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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q/A
(Mark One)
[ x ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended January 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: 33-93302
AM General Corporation
(Exact name of registrant as specified in its charter)
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Delaware 35-1852615
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation ororganization )
105 North Niles Avenue
South Bend, Indiana 46617
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (219) 284-2907
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None
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
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1,000 shares of the registrant's common stock, par value $.01 per share, is
outstanding as of March 17, 1998.
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The Registrant's Quarterly Report on Form 10-Q for the quarter ending
January 31, 1998 is being amended. Specifically, pages 13-17, which were
inadvertently omitted by our filing agent from the Quarterly Report, is being
filed with this amendment. No other parts of the Quarterly Report are being
amended.
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Liquidity and Capital Resources
The Company's liquidity requirements result from capital investments, working
capital requirements, postretirement health care and pension funding, interest
expense, and, to a lesser extent, principal payments on its indebtedness. The
Company has met these requirements in each fiscal year since 1992 from cash
provided by operating activities and borrowings under its Revolving Credit
Facility.
Cash used by operating activities was $10.0 million for the three months ended
January 31, 1998 compared to cash generated by operating activities of $17.0
million for the three months ended January 31, 1997. The key factors affecting
cash flow from operating activities during the first three months of 1998 were
the increase in the net loss, decreases in accounts receivable partially offset
by a reduction in accounts payable and accrued expenses. Other factors include
non-cash charges to operating income including depreciation, amortization and
non-cash postretirement expenses.
Accounts receivable levels at the end of the three months ended January 31, 1998
were lower than levels at the end of the prior fiscal year, primarily due to the
collection of past due US government receivables.
Inventory levels at the end of the three months ended January 31, 1998 were
substantially the same as levels at the end of the prior fiscal year. Included
in the finished goods inventory at October 31, 1997 and at January 31, 1998 are
406 A2 Series HUMVEEs which were built for two customers. Contract negotiations
with one customer were concluded in February 1998. A portion of those vehicles
was sold and the balance is expected to be sold by the end of the second quarter
of 1998. The units for the other customer are expected to be sold by the end of
the third quarter of 1998. The 406 A2 Series units have a combined selling price
of $25 million.
During the first three months of 1998, the Company spent $.1 million on capital
expenditures primarily for tooling for vehicle production, as compared to $.4
million during the three months ended January 31, 1997. The Company anticipates
that operating cash flow and availability under the Revolving Credit Facility
will be adequate to fund capital expenditures for fiscal 1998.
Management anticipates that cash flow from operations as impacted by the reduced
HUMVEE/HUMMER production rate and overhead structure, as well as availability
under its Revolving Credit Facility will be sufficient to finance the Company's
liquidity needs for the foreseeable future.
The Company's Revolving Credit Facility has a maximum borrowing limit of $60
million, is secured by eligible inventories and receivables, as defined therein,
and expires on October 31, 1999. As of January 31, 1998, the Company had
borrowings of $22.2 million outstanding and approximately $17.0 million of
availability under the Revolving Credit Facility. When the 406 A2 series units
described above have been sold and the revenues collected, the loan balance will
be reduced by $25 million.
The ability of the Company to meet its debt service requirements and to comply
with debt covenants will be dependent upon future operating performance and
financial results of the Company, which will be subject to financial, economic,
political, competitive and other factors affecting the Company, many of which
are beyond its control.
Forward-Looking Statements
This report includes "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995, which involve known and
unknown risks, uncertainties and other important factors that could cause the
actual results, performance or achievements of the Company to differ materially
from any future results, performance or achievements expressed or implied by
such forward-looking statements. Such risks, uncertainties and other important
factors include, among others: general economic and business conditions; funding
for government HUMVEE and ESP orders; volume of international and commercial
orders for HUMMER/HUMVEEs; the outcome of the MTTR competition;
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the outcome of pending litigation; the loss of any significant customers; the
loss of any major supplier; and the availability of qualified personnel.
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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Age Discrimination Claim
William Wilson filed an age discrimination suit against the Company on February
21, 1995 in the United States District Court for the Northern District of
Indiana asserting that his termination in March 1994 was the result of age
discrimination. A jury verdict against the Company was entered on the issue as
to discrimination under the Age Discrimination in Employment Act, but in favor
of the Company on the issue of willfulness. The jury awarded Mr. Wilson $238,902
in back pay. The court awarded Mr. Wilson the following additional amounts:
$13,604 in pre-judgement interest; $160,194 in front pay; and $56,890 in
attorney's fees. The Company has appealed the judgement. On February 24, 1998,
the Company presented oral arguments before the US Court of Appeals for the 7th
Circuit in Chicago, Illinois with respect to its appeal of the judgement. A
decision from the court is expected in August 1998.
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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(b) Reports on Form 8-K. Registrant did not file any reports on Form 8-K
during the quarter for which this report is filed.
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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.
Date: March 17, 1998 AM GENERAL CORPORATION
Registrant
By ___________________________
Paul J. Cafiero
Vice President and
Chief Financial Officer
Duly authorized officer and
principal financial officer
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