EXHIBIT (99)(a)
Clark Equipment Company
100 North Michigan St.
P.O. Box 7008
South Bend, Indiana 46634
NEWS RELEASE
Contact: Joe Fimbianti Release Date: Immediate
219-239-0176
CLARK EQUIPMENT COMPANY ANNOUNCES YEAR-END RESULTS
SOUTH BEND, INDIANA, January 26, 1995-- Clark Equipment Company (NYSE:
CKL) today reported 1994 net income of $161.9 million, or $9.30 per
share. This compares to 1993 net income of $48.0 million, or $2.76
per share. Included in the 1994 results is $99.1 million, or $5.69
per share, from two discontinued businesses -- CAPCO and VME Group
N.V. The gain from CAPCO, which is Clark's former Brazilian
automotive components company, was $34.1 million, or $1.96 per share.
Clark's share of VME's 1994 earnings was $65.0 million, or $3.73 per
share. Separately, Clark announced plans to offer its shares of VME
Group N.V., its 50-percent-owned joint venture, in an initial public
offering during first quarter 1995 (copy attached). Clark reported
VME results as a discontinued operation. The announcements were made
by Leo J. McKernan, Clark chairman, president and chief executive
officer.
Full-year 1993 net income of $48.0 million, or $2.76 per share,
included $12.5 million, or $0.72 per share, from CAPCO and $14.0
million, or $0.80 per share, from VME. Clark sales for 1994
continuing operations were $946.6 million, up 37 percent from $692.0
million in 1993.
In making the announcement, Mr. McKernan said, "Clark's operating
businesses continued to make excellent gains in 1994. Continuing
consolidated operations, which include Melroe Company, Clark-Hurth
Components and Blaw-Knox Construction Equipment Corporation, delivered
profits of $63.3 million, up 193 percent from $21.6 million in 1993,
on a sales increase of 37 percent. All Clark businesses produced
increased earnings, operating margins and operating cash flow."
In fourth quarter 1994, Clark recorded total net income of $40.2
million, or $2.31 per share, compared to $18.4 million, or $1.06 per
share, in 1993. Fourth quarter results from continuing operations
were $19.9 million, or $1.14 per share, in 1994 compared to $4.8
million, or $0.28 per share in 1993. Operating earnings from both
consolidated operations and VME improved substantially. LIFO
adjustments were not material in either 1993 or 1994.
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Discussing the performance of Clark's core businesses, Mr. McKernan
said, "Strong markets throughout North America spurred Melroe 1994
sales to a new record, $604.1 million, up 29 percent compared to 1993.
Fourth quarter North American shipments rose more than 20 percent
compared to fourth quarter 1993." He added that fourth quarter
European shipments also improved compared to somewhat sluggish results
during the same period in 1993. Overall, European full-year 1994
sales were up slightly for skid-steer loaders. Increased shipments
to Italy, France and Spain offset declines in Germany. During 1994,
Bobcat sales of mini-excavators grew rapidly in both North America and
Europe.
Regarding the company's off-highway driveline components business, Mr.
McKernan said, "Continuing strength in the North American construction
machinery market and a steady improvement in Europe increased Clark-Hurth
sales and earnings in the fourth quarter as well as for the full
year. Order rates remained at high levels with fourth quarter orders
more than 60 percent above the same period in 1993. Full-year 1994
orders were more than 50 percent above 1993 levels." He added that
Clark-Hurth's full-year shipments grew 30 percent compared to 1993,
reflecting the growing economic recovery in most major markets as well
as share gains in transaxles, mid-sized transmissions and Hurth axles.
Discussing Clark's May 1994 acquisition of the nation's leading
asphalt paving equipment manufacturer, Mr. McKernan remarked, "Blaw-Knox
showed steady improvement in the fourth quarter, with shipments
up 15 percent from 1993. Full-year shipments grew 20 percent from
1993 levels. Blaw-Knox sales gains came primarily from North American
markets, while European sales remained flat in a stagnant market." He
also said that Blaw-Knox profitability continued to be strong,
reflecting increased product sales, record parts shipments and cost-reduction
programs.
Incoming orders were $269.0 million in fourth quarter 1994, compared
to $260.0 million in third quarter 1994 and $178.0 million in fourth
quarter 1993. Order backlogs at December 31, 1994, were $221.0
million, compared to $125.0 million at year-end 1993. Orders and
backlog in 1993 do not include Blaw-Knox, which was acquired in May
1994.
Looking ahead, Mr. McKernan said, "The outlook for 1995 is excellent.
Demand in our core businesses is unusually strong for the first
quarter. Given current order levels and performance, we anticipate
that first quarter 1995 sales and earnings will offset the normal
seasonal decline and exceed fourth quarter 1994 results. Overall, we
believe that 1995 will be another year of strong growth for Clark's
core businesses."
Clark Equipment Company's core businesses design, manufacture and sell
skid-steer loaders, highway paving and construction equipment, and
axles and transmissions for off-highway equipment.
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CLARK EQUIPMENT COMPANY AND CONSOLIDATED SUBSIDIARIES
STATEMENT OF INCOME AND RETAINED EARNINGS (AUDITED)
For the Period Ended December 31,
(Amounts in Thousands, except per share data) Fourth Quarter Twelve Months
1994 1993* 1994 1993*
Net sales............................................$ 249,701 $ 174,536 $ 946,599 $ 692,022
Operating costs and expenses:
Cost of goods sold................................ 199,426 144,487 747,492 557,138
Selling, general and
administrative expenses........................ 24,445 25,416 107,668 102,699
223,871 169,903 855,160 659,837
Operating income..................................... 25,830 4,633 91,439 32,185
Other income, net.................................... 7,106 4,888 21,171 15,016
Interest expense..................................... (4,809) (5,446) (19,966) (21,426)
Pre-tax income from consolidated operations.......... 28,127 4,075 92,644 25,775
Provision for income taxes........................... 7,908 (743) 29,329 4,196
Income from consolidated operations.................. 20,219 4,818 63,315 21,579
Equity in net loss
of associated company............................. (335) 0 (500) 0
Income from continuing operations.................... 19,884 4,818 62,815 21,579
Discontinued operations:
Income from operations............................ 20,337 13,576 66,236 20,290
Gain on sale...................................... 0 0 32,884 0
Income from discontinued operations.................. 20,337 13,576 99,120 20,290
Income before effect of
change in accounting principle.................... 40,221 18,394 161,935 41,869
Effect of accounting change--income taxes............ - - - 6,150
Net income........................................... 40,221 18,394 161,935 48,019
Add: Income retained
at beginning of period............................ 214,422 74,471 92,708 44,869
Deduct: Excess cost of treasury shares issued over
the cost of certain employee benefits............. 0 157 0 180
Income retained at end of period.....................$ 254,643 $ 92,708 $ 254,643 $ 92,708
Income per share:
From continuing operations........................$ 1.14 $ .28 $ 3.61 $ 1.24
From discontinued operations:
VME operations................................. 1.17 .60 3.73 .45
CAPCO operations............................... - .18 .07 .72
Gain on sale of CAPCO.......................... - - 1.89 -
From effect of accounting change.................. - - - .35
Net income........................................$ 2.31 $ 1.06 $ 9.30 $ 2.76
Average number of shares............................. 17,402 17,425 17,412 17,421
Number of shares outstanding
at end of period.................................. 17,401 17,402 17,401 17,402
<FN>
* Restated to reflect the deconsolidation of the automotive business and relect the equity in net income
of VME Group NV as a discontinued operation.
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CLARK EQUIPMENT COMPANY AND CONSOLIDATED SUBSIDIARIES
CONDENSED BALANCE SHEET (AUDITED)
(Amounts in Thousands) Dec.31 Dec.31
1994 1993
ASSETS
Current Assets:
Cash, equivalents, and short-term investments.......$ 228,604 $ 235,828
Accounts and notes receivable........................ 108,460 77,103
Accounts receivable from associated companies........ 1,085 2,041
Refundable income taxes.............................. 0 3,543
Inventories.......................................... 123,728 104,841
Deferred tax assets--net............................. 24,384 29,202
Other current assets................................. 8,862 9,213
Total current assets.............................. 495,123 461,771
Investments and advances--associated companies.......... 12,555 122,106
Investment in discontinued operations-
VME Group NV....................................... 195,943 0
Deferred tax assets--net ............................... 100,402 97,357
Property, plant and equipment--net...................... 181,139 201,924
Assets held for sale.................................... 0 6,765
Goodwill................................................ 167,272 67,461
Other assets............................................ 41,465 45,890
Total assets.....................................$1,193,899 $1,003,274
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Notes payable.......................................$ 11,944 $ 22,512
Accounts payable and accrued liabilities............. 157,128 150,142
Income taxes payable................................. 1,547 4,139
Accrued postretirement benefits...................... 21,132 19,560
Deferred income taxes................................ 715 800
Current installments on long-term debt............... 12,140 9,612
Total current liabilities......................... 204,606 206,765
Long-term borrowings.................................... 193,294 204,770
Other non-current liabilities........................... 93,994 79,686
Accrued postretirement benefits......................... 241,837 233,239
Deferred income taxes................................... 8,008 10,661
Total liabilities................................. 741,739 735,121
Stockholders' Equity:
Capital stock........................................ 324,067 323,540
Retained earnings.................................... 254,643 92,708
Cumulative translation and other adjustments......... (47,211) (67,083)
Common stock held in treasury at cost................ (53,470) (49,728)
Leveraged Employee Stock Ownership
Plan shares....................................... (25,869) (31,284)
Total stockholders' equity........................ 452,160 268,153
Total liabilities and stockholders' equity.......$1,193,899 $1,003,274
Debt/Capitalization Ratio............................... 32.5% 46.9%
Current year capital expenditures......................$ 39,119 $ 29,877
Current year depreciation charges......................$ 33,800 $ 36,379
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