Harvard Industries, Inc. Reports 1998 Earnings
15 January 1999
Harvard Industries, Inc. Reports 1998 Earnings
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.