UNITED STATES SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
April 13, 1998
- -------------------------------------------------
Date of Report (Date of earliest event reported)
Harnischfeger Industries, Inc.
- -----------------------------------
(Exact name of registrant as specified in its
charter)
Delaware 1-9299 39-1566457
- --------------------------------------------------
(State or other (Commission IRS Employer
jurisdiction of File Number)
Identification No.
incorporation)
3600 South Lake Drive, St. Francis, Wisconsin
- ---------------------------------------------
(Address of principal executive offices)
53235-3716
- ----------
Zip Code
(414) 486-6400
- --------------------------------------------------
Registrant's telephone number, including area
code)
- -------------------------------------------------
Former name or former address, if changed since
last report)
Item 2. Acquisition or Disposition of Assets.
On March 30, 1998, Harnischfeger Industries, Inc.
(the "Company") completed the sale of
approximately 80% of the common stock of the
Company's P&H Material Handling ("Material
Handling") business to Chartwell Investments, Inc.
in a leveraged recapitalization transaction for
approximately $340 million in cash and $4.8
million of preferred stock which carries a 12.25%
PIC dividend. The Company will retain
approximately 20% of the outstanding common stock
and 11% of the outstanding voting securities of
Material Handling and will hold one of the eight
Board of Directors seats for Material Handling.
In addition, the Company has licensed to Material
Handling the sole and exclusive right to use the
P&H trademark on existing Material Handling
produced products on a worldwide basis for periods
specified in the agreement for a royalty fee
payable over a ten year period.
Material Handling is a leading supplier of
through-the-air cranes, hoists and dock-side
cranes for industrial and shipyard settings.
Item 7. Financial Statements and Exhibits
Filed with this Current Report on Form 8-K is pro
forma financial information relative to the
divestiture of Material Handling required pursuant
to Article 11 of Regulation S-X.
The following financial statements and exhibits
are filed as part of this report:
Page No.
-------
(b) Pro forma financial information
(1) Unaudited Pro Forma Condensed
Statements of Income 2-6
(2) Unaudited Pro Forma Condensed
Balance Sheet 7
Harnischfeger Industries, Inc.
Unaudited Pro Forma Condensed
Financial Statements
The unaudited pro forma condensed financial
statements should be read in conjunction with the
historical financial statements of Harnischfeger
Industries, Inc.
The pro forma data is presented for informational
purposes only and is not necessarily indicative of
the operating results or financial position that
would have occurred had the divestiture of
Material Handling been consummated on the dates
indicated, nor is such data necessarily indicative
of future operating results or financial position.
There is no assurance that similar results will be
achieved in the future. Allocations and
adjustments have been based on the best
information currently available.
The accompanying pro forma condensed balance sheet
reflects the use of the after-tax proceeds from
the sale of approximately $300 million to
initially pay down debt.
The historical statements of income of
Harnischfeger Industries, Inc. for fiscal years
ended October 31, 1995, 1996 and 1997 and the
first quarters of fiscal 1997 and 1998 have been
restated to reflect the Material Handling business
as a discontinued operation. The results of the
discontinued operations do not reflect any
interest expense or management fees allocated by
the Company.
NOTE 1 - The pro forma condensed statements of
income have been prepared assuming that the
divestiture of Material Handling occurred on
November 1, 1996, and the pro forma condensed
balance sheet has been prepared assuming that the
divestiture of Material Handling occurred as of
January 31, 1998.
<TABLE>
<CAPTION>
Harnischfeger Industries, Inc.
Unaudited Pro Forma Condensed Statement of Income
For the Year Ended October 31, 1995
Historical MHE Restated
----------- --------- -----------
<S> <C> <C> <C>
REVENUES
Net Sales $2,152,079 $239,882 $1,912,197
Other Income 32,208 3,766 28,442
---------- -------- ----------
2,184,287 243,648 1,940,639
COST OF SALES 1,671,932 183,492 1,488,440
PRODUCT DEVELOPMENT,
SELLING &
ADMINISTRATIVE
EXPENSES 330,990 37,306 293,684
---------- -------- ----------
OPERATING INCOME 181,365 22,850 158,515
INTEREST EXPENSE-NET (40,713) (200) ($40,513)
---------- -------- ----------
INCOME BEFORE JOY
MERGER COSTS,
GAIN ON SALE
OF MEASUREX INVESTMENT,
PROVISION FOR INCOME
TAXES & MINORITY
INTEREST 140,652 22,650 118,002
JOY MERGER COSTS (17,459) - (17,459)
GAIN ON SALE OF MEASUREX
INVESTMENT 29,657 - 29,657
PROVISION FOR
INCOME TAXES (53,500) (7,928) (45,572)
MINORITY INTEREST (7,230) - (7,230)
---------- ---------- ----------
INCOME FROM
CONTINUING
OPERATIONS $92,120 $14,722 $77,398
INCOME PER SHARE FROM
CONTINUING OPERATIONS
BASIC $1.99 $1.67
===== =====
DILUTED $1.97 $1.66
===== =====
AVERAGE SHARES OUTSTANDING
BASIC 46,218 46,218
====== ======
DILUTED 46,659 46,659
====== ======
</TABLE>
<TABLE>
<CAPTION>
Harnischfeger Industries, Inc.
Unaudited Pro Forma Condensed Statement of Income
For the Year Ended October 31, 1996
Historical MHE Restated
---------- ----- ---------
<S> <C> <C> <C>
REVENUES
Net Sales $2,863,931 $323,216 $2,540,715
Other Income 23,639 2,613 21,026
---------- -------- ----------
2,887,570 325,829 2,561,741
COST OF SALES 2,166,775 247,397 1,919,378
PRODUCT DEVELOPMENT,
SELLING &
ADMINISTRATIVE
EXPENSES 433,776 45,325 388,451
RESTRUCTURING CHARGE 43,000 - 43,000
---------- -------- ----------
OPERATING INCOME 244,019 33,107 210,912
INTEREST EXPENSE-NET (62,258) (245) (62,013)
---------- -------- ----------
INCOME BEFORE PROVISION
FOR INCOME TAXES
& MINORITY INTEREST 181,761 32,862 148,899
PROVISION FOR
INCOME TAXES (63,600) (11,502) (52,098)
MINORITY INTEREST (3,944) (45) (3,899)
---------- ---------- -----------
INCOME FROM CONTINUING
OPERATIONS $114,217 $21,315 $92,902
========== ========== ===========
INCOME PER SHARE FROM
CONTINUING OPERATIONS
BASIC $2.42 $1.97
===== =====
DILUTED $2.40 $1.95
===== =====
AVERAGE SHARES OUTSTANDING
BASIC 47,196 47,196
====== ======
DILUTED 47,565 47,565
====== ======
</TABLE>
<TABLE>
<CAPTION>
Harnischfeger Industries, Inc.
Unaudited Pro Forma Condensed Statement of Income
For the Year Ended October 31, 1997
Historical MHE Restated
------------ -------- -----------
<S> <C> <C> <C>
REVENUES
Net Sales $3,088,538 $353,350 $2,735,188
Other Income 29,705 2,524 27,181
---------- --------- -----------
3,118,243 355,874 2,762,369
COST OF SALES 2,341,515 261,168 2,080,347
PRODUCT DEVELOPMENT,
SELLING &
ADMINISTRATIVE
EXPENSES 457,456 56,307 401,149
---------- --------- -----------
OPERATING INCOME 319,272 38,399 280,873
INTEREST EXPENSE-NET (72,543) (398) (72,145)
INCOME BEFORE
PROVISION
FOR INCOME TAXES
& MINORITY
INTEREST 246,729 38,001 208,728
PROVISION FOR
INCOME TAXES (83,875) (12,920) (70,955)
MINORITY INTEREST (10,014) (18) (9,996)
----------- ---------- -----------
INCOME FROM
CONTINUING
OPERATIONS $152,840 $25,063 $127,777
INCOME PER SHARE FROM
CONTINUING OPERATIONS
BASIC $3.20 $2.67
===== =====
DILUTED $3.17 $2.65
===== =====
AVERAGE SHARES OUTSTANDING
BASIC 47,827 47,827
====== ======
DILUTED 48,261 48,261
====== ======
</TABLE>
<TABLE>
<CAPTION>
Harnischfeger Industries, Inc.
Unaudited Pro Forma Condensed Statement of Income
For the Year Ended October 31, 1997
Adjustments Pro Forma
----------- ---------
<S> <C> <C>
REVENUES
Net Sales $ - $2,735,188
Other Income 588 (A) 30,419
2,650 (B)
----------- -----------
3,238 2,765,607
COST OF SALES - 2,080,347
PRODUCT DEVELOPMENT,
SELLING &
ADMINISTRATIVE
EXPENSES - 401,149
---------- -----------
OPERATING INCOME 3,238 284,111
INTEREST EXPENSE-NET 10,567 (C) (61,578)
---------- -----------
INCOME BEFORE PROVISION
FOR INCOME TAXES
& MINORITY INTEREST 13,805 222,533
PROVISION FOR
INCOME TAXES (4,694)(D) (75,649)
MINORITY INTEREST - (9,996)
----------- ----------
INCOME FROM CONTINUING
OPERATIONS $9,111 $136,888
=========== ==========
INCOME PER SHARE FROM
CONTINUING OPERATIONS
BASIC $2.86
=====
DILUTED $2.84
=====
AVERAGE SHARES OUTSTANDING
BASIC 47,827
======
DILUTED 48,261
======
(A) Reflects dividend income from the 12.25% preferred stock.
(B) Reflects royalty income calculated as a percent of MHE's sales.
(C) Reflects the reduction in interest expense resulting from the repayment of
short- and long-term debt available for repayment.
(D) Reflects tax effects of pro forma adjustments.
</TABLE>
<TABLE>
<CAPTION>
Harnischfeger Industries, Inc.
Unaudited Pro Forma Condensed Statement of Income
For the Quarter Ended January 31, 1997
Historical MHE Restated
---------- ----- ----------
<S> <C> <C> <C>
REVENUES
Net Sales $699,411 $79,982 $619,429
Other Income 8,760 1,376 7,384
-------- ------- --------
708,171 81,358 626,813
COST OF SALES 527,637 60,792 466,845
PRODUCT DEVELOPMENT,
SELLING & ADMINISTRATIVE
EXPENSES 113,034 13,370 99,664
-------- ------- --------
OPERATING INCOME 67,500 7,196 60,304
INTEREST EXPENSE-NET (16,497) (221) (16,276)
------- ------- --------
INCOME BEFORE PROVISION
FOR INCOME TAXES &
MINORITY INTEREST 51,003 6,975 44,028
PROVISION FOR INCOME TAXES (17,850) (2,441) (15,409)
MINORITY INTEREST (2,295) (8) (2,287)
-------- -------- ---------
INCOME FROM CONTINUING
OPERATIONS $30,858 $4,526 $26,332
======== ======== =========
INCOME PER SHARE FROM
CONTINUING OPERATIONS
BASIC $0.65 $0.55
===== =====
DILUTED $0.64 $0.55
===== =====
AVERAGE SHARES OUTSTANDING
BASIC 47,720 47,720
====== ======
DILUTED 48,258 48,258
====== ======
</TABLE>
<TABLE>
<CAPTION>
Harnischfeger Industries, Inc.
Unaudited Pro Forma Condensed Statement of Income
For the Quarter Ended January 31, 1997
Pro Forma
Adjustments Pro Forma
------------ ---------
<S> <C> <C>
REVENUES
Net Sales $ - $619,429
Other Income 147 (A) 8,194
663 (B)
---------- --------
810 627,623
COST OF SALES - 466,845
PRODUCT DEVELOPMENT,
SELLING & ADMINISTRATIVE
EXPENSES - 99,664
---------- --------
OPERATING INCOME 810 61,114
INTEREST EXPENSE-NET 2,978 (C) (13,298)
---------- --------
INCOME BEFORE PROVISION
FOR INCOME TAXES &
MINORITY INTEREST 3,788 47,816
PROVISION FOR INCOME TAXES (1,326)(D) (16,735)
MINORITY INTEREST - (2,287)
---------- --------
INCOME FROM CONTINUING
OPERATIONS $2,462 $28,794
========== ========
INCOME PER SHARE FROM
CONTINUING OPERATIONS
BASIC $0.60
=====
DILUTED $0.60
=====
AVERAGE SHARES OUTSTANDING
BASIC 47,720
======
DILUTED 48,258
======
(A) Reflects dividend income from the 12.25% preferred stock.
(B) Reflects royalty income calculated as a percent of MHE's sales.
(C) Reflects the reduction in interest expense resulting from the repayment
of short- and long-term debt available for repayment.
(D) Reflects tax effects of pro forma adjustments.
</TABLE>
<TABLE>
<CAPTION>
Harnischfeger Industries, Inc.
Unaudited Pro Forma Condensed Statement of Income
For the Quarter Ended January 31, 1998
Historical MHE Restated
----------- ------- ---------
<S> <C> <C> <C>
REVENUES
Net Sales $634,327 $76,483 $557,844
Other Income 10,158 148 10,010
-------- ------- --------
644,485 76,631 567,854
COST OF SALES 479,253 56,653 422,600
PRODUCT DEVELOPMENT,
SELLING & ADMINISTRATIVE
EXPENSES 112,181 14,344 97,837
-------- ------- -------
OPERATING INCOME 53,051 5,634 47,417
INTEREST EXPENSE-NET (18,772) (477) (18,295)
-------- ------- --------
INCOME BEFORE PROVISION
FOR INCOME TAXES &
MINORITY INTEREST 34,279 5,157 29,122
PROVISION FOR INCOME TAXES (11,650) (1,753) (9,897)
MINORITY INTEREST (900) - (900)
-------- -------- --------
INCOME FROM CONTINUING
OPERATIONS $21,729 $3,404 $18,325
======== ======== ========
INCOME PER SHARE FROM
CONTINUING OPERATIONS
BASIC $0.46 $0.39
===== =====
DILUTED $0.46 $0.39
===== =====
AVERAGE SHARES OUTSTANDING
BASIC 46,742 46,742
====== ======
DILUTED 46,941 46,941
====== ======
</TABLE>
<TABLE>
<CAPTION>
Harnischfeger Industries, Inc.
Unaudited Pro Forma Condensed Statement of Income
For the Quarter Ended January 31, 1998
Pro Forma
Adjustments Pro Forma
----------- ----------
<S> <C> <C>
REVENUES
Net Sales $ - $557,844
Other Income 147 (A) 10,820
663 (B)
---------- --------
810 568,664
COST OF SALES - 422,600
PRODUCT DEVELOPMENT,
SELLING & ADMINISTRATIVE
EXPENSES - 97,837
--------- --------
OPERATING INCOME 810 48,227
INTEREST EXPENSE-NET 4,462 (C) (13,833)
--------- --------
INCOME BEFORE PROVISION
FOR INCOME TAXES & MINORITY
INTEREST 5,272 34,394
PROVISION FOR INCOME TAXES (1,792)(D) (11,689)
MINORITY INTEREST - (900)
--------- --------
INCOME FROM CONTINUING
OPERATIONS $3,480 $21,805
========= =========
INCOME PER SHARE FROM
CONTINUING OPERATIONS
BASIC $0.47
=====
DILUTED $0.46
=====
AVERAGE SHARES OUTSTANDING
BASIC 46,742
======
DILUTED 46,941
======
(A) Reflects dividend income from the 12.25% preferred stock.
(B) Reflects royalty income calculated as a percent of MHE's sales.
(C) Reflects the reduction in interest expense resulting from the repayment
of short- and long-term debt available for repayment.
(D) Reflects tax effects of pro forma adjustments.
</TABLE>
<TABLE>
<CAPTION>
Harnischfeger Industries Inc.
Unaudited Pro Forma Condensed Balance Sheet
January 31, 1998
HII MHE
-------- -------
<S> <C> <C>
Assets
Current assets:
Cash & cash equivalents $ 18,065 $ -
Accounts receivable - net 885,623 75,545
Inventories 623,160 38,226
Businesses held for sale 9,576 -
Other current assets 133,303 6,383
---------- --------
1,669,727 120,154
Property, plant
and equipment - net 639,442 43,662
Intangible assets 506,959 37,154
Other assets 138,098 13,867
---------- --------
Total Assets $2,954,226 $214,837
========== ========
Liabilities and
Sharholders' Equity
Current Liabilities:
Short-term notes payable,
including current
portion of long-term
obligations $ 136,624 $ 3,280
Trade accounts payable 409,430 23,897
Employee compensation
and benefits 114,166 7,513
Advance payments and
progress billings 119,647 9,321
Accrued warranties 61,087 3,476
Other current liabilities 188,366 20,655
--------- --------
1,029,320 68,142
Long-term obligations 895,011 1,009
Liability for
postretirement benefits 50,952 -
Deferred income taxes 84,589 -
Other liabilities 47,041 -
Minority Interest 101,506 377
Shareholders' equity 745,807 145,309
---------- ---------
Total Liabilities and
Shareholders' Equity $2,954,226 $214,837
========== =========
</TABLE>
<TABLE>
<CAPTION>
Harnischfeger Industries Inc.
Unaudited Pro Forma Condensed Balance Sheet
January 31, 1998
Pro Forma HII
Adjustments Restated
----------- ---------
<S> <C> <C>
Assets
Current assets:
Cash & cash equivalents $ - $ 18,065
Accounts receivable - net - 810,078
Inventories - 584,934
Businesses held for sale - 9,576
Other current assets - 126,920
--------- ----------
- 1,549,573
Property, plant
and equipment - net - 595,780
Intangible assets - 469,805
Other assets 4,809(A) 129,040
------------- ----------
Total Assets $ 4,809 $2,744,198
============= ==========
Liabilities and
Sharholders' Equity
Current Liabilities:
Short-term notes payable,
including current
portion of long-term
obligations $(65,000)(B) $ 68,344
Trade accounts payable - 385,533
Employee compensation
and benefits - 106,653
Advance payments and
progress billings - 110,326
Accrued warranties - 57,611
Other current liabilities 55,000 (D) 222,711
------------ --------
(10,000) 951,178
Long-term obligations (275,000)(C) 619,002
Liability for
postretirement benefits - 50,952
Deferred income taxes - 84,589
Other liabilities - 47,041
Minority Interest - 101,129
Shareholders' equity 289,809 (E) 890,307
------------- ----------
Total Liabilities and
Shareholders' Equity $ 4,809 $2,744,198
============= ==========
A) Reflects the investment in preferred stock of $4,809.
B) Reflects the repayment of short term debt.
C) Reflects the repayment of long term debt.
D) Amount represents $10 million in estimated transaction-related
expenses and $45 million in estimated taxes.
E) Reflects the following:
Gain on sale after tax $144,500
Add back of MHE equity
which would have
been eliminated in
consolidation 145,309
--------
$289,809
========
</TABLE>
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 hereunto duly authorized.
Harnischfeger Industries, Inc.
April 13, 1998 By /s/ James C. Benjamin
------------------------------
Vice President, Controller
and Chief Accounting Officer
