<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 31, 1998
----------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____ to _____
Commission File Number 0-22906
-------
ABC Rail Products Corporation
(Exact name of registrant as specified in its charter)
Delaware 36-3498749
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
200 South Michigan Avenue 60604-2402
Chicago, IL (Zip Code)
(Address of principal executive offices)
(312) 322-0360
--------------
(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 (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
-------- --------
At November 30, 1998, there were 8,976,304 shares of the registrant's Common
Stock outstanding.
<PAGE>
ABC RAIL PRODUCTS CORPORATION AND SUBSIDIARIES
INDEX
Page
----
Part I Financial Information
Item 1 Consolidated Financial Statements
Consolidated Balance Sheets 3
Consolidated Statements of Operations 4
Consolidated Statements of Stockholders' Equity 5
Consolidated Statements of Cash Flows 6
Notes to Unaudited Consolidated Financial Statements 7-8
Item 2 Management's Discussion and Analysis of Financial Condition
and Results of Operations 9-10
Part II Other Information
Item 6 Exhibits and Reports on Form 8-K 11-14
2
<PAGE>
ABC RAIL PRODUCTS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
As of October 31, 1998 and July 31, 1998
(In thousands, except share and per share data)
<TABLE>
<CAPTION>
October 31, July 31,
ASSETS 1998 1998
- ------ ----------- --------
(Unaudited)
<S> <C> <C>
CURRENT ASSETS:
Accounts receivable, less allowances of $1,437 and $1,434, respectively $ 56,185 $ 49,708
Inventories 59,450 51,973
Prepaid expenses and other current assets 2,524 1,925
Prepaid income taxes 3,689 2,833
-------- --------
Total current assets 121,848 106,439
-------- --------
PROPERTY, PLANT AND EQUIPMENT:
Land 1,890 1,890
Buildings and improvements 16,457 15,948
Machinery and equipment 112,461 98,621
Construction in progress 64,590 68,051
-------- --------
195,398 184,510
Less - Accumulated depreciation (49,351) (45,846)
-------- --------
Net property, plant and equipment 146,047 138,664
-------- --------
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES 14,731 15,586
-------- --------
OTHER ASSETS - net 35,210 34,652
-------- --------
Total assets $317,836 $295,341
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
CURRENT LIABILITIES:
Cash overdrafts $ 5,145 $ 6,300
Current maturities long-term debt 2,985 2,516
Accounts payable 34,621 24,176
Accrued liabilities 14,733 19,556
-------- --------
Total current liabilities 57,484 52,548
-------- --------
LONG-TERM DEBT, less current maturities 161,251 143,529
-------- --------
DEFERRED INCOME TAXES 8,186 7,556
-------- --------
OTHER LONG-TERM LIABILITIES 4,707 4,495
-------- --------
STOCKHOLDERS' EQUITY:
Preferred stock, $1.00 par value; 1,000,000 shares authorized; - -
no shares issued or outstanding
Common stock, $.01 par value; 25,000,000 shares authorized;
8,976,304 shares issued and outstanding 90 90
as of October 31, 1998 and July 31, 1998 67,798 67,798
Additional paid-in capital 18,320 19,325
Retained earnings -------- --------
Total stockholders' equity 86,208 87,213
-------- --------
Total liabilities and stockholders' equity $317,836 $295,341
======== ========
</TABLE>
The accompanying notes to the unaudited consolidated financial statements are an
integral part of these consolidated balance sheets.
3
<PAGE>
ABC RAIL PRODUCTS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended October 31, 1998 and 1997
(Unaudited)
(In thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended
October 31
-------------------
1998 1997
------- -------
<S> <C> <C>
NET SALES $77,514 $67,885
COST OF SALES 69,566 61,093
------- -------
Gross profit 7,948 6,792
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 4,648 3,622
------- -------
Operating income 3,300 3,170
EQUITY (INCOME) OF UNCONSOLIDATED JOINT VENTURES (175) (401)
INTEREST EXPENSE 2,241 2,185
AMORTIZATION OF DEFERRED FINANCING COSTS 173 129
------- -------
Income before income taxes and cumulative effect of accounting change 1,061 1,257
PROVISION FOR INCOME TAXES 446 552
------- -------
Income before cumulative effect of accounting change 615 705
CUMULATIVE EFFECT OF ACCOUNTING CHANGE, net of income
taxes of $1,014 (1,620) -
------- -------
Net income (loss) $(1,005) $ 705
======= =======
EARNINGS PER SHARE DATA
Basic:
Income before cumulative effect of accounting change $ 0.07 $ 0.08
Cumulative effect of accounting change (0.18) -
------- -------
Net income (loss) $ (0.11) $ 0.08
======= =======
Weighted average common shares outstanding 8,976 8,954
======= =======
Diluted:
Income before cumulative effect of accounting change $ 0.07 $ 0.08
Cumulative effect of accounting change (0.18) -
------- -------
Net income (loss) $ (0.11) $ 0.08
======= =======
Weighted average common and equivalent shares outstanding 9,140 9,073
======= =======
</TABLE>
The accompanying notes to the unaudited consolidated financial statements are an
integral part of these consolidated statements.
4
<PAGE>
ABC RAIL PRODUCTS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
For the Three Months Ended October 31, 1998 and 1997
(Unaudited)
(In thousands)
<TABLE>
<CAPTION>
Additional
Common Paid-in Retained Comprehensive
Stock Capital Earnings Income (loss)
------- ---------- -------- -------------
<S> <C> <C> <C> <C>
BALANCE, July 31, 1997 $90 $67,362 $13,044
Net income - - 705 $ 705
--- ------- ------- -------
BALANCE, October 31, 1997 $90 $67,362 $13,749 $ 705
=== ======= ======= =======
BALANCE, July 31, 1998 $90 $67,798 $19,325
Net (loss) - - (1,005) $(1,005)
--- ------- ------- -------
BALANCE, October 31, 1998 $90 $67,798 $18,320 $(1,005)
=== ======= ======= =======
</TABLE>
The accompanying notes to the unaudited consolidated financial statements are an
integral part of these consolidated statements.
5
<PAGE>
ABC RAIL PRODUCTS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months Ended October 31, 1998 and 1997
(Unaudited)
(In thousands)
<TABLE>
<CAPTION>
Three Months Ended
October 31
----------
1998 1997
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (1,005) $ 705
Adjustments to reconcile net income (loss) to net cash used in
operating activities:
Cumulative effect of accounting change 1,620 -
Equity income of unconsolidated joint ventures (175) (401)
Depreciation and amortization 4,772 3,277
Deferred income taxes (226) 300
Changes in certain assets and liabilities:
Accounts receivable -- net (6,477) (7,246)
Inventories (7,477) 3,270
Prepaid expenses and other current assets (599) (1,043)
Other assets -- net (1,789) (642)
Accounts payable and accrued liabilities 6,648 1,858
Other long-term liabilities 212 (218)
-------- -------
Total adjustments (3,491) (845)
-------- -------
Net cash used in operating activities (4,496) (140)
-------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (12,400) (9,083)
Investment in unconsolidated joint ventures - (321)
-------- -------
Net cash used in investing activities (12,400) (9,404)
-------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Change in cash overdrafts (1,155) 2,096
Net activity under revolving line of credit 18,813 10,041
Repayment of other long-term debt (622) (2,593)
Payment of deferred financing costs (140) -
-------- -------
Net cash provided by financing activities
16,896 9,544
-------- -------
Net change in cash - -
CASH, beginning of period - -
-------- -------
CASH, end of period $ - $ -
======== =======
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest $ 3,148 $ 1,698
Cash paid for income taxes 905 39
</TABLE>
The accompanying notes to the unaudited consolidated financial statements are an
integral part of these consolidated statements.
6
<PAGE>
ABC RAIL PRODUCTS CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation
ABC Rail Products Corporation (the "Company") is a leader in the
engineering, manufacturing and marketing of replacement products and
original equipment for the North American freight railroad and rail transit
industries. The Company's products include specialty trackwork, such as
rail crossings and switches; mechanical products, such as railcar,
locomotive and idler wheels, mounted wheel sets and metal brake shoes;
classification yard products and automation systems; and railway signal and
communication systems engineering, installation and maintenance services.
The accompanying unaudited consolidated financial statements include, in
the opinion of management, all adjustments (consisting of only normal
recurring adjustments) necessary for a fair statement of the results of
operations and financial condition of the Company for and as of the interim
dates. Results for the interim period are not necessarily indicative of
results for the entire year.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to the rules and
regulations of the Securities and Exchange Commission. The Company
believes that the disclosures contained herein are adequate to make the
information presented not misleading. These unaudited consolidated
financial statements should be read in conjunction with the information and
the consolidated financial statements and notes thereto included in the
Company's 1998 Form 10-K and amended 1998 Form 10-K/A.
2. Inventories
Inventories are stated at the lower of cost or market. Cost is determined
using the first-in, first-out method for substantially all inventories.
Inventory costs include material, labor and manufacturing overhead.
Supplies and spare parts primarily consist of manufacturing supplies and
equipment replacement parts.
Inventories at October 31, 1998, and July 31, 1998, consisted of the
following (in thousands):
<TABLE>
<CAPTION>
October 31, July 31,
1998 1998
----------- ---------
<S> <C> <C>
Raw materials $36,800 $34,504
Work in process and finished goods 18,373 13,367
Supplies and spare parts 4,277 4,102
------- -------
$59,450 $51,973
======= =======
</TABLE>
7
<PAGE>
ABC RAIL PRODUCTS CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
3. Earnings Per Share
SFAS No. 128, "Earnings Per Share" was issued in February 1997 and adopted
by the Company in the second quarter of fiscal 1998. This new
pronouncement established revised reporting standards for earnings per
share and has been retroactively applied to all periods presented herein.
Previously reported earnings per share for each such period were not
materially different than currently reported diluted earnings per share.
Additionally, application of the new standard for fiscal 1998 periods did
not materially impact the calculation of diluted earnings per share versus
what would have been reported under the prior standard. Diluted earnings
per share for the Company includes the impact of the assumed exercise of
dilutive stock options as well as the assumed issuance of up to 120,000
shares related to the earn-out for an acquired company.
4. Unconsolidated Joint Venture
ABC has various unconsolidated joint ventures with ownership interests of
40% to 50%. The most significant of these ventures is Anchor Brake Shoe,
LLC with operations in West Chicago, Illinois. Summarized financial
information for the Anchor Brake Shoe joint venture for the three months
ended October 31, 1998 and 1997 is as follows:
<TABLE>
<CAPTION>
Three Months Ended
October 31
------------------
1998 1997
------ ------
<S> <C> <C>
Net sales $4,263 $4,116
Gross profit 1,210 1,395
Net income 645 801
</TABLE>
5. Accounting Change
In April 1998, Statement of Position No. 98-5 was issued which requires
that companies write-off previously capitalized start-up costs and expense
future start-up costs as incurred. The Company had capitalized certain
start-up costs in prior periods. Effective August 1, 1998, the Company
elected early adoption of this standard and wrote-off $2.6 million ($1.6
million after-tax) of previously capitalized start-up costs.
8
<PAGE>
ABC RAIL PRODUCTS CORPORATION AND SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations
The following is management's discussion and analysis of certain significant
factors which have affected the Company's financial condition and results of
operations during the interim periods included in the accompanying unaudited
Consolidated Financial Statements.
SEASONALITY
- -----------
The peak season for installation of specialty trackwork extends from March
through October, when weather conditions are generally favorable for
installation and, as a result, net sales of specialty trackwork have
historically been more concentrated in the period from January through June, a
period roughly corresponding to the second half of the Company's fiscal year. In
addition, a number of the Company's facilities close for regularly scheduled
maintenance in the late summer and late December, which tends to reduce
operating results during the first half of the Company's fiscal year. Transit
industry practice with respect to specialty trackwork generally involves the
periodic shipment of large quantities, which may be unevenly distributed
throughout the year. The Company, except where noted, does not expect any
significant departure from the historical demand patterns during the present
fiscal year ending July 31, 1999.
RESULTS OF OPERATIONS
- ---------------------
Three Months Ended October 31, 1998 Compared to Three Months Ended October 31,
1997
Net Sales. Net sales increased 14.2% to $77.5 million from $67.9 million. The
increase in sales is due primarily to an increase in sales in the Wheel
Manufacturing and Wheel Services Division ($10.1 million), with production up
substantially over last year at the wheel manufacturing facility. Offsetting
this increase was a $3.7 million reduction in sales within the Track Products
Division. Track orders from two of our major Class I Railroad customers were
down significantly from the first quarter last year. The decline in orders from
one of these major customers is due to an across-the-board reduction in orders
for capital goods by that customer that may also impact future periods.
Gross Profit and Cost of Sales. Gross profit increased from 10.0% of revenue in
1997 to 10.3% of revenue in 1998. The increase in the gross profit is primarily
the result of improved operating results in the Wheel Division, partially offset
by the reduction in the Track Products Division as a result of the lower sales
volume.
Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $1.0 million. The increase in expenses
between periods reflects additional expense required to support the Company's
new information systems (SAP's R/3 enterprise-wide software) and other general
increases.
Accounting Change. The non-cash, after-tax effect of an accounting change of
$1.6 million represents the write-off, in accordance with Statement of Position
98-5, of previously capitalized start-up costs. See Note 5 to the Notes to
Unaudited Consolidated Financial Statements for additional information.
9
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
- --------------------------------
For the three months ended October 31, 1998 and 1997, net cash used in operating
activities totaled $4.5 million and $0.1 million, respectively. The decrease in
operating cash flow is due primarily to a net increase in working capital. The
Company has elected to build some inventory in the Track Products Division in
anticipation of additional orders after the start of the calendar year.
Capital expenditures during the first three months of fiscal 1999 and 1998 were
$12.4 million and $9.1 million, respectively. Spending during the first quarter
of fiscal 1999 is related primarily to cost associated with the implementation
of SAP's R/3 enterprise-wide software, a new track panel facility in Ashland,
Wisconsin, normal improvements to the Calera, Alabama wheel plant and production
equipment for a new facility to process used rail into reusable heat-treated and
head-hardened rail.
For the three months ended October 31, 1998 and 1997, net cash provided by
financing activities totaled $16.9 million and $9.5 million, respectively. The
increase in financing cash flows is due primarily to the higher level of net
borrowings during the period.
As of October 31, 1998, availability under the Company's Credit Agreement was
$13.2 million.
As described in detail in Item 7 of the Company's fiscal 1998 Form 10-K, the
Company is actively addressing its Year 2000 ("Y2K") issues. The Company
remains on target with the initiatives detailed in the Form 10-K. At the
present time, management is unable to estimate the potential impact on the
Company of the possible failure of its customers and suppliers to become Year
2000 compliant. If the Company's major customers and suppliers are not and do
not become Year 2000 compliant on a timely basis, the Company's results of
operations could be adversely affected.
REGARDING FORWARD-LOOKING STATEMENTS
- ------------------------------------
The foregoing contains forward-looking statements that are based on current
expectations and are subject to a number of risks and uncertainties. Actual
results could differ materially from current expectations due to a number of
factors, including general economic conditions; competitive factors and pricing
pressures; shifts in market demand; the performance and needs of industries
served by the Company's businesses; actual future costs of operating expenses
such as rail and scrap steel, self-insurance claims and employee wages and
benefits; actual costs of continuing investments in technology; the availability
of capital to finance possible acquisitions and to refinance debt; the ability
of management to implement the Company's long-term business strategy of
acquisitions; "Y2K" issues and the risks described from time to time in the
Company's SEC reports.
10
<PAGE>
Part II OTHER INFORMATION
- --------------------------------------------------------------------------------
Item 6 - Exhibits and Reports on Form 8-K
(A) Exhibits
<TABLE>
<CAPTION>
Exhibit
No. Description
- ------- -----------
<C> <S>
2.1 Agreement and Plan of Merger by and among the Company, ABCR
Acquisition Sub, Inc. and NACO, Inc Dated September 18, 1998
(Incorporated by reference to the Company's Current Report on Form 8-K
filed with the Securities and Exchange Commission on September 18,
1998.) (SEC File No. 0-22906).
3.1 Restated Certificate of Incorporation of the Company (Incorporated by
reference to the same numbered exhibit filed with the Registrant's
Registration Statement on Form S-1 originally filed with the
Securities and Exchange Commission on April 13, 1994) (SEC File
No. 33-77652).
3.2 Bylaws of the Company (Incorporated by reference to the same numbered
exhibit filed with the Registrant's Annual Report on Form 10-K for the
fiscal year ended July 31, 1994) (SEC File No. 0-22906).
3.3 Certificate of Designation, Preferences and Rights of Series A Junior
Participating Preferred Stock of the Company (Incorporated by
reference to Exhibit 3.1 filed with the Registrant's Quarterly Report
on Form 10-Q for the quarter ended October 31, 1996) (SEC File
No. 0-22906).
3.4 Certificate of Correction of Certificate of Designation of the Company
(Incorporated by reference to Exhibit 3.2 filed with the Registrant's
Quarterly Report on Form 10-Q for the quarter ended October 31, 1996)
(SEC File No. 0-22906).
4.1 Form of certificate representing shares of Common Stock of the Company
(Incorporated by reference to the same numbered exhibit filed with the
Registrant's Registration Statement on Form S-1 originally filed with
the Securities and Exchange Commission on October 12, 1993) (SEC File
No. 33-70242).
4.2 Rights Agreement, dated as of September 29, 1995 between the Company
and LaSalle National Trust, N.A., as Rights Agent (the "Rights
Agreement"), which includes the Form of Certificate of Designation,
Preferences and Rights, the form of Rights Certificate and the Summary
of Stockholder Rights Plan (Incorporated by reference to the same
numbered exhibit filed with the Registrant's Current Report on Form
8-K dated October 2, 1995) (SEC File No. 0-22906).
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
<C> <S>
4.3 Amendment No. 1 to the Rights Agreement Dated November 15, 1996
(Incorporated by reference to Exhibit 4.1 filed with the Registrant's
Quarterly Report on Form 10-Q for the quarter ended October 31, 1996)
(SEC File No. 0-22906).
4.4 Amendment No. 2 to the Rights Agreement Dated September 17, 1998
(Incorporated by reference to Exhibit 4.1 filed with the Registrant's
Form 8-A/A on September 24, 1998 (Sec File No. 0-22906).
4.5 Indenture, dated January 15, 1997, from the Company to First Trust of
Illinois, National Association, as Trustee (incorporated by reference
to Exhibit 4.5 in the Registrant's Registration Statement on Form S-3
filed with the Securities and Exchange Commission on November 15,
1996) (SEC File No. 333-16241).
4.6 First Supplemental Indenture to the Indenture dated January 15, 1997
between the Company and First Trust National Association, as Trustee
(incorporated by reference to Exhibit 4.1 the Registrant's Current
Report on Form 8-K filed with the Securities and Exchange Commission
on January 17, 1997) (SEC File No. 0-22906).
4.7 Second Supplemental Indenture to the Indenture dated as of January 15,
1997 between the Company and First Trust National Association, as
Trustee (Incorporated by reference to the Registrant's Current Report
on Form 8-K filed with the Securities and Exchange Commission on
December 22, 1997) (SEC File No. 0-22906).
10.1 Registration Rights Agreement, dated as of August 28, 1991, among the
Company, KARC and the Management Investors named therein (Incorporated
by reference to the same numbered exhibit filed with the Registrant's
Registration Statement on Form S-1 originally filed with the
Securities and Exchange Commission on October 12, 1993) (SEC File No.
33-70242).
10.2 Second Amended and Restated Loan and Security Agreement (the "Security
Agreement"), dated as of January 31, 1997, among the Company, ABC Deco
Inc. and American Systems Technologies, Inc., as borrowers, the
financial institutions named therein, as lenders, and American
National Bank and Trust Company of Chicago, as agent, and Amendment
No. 1 thereto dated as of August 8, 1997 ("Amendment 1"), Amendment
No. 2 thereto dated as of October 31, 1997 ("Amendment 2") Amendment
No. 3 thereto dated as of December 8, 1997 ("Amendment 3"), Amendment
No. 4 thereto dated December 22, 1997 ("Amendment 4") and Amendment
No. 5 thereto dated April 24, 1998 ("Amendment 5") (Security Agreement
and Amendment 1 incorporated by reference to the same numbered exhibit
filed with the Registrant's Annual Report on Form 10-K for the fiscal
year ended July 31, 1997 (SEC File No. 0-22906); Amendment 2
incorporated by reference to Exhibit 10.1 filed with the Registrant's
Quarterly Report on Form 10-Q for the quarter ended October 31, 1997
(SEC File No. 0-22906); Amendment 3 incorporated by reference to
Exhibit 10.1 filed with the Registrant's Quarterly Report on Form 10-Q
for the quarter ended January 31, 1998 (SEC File No. 0-22906);
Amendment 4 incorporated by reference to Exhibit 10.1 filed with the
Registrant's Quarterly Report on Form 10-Q for the quarter ended
</TABLE>
12
<PAGE>
April 30, 1998 (SEC File No. 0-22906); and Amendment 5 incorporated by
reference to Exhibit 10.3 filed with the Registrant's Quarterly Report
on Form 10-Q for the quarter ended April 30, 1998 (SEC File No.
0-22906).
10.3 Stock Option Plan dated July 1, 1993 (Incorporated by reference to the
same numbered exhibit filed with the Registrant's Registration
Statement on Form S-1 originally filed with the Securities and
Exchange Commission on October 12, 1993) (SEC File No. 33-70242).
10.4 Lease, entered into March 10, 1993, between the Company and Milton M.
Siegel Company (Incorporated by reference to the same numbered exhibit
filed with the Registrant's Registration Statement on Form S-1
originally filed with the Securities and Exchange Commission on
October 12, 1993) (SEC File No. 33-70242).
10.5 ABC Rail Corporation Master Savings Trust (Incorporated by reference
to the same numbered exhibit filed with the Registrant's Registration
Statement on Form S-1 originally filed with the Securities and
Exchange Commission on October 12, 1993) (SEC File No. 33-70242).
10.6 ABC Rail Corporation Savings and Investment Plan, as amended and
restated effective as of May 1, 1988 (Incorporated by reference to the
same numbered exhibit filed with the Registrant's Registration
Statement on Form S-1 originally filed with the Securities and
Exchange Commission on October 12, 1993) (SEC File No. 33-70242).
10.7 Partnership Agreement, dated as of February 1, 1992, by and between
ABC Rail French Holdings, Inc. and Cogifer Americas, Inc.
(Incorporated by reference to the same numbered exhibit filed with the
Registrant's Registration Statement on Form S-1 originally filed with
the Securities and Exchange Commission on October 12, 1993) (SEC File
No. 33-70242).
10.8 Commercial Representation Agreement, dated February 21, 1992, between
the Company and Cogifer Industries of Croissy-sur-Sein, France and
certain of its affiliates, terminated by the Company on September 4,
1998 (Incorporated by reference to the same numbered exhibit filed
with the Registrant's Registration Statement on Form S-1 originally
filed with the Securities and Exchange Commission on October 12, 1993)
(SEC File No. 33-70242).
10.9 Agreement, dated February 21, 1992, by and between the Company and
Cogifer Industries (Incorporated by reference to the same numbered
exhibit filed with the Registrant's Registration Statement on Form S-1
originally filed with the Securities and Exchange Commission on
October 12, 1993) (SEC File No. 33-70242).
10.10 Lease, dated March 1, 1994, by and between the City of Newton, Kansas
and the Company (Incorporated by reference to the same numbered
exhibit filed with the Registrant's Registration Statement on Form S-1
originally filed with the Securities and Exchange Commission on April
13, 1994) (SEC File No. 33-77652).
13
<PAGE>
10.11 1994 Director Stock Option Plan (Incorporated by reference to the same
numbered exhibit filed with the Registrant's Annual Report on Form
10-K for the fiscal year ended July 31, 1994) (SEC File No. 0-22906).
10.12 Amendment No. 1 to 1994 Director Stock Option Plan (Incorporated by
reference to the same numbered exhibit filed with the Registrant's
Annual Report on Form 10-K for the fiscal year ended July 31, 1996)
(SEC File No. 0-22906).
10.13 Form of option agreement evidencing options granted to Donald W.
Grinter (72,000 shares), D. Chishold MacDonald (40,000 shares), David
G. Kleeschulte (40,000 shares) and Eugene Ziemba (60,000 shares)
pursuant to the Stock Option Plan listed as Exhibit 10.3 above
(Incorporated by reference to the same numbered exhibit filed with the
Registrant's Annual Report on Form 10-K for the fiscal year ended July
31, 1994) (SEC File No. 0-22906).
10.14 Asset Purchase Agreement dated April 3, 1995, between the Company and
General Electric Railcar Wheel and Parts Service Corporation
(Incorporated by reference to the same numbered exhibit filed with the
Registrant's Current Report on Form 8-K dated May 15, 1995) (SEC File
No. 0-22906).
10.15 1994 Stock Option Plan (Incorporated by reference to the same numbered
exhibit filed with the Registrant's Registration Statement on Form S-1
originally filed with the Securities and Exchange Commission on April
13, 1994) (SEC File No. 33-77652).
10.16 Agreement and General Release dated as of October 2, 1996 between Ben
R. Yorks and the Company (Incorporated by reference to the same
numbered exhibit filed with the Registrant's Annual Report on Form
10-K for the fiscal year ended July 31, 1996) (SEC File No. 0-22906).
27.1 Financial Data Schedule
(B) Reports on Form 8-K
The Company filed a Form 8-K on September 18, 1998, to announce the
execution of an Agreement and Plan of Merger (the "Merger Agreement")
by and among the Company, ABCR Acquisition Sub, Inc. (a wholly owned
subsidiary of the Company) and NACO, Inc. ("NACO"). The Form 8-K
included the joint press release issued by the Company and NACO in
connection with the execution of the Merger Agreement.
14
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ABC RAIL PRODUCTS CORPORATION
/s/ Donald W. Grinter
---------------------------
Donald W. Grinter
Chairman of the Board and
Chief Executive Officer
/s/ J. P. Singsank
---------------------------
J. P. Singsank
Corporate Controller and
Assistant Secretary
(Principal Financial and
Accounting Officer)
Date: December 9, 1998
----------------------------
15
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND> THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE UNAUDITED CONSOLIDATED BALANCE SHEETS AND CONSOLIDATED STATEMENTS OF
OPERATIONS FOR THE PERIOD ENDED OCTOBER 31 1998 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUL-31-1999
<PERIOD-START> AUG-01-1998
<PERIOD-END> OCT-31-1998
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 56,185<F1>
<ALLOWANCES> 0
<INVENTORY> 59,450
<CURRENT-ASSETS> 121,848
<PP&E> 195,398
<DEPRECIATION> 49,351
<TOTAL-ASSETS> 317,836
<CURRENT-LIABILITIES> 57,484
<BONDS> 161,251
0
0
<COMMON> 90
<OTHER-SE> 86,118
<TOTAL-LIABILITY-AND-EQUITY> 317,836
<SALES> 77,514
<TOTAL-REVENUES> 77,514
<CGS> 69,566
<TOTAL-COSTS> 69,566
<OTHER-EXPENSES> 4,473
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,414
<INCOME-PRETAX> 1,061
<INCOME-TAX> 446
<INCOME-CONTINUING> 615
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> (1,620)
<NET-INCOME> (1,005)
<EPS-PRIMARY> (0.11)
<EPS-DILUTED> (0.11)
<FN>
<F1> Notes and accounts receivable - trade are reported net of allowances for
doubtful accounts in the Consolidated Balance Sheets.
</FN>
</TABLE>
