-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NG6fhkGLyEFIyQR4pPZMDLRammHSXHuCfkZnJmxYsd6TzcwCm+KBi8agFnfwicZI nh/p9+HWJonp4Na3YDAquA== 0000950152-98-005836.txt : 19980708 0000950152-98-005836.hdr.sgml : 19980708 ACCESSION NUMBER: 0000950152-98-005836 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19980531 FILED AS OF DATE: 19980707 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: EAGLE PICHER INDUSTRIES INC CENTRAL INDEX KEY: 0000030927 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLE PARTS & ACCESSORIES [3714] IRS NUMBER: 310268670 STATE OF INCORPORATION: OH FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: SEC FILE NUMBER: 333-49957 FILM NUMBER: 98661119 BUSINESS ADDRESS: STREET 1: 250 EAST FIFTH STREET, SUITE 500 STREET 2: P O BOX 779 CITY: CINCINNATI STATE: OH ZIP: 45202 BUSINESS PHONE: 5137217010 MAIL ADDRESS: STREET 1: 580 WALNUT ST PO BOX 779 CITY: CINCINNATI STATE: OH ZIP: 45201 FORMER COMPANY: FORMER CONFORMED NAME: EAGLE PICHER CO DATE OF NAME CHANGE: 19660921 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EAGLE PICHER HOLDINGS INC CENTRAL INDEX KEY: 0001059364 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLES & PASSENGER CAR BODIES [3711] IRS NUMBER: 133989553 STATE OF INCORPORATION: DE FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: SEC FILE NUMBER: 333-49957-01 FILM NUMBER: 98661120 BUSINESS ADDRESS: STREET 1: 250 EAST FIFTH STREET, SUITE 500 CITY: CINCINNATI STATE: OH ZIP: 45202 BUSINESS PHONE: 5137217010 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DAISY PARTS INC CENTRAL INDEX KEY: 0001059567 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLE PARTS & ACCESSORIES [3714] IRS NUMBER: 381406772 STATE OF INCORPORATION: OH FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: SEC FILE NUMBER: 333-49957-02 FILM NUMBER: 98661121 BUSINESS ADDRESS: STREET 1: 250 EAST FIFTH STREET, SUITE 500 STREET 2: C/O EAGLE PICHER INDUSTRIES INC CITY: CINCINNATI STATE: OH ZIP: 45202 BUSINESS PHONE: 5137217010 MAIL ADDRESS: STREET 1: C/O EAGLE PICHER INDUSTRIES INC STREET 2: P O BOX 779 CITY: CINCINNATI STATE: OH ZIP: 45202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EAGLE PICHER DEVELOPMENT CO INC CENTRAL INDEX KEY: 0001059568 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLE PARTS & ACCESSORIES [3714] IRS NUMBER: 311215706 STATE OF INCORPORATION: OH FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: SEC FILE NUMBER: 333-49957-03 FILM NUMBER: 98661122 BUSINESS ADDRESS: STREET 1: 250 EAST FIFTH STREET, SUITE 500 STREET 2: C/O EAGLE PICHER INDUSTRIES INC CITY: CINCINNATI STATE: OH ZIP: 45202 BUSINESS PHONE: 5137217010 MAIL ADDRESS: STREET 1: C/O EAGLE PICHER INDUSTRIES INC STREET 2: P O BOX 779 CITY: CINCINNATI STATE: OH ZIP: 45202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EAGLE PICHER FAR EAST INC CENTRAL INDEX KEY: 0001059570 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLE PARTS & ACCESSORIES [3714] IRS NUMBER: 311235685 STATE OF INCORPORATION: OH FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: SEC FILE NUMBER: 333-49957-04 FILM NUMBER: 98661123 BUSINESS ADDRESS: STREET 1: 250 EAST FIFTH STREET, SUITE 500 STREET 2: C/O EAGLE PICHER INDUSTRIES INC CITY: CINCINNATI STATE: OH ZIP: 45202 BUSINESS PHONE: 5137217010 MAIL ADDRESS: STREET 1: C/O EAGLE PICHER INDUSTRIES INC STREET 2: P O BOX 779 CITY: CINCINNATI STATE: OH ZIP: 45202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EAGLE PICHER FLUID SYSTEMS INC CENTRAL INDEX KEY: 0001059571 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLE PARTS & ACCESSORIES [3714] IRS NUMBER: 311452637 STATE OF INCORPORATION: OH FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: SEC FILE NUMBER: 333-49957-05 FILM NUMBER: 98661124 BUSINESS ADDRESS: STREET 1: 250 EAST FIFTH STREET, SUITE 500 STREET 2: C/O EAGLE PICHER INDUSTRIES INC CITY: CINCINNATI STATE: OH ZIP: 45202 BUSINESS PHONE: 5137217010 MAIL ADDRESS: STREET 1: C/O EAGLE PICHER INDUSTRIES INC STREET 2: P O BOX 779 CITY: CINCINNATI STATE: OH ZIP: 45202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EAGLE PICHER MINERALS INC CENTRAL INDEX KEY: 0001059572 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLE PARTS & ACCESSORIES [3714] IRS NUMBER: 311188662 STATE OF INCORPORATION: OH FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: SEC FILE NUMBER: 333-49957-06 FILM NUMBER: 98661125 BUSINESS ADDRESS: STREET 1: 250 EAST FIFTH STREET, SUITE 500 STREET 2: C/O EAGLE PICHER INDUSTRIES INC CITY: CINCINNATI STATE: OH ZIP: 45202 BUSINESS PHONE: 5137217010 MAIL ADDRESS: STREET 1: C/O EAGLE PICHER INDUSTRIES INC STREET 2: P O BOX 779 CITY: CINCINNATI STATE: OH ZIP: 45202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HILLSIDE TOOL & MANUFACTURING CO CENTRAL INDEX KEY: 0001059573 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLE PARTS & ACCESSORIES [3714] IRS NUMBER: 380946293 STATE OF INCORPORATION: OH FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: SEC FILE NUMBER: 333-49957-07 FILM NUMBER: 98661126 BUSINESS ADDRESS: STREET 1: 250 EAST FIFTH STREET, SUITE 500 STREET 2: C/O EAGLE PICHER INDUSTRIES INC CITY: CINCINNATI STATE: OH ZIP: 45202 BUSINESS PHONE: 5137217010 MAIL ADDRESS: STREET 1: C/O EAGLE PICHER INDUSTRIES INC STREET 2: P O BOX 779 CITY: CINCINNATI STATE: OH ZIP: 45202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MICHIGAN AUTOMOTIVE RESEARCH CORP CENTRAL INDEX KEY: 0001059575 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLE PARTS & ACCESSORIES [3714] IRS NUMBER: 382185909 STATE OF INCORPORATION: OH FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: SEC FILE NUMBER: 333-49957-08 FILM NUMBER: 98661127 BUSINESS ADDRESS: STREET 1: 250 EAST FIFTH STREET, SUITE 500 STREET 2: C/O EAGLE PICHER INDUSTRIES INC CITY: CINCINNATI STATE: OH ZIP: 45202 BUSINESS PHONE: 5137217010 MAIL ADDRESS: STREET 1: C/O EAGLE PICHER INDUSTRIES INC STREET 2: P O BOX 779 CITY: CINCINNATI STATE: OH ZIP: 45202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EAGLE PICHER TECHNOLOGIES LLC CENTRAL INDEX KEY: 0001059576 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLE PARTS & ACCESSORIES [3714] IRS NUMBER: 311587660 STATE OF INCORPORATION: OH FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: SEC FILE NUMBER: 333-49957-09 FILM NUMBER: 98661128 BUSINESS ADDRESS: STREET 1: 250 EAST FIFTH STREET, SUITE 500 STREET 2: C/O EAGLE PICHER INDUSTRIES INC CITY: CINCINNATI STATE: OH ZIP: 45202 BUSINESS PHONE: 5137217010 MAIL ADDRESS: STREET 1: C/O EAGLE PICHER INDUSTRIES INC STREET 2: P O BOX 779 CITY: CINCINNATI STATE: OH ZIP: 45202 10-Q/A 1 EAGLE-PICHER INDUSTRIES FORM 10-Q AMENDED 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-Q/A QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter ended May 31, 1998 Commission file number 333-49957 ---------- EAGLE-PICHER INDUSTRIES, INC. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) SEE TABLE OF ADDITIONAL REGISTRANTS ----------------------------------- OHIO 31-0268670 - ---------------------------------- -------------------------------------- (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 250 East Fifth Street, Suite 500, Cincinnati, Ohio 45202 - ------------------------------------------------------------------------------ (Address of principal executive offices) Zip Code Registrant's telephone number, including area code 513-721-7010 ----------------------------- (Not Applicable) - ------------------------------------------------------------------------------- Former name, former address and former fiscal year, if changed since last report 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 twelve months, and (2) has been subject to such filing requirements for the past 90 days. Yes No X ---- ---- 100 shares of common capital stock, no par value, were outstanding at June 26, 1998. 1 2 TABLE OF ADDITIONAL REGISTRANTS
Jurisdication of Commission IRS Employer Incorporation or File Identification Name Organization Number Number ---- ------------ ------------ -------------- Eagle-Picher Holdings, Inc. Delaware 333-49957-01 13-3989553 Daisy Parts, Inc. Michigan 333-49957-02 38-1406772 Eagle-Picher Development Co., Inc. Delaware 333-49957-03 31-1215706 Eagle-Picher Far East, Inc. Delaware 333-49957-04 31-1235685 Eagle-Picher Fluid Systems, Inc. Michigan 333-49957-05 31-1452637 Eagle-Picher Minerals, Inc. Nevada 333-49957-06 31-1188662 Eagle-Picher Technologies, LLC Delaware 333-49957-09 31-1587660 Hillsdale Tool & Manufacturing Co. Michigan 333-49957-07 38-0946293 Michigan Automotive Research Corp. Michigan 333-49957-08 38-2185909
2 3 TABLE OF CONTENTS Page Number ------ PART I. FINANCIAL INFORMATION Item 1. Financial Statements.........................................4 Condensed Consolidated Statements of Income (Loss) (Unaudited)...4 Condensed Consolidated Balance Sheets (Unaudited)................5 Condensed Consolidated Statements of Cash Flows (Unaudited)......7 Notes to Condensed Consolidated Financial Statements (unaudited).9 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.............................21 Item 3. Quantitative and Qualitative Disclosures About Market Risk..25 PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K............................26 Signature............................................................27 Exhibit Index........................................................37 3 4 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS. EAGLE-PICHER INDUSTRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)(UNAUDITED) (Dollars in thousands, except per share amounts)
Three Months Ended Three Months Ended Six Months Ended May 31 ------------------ May 31 ------------------ May 31 Feb. 28 ---------------- 1998 1997 1998 1998 1997 ---- ---- ---- ---- ---- Predecessor Predecessor Predecessor Net Sales $219,921 $242,183 $219,921 $205,842 $465,790 -------- -------- -------- -------- -------- Operating Costs and Expenses: Cost of products sold 169,575 194,578 169,575 162,796 374,979 Selling and administrative 20,287 19,619 20,287 17,141 39,343 Management compensation expense 17,321 - 17,321 2,056 - Depreciation 9,773 10,643 9,773 8,983 21,009 Amortization of intangibles 4,497 4,079 4,497 3,839 8,155 -------- -------- -------- -------- -------- 221,453 228,919 221,453 194,815 443,486 -------- -------- -------- -------- -------- Operating Income (Loss) (1,532) 13,264 (1,532) 11,027 22,304 Interest expense (12,554) (7,924) (12,554) (6,940) (16,851) Other income 326 (347) 326 820 1,356 -------- -------- -------- -------- -------- Income (Loss) Before Taxes (13,760) 4,993 (13,760) 4,907 6,809 Income Taxes (4,461) 4,448 (4,461) 4,100 7,484 -------- -------- -------- -------- -------- Net Income (Loss) $ (9,299) $ 545 $ (9,299) $ 807 $ (675) ======== ======== ======== ======== ======== Income (Loss) per Share $(92,990.00) $.05 $(92,990.00) $.08 $(.07) ========== ==== ========== ==== =====
See accompanying notes to the consolidated financial statements. 4 5
EAGLE-PICHER INDUSTRIES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Dollars in thousands) May 31 Nov. 30 1998 1997 ---- ---- ASSETS Predecessor CURRENT ASSETS Cash and cash equivalents $ 10,978 $ 53,739 Receivables, less allowances 121,257 130,927 Income tax refunds receivable 1,956 3,025 Inventories: Raw materials and supplies 53,653 51,592 Work in process 19,690 25,801 Finished goods 17,500 14,803 ------- ------- 90,843 92,196 Prepaid expenses 8,457 8,290 Deferred income taxes 18,935 13,793 ------- ------- Total current assets 252,426 301,970 ------- ------- PROPERTY, PLANT AND EQUIPMENT 248,675 279,847 Less accumulated depreciation 9,813 36,309 ------- ------- Net property, plant and equipment 238,862 243,538 DEFERRED INCOME TAXES - 98,991 EXCESS OF ACQUIRED NET ASSETS OVER COST NET OF ACCUMULATED AMORTIZATION OF $4,491 251,004 - REORGANIZATION VALUE IN EXCESS OF AMOUNTS ALLOCABLE TO IDENTIFIABLE ASSETS NET OF ACCUMULATED AMORTIZATION OF $16,284 - 48,837 OTHER ASSETS 86,601 53,545 ------- ------- Total Assets $828,893 $746,881 ======= ======= LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 48,045 $ 52,886 Long-term debt - current portion 13,028 3,403 Income taxes 6,878 2,294 Other current liabilities 64,655 55,419 ------- ------- Total current liabilities 132,606 114,002 ------- ------- LONG-TERM DEBT - less current portion 498,773 269,994 DEFERRED INCOME TAXES 1,115 - OTHER LONG TERM LIABILITIES 25,040 26,768 ------- ------- Total Liabilities 657,534 410,764 ------- -------
5 6 EAGLE-PICHER INDUSTRIES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Dollars in thousands)
May 31 Nov. 30 1998 1997 ------ ---------- Predecessor SHAREHOLDERS' EQUITY Common shares -- authorized 20,000,000 shares; issued and outstanding 100 and 10,000,000 shares 180,005 341,807 Foreign currency translation 653 (1,836) Accumulated deficit (9,299) (3,854) ------- ------- Total Shareholders' Equity 171,359 336,117 ------- ------- Total Liabilities and Shareholders' Equity $828,893 $746,881 ======== ========
See accompanying notes to the consolidated financial statements. 6 7 EAGLE-PICHER INDUSTRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Dollars in thousands)
Three Months Ended Six Months ------------------ Ended May 31 Feb. 28 May 31 1998 1998 1997 ---- ---- ---- Predecessor Predecessor CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $ (9,299) $ 807 $ (675) Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization 14,952 12,822 29,159 Changes in assets and liabilities: Receivables 14,375 (4,705) 117 Income tax refunds receivable 45 1,024 69,741 Inventories 4,205 (2,235) (3,946) Accounts payable (2,854) (2,787) 4,571 Accrued liabilities 14,724 (5,488) (4,206) Other (298) (8,521) 8,094 ------- ------- ------- Net cash provided by (used in) operating activities 35,850 (9,083) 102,855 CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (9,064) (5,692) (29,264) Other 561 (1,042) (2,025) ------- ------- ------- Net cash used in investing activities (8,503) (6,734) (31,289) CASH FLOWS FROM FINANCING ACTIVITIES: Issuance of long-term debt - 445,000 - Reduction of long-term debt - (250,000) (69,658) Borrowings under revolving credit agreement 14,825 79,100 - Repayments under revolving credit agreement (49,925) - - Redemption of common stock - (446,638) - Issuance of common stock - 180,005 - Debt issuance cost - (26,062) - Other (236) (360) 2,311 ------- -------- ------- Net cash used in financing activities (35,336) (18,955) (67,347) ------- -------- -------
7 8 EAGLE-PICHER INDUSTRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Dollars in thousands)
Three Months Ended Six Months ------------------- Ended May 31 Feb. 28 May 31 1998 1998 1997 ---- ---- ---- Predecessor Predecessor Net increase (decrease) in cash and cash equivalents (7,989) (34,772) 4,219 Cash and cash equivalents, beginning of period 18,967 53,739 32,725 ------- -------- ------- Cash and cash equivalents, end of period $10,978 $ 18,967 $36,944 ====== ======= ======
Supplemental cash flow information: 1998 1997 - ----------------------------------- ---- ---- Cash paid during the six months ended May 31: Interest paid $ 13,492 $ 16,501 Income taxes paid (refunded), net $ 305 $(67,229) Cash paid during the three months ended May 31: Interest paid $ 7,090 $ 16,026 Income taxes paid (refunded), net $ 681 $(51,301)
See accompanying notes to the consolidated financial statements. 8 9 EAGLE-PICHER INDUSTRIES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) A. BASIS OF REPORTING FOR INTERIM FINANCIAL STATEMENTS The unaudited financial statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. These financial statements should be read in conjunction with the financial statements and notes thereto included for the fiscal year ended November 30, 1997 and for the three months ended February 28, 1998, presented in the Company's Form S-4/A filed with the SEC on June 5, 1998. The financial statements presented herein reflect all adjustments (consisting of normal and recurring accruals) which, in the opinion of management, are necessary to fairly state the results of operations for the three and six month periods ended May 31, 1998 and 1997. (See Note B.) Results of operations for interim periods are not necessarily indicative of results to be expected for an entire year. The three month periods ended May 31, 1998 and February 28, 1998 (Predecessor) included in the Condensed Consolidated Statements of Income (Loss) and of Cash Flows are presented for comparison to the six months ended May 31, 1997 of the Predecessor Company. (See Note B.) B. ACQUISITION OF THE COMPANY On February 24, 1998 ("Closing Date"), Eagle-Picher Industries, Inc. ("Company") was acquired by a subsidiary of Granaria Industries BV, Eagle-Picher Holdings, Inc. ("Parent"), from the Eagle-Picher Industries, Inc. Personal Injury Settlement Trust ("Trust") (the "Acquisition"). The Trust was established pursuant to the Company's Plan of Reorganization upon its emergence from bankruptcy. The unaudited condensed consolidated financial statements as of and for the three months ended February 28, 1998 include the effects of the Acquisition as of February 24, 1998. Accordingly, the condensed consolidated statement of income (loss) for the three months ended February 28, 1998 includes results of operations from (1) December 1, 1997 through February 24, 1998 of the Company prior to the consummation of the Acquisition (for clarity, sometimes referred to herein as the "Predecessor Company") and (2) February 25 through February 28, 1998 of the Company. The Company, which is the operating entity, is a wholly-owned subsidiary of the Parent. The Parent's results of operations and cash flow approximate those of the Company. The Acquisition was accounted for using the purchase method of accounting. The preliminary allocation of the purchase price of the Company has been determined based on estimates of fair value and are subject to change. Appraisals are currently being completed 9 10 EAGLE-PICHER INDUSTRIES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) to value property, plant, equipment and identifiable intangible assets. The excess of purchase price over the assessed values of those assets will be allocated to goodwill. The Company expects to finalize the purchase price allocation by November 30, 1998. Adjustments are not expected to be material. The following pro forma information for the six months ended May 31, 1998 and 1997 gives effect to the Acquisition as if it had been consummated on December 1, 1997 and 1996, respectively. This information is not necessarily indicative of either the future results of operations or the results of operations that would have occurred if those events had been consummated on the indicated dates.
Six Months Ended May 31 ----------- 1998 1997 ---- ---- (In thousands of dollars, except per share amounts) Net Sales $425,763 $465,790 Net income (loss) $(12,700) $(17,100) Net income (loss) per share $(127,000.00) $(171,000.00) Average number of shares outstanding 100 100
Upon closing of the acquisition, the Parent received $100 million equity investment from Granaria Industries BV and an equity partner. The Parent also received proceeds approximating $80 million from its offering of preferred stock. These proceeds were invested in the Company, which issued approximately $180 million of common stock to the Parent. The Company also borrowed $225 million in term loans and $79.1 million in revolving credit loans under a syndicated senior secured loan facility ("Credit Agreement"), and issued $220 million in senior subordinated notes ("Subordinated Notes"), the proceeds of which were used to redeem the Company's 10% Senior Unsecured Sinking Fund Debentures ("Debentures") and common stock, both held by the Trust. Both the Credit Agreement and the Subordinated Notes are guaranteed on a full, unconditional and joint and several basis by certain of the Company's wholly-owned domestic subsidiaries ("Guarantors"). Management has determined that full financial statements of the Guarantors would not be material to investors and such financial statements are not presented. The following supplemental condensed combining financial statements present information regarding the Guarantors, the issuer of the debt and the subsidiaries that did not guarantee the debt. 10 11 EAGLE-PICHER INDUSTRIES, INC. SUPPLEMENTAL CONDENSED COMBINING STATEMENTS OF INCOME (LOSS) (UNAUDITED) FOR THREE MONTHS ENDED MAY 31, 1998
FOREIGN ISSUER GUARANTORS SUBSIDIARIES ELIMINATIONS TOTAL --------- --------- --------- --------- --------- (IN THOUSANDS OF DOLLARS) Net Sales Customers $ 69,233 $ 125,525 $ 25,163 $ -- $ 219,921 Intercompany 4,151 2,631 2,329 (9,111) -- Operating Costs and Expenses Cost of products sold 54,282 101,847 22,499 (9,053) 169,575 Selling and administrative 12,094 5,796 2,397 -- 20,287 Management compensation expense 17,321 -- -- -- 17,321 Intercompany charges (2,297) 2,297 -- -- -- Depreciation 3,050 5,785 999 (61) 9,773 Amortization of intangibles 863 3,634 -- -- 4,497 --------- --------- --------- --------- --------- Total 85,313 119,359 25,895 (9,114) 221,453 Operating Income (Loss) (11,929) 8,797 1,597 3 (1,532) Other Income (Expense) Interest expense (12,417) -- (137) -- (12,554) Other income (expense) 191 86 49 -- 326 --------- --------- --------- --------- --------- Income (Loss) Before Taxes (24,155) 8,883 1,509 3 (13,760) Income taxes (8,167) 2,825 881 -- (4,461) --------- --------- --------- --------- --------- Net Income (Loss) $ (15,988) $ 6,058 $ 628 $ 3 $ (9,299) ========= ========= ========= ========= =========
11 12 EAGLE-PICHER INDUSTRIES, INC. SUPPLEMENTAL CONDENSED COMBINING STATEMENTS OF INCOME (LOSS) (UNAUDITED) FOR THREE MONTHS ENDED FEBRUARY 28, 1998
FOREIGN ISSUER GUARANTORS SUBSIDIARIES ELIMINATIONS TOTAL --------- --------- --------- ------------ --------- (IN THOUSANDS OF DOLLARS) Net Sales Customers $ 61,071 $ 123,181 $ 21,590 $ -- $ 205,842 Intercompany 3,381 2,421 1,451 (7,253) -- Operating Costs and Expenses Cost of products sold 48,329 102,771 18,772 (7,076) 162,796 Selling and administrative 9,673 5,167 2,301 -- 17,141 Management compensation expense 2,056 -- -- -- 2,056 Intercompany charges (2,172) 2,172 -- -- -- Depreciation 2,823 5,220 940 -- 8,983 Amortization of intangibles 765 3,064 10 -- 3,839 --------- --------- --------- --------- --------- Total 61,474 118,394 22,023 (7,076) 194,815 Operating Income (Loss) 2,978 7,208 1,018 (177) 11,027 Other Income (Expense) Interest expense (6,844) -- (96) -- (6,940) Other income (expense) 812 333 (325) -- 820 --------- --------- --------- --------- --------- Income (Loss) Before Taxes (3,054) 7,541 597 (177) 4,907 Income taxes 1,083 2,486 531 -- 4,100 --------- --------- --------- --------- --------- Net Income (Loss) $ (4,137) $ 5,055 $ 66 $ (177) $ 807 ========= ========= ========= ========= =========
12 13 EAGLE-PICHER INDUSTRIES, INC. SUPPLEMENTAL CONDENSED COMBINED BALANCE SHEETS (UNAUDITED) AS OF MAY 31, 1998
FOREIGN ISSUER GUARANTORS SUBSIDIARIES ELIMINATIONS TOTAL --------- --------- --------- --------- --------- (IN THOUSANDS OF DOLLARS) ASSETS Cash and cash equivalents $ 4,169 $ 795 $ 7,325 $ (1,311) $ 10,978 Receivables 37,080 71,545 12,632 -- 121,257 Intercompany accounts receivable 180 194 6,809 (7,183) -- Income tax refunds receivable 1,956 -- -- -- 1,956 Inventories 35,121 42,634 14,463 (1,375) 90,843 Prepaid expenses 4,498 3,156 803 -- 8,457 Deferred income taxes 18,935 -- -- -- 18,935 --------- --------- --------- --------- --------- Total current assets 101,939 118,324 42,032 (9,869) 252,426 Property, plant and equipment 72,467 128,950 37,445 -- 238,862 Investment in subsidiaries 62,901 5,185 -- (68,086) -- Excess of acquired net assets over cost 51,143 199,861 -- -- 251,004 Other Assets 68,364 18,024 213 -- 86,601 --------- --------- --------- --------- --------- Total Assets $ 356,814 $ 470,344 $ 79,690 $ (77,955) $ 828,893 ========= ========= ========= ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY Accounts payable $ 15,723 $ 22,922 $ 9,400 $ -- $ 48,045 Intercompany accounts payable 150 175 8,096 (8,421) -- Accrued liabilities 40,507 21,154 2,994 -- 64,655 Income taxes 6,092 -- 786 -- 6,878 Long-term debt - current portion 10,280 -- 2,748 -- 13,028 --------- --------- --------- --------- --------- Current liabilities 72,752 44,251 24,024 (8,421) 132,606 Long-term debt - less current portion 497,120 -- 1,653 -- 498,773 Deferred income taxes 1,115 -- -- -- 1,115 Other liabilities 25,040 -- -- -- 25,040 --------- --------- --------- --------- --------- Total liabilities 596,027 44,251 25,677 (8,421) 657,534 Intercompany accounts (403,230) 373,232 22,958 7,040 -- Shareholders' Equity 164,017 52,861 31,055 (76,574) 171,359 --------- --------- --------- --------- --------- Total Liabilities and Shareholders' Equity $ 356,818 $ 470,344 $ 79,690 $ (77,955) $ 828,893 ========= ========= ========= ========= =========
13 14 EAGLE-PICHER INDUSTRIES, INC. SUPPLEMENTAL CONDENSED COMBINING STATEMENTS OF CASH FLOWS (UNAUDITED) FOR THREE MONTHS ENDED MAY 31, 1998
FOREIGN ISSUER GUARANTORS SUBSIDIARIES ELIMINATIONS TOTAL -------- ----------- ------------ ------------- -------- (IN THOUSANDS OF DOLLARS) CASH FLOWS FROM OPERATING ACTIVITIES: Net Income (Loss) $(15,988) $ 6,058 $ 628 $ 3 $ (9,299) Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization 4,595 9,419 999 (61) 14,952 Changes in assets and liabilities 17,996 12,758 1,148 (1,705) 30,197 -------- -------- -------- -------- -------- Net cash provided by (used in) operating activities 6,603 28,235 2,775 (1,763) 35,850 CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (3,436) (2,620) (3,008) -- (9,064) Other (1,989) 21 397 2,132 561 -------- -------- -------- -------- -------- Net cash provided by (used in) investing activities (5,425) (2,599) (2,611) 2,132 (8,503) CASH FLOWS FROM FINANCING ACTIVITIES: Borrowings under revolving credit agreement 14,825 -- -- -- 14,825 Repayments under revolving credit agreement (49,925) -- -- -- (49,925) Other -- -- (236) -- (236) -------- -------- -------- -------- -------- Net cash used in financing activities (35,100) -- (236) -- (35,336) -------- -------- -------- -------- -------- Increase (decrease) in cash and cash equivalents (33,922) 25,636 (72) 369 (7,989) Intercompany accounts 25,976 (25,986) 1,884 (1,874) -- Cash and cash equivalents, beginning of period 12,115 1,145 5,513 194 18,967 -------- -------- -------- -------- -------- Cash and cash equivalents, end of period $ 4,169 $ 795 $ 7,325 $ (1,311) $ 10,978 ======== ======== ======== ======== ========
14 15 EAGLE-PICHER INDUSTRIES, INC. SUPPLEMENTAL CONDENSED COMBINING STATEMENTS OF CASH FLOWS (UNAUDITED) FOR THREE MONTHS ENDED FEBRUARY 28, 1998
FOREIGN ISSUER GUARANTORS SUBSIDIARIES ELIMINATIONS TOTAL --------- --------- --------- --------- --------- (IN THOUSANDS OF DOLLARS) CASH FLOWS FROM OPERATING ACTIVITIES: Net Income (Loss) $ (4,137) $ 5,055 $ 66 $ (177) $ 807 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization 3,588 8,284 950 -- 12,822 Changes in assets and liabilities (16,059) (9,247) 2,019 575 (22,712) --------- --------- --------- --------- --------- Net cash provided by (used in) operating activities (16,608) 4,092 3,035 398 (9,083) CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (2,300) (1,833) (1,559) -- (5,692) Other (956) 65 (846) 695 (1,042) --------- --------- --------- --------- --------- Net cash provided by (used in) investing activities (3,256) (1,768) (2,405) 695 (6,734) CASH FLOWS FROM FINANCING ACTIVITIES: Issuance of long-term debt 445,000 445,000 Reduction of long-term debt (250,000) (250,000) Borrowings under revolving credit agreement 79,100 -- -- -- 79,100 Redemption of common stock (446,638) -- -- -- (446,638) Issuance of common stock 180,005 -- -- -- 180,005 Debt issue cost (26,062) -- -- -- (26,062) Other -- -- (360) -- (360) --------- --------- --------- --------- --------- Net cash used in financing activities (18,595) -- (360) -- (18,955) --------- --------- --------- --------- --------- Increase (decrease) in cash and cash equivalents (38,459) 2,324 270 1,093 (34,772) Intercompany accounts 1,740 (1,740) 899 (899) -- Cash and cash equivalents, beginning of period 48,834 561 4,344 -- 53,739 --------- --------- --------- --------- --------- Cash and cash equivalents, end of period $ 12,115 $ 1,145 $ 5,513 $ 194 $ 18,967 ========= ========= ========= ========= =========
15 16 EAGLE-PICHER INDUSTRIES, INC. SUPPLEMENTAL CONDENSED COMBINING STATEMENTS OF INCOME (LOSS) (UNAUDITED) FOR THREE MONTHS ENDED MAY 31, 1997
FOREIGN DIVESTED ISSUER GUARANTORS SUBSIDIARIES DIVISIONS ELIMINATIONS TOTAL --------- --------- --------- --------- ----- --------- (IN THOUSANDS OF DOLLARS) Net Sales Customers $ 63,341 $ 125,689 $ 20,546 $ 32,607 $ -- $ 242,183 Intercompany 2,631 2,411 1,278 (8) (6,312) -- Operating Costs and Expenses Cost of products sold 49,357 105,265 17,058 29,173 (6,275) 194,578 Selling and administrative 11,161 4,843 1,557 2,058 -- 19,619 Intercompany charges (3,277) 2,716 -- 561 -- -- Depreciation 2,922 5,341 882 1,498 -- 10,643 Amortization of intangibles 813 3,258 8 -- -- 4,079 --------- --------- --------- --------- --------- --------- Total 60,976 121,423 19,505 33,290 (6,275) 228,919 Operating Income (Loss) 4,996 6,677 2,319 (691) (37) 13,264 Other Income (Expense) Interest expense (7,845) (1) (78) -- -- (7,924) Other income (expense) (45) (47) (337) 82 -- (347) --------- --------- --------- --------- ---------- --------- Income (Loss) Before Taxes (2,894) 6,629 1,904 (609) (37) 4,993 Income taxes 740 2,263 1,381 64 -- 4,448 --------- --------- --------- --------- --------- --------- Net Income (Loss) $ (3,634) $ 4,366 $ 523 $ (673) $ (37) $ 545 ========= ========= ========= ========= ========= =========
16 17 EAGLE-PICHER INDUSTRIES, INC. SUPPLEMENTAL CONDENSED COMBINING STATEMENTS OF INCOME (LOSS) (UNAUDITED) FOR SIX MONTHS ENDED MAY 31, 1997
FOREIGN DIVESTED ISSUER GUARANTORS SUBSIDIARIES DIVISIONS ELIMINATIONS TOTAL --------- --------- --------- --------- ------------ --------- (IN THOUSANDS OF DOLLARS) Net Sales Customers $ 123,651 $ 240,087 $ 40,191 $ 61,861 $ -- $ 465,790 Intercompany 6,096 5,010 2,419 29 (13,554) -- Operating Costs and Expenses Cost of products sold 96,934 201,082 33,911 56,472 (13,420) 374,979 Selling and administrative 22,383 9,686 3,578 3,696 -- 39,343 Intercompany charges (6,795) 5,228 -- 1,567 -- -- Depreciation 5,788 10,501 1,790 2,930 -- 21,009 Amortization of intangibles 1,626 6,516 13 -- -- 8,155 --------- --------- --------- --------- --------- --------- Total 119,936 233,013 39,292 64,665 (13,420) 443,486 Operating (Loss) Income 9,811 12,084 3,318 (2,775) (134) 22,304 Other Income (Expense) Interest expense (16,744) (1) (106) -- -- (16,851) Other income (expense) 1,371 165 (262) 82 -- 1,356 --------- --------- --------- --------- --------- --------- Income (Loss) Before Taxes (5,562) 12,248 2,950 (2,693) (134) 6,809 Income taxes 853 4,303 2,195 133 -- 7,484 --------- --------- --------- --------- --------- --------- Net Income (Loss) $ (6,415) $ 7,945 $ 755 $ (2,826) $ (134) $ (675) ========= ========= ========= ========= ========= =========
17 18 EAGLE-PICHER INDUSTRIES, INC. SUPPLEMENTAL CONDENSED COMBINED BALANCE SHEETS (UNAUDITED) AS OF NOVEMBER 30, 1997
FOREIGN ISSUER GUARANTORS SUBSIDIARIES ELIMINATIONS TOTAL --------- --------- --------- ------------- --------- (IN THOUSANDS OF DOLLARS) ASSETS Cash and cash equivalents $ 48,834 $ 561 $ 4,344 $ -- $ 53,739 Receivables 36,541 72,992 21,394 -- 130,927 Intercompany accounts receivable 2,982 3,295 -- (6,277) -- Income tax refunds receivable 3,025 -- -- -- 3,025 Inventories 32,309 48,830 12,432 (1,375) 92,196 Prepaid expenses 5,618 2,401 271 -- 8,290 Deferred income taxes 13,793 -- -- -- 13,793 --------- --------- --------- --------- --------- Total current assets 143,102 128,079 38,441 (7,652) 301,970 Property, plant and equipment 72,630 135,560 35,348 -- 243,538 Investment in subsidiaries 59,981 5,186 -- (65,167) -- Deferred income taxes 98,991 98,991 Reorganization value in excess of amounts allocable to identifiable assets 9,746 39,091 -- -- 48,837 Other assets 36,395 16,462 688 -- 53,545 --------- --------- --------- --------- --------- Total Assets $ 420,845 $ 324,378 $ 74,477 $ (72,819) $ 746,881 ========= ========= ========= ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY Accounts payable $ 16,974 $ 28,257 $ 7,655 $ -- $ 52,886 Intercompany accounts payable -- -- 6,247 (6,247) -- Accrued liabilities 29,404 22,440 3,713 (138) 55,419 Income taxes 2,284 -- 10 -- 2,294 Long-term debt - current portion 80 -- 3,323 -- 3,403 --------- --------- --------- --------- --------- Current liabilities 48,742 50,697 20,948 (6,385) 114,002 Long-term debt - less current portion 268,320 -- 1,674 -- 269,994 Other liabilities 26,768 -- -- -- 26,768 --------- --------- --------- --------- --------- Total liabilities 343,830 50,697 22,622 (6,385) 410,764 Intercompany accounts (240,324) 210,930 16,895 12,499 -- Shareholders' Equity 317,339 62,751 34,960 (78,933) 336,117 --------- --------- --------- --------- --------- Total Liabilities and Shareholders' Equity $ 420,845 $ 324,378 $ 74,477 $ (72,819) $ 746,881 ========= ========= ========= ========= =========
18 19 EAGLE-PICHER INDUSTRIES, INC. SUPPLEMENTAL CONDENSED COMBINING STATEMENTS OF CASH FLOWS (UNAUDITED) FOR SIX MONTHS ENDED MAY 31, 1997
FOREIGN DIVESTED ISSUER GUARANTORS SUBSIDIARIES DIVISIONS ELIMINATIONS TOTAL --------- --------- --------- --------- --------- --------- (IN THOUSANDS OF DOLLARS) CASH FLOWS FROM OPERATING ACTIVITIES: Net Income (Loss) $ (6,415) $ 7,945 $ 755 $ (2,826) $ (134) $ (675) Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization 7,414 17,017 1,798 2,930 -- 29,159 Income tax refunds 69,741 -- -- -- -- 69,741 Working capital and other 7,241 633 (379) (2,205) (660) 4,630 --------- --------- --------- --------- --------- --------- Net cash provided by (used in) operating activities 77,981 25,595 2,174 (2,101) (794) 102,855 CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (4,368) (19,031) (5,188) (677) (29,264) Other (175) (1,571) (392) (8) 121 (2,025) --------- --------- --------- --------- --------- --------- Net cash provided by (used in) investing activities (4,543) (20,602) (5,580) (685) 121 (31,289) CASH FLOWS FROM FINANCING ACTIVITIES: Reduction of long-term debt (69,658) -- -- -- -- (69,658) Other -- -- 2,311 -- -- 2,311 --------- --------- --------- --------- --------- --------- Net cash provided by (used in) financing activities (69,658) -- 2,311 -- -- (67,347) --------- --------- --------- --------- --------- --------- Increase (decrease) in cash and cash equivalents 3,780 4,993 (1,095) (2,786) (673) 4,219 Intercompany accounts 1,934 (4,810) 123 2,794 (41) -- Cash and cash equivalents, beginning of year 26,089 553 5,985 98 -- 32,725 --------- --------- --------- --------- --------- --------- Cash and cash equivalents end of year $ 31,803 $ 736 $ 5,013 $ 106 $ (714) $ 36,944 ========= ========= ========= ========= ========= =========
19 20 EAGLE-PICHER INDUSTRIES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) C. BASIC EARNINGS PER SHARE The calculation of net income (loss) per share is based upon the average number of common shares outstanding, which was 9,555,560 in the three months ended February 28, 1998, 10,000,000 in the six months ended May 31, 1997, and 100 and 10,000,000 in the three months ended May 31, 1998 and 1997, respectively. In 1998, 100 shares were outstanding after the acquisition. Prior to the acquisition, 10,000,000 shares were outstanding. D. INTANGIBLE ASSETS Excess of acquired net assets over cost is being amortized on a straight-line basis over fifteen years. The recoverability of these assets is evaluated periodically based on current and estimated future cash flows of each of the related business units over the remaining amortization period. Reorganization value in excess of amounts allocable to identifiable assets was being amortized on a straight-line basis over four years. E. LEGAL MATTERS The Company is involved in routine litigation, environmental proceedings and claims pending with respect to matters arising out of the normal course of business. In managements' opinion, the ultimate liability resulting from all claims, individually or in the aggregate, will not materially affect the Company's consolidated financial position, results of operations or cash flows. 20 21 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. RESULTS OF OPERATIONS As a result of the Acquisition of the Company by Granaria Industries B.V. from the Trust as of February 24, 1998, which was accounted for as a purchase, the Company's results of operations and financial position for periods after February 24, 1998 are not comparable to prior periods. The unaudited condensed consolidated statement of income (loss) as of February 28, 1998 includes results of operations from (1) December 1, 1997 through February 24, 1998 of the Predecessor Company and (2) February 25 through February 28, 1998 of the Company. In addition to the effects of the Acquisition, another factor affecting comparability of operations is the sale of the Plastics, Transicoil and Fabricon Products divisions in 1997. The Company also contributed the assets of its former Suspension Systems division to Eagle-Picher-Boge, L.L.C., a joint venture formed in 1997 in which the Company has a 45% interest. These divisions are collectively referred to as the "Divested Divisions." The following table sets forth certain sales and operating data, net of all inter-segment transactions, for the Company's businesses for the periods indicated:
Three months ended Three months ended ------------------ Six months ended May 31 May 31 Feb. 28 May 31 1998 1997 1998 1998 1997 ---- ---- ---- ---- ---- (In millions of dollars) Predecessor Predecessor Predecessor Net sales by segment: Industrial $ 36.4 $ 54.8 $ 36.4 $ 37.6 $104.9 Machinery 68.9 68.9 68.9 64.4 133.6 Automotive 114.6 118.5 114.6 103.8 227.3 ----- ----- ----- ----- ----- Total $219.9 $242.2 $219.9 $205.8 $465.8 ===== ===== ===== ===== ===== EBITDA by segment: Industrial $ 7.1 $ 8.6 $ 7.1 $ 6.6 $ 15.7 Machinery 10.9 8.3 10.9 7.8 16.3 Automotive 17.8 16.6 17.8 15.2 30.0 Corporate overhead (5.7) (5.5) (5.7) (3.7) (10.5) ----- ----- ----- ----- ----- $ 30.1 $ 28.0 $ 30.1 $ 25.9 $ 51.5 ====== ===== ===== ===== ===== Total
Net Sales. The Company's net sales were $219.9 million for the second quarter ended May 31, 1998, a decrease of $22.3 million or 9.2% from the comparable period of 1997. Included in the results of the second quarter of 1997 are $32.6 million of sales of the Divested Divisions, which, if excluded, would result in an increase in the Company's quarterly net sales of approximately 4.9%. 21 22 Net sales of Industrial products, excluding net sales of the Divested Divisions, decreased 17.9% in the second quarter of 1998 from the comparable period in 1997, due primarily to decreased sales of germanium products. Germanium sales have been affected by lower market prices which have resulted from increased supplies, the completion of a major satellite project and the increased use of recycled germanium by the Company's customers in response to sharp increases in germanium prices which took place in 1996. Since the customers now supply a larger portion of the Company's raw materials, the sales volume is less as a toll refiner than as a buyer and seller of germanium. Operating margins, however, have been maintained. Net sales for the Machinery Group in the second quarter of 1998, excluding the Divested Divisions, increased 7.9% due in part to an increase in demand for heavy-duty fork lift trucks. Although demand remains low for special purpose can-washing equipment, resources at that operation have been successfully redeployed to produce and market other industrial machinery, which also contributed to the increased net sales of the Machinery Group. The Automotive Group's net sales, excluding the Divested Divisions, increased 13.0% primarily due to increased market penetration of precision machined components, many of which are used in light trucks, vans and sport utility vehicles which have recently grown in popularity. Volumes of fuel systems have also increased as new programs are implemented. The Ford Motor Company ("Ford") has recently notified the Company that it will no longer purchase certain products from the Automotive Group. Sales contributed by those products in 1997 were $19.4 million. The Company anticipates that these programs will be discontinued gradually through 1999 and that this revenue will be replaced by new programs currently being implemented. The current strike by the United Auto Workers at certain General Motors Corporation ("GM") plants has not impacted the second quarter results of the Automotive Group. However, the third quarter of 1998 could be significantly impacted. Some of the Automotive Group operations have experienced lay-offs as a result of the strike at GM. Historically, the third quarter results of the Automotive Group are depressed as most of the automobile companies shut their plants for two weeks in July to retool for new model years. Since the 1980's, original equipment manufacturers ("OEM's") such as Ford, GM and the Chrysler Corporation have been outsourcing an increasing percentage of their production requirements. OEM's benefit from outsourcing because outside suppliers generally have significantly lower cost structures and can assist in shortening development periods for new products. The Company expects to continue to benefit from the trend toward outsourcing. The Company expects strong price pressure to continue across all product lines, particularly in the Automotive Group. The Company will continue to pursue productivity improvements and material cost reductions to mitigate such price pressure. Historically, sales to certain Asian markets have been insignificant to the Company's total net sales; therefore, the current economic conditions in Asia have not had, nor are they expected to have, a material adverse effect on the Company's operations. The Company believes that despite these conditions, the Asian region has solid long-term growth opportunities and will continue to explore these opportunities. Cost of Products Sold. Cost of products sold, excluding depreciation expense, decreased by $25.0 million or 12.8% from the second quarter of 1997 compared to the comparable period in 1998. Excluding the results of Divested Divisions, as a percentage of sales, cost of products sold declined from 78.9% in the second quarter of 1997 to 77.1% in the second quarter of 1998. Reasons for this decline include better absorption of overhead due to increased sales volumes and improved performance at certain start-up operations. 22 23 Selling and Administrative. Selling and administrative expenses increased by $.7 million or 3.4% in the quarter ended May 31, 1998 from the quarter ended May 31, 1997. Excluding results of Divested Divisions, these expenses increased $2.5 million or 14.1% over the same time frame. Besides a general increase due to activity relating to increased sales volumes, items contributing to this increase include management fees now payable to Granaria Industries B.V. and a retention program for mid-level management. Depreciation and Amortization. Depreciation and amortization are not comparable for the three months ended May 31, 1998 and 1997 due to the differences in asset bases as a result of the Acquisition on February 24, 1998. EBITDA. The Company defines EBITDA as earnings before interest, taxes, depreciation, amortization and management expenses. Due to the differences in the asset bases, it is preferable to compare EBITDA rather than operating income. EBITDA increased from $28.0 million in the three months ended May 31, 1997 to $30.1 million for the same period in 1998 or 7.5%. The increase is 14.0% after excluding the results of Divested Divisions. In the second quarter of 1998, EBITDA for the Industrial Group declined to $7.1 million from $8.6 million in the comparable period of 1997. Excluding the results of Divested Divisions, this decline was $.4 million or 5.3% on a 17.9% decrease in sales. As previously mentioned, although lower germanium prices have contributed to reduced sales, EBITDA has remained relatively consistent as did results at other Industrial Group operations. In the Machinery Group, EBITDA increased from $8.3 million in the second quarter of 1997 to $10.9 million in the same period of 1998. Excluding results of the Divested Divisions, the increase was $3.1 million. Reasons for this increase include a shift in product mix toward more profitable products at operations manufacturing special-purpose batteries, better absorption of overhead on increased sales volumes at the other industrial equipment facilities previously mentioned and improved efficiencies at the aluminum foundry. EBITDA for the Automotive Group increased to $17.8 million in the second quarter of 1998 from $16.6 million in the same period in the prior year. Excluding the results of Divested Divisions, the increase was 7.9%. This increase results from the increased volumes previously discussed. Interest Expense. Interest expense for the three months ended May 31, 1998 and 1997 was $12.6 million and $7.9 million, respectively. In 1997, interest expense included interest on the $250 million Subordinated Debentures held by the Trust which were retired upon the Acquisition and the $50 million Divestiture Notes retired in August 1997. In 1998, the increase in interest was attributable to the borrowings against the new credit facility totaling $304.1 million, the issuance of $220 million in Subordinated Notes and the issuance of an additional $8 million industrial revenue bond in June 1997. FINANCIAL CONDITION The Company generated cash from operations in the second quarter of 1998 despite the net loss of $9.3 million. EBITDA of $30.1 was sufficient to cover interest payments of $7.1 million and capital expenditures of $9.1 million. The receivables were at high levels at February 28, 1998, primarily due to February being a short month. Receivables are at what would be considered a more normal level at May 31, 1998, resulting in an influx of cash in the second quarter of $14.4 million. After drawing down cash balances by $8.0 million, the Company was able to repay $35.1 million of the debt incurred upon the Acquisition. 23 24 The Company's liquidity needs are primarily for debt service and capital maintenance. The Company has scheduled debt payments of $5.3 million in the second half of 1998 and $10.4 million in 1999. The Company anticipates that capital spending will be approximately $15.0 to $18.0 million in the second half of 1998. The Company believes that its cash flows from operations and available borrowings under its bank credit facilities will be sufficient to fund its anticipated liquidity requirements for the next twelve months. In the event that the foregoing sources are not sufficient to fund the Company's expenditures and service its indebtedness, the Company would be required to raise additional funds. YEAR 2000 The Company is performing a comprehensive review to identify the systems affected by the Year 2000 issue. A project committee meets regularly to review the status of the investigation into and resolution of Year 2000 issues. As a result of the committee's progress to date, the Company expects to modify or upgrade existing systems and, in some cases, replace systems. The Company does not expect to spend any significant incremental amounts with outside contractors to complete any necessary modifications or conversions, but is redeploying existing internal resources. The Company presently believes that through the planned modification to existing systems and conversion to new systems, as well as ongoing correspondence with suppliers and customers, the Year 2000 issue will be resolved on a timely basis, and any related costs will not have a material impact on the results of operations, cash flows or financial condition of the Company. FORWARD-LOOKING STATEMENTS This Form 10-Q contains statements which, to the extent that they are not recitations of historical fact, constitute "forward looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934. The words "estimate," "anticipate," "project," "intend," "believe," "expect," and similar expressions are intended to identify forward looking statements. Such forward-looking information involves important risks and uncertainties that could materially alter results in the future from those expressed in any forward-looking statements made by, or on behalf of, the Company. These risks and uncertainties include, but are not limited to, the ability of the Company to maintain existing relationships with long-standing customers, the ability of the Company to successfully implement productivity improvements, cost reduction initiatives, facilities expansion and the ability of the Company to develop, market and sell new products and to continue to comply with environmental laws, rules and regulations. Other risks and uncertainties include uncertainties relating to economic conditions, acquisitions and divestitures, government and regulatory policies, technological developments and changes in the competitive environment in which the Company operates. Persons reading this Form 10-Q are cautioned that such statements are only predictions and that actual events or results may differ materially. In evaluating such forward-looking statements, readers should specifically consider the various factors which could cause actual events or results to differ materially from those indicated by such forward-looking statements. 24 25 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company's $225 million term loan facility (the "Term Loan Facility") bears interest at a variable rate equal to either (a) the average daily rate on overnight U.S. federal funds transactions ("Federal Funds Rate"), or (b) the London Interbank Offered Rate shown on Telerate Page 3750 for the applicable interest period ("LIBOR"), plus, in either case, an applicable spread. On February 26, 1998, the Company entered into a three year interest rate swap agreement with its lead bank to partially hedge its interest rate risk on the Term Loan Facility. Under this agreement the Company pays a fixed rate of 5.805% on a notional amount of $150 million and receives LIBOR on that amount. This swap transaction effectively fixes the interest rate on $150 million of the Term Loan Facility at 5.805% plus the applicable spread for the duration of the interest rate swap. The remaining $75 million of the Term Loan Facility bears interest at the variable rates described above. Accordingly, a 1% increase in an applicable index rate would result in additional interest expense of $750,000 per year. 25 26 PART II. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits: 10.29 Share Appreciation Plan of Eagle-Picher Industries, Inc. 27.1 Financial Data Schedule (b) Reports on Form 8-K--None 26 27 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. EAGLE-PICHER INDUSTRIES, INC. /s/ David S. Hall ------------------------------------ David S. Hall Senior Vice President - Finance and Chief Financial Officer DATE June 29, 1998 27 28 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. EAGLE-PICHER HOLDINGS, INC. /s/ David S. Hall ------------------------------------ David S. Hall Senior Vice President - Finance and Chief Financial Officer DATE June 29, 1998 28 29 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. DAISY PARTS, INC. /s/ David G. Krall ------------------------------------ David G. Krall Secretary DATE June 29, 1998 29 30 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. EAGLE-PICHER DEVELOPMENT COMPANY, INC. /s/ David G. Krall ------------------------------------ David G. Krall Secretary DATE June 29, 1998 30 31 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. EAGLE-PICHER FAR EAST, INC. /s/ David G. Krall ------------------------------------ David G. Krall Secretary DATE June 29, 1998 31 32 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. EAGLE-PICHER FLUID SYSTEMS, INC. /s/ David G. Krall ------------------------------------ David G. Krall Secretary DATE June 29, 1998 32 33 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. EAGLE-PICHER MINERALS, INC. /s/ David G. Krall ------------------------------------ David G. Krall Secretary DATE June 29, 1998 33 34 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. EAGLE-PICHER TECHNOLOGIES, LLC /s/ William E. Long ------------------------------------ William E. Long President DATE June 29, 1998 34 35 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. HILLSDALE TOOL & MANUFACTURING CO. /s/ David G. Krall ------------------------------------ David G. Krall Secretary DATE June 29, 1998 35 36 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. MICHIGAN AUTOMOTIVE RESEARCH CORPORATION /s/ David G. Krall ------------------------------------ David G. Krall Assistant Secretary DATE June 29, 1998 36 37 EXHIBIT INDEX
Exhibit No. Description - ----------- ----------- 10.29 Share Appreciation Plan of Eagle-Picher Industries, Inc. 27.1 Financial Data Schedule (submitted electronically to the Securities and Exchange Commission for its information)
37 EX-10.29 2 EXHIBIT 10.29 1 Exhibit 10.29 SHARE APPRECIATION PLAN OF EAGLE-PICHER INDUSTRIES, INC. Section 1. Purpose. The Share Appreciation Plan is intended to further the attainment of the profit and growth objectives of Eagle-Picher Industries, Inc. (the "Company") and its subsidiaries by providing incentive to key executives whose management and individual performance have a direct impact on achieving those objectives. The Plan also is expected to encourage the continued employment of the Company's and its subsidiaries' key executives and to facilitate the recruiting of executive personnel in the future. The Plan is not intended to be an "employee pension benefit plan" within the meaning of Section 3 of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"). Section 2. Definitions. As used herein, the following terms shall have the following meanings: (a) "Affiliate" means any entity if, (i) the Company, directly or indirectly, owns at least 50% of the combined voting power of all classes of stock of such entity or at least 50% of the ownership interests in such entity, (ii) such entity, directly or indirectly, owns at least 50% of the combined voting power of all classes of stock of the Company, or (iii) such entity is at least 50% owned (directly or indirectly) by one or more entities described in (i) or (ii) above. (b) "Capitalized Earnings Value" means a US Dollar amount equal to the excess of (i) the sum of 6.54 times EBITDA for the Company's and its Subsidiaries' most recently ended fiscal year plus cash and cash equivalents of the Company and its Subsidiaries (but only to the extent the total of such cash and cash equivalents exceeds $15 million) over (ii) the principal amount of outstanding debt of the Parent, the Company and its Subsidiaries owing to banks, or owing with respect to securities issued by the Parent, the Company or by any of its Subsidiaries and the aggregate liquidation preference of all outstanding preferred stock issued by the Parent. The calculation of Capitalized Earnings Value shall be as of the Company's and the Company's Subsidiaries' most recently ended fiscal year. (c) "Award Date" of Units means the date of the letter whereby the Committee announces in writing the award of the Units to a Participant. (d) "Base Value" of a Unit shall mean the Unit Value of the Unit as of the Award Date. (e) "Beneficiary" means the person, persons, trust or trusts which have been designated by a Participant in his or her most recent written beneficiary designation filed with the Committee to receive the Participant's rights under the Plan upon the Participant's death, or, if there is no such designation or no such designated person survives the Participant, then the person, persons, trust or trusts entitled by will or applicable law to receive such rights or, if no such person has such right then the Participant's executor or administrator. 2 (f) "Change of Control Date" shall mean the date as of which (i) any person who as of February 25, 1998 does not beneficially own, directly or indirectly, voting stock of the Company shall acquire (including by purchase or merger) direct or indirect beneficial ownership of more than 50% of the voting stock of the Company (or any successor of the Company) or (ii) substantially all of the assets of the Company are sold, disposed of or liquidated. (g) "Committee" shall mean the committee described in Section 3. (h) "Company" shall mean Eagle-Picher Industries, Inc., or any successor corporation. (i) "EBITDA" (except to the extent modified according to the first sentence of Section 3(c) if applicable) shall have the meaning such term has in the Credit Agreement among E-P Acquisition, Inc., various lenders, and ABN AMRO Bank N.V. as Agent, dated February 19, 1998. (j) "Exercise Date" of a Unit shall mean the date on which the Participant gives notice or is deemed to give notice as provided in Section 7 of the exercise of his right to payment with respect to a vested Unit. (k) "Incapacitated" shall mean permanently and totally disabled within the meaning of Section 22(e)(3) of the Internal Revenue Code of 1986, as amended. (l) "Net Appreciation" of a Unit shall mean the excess, if any, of the Unit Value of the Unit as of the Exercise Date over the Base Value of the Unit. (m) "Parent" shall mean Eagle Picher Holdings, Inc., or any other US entity of which the Company is a Subsidiary. (n) "Participant" shall mean any key employee of the Company or of a Subsidiary or Affiliate of the Company who, in the opinion of the Committee, is in a position to have a direct and significant impact on achieving the Company's profit and growth objectives and to whom the Committee awards Units. (o) "Plan" shall mean this Share Appreciation Plan in its entirety, including any amendments, rules and regulations adopted pursuant hereto. (p) "Subsidiary" of any person shall mean any entity in which the person owns, directly or indirectly, at least 50% of the combined voting power of all classes of stock or at least 50% of the ownership interests. (q) "Unit" shall mean one of the participating shares in the Plan established pursuant to Section 5 representing the right, subject to the provisions of the Plan, to receive a cash payment from the Company equal to the Net Appreciation with respect to such Unit, which right has been awarded to a Participant pursuant to the Plan. (r) "Unit Value" of a Unit means the Capitalized Earnings Value as of that date divided by the sum of (i) one hundred million plus (ii) the number of Units that have been awarded and -2- 3 have neither been forfeited nor exercised under the Plan as of such date, plus (iii) the amount determined by the Committee pursuant to the second sentence of Section 3(c); provided, however that on or before November 30, 1998, the Unit Value of a Unit shall be $1.00. Section 3. Administration. (a) The Committee shall be composed of three individuals each of whom shall continue to serve until he resigns, dies or is Incapacitated. Initially, the members of the Committee shall be Thomas E. Petry, Joel P. Wyler and Andries Ruijssenaars. In the event that either Mr. Petry or Mr. Ruijssenaars shall resign, die or be Incapacitated, the remaining members of the Committee shall appoint his successor. In the event that Mr. Wyler shall resign, die, or be Incapacitated, his successor shall be appointed by Granaria Holdings B.V. (b) The Plan shall be administered by and in the sole discretion of the Committee which, by vote of a majority of the members, but only if Mr. Wyler (or his successor appointed by Granaria Holdings, B.V.) is included in the majority, may establish such rules and regulations as it deems necessary, make amendments consistent with Section 10(d), make adjustments in the calculation of EBITDA and Unit Value pursuant to Section 3(c), interpret the Plan and otherwise make all determinations and take such action in connection with the Plan as it deems appropriate. (c) From time to time, the Committee in its sole discretion may make adjustments in the Company's consolidated earnings derived from operations before interest, taxes, depreciation and amortization determined in accordance with GAAP for purposes of calculating EBITDA so that changes in accounting principles; extraordinary or unusual charges or credits; acquisitions, mergers, consolidations, and other corporate transactions; and other elements or factors influencing calculation of EBITDA do not distort or affect the operation of the Plan in a manner inconsistent with the achievement of its purposes. From time to time, the Committee in its sole discretion may increase the divisor for purposes of calculating Unit Value to take into account any contribution to the equity capital of the Company or any of its Subsidiaries or the proceeds of any issuance of shares of equity capital by the Company or any of its Subsidiaries and in its sole discretion may adjust any such increase to take into account subsequent events. (d) The decisions of the Committee shall be final, conclusive, and binding upon all parties. In administering the Plan, the Committee may employ accountants and counsel (who may be the independent auditors and outside counsel for the Company) and other persons to assist or render advice to it, all at the expense of the Company. Section 4. Eligibility. (a) The Committee shall designate those persons who shall be Participants and shall award Units to each Participant. (b) The Committee shall record the award of Units in writing and shall notify the affected Participant of such award in writing. Each award of Units to a Participant shall be evidenced by a written agreement which shall contain such provisions and be subject to any conditions or limitations as the Committee in each instance shall deem appropriate and not -3- 4 inconsistent with the provisions of this Plan. The Committee may at any time award an additional number of Units to a Participant. Section 5. Establishment of Units. (a) The Company hereby establishes an aggregate maximum of 5,000,000 participating shares in the Plan (the "Units"), each of which shall represent an equal, undivided interest in the future appreciation in Capitalized Earnings Value in accordance with the terms of this Plan. (b) The Units do not, in and of themselves, constitute a share of, nor represent any ownership interest in, the Company. No Participant or Beneficiary shall have any rights of a shareholder by virtue of an award of Units hereunder. The Units represent, upon vesting and exercise as provided in Sections 6 and 7, only the right to receive cash as provided in Section 8. (c) Any Units forfeited by a Participant pursuant to Section 6 or Section 11(h) (or pursuant to the terms of the written agreement evidencing their award) shall be available for subsequent award pursuant to this Plan to other Participants. Section 6. Vesting. A Participant's rights to exercise Units shall vest in accordance with this paragraph 6. One fifth of the Units awarded will vest on each of the first five anniversaries of the Award Date. In the event that a Participant ceases to be an employee of the Company or any Affiliate for any reason other than by reason of death or being Incapacitated, any of the Participant's Units that have not yet vested as of the date of such termination of his employment shall be forfeited. By written notice to the Participant at the time he is notified of the award, the Committee may determine to apply a different vesting schedule to the Units awarded. The Units of a Participant who dies or is Incapacitated while employed by the Company or any Affiliate shall be immediately 100% vested as of the date of death or incapacity. The Units of a Participant who is employed by the Company or any Affiliate on any Change of Control Date shall be immediately 100% vested as of the Change of Control Date. At any time, the Committee may accelerate the vesting schedule applicable to a particular Participant by notifying the Participant in writing. Section 7. Exercise of Rights. (a) Upon the exercise of the rights relating to vested Units, a Participant will be entitled to receive payment for Net Appreciation of vested Units pursuant to the terms of Section 8. Subject to Section 10(b), vested Units may be exercised by the Participant at any time after the sixth anniversary of the Award Date of such Units. On the date a Participant ceases, for any reason, to be employed by the Company and any Affiliate other than by reason of death or being Incapacitated, he shall forfeit all non-vested Units awarded to him. If such employment is terminated for any reason other than for Misconduct as defined in Section 11(h) herein, all vested but unexercised Units shall be deemed to have been immediately exercised and the Exercise Date shall be the date of termination of such employment. -4- 5 (b) Except in case the Participant ceases to be employed by the Company or any Affiliate, the Participant must give written notice of any exercise of rights with regard to vested Units to the Committee. Such written notice must be given in the manner or form as the Committee may determine. In the event a Participant wishes to exercise fewer than all of his vested Units, the notice of exercise shall specify the number of Units that he wishes to exercise and (if the Participant holds vested Units awarded at different times) the Award Date of the Units he wishes to exercise. Any exercise of rights will be deemed to have been made on the date such notice is received by the Committee (the "Exercise Date"). Section 8. Payment for Units. (a) Upon exercise by a Participant of any vested Units, the Participant will be entitled to payment for the number of vested Units exercised multiplied by their Net Appreciation. (b) Payment for any exercised vested Units shall be made in cash in US Dollars. (c) The Company or the Subsidiary that employs the Participant shall pay the Participant the amount described in paragraph (a) of this Section 8 within 30 days after the later of the Exercise Date of the vested Units or the date the Committee receives audited financial statements for the Company's most recently ended fiscal year that ended on or prior to the Exercise Date. Following such payment, the Company shall reduce on its records the total number of Units held by the Participant by the number of Units so exercised. (d) No Participant shall be obligated to make any payments to the Company in the event that the Net Appreciation of his Units at any time is less than zero. (e) If a Participant dies or becomes Incapacitated while the Participant is employed by the Company or any of its Affiliates, all Units of the Participant not previously exercised shall be deemed exercised as of the date of such death or incapacity (which shall be the Exercise Date). Section 9. Designation of Beneficiaries. (a) Each Participant shall file with the Committee a written designation of one or more persons or trusts as the Beneficiary who shall be entitled to receive the amount, if any, payable under the Plan upon his death. A Participant may, from time to time, revoke or change his Beneficiary designation without the consent of any prior Beneficiary by filing a new designation with the Committee. The last such designation received by the Committee shall be controlling; provided, however, that no designation, or change or revocation thereof, shall be effective unless received by the Committee prior to the Participant's death, and in no event shall it be effective as of a date prior to such receipt. (b) If the Committee is in doubt as to the right of any person to receive such amount, the Committee may retain such amount, without liability for any interest thereon, until the rights thereon are determined, or the Committee may pay such amount into any court of appropriate -5- 6 jurisdiction and such payment shall be a complete discharge of the liability of the Plan, the Company, and the Committee therefor. Section 10. Conversion and Termination (a) In the event that a class of common stock of either the Company or of any corporation of which the Company is a Subsidiary shall be or become publicly traded on a securities exchange in the United States or listed on the NASDAQ National Market System, the Committee may, in its discretion, convert all awards of Units then outstanding into equivalent options to purchase such publicly traded common stock; provided, however, that with respect to each Participant, as of the date of such conversion, the excess of the aggregate fair market value of all the shares of common stock subject to the Participant's purchase option (as measured by the closing trading price on the trading day immediately preceding the date of conversion) over their option exercise price shall be at least equal to the aggregate Net Appreciation of the Units held by the Participant immediately before the conversion. (b) No Unit shall be exercisable after the tenth anniversary of the Award Date of the Unit; any Unit not exercised on or before the tenth anniversary of the Award Date of the Unit shall be forfeited. Section 11. Miscellaneous. (a) Nothing in the Plan shall confer upon any Participant the right to continue in the employ of, or to continue as a director of the Company, or any Affiliate, as the case may be, or to be entitled to any remuneration or benefits not set forth in the Plan or to interfere with or limit in any way the right of the Company or any Affiliate to terminate such Participant's employment or directorship. (b) The Company and any Affiliate are authorized to withhold from any payment of cash with respect to Units under the Plan, amounts of withholding and other taxes due in connection with such payment, and to take such other action as the Committee may deem advisable to enable the Company and a Participant to satisfy obligations for the payment of withholding taxes and other tax obligations relating to any Unit or payment with respect to any Unit. (c) The Committee may at any time and from time to time alter, amend, suspend, or terminate the Plan in whole or in part. Notwithstanding the foregoing, no amendment shall affect adversely any of the rights of any Participant without such Participant's consent. (d) Except as provided in Section 4, no person shall have any claim to Units under the Plan. The Units are not shares in the Company and do not represent any ownership interest in the Company. No Participant or Beneficiary shall have any rights of a shareholder by virtue of an award of Units hereunder. Participants shall have no rights as a stockholder. The Plan is for the benefit of the Participants and their Beneficiaries and not for the benefit of any other person. -6- 7 (e) Neither the Units nor any interest in Units shall be subject in any manner to anticipation, alienation, pledge, transfer, or assignment, except by will or by the laws of descent and distribution or with the written consent of the Committee, and any attempt to so anticipate, alienate, pledge, transfer, or assign shall be void and the interest of the Participant in such Units shall be forfeited. (f) Neither the granting of nor any payout of Units under the Plan shall limit a Participant's right to receive, or to be eligible for, any other compensation or benefits from the Company. (g) Awards and payouts of Units will not be considered as compensation for the purpose of computing employee contributions or benefits under the Company's retirement, pension, thrift, group life insurance or other employee benefit plan. (h) In the event a Participant's employment is terminated for "Misconduct," then all his vested Units shall be forfeited. The term "Misconduct" shall mean (i) repeated or prolonged failure to report for work after written warning by the Company or any of its Subsidiaries other than due to illness or authorized leave of absence; (ii) conviction of a felony; (iii) an act of fraud, embezzlement or dishonesty; (iv) deliberate and intentional violation of the material policies or procedures of the Company; or (v) deliberate and intentional disregard of direct instructions from the Company's executive officers or the Board of Directors. (i) Any payment by the Company shall be from the general funds of the Company. No special or separate fund shall be established or other segregation of assets made to assure any cash payment by the Company under the Plan. No Participant or other person shall have under any circumstances any interest whatever in any particular property or assets of the Company. (j) If any provision of the Plan shall be determined to be illegal and unenforceable by any court of law, the remaining provisions shall be severable and enforceable in accordance with their terms. (k) This Plan and all determinations made and actions taken pursuant hereto shall be governed by the laws of the State of Ohio. Section 11. Effective Date. The Plan shall be effective as of May 5 , 1998. -7- EX-27.1 3 EXHIBIT 27.1
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONDENSED CONSOLIDATED STATEMENT OF INCOME (LOSS) AND THE CONDENSED CONSOLIDATED BALANCE SHEET AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 0000030927 EAGLE PICHER INDUSTRIES, INC. 1000 U.S. DOLLARS 3-MOS NOV-30-1997 MAR-01-1997 MAY-31-1997 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 242,183 242,183 194,578 194,578 34,341 0 7,924 4,993 4,448 545 0 0 0 545 .05 .05
EX-27.2 4 EXHIBIT 27.2
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONDENSED CONSOLIDATED STATEMENT OF INCOME (LOSS) AND THE CONDENSED CONSOLIDATED BALANCE SHEET AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 0000030927 EAGLE PICHER INDUSTRIES, INC. 1000 U.S. DOLLARS 3-MOS NOV-30-1998 MAR-01-1998 MAY-31-1998 1 10,978 0 122,919 1,662 90,843 252,426 248,675 9,813 828,893 132,606 498,773 0 0 180,005 8,646 828,893 219,921 219,921 169,575 169,575 51,878 0 12,554 13,760 4,461 9,299 0 0 0 9,299 92,990,000 92,990,000
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