. Longwall's products
include electronically controlled roof support systems,
armored face conveyors, pumps and belt conveyor
components and systems.
The Company has formulated a plan to fully integrate
Longwall's operations into Joy Mining Machinery, thus
enabling Joy Technologies Inc. ("JOY") to offer
integrated underground longwall mining systems to the
worldwide mining industry. As a result of this plan, the
Company has established purchase accounting reserves to
provide for the estimated costs of this effort. The
costs to be incurred relate primarily to the closure of
selected manufacturing and service facilities. Company
management anticipates that the majority of these costs
will be incurred in fiscal 1996. As of April 30, 1996,
approximately $4,800 of the reserves had been used.
Longwall's operating results for the six months ended
April 30, 1996 are included in the April 30, 1996
consolidated statement of income.
The following unaudited pro forma results of operations
give effect to the acquisition of Dobson as if it had
occurred on November 1, 1994:
<TABLE>
<CAPTION>
Three Months Six Months
Ended April 30, Ended April 30,
1995 1995
-------------- ---------------
<S> <C> <C>
Net Sales $630,559 $1,169,473
Income From Continuing
Operations 21,556 25,260
Net Income (loss) 19,780 (2,632)
======= ==========
Earnings per share:
Income from
continuing operations $0.47 $0.55
Net Income (loss) 0.43 (0.06)
===== =========
</TABLE>
The unaudited pro forma information is not necessarily
indicative of either results of operations that would
have occurred had the purchase been made on November 1,
1994, or of future results of operations of the combined
companies.
The industrial electronic and toys/plastics businesses
are held for sale and are separately classified as such
on the Consolidated Balance Sheet. These businesses were
originally valued at $100,000. Several of the businesses
have been sold, aggregating net proceeds of $50,601.
The remaining balance represents the net realizable value
including the expected cash flow from the remaining
businesses held for sale which are expected to be sold
within the next year.
On March 27, 1996, the Company and its Beloit Corporation
subsidiary purchased the assets of the Pulp Machinery
Division of Ingersoll-Rand Company ("IMPCO") for
approximately $125,000. The acquisition was accounted
for as a purchase transaction with the purchase price
allocated to specific assets acquired and liabilities
assumed. This allocation was based on preliminary
estimates and may be revised at a later date. Resultant
goodwill is being amortized over 40 years.
On November 29, 1994, the Company completed the
acquisition of JOY through a stock-for-stock merger with
the acquisition accounted for as a pooling of interests.
JOY's Mining Group is a leader in the worldwide
development, manufacture, distribution and servicing of
underground mining equipment for the extraction of coal
and other bedded materials. Effective November 1, 1994,
the fiscal year of JOY was conformed to the Company's
fiscal year. Transaction costs related to the JOY merger
of $17,459 ($11,384 net of tax or $0.24 per share) were
charged to income during the first quarter of fiscal
1995.
(c)Divestitures and Discontinued Operations
----------------------------------------
In December 1995, the Company completed the sale of
substantially all of the assets of Joy Environmental
Technologies, Inc. to Babcock and Wilcox, an operating
unit of McDermott International, for $11,651. The loss
on sale, net of applicable income taxes, was recorded in
the fourth quarter of fiscal 1995.
On February 16, 1995, the Company completed the sale of
Syscon Corporation ( the remaining unit of the Systems
Group) 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, net of applicable income
taxes, in the first quarter of fiscal 1995.
(d) Inventories
-----------
Consolidated inventories consisted of the following:
<TABLE>
<CAPTION>
April 30, October 31,
1996 1995
----------- -----------
<S> <C> <C>
Finished goods $ 266,849 $ 211,555
Work in process and purchased parts 234,980 170,027
Raw materials 150,367 106,999
--------- --------
652,196 488,581
Less excess of current cost over stated
LIFO value (64,213) (72,186)
--------- ---------
$587,983 $416,395
========= ==========
</TABLE>
Inventories valued using the LIFO method represented
approximately 56% and 80% of consolidated inventories at
April 30, 1996 and October 31, 1995, respectively.
Inventories have been reduced by $5,314 and $6,051 at
April 30, 1996 and October 31, 1995, 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 $9,179 and $7,868 for the three months and $16,324 and
$14,834 for the six months ended April 30, 1996 and 1995,
respectively. Certain capital expenditures used in
research activities 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,
1996 1995
-------- ---------
<S> <C> <C>
Interest income $ 1,078 $ 2,100
Interest expense (16,878) (13,316)
--------- ---------
Interest expense - net $(15,800) $(11,216)
========= =========
</TABLE>
<TABLE>
<CAPTION>
Net interest expense consisted of the following:
Six Months Ended
April 30,
1996 1995
<S> <C> <C>
Interest income $ 3,439 $ 3,766
Interest expense (32,476) (26,474)
---------- ---------
Interest expense - net $(29,037) $(22,708)
========== ==========
</TABLE>
(g) Long-Term Obligations
----------------------
Long-term obligations at April 30, 1996 and October 31,
1995 consisted of the following:
<TABLE>
<CAPTION>
April 30, October 31,
1996 1995
----------- -----------
<S> <C> <C>
10 1/4% Senior Notes due 2003 $188,380 $188,380
8.9% Debentures, due 2022 75,000 75,000
8.7% Debentures, due 2022 75,000 75,000
7 1/4% Debentures, due 2025
(net of discount of $1,267 ) 148,733 -
Senior Notes, Series A through D, at
interest rates of between 8.9% and
9.1%, due 1996 to 2006 75,000 75,000
Revolving Credit Facility, at 5.64% 60,000 -
Industrial Revenue Bonds, at interest
rates of between 5.9% and 8.8%
due 1996 to 2017 34,654 28,428
Other 23,003 21,183
-------- --------
679,770 462,991
Less: Amounts payable within one year 3,567 3,881
------- --------
$676,203 $459,110
======== ========
</TABLE>
The 7 1/4% debentures were issued on December 19, 1995 at
99.153% in connection with the Company's acquisition of
Dobson. The debentures mature on December 15, 2025, are not
redeemable prior to maturity and are not subject to any
sinking fund requirements. Interest on the debentures is
payable semi-annually on June 15 and December 15 of each
year, commencing June 15, 1996.
In the first quarter of fiscal 1995, as a result of the
repayment of the JOY Bank Facility and the partial redemption
of the 10 1/4% Senior Notes, the Company recorded an
extraordinary loss on debt retirement, net of applicable
income taxes, of $(3,481) or $(0.08) per share 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. In December,
1995, the Agreement was amended to provide for an expiration
date of November, 2000. A facility fee is payable on the
Facility. At April 30, 1996, there were direct outstanding
borrowings of $60,000 under the Facility. In addition,
commercial paper borrowings are considered a utilization of
the Facility, which, as of April 30, 1996, amounted to
$32,350.
(h) Contingent Liabilities
----------------------
At April 30, 1996, the Company was contingently liable to
banks, financial institutions, and others for
approximately $238,000 for outstanding letters of credit
securing performance of sales contracts and other
guarantees in the ordinary course of business. The
Company may also guarantee performance of its equipment
at levels specified in sales contracts without the
requirement for letters of credit. Performance guarantees
are a normal part of the Company's business and have not
resulted in significant cash outlays.
In addition, the Company provides a back-up bonding
guarantee facility for certain bid, performance and other
contract bonds issued by H-K Systems, Inc., formerly
Harnischfeger Engineers, Inc. The amount of guarantees
outstanding cannot exceed $70,000 during fiscal 1996,
with the maximum amount decreasing to zero by November,
1998. Outstanding contract bonds under the guarantee
arrangement totaled approximately $64,600 at April 30,
1996; H-K Systems, Inc. typically requires similar bonds
from its major subcontractors. Such guarantees have been
part of H-K Systems' 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.
The Company is a party to litigation matters, claims and
performance guarantees which are normal in the course of
its operations and large damages are at times sought in
litigation against the Company. While the results of
litigation, claims and guarantees cannot be predicted
with certainty, management presently 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
(i) Sale of Measurex Stock
----------------------
On December 29, 1994, Measurex Corporation ("Measurex")
repurchased 2,026,900 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 repurchased
the remaining 1,613,100 shares of its stock. These
transactions resulted in a combined gain of $29,657 in
fiscal 1995. Measurex continues to have cooperative
agreements with Beloit.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
THREE AND SIX MONTHS ENDED APRIL 30, 1996 AND 1995
- --------------------------------------------------
(Amounts in thousands unless indicated)
The following discussion and the foregoing Notes to Financial
Statements contain forward-looking statements. When used in
this document, terms such as "anticipate", "believe",
"estimate", "expect", "indicate", "intends", "may be",
"objective", "plan", "predict", and "will be" are intended to
identify such statements. Forward-looking statements are
subject to certain risks, uncertainties and assumptions which
could cause actual results to differ materially from those
projected, including those described in Item 5. Other
Information - "Cautionary Factors" in Part II of this report.
Net income for the three and six months ended April 30, 1996
amounted to $33,555, or $0.71 per share, and $56,746, or
$1.21 per share, as compared to net income of $19,269, or
$0.42 per share, for the three months and a net loss of
$(3,653), or $(0.08) per share for the six months ended April
30, 1995. Income from continuing operations amounted to
$33,555, or $0.71 per share, for the three months and $
56,746, or $1.21 per share, for the six months ended April
30, 1996 as compared to income of $21,045, or $0.46 per
share, for the three months and $24,238, or $0.53 per share,
for the six months ended April 30, 1995.
Net results for the three and six months ended April 30, 1995
were reduced by charges of $(1,776) or $(0.04) per share for
the loss from the discontinued operation Joy Environmental
Technologies, Inc., and $(24,410), or $(0.53) per share for
losses from discontinued operations (Joy Environmental
Technologies, Inc. and Syscon). Results for the six months
ended April 30, 1995 were also reduced by a charge of
$(3,481), or $(0.08) per share, for the extraordinary loss on
retirement of debt related to repayment of the JOY Bank
Facility and some JOY 10 1/4% Senior Notes.
Per share calculations for the first six months of 1996 and
1995 were based on 46,929 and 45,868 average shares
outstanding, respectively.
Significant factors contributing to the $32,508 increase in
income from continuing operations for the first six months of
1996 as compared to 1995 included: (1) a $43,964 increase in
operating income as described in the Segment Information
-------------------
section which follows, and (2) JOY merger costs of $17,459 in
fiscal 1995, offset by (3) a $6,329 increase in interest
expense resulting from additional debt incurred from the
Dobson acquisition, (4) a $20,250 increase in the provision
for income taxes due to higher pre-tax income and (5) a
$2,336 increase in minority interest in 1996 due to higher,
after-tax results of certain operations owned in part by
other entities.
In December, 1995, the Company completed the sale of
substantially all of the assets of Joy Environmental
Technologies, Inc. to Babcock and Wilcox, an operating unit
of McDermott International, for $11,651. The loss on sale of
discontinued operation, net of applicable income taxes, was
recorded in fiscal 1995.
On February 16, 1995, the Company completed the sale of
Syscon Corporation 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, net of applicable
income taxes, in the first quarter of fiscal 1995.
Segment Information
Operating results of the Company's business segments for the
second quarter and first six months of 1996 and 1995 are
summarized as follows:
<TABLE>
<CAPTION>
Second Quarter Net Sales Operating Income
- -------------- ------------ -----------------
1996 1995 1996 1995
------- ------------------------
<S> <C> <C> <C> <C>
Mining Equipment $358,069 $253,141 $45,950 $34,207
Papermaking Machinery and
Systems 302,047225,579 23,298 12,311
P&H Material Handling 79,393 62,293 8,346 6,227
-------- -------- ------- -------
Total Business Segments $739,509 $541,013 77,594 52,745
======= ========
Corporate Administration (4,945) (5,022)
---------------
Operating Income $72,649 $47,723
======= =======
Six Months Net Sales Operating Income
- ---------- ----------- ----------------
1996 1995 1996 1995
-------- -------- ------- ------
Mining Equipment $ 673,045 $452,223 $ 81,332 $56,876
Papermaking Machinery and
Systems 554,400427,911 41,860 25,146
P&H Material Handling 144,748 110,248 12,678 9,549
-------- ---------------- -------
Total Business Segments $1,372,193$990,382 135,870 91,571
Corporate Administration (10,043) (9,708)
--------- -------
Operating Income $125,827 $81,863
================
</TABLE>
(A) Includes purchased backlog of IMPCO totaling $31,784.
(B) Includes purchased backlog of Longwall International of
$231,495.
Segment Information
- -------------------
Operating results of the Company's business segments for the
second quarter and first six months of 1996 and 1995 are
summarized as follows:
<TABLE>
<CAPTION>
Second Quarter Orders Booked Backlog at
- -------------- ------------- ----------
1996 1995 4/96 1/96
------- ------- ------ ------
<S> <C> <C> <C> <C>
Mining Equipment $323,377 $232,375 $ 394,419 $ 429,111
Papermaking Machinery
and
Systems 260,124247,591 678,506(A)688,645
P&H Material Handling 86,290 66,213 153,904 147,007
------- ------- ----------- --------
Total Business Segments $669,791 $546,179 $1,226,829 $1,264,763
======== ======== ======================
Six Months
- ---------- Orders Booked Backlog at
1996 1995 4/96 10/95
------- -------- ----------- -------
Mining Equipment $ 614,429 $ 433,667 $394,419(B) $ 221,540
Papermaking Machinery
and
Systems 521,497 494,246 678,506(A) 679,625
P&H Material Handling 167,773 115,702 153,904 130,879
--------- -------- ---------------------
Total Business Segment $1,303,699 $1,043,615 $1,226,829 $1,032,044
========== ========= =======================
</TABLE>
(A) Includes purchased backlog of IMPCO totaling $31,784.
(B) Includes purchased backlog of Longwall International of
$231,495.
Segment Information - Continuing Operations
- --------------------------------------------
Net sales of the Mining Equipment segment amounted to
$673,045 and $452,223 for the first six months of 1996 and
1995, respectively, representing a 49% increase in 1996 as
compared to 1995. The sales increase is primarily due to the
addition of Longwall and to increases in both original
equipment and aftermarket activity for both surface and
underground mining operations. Operating profit increased to
$81,332 for the first six months of 1996 as compared to
$56,876 in 1995. The increase in operating profit is
primarily due to the addition of Longwall and strong surface
mining results. Bookings for the first six months of 1996
amounted to $614,429 as compared to $433,667 for the same
period in 1995.
The Papermaking Machinery and Systems segment contributed
sales and operating profit of $554,400 and $41,860,
respectively, for the first six months of 1996, as compared
to net sales of $427,911 and operating profit of $25,146 for
the corresponding period in 1995. Sales increased 30% in
1996 over 1995 due primarily to an increase in sales of
original equipment and rebuilds. Operating profit reflected
stronger gross margins due to stronger sales and improved
margins. Income in the first quarter of 1995 included a gain
recognized in connection with the sale of Measurex shares.
Bookings for the first six months of 1996 amounted to
$521,497 as compared to $494,246 for the same period in 1995.
The Material Handling segment contributed sales and operating
profit of $144,748 and $12,678, respectively, for the first
six months of 1996, as compared to sales of $110,248 and
operating profit of $9,549 for the comparable period in 1995.
Sales increased primarily due to an increase in original
equipment sales. Operating profit increased as a result of
increased sales and improved margins. Bookings for the first
six months of 1996 and 1995 amounted to $167,773 and
$115,702, respectively due to an increase in machine
bookings.
Income Taxes
- ------------
The Company's estimated annual effective tax rate for
continuing operations for the first six months of 1996 was
36% compared to a 35% federal statutory tax rate. The
principal reason for the difference between the effective
rate and the statutory tax rate is nondeductible goodwill
partially offset by the availability of tax credits.
Liquidity and Cash Flows
- ------------------------
The Company's capital structure at April 30, 1996 and October
31, 1995 was as follows:
<TABLE>
<CAPTION>
April 30, October 31,
1996 1995
--------- ------------
<S> <C> <C>
Short-term notes payable $ 137,679 $ 18,921
Long-term obligations,
including current portion 679,770 462,991
-------- --------
817,449 481,912
Liability for postretirement
benefits (after tax) 59,447 66,043
Minority interest 95,142 89,611
Shareholders' equity, excluding SECT 680,884 619,759
------- -------
Total capitalization $1,652,922 $1,257,325
========== ==========
Debt to capitalization ratio 49.5% 38.3%
====== ======
</TABLE>
Cash Flow from Operating Activities
- -----------------------------------
Cash flow used by operating activities was $32,275 for the
six months ended April 30, 1996 compared to cash flows
provided by operating activities of $1,082 for the comparable
period in 1995. The decrease in cash flows between periods
is primarily the result of an increase in accounts receivable
due to increased sales, an increase in inventory and a
decrease in employee compensation and benefits offset by an
increase in advance payments and other current liabilities.
Net working capital, exclusive of businesses held for sale,
decreased $235,697 during the six months ended April 30, 1996
primarily due to increases in short-term notes payable and a
decline in cash and cash equivalents resulting from the
acquisition of Dobson and the Pulp Machinery Division of
Ingersoll-Rand Company.
Cash Flow from Investment Activities
- ------------------------------------
Cash flow applied to investment activities was $420,796 for
the six months ended April 30, 1996 compared to cash flow
provided by investment activities of $64,988 for the
comparable period in 1995. The change is due to the
$330,000 acquisition of Dobson in early fiscal 1996 and the
$125,000 acquisition of the Pulp Machinery Division of
Ingersoll-Rand Company in March 1996 offset by proceeds of
$50,601 from the sale of certain of the industrial electronic
and toys/plastics businesses of Dobson.
Cash Flow for Financing Activities
- ----------------------------------
The $256,917 cash provided by financing activities in the
first six months of fiscal 1996 was due to the issuance of
$150,000, 7 1/4% debentures, $60,000 direct borrowings from
the Revolving Credit Facility and a $50,498 increase in
short-term notes payable in connection with the acquisitions
of the Pulp Machinery Division of Ingersoll-Rand Company and
Dobson.
Financing activities for the second quarter of fiscal 1995
included $95,458 for redemption of JOY's remaining Bank
Facility and partial redemption of JOY's 10 1/4% Senior
Notes. As a result of the redemptions of the Bank Facility
and Senior Notes, the Company recorded an extraordinary loss
on debt retirement, net of applicable taxes, of $(3,481), or
$(0.08) per share consisting primarily of unamortized
financing costs and redemption premiums.
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 during the period February 26, 1994 to
November 1, 1994.
The Company maintains the ability to expand its borrowings in
several ways, including the following:
(1) A Revolving Credit Financing Facility Agreement expiring
November, 2000, between the Company and certain domestic
and foreign financial institutions that allows for
borrowings of up to $240,000 at rates expressed in
relation to LIBOR and other rates. At April 30, 1996,
there were direct outstanding borrowings of $60,000
under the Facility. In addition, commercial paper
borrowings are considered a utilization of the Facility,
which, as of April 30, 1996, amounted to $32,350.
(2) Short-term bank credit lines of foreign subsidiaries of
approximately $181,500, of which approximately $55,300
was outstanding at April 30, 1996.
(3) In April, 1996, the Company filed a shelf registration
with the Securities and Exchange Commission for up to
$200,000 of debt securities. To date, no securities
have been issued under this registration.
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, 1996; 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.
Acquisitions
- ------------
In early fiscal 1996, the Company completed the acquisition
of Dobson for a purchase price of approximately $330,000
including acquisition costs, plus the assumption of debt of
approximately $75,300. The acquisition was accounted for as
a purchase transaction with the purchase price allocated to
specific assets acquired and liabilities assumed. This
allocation was based on preliminary estimates and may be
revised at a later date. Resultant goodwill is being
amortized over 40 years.
Dobson, headquartered in the United Kingdom, is an industrial
engineering group with interests in underground mining
equipment, industrial electronic control systems, toys and
plastics. Longwall International, one of the main
subsidiaries of Dobson, is engaged in the manufacture, sale
and service of underground mining equipment for the
international coal mining industry. Longwall's products
include electronically controlled roof support systems,
armored face conveyors, pumps and belt conveyor components
and systems. The Company has formulated a plan to fully
integrate Longwall's operations into Joy Mining Machinery,
thus enabling JOY to offer integrated underground longwall
mining systems to the worldwide mining industry. As a result
of this plan, the Company has established purchase accounting
reserves to provide for the estimated costs of this effort.
The costs to be incurred relate primarily to the closure of
selected manufacturing and service facilities. Company
management anticipates that the majority of these costs will
be incurred in fiscal 1996. As of April 30, 1996,
approximately $4,800 of the reserves had been used.
Longwall's operating results for the six months ended April
30, 1996 are included in the April 30, 1996 consolidated
statement of income.
The industrial electronic and toys/plastics businesses are
held for sale and are separately classified as such on the
Consolidated Balance Sheet. These businesses were originally
valued at $100,000. Certain of the businesses have been
sold, aggregating net proceeds of $50,601. The remaining
balance represents the net realizable value including the
cash flow from the remaining businesses held for sale which
are expected to be sold within the year.
On March 27, 1996, the Company's Beloit Corporation
subsidiary purchased the assets of the Pulp Machinery
Division of Ingersoll-Rand Company for approximately
$125,000. The acquisition was accounted for as a purchase
transaction with the purchase price allocated to specific
assets acquired and liabilities assumed. This allocation was
based on preliminary estimates and may be revised at a later
date. Resultant goodwill is being amortized over 40 years.
On November 29, 1994, the Company completed the acquisition
of JOY through a stock-for-stock merger with the acquisition
accounted for as a pooling of interests. Effective November
1, 1994, the fiscal year of JOY was conformed to the
Company's fiscal year. 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 of fiscal
1995.
Sale of Measurex Stock
- ----------------------
On December 29, 1994, Measurex Corporation repurchased
2,026,900 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 repurchased the remaining 1,613,100 shares of
its stock. These transactions resulted in a combined gain of
$29,657 in fiscal 1995. Measurex continues to have
cooperative agreements with Beloit.
PART II. OTHER INFORMATION
----------------------------
Item 4 Submission of Matters to a Vote of Security Holders
---------------------------------------------------
The following two matters were submitted to a vote
of security holders at the Annual Stockholders'
Meeting held April 9, 1996.
1. Management's nominees were elected as directors
to terms ending in 1999. The number of shares voted for each
nominee were:
<TABLE>
<CAPTION> For Against
----------- ----------
<S> <C> <C>
Jeffery T. Grade 42,875,684 262,627
Robert M. Gerrity 42,876,109 262,202
Robert F. Schnoes 42,874,811 263,500
Donald Taylor 42,876,132 262,179
</TABLE>
2. A proposal to approve the Harnischfeger
Industries, Inc. Stock Incentive Plan was approved. In a
vote to approve the Plan, the following number of shares of
Common Stock were voted.
31,988,967 For
10,903,542 Against
191,391 Abstained
54,411 Non-votes
Item 5 Other Information "Cautionary Factors"
--------------------------------------
This report and other documents or oral statements
which have been and will be prepared or made in the
future contain or may contain forward-looking
statements by or on behalf of the Company. Such
statements are based upon management's expectations
at the time they are made. In addition to the
assumptions and other factors referred to
specifically in connection with such statements, the
following factors, among others, could cause actual
results to differ materially from those
contemplated.
The Company's principal businesses involve
designing, manufacturing, marketing and servicing
large, complex machines for the mining, papermaking
and capital goods industries. Long periods of time
are necessary to plan, design and build these
machines. With respect to new machines and
equipment, there are risks of customer acceptances
and start-up or performance problems. Large amounts
of capital are required to be devoted by the
Company's customers to purchase these machines and
to finance the mines, paper mills, steel mills and
other facilities that use these machines. The
Company's success in obtaining and managing a
relatively small number of sales opportunities can
have a material effect on the Company's financial
performance. In addition, many projects are located
in undeveloped or developing economies where
business conditions are less predictable. In recent
years, approximately 46% of the Company's total
sales occurred outside the United States.
Other factors that could cause actual results to
differ materially from those contemplated include:
- Factors affecting purchases of new equipment,
rebuilds, parts and services such as: production
capacity, stockpiles and production and
consumption rates of coal, copper, iron, gold,
fiber, paper/paperboard, recycled paper, steel
and other commodities; the cash flows of
customers; the cost and availability of
financing to customers and the ability of
customers to obtain regulatory approval for
investments in mining, papermaking, steel
making, automotive manufacturing and other heavy
industrial projects; the ages, efficiencies and
utilization rates of existing equipment; the
development of new technologies; the
availability of used or alternative equipment;
consolidations among customers; work stoppages
at customers or providers of transportation; and
the timing, severity and duration of customer
buying cycles, particularly in the paper and
mining businesses.
- Factors affecting the Company's ability to
capture available sales opportunities,
including: customers' perceptions of the quality
and value of the Company's products as compared
to competitors' products; the existence of
patents protecting or restricting the Company's
ability to offer features requested by
customers; whether the Company has successful
reference installations to show customers,
especially for papermaking and mining equipment;
customers' perceptions of the health and
stability of the Company as compared to its
competitors; the Company's ability to offer
competitive seller financing programs; the
availability of manufacturing capacity at the
Company's factories; and whether the Company can
offer the complete package of products and
services sought by its customers.
- Factors affecting the Company's ability to
successfully manage sales it obtains, such as:
the accuracy of the Company's cost and time
estimates for major projects; the Company's
success in completing projects on time and
within budget; the Company's success in
recruiting and retaining managers and key
employees; wage stability and cooperative labor
relations; plant capacity and utilization; and
whether acquisitions are assimilated and
divestitures completed without notable surprises
or unexpected difficulties.
- Factors affecting the Company's general
business, such as: unforeseen patent, tax,
product, environmental, employee health or
benefit or contractual liabilities; nonrecurring
restructuring charges; changes in accounting or
tax rules or regulations; and reassessments of
asset valuations such as inventories.
- Factors affecting general business levels, such
as: political turmoil and economic growth in
major markets such as the United States, Canada,
Europe, The Far East, South Africa, Australia
and Chile; environmental and trade regulations;
and the stability and ease of exchange of
currencies.
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
None<PAGE>
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 and
Date June 14, 1996 Administration
- ------------------- and Chief Financial
Officer
/s/James C. Benjamin
---------------------
James C. Benjamin
Vice President and Controller
Date June 14, 1996 and Chief Accounting Officer
- -------------------<PAGE>
Exhibit 11
- ----------
<TABLE>
<CAPTION>
HARNISCHFEGER INDUSTRIES, INC.
- ------------------------------
CALCULATION OF EARNINGS PER SHARE
- ---------------------------------
(Amounts in thousands except per share amounts)
Three Months Ended
April 30,
-------------------
1996 1995
------- -------
<S> <C> <C>
Average Shares Outstanding 47,063 46,045
======== ======
Income from Continuing Operations $33,555 $21,045
Loss from and Net Loss on Sale of
Discontinued Operation,
net of applicable income taxes - (1,776)
Extraordinary Loss on
Retirement of Debt,
net of applicable income taxes - -
--------- -------
Net Income (Loss) $33,555 $19,269
========== ========
Earnings (Loss) Per Share
Income from continuing operations $ 0.71 $0.46
Loss from and net loss on sale
of discontinued operation - (0.04)
Extraordinary loss on
retirement of debt - -
------- -------
Net income (loss) $0.71 $0.42
======= =======
</TABLE>
<TABLE>
<CAPTION>
HARNISCHFEGER INDUSTRIES, INC.
- ------------------------------
CALCULATION OF EARNINGS PER SHARE
- ---------------------------------
(Amounts in thousands except per share amounts)
Six Months Ended
April 30,
----------------------
1996 1995
------- -------
<S> <C> <C>
Average Shares Outstanding 46,929 45,868
======= =======
Income from Continuing Operations $56,746 $ 24,238
Loss from and Net Loss on Sale of
Discontinued Operation,
net of applicable income taxes -(24,410)
Extraordinary Loss on Retirement of Debt,
net of applicable income taxes - (3,481)
------- --------
Net Income (Loss) $56,746$(3,653)
======= ========
Earnings (Loss) Per Share
Income from continuing operations $1.21 $0.53
Loss from and net loss on sale
of discontinued operation - (0.53)
Extraordinary loss on retirement of debt - (0.08)
----- -------
Net income (loss) $1.21 $(0.08)
===== =======
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-END> APR-30-1996
<CASH> 43,844
<SECURITIES> 0
<RECEIVABLES> 666,623
<ALLOWANCES> 9,263
<INVENTORY> 587,983
<CURRENT-ASSETS> 1,446,575
<PP&E> 1,095,913
<DEPRECIATION> 475,607
<TOTAL-ASSETS> 2,693,103
<CURRENT-LIABILITIES> 1,145,161
<BONDS> 676,203
0
0
<COMMON> 51,348
<OTHER-SE> 551,772
<TOTAL-LIABILITY-AND-EQUITY> 2,693,103
<SALES> 1,372,193
<TOTAL-REVENUES> 1,385,412
<CGS> 1,052,352
<TOTAL-COSTS> 1,259,585
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 29,037
<INCOME-PRETAX> 96,790
<INCOME-TAX> 34,850
<INCOME-CONTINUING> 56,746
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 56,746
<EPS-PRIMARY> 1.21
<EPS-DILUTED> 1.21
</TABLE>
