SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 8-K Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): January 26, 1994 CLARK EQUIPMENT COMPANY (Exact name of registrant as specified in its charter) Delaware 1-5646 38-0425350 (State or other juris- (Commission (IRS Employer diction of incorporation) File Number) Identification Number) 100 North Michigan Street P. O. Box 7008 South Bend, Indiana (Address of principal 46634 executive offices) (Zip Code) Registrant's telephone number (219) 239-0100 including area code ITEM 5. OTHER EVENTS On January 26, 1994, Registrant issued a press release regarding its fourth quarter and full year 1993 results. A copy of this press release is attached as Exhibit (99) and incorporated in this Item by reference. The press release contains certain forward-looking statements about Registrant as defined in paragraph (c) of Rule 3b-6, "Liability for Certain Statements by Issuers" issued pursuant to the Securities Exchange Act of 1934. The forward-looking statements of Registrant published in the press release are reaffirmed hereby. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS Exhibit (99) - Registrant's press release regarding its fourth quarter and full year 1993 results issued January 26, 1994. SIGNATURES 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 hereunto duly authorized. CLARK EQUIPMENT COMPANY /s/ John J. Moran, Jr. John J. Moran, Jr. Assistant Secretary Date: January 26, 1994 EXHIBIT (99) NEWS RELEASE Contact: Joe Fimbianti Release Date: IMMEDIATE 219/239-0176 CLARK REPORTS PROFITABLE 1993; SIGNIFICANTLY IMPROVED RESULTS FROM OPERATIONS SOUTH BEND, INDIANA, January 26, 1994 -- Clark Equipment Company (NYSE: CKL) today announced net income of $48 million, or $2.76 per share, for 1993. Included in 1993 results is a gain of $6.2 million, or $0.35 per share, related to a change in accounting for income taxes from the Company's investment in VME Group N.V. These results compare to 1992 net income of $66 million, or $3.81 per share, which included a one-time benefit of $92 million for an accounting change for deferred taxes and a $1.5 million net benefit from the sale and operating losses of Clark's forklift truck business. Sales for 1993 were $874.9 million, up 9 percent from $802.7 million in 1992. The announcement was made by Leo J. McKernan, Clark chairman, president, and chief executive officer. Commenting on the year's performance, Mr. McKernan said, "Our operating businesses made solid gains in 1993. Clark consolidated operations, which include Melroe, Clark-Hurth Components, and Clark Automotive Products, delivered profits of $34 million, up 68 percent from $20.2 million in 1992, on a 9 percent sales increase. Similarly, the performance of VME Group N.V., Clark's 50-percent-owned joint venture, improved $55.9 million, with Clark's share of net operating income rising to $7.8 million, despite a 9 percent sales decline." In 1992, Clark's share of VME's losses was $48.1 million. In fourth quarter 1993, Clark recorded net income of $18.4 million, or $1.06 per share, on sales of $220.3 million, compared to a loss of $2.8 million, or $0.16 per share, on sales of $191.3 million in the prior- year period. There was substantial improvement in the operating earnings of Clark consolidated businesses and VME. There was no LIFO income in 1993, compared to $1.8 million in fourth quarter 1992. Two special charges combined to lower Clark 1993 fourth quarter net income by $5.2 million. These included (1) an expense related to stock appreciation rights due to an increase in Clark's share price and (2) a charge to field retrofit one skid-steer loader model with an additional hydraulic lock-out system to prevent potential misuse. The negative impact of these special charges was reduced by decreased provisions for taxes in the fourth quarter related to Clark's ability to utilize capital loss carryforwards in the U.S. and Brazil. Incoming orders in the fourth quarter 1993 were $207 million, compared to $224 million in third quarter 1993 and $147 million in fourth quarter 1992. Order backlogs at December 31, 1993, were $146 million, compared to $123 million at year-end 1992. Commenting on the results of Clark's consolidated businesses, Mr. McKernan said, "Clark-Hurth's fourth quarter sales were flat compared to the third quarter. The European recession was largely responsible for reducing overall 1993 sales by more than 10 percent. However, during the fourth quarter, incoming order and backlog trends improved, especially in the European axle and transmission businesses. Even though the market outlook is relatively flat again in 1994, Clark-Hurth has reduced its breakeven level significantly and should be profitable at 1993 sales volumes." Regarding Brazil-based Clark Automotive Products, Mr. McKernan said, "The business remained profitable, even with the normal seasonal fourth quarter sales decline. Sales, orders, and earnings for fourth quarter 1993 increased compared to the prior-year period." The automotive, light truck, and industrial sectors in Brazil also continued to improve compared to 1992. The agricultural tractor and heavy truck sectors also grew, but remained well below normal sales levels. Improved sales of replacement parts also benefited margins. "At Melroe, sales and orders increased compared to an unusually strong third quarter," said Mr. McKernan. "This growth is coming from the strong North American market, where industry fourth quarter retail sales were up by more than 20 percent over 1992. In 1993, Melroe market share also improved over 1992." He added that the strength in North American markets was partially offset by the continued deterioration in Europe, where skid-steer sales declined. Bobcat mini- excavator 1993 sales increased, as the product line made continued headway in North America and Europe. Discussing the performance of VME Group, Mr. McKernan noted, "Clark's share of VME's net income increased to $10.3 million in the fourth quarter from $1.8 million in the third quarter and a reported loss of $7.4 million in fourth quarter 1992. Sales improved in Scandinavia, North America, and Brazil over the third quarter, offsetting continuing weakness in most European markets. Fourth quarter 1993 sales were virtually unchanged from the prior-year period, reflecting substantial margin gains from cost reduction efforts in 1992 and 1993 and the devaluation of the Swedish Krona." Mr. McKernan also noted that VME strengthened its worldwide position in mining equipment markets by forming a joint venture with Hitachi Construction Machinery in the rigid hauler business. Hitachi, which holds a substantial minority ownership in the venture, will distribute rigid haulers in Japan and select markets in Asia and Oceania. Hitachi will also distribute VME's Volvo BM line of articulated haulers and large wheel loaders in Japan. Looking ahead, Mr. McKernan said, "We're cautiously optimistic about 1994. While we expect earnings for first quarter 1994 to be below fourth quarter 1993 for seasonal reasons, first quarter results should improve compared to the prior-year period. Clark operations will make performance gains in 1994, even if markets remain flat during the remainder of the year. Results will improve as our businesses continue to benefit from previous cost reduction programs. When worldwide markets strengthen, particularly in Europe, we expect further gains in financial performance." Clark Equipment Company's business is the design, manufacture, and sale of skid-steer loaders, construction machinery, transmissions for on- highway vehicles, and axles and transmissions for off-highway equipment. # # # # # CLARK EQUIPMENT COMPANY AND CONSOLIDATED SUBSIDIARIES STATEMENT OF INCOME AND RETAINED EARNINGS (AUDITED) For the Period Ended December 31, 1993 (Amounts in Thousands, except per share data) Fourth Quarter Twelve Months 1993 1992 1993 1992 Net sales....................................$ 220,283 $ 191,270 $ 874,917 $ 802,716 Operating costs and expenses: Cost of goods sold......................... 179,294 156,863 700,370 663,565 Selling, general and administrative expenses................. 30,276 26,492 118,504 99,821 209,570 183,355 818,874 763,386 Operating income.............................. 10,713 7,915 56,043 39,330 Other income, net............................. 657 4,068 11,939 16,885 Interest expense.............................. (2,721) (5,661) (21,506) (25,631) Pre-tax income from consolidated operations... 8,649 6,322 46,476 30,584 Provision for income taxes.................... 642 1,736 12,447 10,361 Income from consolidated operations........... 8,007 4,586 34,029 20,223 Equity in net income (loss) of associated company...................... 10,387 (7,363) 7,840 (48,083) Income (loss) from continuing operations...... 18,394 (2,777) 41,869 (27,860) Discontinued operations: Income (loss) from operations.............. 0 0 0 (6,701) Gain on sale............................... 0 0 0 8,519 Income from discontinued operations........... 0 0 0 1,818 Income (loss) before effect of change in accounting principle............. 18,394 (2,777) 41,869 (26,042) Effect of accounting change--income taxes..... - - 6,150 92,000 Net income (loss)............................. 18,394 (2,777) 48,019 65,958 Add: Income retained (accumulated deficit) at beginning of period..................... 74,471 47,836 44,869 (20,899) Deduct: Excess cost of treasury shares issued over the cost of certain employee benefits. 157 190 180 190 Income retained at end of period.............$ 92,708 $ 44,869 $ 92,708 $ 44,869 Income (loss) per share: From continuing operations................$ 1.06 $ (.16)$ 2.41 $ (1.60) From discontinued operations............... - - - .10 From effect of accounting change........... - - .35 5.31 Net income (loss).........................$ 1.06 $ (.16)$ 2.76 $ 3.81 Average number of shares...................... 17,425 17,349 17,421 17,334 Number of shares outstanding at end of period........................... 17,402 17,351 17,402 17,351 Sales by classes of products (In millions): Off-highway...............................$ 174.2 $ 157.4 $ 690.6 $ 657.5 On-highway................................. 46.1 33.9 184.3 145.2 Total net sales..............................$ 220.3 $ 191.3 $ 874.9 $ 802.7 <FN> CLARK EQUIPMENT COMPANY AND CONSOLIDATED SUBSIDIARIES CONDENSED BALANCE SHEET (AUDITED) (Amounts in Thousands) Dec.31 Dec.31 ASSETS 1993 1992 Current Assets: Cash, equivalents, and short-term investments.......$ 235,828 $ 191,924 Accounts and notes receivable........................ 77,103 66,151 Accounts receivable from associated companies........ 2,041 1,046 Refundable income taxes.............................. 3,543 0 Inventories.......................................... 108,620 100,817 Investment in discontinued operations- remaining insurance operations ................... 0 9,648 Deferred tax assets--net............................. 29,202 21,341 Other current assets................................. 5,434 5,198 Total current assets.............................. 461,771 396,125 Investments and advances--associated companies.......... 122,106 121,314 Deferred tax assets--net ............................... 107,901 101,831 Property, plant and equipment--net...................... 201,924 216,196 Assets held for sale.................................... 6,765 9,676 Goodwill................................................ 67,461 81,653 Other assets............................................ 40,890 31,896 Total assets.....................................$1,008,818 $ 958,691 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Notes payable.......................................$ 22,512 $ 23,821 Accounts payable and accrued liabilities............. 150,142 118,195 Income taxes payable................................. 4,139 3,320 Accrued postretirement benefits...................... 19,560 19,000 Deferred income taxes................................ 800 963 Current installments on long-term debt............... 9,612 21,570 Total current liabilities......................... 206,765 186,869 Long-term borrowings.................................... 204,770 186,629 Other non-current liabilities........................... 74,686 90,508 Accrued postretirement benefits......................... 233,239 229,903 Deferred income taxes................................... 21,205 12,195 Total liabilities................................. 740,665 706,104 Stockholders' Equity: Capital stock........................................ 323,540 323,164 Retained earnings.................................... 92,708 44,869 Cumulative translation and other adjustments......... (67,083) (28,843) Common stock held in treasury at cost................ (49,728) (50,951) Leveraged Employee Stock Ownership Plan shares....................................... (31,284) (35,652) Total stockholders' equity........................ 268,153 252,587 Total liabilities and stockholders' equity.......$1,008,818 $ 958,691 Debt/Capitalization Ratio............................... 46.9% 47.9% Year-to-date capital expenditures......................$ 29,877 $ 37,284 Year-to-date depreciation charges......................$ 36,379 $ 44,120 <FN>