-----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, Iq03RSp4EcQez+UGkYnbbBuo6/6fbd6tCv4hrWmRP3F16gQp69C9v79gMW/yo/ZD HdqqOce1/Snzr1DfUhHVFw== 0000889812-99-001208.txt : 19990416 0000889812-99-001208.hdr.sgml : 19990416 ACCESSION NUMBER: 0000889812-99-001208 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19990103 FILED AS OF DATE: 19990415 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HARVARD INDUSTRIES INC CENTRAL INDEX KEY: 0000046012 STANDARD INDUSTRIAL CLASSIFICATION: FABRICATED RUBBER PRODUCTS, NEC [3060] IRS NUMBER: 210715310 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: SEC FILE NUMBER: 001-01044 FILM NUMBER: 99594473 BUSINESS ADDRESS: STREET 1: 3 WERNER WAY CITY: LEBANON STATE: NJ ZIP: 08833 BUSINESS PHONE: 9084374100 MAIL ADDRESS: STREET 1: 3 WERNER WAY STREET 2: SUITE 960 CITY: LEBANON STATE: NJ ZIP: 08833 FORMER COMPANY: FORMER CONFORMED NAME: HARVARD BREWING CO DATE OF NAME CHANGE: 19710315 10-Q/A 1 AMENDMENT NO. 2 TO QUARTERLY REPORT AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL , 1999 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ FORM 10-Q/A AMENDMENT NO. 2 /X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JANUARY 3, 1999 OR / / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO COMMISSION FILE NO. 0-21362 ------------------------ HARVARD INDUSTRIES, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE 21-0715310 (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.) 3 WERNER WAY 08833 LEBANON, NEW JERSEY (ZIP CODE) (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (908) 437-4100 (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 / / APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS: Indicate by check mark whether the Registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes /x/ No / / APPLICABLE ONLY TO CORPORATE ISSUERS: The number of shares outstanding of Registrant's Common Stock, as of April 5, 1999, was 8,240,295. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- HARVARD INDUSTRIES, INC. INDEX
PAGE ----- PART I. FINANCIAL INFORMATION: Item 1. Financial Statements: Consolidated Balance Sheets January 3, 1999 (Unaudited) Post-Confirmation And September 30, 1998 (Audited) Pre-Confirmation....................................................... 3 Consolidated Statements of Operations (Unaudited) One Month-Ended January 3, 1999 (Post-Confirmation), Three Months Ended December 31, 1997 And Two Months Ended November 29, 1998 (Pre-Confirmation)............................................... 4 Consolidated Statements of Cash Flows (Unaudited) One Month Ended January 3, 1999 (Post-Confirmation), Three Months Ended December 31, 1997 And Two Months Ended November 29, 1998 (Pre-Confirmation)............................................... 5 Notes to Consolidated Financial Statements--(Unaudited)................................................... 6-21 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations............. 22-26 PART II. OTHER INFORMATION: Item 1. Legal Proceedings................................................................................. 27 Item 2. Changes in Securities............................................................................. 27 Item 3. Defaults Upon Senior Securities................................................................... 27 Item 4. Submission of Matters to a Vote of Securities Holders............................................. 27 Item 5. Other Information................................................................................. 27 Item 6. Exhibits and Reports on Form 8-K.................................................................. 28 SIGNATURES................................................................................................ 29
This Quarterly Report on Form 10-Q for the quarterly period ended January 3, 1999 is being amended hereby to clarify certain disclosures made as of January 3, 1999 or as of the original dates of filing, as the case may be, unless a different date is specified. 2 HARVARD INDUSTRIES, INC. CONSOLIDATED BALANCE SHEETS JANUARY 3, 1999 (UNAUDITED) (POST-CONFIRMATION) AND SEPTEMBER 30, 1998 (PRE-CONFIRMATION) (IN THOUSANDS OF DOLLARS)
POST-CONFIRMATION PRE-CONFIRMATION ----------------- ---------------- JANUARY 3, SEPTEMBER 30, 1999 1998 (UNAUDITED) ---------------- ----------------- ASSETS Current assets: Cash and cash equivalents.................................................. $ 11,624 $ 7,319 Accounts receivable, net................................................... 57,046 48,030 Inventories................................................................ 26,646 32,269 Prepaid expenses and other current assets.................................. 5,701 6,837 -------- --------- Total current assets.................................................. 101,017 94,455 Property, plant and equipment, net........................................... 122,579 123,561 Intangible assets, net....................................................... 2,833 309,669 Other assets, net............................................................ 24,552 5,535 -------- --------- Total assets.......................................................... $250,981 $ 533,220 -------- --------- -------- --------- LIABILITIES AND SHAREHOLDERS' (DEFICIENCY) EQUITY Current liabilities: Current portion of Debtor-in-Possession (DIP) loans........................ $ 39,161 $ -- Creditors subordinated term loan........................................... 25,000 -- Short-term borrowings...................................................... 6,666 Current portion of long-term debt.......................................... -- 1,000 Accounts payable........................................................... 25,098 40,654 Accrued expenses........................................................... 93,337 61,364 Income taxes payable....................................................... 8,445 7,602 -------- --------- Total current liabilities............................................. 191,041 117,286 Liabilities subject to compromise............................................ 385,665 -- Long-term debt............................................................... -- 73,750 Postretirement benefits other than pensions.................................. 95,515 95,466 Other........................................................................ 63,353 77,566 -------- --------- Total liabilities..................................................... 735,574 364,068 Commitments and Contingencies................................................ -- -- 14 1/4% Pay-In-Kind Exchangeable Preferred Stock, (includes $10,142 of undeclared accrued dividends)................................... 124,637 -- Shareholders' (deficiency) equity: Common stock $.01 par value; 15,000,000 shares authorized 7,026,437 shares issued and outstanding; at September 30, 1998 and 50,000,000 shares authorized; 8,240,295 shares issued and outstanding; at January 3, 1999.................................................................... 70 82 Additional paid-in capital................................................. 32,134 174,918 Additional minimum pension liability....................................... (8,902) -- Foreign currency translation adjustment.................................... (2,991) (851) Accumulated (deficit) retained earnings.................................... (629,541) (4,997) -------- --------- Total shareholders' (deficiency) equity............................... (609,230) 169,152 -------- --------- Total liabilities and shareholders' (deficiency) equity............... $250,981 $ 533,220 -------- --------- -------- ---------
See accompanying notes to consolidated financial statements. 3 HARVARD INDUSTRIES, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) ONE MONTH ENDED JANUARY 3, 1999 (POST-CONFIRMATION), THREE MONTHS ENDED DECEMBER 31, 1997 AND TWO MONTHS ENDED NOVEMBER 29, 1998 (PRE-CONFIRMATION) (IN THOUSANDS OF DOLLARS, EXCEPT SHARE AND PER SHARE DATA)
POST- PRE-CONFIRMATION CONFIRMATION ---------------------------- ------------ THREE MONTHS TWO MONTHS ONE MONTH ENDED ENDED ENDED DECEMBER 31, NOVEMBER 29, JANUARY 3, 1997 1998 1999 ------------ ------------ ------------ Sales................................................................ $ 197,052 $ 89,050 $ 40,166 Cost of sales........................................................ 191,722 79,628 35,634 ---------- ---------- ---------- Gross profit.................................................. 5,330 9,422 4,532 Selling, general and administrative expense.......................... 9,835 5,151 3,021 Amortization of intangible assets.................................... 396 264 5,232 Restructuring charges................................................ 5,000 -- -- Interest expense (contractual interest of $12,758 in 1997 and $6,931 for the two months ended November 29, 1998)........................ 3,853 1,636 991 Gain on sale of operations........................................... (11,354) -- -- Other (income) expense, net.......................................... 8 (34) (7) ---------- ---------- ---------- (Loss) income before reorganization items and income taxes........... (2,408) 2,405 (4,705) Reorganization items................................................. 2,942 50,384 -- ---------- ---------- ---------- Loss before income taxes and extraordinary item...................... (5,350) (47,979) (4,705) ---------- ---------- ---------- Provision for income taxes........................................... 169 584 292 ---------- ---------- ---------- Loss before extraordinary item....................................... (5,519) (48,563) (4,997) ---------- ---------- ---------- Extraordinary item--gain on forgiveness of debt...................... -- (206,363) -- ---------- ---------- ---------- Net (loss) income............................................. $ (5,519) $ 157,800 $ (4,997) ---------- ---------- ---------- ---------- ---------- ---------- PIK Preferred Dividends and Accretion (contractual amount for the three months ended December 31, 1997 was $4,763 and for the two months ended November 29, 1998 was $3,219)......................... $ -- $ -- $ -- ---------- ---------- ---------- ---------- ---------- ---------- Net (loss) income attributable to common shareholders......... $ (5,519) $ 157,800 ($ 4,997) ---------- ---------- ---------- ---------- ---------- ---------- Basic and diluted earnings per share: Loss before extraordinary item................................ $ (0.79) $ (6.91) $ (0.61) Income from extraordinary item....................................... -- 29.37 -- ---------- ---------- ---------- Net (loss) income per share................................... $ (0.79) $ 22.46 $ (0.61) ---------- ---------- ---------- ---------- ---------- ---------- Weighted average number of common shares outstanding................. 7,026,437 7,026,437 8,240,295 ---------- ---------- ---------- ---------- ---------- ----------
See accompanying notes to consolidated financial statements. 4 HARVARD INDUSTRIES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) ONE MONTH ENDED JANUARY 3, 1999 (POST-CONFIRMATION), THREE MONTHS ENDED DECEMBER 31, 1997 AND TWO MONTHS ENDED NOVEMBER 29, 1998 (PRE-CONFIRMATION) (IN THOUSANDS OF DOLLARS)
PRE-CONFIRMATION POST-CONFIRMATION ---------------------------- ----------------- THREE MONTHS TWO MONTHS ONE MONTH ENDED ENDED ENDED DECEMBER 31, NOVEMBER 29, JANUARY 3, 1997 1998 1999 ------------ ------------ ----------------- Cash flows related to operating activities: Income (loss) from operations before reorganization items...... $ (2,577) $ 1,820 $ (4,997) Add back (deduct) items not affecting cash and cash equivalents: Depreciation and amortization............................... 8,108 3,979 6,166 Gain on sale of operation................................... (11,354) -- -- Loss on disposition of property, plant and equipment........ 15 -- -- Postretirement benefits..................................... 1,475 -- -- Changes in operating assets and liabilities net of effects of divestitures and reorganization items: Accounts receivable............................................ 878 (15,077) 24,093 Inventories.................................................... 5,882 (1,168) (4,455) Other current assets........................................... (1,234) 402 (1,538) Accounts payable............................................... (27) 21,676 (6,120) Accrued expenses and income taxes payable...................... 5,881 (23,745) (4,620) Other noncurrent............................................... 5,905 (1,412) (638) -------- -------- --------- Net cash provided by (used in) operations before reorganization items.......................................................... 12,952 (13,525) 7,891 Net cash used by reorganization items............................ (2,445) (4,018) (2,477) -------- -------- --------- Net cash provided by (used in) operations........................ 10,507 (17,543) 5,414 -------- -------- --------- Cash flows related to investing activities: Acquisition of property, plant and equipment................... (1,354) (2,856) (3,100) Net proceeds from sale of operation.............................. 16,391 -- -- -------- -------- --------- Net cash provided by (used in) investing activities.............. 15,037 (2,856) (3,100) -------- -------- --------- Cash flows related to financing activities: Net borrowings (repayments) under DIP financing agreement...... (27,634) 1,062 -- Repayments of long-term debt................................... (391) -- -- Payment of EPA settlements..................................... (36) -- -- Net borrowings under financing/credit agreement................ -- 81,425 (9) Retirement of DIP financing.................................... -- (40,360) -- Retirement of creditors unsecured term loan.................... -- (25,000) -- Deferred financing costs....................................... -- (3,338) -- -------- -------- --------- Net cash (used in) provided by financing activities.............. (28,061) 13,789 (9) -------- -------- --------- Net (decrease) in cash and cash equivalents...................... (2,517) (6,610) 2,305 Cash and cash equivalents, beginning of period................... 9,212 11,624 5,014 -------- -------- --------- Cash and cash equivalents, end of period......................... $ 6,695 $ 5,014 $ 7,319 -------- -------- --------- -------- -------- ---------
See accompanying notes to consolidated financial statements. 5 HARVARD INDUSTRIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (IN THOUSANDS OF DOLLARS, EXCEPT SHARE AND PER SHARE DATA) 1. BASIS OF PRESENTATION AND EMERGENCE FROM BANKRUPTCY: The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments and fresh start reporting adjustments) considered necessary for a fair presentation have been included. Operating results for the one month period ended January 3, 1999 are not necessarily indicative of the results that may be expected for the period ending September 30, 1999. The balance sheet at September 30, 1998 has been derived from the audited financial statements at that date. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's annual report on Form 10-K for the year ended September 30, 1998. On November 24, 1998 (the "Effective Date") the Company emerged from Chapter 11 reorganization under the United States Bankruptcy Code. On the effective date, pursuant to the Plan of Reorganization, substantially all pre-petition unsecured debt at pre-reorganization Harvard was converted into equity at post-reorganization Harvard in the form of common stock (the "New Common Stock"). Each one hundred dollars ($100) of pre-petition debt allowed as a claim by the United States Bankruptcy Court for the District of Delaware (the "Bankruptcy Court") is entitled to receive 2.6607 shares of New Common Stock. Under the terms of the Plan of Reorganization, its First Amended Modified Consolidated Plan under Chapter 11 of the Bankruptcy Code ("Plan of Reorganization") holders of Harvard's Pay-In-Kind Exchangeable Preferred ("PIK Preferred Stock") and holders of Harvard's existing common stock (the "Old Common Stock") have each received warrants ("Warrants") to acquire, in the aggregate, approximately 5% of the New Common Stock, with holders of PIK Preferred Stock each receiving their pro rata share of 66.67% of the Warrants and holders of the Old Common Stock each receiving their pro rata share of 33.33% of the Warrants. On the Effective Date, the Old Common Stock and PIK Preferred Stock were canceled in their entirety. In connection with its emergence from Chapter 11 bankruptcy proceedings, the Company implemented "Fresh Start Reporting," as of November 29, 1998 (its normal interim closing date), as set forth in Statement of Position 90-7, "Financial Reporting by Entities in Reorganization Under the Bankruptcy Code" (SOP 90-7), issued by the American Institute of Certified Public Accountants. "Fresh Start Reporting" was required because there was more than a 50% change in the ownership of the Company. Accordingly, all assets and liabilities were restated to reflect their respective fair values. Consolidated financial statement amounts of post-confirmation periods will be segregated by a black line in order to signify that such consolidated statements of operations, stockholders' equity (deficiency) and cash flows are those of a new reporting entity and have been prepared on a basis not comparable to the pre-confirmation periods. The Company, in accordance with SOP 90-7, has followed the accounting and reporting guidelines for companies operating as debtor-in-possession since its filing for bankruptcy protection on May 8, 1997 and until its emergence from bankruptcy protection as described above. The reorganization value of the Company was determined by management, with assistance from Chanin Kirkland Messina LLC, independent financial professionals. The methodology employed involved estimation of enterprise value (i.e., the market value of the Company's debt and stockholders' equity which was determined to be $275,000), taking into account a discounted cash flow analysis (Enterprise Value). The discounted cash flow analysis was based on five-year cash flow projections prepared by management and average discount rates of 5.34 percent. The reorganization value of the Company was determined to be $552,428 as of November 29, 1998 (Reorganization Value). 6 HARVARD INDUSTRIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)--(CONTINUED) (IN THOUSANDS OF DOLLARS, EXCEPT SHARE AND PER SHARE DATA) 1. BASIS OF PRESENTATION AND EMERGENCE FROM BANKRUPTCY:--(CONTINUED) The reorganization value of the Company has been allocated to specific asset categories as follows: Current assets.............................................................................. $ 110,250 Property, plant and equipment............................................................... 121,516 Other noncurrent assets..................................................................... 5,761 Reorganization value in excess of amounts allocable to identifiable assets.................. 314,901 ---------- $ 552,428 ---------- ----------
Current assets have been recorded at their historical carrying values. Property, plant and equipment have been recorded at their appraised value as determined by an independent appraisal performed by Norman Levy Associates, Inc., independent appraiser, based on "orderly liquidation value," which assumes that the assets will be used for the purpose for which they were designed and constructed. Property held for sale is valued at net realizable value. Other noncurrent assets are stated at historical carrying values which approximate fair value. The portion of the reorganization value which cannot be attributed to specific tangible or identifiable intangible assets of the reorganized Company has been reported as "Reorganization value in excess of amounts allocable to identifiable assets." This intangible asset is being amortized using the straight-line method over 5 years. The Company selected a useful life of 5 years based on the Company's previous experience, methodologies employed by the independent financial professionals and the Company's turnaround business strategy. The Company evaluates whether changes have occurred that would require revision of the remaining estimated useful life of the reorganization value in excess of amounts allocable to identifiable assets or render such assets not recoverable. 7 HARVARD INDUSTRIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)--(CONTINUED) (IN THOUSANDS OF DOLLARS, EXCEPT SHARE AND PER SHARE DATA) 1. BASIS OF PRESENTATION AND EMERGENCE FROM BANKRUPTCY:--(CONTINUED) The effect of the Plan on the Company's consolidated balance sheet as of November 29, 1998 was as follows:
ADJUSTMENTS TO RECORD EFFECTS OF THE PLAN -------------------------------------------------------------- PRE- POST- CONFIRMATION CONFIRMATION CONSOLIDATED REORGANIZATION FRESH START CONSOLIDATED BALANCE SHEET ADJUSTMENTS ADJUSTMENTS BALANCE SHEET ------------- -------------- ------------ -------------- Current assets................................ $ 110,250 $ -- $ -- $110,250 Property, plant and equipment, net............ 117,816 -- 3,700 121,516 Intangible assets, net........................ 2,569 -- (2,569) -- Other assets, net............................. 3,645 -- 2,116 5,761 Reorganization value in excess of amounts allocable to identifiable assets............ -- -- 314,901 314,901 --------- -------- -------- -------- $ 234,280 $ -- $318,148 $552,428 --------- -------- -------- -------- --------- -------- -------- -------- Current liabilities........................... $ 193,973 $ -- $(71,155) $122,818 Liabilities subject to compromise............. 381,363 (381,363) -- -- Long-term debt................................ 200 -- 81,225 81,425 Postretirement benefits other than pension..................................... 95,466 -- -- 95,466 Other......................................... 77,719 -- -- 77,719 14 1/4% PIK exchangeable preferred stock...... 124,637 (124,637) -- Common stock.................................. 70 82 (70) 82 Additional paid-in capital.................... 32,134 174,918 (32,134) 174,982 Additional minimum pension liability.......... (8,902) -- 8,902 -- Foreign currency translation adjustment....... (3,163) -- 3,163 -- Accumulated deficit........................... (659,217) 206,363 452,854 -- --------- -------- -------- -------- $ 234,280 $ -- $318,148 $552,428 --------- -------- -------- -------- --------- -------- -------- --------
Reorganization adjustments reflect the conversion of both the 12% Notes and the 11 1/8% Notes and the related accrued interest as of May 7, 1997 and other prepetition trade payables into new common stock resulting in an extraordinary gain of $206,363. Fresh start adjustments reflect the adjustments to state assets and liabilities at their respective fair values which resulted in a net fair value adjustment of $50,431, which adjustment, net of interest income of $47, has been shown as a reorganization item. All of the reorganization and fresh start adjustments have been reflected in the consolidated statement of operations for the two months ended November 29, 1998. The following table summarizes unaudited pro forma financial information as if the Plan had become effective on October 1, 1998. The unaudited pro forma financial information combines the Company's operations for the two months ended November 29, 1998 with the one month ended January 3, 1999 and contains adjustments for depreciation expense, pension expense and the amortization of reorganization value in excess of amounts allocable to identifiable assets. The unaudited pro forma financial information does not purport to be 8 HARVARD INDUSTRIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)--(CONTINUED) (IN THOUSANDS OF DOLLARS, EXCEPT SHARE AND PER SHARE DATA) 1. BASIS OF PRESENTATION AND EMERGENCE FROM BANKRUPTCY:--(CONTINUED) indicative of the results which would have been obtained had the Plan been effective as of October 1, 1998, or which may be obtained in the future.
(UNAUDITED) QUARTER ENDED JANUARY 3 1999 ------------- Sales................................................................................... $129,216.00 ----------- ----------- Net loss................................................................................ $(13,019.00) ----------- ----------- Net loss attributable to common stockholders............................................ $(13,019.00) ----------- ----------- Loss per common share................................................................... $ (1.58) ----------- -----------
The net loss is before reorganization items. Continuation of the Company's business after reorganization is dependent upon the success of future operations, including execution of the company's turnaround business strategy and the ability to meet obligations as they become due. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company has suffered recurring losses from operations and at January 3, 1999 had a net working capital deficit. These factors among others raise substantial doubt about the Company's ability to achieve successful future operations. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. 2. DISPOSITION OF BUSINESS: Condensed operating data of operations disposed or being disposed of are as follows:
POST- PRE-CONFIRMATION CONFIRMATION ---------------------------- ------------ THREE MONTHS TWO MONTHS ONE MONTH ENDED ENDED ENDED DECEMBER 31, NOVEMBER 29, JANUARY 3, 1997 1998 1999 ------------ ------------ ------------ Sales....................................................... $ 80,033 $ 8,389 $ 3,197 Gross profit (loss)......................................... (2,636) (1,534) (990)
On January 28, 1999, the Company sold the land, building, and certain other assets of its Tiffin, Ohio facility for gross proceeds of approximately $1.5 million. The Company is actively pursuing the sale of its Ripley, Tennessee facility. 9 HARVARD INDUSTRIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)--(CONTINUED) (IN THOUSANDS OF DOLLARS, EXCEPT SHARE AND PER SHARE DATA) 3. INVENTORIES: Inventories consist of the following:
POST- CONFIRMATION PRE-CONFIRMATION ----------------- ---------------- JANUARY 3, SEPTEMBER 30, 1999 1998 (UNAUDITED) ---------------- ----------------- Finished goods...................................................... $ 6,476 $ 9,661 Work-in-process..................................................... 2,078 1,470 Tooling............................................................. 5,991 7,939 Raw materials....................................................... 12,101 13,199 -------- ------- Total inventories................................................... $ 26,646 $32,269 -------- ------- -------- -------
4. LONG-TERM DEBT AND CREDIT AGREEMENTS: Long-term debt consists of the following:
POST- CONFIRMATION PRE-CONFIRMATION ----------------- ---------------- JANUARY 3, SEPTEMBER 30, 1999 1998 (UNAUDITED) ---------------- ----------------- 14 1/2% Senior Secured Notes Due 2003............................... $ -- $25,000 Senior Secured Credit Facility...................................... -- 49,750 -------- ------- Total long-term debt................................................ -- 74,750 Less current portion................................................ -- (1,000) -------- ------- Long-term portion................................................... $ -- $73,750 -------- -------
On November 24, 1998, the Company issued $25,000 of 14 1/2% Senior Secured Notes (the "Notes") due September 1, 2003. The Notes were issued pursuant to an indenture by and among the Company and Guarantors, which are subsidiaries of the Company, and Norwest Bank Minnesota, National Association, as Trustee. In addition to the stated coupon interest rate the Notes have a Cash Flow Participation Interest provision which entitles the holder to additional interest computed as a percentage of consolidated cash flow as set forth in the indenture. This interest can be no less than $1,000 for any 12 month period. The Notes are subject to restrictive covenants for Consolidated Leverage Ratio and Consolidated Interest Coverage Ratio, as defined. On November 24, 1998 the Company entered into a $115,000 senior credit facility that provides for up to $50,000 in term loan borrowings and up to $65,000 of revolving credit borrowings. The term loan has an interest rate of the base rate (prime rate) plus 2.250% or the Eurdollar base rate (Eurodollar loan rate) plus 3.500%. The term loan has 16 quarterly installment payments of principal in the amount of $250 commencing on January 3, 1999 with the balance of the loan due on September 30, 2002. The revolver has an interest rate of the base rate plus 2.125% or the Eurodollar base rate plus 3.375%. The revolving credit facility terminates on November 24, 2001. The senior credit facility is subject to restrictive covenants for Consolidated Leverage Ratio, Consolidated interest Coverage Ratio and Fixed Charge Ratio, as defined. 10 HARVARD INDUSTRIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)--(CONTINUED) (IN THOUSANDS OF DOLLARS, EXCEPT SHARE AND PER SHARE DATA) 5. EARNINGS PER COMMON SHARE: Statement of Financial Accounting Standards No. 128, "Earnings per Share," which became effective for fiscal 1998, established new standards for computing and presenting earnings per share (EPS). The new standard requires the presentation of basic EPS and diluted EPS and the restatement of previously reported EPS amounts. Basic EPS is calculated by dividing income available to common shareholders by the weighted average number of shares of common stock outstanding during the period. Diluted EPS is calculated by dividing income available to common shareholders, adjusted to add back dividends or interest on convertible securities, by the weighted average number of shares of common stock outstanding plus additional common shares that could be issued in connection with potentially dilative securities. Income (loss) available to common shareholders used in determining both basic and diluted EPS was ($4,977) for the one month ended January 3, 1999, $157,800 for the two months ended November 29, 1998 and ($5,519) for the three months ended December 31, 1997, respectively. The weighted average number of shares of common stock used in determining basic and diluted EPS was 8,240,295 for the one month ended January 3, 1999, 7,026,437 for the two months ended November 29, 1998 and 7,026,437 for the three months ended December 31, 1997. Although on February 16, 1999, 8,240,295 of the Company's 50,000,000 authorized shares were outstanding, the Registrant's Chapter 11 Plan of Reorganization requires it to issue additional shares to certain claimants in the Bankruptcy case. The exact number of shares to be issued is presently unknown, as certain claims are unliquidated and others are disputed as to amount or validity. However, management estimates that approximately 3,750,000 additional shares will be issued in the process of resolving claims. The issuance of additional shares will not involve additional consideration, and therefore no accounting recognition other than the impact on outstanding share and per share amounts is expected. The Company's Reorganization Plan also provides for holders of its Old Common Stock and PIK Preferred Stock to receive in the aggregate approximately to receive 633,000 warrants, expiring November 23, 2003, permitting the purchase of new common shares at an exercise price of $41.67 per share. Members of the Company's Board of Directors have each been granted 20,000 shares which vest over five (5) years. A total of 120,000 shares will be issued as one director declined the grant and one member of management is ineligible. An incentive plan has been authorized by the Board of Directors providing for a grant of options to certain members of senior management. No shares have yet been awarded under this plan. The above options, warrants and shares to be issued have been excluded from the computation of earnings per share as their effect would be anti dilutive. 11 HARVARD INDUSTRIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)--(CONTINUED) (IN THOUSANDS OF DOLLARS, EXCEPT SHARE AND PER SHARE DATA) 6. COMPREHENSIVE INCOME: In June 1997, the Financial Accounting Standards Board (the "FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 130, "Reporting Comprehensive Income," which is effective for fiscal years beginning after December 15, 1997. Reclassification of financial statements for earlier periods is required.
PRE-CONFIRMATION POST-CONFIRMATION ----------------------------- ----------------- THREE MONTHS TWO MONTHS ONE MONTH ENDED ENDED ENDED DECEMBER 31, NOVEMBER 29, JANUARY 3, 1998 1998 1999 ------------- ------------ ----------------- Net income (loss)...................................... $(5,519) $157,800 $(4,997) Other comprehensive income, net of tax: Foreign currency translation adjustment.............. (448) -- (851) ------- -------- ------- Total other comprehensive income (loss)......... (448) -- (851) ------- -------- ------- Comprehensive income (loss)..................... $(5,967) $157,800 $(5,848) ------- -------- ------- ------- -------- -------
7. GUARANTOR SUBSIDIARIES: Both the $115,000 Senior Credit Facility and the 14 1/2% Senior Secured Notes are unconditionally guaranteed (collectively, the "Guarantees") jointly and severally on a senior basis, by each of the Company's domestic subsidiaries (the "Subsidiary Guarantors"). The Senior Credit Facility is secured by a first priority security interest and the Senior Secured Notes are senior obligations of the Subsidiary Guarantors (including indebtedness incurred under the Senior Credit Facility) and rank senior to all existing and future subordinated obligations of such Subsidiary Guarantors. Senior Secured Notes are secured by a second priority security interest in substantially all of the tangible property (and all of the capital stock of the Subsidiary Guarantors) of the Company and the Subsidiary Guarantors and all proceeds thereof. Harvard's Canadian Subsidiary, Trim Trends Canada, Ltd. has pledged a majority of its common stock under the Guarantees. The claims of the creditors (including trade creditors) of any subsidiary that is not a Subsidiary Guarantor, i.e. Trim Trends Canada, Ltd. generally have priority as to the assets of such subsidiaries over the claims of the holders of the Notes. The Company conducts all of its automotive business through and derives virtually all of its income from its subsidiaries. Therefore, the Company's ability to make required principal and interest payments with respect to the Company's indebtedness (including the Notes) and other obligations depends on the earnings of its subsidiaries and on its ability to receive funds from its subsidiaries through dividends or other payments. The ability of its subsidiaries to pay such dividends or make payments on inter-company indebtedness or otherwise will be subject to applicable state laws. Upon the sale or other disposition of a Guarantor or the sale or disposition of all or substantially all of the assets of a Guarantor (in each case other than to the Company or an affiliate of the Company) permitted by the indenture governing the Notes, such Guarantor will be released and relieved from all of its obligations under its Guaranty. The following condensed consolidating information presents-- 1. Condensed balance sheets as of January 3, 1999 (Post-Confirmation) and September 30, 1998 (Pre-Confirmation) and condensed statements of operations and cash flows for the one month ended January 3, 1999 (Post-Confirmation) the three months ended December 31, 1997 and two months ended November 29, 1998 (Pre-Confirmation). 12 HARVARD INDUSTRIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)--(CONTINUED) (IN THOUSANDS OF DOLLARS, EXCEPT SHARE AND PER SHARE DATA) 7. GUARANTOR SUBSIDIARIES:--(CONTINUED) 2. The Parent Company and Combined Guarantor Subsidiaries with their investments in subsidiaries accounted for on the equity method. 3. Elimination entries necessary to consolidate the Parent Company and all of its subsidiaries. 4. Reorganization items have been included under the Parent Company in the accompanying condensed consolidating statements of operations and cash flows. 5. The Parent Company, pursuant to the terms of an interest bearing note with Guarantor Subsidiaries, has included in their allocation of expenses, interest expense for the two months ended November 29, 1998 and the three months ended December 31, 1997. The Company believes that providing the following condensed consolidating information is of material interest to investors in the Notes and has not presented separate financial statements for each of the Guarantors, because it was deemed that such financial statements would not provide the investor with any material additional information. 13 HARVARD INDUSTRIES, INC. CONSOLIDATING BALANCE SHEETS (UNAUDITED) JANUARY 3, 1999 (POST-CONFIRMATION) (IN THOUSANDS OF DOLLARS)
COMBINED COMBINED NON- PARENT GUARANTOR GUARANTOR COMPANY SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED -------- ------------ ------------ ------------ ------------ ASSETS Current assets: Cash and cash equivalents.................... $ 2,626 $ 4,424 $ 269 $ 0 $ 7,319 Accounts receivable, net..................... 412 40,577 7,041 0 48,030 Inventories.................................. 0 31,514 755 0 32,269 Prepaid expenses and other current assets.... 3,292 3,365 180 0 6,837 -------- -------- -------- ---------- -------- Total current assets.................... 6,330 79,880 8,245 0 94,455 Investment in subsidiaries..................... 53,268 14,087 0 (67,355) 0 Property, plant and equipment, net............. 2,154 113,627 7,780 0 123,561 Intangible assets, net......................... 0 309,669 0 0 309,669 Intercompany receivables....................... 128,243 0 2,195 (130,438) 0 Other assets, net.............................. 4,553 908 74 0 5,535 -------- -------- -------- ---------- -------- $194,548 $518,171 $ 18,294 $ (197,793) $533,220 -------- -------- -------- ---------- -------- -------- -------- -------- ---------- -------- LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIENCY) Current liabilities: Current portion of DIP loans................. Creditors subordinated term loan............. Current portion of long-term debt............ 7,666 7,666 Accounts payable............................. 6,220 31,047 3,387 40,654 Accrued expenses............................. 4,318 56,226 820 61,364 Income taxes payable......................... 0 7,602 0 7,602 -------- -------- -------- ---------- -------- Total current liabilities............... 10,538 102,541 4,207 0 117,286 Liabilities subject to compromise(a) DIP loans...................................... Long-term debt................................. 73,750 73,750 Postretirement benefits other than pensions.... 95,466 95,466 Intercompany payables.......................... 130,438 (130,438) 0 Other.......................................... 14,858 62,708 0 77,566 -------- -------- -------- ---------- -------- Total liabilities....................... 25,396 464,903 4,207 (130,438) 364,068 -------- -------- -------- ---------- -------- PIK Preferred.................................. 0 0 0 0 0 -------- -------- -------- ---------- -------- Shareholders' equity (deficiency): Common stock and additional paid-in-capital........................... 17,200 (297,705) 9 297,696 17,200 Additional minimum pension liability......... Foreign current translation adjustment....... (851) (851) (851) 1,702 (851) Retained earnings (deficiency)............... 152,803 351,824 14,929 (366,753) 152,803 -------- -------- -------- ---------- -------- Total shareholders' equity (deficiency)......................... 169,152 53,268 14,087 (67,355) 169,152 -------- -------- -------- ---------- -------- Total shareholders' equity (deficiency)......................... $194,548 $518,171 $ 18,294 $ (197,793) $533,220 -------- -------- -------- ---------- -------- -------- -------- -------- ---------- --------
- ------------------ (a) Includes $309,728 senior notes payable and accrued interest which are subject to the guaranty of the combined guarantor subsidiaries. 14 HARVARD INDUSTRIES, INC. CONSOLIDATING BALANCE SHEETS SEPTEMBER 30, 1998 (PRE-CONFIRMATION) (IN THOUSANDS OF DOLLARS)
COMBINED COMBINED PARENT GUARANTOR NON-GUARANTOR COMPANY SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED --------- ------------ ------------- ------------ ------------ ASSETS Current assets: Cash and cash equivalents.............. $ 10,229 $ 1,395 $ -- $ -- $ 11,624 Accounts receivable, net............... 2,217 50,990 3,839 -- 57,046 Inventories............................ 1,720 24,177 749 -- 26,646 Prepaid expenses and other current assets.............................. 1,982 3,702 17 -- 5,701 --------- ---------- ------- ------------ -------- Total current assets.............. 16,148 80,264 4,605 -- 101,017 Investment in subsidiaries (262,212) 14,653 -- 247,559 -- Property, plant and equipment, net....... 2,755 112,057 7,767 -- 122,579 Intangible assets, net -- 2,833 -- -- 2,833 Intercompany receivables................. 600,848 524,198 14,625 (1,139,671) -- Other assets, net 23,211 1,341 -- -- 24,552 --------- ---------- ------- ------------ -------- Total assets...................... $ 380,750 $ 735,346 $26,997 (892,112) 250,981 --------- ---------- ------- ------------ -------- --------- ---------- ------- ------------ -------- LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIENCY) Current liabilities: Current portion of Debtor-in- Possession (DIP) loans.............. $ -- $ 39,161 $ -- $ -- $ 39,161 Creditors subordinated term loan......... -- 25,000 -- -- 25,000 Accounts payable......................... 2,382 19,812 2,904 -- 25,098 Accrued expenses......................... 12,285 81,104 (52) -- 93,337 Income taxes payable..................... 8,144 169 132 -- 8,445 --------- ---------- ------- ------------ -------- Total current liabilities......... 22,811 165,246 2,984 -- 191,041 Liabilities subject to compromise(a)..... 314,030 71,635 -- -- 385,665 DIP loans................................ -- -- -- -- -- Long-term debt........................... -- -- -- -- -- Postretirement benefits other than pensions............................... 0 95,515 -- -- 95,515 Intercompany payables.................... 505,109 625,531 9,031 (1,139,671) -- Other.................................... 23,393 39,631 329 -- 63,353 --------- ---------- ------- ------------ -------- Total liabilities................. 865,343 997,558 12,344 (1,139,671) 735,574 --------- ---------- ------- ------------ -------- PIK preferred............................ 124,637 -- -- -- 124,637 --------- ---------- ------- ------------ -------- Shareholders' equity (deficiency): Common stock and additional paid-in-capital........................ 32,204 16,937 10 (16,947) 32,204 Additional minimum pension liability... (8,902) (8,902) -- 8,902 (8,902) Foreign current translation adjustment.......................... (2,991) (2,991) (2,991) 5,982 (2,991) Retained earnings (deficiency)......... (629,541) (267,256) 17,634 249,622 (629,541) --------- ---------- ------- ------------ -------- Total shareholders' equity (deficiency)................... (609,230) (262,212) 14,653 247,559 (609,230) --------- ---------- ------- ------------ -------- Total liabilities and shareholders' equity (deficiency)................... $ 380,750 $ 735,346 $26,997 $ (892,112) $250,981 --------- ---------- ------- ------------ -------- --------- ---------- ------- ------------ --------
- ------------------ (a) Includes $309,728 senior notes payable and accrued interest which are subject to the guaranty of the combined guarantor subsidiaries. 15 HARVARD INDUSTRIES, INC. CONSOLIDATING STATEMENTS OF OPERATIONS (UNAUDITED) ONE MONTH ENDED JANUARY 3, 1999 (POST-CONFIRMATION) (IN THOUSANDS OF DOLLARS)
COMBINED COMBINED PARENT GUARANTOR NON-GUARANTOR COMPANY SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED ------- ------------ -------------- ------------ ------------ Sales........................................ $ 0 $ 38,645 $1,521 $ 0 $ 40,166 ------- -------- ------ -------- -------- Costs and expenses: Cost of sales........................... 0 34,372 1,262 35,634 Selling, general and administrative........................ 814 2,207 0 3,021 Interest expense........................ 0 997 (6) 991 Restructuring charges................... 0 0 0 0 Gain on sale of operation............... 0 0 0 0 Amortization of goodwill................ 0 5,232 0 5,232 Other (income) expense, net............. (25) (63) 81 (7) Equity in (income) loss of subsidiaries.......................... 3,999 (112) 0 (3,887) 0 Allocated expenses...................... (10) 10 0 0 0 ------- -------- ------ -------- -------- Total costs and expenses.............. 4,778 42,643 1,337 (3,887) 44,871 ------- -------- ------ -------- -------- Income (loss) before income taxes and reorganization items....................... (4,778) (3,998) 184 3,887 (4,705) Reorganization items......................... 0 0 0 0 0 ------- -------- ------ -------- -------- Income (loss) before income taxes............ (4,778) (3,998) 184 3,887 (4,705) Provision for income taxes................... 219 1 72 0 292 ------- -------- ------ -------- -------- Net gain (loss)....................... $(4,997) $ (3,999) $ 112 $ 3,887 $ (4,997) ------- -------- ------ -------- -------- ------- -------- ------ -------- --------
16 HARVARD INDUSTRIES, INC. CONSOLIDATING STATEMENTS OF OPERATIONS (UNAUDITED) THREE MONTHS ENDED DECEMBER 31, 1997 (PRE-CONFIRMATION) (IN THOUSANDS OF DOLLARS)
COMBINED COMBINED PARENT GUARANTOR NON-GUARANTOR COMPANY SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED ------- ------------ -------------- ------------ ------------ Sales........................................ $4,018 $188,871 $4,163 $ -- $197,052 ------- -------- ------ ------ -------- Costs and expenses: Cost of sales........................... 3,933 183,738 4,051 -- 191,722 Selling, general and administrative........................ 2,237 7,598 -- -- 9,835 Interest expense........................ 833 3,017 3 -- 3,853 Restructuring charges................... 5,000 -- -- -- 5,000 Gain on sale of operation............... -- (11,354) -- -- (11,354) Amortization of goodwill................ -- 396 -- -- 396 Other (income) expense, net............. -- 10 (2) -- 8 Equity in (income) loss of subsidiaries.......................... (89) 219 -- (130) -- Allocated expenses...................... (5,369) 5,039 330 -- -- ------- -------- ------ ------ -------- Total costs and expenses.............. 6,545 188,663 4,382 (130) 199,460 ------- -------- ------ ------ -------- Income (loss) before income taxes and reorganization items....................... (2,527) 208 (219) 130 (2,408) Reorganization items......................... 2,992 (50) -- -- 2,942 ------- -------- ------ ------ -------- Income (loss) before income taxes............ (5,519) 258 (219) 130 (5,350) Provision for income taxes................... -- 169 -- -- 169 ------- -------- ------ ------ -------- Net gain (loss)....................... $(5,519) $ 89 $ (219) $ 130 $ (5,519) ------- -------- ------ ------ -------- ------- -------- ------ ------ --------
17 HARVARD INDUSTRIES, INC. CONSOLIDATING STATEMENTS OF OPERATIONS (UNAUDITED) TWO MONTHS ENDED NOVEMBER 29, 1998 (PRE-CONFIRMATION) (IN THOUSANDS OF DOLLARS)
COMBINED COMBINED PARENT GUARANTOR NON-GUARANTOR COMPANY SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED -------- ------------ ------------- ------------ ------------ Sales....................................... $ 0 $ 85,550 $ 3,500 $ 89,050 -------- -------- ------- -------- -------- Costs and expenses: Cost of sales.......................... 0 76,774 2,854 79,628 Selling, general and administrative....................... 2,230 2,921 5,151 Interest expense....................... 0 1,633 3 1,636 Restructuring charges.................. Gain on sale of operation.............. Amortization of goodwill............... 264 0 264 Other (income) expense, net............ (198) 164 (34) Equity in (income) loss of subsidiaries......................... 6,844 (269) (6,575) 0 Allocated expenses..................... (20) 20 0 -------- -------- ------- -------- -------- Total costs and expenses............. 9,054 81,145 3,021 (6,575) 86,645 -------- -------- ------- -------- -------- Income (loss) before income taxes and reorganization items...................... (9,054) 4,405 479 6,575 2,405 Reorganization items........................ 0 50,384 0 0 50,384 -------- -------- ------- -------- -------- Income (loss) before income taxes........... (9,054) (45,979) 479 6,575 (47,979) Provision for income taxes.................. 300 74 210 0 584 -------- -------- ------- -------- -------- Net loss before extraordinary item... (9,354) (46,053) 269 6,575 (48,563) Extraordinary item.......................... 167,154 39,209 0 0 206,363 -------- -------- ------- -------- -------- Net income (loss).................... $157,800 $ (6,844) $ 269 $ 6,575 $157,800 -------- -------- ------- -------- -------- -------- -------- ------- -------- --------
18 HARVARD INDUSTRIES, INC. CONSOLIDATING STATEMENTS OF CASH FLOWS (UNAUDITED) THREE MONTHS ENDED DECEMBER 31, 1997 (PRE-CONFIRMATION) (IN THOUSANDS OF DOLLARS)
COMBINED COMBINED PARENT GUARANTOR NON-GUARANTOR COMPANY SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED ------- ------------ ------------- ------------ ------------ Cash flows related to operating activities: Loss from operations before reorganization items................................... $(2,577) $ 39 $ (219) $ (180) $ (2,577) Add back (deduct) items not affecting cash and cash equivalents: Equity in (income) loss of subsidiaries.......................... (39) 219 -- (180) -- Depreciation and amortization........... 518 7,223 367 -- 8,108 Gain on sale of operation............... -- (11,354) -- -- (11,354) Loss on disposition of property, plant and equipment......................... -- 15 -- -- 15 Postretirement benefits................. -- 1,475 -- -- 1,475 Changes in operating assets and liabilities net of effects from reorganization items: Accounts receivable..................... 719 2,017 (1,858) -- 878 Inventories............................. 410 5,317 155 -- 5,882 Other current assets.................... (627) (601) (6) -- (1,234) Accounts payable........................ (138) (222) 333 -- (27) Accrued expenses and income taxes payable............................... 4,984 2,933 (2,036) -- 5,881 Other noncurrent........................ (40) 6,074 (129) -- 5,905 ------- -------- ------- ------ -------- Net cash provided by (used in) operations before reorganization items.............................. 3,210 13,135 (3,393) -- 12,952 Net cash provided by (used in) reorganization items............... (2,495) 50 -- -- (2,445) ------- -------- ------- ------ -------- Net cash provided by (used in) operations......................... 715 13,185 (3,393) -- 10,507 ------- -------- ------- ------ -------- Cash flows related to investing activities: Acquisition of property, plant and equipment............................... (85) (1,181) (88) -- (1,354) Net proceeds from sale of operation........ 16,391 -- -- 16,391 ------- -------- ------- ------ -------- Net cash provided by (used in) investing activities............... $ (85) $ 15,210 $ (88) $ -- $ 15,057 ------- -------- ------- ------ -------- Cash flows related to financing activities: Net borrowings (repayments) under DIP financing............................... (235) (27,399) -- -- (27,634) Repayments of long-term debt............... -- (391) -- -- (391) Repayment of EPA settlements............... -- (36) -- -- (36) Net changes in intercompany balances....... (122) (2,072) 2,194 -- -- ------- -------- ------- ------ -------- Net cash provided by (used in) financing activities............... (357) (29,898) 2,194 -- (28,061) ------- -------- ------- ------ -------- Net increase (decrease) in cash and cash equivalents................................ 273 (1,503) (1,287) -- (2,517) Cash and cash equivalents: Beginning of period........................ 3,324 5,376 512 -- 9,212 ------- -------- ------- ------ -------- End of period.............................. $3,597 $ 8,873 $ (775) $ -- $ 6,695 ------- -------- ------- ------ -------- ------- -------- ------- ------ --------
19 HARVARD INDUSTRIES, INC. CONSOLIDATING STATEMENTS OF CASH FLOWS (UNAUDITED) TWO MONTHS ENDED NOVEMBER 29, 1998 (PRE-CONFIRMATION) (IN THOUSANDS OF DOLLARS)
COMBINED COMBINED PARENT GUARANTOR NON-GUARANTOR COMPANY SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED ------- ------------ ------------- ------------ ------------ Cash flows related to operating activities: Loss from operations before reorganization items........................................ (9,355) 4,331 269 6,575 1,820 Add back (deduct) items not affecting cash and cash equivalents: Equity in (income) loss of subsidiaries...... 6,844 (269) -- (6,575) 0 Depreciation and amortization................ 12 3,799 168 -- 3,979 Gain on sale of operation.................... -- -- -- -- -- Loss on disposition of property, plant and equipment.................................. -- -- -- -- -- Postretirement benefits...................... -- -- -- -- -- Changes in operating assets and liabilities net of effects from reorganization items: Accounts receivable.......................... 1,654 (12,667) (4,064) -- (15,077) Inventories.................................. 1,720 (2,986) 98 -- (1,168) Other current assets......................... 470 35 (103) -- 402 Accounts payable............................. 4,199 17,713 (236) -- 21,676 Accrued expenses and income taxes payable.................................... (16,671) (7,456) 382 -- (23,745) Other noncurrent liabilities................. 5,266 (10,164) 3,486 -- (1,412) ------- -------- ------- ------ -------- Net cash provided by (used in) operations before reorganization items............. (5,861) (7,664) 0 (13,525) Net cash provided by (used in) reorganization items.................... 0 (4,018) 0 -- (4,018) ------- -------- ------- ------ -------- Net cash provided by (used in) operations.. (5,861) (11,682) 0 (17,543) ------- -------- ------- ------ -------- Cash flows related to investing activities: Acquisition of property, plant and equipment... -- (2,856) -- -- -- Net proceeds from sale of operation............ -- -- -- -- -- Net change in other noncurrent accounts........ -- -- -- -- -- ------- -------- ------- ------ -------- Net cash provided by (used in) investing activities.............................. 0 (2,856) 0 (2,856) ------- -------- ------- ------ -------- Cash flows related to financing activities: Deferred financing costs....................... (3,338) (3,338) Net borrowings (repayments) under DIP financing.................................... -- -- -- Net borrowings (and repayments) under financing/credit agreement................... (39,298) (39,298) Advance payment from customer.................. -- -- -- Repayments of long-term debt................... -- 81,425 -- -- 81,425 Retirement of creditors unsecured term loan.... (25,000) (25,000) Repayment of EPA settlements................... -- -- -- Net changes in intercompany balances........... -- -- -- -- -- ------- -------- ------- ------ -------- Net cash provided by (used in) financing activities.................... 0 13,789 0 -- 13,789 ------- -------- ------- ------ -------- Net increase (decrease) in cash and cash equivalents.................................... (5,861) (749) 0 -- (6,610) Cash and cash equivalents: Beginning of period............................ 10,229 1,395 0 -- 11,624 ------- -------- ------- ------ -------- End of period.................................. 4,368 646 0 -- 5,014 ------- -------- ------- ------ -------- ------- -------- ------- ------ --------
20 HARVARD INDUSTRIES, INC. CONSOLIDATING STATEMENTS OF CASH FLOWS (UNAUDITED) ONE MONTH ENDED JANUARY 3, 1999 (POST-CONFIRMATION) (IN THOUSANDS OF DOLLARS)
COMBINED COMBINED PARENT GUARANTOR NON-GUARANTOR COMPANY SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED ------- ------------ ------------- ------------ ------------ Cash flows related to operating activities: Loss from operations before reorganization items........................................ (4,997) (3,999) 112 3,887 (4,997) Add back (deduct) items not affecting cash and cash equivalents: Equity in (income) loss of subsidiaries...... 3,999 (112) -- (3,887) 0 Depreciation and amortization................ 6 6,006 154 -- 6,166 Gain on sale of operation.................... -- -- -- -- -- Loss on disposition of property, plant and equipment.................................. -- -- -- -- -- Postretirement benefits...................... -- -- -- -- -- Changes in operating assets and liabilities net of effects from reorganization items: Accounts receivable.......................... 151 23,080 862 -- 24,093 Inventories.................................. 0 (4,351) (104) -- (4,455) Other current assets......................... (1,780) 302 (60) -- (1,538) Accounts payable............................. (361) (6,478) 719 -- (6,120) Accrued expenses and income taxes payable.................................... 541 (5,519) 358 -- (4,620) Other noncurrent............................. 699 435 (1,772) -- (638) ------- ------ ------- ------ ------ Net cash provided by (used in) operations before reorganization items............. (1,742) 9,364 269 -- 7,891 Net cash provided by (used in) reorganization items.................... 0 (2,477) 0 -- (2,477) ------- ------ ------- ------ ------ Net cash provided by (used in) operations.. (1,742) 6,887 269 -- 5,414 ------- ------ ------- ------ ------ Cash flows related to investing activities: Acquisition of property, plant and equipment... -- (3,100) -- -- (3,100) Net proceeds from sale of operation............ -- -- -- -- -- Net change in other noncurrent accounts........ -- -- -- -- -- ------- ------ ------- ------ ------ Net cash provided by (used in) investing activities.............................. 0 (3,100) 0 -- (3,100) ------- ------ ------- ------ ------ Cash flows related to financing activities: Net borrowings (repayments) under DIP financing.................................... Net borrowing (and repayments) under Financing/Credit agreement................... Advance payment from customer.................. 0 (9) 0 -- (9) Repayments of long-term debt................... -- -- -- -- -- Repayment of EPA settlements................... -- -- -- -- -- Net changes in intercompany balances........... -- -- -- -- -- ------- ------ ------- ------ ------ Net cash provided by (used in) financing activities.............................. 0 (9) 0 -- (9) ------- ------ ------- ------ ------ Net increase (decrease) in cash and cash equivalents.................................... (1,742) 3,778 269 -- 2,305 Cash and cash equivalents: Beginning of period............................ 4,368 646 0 -- 5,014 ------- ------ ------- ------ ------ End of period.................................. 2,626 4,424 269 -- 7,319 ------- ------ ------- ------ ------ ------- ------ ------- ------ ------
21 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (IN THOUSANDS OF DOLLARS) FORWARD-LOOKING STATEMENTS This Quarterly Report on Form 10-Q contains forward-looking statements. Additional written or oral forward-looking statements may be made by the Company from time to time, in filings with the Securities and Exchange Commission or otherwise. Such forward-looking statements are within the meaning of that term in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such statements may include, but not be limited to, projections of revenues, income or losses, covenants provided for in the financing agreements, capital expenditures, plans for future operations, financing needs or plans, plans relating to products or services of the Company, as well as assumptions relating to the foregoing. In addition, when used in this discussion, the words "anticipates," "believes," "estimates," "expects," "intends," "plans" and similar expressions are intended to identify forward-looking statements. Forward-looking statements are inherently subject to risks and uncertainties, including, but not limited to, product demand, pricing, market acceptance, risk of dependence on third party suppliers, intellectual property rights and litigation, risks in product and technology development and other risk factors detailed in the Company's Securities and Exchange Commission filings, some of which cannot be predicted or quantified based on current expectations. Consequently, future events and actual results could differ materially from those set forth in, contemplated by, or underlying the forward-looking statements. Statements in this Quarterly Report, particularly in the Notes to Consolidated Financial Statements and "Management's Discussion and Analysis of Financial Condition and Results of Operations," describe factors, among others, that could contribute to or cause such differences. Other factors that could contribute to or cause such differences include unanticipated increases in launch and other operating costs, a reduction and inconsistent demand for passenger cars and light trucks, labor disputes, capital requirements, adverse weather conditions, and increases in borrowing costs. Readers are cautioned not to place undue reliance on any forward-looking statements contained herein, which speak only as of the date hereof. The Company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. RESULTS OF OPERATIONS GENERAL Effective November 24, 1998, the Company emerged from Chapter 11 bankruptcy proceedings and implemented "Fresh Start Reporting." Accordingly, all assets and liabilities were restated to reflect their respective fair values. The consolidated financial statements after that date are those of a new reporting entity and are not comparable to the Pre-Confirmation periods. However, for purposes of this discussion, the month of December 1998 (Post-Confirmation) was combined with the two months ended November 29, 1998 (Pre-Confirmation) and then compared to the three months ended December 31, 1997. Differences between periods due to "Fresh Start Reporting" adjustments are explained when necessary. The following table is included solely 22 for use in comparative analysis of results of operations, and to complement management's discussion and analysis.
3 MONTHS ENDED ---------------------------- JANUARY 3, DECEMBER 31, 1999 1997 ------------ ------------ Sales...................................................................... $129,216 $197,052 Cost of Sales.............................................................. 115,262 191,722 -------- -------- Gross Profit............................................................. 13,954 5,330 Selling, General and Administrative Expenses............................... 8,172 9,835 -------- -------- Operating income......................................................... 5,782 (4,505) Interest Expense........................................................... 2,627 3,853 Amortization of intangible assets.......................................... 5,496 396 Restructuring Charges...................................................... -- 5,000 (Gain) on Sale of Operation................................................ -- (11,354) Other (Income) Expense, Net................................................ (41) 8 -------- -------- Income (loss) before Income Taxes, Reorganization Items and Extraordinary Item.................................................................. (2,300) (2,408) Reorganization Items....................................................... 50,384 2,942 Provision for Income Taxes................................................. 876 169 Extraordinary Item......................................................... (206,363) -- -------- -------- Net income (loss)........................................................ $152,803 ($ 5,519) -------- -------- -------- --------
THREE MONTHS ENDED JANUARY 3, 1999 COMPARED TO THE THREE MONTHS ENDED DECEMBER 31, 1997. Sales. Consolidated sales decreased $67,836 from $197,052 to $129,216, or 34.4%. Aggregate sales for the operations designated for sale or wind down decreased approximately $68,447 from $80,033 to $11,586 as the Company's divestiture program nears completion. Sales for the remaining operations increased $611 from $117,019 to $117,630 as new business was partially offset by the wind down of older programs. Gross Profit. The consolidated gross margin, expressed as a percentage of sales, increased from 2.7% to 10.8%, or $8,624. The gross (loss) for operations designated for sale or wind-down decreased from ($2,636) to ($155) as operating losses of ($2,369) were charged to loss contract reserves that were established during the fourth quarter of fiscal year 1998. The increase of $6,143 in gross profit for the remaining operations was mainly due to improved operating efficiencies and management's focus on higher margin business. Selling, General and Administrative Expenses. Selling, general and administrative expenses decreased from $9,835 to $8,172 due to reduced levels of staffing and spending as a result of the reorganization program implemented by current management. Interest Expense. Interest expense decreased from $3,852 to $2,627 as a result of lower borrowing levels resulting from the cash generated by the sale or wind down of unprofitable businesses and improved working capital management. Amortization of Intangibles. Amortization of intangibles increased from $396 to $5,496 as a result of the amortization on the $314,901 reorganization asset, established as part of "Fresh Start Reporting," which is being amortized over five years. Restructuring Costs. During the period ended December 31, 1997 the Company recorded $5,000 in restructuring charges for shutdown and relocation costs relating to the move of the corporate headquarters from Tampa, Florida to Lebanon, New Jersey. No restructuring charges were recorded during the period ended January 3, 1999. Gain on Sale of Operation. During the period ended December 31, 1997, the Company recognized a gain on the sale of the Material Handling division of Kingston Warren of $11,354. 23 Other (Income) Expenses, Net. Other (income) expense increased from $9 to ($41) due to rental income from an idle facility. Reorganization Items. During the period ended January 3, 1999, the Company recognized, as part of "Fresh Start Reporting," charges that aggregated $50,430 for adjustments to reflect all assets and liabilities at their respective fair values. Reorganization charges during the period ended December 31, 1997 represent mainly professional fees incurred in connection with the bankruptcy proceedings. Provision for Income Taxes. The increase from $169 to $876 was principally due to the reorganization of the Company. Items that materially contributed to the increase were the Federal minimum tax and state income taxes. Extraordinary Item. During the period ended January 3, 1999 an extraordinary gain of $206,363 was recorded for the forgiveness of debt that resulted from the reorganization of the Company in accordance with "Fresh Start Reporting." Net Income (Loss). The net income (loss) increased from ($5,519) to $152,803 for the reasons described above. LIQUIDITY AND CAPITAL RESOURCES On a pro forma basis, the cash flow (usage) for the two months ended November 29, 1998 (pre-confirmation) and the one month ended January 3, 1999 (post-confirmation) have been combined for purposes of comparison to the three months ended December 31, 1997. For the three months ended January 3, 1999, the Company had cash (used by) operations of ($12,129) compared to cash provided by operations of $10,507 for the three months ended December 31, 1997. The decrease was due to an increase in financing, legal and professional fees and other payments related to the Company's emergence from Chapter 11 proceedings on November 24, 1998 in addition to significant expenditures related to its installation of a new management information system that will allow its critical information systems and technology infrastructure to be Year 2000 compliant. The prior year's results included an advance from a major customer to partially defray the cost of shutting down the Toledo, Ohio facility. The Company emerged from Chapter 11 on November 24, 1998, repaid the DIP Facility, the Post-Petition Term Loan, and issued $25,000 of Senior Secured Notes and entered into a $115,000 Senior Credit facility. The Company had borrowing availability of approximately $30,000 as of February 16, 1999. Management anticipates having sufficient liquidity to conduct its activities in fiscal 1999 as result of the borrowing availability provided by these facilities. Continuation of the Company's business after reorganization is dependent upon the success of future operations, including execution of the company's turnaround business strategy and the ability to meet obligations as they become due. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company has suffered recurring losses from operations and at January 3, 1999 had a net working capital deficit. These factors among others raise substantial doubt about the Company's ability to achieve successful future operations. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. YEAR 2000 COMPLIANCE The Year 2000 issue is the result of many computer programs and imbedded chips being written using two digits rather than four to define the applicable year. Many of the Company's computer programs that have date-sensitive software may recognize a date using "00" as the year 1900 rather than the year 2000. If not addressed and completed on a timely basis, failure of the Company's computer systems to process Year 2000 related data correctly could have a material adverse effect on the Company's financial condition and results of operations. Failures of this kind could, for example, lead to incomplete or inaccurate accounting, supplier and customer order processing or recording errors in inventories or other assets and the disruption of its manufacturing process as well as transactions with third parties. If not addressed, the potential risks to the Company include financial loss, legal liability and interruption to business. 24 Year 2000 Readiness. During the summer of 1997, the Company undertook an evaluation of its critical information systems and technology infrastructure for Year 2000 compliance and functionality. The Company determined as a result of its evaluation that its computer systems and related software applications lacked the Year 2000 compliance and functionality needed to support the Company's operations. Based upon such determination, the Company decided to replace (i) its computer hardware with new hardware and peripheral equipment, and (ii) its computer software with Enterprise Resource Planning ("ERP") software. During the fourth quarter of 1997, the Company's cross-functional Year 2000 compliance team (consisting of members of the Company's materials management, scheduling, manufacturing, marketing, engineering, information technology, cost accounting and finance divisions) selected the "System 21" and "Future 3" ERP software of JBA International as the software to replace the Company's existing software. In January 1998, the Company engaged a consulting firm to provide project management for the implementation of the new ERP software system. The Company's ERP implementation project consists of five phases, as follows: Phase I--Analysis. Document Harvard's business strategy and current processes at pilot sites (including various plants and the corporate accounting and finance offices), design future processes and conduct Company-wide integration meetings in order to obtain input from both the management and staff of all operating plants. This phase commenced in February 1998 and was completed in April 1998. Phase II--Design. Designate a general corporate pilot site, determine improvements to planned systems to achieve full utilization of System 21 software capabilities and design methods to implement such improvements. Phase II commenced in April 1998 and ended in June 1998. Phase III--Construction. Begin conference room pilot programs at designated pilot sites, develop and approve policies and procedures and design training and education materials. Phase III commenced in June 1998 and ended in August 1998. Phase IV--Implementation at Pilot Sites and Finance Division. Provide training and education, implementation support and post-implementation reviews at pilot sites. Phase IV commenced in July 1998 and ended in October 1998. Phase V--Implementation Roll-out. Provide training and education, implementation support and post-implementation reviews at all other sites. As of March 1, 1999, the Company had successfully implemented ERP software at eleven plants and in corporate finance. The new ERP software is scheduled to be installed at four additional plants between March 29, 1999 and June 30, 1999. Concurrent with the implementation of the new ERP software system, the Company completed an inventory of millennium-sensitive information technology ("IT") equipment (manufacturing, engineering, lab and measurement equipment, IT infrastructure, general office equipment and electronic data interchange ("EDI") interfaces). Components of such equipment containing microprocessors were identified and are being tested for correct date processing. The Company estimates that the final verification of date processing capabilities of components containing microprocessors will be completed on or about September 30, 1999. Surveys. Even if the changes made by the Company are successful, the Company remains at risk from Year 2000 failures caused by third parties. The Company's purchasing organization has evaluated systems in place for the supply of many of the raw materials, services and other items, the disruption of which could have an impact upon the Company's operations. Although various suppliers and utilities have not yet responded to the Company's requests for information, based upon the responses received, the Company does not currently foresee any significant interruptions of its business arrangements due to Year 2000 issues. Nevertheless, failure by key suppliers or utilities to complete Year 2000 compliance work in a timely manner could have a material adverse effect on certain of the Company's operations. Examples of problems that could result from the failure by third parties with whom the Company interacts to remediate Year 2000 problems include, in the case of utilities, service failures such as power, telecommunications, elevator operations and loss of security access control and, in the case of suppliers, failures to satisfy orders on a timely basis and to process 25 orders correctly. Additionally, general uncertainty regarding the success of remediation may cause many suppliers to reduce their activities temporarily as they assess and address their Year 2000 efforts in 1999. This could result in a general reduction in available supplies in late 1999 and early 2000. Management cannot predict the magnitude of any such reduction or its impact on the Company's financial results. There can be no assurance that the systems of other companies on which the Company's systems rely will be converted in a timely fashion, or that a failure to convert by another company, or a conversion that is incompatible with the Company's systems, would not have a material adverse effect on the Company's consolidated financial statements. Remediation costs. The Company expects to spend approximately $14,000 to address issues related to Year 2000 compliance and functionality, including $2,400 for new software, $2,000 for new hardware (mainframe, personal computers and infrastructure wiring), $4,200 for software implementation and $5,400 for project management consultants. Approximately $11,600 of such amount has been spent through January 3, 1999. The source of such funds was working capital loans. The balance of the remediation costs are expected to be incurred through August 1999. The Company does not believe that the payment of such costs will have a material impact on the Company's financial position or results of operations. Contingency plans. The Company is currently installing a backup hardware system to supplement the Company's hardware in the event of Year 2000 failures. The Company also plans to conduct a strategy session during the summer of 1999 to evaluate the necessity of preparing any additional contingency plans for addressing the consequences of possible Year 2000 failures. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK Management does not believe that here is any material market risk exposure with respect to derivative or other financial instruments that are required to be disclosed. 26 PART II--OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS The Company is a party to various claims and routine litigation arising in the normal course of its business. Obligations of the Company in respect of litigation arising out of activities prior to the Petition Date, will be discharged in accordance with the Plan of Reorganization. Based on information currently available, management of the Company believes, after consultation with legal counsel, that the result of such claims and litigation, will not have a material adverse effect on the financial position or results of operations of the Company. ITEM 2. CHANGES IN SECURITIES On May 8, 1997, Harvard filed a petition for relief under Chapter 11 of the Bankruptcy Code with the United States Bankruptcy Court for the District of Delaware. On November 24, 1998, the Company substantially consummated its First Amended Modified Consolidated Plan Under Chapter 11 of The Bankruptcy Code dated August 19, 1998 and emerged from bankruptcy. The Plan of Reorganization provided that New Common Stock, New Junior Secured Debentures and the New Warrants issued under the Plan of Reorganization may be resold by the holders thereof without registration unless any such holder is deemed to be an "underwriter" with respect to such securities, as defined in section 1145(b)(1) of the Bankruptcy Code. On November 24, 1998, the Company issued $25,000,000 of 14-1/2% Senior Secured Notes due September 1, 2003. The Notes were issued pursuant to its Chapter 11 Plan of Reorganization and subject to an exemption from the registration requirements of the Securities Act of 1933 (and of equivalent state securities or "blue sky" laws) provided by Section 3(a)(7) of the Securities Act and by Section 1145(a)(1) of the Bankruptcy Code. The Notes were issued to Lehman Brothers, as initial purchaser, and resold pursuant to Rule 144A to Qualified Institutional Buyers (as defined in such Rule) for an aggregate purchase price of $25,000,000, of which $1,000,000 was retained by Lehman Brothers, as underwriter's discount, and $24,000,000 was received by the Company. On or about November 24, 1998, in reliance upon Section 3(a)(7) of the Securities Act and Section 1145(a)(1) of the Bankruptcy Code and pursuant to the confirmed Plan of Reorganization, the Company issued 8,240,295 shares of New Common Stock, in the aggregate, to holders of allowed unsecured claims in the Company's bankruptcy proceeding. In addition, on and after November 24, 1998, warrants to purchase an aggregate of approximately 626,200 shares of New Common Stock have been issued pursuant to the confirmed Plan of Reorganization and in reliance upon Section 3(a)(7) of the Securities Act and Section 1145(a)(1) of the Bankruptcy Code, to holders of the Company's formerly outstanding shares of common and preferred stock, which were cancelled pursuant to the Plan of Reorganization. The warrants are exercisable until November 23, 2003 to purchase shares of New Common Stock at an exercise price of $41.67 per share. The shares of New Common Stock and warrants issued pursuant to the Plan of Reorganization were issued without cash or other consideration, in exchange for the claims in bankruptcy of such holders. See Footnote 5 for the financial impact of the Plan of Reorganization on registered securities. ITEM 3. DEFAULTS UPON SENIOR SECURITIES None ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None ITEM 5. OTHER INFORMATION See Footnote 1 for information related to Emergence from Chapter 11 Reorganization 27 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits: (27) Financial Data Schedule (for electronic submission only) (b) Reports on Form 8-K: None. 28 SIGNATURES PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(D) 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: April 14, 1999 HARVARD INDUSTRIES, INC. By: /s/ ROGER G. POLLAZZI ---------------------------------- Roger G. Pollazzi Chairman of the Board Chief Executive Officer and Director PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE REGISTRANT AND IN THE CAPACITIES AND ON THE DATES INDICATED.
SIGNATURE TITLE DATE - ------------------------------------------ ------------------------------------------- ------------------- /s/ THEODORE W. VOGTMAN Executive Vice President and Chief April 14, 1999 - ------------------------------------------ Financial Officer (Principal Financial Theodore W. Vogtman Officer) /s/ KEVIN L. B. PRICE Vice President, Controller and Treasurer April 14, 1999 - ------------------------------------------ (Principal Accounting Officer) Kevin L. B. Price
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