-----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, Hj7ybbKnZJVaoRfrJNl96Dtdy3oHfUpqRYc+NEAxptwbImnxIOfTc+yrSz/oACRM YL1zQNHG3Udh4aedWGvzRw== 0000919563-97-000016.txt : 19971107 0000919563-97-000016.hdr.sgml : 19971107 ACCESSION NUMBER: 0000919563-97-000016 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971106 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MOTIVEPOWER INDUSTRIES INC CENTRAL INDEX KEY: 0000919563 STANDARD INDUSTRIAL CLASSIFICATION: RAILROAD EQUIPMENT [3743] IRS NUMBER: 820461010 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-13225 FILM NUMBER: 97709437 BUSINESS ADDRESS: STREET 1: 1200 REEDSDALE ST CITY: PITTSBURGH STATE: PA ZIP: 15233 BUSINESS PHONE: 4122372250 MAIL ADDRESS: STREET 1: 1200 REEDSDALE STREET CITY: PITTSBURGH STATE: PA ZIP: 15233 FORMER COMPANY: FORMER CONFORMED NAME: MK RAIL CORP DATE OF NAME CHANGE: 19940228 10-Q 1 QUARTERLY REPORT UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q [x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1997 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _____ TO _____ Commission file number 0-23802 MOTIVEPOWER INDUSTRIES, INC. ---------------------------- (Exact name of registrant as specified in its charter) Delaware 82-0461010 -------- ---------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1200 Reedsdale Street, Pittsburgh, PA 15233 - ------------------------------------- ----- (Address of principal executive offices) (Zip Code) (412) 237-2250 -------------- (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 ( ) Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class Outstanding at November 6, 1997 ----- ------------------------------- Common stock, $.01 par value 17,736,443 21 MOTIVEPOWER INDUSTRIES, INC. Quarterly Report on Form 10-Q for the Three and Nine Months Ended September 30, 1997 TABLE OF CONTENTS PART I. FINANCIAL INFORMATION Item 1 Condensed Consolidated Financial Statements PAGE Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 1997 and 1996 ........................ 3 Condensed Consolidated Balance Sheets at September 30, 1997 and December 31, 1996 ................................................ 4 Condensed Consolidated Statements of Cash Flows for the Three and Nine Months Ended September 30, 1997 and 1996 ............................. 5 Notes to Condensed Consolidated Financial Statements ................. 6 Item 2 Management's Discussion and Analysis of Results of Operations and Financial Condition .............................................. 10 PART II. OTHER INFORMATION Item 1 Legal Proceedings 20 Item 2 Changes in Securities 21 Item 3 Defaults upon Senior Securities 21 Item 4 Submission of Matters to a Vote of Security Holders 21 Item 5 Other Information 21 Item 6 Exhibits and Reports on Form 8-K 21 Signature 22 PART I. FINANCIAL INFORMATION ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MOTIVEPOWER INDUSTRIES, INC ........................... CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996 (Thousands of dollars except share data) (Unaudited) (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, ------------- ------------- 1997 1996 1997 1996 ------------ ------------ ------------ ------------ Net sales ............................................. $ 73,849 $ 69,046 $ 217,320 $ 205,282 Cost of sales ......................................... (56,350) (56,291) (164,681) (165,894) ------------ ------------ ------------ ------------ Gross profit .......................................... 17,499 12,755 52,639 39,388 General and administrative expense .................... (8,268) (8,278) (27,068) (24,106) ------------ ------------ ------------ ------------ Operating income ...................................... 9,231 4,477 25,571 15,282 Investment income ..................................... 230 418 532 1,661 Interest expense ...................................... (1,275) (1,345) (3,740) (6,992) Other income - Argentina .............................. 391 13 1,186 1,461 Gain on sale of assets ................................ -- 465 -- 465 Foreign exchange (loss) gain .......................... (66) 118 (222) 172 ------------ ------------ ------------ ------------ Income before income taxes ............................ 8,511 4,146 23,327 12,049 Income tax expense .................................... (3,134) (1,558) (9,064) (4,440) ------------ ------------ ------------ ------------ Net income ............................................ $ 5,377 $ 2,588 $ 14,263 $ 7,609 ============ ============ ============ ============ Weighted average shares outstanding ................... 18,871,899 17,562,793 18,451,724 17,562,793 Primary earnings per share ............................ $ .28 $ .15 $ .77 $ .43 Weighted average shares outstanding ................... 19,062,308 17,562,793 19,062,308 17,562,793 Fully diluted earnings per share ...................... $ .28 $ .15 $ .75 $ .43
The accompanying notes are an integral part of the financial statements.
MOTIVEPOWER INDUSTRIES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS At September 30, 1997 and December 31, 1996 (Thousands of dollars except share data) (Unaudited) September 30, December 31, ASSETS 1997 1996 ------------------- ------------------- Current Assets: Cash and cash equivalents............................................. $ 9,906 $ 5,236 Receivables from customers: Billed, net of allowance for doubtful accounts of $305 and $284, 41,777 25,754 respectively Unbilled............................................................ 2,511 468 Inventories............................................................ 80,496 78,438 Deferred income taxes.................................................. 5,432 4,635 Other current assets................................................... 3,641 2,638 ------------------- ------------------- Total current assets.............................................. 143,763 117,169 Locomotive lease fleet, net............................................ 1,535 2,083 Property, plant and equipment: Land................................................................ 1,521 1,737 Buildings and improvements.......................................... 34,282 32,679 Machinery and equipment............................................. 57,503 53,211 ------------------- ------------------- Property, plant and equipment - at cost............................. 93,306 87,627 Less - accumulated depreciation..................................... (48,487) (43,644) ------------------- ------------------- Property, plant and equipment - net.................................... 44,819 43,983 Underbillings - MPI de Mexico.......................................... 28,498 19,561 Deferred income taxes.................................................. 14,625 15,348 Goodwill and intangibles............................................... 23,626 24,637 Other.................................................................. 11,247 11,263 ------------------- ------------------- Total assets .................................................. $ 268,113 $ 234,044 =================== =================== LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Current portion of long-term debt...................................... $ 9,814 $ 11,626 Accounts payable - trade............................................... 22,612 13,470 Accrued expenses and other current liabilities......................... 34,008 28,236 Income taxes payable................................................... 5,530 1,957 Revolving credit borrowings............................................ - 22,431 Advances from customers................................................ 4,301 - ------------------- ------------------ Total current liabilities........................................ 76,265 77,720 Long-term debt......................................................... 37,163 15,535 Commitments and contingencies.......................................... 15,801 18,394 Other.................................................................. 1,432 1,415 ------------------- ------------------ Total liabilities................................................ 130,661 113,064 ------------------- ------------------ Stockholders' Equity: Common Stock, par value $.01 per share, authorized 55,000,000 shares; issued 17,705,818 shares at September 30, 1997 and 17,562,793 shares at December 31, 1996..................................... 177 176 Additional paid-in capital.......................................... 204,737 201,661 Deficit............................................................. (61,365) (75,629) Cumulative translation adjustments, net of tax...................... (5,105) (5,105) Deferred compensation............................................... (992) (123) ------------------- ------------------ Total stockholders' equity....................................... 137,452 120,980 ------------------- ------------------ Total liabilities and stockholders' equity ............................ $ 268,113 $ 234,044 =================== ==================
The accompanying notes are an integral part of the financial statements.
MOTIVEPOWER INDUSTRIES, INC CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996 (Thousands of dollars) (Unaudited) (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, ------------------------------------ -------------------------- 1997 1996 1997 1996 ---- ---- ---- ---- Operating Activities Net income $ 5,377 $ 2,588 $14,263 $ 7,609 ---- ---- ---- ---- Adjustments to reconcile net income to net cash (used in) provided by operating activities: Depreciation . . . . . . . . . . . . . . . . . 1,575 2,084 4,941 5,369 Amortization . . . . . . . . . . . . . . . . . 851 833 2,488 2,540 Gain on sale of assets . . . . . . . . . . . . . - (465) - (465) Receivables from customers . . . . . . . . . . . (6,695) 1,721 (18,066) (3,641) Inventories . . . . . . . . . . . . . . . . . . (2,622) 1,884 (2,058) 6,575 Underbillings - MPI de Mexico . . . . . . . . . (4,777) (258) (8,937) (5,272) Accounts payable and accrued expenses . . . . . 3,741 4,153 14,330 4,899 Advances from customers . . . . . . . . . . . . 1,487 (5,807) 4,301 11,864 Other, net . . . . . . . . . . . . . . . . . . . (3) 595 1,523 3,803 ---- ---- ---- ---- Net cash (used in) provided by operating activities . . (1,066) 7,328 12,785 33,281 ---- ---- ---- ---- Investing Activities Additions to property, plant and equipment . . . . . . (3,143) (2,053) (7,833) (3,366) Deletions from property, plant and equipment . . . . 1,558 - 2,122 - Proceeds from sale of locomotive lease fleet, net . . - 15 - 10,071 Proceeds from sale of assets. . . . . . . . . . . . . - 3,762 - 3,762 Other, net . . . . . . . . . . . . . . . . . . . . . . (205) (357) 33 386 ---- ---- ---- ---- Net cash (used in) provided by investing activities . . (1,790) 1,367 (5,678) 10,853 ---- ---- ---- ---- Financing Activities Increase in intangibles . . . . . . . . . . . . . . . . (114) (130) (1,477) (350) Change in payable to Morrison Knudsen . . . . . . . . - (35,634) - (35,634) Net borrowings (repayments) of debt . . . . . . . . . . 442 25,007 (2,615) (12,093) Proceeds from exercise of stock options. . . . . . . . 1,418 - 1,655 - ---- ---- ---- ---- Net cash provided by (used in) financing activities . . 1,746 (10,757) (2,437) (48,077) ---- ---- ---- ---- Net (decrease) increase in cash and cash equivalents . (1,110) (2,062) 4,670 (3,943) Cash and cash equivalents at beginning of period . . . 11,016 3,815 5,236 5,696 ---- ---- ---- ---- Cash and cash equivalents at end of period . . . . . $ 9,906 $ 1,753 $9,906 $ 1,753 ==== ==== ==== ==== Supplemental Disclosures of Cash Flow Information Interest paid . . . . . . . . . . . . . . . . . . . . $ 392 $ 716 $ 1,526 $ 989 Income taxes paid, net . . . . . . . . . . . . . . . 1,752 121 4,686 182
The accompanying notes are an integral part of the financial statements. MOTIVEPOWER INDUSTRIES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 1. Financial Statements Basis of Presentation: The financial statements included herein are unaudited. In the opinion of management, these statements include all adjustments consisting of normal, recurring adjustments necessary for a fair presentation of the financial position of MotivePower Industries, Inc. and subsidiaries (the "Company") at September 30, 1997 and the results of their operations and their cash flows for the three and nine month periods ended September 30, 1997 and 1996. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 1996 included in Form 10-K. The results of operations for the nine months ended September 30, 1997 are not necessarily indicative of the results to be expected for the full year. Certain reclassifications have been made to the 1996 financial statements to conform to the 1997 presentation. Earnings Per Share: In February 1997 Statement of Financial Accounting Standards No. 128 "Earnings Per Share" ("SFAS 128") was issued. SFAS 128 is effective for financial statements issued for periods ending after December 15, 1997, including interim periods; earlier adoption is not permitted. The adoption of SFAS 128 is not expected to materially affect the Company's calculations of earnings per share and will have no impact on the Company's financial position or results of operations. Employee stock options are considered common stock equivalents and are reflected in earnings per share calculations when their effect, using the treasury stock method, is dilutive. Comprehensive Income: In June 1997 Statement of Financial Accounting Standards No. 130 "Reporting Comprehensive Income" ("SFAS 130") was issued. SFAS 130 is effective for financial statements issued for periods beginning after December 15, 1997. The adoption of SFAS 130 will have no impact on the Company's financial position or results of operations. Segment Information: In June 1997 Statement of Financial Accounting Standards No. 131 "Disclosures about Segments of an Enterprise and Related Information" ("SFAS 131") was issued. SFAS 131 is effective for financial statements issued for periods beginning after December 15, 1997. The Company has not yet determined the effect of this standard. 2. Inventories Inventories consist of the following: (Unaudited) September 30, December 31, 1997 1996 ------- ------- (In thousands) Raw materials ...................................... $37,887 $50,699 Work in progress ................................... 24,591 13,912 Finished goods ..................................... 18,018 13,827 ------- ------- $80,496 $78,438 ======= ======= Approximately $31 million and $34 million of total inventories at September 30, 1997 and December 31, 1996, respectively, were valued on the LIFO cost method. The excess current replacement cost of these inventories over the stated LIFO value was $1 million and $902,000 at September 30, 1997 and December 31, 1996, respectively. Two of the Company's domestic subsidiaries value inventory on the LIFO basis. 3. Indebtedness On February 27, 1997, the Company and a syndicate of lenders led by Bank of America NT and SA entered into a Second Amended and Restated Credit Agreement to replace the Company's Restated Agreement with BankAmerica Business Credit. The facility consists of a $20 million amortizing term loan and a $55 million revolving credit line including a $15 million letter of credit sub-facility. The entire $75 million facility is for a term of four years and is collateralized by substantially all of the domestic assets of the Company. Interest rate spreads charged under the new facility will reset at the end of each quarter based on the ratio of the Company's quarter-ending debt to trailing 12-month cash flow. Both base rate and LIBOR borrowings are available, at the Company's discretion. Interest rates range from LIBOR plus 0.5% to LIBOR plus 2.0%, and base rate to base rate plus 1.0%. For the first six months of the facility, interest rates may not go below LIBOR plus 1.0% for LIBOR-based borrowings, and the base rate for base rate borrowings. The effective interest rate was 6.54% for domestic borrowings and 8.83% for international borrowings at September 30, 1997 and 8.61% and 8.44% respectively at December 31, 1996. On May 23, 1997, the Company entered into Amendment No.1 to the Second Amended and Restated Credit Agreement. The amendment increases the limit on the issuance of performance bonds from $10 million to $30 million, increases the limit on the issuance of letters of credit in support of performance bonds from $2.5 million to $10 million and increases the limit on the aggregate amount of letters of credit from $15 million to $20 million. 4. Commitments and Contingencies The Company has commitments and performance guarantees arising from locomotive remanufacturing contracts and maintenance agreements, and warranties from the sale of new locomotives, remanufactured locomotives and components for locomotives and engines. Environmental: The Company is subject to a RCRA Part B Closure Permit (the "Permit") issued by the Environmental Protection Agency and the Idaho Department of Health and Welfare, Division of Environmental Quality relating to the monitoring and treatment of groundwater contamination on, and adjacent to, the Company's Boise Locomotive facility. In compliance with the Permit, the Company has drilled wells onsite to retrieve and treat contaminated groundwater, and onsite and offsite to monitor the amount of hazardous constituents. The Company has estimated the expected aggregate undiscounted costs to be incurred over the next 24 years, adjusted for inflation at 3% per annum, to be $4.8 million, based on the Permit's Corrective Action Plan, and $4.4 million for contingent additional Permit compliance requirements related to off-site groundwater contamination. The discounted liability at September 30, 1997, using a discount rate of 6.5%, was $2.1 million based on the Permit's Corrective Action Plan, and $2 million for contingent additional Permit compliance requirements related to offsite groundwater contamination. The estimated outlays for each of the five succeeding years from 1997 to 2001 are: $253,000, $260,000, $268,000, $317,000, and $284,000. The Company was in compliance with the Permit at December 31, 1996 and September 30, 1997. Legal Proceedings: In December 1995, Morrison Knudsen, the Company and certain of Morrison Knudsen's directors and officers were named as defendants in a complaint (the "Pilarczyk Lawsuit") filed in the United States District Court for the Northern District of New York by plaintiffs who were principals in and/or held substantial stock in TMS, Inc. ("TMS"), a New York corporation acquired by Morrison Knudsen on December 30, 1992. The complaint, which seeks five million dollars in damages, alleges among other things, violations of Section 10(b), Rule 10b-5 and Section 20(a) of the Securities Exchange Act of 1934, breach of contract, unjust enrichment, negligent misrepresentation and common law fraud during Morrison Knudsen's acquisition of TMS in 1992. Plaintiffs assert that the Company, which was not formed by Morrison Knudsen until 1993, is fully responsible for the acts of Morrison Knudsen. However, the actions complained of occurred before the Company was formed and the Company did not assume such liabilities of Morrison Knudsen. A motion to dismiss, filed in April 1996 on behalf of all defendants to the Pilarczyk Lawsuit, was granted on May 19, 1997. On June 10, 1997 plaintiffs appealed the dismissal in the U.S. District Court, Northern District of New York. The Company with the advice of outside counsel, believes the causes of action in the Pilarczyk Lawsuit relating to the Company are without merit. The Company intends to make appropriate requests to the court to seek to require the plaintiff to pay the Company's legal fees and costs. The Company is engaged in a commercial dispute with a former supplier, Samyoung Machinery Industrial Co. and Samyoung (America), Inc. (collectively, "Samyoung"). The Company filed suit on April 16, 1996 alleging delivery of defective product and seeking damages in excess of $1 million. Samyoung denies that the product was defective and countersued to recover $300,000 under the contract, and $10 million for trade libel and interference with prospective economic relationships as a result of the Company allegedly making false disparaging statements concerning the diesel engine assembly liners to customers. The Company, with the advice of outside counsel, believes that Samyoung's claims are without merit, and, to date, no evidence supporting Samyoung's counterclaims has come to light through the discovery being conducted by the parties. The Company intends to vigorously prosecute its own claims and defend against Samyoung's counterclaims. On June 25, 1997, Theodore E. Nelson ("Nelson"), then President and former 51% owner of Touchstone Company ("Touchstone"), a wholly-owned subsidiary of the Company, filed suit, seeking an unspecified amount of damages, against Touchstone, Inc. (sic), MotivePower Industries, Inc. and Michael Wolf (President of MotivePower Industries, Inc.) in the Chancery Court of Tennessee, Madison County, Tennessee. Nelson disputed the amount of bonus or other monies earned by him under his employment agreement with Touchstone, which was purchased on February 1, 1994 by Morrison Knudsen Corporation, the former parent company of MotivePower Industries. The complaint listed a variety of causes of action including civil conspiracy, breach of contract, breach of duty of good faith and fair dealing, misrepresentation, promissory fraud, and tortious interference with contract and sought compensatory, punitive and treble damages and attorney's fees in unspecified amounts. The Company, with the advice of outside counsel, believed that Nelson's claims were without merit. On September 15, 1997, the Company filed a counterclaim with causes of action in breach of contract, breach of fiduciary duty, appropriation of business or corporate opportunity, fraud and deceit, breach of duty of good faith and fair dealing, and civil conspiracy. In October 1997 the Company settled the disputes between itself and Mr. Nelson, and Mr. Nelson resigned from Touchstone to pursue other business opportunities. The estimated cost of the settlement had previously been provided for in the financial statements. Touchstone's board of directors appointed Jack E. Floyd as President of Touchstone upon the resignation of Mr. Nelson. The board of directors for Touchstone had also initiated a management transition program at Touchstone in the second quarter, and under this program, the board of directors for Touchstone added a new vice president of sales and marketing. In the ordinary course of its business, the Company is involved in legal proceedings incident to the normal conduct of its business, including contract claims and employee matters. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION GENERAL The Company is a leader in the manufacturing of products for rail and other power-related industries. Through its subsidiaries, the Company manufactures and distributes engineered locomotive components; provides locomotive fleet maintenance and overhauls, and diesel engine overhauls; manufactures new, environmentally friendly, switcher, commuter and mid-range locomotives up to 4,000 horsepower; and manufactures components for power, marine and industrial markets. The Company recorded net income of $5.4 million, or 28 cents of primary earnings per share, (fully diluted EPS was also 28 cents per share), on sales of $73.8 million in the third quarter of 1997 compared to net income of $2.6 million, or 15 cents of primary earnings per share, (fully diluted EPS was also 15 cents per share) on sales of $69 million in the third quarter of 1996. For the nine months ended September 30, 1997 the Company recorded net income of $14.3 million or 77 cents of primary earnings per share, (fully diluted EPS was 75 cents per share) on sales of $217.3 million compared to net income of $7.6 million, or 43 cents of primary earnings per share, (fully diluted EPS was also 43 cents per share) on sales of $205.3 million for the nine months ended September 30, 1996. The increase in profits in both periods of 1997 is the result of higher sales volume, improved gross margins resulting from cost reductions, productivity improvements and product mix, and substantially lower corporate interest expense due to debt reduction and lower financing costs. The difference between primary and fully diluted earnings per share arises from the accounting method required to be used for stock options. The Company anticipates that the effect on earnings per share in the fourth quarter of 1997 will be similar to the third quarter of 1997, assuming current stock prices. As the Company continues to focus on operating improvements, management has identified the following six growth opportunities for the future: 1) outsourcing by the railroads as they look to become more efficient in light of the recent mergers; 2) expanding privatization of the Mexican market and opportunities to enhance maintenance capabilities in Mexico; 3) international sales targeting specifically the Pacific Rim, Latin America, Central Europe and the Mid-East for component parts and original equipment locomotives; 4) new products in traditional markets and new markets for traditional products as the Company explores expanded applications of its proven products; 5) alliances with Original Equipment Manufacturers combining skills to improve both products and service; and 6) acquisitions that contribute to earnings and complement the existing product base. In February 1997, the U.S. Environmental Protection Agency issued a notice of Proposed Rulemaking (NPRM) relating to requirements for the control of emissions from locomotives and engines used in locomotives as required by the Clean Air Act. The final rules are expected to be issued in late 1997. The Company, in order to best serve its customers and the railroad industry, has begun research and development which will allow the Company to become a full service emissions company that is capable of supplying customers emissions needs for kits, engines, remanufactured and new locomotives, maintenance, documentation and testing services. The Company believes that development of products and services related to emissions control will protect current sales of related component parts and will position the Company to capitalize on EPA regulatory opportunities as they develop. In addition, the Company anticipates that the marine industry will be similarly regulated in the future, at which point the Company would be well positioned to serve those needs. The Company's expenditures relating to this project are expected to be approximately $300,000 in 1997, $3.8 million in 1998, and $3 million per year thereafter. This document contains certain statements regarding the Company's goals and expectations, including statements that suggest the Company will increase revenues and earnings, and otherwise improve its business operations. Statements such as these, and other statements that discuss the future of the Company or the rail industry, are forward-looking statements. The Company's actual results could differ materially from the results suggested in any forward-looking statement. Factors that could cause or contribute to these material differences include, but are not limited to, the following: - --Continued consolidation by U.S. and Canadian railroads, which could cause them to reduce purchases of goods and services; - --Changes in the Mexican government's railroad privatization efforts; - --A general decline in the U.S. or Mexican economy; - --A decrease in NAFTA rail traffic as measured by revenue ton-miles and locomotive fleet utilization; - --The Company's inability to secure new or retain existing domestic contracts; - --The Company's inability to grow through strategic alliances, joint ventures or acquisitions.
RESULTS OF OPERATIONS The following table sets forth the percentage of sales represented by certain items in the Company's Condensed Consolidated Statements of Operations: Three Months Nine Months Ended Ended September 30, September 30, ------------- ------------- 1997 1996 1997 1996 ------ ------ ------ ------ Net sales .......................... 100.0% 100.0% 100.0% 100.0% Cost of sales ...................... (76.3) (81.5) (75.8) (80.8) ------ ------ ------ ------ Gross profit ....................... 23.7 18.5 24.2 19.2 General and administrative expense . (11.2) (12.0) (12.5) (11.7) ------ ------ ------ ------ Operating income ................... 12.5 6.5 11.7 7.5 Investment income .................. .3 .6 .2 .8 Interest expense ................... (1.7) (2.0) (1.7) (3.4) Other income - Argentina ........... .5 -- .6 .7 Gain on sale of assets ............. -- .7 -- .2 Foreign exchange (loss) gain ....... (.1) .2 (.1) .1 ------ ------ ------ ------ Income before income taxes ......... 11.5 6.0 10.7 5.9 Income tax expense ................. (4.2) (2.3) (4.2) (2.2) ------ ------ ------ ------ Net income ......................... 7.3% 3.7% 6.5% 3.7% ====== ====== ====== ======
Consolidated Operations Three Months Ended September 30, 1997 - ------------------------------------- Net sales for the three months ended September 30, 1997 were $73.8 million, compared to $69 million for the three months ended September 30, 1996, an increase of 7%. Excluding sales from divested operations, the sales increase for the three months ended September 30, 1997 was 11%. The increase in sales is primarily attributed to increased sales in the Components Group, principally international sales at Motor Coils. Increased locomotive maintenance sales at MPI de Mexico were offset by a decrease in sales at Boise Locomotive. The decrease in sales at Boise Locomotive between periods is attributed to the sale of switcher locomotives in the 1996 period, which were not repeated in the 1997 period. Gross profit for the three months ended September 30, 1997 was $17.5 million or 24%, compared to $12.8 million, or 18%, for the three months ended September 30, 1996. The increase in gross profit is attributed to the increased sales volume, continuing cost reductions, productivity improvements and a favorable product mix. General and administrative expense for the three months ended September 30, 1997 was $8.3 million, compared to $8.3 million for the three months ended September 30, 1996. Although general and administrative expense is the same as the prior period, current period expense includes costs for incentive related programs ($700,000) and stock option and stock appreciation programs ($433,000). These costs were offset by cost reductions, allowing overall costs between periods to remain level. Investment income for the three months ended September 30, 1997 was $230,000 compared to $418,000 for the three months ended September 30, 1996. The decrease is primarily attributed to a decrease in funds invested at MPI de Mexico, partially offset by an increase in funds invested domestically. Interest expense for the three months ended September 30, 1997 was $1.3 million compared to $1.3 million for the three months ended September 30, 1996. A decrease in domestic interest expense resulting from decreased borrowings and a rate reduction was offset by increased borrowings at MPI de Mexico needed to support the investment in facilities and equipment. Other income - Argentina for the three months ended September 30, 1997 was $391,000 compared to $13,000 for the three months ended September 30, 1996. For both periods, this other income represents amounts received from the Company's restructured investments in Argentina. Due to the uncertain financial strength of the other parties involved, the Company recognizes income only when funds are actually received. The gain on sale of assets of $465,000 for the three months ended September 30, 1996 is the result of net sale proceeds in excess of net assets sold associated with the sale of Alert Manufacturing and Supply Co. A foreign exchange loss of $66,000 was realized for the three months ended September 30, 1997 compared to a foreign exchange gain of $118,000 for the three months ended September 30, 1996, as a result of fluctuations in the Mexican peso. Income tax expense for the three months ended September 30, 1997 was $3.1 million, or 36.8% of pre-tax income, compared to $1.6 million or 37.6% of pre-tax income for the three months ended September 30, 1996. The increase in the expense is directly related to the increased pre-tax income between periods. The Company has formed a Foreign Sales Corporation ("FSC"), which reduced the effective tax rate for the current quarter when compared to the previous years quarter as well as the previous two quarters of 1997. In addition, the Company anticipates that future periods' tax expense will be reduced through the use of the FSC. Nine Months Ended September 30, 1997 - ------------------------------------ Net sales for the nine months ended September 30, 1997 were $217.3 million, compared to $205.3 million for the three months ended September 30, 1996, an increase of 6%. Excluding sales from divested operations, the sales increase for the nine months ended September 30, 1997 was 13%. The increase in sales is primarily attributed to increased international sales in the Components Group and increased locomotive maintenance sales at MPI de Mexico. Sales at Boise Locomotive decreased as a result of decreased sales of switcher locomotives between periods. Gross profit for the nine months ended September 30, 1997 was $52.6 million or 24%, compared to $39.4 million, or 19%, for the nine months ended September 30, 1996. The increase in gross profit is attributed to the increased sales volume, a favorable product mix, continuing cost reductions and productivity improvements. General and administrative expense for the nine months ended September 30, 1997 was $27.1 million, compared to $24.1 million for the nine months ended September 30, 1996. The increase is primarily attributed to approximately $2 million of expenses related to stock appreciation rights and stock options, and approximately $2.5 million of performance related incentive expenses. These costs were partially offset by cost reductions in other areas. Investment income for the nine months ended September 30, 1997 was $532,000 compared to $1.7 million for the nine months ended September 30, 1996. The decrease is primarily attributed to a decrease in funds invested at MPI de Mexico. Interest expense for the nine months ended September 30, 1997 was $3.7 million compared to $7 million for the nine months ended September 30, 1996. The decrease is attributed to decreased domestic borrowings, the redemption in September 1996 of $56.6 million of debt owed to the Company's former majority shareholder and a decrease in the interest rate charged on domestic borrowings. These decreases were partially offset by increased borrowings under the Mexican credit facility needed to support the investments in facilities and equipment. Other income - Argentina for the nine months ended September 30, 1997 was $1.2 million compared to $1.5 for the nine months ended September 30, 1996. For both periods, this other income represents amounts received from the Company's investments in Argentina. Due to the uncertain financial strength of the other parties involved, the Company recognizes income only when funds are actually received. The gain on sale of assets of $465,000 for the nine months ended September 30, 1996 is the result of net sale proceeds in excess of net assets sold associated with the sale of Alert Manufacturing and Supply Co. A foreign exchange loss of $222,000 was realized for the nine months ended September 30, 1997 compared to a foreign exchange gain of $172,000 for the nine months ended September 30, 1996, as a result of fluctuations in the Mexican peso. Income tax expense for the nine months ended September 30, 1997 was $9.1 million, or 38.9 % of pre-tax income, compared to $4.4 million or 36.8% of pre-tax income for the nine months ended September 30, 1996. The increase in the expense for the nine months ended September 30, 1997 compared to the nine months ended September 30, 1996 is related to the increased pre-tax income between periods, the reduced availability of net operating loss carryforwards in 1997 in conjunction with Morrison Knudsen distributing its remaining ownership stake in the Company as part of Morrison Knudsen's bankruptcy settlement in October 1996, partially offset by the utilization of the FSC in the current quarter. FINANCIAL CONDITION AND LIQUIDITY In February 1997, the Company entered into a Second Amended and Restated Credit Agreement which consists of a $20 million amortizing term loan and a $55 million revolving credit line including a $15 million letter of credit sub-facility. In addition to providing increased borrowing capacity, the credit agreement also provides for a reduction in interest rates as compared to the Company's previous credit facility. On May 23, 1997, the Company entered into Amendment No.1 to the Second Amended and Restated Credit Agreement. The amendment increases the limit on the issuance of performance bonds from $10 million to $30 million, increases the limit on the issuance of letters of credit in support of performance bonds from $2.5 million to $10 million and increases the limit on the aggregate amount of letters of credit from $15 million to $20 million. In February 1997, the Board of Directors of the Company approved the funds to construct a new facility and relocate the Company's Touchstone operations. On October 3,1997, Touchstone signed a contract for construction of the facility. Currently, the total project cost is estimated at approximately $5.3 million, inclusive of the land which was purchased earlier this year. The Company is, and will continue to, monitor and review the project in an attempt to reduce the overall project cost to approximately $5 million. The Company intends to fund the project through local Industrial Revenue Bonds. It is anticipated that the new facility will be available for occupancy on or about May 1, 1998. On July 3, 1997 the Company entered into a 90-day outright forward foreign exchange transaction with a domestic bank in an effort to protect Company assets in Mexico against a possible currency devaluation. On October 7, 1997, the contract was renewed for another 90-day period. The contract is marked to market on a monthly basis. The table below highlights the debt and cash position of the Company at the dates indicated. September 30, September 30, 1997 1996 ---- ---- (In thousands) Domestic-revolver ............................. $ -- $39,576 Domestic-term loan ............................. 19,375 -- MPI de Mexico credit facility .................. 27,602 14,525 Other domestic debt ............................ -- 1,829 ------- ------- Total debt ..................................... $46,977 $55,930 ======= ======= Cash and equivalents ........................... $ 9,906 $ 1,753 ======= ======= With the revised domestic credit agreement, the Company's cash position and the Company's profitable operating results, management believes that its financing is adequate to support its normal operations and capital spending requirements. This is a forward-looking statement, and factors such as a decrease in rail traffic, a reduction in railroads' capital and maintenance spending plans with regard to their locomotive fleets, or the Company's inability to retain existing contracts and/or obtain new contract awards are among the factors which could affect the Company's financing needs. The following table summarizes the net changes in cash flows. Nine Months Ended September 30, 1997 1996 ---- ---- (In thousands) Net cash provided by (used in) Operating activities ............................... $ 12,785 $ 33,281 Investing activities ............................... (5,678) 10,853 Financing activities ............................... (2,437) (48,077) -------- -------- Net increase (decrease) in cash and equivalents .... $ 4,670 $ (3,943) ======== ======== Cash and equivalents at end of period .............. $ 9,906 $ 1,753 ======== ======== Net cash provided by operating activities totaled $12.8 million for the first nine months of 1997, compared to $33.3 million for the first nine months of 1996. During the first nine months of 1997, accounts receivable increased $18.1 million principally as a result of increased sales at the operating groups, including a very strong sales month in September 1997. Inventories in the first nine months of 1997 increased $2.1 million primarily from the manufacturing of two new demonstration models of the switcher locomotive being used for "test drives" by potential customers in North America. Offsetting these working capital increases, was an increase in accounts payable and accrued expenses in the first nine months of 1997 of $14.3 million. Depreciation and amortization for the first nine months of 1997 was $7.4 million. Net cash used in investing activities totaled $5.7 million for the first nine months of 1997 compared to net cash provided by investing activities of $10.9 million for the first nine months of 1996. The first nine months of 1996 were favorably affected by $10.1 million of proceeds from the sale of the locomotive lease fleet, and $3.8 million of proceeds from the sale of Alert Manufacturing and Supply Co. The majority of the 1997 activity relates to additions to property, plant and equipment, with the largest expenditures being made at MPI de Mexico. Offsetting the additions were $2.1 million of fixed asset disposals, the majority being the sale of the Touchstone production facility. The Company expects additions to property, plant and equipment in 1997 to be significantly greater than 1996 as a result of the construction of a new facility at Touchstone and contractual obligations for fixed asset additions at MPI de Mexico. Actual capital expenditures could vary based on availability of capital, interest rate increases and changes in market conditions. Net cash used in financing activities totaled $2.4 million for the first nine months of 1997, compared to $48.1 million for the first nine months of 1996. The 1996 activity is principally the pay down of debt by the Company, including the Morrison Knudsen debt, as part of its restructuring plan. The 1997 activity is the net pay down of debt with cash generated by operations, and an increase in intangible assets, principally bank fees, paid in connection with the closing of the new domestic credit facility offset by proceeds from the exercise of stock options. COMPONENTS GROUP Three Months Ended Nine Months Ended September 30, September 30, ------------- ------------- 1997 1996 1997 1996 --------- --------- -------- --------- (In thousands) Net sales ................... $ 37,011 $ 30,859 $117,267 $ 108,816 Less: divested operations ... -- (1,025) -- (7,154) ========= ========= ======== ========= Adjusted net sales .......... $ 37,011 $ 29,834 $117,267 $ 101,662 ========= ========= ======== ========= Percentage change ........... 24% 15% Operating income ............ $ 5,534 $ 3,385 $ 20,406 $ 14,743 Less: divested operations ... -- 180 -- (142) ========= ========= ======== ========= Adjusted operating income ... $ 5,534 $ 3,565 $ 20,406 $ 14,601 ========= ========= ======== ========= Percentage change ........... 55% 40% The increase in adjusted net sales for the three-month and nine-month period ended September 30, 1997 compared to the three-month and nine-month period ended September 30, 1996 is primarily attributed to increased sales at Motor Coils, Engine Systems and Power Parts in both the international and domestic markets. The increase in adjusted operating income for the three-month and nine-month period ended September 30, 1997, compared to the three-month and nine-month period ended September 30, 1996 is primarily attributed to the increased sales volume, particularly the international portion, in addition to cost reductions and production efficiencies at the operating entities. LOCOMOTIVE GROUP Three Months Ended Nine Months Ended September 30, September 30, -------- -------- 1997 1996 1997 1996 -------- -------- -------- -------- (In thousands) Net sales ...................... $ 36,839 $ 38,188 $100,053 $ 96,466 Less: divested operations ...... -- (1,404) -- (6,037) -------- -------- -------- -------- Adjusted net sales ............. $ 36,839 $ 36,784 $100,053 $ 90,429 ======== ======== ======== ======== Percentage change .............. 0% 11% Operating income ............... $ 6,531 $ 3,581 $ 15,909 $ 8,396 Less: divested operations ...... -- (210) -- (1,531) -------- -------- -------- -------- Adjusted operating income ...... $ 6,531 $ 3,371 $ 15,909 $ 6,865 ======== ======== ======== ======== Percentage change .............. 94% 132% The adjusted net sales for the three-month period ended September 30, 1997 remained constant when compared to the three-month period ended September 30, 1996. In comparing the periods, sales decreased at Boise Locomotive, as a direct result of decreased switcher locomotive sales. This sales decrease was offset by an increase in sales at MPI de Mexico under the base contract and additional non-contract work. The increase in operating income for the three-month period ended September 30, 1997 compared to the three-month period ended September 30, 1996 is primarily attributed to increased operating efficiencies at Boise Locomotive and improved operating efficiencies and increased sales volume at MPI de Mexico. The increase in adjusted net sales for the nine-month period ended September 30, 1997 compared to the nine-month period ended September 30, 1996 is a result of decreased sales at Boise Locomotive, principally switcher locomotives, offset by increased sales at MPI de Mexico under the base contract and non-contract work. The increase in operating income for the nine-month period ended September 30, 1997 compared to the nine-month period ended September 30, 1996 is primarily attributed to the sales volume increase at MPI de Mexico and operating efficiencies, and cost reductions at both Boise Locomotive and MPI de Mexico. SIGNIFICANT EVENTS During the quarter ended September 30, 1997, and subsequently, MotivePower Industries announced the following contracts through its subsidiaries: -On August 25, 1997 Touchstone Company was awarded a two-year contract renewal for inventory management and supply of heat exchanger products by the Union Pacific Railroad. Based on current volumes, the contract is worth about $6 million. - On September 15, 1997, Motor Coils Manufacturing Company was awarded $3.4 million of international contracts to supply locomotive traction motors and components. The orders included a $1.7 million worth of orders from Korea, Brazil, and Australia. It is anticipated these orders will be filled in thefourth quarter of 1997 and the first quarter of 1998. - On September 17, 1997, Engine Systems signed a two year contract with the Union Pacific Railroad to supply locomotive turbochargers and related components. The contract is expected to generate approximately $17 million in revenue over the next two years, compared to approximately $12 million in the previous two years. - On September 24, 1997, Boise Locomotive Company was awarded a contract to overhaul six locomotives for approximately $7 million for the Mass Transit Administration of the Maryland Department of Transportation. The work will be completed during the first half of 1998. - On October 16, 1997, Boise Locomotive was awarded contracts worth approximately $30 million to overhaul locomotives for Burlington Northern and Sante Fe Railway, First Union Rail Corporation, and Tri-County Commuter Rail Authority. The contracts are expected to begin in the fourth quarter of this year and be completed by the third quarter of 1998. OTHER SIGNIFICANT EVENTS On July 24, 1997 Touchstone sold its existing production facilities in Jackson, Tennessee for $1.1 million and concurrently entered into a short-term lease of the same facilities through May 1998, at which time a manufacturing facility currently in the early stages of construction is expected to be available for occupancy. The sale of the facilities was made at book value. On August 18, 1997, MotivePower Industries common stock began trading on the New York Stock Exchange under the symbol "MPO". Since going public in April 1994, the Company's stock had traded on Nasdaq. On August 22, 1997, the Board of Directors of MotivePower Industries Inc. amended the Company's Stockholder Rights Plan, increasing the exercise price from $16 per share to $80 per share. The plan was neither adopted nor amended in response to any specific take over bid. On September 8, 1997, MotivePower Industries announced that Boise Locomotive has manufactured demonstration models of its two new low-horsepower locomotives that railroads can test drive and fully evaluate at their respective locations. The units are booked for demonstrations through January 1998. On March 6, 1997 the Company signed a letter of intent to sell its Mountaintop, Pa facility to Summit Manufacturing Inc. The agreement extended the term of the letter to October 31, 1997. The Company and Summit did not close the sale of the property by October 31, 1997, and accordingly the Company has put the property back on the market, and Summit has forfeited the hand money ($100,000) and the retention payments ($100,000). The Company will continue to pursue the sale of the property to Summit but will also pursue sale of the facility to other interested parties. It is not anticipated the sale of the facility will close in 1997. On October 7, 1997 Jack E. Floyd, vice president of finance and controller of Boise Locomotive Company, was named president of Touchstone Company. Floyd replaced Ted Nelson, who resigned to pursue other business opportunities, after serving as president of Touchstone since 1982. On October 23, 1997, the Company announced that it has signed a Memorandum of Understanding with ANI Railway Transportation Group to create an exclusive distribution agreement for the Pacific Rim Region. BACKLOG The Company's total backlog at September 30, 1997 is summarized as follows: 1997 Other Years Total Backlog ---------------------- --------------------- ------------------ (In thousands) $ 70,100 $ 378,400 $ 448,500 PRO-FORMA INFORMATION The following table highlights certain operating line items exclusive of Alert Manufacturing and Supply Company and Power Parts Sign Company which were sold in July 1996 and October 1996, respectively, and the portion of the Locomotive Lease Fleet sold in 1996. Three Months Three Months Ended Ended September 30, 1997 September 30, 1996 ------------------ --------------------------------- (In thousands) As reported As reported Adjustments As adjusted ----------------- -------- -------- -------- Net sales .............. $ 73,849 $ 69,046 ($ 2,429) $ 66,617 Gross profit ........... $ 17,499 $ 12,755 ($ 297) $ 12,458 Operating income ....... $ 9,231 $ 4,477 ($ 30) $ 4,447 Nine Months Nine Months Ended Ended September 30, 1997 September 30, 1996 ------------------ ------------------------------ (In thousands) As reported As reported Adjustments As adjusted ------------------- -------- -------- -------- Net sales .............. $ 217,320 $205,282 ($13,191) $192,091 Gross profit ........... $ 52,639 $ 39,388 ($2,761) $ 36,627 Operating income ....... $ 25,571 $ 15,282 ($ 1,673) $ 13,609 PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS Legal Proceedings: In December 1995, Morrison Knudsen, the Company and certain of Morrison Knudsen's directors and officers were named as defendants in a complaint (the "Pilarczyk Lawsuit") filed in the United States District Court for the Northern District of New York by plaintiffs who were principals in and/or held substantial stock in TMS, Inc. ("TMS"), a New York corporation acquired by Morrison Knudsen on December 30, 1992. The complaint, which sought five million dollars in damages, alleges among other things, violations of Section 10(b), Rule 10b-5 and Section 20(a) of the Securities Exchange Act of 1934, breach of contract, unjust enrichment, negligent misrepresentation and common law fraud during Morrison Knudsen's acquisition of TMS in 1992. Plaintiffs asserted that the Company, which was not formed by Morrison Knudsen until 1993, is fully responsible for the acts of Morrison Knudsen. However, the actions complained of occurred before the Company was formed and the Company did not assume such liabilities of Morrison Knudsen. A motion to dismiss, filed in April 1996 on behalf of all defendants to the Pilarczyk Lawsuit, was granted on May 19, 1997. On June 10, 1997 plaintiffs appealed the dismissal in the U.S. District Court, Northern District of New York. The Company with the advice of outside counsel, believes the causes of action in the Pilarczyk Lawsuit relating to the Company are without merit. The Company intends to make appropriate requests to the court to seek to require the plaintiff to pay the Company's legal fees and costs. The Company is engaged in a commercial dispute with a former supplier, Samyoung Machinery Industrial Co. and Samyoung (America), Inc. (collectively, "Samyoung"). The Company filed suit on April 16, 1996 alleging delivery of defective product and seeking damages in excess of $1 million. Samyoung denies that the product was defective and countersued to recover $300,000 under the contract, and $10 million for trade libel and interference with prospective economic relationships as a result of the Company allegedly making false disparaging statements concerning the diesel engine assembly liners to customers. The Company, with the advice of outside counsel, believes that Samyoung's claims are without merit, and, to date, no evidence supporting Samyoung's counterclaims has come to light through the discovery being conducted by the parties. The Company intends to vigorously prosecute its own claims and defend against Samyoung's counterclaims. On June 25, 1997, Theodore E. Nelson ("Nelson"), then President and former 51% owner of Touchstone Company ("Touchstone"), a wholly-owned subsidiary of the Company, filed suit, seeking an unspecified amount of damages, against Touchstone, Inc. (sic), MotivePower Industries, Inc. and Michael Wolf (President of MotivePower Industries, Inc.) in the Chancery Court of Tennessee, Madison County, Tennessee. Nelson disputed the amount of bonus or other monies earned by him under his employment agreement with Touchstone, which was purchased on February 1, 1994 by Morrison Knudsen Corporation, the former parent company of MotivePower Industries. The complaint listed a variety of causes of action including civil conspiracy, breach of contract, breach of duty of good faith and fair dealing, misrepresentation, promissory fraud, and tortious interference with contract and sought compensatory, punitive and treble damages and attorney's fees in unspecified amounts. The Company, with the advice of outside counsel, believed that Nelson's claims were without merit. On September 15, 1997, the Company filed a counterclaim with causes of action in breach of contract, breach of fiduciary duty, appropriation of business or corporate opportunity, fraud and deceit, breach of duty of good faith and fair dealing, and civil conspiracy. In October 1997 the Company settled the disputes between itself and Mr. Nelson, and Mr. Nelson resigned from Touchstone to pursue other business opportunities. The estimated cost of the settlement had previously been provided for in the financial statements. Touchstone's board of directors appointed Jack E. Floyd as President of Touchstone upon the resignation of Mr. Nelson. The board of directors for Touchstone had also initiated a management transition program at Touchstone in the second quarter, and under this program, added a new vice president of sales and marketing. In the ordinary course of its business, the Company is involved in legal proceedings incident to the normal conduct of its business, including contract claims and employee matters. ITEM 2. CHANGES IN SECURITIES None. ITEM 3. DEFAULTS UPON SENIOR SECURITIES None. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None. ITEM 5. OTHER INFORMATION None. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K Exhibits: Reports on Form 8-K No reports on Form 8-K were filed during the quarter ended September 30, 1997. SIGNATURE 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. MOTIVEPOWER INDUSTRIES INC. By: /s/ William D. Grab ----------------------- William D. Grab Vice President, Controller and Principal Accounting Officer Date: November 6, 1997 EX-27 2 ARTICLE 5 FIN. DATA SCHEDULE FOR 3RD QTR 10-Q
5 This schedule contains summary financial information extracted from the consolidated financial statements for the year ended December 31, 1997 and is qualified in its entirety by reference to such financial statements 1000 9-Mos Dec-31-1997 Jan-01-1997 Sep-30-1997 9906 0 44288 305 80496 143763 44819 48487 268113 76265 37163 0 0 177 137275 268113 217320 217320 164681 164681 0 0 3740 23327 9064 14263 0 0 0 14263 0.77 0.75
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