Bradlees Reports 1996 Third Quarter Results; Company Cites Significant Financial Improvements Over Last
Year
BRAINTREE, Mass., Nov. 21, 1996 - Bradlees Inc. (NYSE: BLE) today reported results for the third quarter of
fiscal 1996 (the 13 weeks ended November 2, 1996). Comparable stores sales for the third quarter increased
5%. Total sales for the third quarter were $420.3 million compared with $418.7 million for the third quarter of
fiscal 1995 (the 13 weeks ended October 28, 1995), despite the closing of 26 stores during this year (14 stores
closed during the third quarter and 12 stores closed during the second quarter). The loss before interest,
reorganization items and income taxes for the quarter was $13.1 million reflecting an improvement of $22.2
million compared with the loss before interest, reorganization items and income taxes of $35.3 million for the
same period last year. The 1996 third quarter loss before income taxes of $23.1 million represents an
improvement of $27.9 million or 54.7%, compared with the 1995 third quarter loss before income taxes of $51.0
million. The net loss for the quarter was $23.1 million, compared with a net loss of $38.6 million in 1995. The
prior year's pre tax loss was reduced by an income tax benefit of $12.4 million.
Borrowings under the Company's Debtor-In-Possession (DIP) financing facility were below planned levels. At
the close of the third quarter, the Company had available borrowing capacity of approximately $120 million
under its DIP facility, well in excess of its projected fourth quarter needs.
Sales for the three quarters (39 weeks) ended November 2, 1996 were $1.156 billion compared with $1.249
billion for the same period in 1995, reflecting, in part, the Company's closing of the 26 stores during this year.
Year-to-date comparable store sales declined 5.5%. The year-to-date loss before interest, reorganization items
and income taxes was $96.2 million, an improvement of $12.5 million or 11.6% over last year. This year's net
loss of $159.6 million includes a $35.5 million increase in charges for reorganization items, while last year's net
loss of $98.5 million included a $50.8 million income tax credit. No income tax credit was available to offset
losses in the current year.
Commenting on the third quarter results, Mark A. Cohen, Chairman and Chief Executive said, "We are
encouraged by our third quarter results, particularly our comparable store sales performance. Our strategy of
offering higher value assortments with improved fashion and quality, coupled with significant breakthroughs in
merchandise presentation and customer service, has begun to demonstrate positive results."
BRADLEES, INC.
(Operating as Debtor-In-Possession)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands except per share amounts)
13 Weeks ended 39 Weeks ended
Nov. 2, Oct. 28, Nov. 2,
Oct. 28,
1996 1995 1996 1995
Total sales $420,319 $418,656 $1,156,405
$1,248,532
Leased department sales 15,863 14,529 44,668
43,367
Net sales 404,456 404,127 1,111,737
1,205,165
Cost of goods sold 291,396 288,417 794,767
865,488
Gross margin 113,060 115,710 316,970
339,677
Leased department and other
operating income 3,475 3,459 9,908
10,529
Total 116,535 119,169 326,878
350,206
Selling, store operating,
administrative and
distribution expenses 120,741 141,694 392,715
419,696
Depreciation and amortization 10,595 12,781 32,071
39,212
Gain on disposition of propert (1,689) --- (1,689)
---
Loss before interest,
reorganization items,
and income taxes (13,112) (35,306) (96,219)
(108,702)
Interest and debt expense 1,878 2,655 6,837
19,577
Reorganization items 8,083 13,066 56,549
21,035
Loss before income taxes (23,073) (51,027) (159,605)
(149,314)
Income tax benefit --- 12,435
--- 50,767
Net loss ($23,073) ($38,592) ($159,605)
($98,547)
Net loss per share: ($2.02) ($3.38) ($13.99)
($8.63)
BRADLEES, INC.
(Operating as Debtor-In-Possession)
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands)
ASSETS 11/2/96 2/3/96
10/28/95
Current assets:
Unrestricted cash and cash equivalents $--- $63,012 $65,947
Restricted cash and cash equivalents 9,030 1,194 1,083
Total cash and cash equivalents 9,030 64,206 67,030
Accounts receivable 17,562 10,536 16,296
Refundable income taxes --- 24,576 ---
Inventories 339,178 282,270 413,236
Prepaid expenses 10,458 10,008 10,915
Deferred income taxes --- --- 27,733
Assets held for sale 8,954 8,954 ---
Total current assets 385,182 400,550 535,210
Property excluding capital leases, net 147,987 170,247 210,859
Property under capital leases, net 28,232 37,249 58,946
Total property, plant and equipment, net 176,219 207,496 269,805
Lease interests at fair value and lease
acquisition costs, net 180,161 186,626 240,187
Assets held for sale 10,153 --- ---
Other, net 3,714 3,990 1,556
Total other assets 194,028 190,616 241,743
Total Assets $755,429 $798,662 $1,046,758
BRADLEES, INC.
(Operating as Debtor-In-Possession)
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands)
LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIENCY) 11/2/96 2/3/96
10/28/95
Current liabilities:
Accounts payable $218,565 $148,870
$266,094
Accrued expenses 64,661 63,735
55,303
Short-term debt 24,000
--- ---
Current portion of capital lease obligations 2,110 2,602
5,019
Total current liabilities 309,336 215,207
326,416
Long-term liabilities:
Obligations under capital leases 47,534 53,396
40,695
Deferred income taxes 8,581 8,581
65,504
Other long-term liabilities 24,673 26,723
28,573
Total long-term liabilities 80,788 88,700
134,772
Liabilities subject to settlement under
the reorganization case 569,581 539,765
521,845
Stockholders' equity (deficiency):
Common stock 11,406,620 shares outstanding
(11,417,958 shares outstanding at 10/28/95)
Par value 115 115
115
Additional paid-in capital 137,951 137,951
137,954
Unearned compensation (316) (793)
(945)
Accumulated deficit (341,371) (181,766)
(72,899)
Treasury stock, at cost (655) (517)
(500)
Total stockholders' equity (deficiency) (204,276) (45,010)
63,725
Total Liabilities and Stockholders'
Equity (Deficiency) $755,429 $798,662
$1,046,758
SOURCE Bradlees Inc./CONTACT: Coleman Nee of Bradlees, 617-380-8354/
Holly Products announces second quarter results and substantial reduction of losses
BALA CYNWYD, Pa.--Nov. 21, 1996--Holly Products Inc. (NASDAQ: HOPR, HOPRW, HOPRP; BSE: HOP,
HOPP) today announced results of its second quarter ended Sept. 30, 1996.
Results for the first two quarters of this year show a substantial turnaround for the company's wholly owned
subsidiary, Navtech Industries Inc., since the change in management earlier this year. Navtech posted
approximately $130,000 in operating profits as compared to a substantial loss for the same period last year.
The company is still experiencing one-time administrative expenses of approximately $900,000 associated with
supporting Country World Casinos Inc.'s Chapter 11 proceedings, as well as thecompany's settlement of
previously outstanding litigation and outstanding promotional fees to be expensed through March 1997.
William H. Patrowicz, president of Holly Products Inc., said, "Navtech continues to do well while Country
World finalizes its Chapter 11 proceedings. We look forward to continued progress and great expectations for
next year."
Holly Products Inc., headquartered in Bala Cynwyd, has a wholly owned subsidiary, Navtech Industries Inc. of
Shiprock, N.M., and a majority-owned subsidiary, Country World Casinos Inc. of Denver. Navtech is a
manufacturer and tester of electronic components for casino equipment, hotel equipment and signage. Country
World Casinos Inc. is a development corporation, whose plan is to construct a casino in Black Hawk, Colo., as
well as a hotel complex.
HOLLY PRODUCTS INC.
Six months ended Sept. 30,
1996 1995
Net sales $ 3,038,233 $ 2,389,874
Gross profit (loss) $ 1,037,664 $ (266,648)
Total expenses $ 2,516,220 $ 4,621,008
Net (loss) $ (1,478,556) $ (4,887,656)
Loss per common share $ (.07) $ (.35)
CONTACT: Holly Products, Bala Cynwyd William H. Patrowicz, 610/617-0400 or Martin E. Janis & Co.,
Chicago Elliott Jacobson, 312/943-1100
Presidio Capital Corp. Announces Completion of TSA Securitization
HAMILTON, HM DX, Bermuda, Nov. 21, 1996 - Presidio Capital Corp., a British Virgin Islands Corporation
and the post- bankruptcy successor to Integrated Resources, Inc., announced today that the Company sold in a
private securitization transaction the Company's rights to a deferred payment stream that was originally generated
by Integrated's tax shelter annuity business ("Payment Rights"). Proceeds realized by the Company, net of the
placement fee, rating agency fees and reserves, was approximately $20.5 million.
The Payment Rights were sold to a trust which issued notes backed solely by the Payment Rights. As part of this
transaction, certificates evidencing the equity ownership of the trust (and entitlement to the residual of the
Payment Rights upon satisfaction of the notes in full) were issued and sold to two newly formed companies,
T-Two TSA LLC and T-Two TSA II LLC. The purchasers of the residual equity certificates are each owned 99%
by T-Two Holding, L.L.C. T-Two Holding, L.L.C. is also the indirect 99% owner of the residual interests
resulting from the contract right securitization completed in March 1996 and is obligated to undertake a rights
offering, or similar vehicle, of its equity to the shareholders of Presidio as soon as practicable.
Presidio Capital Corp. is engaged in the liquidation and disposition of the assets of Integrated, which were
acquired pursuant to the Sixth Amended Plan of Reorganization submitted by the Subordinated Bondholders
Committee and the Steinhardt Group. The plan of the reorganization was consummated on November 3, 1994.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities. The
securitization notes and certificates referred to in the press release have been sold. These securities have not
been registered under the Securities Act of 1933 and may not be sold in the United States or to U.S. persons
absent registration or an applicable exemption from registration requirements.
SOURCE Presidio Capital Corp./CONTACT: Christopher Weatherhill of Presidio, 441-295-9166/
CompuServe Reports Expected Q2 Loss And Other Charges
COLUMBUS, Ohio, Nov. 21, 1996 - The following text was issued last night via PRNewswire at 10:37 p.m.
EST. The full text is being repeated below, along with financial statements that were not sent last night:
CompuServe Corporation (Nasdaq: CSRV) today confirmed its previously forecast second-quarter loss,
announced an accelerated amortization of previously capitalized subscriber acquisition costs and disclosed a
shift in its marketing strategy to reduce costs and to focus on business and professional subscribers.
Consistent with the company's previous announcement, delays in the shipment of its new CompuServe 3.0
interface coupled with a continued decline in domestic CompuServe Interactive (CSi) membership resulted in a
second-quarter loss of $24.5 million, or 26 cents per share before special charges. The accelerated amortization
of previously capitalized subscriber acquisition costs produced an after-tax charge of $28.6 million, or 31 cents
per share. As part of the shift in strategy, CompuServe will withdraw its family-oriented WOW! online service
from the marketplace effective January 31, 1997, resulting in a one-time after-tax charge of $4.9 million, or 6
cents per share, for the second quarter. The total loss for the quarter, including the special charges, was $58
million, or 63 cents per share.
"Back-to-Basics" Global Strategy
CompuServe also announced a "back-to-basics" global strategy aimed at building on its leadership in the
business and professional market while focusing on profitable segments in the consumer market. The company
said it will continue pursuing growth in higher-margin European and other international consumer markets. In the
U.S. consumer market, it will continue to provide a distinctive experience in the CSi online and Internet service,
while focusing its retention and growth efforts on CSi's traditional and loyal base of users.
The company will launch "CompuServe for Business," an enhanced service built on its CSi service with content
specifically designed for business people and professionals. CompuServe for Business will be launched early
next year. In the same time frame, CompuServe plans to introduce enhanced offerings for the business and
professional sector in Europe as well.
"Going forward, we will emphasize our inherent strengths," said Bob Massey, CompuServe president and chief
executive officer. "We're going to refocus on our existing leadership among business, professional and technical
users, as well as our traditional base of consumer subscribers. These are segments with more stable subscriber
bases. This is where we built our name and reputation, and where we continue to be the undisputed leader.
"We will stop undifferentiated marketing to mass consumers," said Massey. "Like others in our industry, we were
bringing new users in the front door and seeing many go out the back. Our revised strategy will enable us to
reduce costs by eliminating mass consumer marketing.
"When we launched our WOW! service earlier this year, we felt it was the right product for the time," he said.
"Since that time, much has changed in terms of market entrants, pricing and the high cost to compete in the mass
consumer market. We intend to focus our resources in those sectors where we can profitably expand our
business."
Network Services
The CompuServe Network Services division continued impressive growth in the second quarter. It added 52
corporate customers, bringing the total to 1,061 corporations, with wide area intranet connectivity as well as
applications and system management. Revenues from Network Services grew 33 percent over last year's quarter
to $63.6 million and represented nearly 30 percent of total company revenues.
"CompuServe Network Services continues to outpace the strong overall growth in the corporate data
communications market," Massey said. "Over the past few years, revenues have increased well over 30 percent
annually, while attracting a growing base of Fortune 1000 customers under long-term contracts for outsourced
data communications, intranet solutions and applications hosting."
Interactive Services
As of October 31, 1996, CompuServe had 3,312,000 direct subscribers worldwide, flat with the 3,313,000
reported as of July 31, 1996. International subscribers grew by 56,000 to 1,120,000 while North American users
declined by 57,000 to 2,192,000. CompuServe's Japanese licensee, NIFTY-Serve, had 2,029,000 subscribers, up
from 1,864,000 at the end of the prior quarter.
Subscribers to WOW!, introduced 7 months ago, increased to 102,000 from 92,000 while subscribers to
SPRYNET, CompuServe's Internet-only access service, grew to 218,000 from 163,000 a quarter earlier.
CompuServe's new online interface, CompuServe 3.0, was launched in late September, with distribution of the
product to current and recently canceled subscribers commencing in the month of October. Overall unsolicited
feedback has been positive. Because of the timing of the release of the new software, it had little effect on second
quarter revenues.
Revenues Up
For the quarter ended October 31, 1996, CompuServe reported revenues of $214.3 million, 14 percent higher
than the year-earlier period and 3 percent higher than the preceding quarter. Interactive Services revenues rose 8
percent versus year-ago levels, driven largely by the continued growth of the company's international business.
Versus the previous quarter, Interactive Services revenues grew 2 percent despite a slight decline in overall
membership as higher service usage drove an increase in per-member revenues. These increases, coupled with
the continued growth in Network Services, were not enough to overcome the continuing high cost of the network
infrastructure, the operation of the WOW! service and the distribution of the new CompuServe 3.0 interface. The
majority of the expected savings attributable to the restructuring and profit improvement initiatives announced in
late August will be realized in the third and fourth quarters.
Accelerated Amortization of Subscriber Acquisition Costs The accelerated amortization of previously
capitalized subscriber acquisition costs reflects a combination of a decline in overall subscriber retention rates, a
more prolonged decline in per-member revenues and the generally unfavorable economics of the company's
flat-priced WOW! service and SPRYNET Internet access service.
The most recent data suggested that the rate of capitalized cost amortization be accelerated to correlate with the
recent rates of customer retention and lower member revenue streams. Accordingly, the results for the second
quarter reflect an accelerated writedown of previously deferred costs totaling $45.3 million ($28.6 million after
tax). This assumes that the capitalized costs of CSi subscriber acquisition are expensed at the rate of 50 percent
in the first three months, 30 percent over the next nine months and 20 percent in the subsequent year. Under the
previous policy, such costs were expensed at the rate of 60 percent in the first 12 months and 40 percent in the
subsequent year. The amount also includes the total writedown of previously capitalized subscriber acquisition
costs for WOW! and SPRYNET reflecting the high costs to support these high usage, flat-priced customer groups.
At quarter-end, the remaining unamortized subscriber costs totaled $50.2 million.
Founded in 1969, CompuServe provides the world's most comprehensive online/Internet access through its three
brands - CompuServe, WOW! and SPRYNET. Through CompuServe, its Japanese Licensee NIFTY-Serve and
its affiliates around the world, more than 5 million home and business users in more than 185 countries are
connected online and to the Internet. CompuServe Network Services manages complex global data
communication environments for more than 1,000 corporate customers. With world headquarters in Columbus,
Ohio, CompuServe's offices include European centers in London, Munich,, Amsterdam, Zurich and Paris.
Except for historical information contained herein, the matters set forth in this press release are forward-looking
statements that are subject to risks and uncertainty which could cause actual results to differ materially.
CompuServe cannot assure for example, that its interface software will be widely accepted by its membership,
that its strategy and related marketing programs will produce the anticipated results or that churn and subscriber
growth will be materially impacted by these interfaces and marketing efforts.
COMPUSERVE CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS
(AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
3 Months Ended 6 Months Ended
October 31 October 31
REVENUES 1996 1995 1996 1995
Interactive Services
revenues $144,093 $132,925 $285,507
$267,117
Network Services revenues 63,607 47,649 122,885
92,713
Other revenues 6,643 7,800 14,593
15,093
TOTAL REVENUES 214,343 188,374 422,985
374,923
COSTS AND EXPENSES
Costs of revenues 146,185 91,035 285,881
173,265
Marketing 110,923 37,016 169,954
64,593
General and administrative 11,280 11,745 20,774
21,378
Depreciation and
amortization 27,864 17,335 54,717
31,857
Product development 4,736 7,508 11,792
14,490
Nonrecurring items 7,850 --- 25,563
---
TOTAL COSTS AND
EXPENSES 308,838 164,639 568,681
305,583
OPERATING EARNINGS/(LOSS) (94,495) 23,735 (145,696)
69,340
INTEREST INCOME 2,380 --- 5,511
---
EARNINGS/(LOSS) BEFORE TAXES (92,115) 23,735 (140,185)
69,340
INCOME TAX EXPENSE/(BENEFIT) (34,080) 9,769 (52,535)
28,539
NET EARNINGS/(LOSS) ($58,035) $13,966 ($87,650)
$40,801
EARNINGS/(LOSS) PER SHARE ($0.63) $0.19 ($0.95)
$0.55
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING 92,600,000 74,200,000 92,600,000
74,200,000
COMPUSERVE CORPORATION
CONSOLIDATED BALANCE SHEETS
(AMOUNTS IN THOUSANDS)
October 31 April 30
1996 1996
CURRENT ASSETS
Cash and cash equivalents $100,064 $280,646
Investments 85,353 29,345
Receivables 111,237 119,186
Other current assets 98,908 56,713
TOTAL CURRENT ASSETS 395,562 485,890
INTANGIBLE ASSETS 16,098 22,809
PROPERTY AND EQUIPMENT, net 384,679 348,059
OTHER ASSETS
Deferred subscriber acquisition costs, net 50,213 96,636
Other Assets 14,402 12,434
TOTAL OTHER ASSETS 64,615 109,070
TOTAL ASSETS $860,954 $965,828
CURRENT LIABILITIES $133,374 $138,399
DEFERRED INCOME TAXES 43,268 56,763
STOCKHOLDERS' EQUITY 684,312 770,666
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $860,954 $965,828
COMPUSERVE CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(AMOUNTS IN THOUSANDS)
3 Months Ended 6 Months Ended
October 31 October 31
1996 1996 1995
CASH FLOWS FROM OPERATING ACTIVITIES
Net Earnings ($58,035) ($87,650) $40,801
Depreciation and amortization 27,864 54,717 31,857
Deferred subscriber acquisition costs (13,017) (39,832) (28,920)
Amortization of deferred
subscriber acquisition costs 67,242 86,255 2,821
Provision for deferred taxes (19,961) (14,405) 17,750
Changes in net working capital 3,843 (39,271) (16,402)
Net cash flow from operating
activities 7,936 (40,186) 47,907
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment (22,669) (85,557) (96,637)
Purchase of short-term investments --- (119,008) ---
Maturities of short-term investments 63,000 63,000 ---
Other, net 432 1,169 (7,869)
Net cash flow from investing
activities 40,763 (140,396) (104,506)
CASH FLOWS FROM FINANCING ACTIVITIES
Advances from parent --- --- 57,374
Net cash flow from financing activities 0 0 57,374
NET INCREASE/(DECREASE) IN CASH AND
CASH EQUIVALENTS 48,699 (180,582) 775
CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIOD 51,365 280,646 4,913
CASH AND CASH EQUIVALENTS AT END
OF PERIOD $100,064 $100,064 $5,688
INVESTMENTS $85,353 $85,353 ---
CompuServe Corporation
Other Quarterly Data
10/31/95 4/30/96 7/31/96 10/31/96
Network Data
Network Customers 863 966 1,009 1,061
Commercial Customer
Hours 10,728,000 13,476,000 19,544,000 24,650,000
Online Subscriber Hours 24,853,000 43,702,000 38,111,000 38,276,000
Total Ports 51,511 59,860 70,404 77,639
Total Points of Presence 443 461 485 501
Online/Internet Services
Subscribers
North America 2,027,000 2,337,000 2,249,000 2,192,000
International 734,000 1,015,000 1,064,000 1,120,000
Total CompuServe
Hosted 2,761,000 3,352,000 3,313,000 3,312,000
Licensee 1,286,000 1,674,000 1,864,000 2,029,000
Total 4,047,000 5,026,000 5,177,000 5,341,000
Subscribers by Service
CSi 2,684,000 3,157,000 3,059,000 2,992,000
WOW! -- 63,000 92,000 102,000
SpryNet 90,000 132,000 163,000 218,000
CSi Quarterly Subscriber
Retention Rates
At the End of Month 3 N/A 63% 57% 55%
At the End of Month 6 N/A 59% 47% 44%
At the End of Month 9 N/A N/A 45% 36%
At the End of Month 12 N/A N/A N/A 36%
FY 1996 FY 1997
Fees/Usage Total .. Fees/Usage
Total ..
Average Revenue Per Customer
First Quarter $18.59 $19.11 $14.20 $14.48
Second Quarter $17.06 $17.54 $14.77 $15.06
Third Quarter $16.11 $16.88 -- --
Fourth Quarter $16.45 $16.71 -- --
.. Includes revenues from merchandising, advertising and
transaction fees.
SOURCE CompuServe Corporation /CONTACT: Steve Conway, Media, 614-538-3829, or Herb Kahn,
Analysts, 614-538-3556, both of CompuServe; or Karl Plath, General Information, 312-640-6738, or Julie
Creed, Analysts, 312-640-6742, or Beth Gallanis, Media, 312-640-6737, all of the Financial Relations Board/
Harnischfeger Reports Record Fiscal Year-End Results
MILWAUKEE, WI - Nov. 21, 1996 - Harnischfeger Industries, Inc. (NYSE: HPH) Chairman and Chief Executive
Officer Jeffery T. Grade today announced significant increases in operating results and bookings for the
company's fiscal fourth quarter and year ended Oct. 31, 1996.
Net sales increased 16 percent to $712 million in the fourth quarter, up from $614 million in the same quarter last
year as a result of continued strong performance by all three core businesses: mining equipment, pulp and paper
machinery, and material handling.
Fourth-quarter income from continuing operations, before Beloit Corporation pre-tax restructuring charges of
$43.0 million, increased 37 percent to $41.6 million ($0.87 per share) from $30.3 million ($0.65 per share). Net
income in the quarter after restructuring charges was $19.8 million ($0.41 per share) compared to $23.4 million
($0.51 per share) in the same quarter last year.
Fourth-quarter bookings of $851 million improved 30 percent from levels of a year ago. Each of the company's
businesses continues to experience strong order and sales activity for original equipment and aftermarket support
products and services.
Record net sales for the fiscal year of $2,864 million increased 33 percent over 1995 sales of $2,152 million.
Income from continuing operations in fiscal 1996 before the restructuring charge was $136.0 million ($2.88 per
share) compared to $84.8 million ($1.83 per share) last year. Record net income of $114.2 million ($2.42 per
share) after the restructuring charge compared to $57.4 million ($1.24 per share) in fiscal 1995.
Fiscal year 1996 bookings of $3,001 million were 33 percent above 1995, with record bookings in all segments.
Order backlogs were $1,432 million at fiscal year end, compared to $1,032 million at the close of 1995.
"The company's increasingly strong operating results and bookings reflect ongoing strengths in our businesses on
a global basis," said Grade. "Harnischfeger's commitment to improving its Economic Value Added (EVA)
performance resulted in further progress during the year. For the first time, each of our businesses generated
positive EVA for our shareholders, which equates to at least 12 percent after tax on invested capital."
Mining
Sales of $349 million for the mining segment, including P&H Mining Equipment and Joy Mining Machinery, were
up 36 percent from the same quarter last year. Operating profit of $49.3 million was 39 percent higher than in the
same quarter last year. Bookings of $404 million were up 38 percent over the same period in 1995.
For the fiscal year, mining sales increased 49 percent to $1,406 million. Operating profit was $183.1 million, up
50 percent. The return on sales for the year was 13.0 percent. Bookings were up 45 percent to $1,406 million,
reflecting the strength of original equipment orders, including three new Model 9020 draglines in Australia and a
large, multi-unit order for Joy in Russia.
"Machinery orders and margins in our mining businesses continue to improve," Grade said. "The softness in
underground mining in the U.S. has begun to improve and the integration of Longwall with Joy continues on track.
In the important aftermarket segment of the mining business, both P&H and Joy have continued to focus on
growth."
Pulp and Paper Machinery
Beloit Corporation's sales were $266 million in the fourth quarter versus $289 million in the same period last
year, reflecting the completion of several large orders in the previous fiscal year. In the quarter, Beloit's
operating profit before restructuring rose 15 percent to $25.6 million and bookings were $368 million, up 38
percent over the same quarter the previous year.
For fiscal 1996, Beloit posted sales of $1,135 million, up 17 percent over fiscal 1995. Operating profit before
restructuring was up 63 percent to $91.5 million and the return on sales increased to 8.1 percent. Bookings for
1996 for Beloit totaled $1,270 million, up 25 percent, and backlog at year end was $846 million compared with
$680 million at the end of 1995.
Beloit's $43.0 million pre-tax restructuring charge, taken during the quarter, is based on its revised strategic plan.
The charge reflects the elimination or rearrangement of selected fixed assets and the expected reduction of
worldwide headcount by up to 7 percent or about 500 employees.
Grade said, "Beloit's strategic redirection positions the company to aggressively expand its Mill Services
business serving the pulp and paper industry and also to refocus its manufacturing and engineering operations into
global 'Centers of Excellence.' The company is dedicated to becoming more efficient and responsive to changing
customer needs in all markets, and in particular, in the rapidly growing Pacific Rim."
Material Handling
Fourth-quarter sales of $97 million in the quarter were up 41 percent over the equivalent year-earlier period.
Operating profit rose 69 percent to $12.4 million. For fiscal 1996, P&H Material Handling sales grew to $323
million, up 35 percent over 1995. Operating profit for the year increased 45 percent to $33.1 million, with return
on sales at 10.2 percent, and bookings of $325 million were up 23 percent.
"The P&H Material Handling results reflected continued high levels of demand for original equipment in
traditionally strong North American and U.K. markets plus the growing Pacific Rim region. Of equal importance,
P&H Material Handling continues to significantly expand its network of service and repair centers to meet the
needs of overhead crane users wherever they may be located," Grade said.
Harnischfeger Industries, Inc. (NYSE: HPH) is an international holding company with business segments
involved in the manufacture and distribution of equipment for surface mining (P&H Mining Equipment),
underground mining (Joy Mining Machinery), pulp and papermaking (Beloit Corporation), and material handling
(P&H Material Handling).
HARNISCHFEGER INDUSTRIES, INC.
CONSOLIDATED STATEMENT OF INCOME
(000)
Three Months Ended
October 31,
1996 1995
$ $
REVENUES
Net sales 711,986 614,021
Other income 3,477 9,253
715,463 623,274
COST OF SALES 517,158 475,075
PRODUCT DEVELOPMENT,
SELLING AND
ADMINISTRATIVE EXPENSES 116,615 88,654
RESTRUCTURING CHARGE 43,000 --
OPERATING INCOME 38,690 59,545
INTEREST EXPENSE - NET (16,254) (8,767)
INCOME BEFORE JOY MERGER COSTS,
GAIN ON SALE OF MEASUREX
INVESTMENT, PROVISION FOR
INCOME TAXES AND MINORITY
INTEREST 22,436 50,778
PROVISION FOR INCOME TAXES (6,300) (17,800)
MINORITY INTEREST 3,643 (2,708)
INCOME BEFORE JOY MERGER COSTS
AND GAIN ON SALE OF
MEASUREX INVESTMENT 19,779 30,270
JOY MERGER COSTS (Net of tax
credit of $6,075) -- --
GAIN ON SALE OF MEASUREX
INVESTMENT (Net of taxes
of $11,000) -- --
INCOME FROM CONTINUING OPERATIONS,
after the 1996 restructuring
charge of $21,830 and the 1995
Joy merger costs and gain
on sale of Measurex investment 19,779 30,270
LOSS FROM AND NET LOSS ON SALE OF
DISCONTINUED OPERATION, net of
applicable income taxes -- (6,825)
EXTRAORDINARY LOSS ON RETIREMENT
OF DEBT, net of applicable
income taxes -- --
NET INCOME 19,779 23,445
EARNINGS PER SHARE $ $
Income from continuing
operations, before 1996
restructuring charge and 1995
Joy merger costs and gain on
sale of Measurex investment 0.87 0.65
Income from continuing
operations 0.41 0.65
Loss from and net loss on sale
of discontinued operation -- (0.14)
Extraordinary loss on
retirement of debt -- --
Net income per share 0.41 0.51
AVERAGE SHARES OUTSTANDING 47,560 46,680
Twelve Months Ended
October 31,
1996 1995
$ $
REVENUES
Net sales 2,863,931 2,152,079
Other income 23,639 32,208
2,887,570 2,184,287
COST OF SALES 2,166,775 1,671,932
PRODUCT DEVELOPMENT,
SELLING AND
ADMINISTRATIVE EXPENSES 433,776 330,990
RESTRUCTURING CHARGE 43,000 --
OPERATING INCOME 244,019 181,365
INTEREST EXPENSE - NET (62,258) (40,713)
INCOME BEFORE JOY MERGER COSTS,
GAIN ON SALE OF MEASUREX
INVESTMENT, PROVISION FOR
INCOME TAXES AND MINORITY
INTEREST 181,761 140,652
PROVISION FOR INCOME TAXES (63,600) (48,575)
MINORITY INTEREST (3,944) (7,230)
INCOME BEFORE JOY MERGER COSTS
AND GAIN ON SALE OF
MEASUREX INVESTMENT 114,217 84,847
JOY MERGER COSTS (Net of tax
credit of $6,075) -- (11,384)
GAIN ON SALE OF MEASUREX
INVESTMENT (Net of taxes
of $11,000) -- 18,657
INCOME FROM CONTINUING OPERATIONS,
after the 1996 restructuring
charge of $21,830 and the 1995
Joy merger costs and gain
on sale of Measurex investment 114,217 92,120
LOSS FROM AND NET LOSS ON SALE OF
DISCONTINUED OPERATION, net of
applicable income taxes -- (31,235)
EXTRAORDINARY LOSS ON RETIREMENT
OF DEBT, net of applicable
income taxes -- (3,481)
NET INCOME 114,217 57,404
EARNINGS PER SHARE $ $
Income from continuing
operations, before 1996
restructuring charge and 1995
Joy merger costs and gain on
sale of Measurex investment 2.88 1.83
Income from continuing
operations 2.42 1.99
Loss from and net loss on sale
of discontinued operation -- (0.67)
Extraordinary loss on
retirement of debt -- (0.08)
Net income per share 2.42 1.24
AVERAGE SHARES OUTSTANDING 47,196 46,218
HARNISCHFEGER INDUSTRIES, INC.
BUSINESS SEGMENT SUMMARY
FOR THE THREE MONTHS ENDED OCTOBER 31, 1996
(000)
Net Sales
1996 1995
$ $
Mining Equipment 349,372 256,441
Pulp and Paper Machinery 266,049 289,130
P&H Material Handling 96,565 68,450
Total Business Segments 711,986 614,021
Operating Profit
1996 1995
$ $
Mining Equipment 49,336 35,611
Pulp and Paper Machinery 25,575 22,297
Restructuring Charge (43,000) --
Total (17,425) 22,297
P&H Material Handling 12,373 7,304
Total Business Segments 44,284 65,212
Corporate Administration (5,594) (5,667)
Interest Expense - Net (16,254) (8,767)
Income before Provision for Income
Taxes, Minority Interest, and
1995 Joy Merger Costs and Gain
on Sale of Measurex Investment 22,436 50,778
Orders Booked
1996 1995
$ $
Mining Equipment 403,607 292,478
Pulp and Paper Machinery 368,069 266,984
P&H Material Handling 79,626 94,153
Total Business Segments 851,302 653,615
Backlog at
End of Period
10/96 07/96
$ $
Mining Equipment 453,480 399,245
Pulp and Paper Machinery 846,137 744,117
P&H Material Handling 132,550 149,489
Total Business Segments 1,432,167 1,292,851
HARNISCHFEGER INDUSTRIES, INC.
BUSINESS SEGMENT SUMMARY
FOR THE YEAR ENDED OCTOBER 31, 1996
(000)
Net Sales
1996 1995
$ $
Mining Equipment 1,405,936 941,779
Pulp and Paper Machinery 1,134,779 970,418
P&H Material Handling 323,216 239,882
Total Business Segments 2,863,931 2,152,079
Operating Profit
1996 1995
$ $
Mining Equipment 183,141 122,116
Pulp and Paper Machinery 91,511 56,062
Restructuring Charge (43,000) --
Total 48,511 56,062
P&H Material Handling 33,107 22,850
Total Business Segments 264,759 201,028
Corporate Administration (20,740) (19,663)
Interest Expense - Net (62,258) (40,713)
Income before Provision for Income
Taxes, Minority Interest, and
1995 Joy Merger Costs and Gain
on Sale of Measurex Investment 181,761 140,652
Orders Booked
1996 1995
$ $
Mining Equipment 1,406,381 (1) 972,419
Pulp and Paper Machinery 1,269,507 (2) 1,016,273
P&H Material Handling 324,887 263,649
Total Business Segments 3,000,775 2,252,341
Backlog at
End of Period
10/96 10/95
$ $
Mining Equipment 453,480 221,540
Pulp and Paper Machinery 846,137 679,625
P&H Material Handling 132,550 130,879
Total Business Segments 1,432,167 1,032,044
(1) Does not include backlog assumed in the purchase of Longwall
International totaling $231,495.
(2) Does not include backlog assumed in the purchase of IMPCO totaling
$31,784.
HARNISCHFEGER INDUSTRIES, INC.
CONDENSED BALANCE SHEET
(000)
October 31, October 31,
1996 1995
$ $
Assets
Current assets:
Cash and cash equivalents 36,936 239,043
Accounts receivable - net 667,786 499,953
Inventories 547,115 416,395
Other current assets 132,261 57,999
Businesses held for sale 26,152 --
1,410,250 1,213,390
Property, plant and
equipment - net 634,045 487,656
Intangible assets 551,866 214,739
Other assets 93,868 124,982
Total Assets 2,690,029 2,040,767
Liabilities and Shareholders'
Equity
Current liabilities:
Short-term notes payable,
including current portion
of long-term obligations 49,633 22,802
Trade accounts payable 346,056 263,750
Employee compensation and
benefits 160,488 100,041
Advance payments and
progress billings 155,199 154,401
Accrued warranties 50,718 43,801
Other current liabilities 315,033 138,508
1,077,127 723,303
Long-term obligations 657,765 459,110
Liability for postretirement
benefits 78,814 101,605
Deferred income taxes 54,920 34,805
Other liabilities 54,266 73,057
Minority interest 93,652 89,611
Shareholders' equity 673,485 559,276
Total Liabilities and
Shareholders' Equity 2,690,029 2,040,767
SOURCE Harnischfeger Industries, Inc./CONTACT: Francis M. Corby, Jr., Executive Vice President, Finance
and Administration, 414-486-6518; James C. Benjamin, V.P. And Controller, 414-486-6870; or David A.
Brukardt, Dir., Corp. Comm., 414-486-6474, all of Harnischfeger Industries/