1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-Q
[ X ] QUARTERLY REPORT UNDER SECTION 13 or 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended: March 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to _______
Commission File No.: 33-62598
Fairfield Manufacturing Company, Inc.
(Exact name of Registrant as specified in its charter)
Delaware 63-0500160
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
U. S. 52 South, Lafayette, IN 47905
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (765) 474-3474
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 (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
The number of shares outstanding of each of the issuer's classes of
common stock as of March 31, 1997 is as follows:
7,857,000 shares of Common Stock
FAIRFIELD MANUFACTURING COMPANY, INC.
Form 10-Q
March 31, 1997
PART I - FINANCIAL INFORMATION
Page
Number
Item 1 - Financial Statements:
Consolidated Balance Sheets, March 31, 1997 (Unaudited) and 3
December 31, 1996
Consolidated Statements of Operations for the three months 4
ended March 31, 1997 and 1996 (Unaudited)
Consolidated Statements of Cash Flows for the three months 5
ended March 31, 1997 and 1996 (Unaudited)
Consolidated Statement of Stockholder's Equity (Deficit) 6
for the three months ended March 31, 1997 (Unaudited)
Notes to Consolidated Financial Statements (Unaudited) 7-8
Item 2 - Management's Discussion and Analysis of Financial 9-11
Condition and Results of Operations
PART II - OTHER INFORMATION
Item 5 - Other Information 11
Item 6 - Exhibits and Reports on Form 8-K 11
SIGNATURE 12
EXHIBIT INDEX 13-18
FAIRFIELD MANUFACTURING COMPANY, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
March 31, 1997 December 31,
1996
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 1,714 $ 6,185
Trade receivables, less allowance of $600 25,667 24,696
in 1997 and 1996
Inventory 21,237 18,918
Prepaid expenses 755 853
Total current assets 49,373 50,652
PROPERTY, PLANT AND EQUIPMENT, NET 69,500 70,211
OTHER ASSETS:
Excess of investment over net assets 52,090 52,491
acquired, less accumulated
amortization of $12,269 in 1997 and
11,868 in 1996
Deferred financing costs, less 2,845 3,016
accumulated amortization of $2,526
in 1997 and $2,355 in 1996
Total other assets 54,935 55,507
Total assets $173,808 $176,370
LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt $ 3,250 $ 3,000
Accounts payable 14,843 13,260
Due to parent 445 287
Accrued liabilities 17,505 18,182
Deferred income taxes 3,800 3,800
Total current liabilities 39,843 38,529
ACCRUED RETIREMENT COSTS 14,442 15,423
DEFERRED INCOME TAXES 12,046 11,988
LONG-TERM DEBT, NET OF CURRENT 111,000 115,000
MATURITIES
11-1/4% CUMULATIVE EXCHANGEABLE PREFERRED 47,707 --
STOCK
STOCKHOLDER'S EQUITY (DEFICIT):
Common stock: par value $.01 per share, 79 78
10,000,000 shares authorized,
7,857,000 and 7,805,000 issued and
outstanding in 1997 and 1996,
respectively
Additional paid-in capital 37,196 36,788
Accumulated deficit (88,505) (41,436)
Total stockholder's equity (51,230) (4,570)
(deficit)
Total liabilities and stockholder's $173,808 $176,370
equity (deficit)
The accompanying notes to consolidated financial statements
are an integral part of these statements.
FAIRFIELD MANUFACTURING COMPANY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
For the For the
three three
months months
ended March ended March
31, 1997 31, 1996
Net sales $ 49,235 $ 51,340
Cost of sales 39,852 41,675
Selling, general and administrative
expenses 4,218 4,038
OPERATING INCOME 5,165 5,627
Interest expense, net 3,231 3,070
Other expense, net
20 21
INCOME BEFORE INCOME TAXES 1,914 2,536
Provision for income taxes
940 983
NET INCOME $ 974 $ 1,553
Preferred stock dividends and discount
accretion (300) --
NET INCOME AVAILABLE TO COMMON
STOCKHOLDER $ 674 $ 1,553
INCOME PER SHARE DATA:
Net income per common share
$0.09 $0.20
Weighted average common shares 7,805,604 7,676,275
outstanding
The accompanying notes to consolidated financial statements
are an integral part of these statements.
FAIRFIELD MANUFACTURING COMPANY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
For the For the
three three
months months
ended ended
March 31, March 31,
1997 1996
OPERATING ACTIVITIES:
Net income $ 974 $ 1,553
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 3,373 3,318
Deferred income tax benefit 58 (60)
(Decrease) increase in accrued retirement (981) 150
costs
(Increase) decrease in current assets:
Trade receivables (971) (1,908)
Inventory (2,319) 4,526
Prepaids 98 35
Increase (decrease) in current
liabilities:
Accounts payable (12) 3,353
Due to parent 158 (537)
Accrued liabilities
(677) (3,100)
Net cash (used in) provided by operating 7,330
activities (299)
INVESTING ACTIVITIES:
Additions to plant and equipment, net
(486) (2,681)
Net cash used in investing activities
(486) (2,681)
FINANCING ACTIVITIES:
Proceeds from additional capital contribution 399 379
Payment of dividends (50,770) --
Advance to parent 3,027 --
Proceeds of long-term debt 4,000 5,000
Payment of long-term debt (7,750) (14,250)
Proceeds of preferred stock offering 50,000 --
Payment of preferred stock issuance costs
(2,300) --
Preferred stock dividend accrued
(292) --
Net cash used in financing activities
(3,686) (8,871)
DECREASE IN CASH AND CASH EQUIVALENTS (4,471) (4,222)
CASH AND CASH EQUIVALENTS:
Beginning of period
6,185 4,324
End of period $ 1,714 $ 102
Supplemental Disclosures:
Cash paid for:
Interest $ 5,581 $5,524
Taxes to parent $ 300 $1,000
Non-cash activities:
Additions to plant and equipment included in accounts payable at
March 31, 1997 and 1996 of $1,595 and $303, respectively, are
excluded from operating activities above.
The accompanying notes to consolidated financial statements
are an integral part of these statements.
FAIRFIELD MANUFACTURING COMPANY, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY (DEFICIT)
(In thousands)
(Unaudited)
Additional Stock-
Common Paid-in Accumulat holder's
Stock Capital ed Equity
Deficit (Deficit)
Balance, January 1, $ 78 $36,788 $(41,436) $ (4,570)
1997
Issuance of common 1 (1) -- --
stock
Capital contribution -- 399 -- 399
Common stock dividends -- -- (50,770) (50,770)
Preferred stock -- -- (7) (7)
discount accretion
Preferred stock -- -- (293) (293)
dividends accrued
Advance to parent -- -- 3,027 3,027
Merger with First -- 10 -- 10
Colony Farms, Inc.
Net income -- 974 -- 974
Balance, March 31, 1997 $ 79 $37,196 $(88,505) $(51,230)
The accompanying notes to consolidated financial statements
are an integral part of these statements.
FAIRFIELD MANUFACTURING COMPANY, INC.
NOTES to CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Interim Financial Information:
The accompanying consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial reporting and with the instructions to Form 10-Q and Rule 10-01
of Regulation S-X. Accordingly, certain information and footnote
disclosures normally included in financial statements prepared under
generally accepted accounting principles have been condensed or omitted
pursuant to such regulations. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary
for a fair presentation of the Fairfield Manufacturing Company, Inc.'s
("the Company") financial position, results of operations and cash flows
have been included. The results for the three months ended March 31, 1997
and 1996 are not necessarily indicative of the results to be expected for
the full year or for any interim period.
2. Parent Company of Registrant:
The Company is wholly-owned by Lancer Industries Inc. ("Lancer").
On March 27, 1997, First Colony Farms, Inc., a Delaware corporation
and wholly-owned subsidiary of Lancer ("First Colony"), merged with and
into the Company, with the Company being the surviving corporation of the
merger. Immediately prior to the merger, First Colony had (i) no known
liabilities (including contingent liabilities) and (ii) assets consisting
of approximately $10 thousand in cash and certain net operating loss carry
forwards.
3. Sale of Preferred Stock:
On March 12, 1997, the Company completed a private offering of 50,000
shares of 11-1/4% Cumulative Exchangeable Preferred Stock ("Preferred Stock").
Each share has a liquidation preference of $1,000, plus accumulated and
unpaid dividends. The Company is required, subject to certain conditions,
to redeem all of the Preferred Stock outstanding on March 15, 2009 at a
redemption price equal to 100% of the liquidation preference. Dividends
are payable semi-annually at an annual rate of 11-1/4%, and may (prior to
March 15, 2002) be paid, at the Company's option, either in cash or in
additional shares of Preferred Stock.
The net proceeds from this offering ($47.7 million) were used to fund
a dividend to Lancer, and used by Lancer to redeem approximately $47.7
million of its Series C Preferred Stock.
4. Inventory:
Inventory consists of the following:
(In thousands) March 31, 1997 December 31, 1996
Raw materials $ 4,449 $ 4,178
Work in process 8,477 8,070
Finished goods 8,922 7,490
21,848 19,738
Less: excess of FIFO cost over (611) (820)
LIFO cost
$ 21,237 $ 18,918
5. Income per Common Share:
Net income per common share is computed by dividing net income less
the preferred stock dividend requirement by the weighted average number of
common shares outstanding during the period, which, for the three months
ended March 31, 1997 was 7,805,604 and for March 31, 1996 was 7,676,275.
The increase in the weighted average common shares outstanding is due to
the Company issuing additional shares of its common stock to Lancer in
consideration of certain capital contributions made by Lancer to the
Company primarily pursuant to the Tax Sharing Agreement.
6. Debt:
In connection with the sale of Preferred Stock, the Company amended
its loan agreement (which provides for a Revolving Credit Facility and a
Term Loan) with a senior lending institution. The amendment allowed for
the sale of the Preferred Stock (see note 3) and the approximately $47.7
million dividend to Lancer.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
Net sales for the three months ended March 31, 1997 decreased by $2.1
million, or 4.1%, to $49.2 million compared to $51.3 million for the three
months ended March 31, 1996. Sales for three months ended March 31, 1996
included $3.9 million of orders which were past due at December 31, 1995.
Cost of sales for the three months ended March 31, 1997 decreased by
$1.8 million, or 4.4%, to $39.9 million, or 80.9% of net sales, compared to
$41.7 million, or 81.2% of net sales, for the three months ended March 31,
1996. The decrease resulted primarily from the decrease in sales volume.
Selling, general and administrative expense ("SG&A") was $4.2 million,
or 8.6% of net sales, for the three months ended March 31, 1997, compared
to $4.0 million, or 7.9% of net sales, for the three months ended March 31,
1996. The $.2 million increase in SG&A expense from 1996 resulted
principally from investments in marketing and sales and design engineering.
Earnings from operations for the three months ended March 31, 1997
were $5.2 million, or 10.5% of net sales compared to $5.6 million, or 11.0%
of net sales compared to the first three months of 1996.
Interest expense for the first quarter of 1997 and 1996 was $3.2
million and $3.1 million, respectively. Interest expense increased due to
a higher average debt balance during the quarter ended March 31, 1997,
compared to the first three months of 1996.
The Company's income before income taxes was $1.9 million for the
first quarter of 1997, compared to $2.5 million for the first three months
of 1996.
The Company's net income was $1.0 million for the first three months
of 1997, as compared to $1.6 million for the first three months of 1996.
Liquidity and Capital Resources
The Company's liquidity requirements have been met by funds provided
by operations and short-term borrowings under its Credit Facilities.
Net cash used by operations for the three months ended March 31, 1997
was $0.3 million, a decrease of $7.6 million compared with net cash
provided by operations of $7.3 million in the comparable 1996 period. The
decrease in cash from operations in comparison to the prior year period was
due primarily to an increase in inventory at March 31, 1997.
Capital expenditures for various machine tools, equipment and building
improvement items totaled $2.1 million and $3.0 million during the first
three months of 1997 and 1996, respectively. Of the $2.1 million in 1997,
$1.6 million has been funded by an increase in accounts payable in the
balance sheet versus $0.3 million of the $3.0 million of capital
expenditures in 1996. The capital expenditures for both 1997 and 1996 were
principally targeted at increasing capacity and productivity to meet
heightened customer demand.
The Company believes that the amounts available under the existing
credit facilities and cash flow from operations will provide adequate
liquidity for the foreseeable future.
PART II - OTHER INFORMATION
Item 5. Other Information
On March 12, 1997, the Company completed a private offering of 50,000
shares of 11-1/4% Cumulative Exchangeable Preferred Stock. The net proceeds
from this offering ($47.7 million) were used to fund a dividend to Lancer,
and used by Lancer to redeem $47.7 million of its Series C Preferred Stock.
On March 27, 1997, First Colony Farms, Inc., a Delaware corporation
and wholly-owned subsidiary of Lancer ("First Colony") merged with and into
the Company, with the Company being the surviving corporation of the
merger. Immediately prior to the merger, First Colony had (i) no known
liabilities (including contingent liabilities) and (ii) assets consisting
of approximately $10,000 in cash and certain net operating loss carry
forwards.
Item 6. Exhibits and Reports on Form 8K
(a) Exhibits
See Exhibit Index
(b) Reports on Form 8-K
The Company filed a current report on Form 8-K on February 27,
1997.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused the report to be signed on its behalf by the
undersigned thereunto duly authorized.
FAIRFIELD MANUFACTURING COMPANY, INC.
Dated: May 15, 1997 By /s/RICHARD A. BUSH
Richard A. Bush
Vice President Finance
EXHIBIT INDEX
Exhibit No. Description
(2) (a) Articles of Merger and related Plan of Merger under
the state of Indiana of Fairfield Manufacturing
Company, Inc. ("Fairfield") with and into Central
Alabama Grain Company, Inc. ("CAG") dated March 31,
1995, incorporated by reference from Exhibit 2(a) to
Fairfield's Form 10-K as filed with the Securities
and Exchange Commission on March 22, 1995 (the "1994
Form 10-K").
(2) (b) Certificate of Ownership and Merger, merging
Fairfield into CAG, incorporated by reference from
Exhibit 2(b) to the 1994 Form 10-K.
(2) (c) Merger Agreement under the State of Delaware between
First Colony Farms, Inc. ("First Colony") and
Fairfield dated as of March 24, 1997, incorporated by
reference from Exhibit 2(c) to Fairfield's Form S-4
as filed with the Securities and Exchange Commission
on April 9, 1997 (the "1997 Form S-4").
(2) (d) Certificate of Merger, merging First Colony with and
into Fairfield, incorporated by reference from
exhibit 2(d) to the 1997 Form S-4.
(3) (a) Restated Certificate of Incorporation of Fairfield,
together with the Certificate of Amendment, dated
March 7, 1997, and filed on March 11, 1997,
incorporated by reference from Exhibit 3(a) to the
1997 Form S-4.
(3) (b) By-Laws of Fairfield, incorporated by reference from
Exhibit 3(c) to the 1994 Form 10-K.
(4) (a) Indenture, dated as of July 7, 1993, between
Fairfield and First Fidelity Bank, National
Association, New York, as trustee, incorporated by
reference from Exhibit 4(a) to Fairfield's Form 10-Q
as filed with the Securities and Exchange Commission
on August 16, 1993 (the "Second Quarter 1993 Form 10-
Q").
(4) (b) Supplemental Indenture No. 1, dated as of March 31,
1995, between CAG as successor-in-interest to
Fairfield and First Fidelity Bank, National
Association, as trustee, incorporated by reference
from Exhibit 4(b) to the 1994 Form 10-K.
(4) (c) Indenture, dated as of March 12, 1997, between
Fairfield and United States Trust Company of New York
as Trustee, incorporated by reference from Exhibit
4(c) to the 1997 Form S-4.
(4) (d) Certificate of Designation, dated March 12, 1997, for
the Existing Preferred Stock, incorporated by
reference from Exhibit 4(d) to the 1997 Form S-4.
(9) Voting Trust Agreement
Not Applicable.
(10) (a) Loan Agreement, dated as of July 7, 1993, among
Fairfield, the lenders named therein and General
Electric Capital Corporation ("GECC"), as agent,
incorporated by reference from Exhibit 10(a) to the
Second Quarter 1993 Form 10-Q.
(10) (b) Amended and Restated Warrant Agreement, dated as of
July 7, 1993, among Fairfield, Mitsui Nevitt Capital
Corporation and Principal Mutual Life Insurance
Company, incorporated by reference from Exhibit 10(b)
to the Second Quarter 1993 Form 10-Q.
(10) (c) Security Agreement, dated as of July 7, 1993, between
Fairfield and GECC, as agent, incorporated by
reference from Exhibit 10(c) to the Second Quarter
1993 Form 10-Q.
(10) (d) Security Agreement, dated as of July 7, 1993, between
T-H Licensing, Inc. ("T-H Licensing") and GECC, as
agent, incorporated by reference from Exhibit 10(d)
to the Second Quarter 1993 Form 10-Q.
(10) (e) Stock Pledge Agreement, dated as of July 7, 1993,
between Fairfield and GECC, as agent, incorporated by
reference from Exhibit 10(e) to the Second Quarter
1993 Form 10-Q.
(10) (f) Stock Pledge Agreement, dated as of July 7, 1993,
between Fairfield Holdings, Inc. and GECC, as agent,
incorporated by reference from Exhibit 10(f) to the
Second Quarter 1993 Form 10-Q.
(10) (g) Trademark Security Agreement, dated as of July 7,
1993, between Fairfield and GECC, as agent,
incorporated by reference from Exhibit 10(g) to the
Second Quarter 1993 Form 10-Q.
(10) (h) Trademark Security Agreement, dated as of July 7,
1993, between T-H Licensing and GECC, as agent,
incorporated by reference from Exhibit 10(h) to the
Second Quarter 1993 Form 10-Q.
(10) (i) Patent Security Agreement, dated as of July 7, 1993,
between Fairfield and GECC, as agent, incorporated
by reference from Exhibit 10(i) to the Second Quarter
1993 Form 10-Q.
(10) (j) Patent Security Agreement, dated as of July 7, 1993,
between T-H Licensing and GECC, as agent,
incorporated by reference from Exhibit 10(j) to the
Second Quarter 1993 Form 10-Q.
(10) (k) Subsidiary Guaranty, dated as of July 7, 1993,
between T-H Licensing and GECC, as agent,
incorporated by reference from Exhibit 10(k) to the
Second Quarter 1993 Form 10-Q.
(10) (l) Mortgage, Assignment of Leases, Rents and Profits,
Security Agreement and Fixture Filing, dated as of
July 7, 1993, between Fairfield and GECC, as agent,
incorporated by reference from Exhibit 10(l) to the
Second Quarter 1993 Form 10-Q.
(10) (m) Collection Account Agreement, dated as of July 7,
1993, among Fairfield and GECC, and acknowledged by
Bank One, Lafayette, N.A., incorporated by reference
from Exhibit 10(m) to the Second Quarter 1993 Form 10-
Q.
(10) (n) Used Machinery Account Agreement, dated as of July 7,
1993, among Fairfield and GECC, and acknowledged by
Bank One, Lafayette, N.A., incorporated by reference
from Exhibit 10(n) to the Second Quarter 1993 Form 10-
Q.
(10) (o) Quitclaim Grant of Security Interest, dated as of
July 7, 1993, between Fairfield and GECC, as agent,
incorporated by reference from Exhibit 10(o) to the
Second Quarter 1993 Form 10-Q.
(10) (p) Supplemental Quitclaim Grant of Security Interest
(Patents only), dated as of July 7, 1993, between
Fairfield and GECC, as agent, incorporated by
reference from Exhibit 10(p) to the Second Quarter
1993 Form 10-Q.
(10) (q) First Amendment to Loan Agreement, dated as of
September 30, 1994, among Fairfield, the lenders
named therein and GECC, as agent, incorporated by
reference from Exhibit 10(q) as filed with the
Securities and Exchange Commission on November 14,
1994.
(10) (r) Second Amendment to Loan Agreement, dated as of March
30, 1995, among Fairfield, the lenders named therein
and GECC, as agent, incorporated by reference from
Exhibit 10(r) to the 1994 Form 10-K.
(10) (s) Third Amendment to Loan Agreement, dated as of March
31, 1995, among Fairfield, the lenders named therein
and GECC, as agent, incorporated by reference from
Exhibit 10(s) to the 1994 Form 10-K.
(10) (t) First Amendment to Mortgage Assignment of Leases,
Rents and Profits, Security Agreement and Fixture
Filing, dated as of March 31, 1995, between Fairfield
and GECC, as agent, incorporated by reference from
Exhibit 10(t) to the 1994 Form 10-K.
(10) (u) Stock Pledge Agreement, dated as of March 31, 1995,
between Lancer Industries Inc. ("Lancer") and GECC,
as agent, incorporated by reference from Exhibit
10(u) to the 1994 Form 10-K.
(10) (v) Amended and Restated Security Agreement, dated as of
March 31, 1995, between Fairfield and GECC, as agent,
incorporated by reference from Exhibit 10(v) to the
1994 Form 10-K.
(10) (w) The Fairfield Manufacturing Company, Inc. Equity
Participation Plan, dated August 21, 1989
incorporated by reference from Exhibit 10(x) to the
1995 Form 10-K.
(10) (x) The Collective Bargaining Agreement, ratified October
28, 1995, between Fairfield and United Auto Workers'
Local 2317 incorporated by reference from Exhibit
10(y) to the 1995 Form 10-K.
(10) (y) The Tax Sharing Agreement, dated as of July 18, 1990,
between Fairfield and Lancer, incorporated by
reference from Exhibit 10(z) to the 1995 Form 10-K.
(10) (z) The Fairfield Manufacturing Company, Inc. (1992)
Supplemental Executive Retirement Plan incorporated
by reference from Exhibit 10(aa) to the 1995 Form 10-
K.
(10) (aa) Letter Agreement, dated December 29, 1989, granting
exclusive license from T-H Licensing to Fairfield
incorporated by reference from Exhibit 10(bb) to the
1995 Form 10-K.
(10) (bb) Fourth Amendment to Loan Agreement, dated as of
December 5, 1996, among Fairfield, the lenders named
therein and GECC, as agent, incorporated by reference
from Exhibit 10(cc) to Fairfield's Form 10-K as filed
with the Securities and Exchange Commission on
February 25, 1997 (the "1996 Form 10-K").
(10) (cc) Second Amendment to Mortgage Assignment of Leases,
Rents and Profits, Security Agreement and Fixture
Filing, dated as of December 5, 1996, between
Fairfield and GECC, as agent, incorporated by
reference from Exhibit 10(dd) to the 1996 Form 10-K.
(10) (dd) Fifth Amendment to the Loan Agreement, dated as of
February 26, 1997, among Fairfield, the lenders named
therein and GECC, as agent, incorporated by reference
from Exhibit 10(ee) to the 1997 Form S-4.
(10) (ee) The Employment Agreement, dated as of June 1, 1996,
between Fairfield and K. A. Burns, incorporated by
reference from Exhibit 10(ee) to the 1996 Form 10-K.
(10) (ff) Consent and Amendment, dated as of March 27, 1997,
among Fairfield and GECC, as sole lender and agent,
incorporated by reference from Exhibit 10(gg) to the
1997 Form S-4.
(10) (gg) Securities Purchase Agreement, dated March 7, 1997,
between Fairfield and the Initial Purchaser,
incorporated by reference from Exhibit 10(hh) to the
1997 Form S-4.
(10) (hh) Share Registration Rights Agreement, dated March 12,
1997, between Fairfield and the Initial Purchaser,
incorporated by reference from Exhibit 10(ii) to the
1997 Form S-4.
(11) Statement re computation of per share earnings.
Not Applicable.
(12) Statement re Computation of ratios.
Not Applicable.
(13) Annual Report to Security Holders, Form 10-Q or
Quarterly Report to Security Holders.
Not Applicable.
(16) Letter re Change in Certifying Accountant.
Not Applicable.
(18) Letter re change in accounting principles.
Not Applicable.
(21) Subsidiaries of Fairfield Manufacturing Company, Inc.
T-H Licensing, Inc.
(22) Published report regarding matters submitted to vote
of security holders.
Not Applicable.
(23) Consents of experts and counsel.
Not Applicable.
(24) Power of attorney.
Not Applicable.
(28) Information from Reports Furnished to State Insurance
Regulatory Authorities.
Not Applicable.
(99) Additional exhibits.
Not Applicable.
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This schedule contains summary financial information extracted from SEC Form
10-Q and is qualified in its entirety by reference to such financial statement.
</LEGEND>
<CIK> 0000904543
<NAME> FAIRFIELD MFG CO INC
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<PERIOD-END> MAR-31-1997
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