EXHIBIT 99
CASE News Release
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CASE CORPORATION 700 STATE STREET RACINE, WI 53404
U.S.A. HTTP://WWW.CASECORP.COM
For more information, contact:
William B. Masterson (414) 636-5793
CASE CORPORATION PLANS FOR DECLINE
IN AGRICULTURAL EQUIPMENT MARKET
Company Lowers Production Schedules and Reduces Costs;
Expects Lower Earnings in 1998
Racine, Wisconsin (September 9, 1998) -- Case Corporation (NYSE:CSE) said
today that it is taking a number of actions in response to anticipated lower
demand for agricultural equipment. This lower demand is due to a combination of
lower projected farm income in many of the company's major markets and
deteriorating economic conditions in several emerging markets, in particular
Eastern Europe and the Commonwealth of Independent States. As a result, the
company is planning to lower production schedules and aggressively reduce costs
to maximize earnings in expectation of a weaker retail market for agricultural
equipment in 1999.
"Recent events in emerging markets and our continued assessment of the
global harvest outlook, commodity prices and economic conditions, have increased
the likelihood that demand for agricultural equipment will slow from the strong
levels of the past several years," said Jean-Pierre Rosso, Case chairman and
chief executive officer. "We anticipate that the market will decline next year,
by 15 percent in North America and by 5 percent in Western Europe. However, we
remain very positive about the industry's underlying long-term fundamentals."
Based upon this outlook, Case is lowering its planned worldwide production
of agricultural equipment by 9 percent, in addition to the 3 percent reduction
announced in the second quarter of this year. The reductions will be made
throughout the company's agricultural equipment line, with a higher percentage
coming in large equipment to bring production in line with expected retail
demand.
Case also will reduce its worldwide workforce by approximately 1,000 people
by year-end, the result of continued process re-engineering benefits, further
outsourcing, and lower production. Accordingly, Case said that it will take a
restructuring charge of $70 to $80 million in the second half of 1998 for the
planned headcount reduction.
In addition, Case said that, due to the recent devaluation of the Russian
ruble and its effect on parts of the former Soviet Union, it was not forecasting
that it would complete planned orders for large sales of agricultural equipment
to Russia and other countries in the region during 1998. As a result of not
completing these sales and of lowering production for the year, Case expects its
earnings, before restructuring charges, to be moderately below those of the
third quarter of 1997, and that full-year earnings would be approximately 25
percent below comparable 1997 results.
"The bold steps that we are taking enable us to proactively manage our
business in light of an expected agricultural equipment market downturn," Rosso
said. "Case is now positioned to deliver earnings in 1999 at comparable levels
to 1998, despite a significantly lower retail environment for agricultural
equipment.
"Meanwhile, our construction equipment business continues to be strong, up
18 percent in the first half of this year, and we are steadily expanding the
scope of our financial services business to build a greater source of non-
cyclical earnings growth. By continually reducing costs throughout the company
and by capitalizing on select growth opportunities within our worldwide
business, we are focused on maximizing earnings under these business
conditions."
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Case Corporation is a leading worldwide designer, manufacturer and
distributor of agricultural and construction equipment, and offers a broad array
of financial products and services. Headquartered in Racine, Wisconsin, Case had
1997 revenues of $6 billion and sells its products in 150 countries through a
network of approximately 4,900 independent dealers.
The information included in this news release contains forward-looking
statements and involves risks and uncertainties that could cause actual results
to differ materially from those in the forward-looking statements. The company's
outlook is predominantly based on its interpretation of what it considers key
economic assumptions. Crop production and commodity prices are strongly affected
by weather and can fluctuate significantly. Housing starts and other
construction activity are sensitive to interest rates and government spending.
Some of the other significant factors for the company include general economic
and capital market conditions, the cyclical nature of its business, foreign
currency movements, the company's and its customers' access to credit, political
uncertainty and civil unrest in various areas of the world, pricing, product
initiatives and other actions taken by competitors, disruptions in production
capacity, excess inventory levels, the effect of changes in laws and regulations
(including government subsidies and international trade regulations), changes in
environmental laws, and employee and labor relations. Further information
concerning factors that could significantly impact expected results is included
in the following sections of the company's Form 10-K Annual Report for 1997, as
filed with the Securities and Exchange Commission: Business--Employees,
Business--Environmental Matters, Business--Significant International Operations,
Business--Seasonality and Production Schedules, Business--Competition, Legal
Proceedings, and Management's Discussion and Analysis of Financial Condition and
Results of Operations.