SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
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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):
April 2, 1997
Commission File Number 0-22906
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ABC RAIL PRODUCTS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 36-3498749
(State or other jurisdiction (IRS Employer
of incorporation) Identification Number)
200 South Michigan Avenue
Suite 1300
Chicago, Illinois 60604
(312) 322-0360
(Address and telephone number of principal executive offices)
Item 5. Other Events.
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On April 2, 1997, the Company, pointing to a combination of factors,
including customer mandated product design changes and several facility and
process upgrades designed to streamline the Company's manufacturing operations
and reduce costs, announced that it expects that results for its fiscal third
quarter ending April 26, 1997 would be significantly below the consensus analyst
estimate of 52 cents per share. See the press release filed herewith as Exhibit
99.1 for additional information.
Item 7. Financial Statements and Exhibits.
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(c) Exhibits
99.1 Text of Press Release dated April 2, 1997 regarding results expected
for the Company's fiscal third quarter.
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SIGNATURES
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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.
ABC RAIL PRODUCTS CORPORATION
By: /s/ D. Chisholm MacDonald
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D. Chisholm MacDonald
Senior Vice President, Chief Financial Officer
and Director (Principal Financial and
Accounting Officer)
Date: April 3, 1997
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EXHIBIT INDEX
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Exhibit Sequential
Number Document Description Page Number
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99.1 Text of Press Release dated April 2, 1997 5
regarding results expected for the Company's
fiscal third quarter.
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EXHIBIT 99.1
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ABC RAIL SAYS FISCAL THIRD QUARTER
WILL BE MUCH IMPROVED FROM LAST YEAR
BUT WILL NOT MEET STREET ESTIMATES
NEW YORK, APRIL 2, 1997 -- ABC Rail Products Corp. (Nasdaq: ABCR), said results
for its fiscal third quarter ending April 26 would be significantly below the
consensus analyst estimate of 52 cents per share due to a number of operating
factors that were temporarily depressing earnings.
D. Chisholm MacDonald, Senior Vice President and Chief Financial Officer, told
analysts attending an investor conference in New York today that, although
orders were stronger than anticipated, a combination of factors were converging
to hamper operations. Among the factors were several facility and process
upgrades designed to streamline ABC Rail's manufacturing operating and reduce
costs.
Donald W. Grinter, Chairman and Chief Executive Officer, said in an earlier
statement that ABC Rail was involved in a "total immersion" effort to strengthen
the company.
"While we are feeling some near-term effects from our re-engineering of ABC
Rail, we will emerge as a much stronger company better positioned for a
leadership position in the marketplace," Grinter said. "Some of the projects are
to fix what's wrong, but most are to move ABC Rail out in front of the
competition and our industry."
MacDonald stated, "Considering what's going on, the quarter won't be all that
bad; but it certainly won't measure up to our earlier expectations or those of
the Street.
He said, "Complete re-design of track turnout products resulting from the recent
large Western railroad mergers has slowed output at our Superior, Wisconsin, and
Newton, Kansas, trackwork plants serving the BNSF and our Pueblo, Colorado, and
Chicago Heights, Illinois, plants serving the UP.
"The absence of 45-50 top-performers (equal to about 35 percent of the workforce
at our Chicago Heights plant) for training on new machining processes has
further cut efficiency at this recently modernized plant.
"We have been slow in closing a money-losing plant acquired as part of our May
1996 acquisition of Deco Industries, a leader in designing rail yard control and
automation systems.
"Progress in bringing the recently re-built Calera wheel manufacturing plant up
to speed also has been slower than anticipated.
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"On top of these individual situations, we still are near the beginning of the
learning curve throughout the company in terms of plant restructuring to install
just-in-time cells, new computer systems and other cost-saving programs," said
MacDonald.
In the same quarter last year, the company had a net loss of $2.5 million, or 30
cents per share, resulting from a fire that closed the Calera, Alabama, plant
for ten weeks during the quarter.
This news release includes "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995, including, without
limitation, statements as to expectations, beliefs and future financial
performance, that are based on current expectations and are subject to a number
of risks and uncertainties. Actual results or outcomes could differ from current
expectations due to a number of factors, including general economic conditions,
competitive factors and pricing pressures, shifts in market demand, the
performance and needs of industries served by the Company's business, actual
future costs of operating expenses such as rail and scrap steel, self-insurance
claims and employee wages and benefits, actual costs of continuing investments
in technologies, as well as the risks, uncertainties and other factors described
from time to time in the Company's SEC filings and reports.
ABC Rail Products is a leader in the engineering, manufacturing, and marketing
of replacement products and original equipment for the freight railroad and rail
transit industries. The company's products include specialty trackwork, such as
rail crossings and switches; mechanical products, such as rail car, locomotive
and idler wheels, mounted wheel sets and metal brake shoes; classification yard
products and automation systems; and signal systems installation and maintenance
services. The company's operating facilities are located at Chicago Heights,
Ill.; Crown Point and Anderson, Ind.; Baltimore; Calera, Ala.; Milwaukee,
Superior and Verona, Wis.; Duluth, Minn.; Pueblo, Colo.; Cincinnati, Ohio;
Newton and Kansas City, Kan.; Corsicana, Texas; Lewiston and Norristown, Pa.;
Riverside, Calif.; and Tacoma, Wash.
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