Harvard Industries, Inc. Reports 1997 Operating Results

29 December 1997

    TAMPA, Fla., Dec. 29 -- Harvard Industries, Inc.,
(Debtor-In-Possession "DIP"), a major producer of OEM automotive parts
and accessories today filed their Annual Report on Form 10K for the year ended
September 30, 1997.
    Consolidated net sales amounted to $810,769,000 for the year ended
September 30, 1997, compared with $824,837,000 for 1996.
    After deducting accrued dividends and accretions of $10,142,000 related
to the Company's 14-1/4% PIK Preferred Stock, the net loss for the year ended
September 30, 1997 attributable to common shareholders was
$399,571,000.  In 1996, after deducting accrued dividends and accretions
of $14,844,000, the net loss attributed to common shareholders was
$83,556,000.
    Harvard Industries , Inc., through its subsidiaries, designs, develops
and manufactures a broad range of components for original equipment
manufacturers, producing cars and light trucks in North America and
abroad.

               HARVARD INDUSTRIES, INC. (Debtor-In-Possession)
                         Consolidated Balance Sheets
                  September 30, 1997 and September 30, 1996
                          (In Thousands of Dollars)

                                          September 30, 1997  September 30, 1996

    ASSETS
    Current assets:
      Cash and cash equivalents                  $9,212              $1,107
      Accounts receivable, net of
       allowance of $2,588
       in 1997 and $744 in 1996                  76,190              99,581
      Inventories                                54,218              53,901
      Prepaid expenses and
       other current assets                       7,602               1,637
      Total current assets                      147,222             156,226
    Property, plant and equipment, net          132,266             300,673
    Intangible assets, net                        4,417             127,250
    Other assets, net                            23,589              33,556
                                               $307,494            $617,705
    LIABILITIES AND SHAREHOLDERS' DEFICIENCY
    Current liabilities:
      Current portion of
       Debtor-in-Possession (DIP) Loans         $36,436                $ --
      Current portion of long term debt           1,748               1,487
      Accounts payable                           32,267              89,073
      Accrued expenses                           72,235              66,949
      Income taxes payable                        2,440               5,875
      Total current liabilities                 145,126             163,384
    Liabilities subject to compromise           397,319                  --
    DIP Loans                                    51,035                  --
    Long-term debt                               12,339             359,116
    Postretirement benefits
     other than pensions                         96,929             100,464
    Other                                        27,237              25,970
      Total liabilities                         729,985             648,934
    14-1/4% Pay-In-Kind Exchangeable
      Preferred Stock,
      (At September 30, 1997
      - includes $10,142 of
      undeclared accrued dividends)             124,637             114,495
    Shareholders' deficiency:
      Common Stock, $.01 par value;
      15,000,000 shares authorized;
      shares issued and outstanding:
      7,026,437 at September 30, 1997
      and 7,014,357 at September 30, 1996            70                  70
    Additional paid-in capital                   32,134              42,245
    Additional minimum pension liability        (3,665)             (1,767)
    Foreign currency transaction adjustment     (1,930)             (1,964)
    Accumulated deficit                       (573,737)           (184,308)
    Total shareholders' (deficiency)          (547,128)           (145,724)
    Commitments and contingent liabilities     $307,494            $617,705

               HARVARD INDUSTRIES, INC. (Debtor-In-Possession)
                    Consolidated Statements of Operations
                Years Ended September 30, 1997, 1996, and 1995
          (In Thousands of Dollars, Except Share and Per Share Data)

                                               1997         1996        1995

    Sales                                    $810,769     $824,837    $631,832
    Costs and expenses
      Cost of sales                           797,774      776,141     557,340
      Selling, general and administrative      45,822       42,858      33,037
      Interest expense (contractual interest   36,659       47,004      19,579
      interest of $50,264 in 1997)
      Amortization of goodwill                  8,448       15,312       2,986
      Impairment of long-lived assets and
       restructuring costs                    288,545           --          --
      Other (income) expense, net               5,530        1,538     (1,789)
      Total costs and expenses              1,182,778      882,853     611,153
    Income (loss) from continuing
      operations before reorganization
      items, income taxes and
      extraordinary item                    (372,009)     (58,016)      20,679
    Reorganization items                       16,216           --          --
    Income (loss) from
     continuing operations before
     income taxes and extraordinary item    (388,225)     (58,016)      20,679
    Provision for income taxes                  1,204        3,196      11,566
    Income (loss) from
     continuing operations before
     extraordinary item                     (389,429)     (61,212)       9,113
    Loss from discontinued operations              --      (7,500)          --
    Income (loss) before extraordinary item (389,429)     (68,712)       9,113
    Extraordinary item - early
     extinguishment of debt
     (net of income tax benefit of $1,200)         --           --     (2,192)
    Net income (loss)                      $(389,429)    $(68,712)      $6,921
    PIK preferred dividends
     and accretion (contractual
     amount of $16,891 in 1997)               $10,142      $14,844     $14,809
    Net loss attributable
     to common shareholders                $(399,571)    $(83,556)    $(7,888)
    Primary per common
     and common equivalent share:
      Loss from continuing
       operations before
       extraordinary item                    $(56.91)     $(10.87)     $(0.83)
      Loss from discontinued operations            --       (1.07)          --
      Extraordinary item                           --           --      (0.32)
    Loss per common and
     common equivalent share                 $(56.91)     $(11.94)     $(1.14)
    Weighted average number of common and
     common equivalent shares outstanding   7,020,692    6,999,279   6,894,093

               HARVARD INDUSTRIES, INC. (Debtor-In-Possession)
                    Consolidated Statements of Cash Flows
                Years Ended September 30, 1997, 1996, and 1995
                          (In Thousands of Dollars)

                                              1997         1996          1995

    Cash flows related to
     operating activities:
      Loss from continuing operations
       before reorganization items         $(373,213)    $(61,212)      $9,113
      Add back (deduct) items
       not affecting cash and
       cash equivalents:
      Income tax allocation
       related to reorganization
       value, exercise of stock options
       and discontinued operations                 --           --       6,251
      Depreciation and amortization            60,186       65,658      34,856
      Impairment of long-lived assets and
       restructuring charges                  288,545           --          --
      Loss on disposition of property,
       plant and equipment
       and property held for sale               1,931        2,053         461
      Postretirement benefits                 (4,138)        5,822       4,373
      Write-off of deferred debt expense        1,792           --          --
      Senior notes interest accrued not paid    9,728           --          --
    Changes in operating assets
     and liabilities of continuing
     operations, net of effects from
     acquisitions and reorganization items:
      Accounts receivable                      22,798        3,133     (9,865)
      Inventories                             (7,225)        7,112         880
      Other current assets                    (5,965)        (222)       1,712
      Accounts payable                       (56,806)        9,371       1,696
      Accounts payable prepetition             81,429           --          --
      Accrued expenses and
       income taxes payable                  (10,254)     (30,444)    (21,954)
      Other noncurrent liabilities              6,933          819     (2,472)
    Net cash provided by
     continuing operations before
     reorganization items                      15,741        2,090      25,051
    Net cash used in reorganization items     (2,864)           --          --
    Net cash provided by
     continuing operations                     12,877        2,090      25,051
    Cash flows related
     to investing activities:
      Acquisition of property,
       plant and equipment                   (36,572)     (40,578)    (22,080)
      Cash flows related
       to discontinued operations                 713      (3,332)       5,029
      Proceeds from disposition
       of property, plant
       and equipment                            1,703          909       1,259
      Acquisition of Boehler-Jarvis,
       including debt refinancing,
       net of cash acquired                        --           --   (210,231)
      Net change in other
       noncurrent accounts                    (1,832)      (5,223)       (746)
    Net cash used in investing activities    (35,988)     (48,224)   (226,769)
    Cash flows related
     to financing activities:
      Proceeds from Senior Notes Offering          --           --     200,000
      Insurance costs of Senior Notes and
       financing agreements                   (2,200)           --    (11,804)
      Net borrowings and (repayments)
       under credit agreement                (38,834)       38,834          --
      Net borrowings under
       DIP financing agreement                 87,471           --          --
      Redemption of PIK preferred stock            --           --    (15,000)
      Proceeds from sale
       of stock and exercise
       of stock options                            31          190       2,419
      Repayments of long-term debt            (7,682)      (3,032)     (5,820)
      Pension fund payments pursuant
       to PBGC settlement agreement           (6,000)      (6,000)     (6,000)
      Payment of EPA settlements              (1,570)      (2,676)     (2,512)
    Net cash provided
     by financing activities                   31,216       27,316     161,283
    Net increase (decrease)
     in cash and cash equivalents               8,105     (18,818)    (40,435)
    Beginning of period                         1,107       19,925      60,360
    End of period                              $9,212       $1,107     $19,925
    Supplemental disclosure
     of cash flow information:
    Interest paid                             $37,328      $41,868     $16,042
    Income taxes paid                          $2,244       $5,092      $4,782

SOURCE  Harvard Industries, Inc.