ADIENCE INC
10-Q/A, 1994-12-13
STRUCTURAL CLAY PRODUCTS
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                                  FORM 10-Q\A



                                UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, DC  20549

             QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                     THE SECURITIES EXCHANGE ACT OF 1934



      For quarter ended:                             Commission File No.
      September 30, 1994                                  33-27289



                                ADIENCE, INC.



           Delaware                                       14-1671486
(State or other jurisdiction of                         (IRS Employer
 incorporation or organization)                     Identification Number)


                            1305 Grandview Avenue
                       Pittsburgh, Pennsylvania  15211
            (Address of registrant's principal executive offices)


                                 412-381-2600
             (Registrant's telephone number, including area code)



     Indicate by check mark whether the registrant (1) has filed all reports 
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 
1934 during the preceding 12 months and (2) has been subject to such filing 
requirements for at least the past 90 days.  Yes /X/     No 

     10,100,000 shares of common stock, par value $.01 per share, are 
outstanding as of September 30, 1994.






                                       




<PAGE>

ADIENCE, INC.

INDEX




PART 1 - FINANCIAL INFORMATION
- ------------------------------

   Item 1.  Financial Statements (Unaudited)

            Consolidated Balance Sheets--
               September 30, 1994 and December 31, 1993....................  2

            Consolidated Statements of Operations--
               Post-Emergence Three Months Ended September 30, 1994;
               Post-Emergence Three Months Ended September 30, 1993
               Post-Emergence Nine Months Ended September 30, 1994;
               Post-Emergence Three Months Ended September 30, 1993;
               Pre-Emergence Six Months Ended June 30, 1993................  4

            Consolidated Statements of Cash Flows--
               Post-Emergence Nine Months Ended September 30, 1994;
               Post-Emergence Three Months Ended September 30, 1993;
               Pre-Emergence Six Months Ended June 30, 1993................  5

            Notes to Consolidated Financial Statements--September 30, 1994.  6


   Item 2.  Management's Discussion and Analysis of
            Financial Condition and Results of Operations.................. 19




PART II - OTHER INFORMATION
- ---------------------------

   Item 5.  Other Information.............................................. 29

   Item 6.  Exhibits and Reports on Form 8-K............................... 29




SIGNATURES................................................................. 30
- ----------






                                       1



<PAGE>

PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

ADIENCE, INC.
CONSOLIDATED BALANCE SHEETS
- ------------------------------------------------------------------------------
                                                 September 30,    December 31,
                                                     1994             1993    
(In thousands of dollars, except share data)      (Unaudited)      (Audited)  
- ------------------------------------------------------------------------------
Assets                                                                        
Current assets:                                                               
   Cash and cash equivalents                        $ 1,322         $  2,200  
   Accounts receivable, less allowance                                        
      (1994 - $1,392; 1993 - $1,287)                 26,645           27,046  
   Inventories                                       16,346           18,650  
   Costs and estimated earnings in excess of                                  
      billings on uncompleted contracts               2,106            1,924  
   Prepaid expenses, deposits and other               2,016            2,231  
- ------------------------------------------------------------------------------
Total current assets                                 48,435           52,051  
- ------------------------------------------------------------------------------
Deferred income taxes                                 3,609            3,609  
Property, plant and equipment:                                                
   Land                                               2,803            2,763  
   Buildings                                         12,918           12,328  
   Machinery and equipment                           25,899           24,877  
- ------------------------------------------------------------------------------
                                                     41,620           39,968  
   Less allowances for depreciation                   9,981            7,151  
- ------------------------------------------------------------------------------
                                                     31,639           32,817  
                                                                              
Other assets                                          4,539            4,720  
                                                                              
Reorganization value in excess of                                             
   amounts allocable to identifiable assets, net      8,373            9,190  
- ------------------------------------------------------------------------------
Total assets                                        $96,595         $102,387  
==============================================================================

The accompanying notes are an integral part of these financial statements.











                                       2



<PAGE>

ADIENCE, INC.
CONSOLIDATED BALANCE SHEETS
- ------------------------------------------------------------------------------
                                                 September 30,    December 31,
                                                     1994             1993    
(In thousands of dollars, except share data)      (Unaudited)      (Audited)  
- ------------------------------------------------------------------------------
Liabilities and shareholders' equity                                          
Current liabilities:                                                          
   Revolving lines of credit                        $13,862       $    9,185  
   Current portion of long-term obligations             686              759  
   Accounts payable                                   9,594           11,424  
   Salaries, wages and withholdings                   1,106              953  
   Payable to principal shareholder                     487              569  
   Accrued expenses                                   4,947            3,727  
   Billings in excess of costs and estimated                                  
      earnings on uncompleted contracts                 900              619  
   Accrued insurance                                  6,026            6,466  
   Accrued income taxes                               1,392            1,569  
   Environmental liability                              492              783  
   Deferred income taxes                                 66               66  
- ------------------------------------------------------------------------------
Total current liabilities                            39,558           36,120  
- ------------------------------------------------------------------------------
Payable to principal shareholder                      1,688            3,189  
Long-term obligations                                46,403           46,211  
Deferred income taxes                                 3,930            3,930  
                                                                              
Minority interest in subsidiary                       3,458            3,428  
                                                                              
Shareholders' equity:                                                         
   Common stock, $.01 par value;                                              
      authorized 20,000,000 shares;                                           
      issued and outstanding 10,000,000 shares in 1993                        
      and 10,100,000 shares in 1994                     101              100  
   Additional paid-in capital                        23,974           23,900  
   Retained deficit                                 (22,272)         (14,367) 
   Foreign currency translation                        (189)            (124) 
   Unamortized stock compensation                       (56)              --  
Total shareholders' equity                            1,558            9,509  
                                                                              
Total liabilities and shareholders' equity          $96,595         $102,387  
==============================================================================

The accompanying notes are an integral part of these financial statements.









                                       3




<PAGE>
<TABLE>

ADIENCE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
UNAUDITED
(In thousands of dollars, except per share data)

<CAPTION>
                                            Post-emergence                            Post-emergence              |  Pre-emergence  
                                ---------------------------------------   ----------------------------------------------------------
                                Three Months Ended   Three Months Ended   Nine Months Ended    Three Months Ended | Six Months Ended
                                September 30, 1994   September 30, 1993   September 30, 1994   September 30, 1993 | June 30, 1993   
- -----------------------------------------------------------------------   ----------------------------------------------------------
<S>                                  <C>                  <C>                  <C>                  <C>                 <C>         
Net revenues                         $38,478              $40,348              $99,098              $40,348       |     $68,171     
Costs and expenses:                                                                                               |                 
   Cost of revenues                   31,279               33,672               82,280               33,672       |      55,474     
   Selling, general                                                                                               |                 
    and administrative                 5,703                6,218               18,293                6,218       |      14,624     
   Amortization of intangible asset      263                  510                  810                  510       |          --     
- -----------------------------------------------------------------------   ----------------------------------------------------------
                                      37,245               40,400              101,383               40,400       |      70,098     
- -----------------------------------------------------------------------   ----------------------------------------------------------
Operating profit (loss)                1,233                  (52)              (2,285)                 (52)      |      (1,927)    
- -----------------------------------------------------------------------   ----------------------------------------------------------
Other income (expense):                                                                                           |                 
   Interest and other income              93                  506                  554                  506       |         258     
   Interest expense                   (2,052)              (1,775)              (5,773)              (1,775)      |      (2,360)    
- -----------------------------------------------------------------------   ----------------------------------------------------------
Loss from continuing operations                                                                                   |                 
   before reorganization items,                                                                                   |                 
   income taxes, minority interest                                                                                |                 
   in subsidiary and extraordinary                                                                                |                 
   item                                 (726)              (1,321)              (7,504)              (1,321)      |      (4,029)    
- -----------------------------------------------------------------------   ----------------------------------------------------------
Reorganization items:                                                                                             |                 
   Professional fees                      --                 (411)                  --                 (411)      |        (102)    
   Write-off of unamortized debt                                                                                  |                 
    discount                              --                   --                   --                   --       |        (455)    
   Write-off of unamortized loan                                                                                  |                 
    origination fees                      --                   --                   --                   --       |      (2,065)    
   Adjust accounts to fair value          --                   --                   --                   --       |      23,165     
- -----------------------------------------------------------------------   ----------------------------------------------------------
                                          --                 (411)                  --                 (411)      |      20,543     
(Loss) income from continuing                                                                                     |                 
   operations before income taxes,                                                                                |                 
   minority interest in subsidiary                                                                                |                 
   and extraordinary item               (726)              (1,732)              (7,504)              (1,732)      |      16,514     
- -----------------------------------------------------------------------   ----------------------------------------------------------
Income tax expense                       428                  509                  371                  509       |         261     
- -----------------------------------------------------------------------   ----------------------------------------------------------
(Loss) income from continuing                                                                                     |                 
   operations before minority                                                                                     |                 
   interest in subsidiary and                                                                                     |                 
   extraordinary item                 (1,154)              (2,241)              (7,875)              (2,241)      |      16,253     
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
                                       4

<PAGE>
<TABLE>

ADIENCE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
UNAUDITED - (Continued)
(In thousands of dollars, except per share data)

<CAPTION>
                                            Post-emergence                            Post-emergence              |  Pre-emergence  
                                ---------------------------------------   ----------------------------------------------------------
                                Three Months Ended   Three Months Ended   Nine Months Ended    Three Months Ended | Six Months Ended
                                September 30, 1994   September 30, 1993   September 30, 1994   September 30, 1993 | June 30, 1993   
- -----------------------------------------------------------------------   ----------------------------------------------------------
<S>                                  <C>                  <C>                  <C>                  <C>                 <C>         
Minority interest in subsidiary           71                  105                   30                  105       |           1     
- -----------------------------------------------------------------------   ----------------------------------------------------------
(Loss) income from continuing                                                                                     |                 
   operations before                                                                                              |                 
   extraordinary item                 (1,225)              (2,346)              (7,905)              (2,346)      |      16,252     
- -----------------------------------------------------------------------   ----------------------------------------------------------
Discontinued operations:                                                                                          |                 
   Income (loss) on disposal of                                                                                   |                 
   discontinued operations                --                   81                   --                   81       |        (400)    
- -----------------------------------------------------------------------   ----------------------------------------------------------
(Loss) income before extraordinary                                                                                                  
   item                               (1,225)              (2,265)              (7,905)              (2,265)      |      15,852     
                                                                                                                  |                 
Extraordinary item-gain on                                                                                        |                 
   discharge of debt                      --                   --                   --                   --       |      17,480     
- -----------------------------------------------------------------------   ----------------------------------------------------------
Net (loss) income                    $(1,225)             $(2,265)             $(7,905)             $(2,265)      |     $33,332     
=======================================================================   ==========================================================
Earnings per common share:*                                                                                       |                 
   Loss from continuing operations   $ (0.12)             $ (0.23)             $ (0.79)             $ (0.23)      |     $   *       
   Income (loss) from discontinued                                                                                |                 
    operations                            --                   --                   --                   --       |         *       
   Extraordinary item                     --                   --                   --                   --       |         *       
- -----------------------------------------------------------------------   ----------------------------------------------------------
Loss per common share                $ (0.12)             $ (0.23)             $ (0.79)             $ (0.23)      |     $   *       
Average common shares outstanding     10,100               10,100               10,040               10,100       |         *       
=======================================================================   ==========================================================

* Earnings per share are not meaningful due to reorganization and revaluation entries and the issueance of new common stock.

  The accompanying notes are an integral part of these financial statements.

</TABLE>








                                       4A



<PAGE>
<TABLE>
ADIENCE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
UNAUDITED
<CAPTION>
                                                                                   Post-emergence               |  Pre-emergence   
                                                                     --------------------------------------------------------------
                                                                     Nine Months Ended      Three Months Ended  |  Six Months Ended
(In thousands of dollars)                                            September 30, 1994     September 30, 1993  |  June 30, 1993   
- -----------------------------------------------------------------------------------------------------------------------------------
<S>                                                                       <C>                    <C>                    <C>        
Cash flow from operating activities                                                                             |                  
Net (loss) income                                                         $(7,905)               $(2,265)       |       $33,332    
Non-cash expenses and revenues included in loss income                                                          |                  
   Depreciation and amortization                                            4,835                  1,985        |         2,000    
   Provision for doubtful accounts                                            298                     --        |           413    
   (Gain) loss on disposal of discontinued operations                          --                    (81)       |           400    
   (Gain) loss on disposal of property, plant and equipment                   (71)                    37        |            23    
   Minority interest                                                           30                    105        |             1    
Changes in operating assets and liabilities:                                                                    |                  
   Short-term investments                                                      --                    258        |            (4)   
   Accounts receivable                                                        296                 (2,665)       |        (3,781)   
   Inventories, prepaid expenses, deposits and other                        2,519                  1,536        |           201    
   Costs and estimated earnings in excess of                                                                    |                  
    billings on uncompleted contracts                                        (182)                  (653)       |        (1,050)   
   Income tax receivable                                                       --                    288        |         2,742    
   Accounts payable, salaries, wages and withholdings, accrued expenses,                                        |                  
    accrued insurance and payable to principal shareholder                 (2,477)                (1,496)       |         2,469    
   Billings in excess of costs and estimated                                                                    |                  
    earnings on uncompleted cotracts                                          281                    221        |           614    
   Accrued income taxes                                                      (177)                   442        |         1,549    
   Environmental liability                                                   (291)                   (18)       |           (82)   
   Other                                                                       68                    174        |           470    
Operating cash flows from reorganization items:                                                                 |                  
   Write-off of unamortized debt discount and loan origination fees            --                     --        |         2,520    
   Adjust accounts to fair value                                               --                     --        |       (23,165)   
   Extraordinary gain on discharge of debt                                     --                     --        |       (17,480)   
- -----------------------------------------------------------------------------------------------------------------------------------
Net cash (used) provided by operating activities                           (2,776)                (2,132)       |         1,172    
- -----------------------------------------------------------------------------------------------------------------------------------
Cash flow from investing activities                                                                             |                  
Purchase of property, plant and equipment                                  (2,097)                  (454)       |          (697)   
Other                                                                        (426)                  (202)       |          (305)   
- -----------------------------------------------------------------------------------------------------------------------------------
Net cash used by investing activities                                      (2,523)                  (656)       |        (1,002)   
- -----------------------------------------------------------------------------------------------------------------------------------
Cash flow from financing activities                                                                             |                  
Net borrowings (payments) on revolving lines of credit                      4,677                  3,739        |        (1,849)   
Principal payments on long-term obligations                                  (256)                   (72)       |          (369)   
- -----------------------------------------------------------------------------------------------------------------------------------
Net cash provided (used) by financing activities                            4,421                  3,667        |        (2,218)   
- -----------------------------------------------------------------------------------------------------------------------------------
Net (decrease) increase in cash and cash equivalents                         (878)                   879        |        (2,048)   
Cash and cash equivalents at beginning of period                            2,200                      0        |         2,048    
- -----------------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period                                $ 1,322                $   879        |       $     0    
===================================================================================================================================
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>

ADIENCE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
UNAUDITED
September 30, 1994

(Dollar amounts in thousands, except share data, unless otherwise noted)


Note 1 - BASIS OF PRESENTATION AND COMPANY REORGANIZATION
- ---------------------------------------------------------

Adience, Inc. ("Adience" or "Company") has significant indebtedness, has 
experienced continued losses from operations pre-and post-emergence under 
Chapter 11, and although Adience has met operating and financial plans for the 
three months ended September 30, 1994, it has not met operating and financial 
plans for the nine months ended September 30, 1994 due to lower than expected 
results at its refractory and information display operations.  These factors 
raise substantial doubt about Adience's ability to continue as a going 
concern.  Management's plans in regard to this matter include further 
implementation of its plans to combine multi-functional resources as teams to 
respond better to customer needs, making an investment in product and service 
opportunities expected to produce a greater return on its investment, 
continuing a cost control program begun in 1993, and exploring capital market 
transactions such as the proposed acquisition of Adience by The Alpine Group, 
Inc. (Item 5).  Although management believes that these plans will enable 
Adience to continue as a going concern for a reasonable period there can be no 
assurance that this will be the case.  These financial statements do not 
include any adjustments relating to the recoverability and classification of 
assets or to the classification of liabilities that might be necessary should 
Adience not be able to continue in existence.

A Prepackaged Plan of Reorganization under Chapter 11 of the Bankruptcy Code 
(the "Prepackaged Plan") was filed by Adience and the Unofficial Committee of 
Noteholders of Adience on February 22, 1993.  The Prepackaged Plan was 
confirmed by the United States Bankruptcy Court for the Western District of 
Pennsylvania on May 4, 1993 and consummated on June 30, 1993.

The Prepackaged Plan provided for a restructuring of Adience's capital 
structure and allowed the holders of $66 million aggregate principal amount of 
Adience's 15% Senior Subordinated Notes ("Old Reset Notes") to exchange them 
for $49 million aggregate principal amount of new 11% Senior Secured Notes 
("New Secured Notes") due June 15, 2002, plus common stock representing 55% of 
the outstanding common stock of Adience.  The Prepackaged Plan also included 
forgiveness of accrued interest totaling approximately $8.8 million.  The 
value of the cash and securities distributed was $17.5 million less than the 
allowed claims; the resultant gain was recorded as an extraordinary gain.







                                       6




<PAGE>

ADIENCE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
UNAUDITED - Continued


NOTE 1 - CONTINUED
- ------------------

Neither Adience Canada, a wholly-owned subsidiary, or Information Display 
Technology, Inc. ("IDT"), a majority-owned subsidiary of Adience, guarantee 
the new 11% Notes issued by Adience under the Prepackaged Plan.  The new Notes 
are secured by a lien on all the assets of Adience, including the stock of 
IDT.

Adience Canada and IDT did not file plans of reorganization.

The sum of allowed claims plus post petition liabilities exceeded the 
reorganization value of the assets of Adience immediately before the date of 
consummation.  Also, the Company experienced a change in control as pre-
reorganization holders of common stock received less than 50% of the new 
common stock issued pursuant to the Prepackaged Plan.  AICPA SOP 90-7, 
Financial Reporting by Entities in Reorganization under the Bankruptcy Code 
("SOP 90-7"), requires that under these circumstances, a new reporting entity 
is created and assets and liabilities should be recorded at their fair values.  
This accounting treatment is referred to in these statements as "fresh start 
reporting".  The Company's basis of accounting for financial reporting 
purposes changed on June 30, 1993 as a result of applying SOP 90-7.  
Specifically, application of SOP 90-7 required the adjustment of the Company's 
assets and liabilities to reflect a reorganization value generally 
approximating the fair value of the Company as a going concern on an 
unleveraged basis, the elimination of its retained deficit, and adjustments to 
its capital structure to reflect consummation of the Prepackaged Plan.  Fresh 
start reporting has not been adopted by Adience Canada and IDT.

The consolidated statements of operations and cash flows after June 30, 1993 
are not comparable to the respective financial statements prior to such date, 
accordingly a solid black line has been shown to separate it from prior year 
information since it is not prepared on a comparable basis.

Reorganization value at the June 30, 1993 consummation date was determined by 
management with the assistance of independent advisors.  The methodology 
employed involved estimation of enterprise value (i.e., the market value of 
the Company's debt and shareholders' equity), taking into account a discounted 
cash flow analysis, as well as the capitalization of earnings and cash flow 
approaches.  The discounted cash flow analysis was based on five-year cash 
flow projections prepared by management.








                                       7



<PAGE>

ADIENCE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
UNAUDITED - Continued


NOTE 1 - CONTINUED
- ------------------

The five-year cash flow projections were based on estimates and assumptions 
about circumstances and events that had not yet taken place.  Such estimates 
and assumptions are inherently subject to significant economic and competitive 
uncertainties and contingencies beyond the control of the corporation, 
including, but not limited to, those with respect to the future courses of the 
Company's business activity.  Accordingly, there will usually be differences 
between projections and actual results because events and circumstances 
frequently do not occur as expected; and those differences may be material.  
The assumptions included: a rate of sales growth of approximately 2.5% per 
annum in excess of the anticipated rate of inflation; selling, general and 
administrative expenses, after adjustment for non-recurring items, increase in 
line with the rate of sales growth; operating profit margins for each of the 
five years are approximately equal to one half of the average annual operating 
profit margins achieved during the most recent profitable period of 1988-1990; 
and effective tax rates of 33%.

At June 30, 1993, the adjustment to record confirmation of the plan of $23 
million was allocated to assets and liabilities as follows:

Inventories                                                  $   1,287 
Property, plant and equipment                                   19,448 
Reorganization value in excess of amounts                              
   allocable to identifiable assets                             18,329 
Intangible assets                                               (3,032)
Deferred income taxes                                           (1,108)
Additional paid-in capital                                     (10,896)
Prepaid contribution to employee stock ownership plan             (863)
                                                               --------
                                                               $ 23,165
                                                               ========

Current assets and liabilities were recorded at fair value.  Property, plant 
and equipment was recorded at reorganization value, which approximated fair 
value in continued use, based on an independent appraisal.  In addition, under 
SOP 90-7, the long-term debt was recorded at present values on June 30, 1993.  
The resulting unamortized discount is being accreted to interest expense over 
the term of the New Secured Notes.









                                       8



<PAGE>

ADIENCE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
UNAUDITED - Continued


NOTE 1 - CONTINUED
- ------------------

Based on the allocation of equity value in conformity with SOP 90-7, the 
portion of the equity value which was not attributed to specific tangible or 
identifiable intangible assets of the reorganized Company of $18,329 was 
reported as "reorganization value in excess of amounts allocable to 
identifiable assets".  This value was initially being amortized on a straight 
line basis in equal annual amounts over 9 years.  On a quarterly basis, 
management evaluates the recoverability of the unamortized portion of the 
reorganization value in excess of amounts allocable to identifiable assets by 
comparing actual cash flows with the projected cash flows used to arrive at 
the reorganization value.  Should a material difference exist, management will 
then consider whether the assumptions made in the preparation of the projected 
cash flows are still reasonable.  If management is of the opinion that new 
projected cash flows are required and that a permanent impairment of the 
remaining reorganization value has occurred, a reduction of some or all of the 
unamortized value will be immediately recognized.

In the fourth quarter of 1993, the Company recorded a charge of $8 million to 
reduce the recorded reorganization value in excess of amounts allocable to 
identifiable assets based on management's comparison of actual cash flows 
post-emergence through December 31, 1993, with the projected cash flows used 
to arrive at the reorganization value.  This comparison resulted in the 
preparation of new cash flow projections, which in turn led the Company to the 
conclusion that permanent impairment of the reorganization value had occurred 
and that an immediate reduction of approximately 50% of the remaining 
unamortized value needed to be recognized.

The Company has adopted "fresh start reporting" in accordance with SOP 90-7 in 
preparing its consolidated balance sheet as of June 30, 1993.  The balance 
sheet became the opening balance sheet for Adience, Inc., as reorganized, on 
July 1, 1993.

The accompanying unaudited consolidated financial statements of Adience have 
been prepared in accordance with generally accepted accounting principles for 
interim financial information and with the instructions to Form 10-Q and 
Article 10 of Regulation S-X.  Accordingly, they do not include all the 
information and footnotes required by generally accepted accounting principles 
for complete financial statements.

In the opinion of management, all adjustments (consisting of normal recurring 
accruals) considered necessary for a fair presentation have been included.  
The consolidated results of operations for the three and nine month periods 
ended September 30, 1994, are not necessarily indicative of the results that 
may be expected for the year ended December 31, 1994.



                                       9



<PAGE>

ADIENCE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
UNAUDITED - Continued


NOTE 1 - CONTINUED
- ------------------

The accompanying unaudited financial statements should be read in conjunction 
with Adience's audited financial statements included in Adience's annual 
report on Form 10-K for the six month periods ended December 31 and June 30, 
1993.

Earnings per common share is computed by dividing net loss by the weighted 
average number of shares outstanding.


Note 2 - Pro Forma Results of Operations
- ----------------------------------------

The following consolidating pro forma statement of operations reflects the 
financial results of the Company as if the reorganization had been effective 
January 1, 1993:































                                       10



<PAGE>
<TABLE>

ADIENCE, INC.
CONSOLIDATING PRO FORMA STATEMENT OF OPERATIONS
UNAUDITED

<CAPTION>
                                                            For  the  NIne  Months  Ended  September  30,  1 9 9 3                 
- -----------------------------------------------------------------------------------------------------------------------------------
                                                                Pro Forma       Unconsolidated                                     
                                            Unconsolidated     Adjustments         Adience                  ADIENCE   ADIENCE, INC.
                                               ADIENCE       Debit      Credit    Pro Forma        IDT      CANADA    CONSOLIDATED 
- -----------------------------------------------------------------------------------------------------------------------------------
<S>                                            <C>        <C>          <C>          <C>          <C>        <C>          <C>       
Net revenues                                   $61,565                              $61,565      $38,761    $ 8,193      $108,519  
                                                                                                                                   
Costs and expenses:                                                                                                                
   Cost of revenues                            (51,174)   $ 1,164(1)                (52,338)     (31,656)    (5,878)      (89,872) 
   Selling, general and administrative         (13,840)                $  564(1)    (13,276)      (6,118)    (1,322)      (20,716) 
   Amortization of intangible asset               (509)       301(1)                   (810)                                 (810) 
- -----------------------------------------------------------------------------------------------------------------------------------
                                               (65,523)     1,465         564       (66,424)     (37,774)    (7,200)     (111,398) 
- -----------------------------------------------------------------------------------------------------------------------------------
Operating (loss) profit                         (3,958)     1,465         564        (4,859)         987        993        (2,879) 
Other income (expense):                                                                                                            
   Interest and other income                       705                                  705           29         30           764  
   Interest expense                             (4,007)     1,318(2)                 (5,325)        (128)                  (5,453) 
- -----------------------------------------------------------------------------------------------------------------------------------
                                                (3,302)     1,318                    (4,620)         (99)        30        (4,689) 
- -----------------------------------------------------------------------------------------------------------------------------------
(Loss) income from continuing operations                                                                                           
   before reorganization items, income taxes,                                                                                      
   minority interest in subsidiary, and                                                                                            
   extraordinary item                           (7,260)     2,783         564        (9,479)         888      1,023        (7,568) 
Reorganization items:                                                                                                              
   Professional fees                              (513)                   513(3)          0                                     0  
   Write-off of unamortized debt discount         (455)                   455(3)          0                                     0  
   Write-off of unamortized loan                                                                                                   
    origniation fees                            (2,065)                 2,065(3)          0                                     0  
   Adjust accounts to fair value                23,165     23,165(3)                      0                                     0  
- -----------------------------------------------------------------------------------------------------------------------------------
                                                20,132     23,165       3,033             0                                     0  
- -----------------------------------------------------------------------------------------------------------------------------------
(Loss) income from continuing operations                                                                                           
   before income taxes, minority interest                                                                                          
   in subsidiary, and extraordinary item        12,872     25,948       3,597        (9,479)         888      1,023        (7,568) 
Income taxes expense                                 6                                    6          355        409           770  
- -----------------------------------------------------------------------------------------------------------------------------------
(Loss) income from continuing operations                                                                                           
   before minority interest in subsidiary,                                                                                         
   and extraordinary item                       12,866     25,948       3,597        (9,485)         533        614        (8,338) 
Minority interest in subsidiary                   (106)                                (106)                                 (106) 
- -----------------------------------------------------------------------------------------------------------------------------------
 (Loss) income from continuing operations                                                                                           
   before extraordinary item                   $12,760    $25,948      $3,597       $(9,591)     $   533    $   614       $(8,444) 
===================================================================================================================================

For explanations of (1), (2) and (3) see page 12.
</TABLE>
<PAGE>

ADIENCE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
UNAUDITED - Continued


NOTE 2 - CONTINUED
- ------------------

(1)  Reflects impact of additional depreciation expense resulting from the 
     write-up of property, plant and equipment, the amortization of the write-
     up in inventory values, the amortization of reorganization value in 
     excess of fair value, and the reduction of ESOP expense and goodwill 
     amortization which was written off in conjunction with fresh start 
     reporting.

(2)  Interest expense on reorganized long-term debt.

(3)  Elimination of the effect of non-recurring reorganization items on 
     operations.


NOTE 3 - INVENTORIES
- --------------------

Inventories consist primarily of raw materials of $7,593 and $7,512, work-in-
process of $1,746 and $2,374 and finished goods of $7,007 and $8,764 at 
September 30, 1994 and December 31, 1993, respectively.


NOTE 4 - CONTRACTS IN PROGRESS
- ------------------------------

The status of contract costs on uncompleted construction contracts was as 
follows:

                       Costs and estimated     Billings in excess             
                           earnings in            of costs and                
                       excess of billings      estimated earnings      Net    
- ------------------------------------------------------------------------------
                                                                              
September 30, 1994:                                                           
Costs and estimated                                                           
   earnings of $1,839       $24,849                 $  9,355                  
Billings                     22,743                   10,255                  
- ------------------------------------------------------------------------------
                            $ 2,106                 $    900        $ 1,206   
==============================================================================
                                                                              
December 31, 1993:                                                            
Costs and estimated                                                           
   earnings of $1,649       $20,113                 $  6,218                  
Billings                     18,189                    6,837                  
- ------------------------------------------------------------------------------
                            $ 1,924                 $    619        $ 1,305   
==============================================================================

                                       12

<PAGE>

ADIENCE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
UNAUDITED - Continued


NOTE 4 - CONTINUED
- ------------------

Accounts receivable at September 30, 1994 and December 31, 1993 include 
amounts billed but not yet paid by customers under retainage provisions of 
approximately $2,816 and $2,989, respectively.  Such amounts are generally due 
within one year.


NOTE 5 - INCOME TAX PAYMENTS
- ----------------------------

For the nine month period ended September 30, 1994, the three month period 
ended September 30, 1993 and the six months ended June 30, 1993 the Company 
made income tax payments totaling $609, $2 and $32, respectively.


NOTE 6 - LINES OF CREDIT
- ------------------------

On the consummation date of the plan of reorganization, June 30, 1993, Adience 
entered into a financing agreement with Congress Financial Corporation 
("Congress") that had a renewal date of June 30, 1994 (the "Renewal Date").  
Certain revisions were made to the terms of the agreement during 1994, 
including the extension of the Renewal Date to June 30, 1995.  The facility 
remains in effect year to year thereafter, unless terminated upon sixty days 
written notice by either party on the anniversary of the Renewal Date in any 
year. Under the revised agreement, Adience may request loan advances not to 
exceed the lesser of $14 million or available collateral (85% of eligible 
accounts receivable less than 90 days, 50% of eligible bagged inventory plus 
30% of eligible raw material and finished goods inventory which does not 
constitute bagged inventory).  The loan is collateralized by accounts 
receivable, inventory, fixed assets, intangible assets and Adience's shares of 
IDT.  In addition, IDT has guaranteed the Adience line of credit and has 
pledged as collateral its own accounts receivable, inventory and equipment.  
The interest rate on the loan is 2.5% over the prime rate (effective rate of 
10.25% at September 30, 1994).  At September 30, 1994 Adience had borrowed 
$11,843 under the credit facility including checks in transit of $1,603.  
Letters of credit issued under the facility totaled $1,143 at September 30, 
1994, which reduced the availability under the financing arrangement in a like 
amount.








                                       13



<PAGE>

ADIENCE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
UNAUDITED - Continued


NOTE 6 - CONTINUED
- ------------------

In addition, IDT entered into a financing agreement with Congress, which was 
also renewed through June 30, 1995.  The facility remains in effect year to 
year thereafter, unless terminated upon sixty days written notice by either 
party on the anniversary date of the Renewal Date in any year.  Certain 
revisions were also made to the terms of the agreement during 1994.  Under the 
revised agreement, IDT may request loan advances not to exceed the lesser of 
$5 million or available collateral (85% of eligible accounts receivable less 
than 90 days plus 30% of raw material and finished goods inventory).  The loan 
is collateralized by accounts receivable, inventory and fixed assets.  Adience 
guarantees IDT's debt to Congress.  The interest rate on the loan is 2.5% over 
the prime rate.  At September 30, 1994, IDT had borrowed $2,019 under the 
credit facility including checks in transit of $398.  Letters of credit issued 
under the facility totaled $700 at September 30, 1994, which reduced the 
availability under the financing arrangement in a like amount.

Both Adience and IDT pay commitment fees on the unused portion of their credit 
facility of 0.5% per annum.  Under the terms of the financing agreements, both 
companies are required to maintain certain financial ratios and meet other 
financial conditions.  The agreements do not allow the companies to incur 
additional indebtedness, pay cash dividends, make certain investments, 
advances or loans, and limits annual capital expenditures.  As of September 
30, 1994, Adience and IDT were in compliance with the covenants of their 
respective agreements.  Adience's ability to continue to comply with such 
conditions is dependent upon Adience's ability to achieve specified levels of 
sales, profitable operations and borrowing availability.  Waivers or 
amendments may be required in the future to ensure compliance.  Inability to 
achieve compliance in the future could affect Adience's access to further 
borrowings or require it to secure additional capital by other means.


















                                       14



<PAGE>

ADIENCE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
UNAUDITED - Continued


NOTE 7 - LONG-TERM OBLIGATIONS
- ------------------------------

                                                  September 30,   December 31,
                                                      1994             1993   
- ------------------------------------------------------------------------------
Long-term obligations consisted of the following:                             
                                                                              
New Senior Secured Notes due in 2002,                                         
   interest at 11%                                  $49,079          $49,079  
Notes payable with monthly installments of                                    
   principal and interest of $22                                              
   through December 1997, interest at 10%               701              836  
Capital lease obligations                               602              745  
Other (interest ranges from 10% to 13%)                 582              560  
- ------------------------------------------------------------------------------
                                                     50,964           51,220  
Less current portion                                    686              759  
- ------------------------------------------------------------------------------
                                                     50,278           50,461  
Discount on New Senior Secured Notes                  3,875            4,250  
- ------------------------------------------------------------------------------
                                                    $46,403          $46,211  
==============================================================================

In connection with the Plan of Reorganization, $49,079 of New Senior Secured 
Notes with an annual interest rate of 11% were issued under an indenture 
agreement dated as of June 30, 1993.  The New Senior Secured Notes are 
redeemable at the option of Adience after December 15, 1997.  The New Senior 
Secured Notes are not guaranteed by subsidiaries of Adience.  The New Notes 
are secured by a lien on all the assets of Adience, including the stock of 
IDT.

Adience, on a consolidated basis, has agreed to certain restrictive covenants 
which are ordinary to such financings including, among other things, 
limitations on asset sales, limitations on additional indebtedness and 
restrictions on the payment of dividends.












                                       15



<PAGE>

ADIENCE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
UNAUDITED - Continued


NOTE 8 - STOCK PLANS
- --------------------

On May 24, 1994, the Board of Directors of Adience adopted the 1994 Stock 
Option Plan ("Stock Option Plan") and 1994 Directors Stock Grant Plan ("Stock 
Grant Plan").  Under the Stock Option Plan, 1,250,000 shares have been 
reserved for issuance upon the exercise of stock options, which may be granted 
to employees by the Compensation Committee of the Company's Board of 
Directors.  Under the Stock Option Plan, options generally become exercisable 
six months following the date of grant or over a period determined by the 
Board of Directors and expire ten years from the date of grant.  The Stock 
Option Plan provides for the option price to be paid in cash, shares of 
Adience's common stock owned by the option holder, or a combination of such 
shares and cash.  As of September 30, 1994, 225,000 options have been granted 
under the Stock Option Plan.  Each option granted entitles the holder to 
acquire one share of Adience common stock at an exercise price not to be less 
that the fair market value of the underlying shares on the date of grant.  
There is currently no public market for the common stock.

Compensation resulting from stock options is initially measured at the grant 
date based on the market value of the common stock, with adjustments to be 
made quarterly for market price fluctuations.  The Company recognized no Stock 
Option Plan compensation expense for the nine months ended September 30, 1994.

The Stock Grant Plan provides that up to 300,000 shares of common stock may be 
granted to the members of the Board of Directors, at no cost to the directors.  
The Stock Grant Plan authorized the automatic grant of 10,000 shares of common 
stock to each director on June 13, 1994, and 10,000 shares of common stock to 
each director on the date of each of the next two successive annual meetings 
of shareholders of the Company provided the director is then re-elected to the 
board, up to an aggregate of not more than 30,000 shares for each director.  
These grants have been made in lieu of a cash retainer which would have been 
paid to each director.

The aggregate fair market value of the shares granted under the Stock Grant 
Plan is considered unearned compensation at the time of grant and compensation 
is earned ratably over the year.  The unamortized unearned compensation value 
is shown as a reduction of shareholders' equity in the accompanying 
consolidated balance sheet.

Additionally, Steib & Company, a New York general partnership, was granted 
options to purchase 1,275,000 shares of Company common stock as partial 
compensation for services to be performed under an advisory agreement with the 
Company.  Steven S. Elbaum, a member of the Company's Board of Directors, is a 
general partner of Steib & Company.




                                       16



<PAGE>

ADIENCE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
UNAUDITED - Continued


NOTE 9 - COMMITMENTS AND CONTINGENCIES
- --------------------------------------

At September 30, 1994, Adience and IDT had $1,143 and $700, respectively, in 
irrevocable standby letters of credit outstanding, not reflected in the 
accompanying consolidated financial statements, as guarantees in force for 
various insurance policies, performance and bid bonds.  These instruments are 
usually for the duration of the contract.  The letters of credit reduce 
Adience's and IDT's availability under the Congress credit facility.

In February 1992, IDT was cited by the Ohio Environmental Protection Agency 
(the "Ohio EPA") for violations of Ohio's hazardous waste regulations, 
including speculative accumulation of waste and illegal disposal of hazardous 
waste on the site of its Alliance, Ohio facility.  IDT had $783 accrued at 
December 31, 1993 for the clean up of this site.

In December 1993, IDT and Adience signed a consent order with the Ohio EPA and 
Ohio Attorney General which required IDT and Adience to pay to the State of 
Ohio a civil penalty of $200 (of which IDT paid $175 and Adience paid $25).  
In addition, the consent order requires the payment of stipulated penalties of 
up to $1 per day for failure to satisfy certain requirements of the consent 
order including milestones in the closure plan.  IDT expects that the work to 
be conducted under the closure plan will be substantially completed in 1994, 
subject to IDT receiving all necessary approvals from the Ohio EPA.  At 
September 30, 1994, environmental accruals amounted to $492 which represents 
management's reasonable estimate of the amounts remaining to be incurred in 
this matter, including the costs of effecting the closure plan, bonding and 
insurance costs, penalties and legal and consultants' fees.  Since 1991, 
Adience and IDT have together paid $614 (excluding the civil penalty) for the 
environmental clean-up related to the Alliance facility.

IDT has commenced discussions with the Ohio EPA concerning a modification to 
the closure plan which would reduce the scope of work required.  Based on 
administrative precedent, IDT believes that it is likely that the Ohio EPA 
will agree to the modification.  If such a modification is not made, 
additional costs may have to be incurred to complete the project.  Although 
there is no assurance that additional costs will not have to be incurred, the 
Company believes that such costs will not need to be incurred.

Under the acquisition agreement pursuant to which IDT acquired the property 
from Adience, Adience represented and warranted that, except as otherwise 
disclosed to IDT, no hazardous material has been stored or disposed of on the 
property.  No disclosure of storage or disposal of hazardous material on the 
site was made.  Accordingly, Adience is required to indemnify IDT for any 
losses in excess of $250.  IDT has notified Adience that it is claiming the 
right to indemnification for all costs in excess of $250 incurred by IDT in 
this matter and has received assurance that Adience will honor such claim.  
Adience has reimbursed IDT $421; if Adience is financially unable to honor its 
remaining obligation, such costs would be borne by IDT.

                                       17


<PAGE>

ADIENCE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
UNAUDITED - Continued


NOTE 9 - CONTINUED
- ------------------

In October 1994, three district sales managers of IDT filed a lawsuit in the 
United States District Court for the Western District of Pennsylvania against 
IDT alleging breach of their employment contracts and age discrimination.  
Although management of IDT believes that the lawsuit can be successfully 
defended and is without merit, no assurance can be given as to the outcome of 
the action.

Adience is engaged in various other legal actions arising in the ordinary 
course of business.  Management believes, after discussions with internal and 
external counsel, that the ultimate outcome of the proceedings will not have a 
material adverse effect on Adience's consolidated financial position.



































                                       18



<PAGE>


Item 2.   Management's Discussion and Analysis of Financial Condition
          and Results of Operations


Reorganization and Fresh-Start Reporting
- ----------------------------------------

Adience, Inc. has experienced continued losses from continuing operations 
(before reorganization items) both pre- and post-emergence under Chapter 11.  
In addition, a write down of reorganization value in excess of amounts 
allocable to identifiable assets was recorded at December 31, 1993, based on 
management's belief that a permanent impairment of this asset existed.

The continued viability of the Company is dependent upon, among other factors, 
the ability to generate sufficient funds from operations, financing, or other 
sources that will meet ongoing obligations over a sustained period.  
Management has prepared detailed operating and financial plans which combine 
multifunctional resources as teams to respond better to customer needs and 
make an investment in product and service opportunities expected to produce a 
significantly greater return on investment.  Management believes that the 
successful implementation of these plans will enable the Company to continue 
as a going concern.  There can be no assurance, however, that such activities 
will achieve the intended improvement in results of operations or financial 
position.

On February 22, 1993, Adience and the unofficial committee of noteholders of 
Adience filed a "prepackaged" plan of reorganization (the "Prepackaged Plan") 
under Chapter 11 of the United States Bankruptcy Code (the "Reorganization").  
The Prepackaged Plan was confirmed by the United States Bankruptcy Court for 
the Western District of Pennsylvania on May 4, 1993 and consummated on June 
30, 1993.

The filing was precipitated by a combination of an overall decline in the 
demand for refractory products and services during 1991 and 1992 caused by a 
decrease in the production of refractory using industries in the United 
States, particularly steel, and losses from discontinued operations.  The 
primary purposes of the Prepackaged Plan were to reduce Adience's debt service 
requirements and overall indebtedness, to realign its capital structure and to 
provide Adience with greater liquidity.  Neither IDT nor Adience Canada, Inc. 
filed a plan of reorganization.

The Prepackaged Plan provided for a restructuring of Adience's capital 
structure and allowed the holders of $66 million aggregate principal amount of 
Adience's Senior Subordinated Reset Notes ("Old Subordinated Notes") to 
exchange them for $49 million aggregate principal amount of new 11% Senior 
Secured Notes ("New Senior Notes") due June 15, 2002, plus common stock 
representing 55% of the outstanding common stock of Adience.  The Prepackaged 
Plan also included forgiveness of outstanding interest totaling approximately 
$8.8 million.  The value of the cash and securities distributed was $17.5 
million less than the allowed claims; the resultant gain was recorded as an 
extraordinary gain.


                                       19



<PAGE>

In connection with the Reorganization described above, Adience applied the 
provisions of the American Institute of Certified Public Accountants' 
Statement of Position No. 90-7, "Financial Reporting by Entities in 
Reorganization under the Bankruptcy Code" ("SOP 90-7") as of June 30, 1993.  
The Company's basis of accounting for financial reporting purposes changed as 
a result of applying SOP 90-7.  Specifically, SOP 90-7 required the adjustment 
of the Company's assets and liabilities to reflect a reorganization value 
generally approximating the fair value of the Company as a going concern on an 
unleveraged basis, the elimination of its accumulated deficit, and adjustments 
to its capital structure to reflect consummation of the Prepackaged Plan.  
Accordingly, the results of operations after June 30, 1993 are not comparable 
to the results of operations prior to such date.


Results of Operations
- ---------------------

Historical Financial Information for the Nine Months Ended September 30, 1994 
and Pro Forma Financial Information for the Nine Months Ended September 30, 
1993.
- ------------------------------------------------------------------------------

The following table summarizes the Company's consolidated results of 
operations for the historical period ended September 30, 1994 and the pro 
forma period ended September 30, 1993, and provides a consistent basis for 
further discussion and analysis of those results.

                                                    Nine Months Ended         
                                                      September 30,           
                                              Historical         Pro Forma    
                                                 1994               1993      
- ------------------------------------------------------------------------------
Operating (loss) income:                                                      
          Heat Technology                     $ (2,406)          $ (3,866)    
          IDT                                      121                987     
                                                                              
(Loss) income from continuing operations                                      
     before extraordinary item:                                               
          Heat Technology                       (8,059)            (8,977)    
          IDT                                      154                533     

A comparison of the Company's historical financial information for the nine 
months ended September 30, 1994 and pro forma financial information for the 
nine months ended September 30, 1993 shows a decrease in the operating loss of 
21%.  The consolidated operating loss declined by $594 during the nine month 
period ended September 30, 1994 despite an 88% decline in operating profit at 
IDT.  The upward trend within Heat Technology is attributable to a small 
increase in revenues and lower selling, general and administrative expenses.






                                       20



<PAGE>

Earnings per share from continuing operations before extraordinary item 
increased to ($.79) in the first nine months of fiscal 1994 from ($.84) in the 
comparable pro forma period of fiscal 1993.  Higher earnings in the Company's 
Heat Technology business segment offset lower earnings in Information Display 
Technology.  The domestic economy remained generally strong for integrated 
steel producers which accounted for 71% of total Heat Technology revenues for 
the nine months ended September 30, 1994 compared with 63% for the pro forma 
nine months ended September 30, 1993.

Net revenues by industry segment for the historical nine months ended 
September 30, 1994 and the pro forma nine months ended September 30, 1993 were 
as follows:

                                        Nine Months Ended                     
                                          September 30,                       
                                 Historical           Pro Forma               
Net Revenues                        1994                1993          % Change
- ------------------------------------------------------------------------------
Heat Technology                   $73,209              $69,758            5%  
IDT                                25,889               38,761          (33%) 
- ------------------------------------------------------------------------------
     Total                        $99,098             $108,519           (9%) 
==============================================================================

A comparison of the Company's historical financial information for the nine 
months ended September 30, 1994 and the pro forma results for the nine months 
ended September 30, 1993 shows an increase in net revenues for Heat Technology 
of 5% from $69,758 to $73,209.  Heat Technology revenues have historically 
depended closely on integrated steel makers and their spending on both routine 
maintenance (a function of overall steel production) and capital improvements.  
Approximately 71% and 63% of Heat Technology revenues for the nine month 
periods ended September 30, 1994 and 1993, respectively, were generated from 
sales and services to steel related industries.  Heat Technology is engaged in 
the rebuilding, repair and maintenance of coke ovens through its Furnco 
refractory division.  Net revenues for this unit increased by $3.5 million or 
112% during the nine months ended September 30, 1994 from the corresponding 
period in 1993 due to increased capital spending within the industry.

Included in net revenues for IDT for the nine months ended September 30, 1993 
is one large project with incremental revenues of $4.5 million.  This project 
was substantially completed in the fourth quarter 1993.  Also included in the 
nine months ended September 30, 1993 were $2.1 million of revenues 
attributable to IDT's Kensington division, which was sold during December 
1993.  The remaining decline is attributable to the concentration of sales 
efforts towards IDT manufactured products rather than material purchased from 
other suppliers and distributed by IDT.  Market conditions remain relatively 
flat overall compared with 1993.  However, the down turn in the northeast 
market, which typically represents the largest concentration of IDT's 
revenues, has been partially offset by increased demand in the west and 
southeast markets.  IDT's backlog as of September 30, 1994 was $16,550 
compared with $21,790 at September 30, 1993.  The reduction in the backlog is 
due to management's decision to redirect sales efforts so that IDT 
manufactured product is the primary market focus instead of resale product 
purchased from other suppliers and distributed by IDT.

                                       21


<PAGE>

                                        Nine Months Ended                     
                                          September 30,                       
                                 Historical           Pro Forma               
Cost of Revenues                    1994                1993          % Change
- ------------------------------------------------------------------------------
Heat Technology                   $61,555              $58,216            6%  
IDT                                20,725               31,656          (35%) 
- ------------------------------------------------------------------------------
     Total                        $82,280              $89,872           (8%) 
==============================================================================

Cost of revenues for Heat Technology increased by a slightly higher percentage 
than the net revenue increase for the nine months ended September 30, 1994.  
Competitive pressures continue to prevent Heat Technology from improving gross 
margins.

During the first quarter of 1993, IDT won a decision by the order of the Board 
of Finance and Revenue of Pennsylvania, relating to a reassessment of use tax 
on casework sold during the period February 1988 through September 1990.  As a 
result, an adjustment to decrease cost of revenues by $438 was recorded during 
the first quarter of 1993 resulting from the reversal of the provision 
relating to this contingency.  In addition, some raw material prices used in 
the IDT manufacturing process have increased significantly over the same 
period in 1993.  Specifically, prices have increased for wood products used in 
institutional casework and aluminum and steel products used in the 
manufacturing of chalk and marker boards.  IDT's gross margin for the nine 
months ended September 30, 1993 excluding the Kensington division, the 1993 
use tax adjustment and the one large project mentioned above, would have been 
comparable to 1994 as a result of significant raw material price increases and 
the decline in the northeast market in 1994.  This has affected overall 
margins since IDT operates from a backlog mainly comprised of fixed fee 
contracts.  IDT anticipates the prices to normalize on these raw materials and 
is attempting to increase selling prices in a market that remains relatively 
flat.

                                        Nine Months Ended                     
                                          September 30,                       
Selling, General and             Historical           Pro Forma               
Administrative Expenses             1994                1993          % Change
- ------------------------------------------------------------------------------
Heat Technology                   $13,250              $14,598           (9%) 
IDT                                 5,043                6,118          (18%) 
- ------------------------------------------------------------------------------
     Total                        $18,293              $20,716          (12%) 
==============================================================================

Selling, general and administrative expenses decreased during the nine months 
ended September 30, 1994, primarily as a result of increases to reserves 
related to Adience's self insurance coverage for workers' compensation and 
general liability, which were recorded during the nine months ended September 
30, 1993.  In addition, included in selling, general and administrative 
expenses for the pro forma nine months ended September 30, 1993 are 
approximately $426 of costs relating to Heat Technology's Los Angeles 
operations which were sold during December 1993.

                                       22


<PAGE>

Selling, general and administrative expenses for IDT decreased $1,075 or 18% 
compared with the nine months ended September 30, 1993.  This decline is 
primarily attributable to lower commissions on reduced levels of sales and 
cost reductions realized by organizational changes made in late 1993.

In connection with the plan of reorganization, Adience entered into a multi-
year agreement, to be effective as of October 1, 1992, with the principal 
shareholder for a period of seven years.  Certain revisions were made to this 
agreement during 1994 which resulted in a reduction to the net present value 
of payments over the term of the agreement.  The resultant gain of $174 was 
classified as other income in the accompanying consolidated financial 
statements for the nine months ended September 30, 1994.

Interest expense increased 6% for the nine months ended September 30, 1994 to 
$5.8 million from $5.5 million for the pro forma nine months ended September 
30, 1993.  The increase in interest expense is attributable to increased 
borrowings on Adience's line of credit agreement with Congress Financial 
Corporation ("Congress").  The interest rate on borrowings is 2.5% over the 
prime rate (which has increased 1.75% in the last year).  The effective rates 
were 10.25% and 8.5% at September 30, 1994 and December 31, 1993, 
respectively.

The Company remains in a net operating loss position.  Therefore, the Company 
does not anticipate that the new tax laws will have a significant effect on 
its results of operations in fiscal 1994.


Historical Financial Information for the Three Month Periods Ended September 
30, 1994 and 1993
- ------------------------------------------------------------------------------

Net revenues by industry segment for the three months ended September 30, 1994 
and 1993 were as follows:

                                       Three Months Ended                     
                                          September 30,                       
                                 Historical           Pro Forma               
Net Revenues                        1994                1993          % Change
- ------------------------------------------------------------------------------
Heat Technology                   $27,796              $25,327           10%  
IDT                                10,682               15,021          (29%) 
- ------------------------------------------------------------------------------
     Total                        $38,478              $40,348           (5%) 
==============================================================================

The increase in net revenues for Heat Technology is attributable to the Furnco 
refractory division and one large job with incremental revenues totaling $2.1 
million for the three months ended September 30, 1994.






                                       23



<PAGE>

Included in net revenues for IDT for the three months ended September 30, 1993 
is one large project with incremental revenues of $591.  Also included in the 
three months ended September 30, 1993 were $618 of revenues attributable to 
IDT's Kensington division.  The remaining decline is attributable to weak 
sales in the northeast region and management's efforts to reduce the number of 
contracts which require the use of purchased rather than manufactured product 
because the former generate unsatisfactory gross margins.

                                       Three Months Ended                     
                                          September 30,                       
                                 Historical           Pro Forma               
Cost of Revenues                    1994                1993          % Change
- ------------------------------------------------------------------------------
Heat Technology                   $22,777              $21,562            6%  
IDT                                 8,502               12,110          (30%) 
- ------------------------------------------------------------------------------
     Total                        $31,279              $33,672           (7%) 
==============================================================================

Cost of revenues for Heat Technology increased at a rate lower than the 
increase in net revenues for the comparable period.  Included in the three 
months ended September 30, 1993 is $644 of amortization related to the write-
up of inventory values in accordance with fresh start reporting.

Gross margins for IDT increased to 20% of net revenues for the three months 
ended September 30, 1994 compared to 19% for the same period in 1993.  The 
improvement in gross margins results principally from a greater amount of 
revenues from contracts using manufactured products.  During the three months 
ended September 30, 1993, there was a higher percentage of contracts using 
material purchased from other suppliers and distributed by IDT.  During 1994, 
some raw materials used in IDT manufactured products have increased in price 
dramatically.  These items include steel, wood products and aluminum.  This 
has affected overall margins since IDT operates from a backlog mainly 
comprised of fixed fee contracts.  IDT anticipates the prices to normalize on 
these raw materials and is attempting to increase prices in a market that 
remains flat.

                                       Three Months Ended                     
                                          September 30,                       
Selling, General and             Historical           Pro Forma               
Administrative Expenses             1994                1993          % Change
- ------------------------------------------------------------------------------
Heat Technology                    $4,109               $4,214           (2%) 
IDT                                 1,594                2,004          (20%) 
- ------------------------------------------------------------------------------
     Total                         $5,703               $6,218           (8%) 
==============================================================================

The reduction in selling, general and administrative expenses in Heat 
Technology for the three months ended September 30, 1994 is attributable to 
the sale of Heat Technology's Los Angeles operations which incurred 
approximately $149 of selling, general and administrative expenses during the 
three month period ended September 30, 1993.

                                       24



<PAGE>

Selling, general and administrative expenses for IDT decreased $410 or 20% 
compared with the three months ended September 30, 1993.  This decline is 
primarily attributable to cost reductions realized by organizational changes 
made in late 1993.

Other income for the three months ended September 30, 1993 includes a 
retroactive health insurance settlement of approximately $215 for the 
Company's medical self-insurance program for the period from September 1991 to 
February 1992.

The increase in interest expense for the three months ended September 30, 1994 
reflects the $956 increase in accounts receivable which increased the need for 
short-term borrowings.

Liquidity and Sources of Capital
- --------------------------------

The Company's principal sources of liquidity are cash from operations, cash on 
hand and certain credit facilities available to the Company.  The Company has 
significant indebtedness, has experienced continued losses from operations 
pre- and post-emergence under Chapter 11, and although the Company has met 
operating and financial plans for the three months ended September 30, 1994, 
it has not met operating and financial plans for the nine months ended 
September 30, 1994 due to lower than expected results at its refractory and 
information display operations.  These factors raise substantial doubt about 
Adience's ability to continue as a going concern.  Management's plans in 
regard to this matter include further implementation of its plans to combine 
multi-functional resources as teams to respond better to customer needs, 
making an investment in product and service opportunities expected to produce 
a greater return on its investment, continuing a cost control program begun in 
1993, and exploring capital market transactions such as the proposed 
acquisition of the Company by The Alpine Group, Inc. (Item 5).  Although 
management believes that these plans will enable the Company to continue as a 
going concern for a reasonable period, there can be no assurance that this 
will be the case.  In the event that these plans are not implemented within 
the time frame anticipated or do not produce the results expected, management 
will need to develop other alternatives to meet its cash requirements over the 
next twelve months.

Net cash flows used by operating activities totaled $2.8 million for the nine 
months ended September 30, 1994.  The decrease in working capital of $7 
million during 1994 relates primarily to lower trade receivables arising from 
a decrease in sales for IDT, lower inventory levels within Heat Technology and 
an increase in short-term borrowings.

Capital expenditures used approximately $2.1 million of funds through 
September 30, 1994.  The 82% increase in capital spending over the comparable 
period in 1993 is due to the purchase of a new plant facility to expand 
current production of a specific product line.  The total cost of this 
facility and the necessary capital expenditures for machinery and equipment 
will be partially financed through the Pennsylvania Industrial Development 
Authority.  As of September 30, 1994 the Company had no material commitments 
for capital spending.  It is anticipated that necessary capital expenditures 
in future years will not exceed depreciation expense but will represent a 
material use of operating funds.  Future capital needs of the Company are 
expected to be provided by future operations, existing cash balances and 
additional borrowings when necessary.

<PAGE>

Adience and IDT together had $3.9 million in available credit as of September 
30, 1994 under their short-term borrowing arrangements with Congress.

On the consummation date of the plan of reorganization, June 30, 1993, Adience 
entered into a financing agreement with Congress that had a renewal date of 
June 30, 1994 (the "Renewal Date").  Certain revisions were made to the terms 
of the agreement during 1994, including the extension of the Renewal Date to 
June 30, 1995.  The facility remains in effect from year to year thereafter, 
unless terminated upon sixty days written notice by either party on the 
anniversary of the Renewal Date in any year. Under the revised agreement, 
Adience may request loan advances not to exceed the lesser of $14 million or 
available collateral (85% of eligible accounts receivable less than 90 days, 
50% of eligible bagged inventory plus 30% of eligible raw material and 
finished goods inventory which does not constitute bagged inventory).  The 
loan is collateralized by accounts receivable, inventory, fixed assets, 
intangible assets and Adience's shares of IDT.  In addition, IDT guaranteed 
the Adience line of credit and has pledged its own accounts receivable, 
inventory and equipment.  The interest rate on the loan is 2.5% over the prime 
rate (effective rate of 10.25% at September 30, 1994).  At September 30, 1994, 
Adience had borrowed $11,843 under the credit facility including checks in 
transit of $1,603.  Letters of credit issued under the facility totaled $1,143 
at September 30, 1994, which reduced the availability under the financing 
arrangement in a like amount.

IDT entered into a financing agreement with Congress which is also renewed 
through June 30, 1995.  The facility remains in effect year to year 
thereafter, unless terminated upon sixty days written notice by either party 
on the anniversary date of the Renewal Date in any year.  Certain revisions 
were also made to the terms of the agreement during 1994.  Under the revised 
agreement, IDT may request loan advances not to exceed the lesser of $5 
million or available collateral (85% of eligible accounts receivable less than 
90 days plus 30% of raw material and finished goods inventory).  The loan is 
collateralized by accounts receivable, inventory and fixed assets.  Adience 
has guaranteed IDT's debt to Congress.  The interest rate on the loan is 2.5% 
over the prime rate.  At September 30, 1994, IDT had borrowed $2,019 under the 
credit facility including checks in transit of $398.  Letters of credit issued 
under the facility totaled $700 at September 30, 1994, which reduced the 
availability under the financing arrangement in a like amount.

Both Adience and IDT pay commitment fees on the unused portion of their credit 
facilities.  Under the terms of the revised financing agreements, Adience is 
required to maintain minimum levels of net worth of negative $1,500 and 
working capital of $6,000.  The agreements additionally contain other 
restrictive covenants applicable to Adience and its subsidiaries which, among 
other things, limit (i) the incurrence of additional indebtedness, (ii) the 
granting of liens, (iii) the making of loans, investments and guaranties, (iv) 
transactions with affiliates, (v) the payment of dividends and other 
distributions, (vi) the amount of annual capital expenditures, and (vii) the 
disposition of real property.





                                       26



<PAGE>

As of September 30, 1994, Adience and IDT were in compliance with the 
covenants of their respective agreements.  Adience's ability to continue to 
comply with such conditions is dependent upon Adience's ability to achieve 
specified levels of sales, profitable operations and borrowing availability.  
Waivers or amendments may be required in the future to ensure compliance.  
Inability to achieve compliance in the future could affect Adience's access to 
further borrowings or require it to secure additional capital by other means.

Long-term liquidity is dependent upon the Company's ability to operate 
profitably and generate cash flow.  Adience's New Senior Notes are due in June 
2002, and may not be redeemed at the option of Adience prior to December 15, 
1997.  Adience has not yet formulated plans to meet these long-term debt 
requirements. The Indenture under which the New Senior Notes were issued 
contains restrictive covenants similar to those included in the financing 
agreements with Congress, and additionally limits the use of cash proceeds 
from the sale of Adience's assets.  The Indenture provides that Adience may 
not make any asset sale outside of the ordinary course of business unless (i) 
such asset sale is for fair value and (ii) at least 50% of the consideration 
therefor received by Adience is in the form of cash and/or cash equivalents.  
In the case of the sale by Adience of all or substantially all of the stock of 
IDT or any other asset for which the gross cash proceeds exceed $2 million, 
Adience is required, within 180 days after the receipt of the net cash 
proceeds of such asset sale, to make an offer to repurchase the New Senior 
Notes at a price equal to 100% of the principal amount of the New Senior Notes 
plus accrued interest thereon.  In addition,  a default on the Congress 
financing agreement will result in a default under the Indenture.

Both internal and external factors are material to the Company's long-term 
liquidity.  External factors include general economic conditions, the 
performance of the steel industry and spending by public school systems.  
Long-term liquidity is dependent upon the Company's ability to control costs 
during periods of low demand so as to sustain positive cash flow from 
operations.  The Company, even after Reorganization, continues to operate with 
a significant amount of interest-bearing debt.  Should additional financing be 
needed, the Company's access to new sources of capital or the amount of 
available and unused lines of bank credit may be limited.

In February 1992, IDT was cited by the Ohio Environmental Protection Agency 
(the "Ohio EPA") for violations of Ohio's hazardous waste regulations, 
including speculative accumulation of waste and illegal disposal of hazardous 
waste on the site of its Alliance, Ohio Facility.  IDT had $783 accrued at 
December 31, 1993 for the clean-up of this site.












                                       27



<PAGE>

In December 1993, IDT and Adience signed a consent order with the Ohio EPA and 
Ohio Attorney General which required IDT and Adience to pay to the State of 
Ohio a civil penalty of $200 (of which IDT paid $175 and Adience paid $25).  
In addition, the consent order requires the payment of stipulated penalties of 
up to $1 per day for failure to satisfy certain requirements of the consent 
order including milestones in the closure plan.  IDT expects that the work to 
be conducted under the closure plan will be substantially completed in 1994, 
subject to IDT receiving all necessary approvals from the Ohio EPA.  At 
September 30, 1994, environmental accruals amounted to $492 which represents 
management's reasonable estimate of the amounts remaining to be incurred in 
this matter, including the costs of effecting the closure plan, bonding and 
insurance costs, penalties and legal and consultants' fees.  Since 1991, 
Adience and IDT have together paid $614 (excluding the civil penalty) for the 
environmental clean-up related to the Alliance facility.

IDT has commenced discussions with the Ohio EPA concerning a modification to 
the closure plan which would reduce the scope of work required.  Based on 
administrative precedent, IDT believes that it is likely that the Ohio EPA 
will agree to the modification.  If such a modification is not made, 
additional costs may have to be incurred to complete the project.  Although 
there is no assurance that additional costs will not have to be incurred, the 
Company believes that such costs will not need to be incurred.

Under the acquisition agreement pursuant to which IDT acquired the property 
from Adience, Adience represented and warranted that, except as otherwise 
disclosed to IDT, no hazardous material has been stored or disposed of on the 
property.  No disclosure of storage or disposal of hazardous material on the 
site was made.  Accordingly, Adience is required to indemnify IDT for any 
losses in excess of $250.  IDT has notified Adience that it is claiming the 
right to indemnification for all costs in excess of $250 incurred by IDT in 
this matter and has received assurance that Adience will honor such claim. 
Adience has reimbursed IDT $421; if Adience is financially unable to honor its 
remaining obligation, such costs would be borne by IDT.





















                                       28



<PAGE>

PART II - OTHER INFORMATION



Item 5.   Other Information

On October 12, 1994, Adience, Inc. and its 80.3% owned subsidiary, Information 
Display Technology, Inc. jointly announced  that they have been informed that 
The Alpine Group, Inc. has reached agreements to acquire approximately 85% of 
the outstanding common stock of Adience and approximately 85% of Adience's 
outstanding 11% Senior Secured Notes.  Completion of the transaction is 
subject to the execution of definitive documentation containing customary 
conditions, receipt of regulatory approvals and Alpine's obtaining adequate 
financing.

Alpine has stated that Adience's refractories and related operations will be 
merged into a newly-formed Alpine subsidiary.  Alpine has also indicated that 
it intends to merge its existing information display operations, consisting of 
its PolyVision technology development and commercialization program and its 
Posterloid menuboard and data display operations, with those of IDT.  The 
merged information display operations are expected to be renamed "PolyVision 
Corporation" and spun off to Alpine shareholders.  The merger of PolyVision 
and Posterloid with IDT will be subject to approval by the holders of a 
majority of the outstanding common stock of IDT, which will be sought at a 
special meeting of IDT's shareholders.  Alpine, which will then control 80.3% 
of the outstanding shares of IDT has indicated that it will vote in favor of 
such merger.



Item 6.   Exhibits and Reports on Form 8-K

The Company did not file any reports on Form 8-K during the three months ended 
September 30, 1994.




















                                       29



<PAGE>

                                  SIGNATURES
                                  ----------


     Pursuant to the requirements of the Securities and Exchange Act of 1934, 
the registrant has duly caused this report to be signed on its behalf by the 
undersigned thereunto duly authorized.

                                          ADIENCE, INC.



Date:  December 12, 1994             By: /s/ Fletcher L. Byrom
     --------------------               -------------------------
                                        Fletcher L. Byrom
                                        Chairman and
                                        Chief Executive Officer




Date:  December 12, 1994             By: /s/ Stephen M. Grimshaw
     --------------------               -------------------------
                                        Stephen M. Grimshaw
                                        Vice President - Finance and Treasurer
                                        (Principal Financial Officer and
                                         Principal Accounting Officer)

























                                       30




<TABLE> <S> <C>

<ARTICLE> 5 
<LEGEND> 
The schedule contains summary financial information extracted from the Adience, 
Inc. September 30, 1994 Consolidated Financial Statements and is qualified in 
its entirety by reference to such financial statements. 
</LEGEND> 
<CIK> 0000846972 
<NAME> ADIENCE, INC. 
<MULTIPLIER> 1,000
        
<S>                               <C>                <C>                <C>                <C>                <C> 
<PERIOD-TYPE>                     OTHER              3-MOS              3-MOS              9-MOS              6-MOS 
<FISCAL-YEAR-END>                 DEC-31-1994        DEC-31-1994        DEC-31-1993        DEC-31-1994        DEC-31-1993 
<PERIOD-END>                      SEP-30-1994        SEP-30-1994        SEP-30-1993        SEP-30-1994        JUN-30-1993 
<CASH>                            $ 1,322              0<F2>              0<F2>              0<F2>              0<F2>
<SECURITIES>                            0              0<F2>              0<F2>              0<F2>              0<F2>  
<RECEIVABLES>                      28,037              0<F2>              0<F2>              0<F2>              0<F2>  
<ALLOWANCES>                       (1,392)             0<F2>              0<F2>              0<F2>              0<F2>   
<INVENTORY>                        16,346              0<F2>              0<F2>              0<F2>              0<F2>        
<CURRENT-ASSETS>                   48,435              0<F2>              0<F2>              0<F2>              0<F2>        
<PP&E>                             41,620              0<F2>              0<F2>              0<F2>              0<F2> 
<DEPRECIATION>                     (9,981)             0<F2>              0<F2>              0<F2>              0<F2> 
<TOTAL-ASSETS>                     96,595              0<F2>              0<F2>              0<F2>              0<F2>        
<CURRENT-LIABILITIES>              39,558              0<F2>              0<F2>              0<F2>              0<F2>        
<BONDS>                            46,403              0<F2>              0<F2>              0<F2>              0<F2>
<COMMON>                              101              0<F2>              0<F2>              0<F2>              0<F2>
                   0              0<F2>              0<F2>              0<F2>              0<F2>
                             0              0<F2>              0<F2>              0<F2>              0<F2>
<OTHER-SE>                          1,457              0<F2>              0<F2>              0<F2>              0<F2>
<TOTAL-LIABILITY-AND-EQUITY>       96,595              0<F2>              0<F2>              0<F2>              0<F2>
<SALES>                             0<F2>              0<F2>              0<F2>              0<F2>              0<F2>
<TOTAL-REVENUES>                    0<F2>            $38,478            $40,348            $99,098            $68,171
<CGS>                               0<F2>              0<F2>              0<F2>              0<F2>              0<F2>
<TOTAL-COSTS>                       0<F2>             31,279             33,672             82,280             55,474
<OTHER-EXPENSES>                    0<F2>              5,966              6,728             19,103             14,624
<LOSS-PROVISION>                    0<F2>                 25                  0                298                413
<INTEREST-EXPENSE>                  0<F2>              2,052              1,775              5,773              2,360
<INCOME-PRETAX>                     0<F2>               (726)            (1,321)            (7,504)            (4,029)
<INCOME-TAX>                        0<F2>                428                509                371                261
<INCOME-CONTINUING>                 0<F2>             (1,225)            (2,346)            (7,905)            16,252
<DISCONTINUED>                      0<F2>                  0                 81                  0               (400)
<EXTRAORDINARY>                     0<F2>                  0                  0                  0             17,480 
<CHANGES>                           0<F2>                  0                  0                  0                  0
<NET-INCOME>                        0<F2>             (1,225)            (2,265)            (7,905)            33,332
<EPS-PRIMARY>                       0<F2>              (0.12)             (0.23)             (0.79)             0<F1>
<EPS-DILUTED>                       0<F2>              0<F2>              0<F2>              0<F2>              0<F2>
<FN> 
<F1>Earnings per share are not meaningful due to reorganization and revaluation 
entries and the issuance of new common stock. 
<F2>Not applicable.
</FN> 
        

</TABLE>


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