Harvard Industries, Inc. Reports 1998 Earnings

15 January 1999

    LEBANON, N.J., Jan. 14 -- Harvard Industries, Inc.
, a major producer of OEM automotive parts and accessories and
other industrial products, today filed their Annual Report on Form 10K for the
year ended September 30, 1998.
    As previously announced, on November 24, 1998, Harvard's Plan of
Reorganization was effective, marking the completion of its Chapter 11
proceeding, and emergence from bankruptcy.  Exit financing, in the form of
$25 million Senior Notes, a $50 million Term Loan, and a $65 million Revolving
Credit Line, was arranged by Lehman Brothers, with GE Capital serving as
Administrative Agent for the Term Loan and Revolving Credit Line.
    "We are strongly encouraged that the course we've charted is taking hold
due to the efforts of the new management team and the strategic plan we've
implemented," said Roger G. Pollazzi, Harvard's chief executive officer.
"This trend is exactly what we anticipated.  We have made significant
improvements in our organization including the sale or divestiture of
non-performing assets, several key additions to our management team, and have
secured financing for our operations going forward.  With the restructuring
effort now behind us, we can concentrate on product diversification and
operational improvements."


                           HARVARD INDUSTRIES, INC.
                            (DEBTOR-IN-POSSESSION)

                    CONSOLIDATED STATEMENTS OF CASH FLOWS

                YEARS ENDED SEPTEMBER 30, 1998, 1997 AND 1996
                          (In thousands of dollars)

                                       1998            1997          1996
    Cash flows related to operating
     activities:
    Loss from continuing
     operations before
     reorganization items          $(40,884)      $(373,213)     $(61,212)
    Add back (deduct) items
     not affecting cash and
     cash equivalents:
    Depreciation and amortization    27,904          60,186        65,658
    Impairment of long-lived
     assets and restructuring
     charges                         10,842         288,545            --
    Gain on sale of operations      (28,673)             --            --
    Loss on disposition of property,
     plant and equipment and
     property held for sale           1,030           1,931         2,053
    Curtailment (gain) loss           4,390          (8,249)           --
    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              10,673          22,798         3,133
    Inventories                      21,862          (7,225)        7,112
    Other current assets              1,460          (5,965)         (222)
    Accounts payable                 (6,658)        (56,806)        9,371
    Accounts payable prepetition         --          81,429            --
    Accrued expenses and income
     taxes payable                   18,567         (10,254)      (30,444)
    Postretirement benefits           1,386          (4,138)        5,822
    Other noncurrent                 10,683          13,350        (4,404)

    Net cash provided by (used in)
     continuing operations before
     reorganization items            32,582          13,909        (3,133)
    Net cash used in reorganization
     items                           (9,056)         (2,864)           --

    Net cash provided by (used in)
     continuing operations           23,526          11,045        (3,133)

    Cash flows related to investing
     activities:
    Acquisition of property, plant
     and equipment                  (24,887)        (36,572)      (40,578)
    Cash flows related to
     discontinued operations            557             713        (3,332)
    Proceeds from sales of
     operations                      27,822              --            --
    Proceeds from disposition of
     property, plant and equipment       72           1,703           909
    Net cash provided by (used in)
     investing activities             3,564         (34,156)      (43,001)
    Cash flows related to financing
     activities:
    Issuance costs of Senior Notes
     and financing agreements            --          (2,200)           --
    Net borrowings (and repayments)
     under credit agreement              --         (38,834)       38,834
    Net borrowings (and repayments)
     under DIP financing agreement  (45,810)         87,471            --
    Net borrowings under Unsecured
     Creditors Term Loan             25,000              --            --
    Proceeds from sale of stock and
     exercise of stock options           --              31           190
    Repayments of long-term debt        (88)         (7,682)       (3,032)
    Pension fund payments pursuant
     to PBGC settlement agreement        --          (6,000)       (6,000)
    Deferred financing costs         (3,725)
    Payment of EPA settlements          (55)         (1,570)       (2,676)
    Net cash (used in) provided by
     financing activities           (24,678)         31,216        27,316
    Net increase (decrease) in
     cash and cash equivalents        2,412           8,105       (18,818)
    Cash and cash equivalents,
     beginning of period              9,212           1,107        19,925
    Cash and cash equivalents,
     end of period                  $11,624          $9,212        $1,107
    Supplemental disclosure of cash
     flow information:
    Interest paid                   $14,039         $37,328       $41,868
    Income taxes paid                  $776          $2,244        $5,092


                           HARVARD INDUSTRIES, INC.
                            (DEBTOR-IN-POSSESSION)

                    CONSOLIDATED STATEMENTS OF OPERATIONS

                YEARS ENDED SEPTEMBER 30, 1998, 1997 AND 1996
          (In thousands of dollars, except share and per share data)

                                       1998            1997          1996
    Net Sales                      $690,076        $810,769      $824,837

    Costs and expenses:
    Cost of sales                   656,243         797,774       776,141
    Selling, general and
     administrative                  66,546          45,822        42,858
    Amortization of goodwill          1,584           8,448        15,312
    Impairment of long-lived assets
     and restructuring costs         10,842         288,545            --
    Interest expense (contractual
     interest of $49,849 in 1998 and
     $50,264 in 1997)                14,231          36,659        47,004
    Gain on sale of operations      (28,673)             --            --
    Other expense, net                3,980           5,530         1,538

    Total costs and expenses        724,753       1,182,778       882,853

    Loss from continuing operations
     before reorganization items
     and income taxes               (34,677)       (372,009)      (58,016)
    Reorganization items             14,920          16,216            --

    Loss from continuing operations
     before income taxes            (49,597)       (388,225)      (58,016)
    Provision for income taxes        6,207           1,204         3,196

    Loss from continuing operations (55,804)       (389,429)      (61,212)
    Loss from discontinued
     operations                          --              --        (7,500)

    Net loss                       $(55,804)      $(389,429)     $(68,712)

    PIK preferred dividends and
     accretion (contractual amount
     of $19,010 in 1998 and
     $16,891 in 1997)                $   --         $10,142       $14,844

    Net loss attributable to
     common shareholders           $(55,804)      $(399,571)     $(83,556)

    Basic and Diluted Earnings
     per share:
    Loss from continuing operations  $(7.94)        $(56.91)      $(10.87)
    Loss from discontinued
     operations                          --              --         (1.07)

    Net loss per share               $(7.94)        $(56.91)      $(11.94)
    Weighted average number of
     common and common equivalent
     shares outstanding           7,026,437       7,020,692     6,999,279


                           HARVARD INDUSTRIES, INC.
                            (DEBTOR-IN-POSSESSION)

                         CONSOLIDATED BALANCE SHEETS

                         SEPTEMBER 30, 1998 AND 1997
                 (In thousands of dollars, except share data)

                              SEPTEMBER 30, 1998     SEPTEMBER 30, 1997
            ASSETS
    Current assets:
    Cash and cash equivalents           $ 11,624                $9,212
    Accounts receivable, net of
     allowance of $1,675 in 1998 and
     $2,589 in 1997                       57,046                76,190
    Inventories                           26,646                54,218
    Prepaid expenses and other
     current assets                        5,701                 7,602

    Total current assets                 101,017               147,222

    Property, plant and equipment, net   122,579               132,266
    Intangible assets, net                 2,833                 4,417
    Other assets, net                     24,552                23,589

    Total Assets                        $250,981              $307,494

          LIABILITIES AND
     SHAREHOLDERS' DEFICIENCY
    Current liabilities:
    Current portion of
     debtor-in-possession (DIP) loans    $39,161               $36,436
    Creditors Subordinated Term Loan      25,000                    --
    Current portion of long term debt         --                 1,748
    Accounts payable                      25,098                32,267
    Accrued expenses                      93,337                72,235
    Income taxes payable                   8,445                 2,440
    Total current liabilities            191,041               145,126
    Liabilities subject to compromise    385,665               397,319
    DIP loans                                 --                51,035
    Long-term debt                            --                12,339
    Post-retirement benefits other
     than pensions                        95,515                96,929
    Other                                 63,353                27,237
    Total liabilities                    735,574               729,985
    Commitments and contingencies             --                    --
    14 1/4% Pay-In-Kind  Exchangeable
     Preferred Stock (At September 30,
     1998 and 1997--includes $10,142 of
     undeclared accrued dividends)       124,637               124,637

    Shareholders' deficiency:
    Common Stock, $.01 par value;
     15,000,000 shares authorized;
     7,026,437 shares issued and
     outstanding at September 30, 1998
     and 1997                                 70                    70
    Additional paid-in capital            32,134                32,134
    Additional minimum pension
     liability                            (8,902)               (3,665)
    Foreign currency translation
     adjustment                           (2,991)               (1,930)
    Accumulated deficit                 (629,541)             (573,737)

    Shareholders' Deficiency            (609,230)             (547,128)

    Total Liabilities and
     Shareholders' Deficiency           $250,981              $307,494

 SOURCE  Harvard Industries, Inc.