UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
Quarterly Report pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the Quarterly Period Ended September 30, 2001
Commission File No. 333-27665
CONTINENTAL GLOBAL GROUP, INC.
------------------------------
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 31-1506889
-------- ----------
(State or other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
CO-REGISTRANTS AND SUBSIDIARY GUARANTORS
Continental Conveyor & Equipment Company Delaware 34-1603197
Goodman Conveyor Company Delaware 34-1603196
Continental Global Continental Conveyor Goodman Conveyor
Group, Inc. & Equipment Company Company
438 Industrial Drive 438 Industrial Drive Route 178 South
Winfield, Alabama 35594 Winfield, Alabama 35594 Belton, South Carolina 29627
(205) 487-6492 (205) 487-6492 (864) 338-7793
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding twelve months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes (x) No ( )
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practical date.
As of October 31, 2001, there were 100 shares of the registrant's common stock
outstanding.
INDEX
CONTINENTAL GLOBAL GROUP, INC.
Page
Part I Financial Information Number
Item 1 Financial Statements (Unaudited) 1
Condensed Consolidated Balance Sheets
September 30, 2001 and December 31, 2000 2
Condensed Consolidated Statements of Operations
Three Months and Nine Months ended September 30, 2001 and 2000 3
Condensed Consolidated Statements of Cash Flows
Nine Months ended September 30, 2001 and 2000 4
Notes to Condensed Consolidated Financial Statements 5-14
Item 2 Management's Discussion and Analysis of Financial Condition and Results of
Operations 15-19
Item 3 Quantitative and Qualitative Disclosures about Market Risk 20
Part II Other Information
Item 6 Exhibits and Reports on Form 8-K 21
Signatures 22
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
1
Continental Global Group, Inc.
Condensed Consolidated Balance Sheets
September 30 December 31
2001 2000
-------------------- --------------------
(Unaudited) (Audited)
ASSETS:
Current assets:
Cash and cash equivalents $ 16,472,928 $ 16,941,949
Accounts receivable, net 35,299,270 28,468,042
Inventories 27,729,418 28,076,134
Other current assets 804,993 632,012
-------------------- --------------------
Total current assets 80,306,609 74,118,137
Property, plant and equipment 25,885,970 26,162,365
Less accumulated depreciation 12,458,035 11,575,056
-------------------- --------------------
13,427,935 14,587,309
Goodwill, net 16,968,204 17,922,783
Deferred financing costs 2,859,462 3,249,389
Deferred income taxes 681,239 -
Other assets 176,593 258,437
-------------------- --------------------
$ 114,420,042 $ 110,136,055
==================== ====================
LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT):
Current liabilities:
Notes payable $ 18,378,080 $ 15,630,900
Trade accounts payable 20,343,251 17,463,905
Accrued compensation and employee benefits 4,926,247 4,648,933
Accrued interest on senior notes 6,600,000 3,300,000
Deferred income taxes 1,408,983 1,594,089
Other accrued liabilities 5,378,404 3,398,710
Current maturities of long-term obligations 1,329,155 1,931,676
-------------------- --------------------
Total current liabilities 58,364,120 47,968,213
Deferred income taxes - 440,894
Senior notes 120,000,000 120,000,000
Other long-term obligations, less current maturities 2,432,072 2,790,135
Stockholder's equity (deficit):
Common stock, $0.01 par value, authorized 5,000,000 shares,
issued and outstanding 100 shares 1 1
Paid-in capital 1,993,687 1,993,687
Accumulated deficit (62,409,773) (58,195,967)
Accumulated other comprehensive loss (5,960,065) (4,860,908)
-------------------- --------------------
(66,376,150) (61,063,187)
-------------------- --------------------
$ 114,420,042 $ 110,136,055
==================== ====================
See notes to condensed consolidated financial statements.
2
Continental Global Group, Inc.
Condensed Consolidated Statements of Operations
Three months ended Nine months ended
September 30 September 30
2001 2000 2001 2000
----------------------------------- ----------------------------------------
(Unaudited) (Unaudited)
Net sales $ 52,499,085 $ 41,100,246 $ 143,065,846 $ 124,229,785
Cost of products sold 45,354,154 34,159,862 119,966,043 104,351,136
----------------------------------- ----------------------------------------
Gross profit 7,144,931 6,940,384 23,099,803 19,878,649
Operating expenses:
Selling and engineering 3,133,689 3,113,329 9,083,959 9,668,617
General and administrative 2,018,907 2,069,216 6,255,842 6,844,525
Management fee 127,519 119,148 472,110 252,080
Amortization expense 146,092 151,824 439,867 461,705
Restructuring charges - 1,129 - 211,522
----------------------------------- ----------------------------------------
Total operating expenses 5,426,207 5,454,646 16,251,778 17,438,449
----------------------------------- ----------------------------------------
Operating income 1,718,724 1,485,738 6,848,025 2,440,200
Other expenses:
Interest expense 3,962,243 3,965,712 11,901,801 11,831,211
Interest income (142,321) (264,493) (546,316) (762,493)
Miscellaneous, net 161,179 31,824 991,524 (17,080)
----------------------------------- ----------------------------------------
Total other expenses 3,981,101 3,733,043 12,347,009 11,051,638
----------------------------------- ----------------------------------------
Loss before income taxes (2,262,377) (2,247,305) (5,498,984) (8,611,438)
Income tax benefit (353,938) - (1,285,178) -
----------------------------------- ----------------------------------------
Net loss $ (1,908,439) $ (2,247,305) $ (4,213,806) $ (8,611,438)
=================================== ========================================
See notes to condensed consolidated financial statements.
3
Continental Global Group, Inc.
Condensed Consolidated Statements of Cash Flows
Nine months ended September 30
2001 2000
---------------------- ---------------------
(Unaudited)
Operating activities:
Net loss $ (4,213,806) $ (8,611,438)
Adjustments to reconcile net loss to net cash used in
operating activities:
Provision for depreciation and amortization 2,122,068 2,334,490
Amortization of deferred financing costs 389,927 389,926
Deferred income taxes (1,285,178) -
Loss (gain) on disposal of assets (11,348) 21,113
Changes in operating assets and liabilities 2,636,950 1,868,910
---------------------- ---------------------
Net cash used in operating activities (361,387) (3,996,999)
---------------------- ---------------------
Investing activities:
Purchases of property, plant, and equipment (799,936) (1,457,485)
Proceeds from sale of property, plant, and equipment 95,724 118,271
Acquisition of business (1,606,806) -
---------------------- ---------------------
Net cash used in investing activities (2,311,018) (1,339,214)
---------------------- ---------------------
Financing activities:
Net increase in borrowings on notes payable 3,020,047 5,553,382
Proceeds from long-term obligations - 775,887
Principal payments on long-term obligations (796,465) (1,323,750)
---------------------- ---------------------
Net cash provided by financing activities 2,223,582 5,005,519
Effect of exchange rate changes on cash (20,198) 8,578
---------------------- ---------------------
Decrease in cash and cash equivalents (469,021) (322,116)
Cash and cash equivalents at beginning of period 16,941,949 18,299,610
---------------------- ---------------------
Cash and cash equivalents at end of period $ 16,472,928 $ 17,977,494
====================== =====================
See notes to condensed consolidated financial statements.
4
Continental Global Group, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
September 30, 2001
A. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the nine-month period ended September 30,
2001 are not necessarily indicative of the results that may be expected for the
year ending December 31, 2001. For further information, refer to the
consolidated financial statements and footnotes of Continental Global Group,
Inc. and subsidiaries for the year ended December 31, 2000, included in the Form
10-K filed by the Company on April 2, 2001.
B. ACQUISITION
On July 19, 2001, the Company purchased certain assets in Alabama from Lippert
Tire & Axle, Inc. for a purchase price of approximately $1,607,000. The purchase
price allocation has been based upon preliminary estimates which may be revised
at a later date. Lippert manufactures new axles and refurbishes used axles and
tires for the manufactured housing industry. The existing operations of the
Company's manufactured housing products segment in Winfield, Alabama have been
merged with the acquired operations. Revenues from the acquired operations were
approximately $13,000,000 for the fiscal year ended December 31, 2000. The
transaction was accounted for as a purchase and accordingly, the results of
operations since the date of acquisition have been included in the condensed
consolidated financial statements.
C. USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
D. INVENTORIES
Inventories, which consist of raw materials, manufactured and purchased parts,
and work in process, are stated at the lower of cost or market. Since inventory
records are maintained on a job order basis, it is not practical to segregate
inventories into their major classes. The cost for approximately 66% and 62% of
inventories at September 30, 2001 and December 31, 2000, respectively, is
determined using the last-in, first-out (LIFO) method with the remainder
determined using the first-in, first-out (FIFO) method. Had the FIFO method of
inventory (which approximates replacement cost) been used to cost all
inventories, inventories would have increased by approximately $1,682,000 and
$1,690,000 at September 30, 2001 and December 31, 2000, respectively. As a
result of a physical inventory conducted by the Company's Australian subsidiary
in July 2001, the Company incurred a charge in the third quarter to cost of
products sold of approximately $757,000.
5
Continental Global Group, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
September 30, 2001
E. RESTRUCTURING CHARGES
In 1998, the Company executed a plan to close certain Australian manufacturing
facilities and merge the operations with other existing facilities; in 1999 and
2000, the Company made further reductions in office staff and facilities. In the
United Kingdom, following the acquisition of Huwood International (Huwood) in
August 1998, the Company consolidated its existing operations and facilities
into the Huwood operations. In connection with these plans, the Company incurred
restructuring charges of approximately $212,000 in the first nine months of 2000
related to its Australian and United Kingdom subsidiaries. Total restructuring
charges incurred to date total approximately $2,715,000. These restructuring
charges consist primarily of severance of approximately 220 employees and
relocation costs. As of September 30, 2001, the Company's Australian and United
Kingdom subsidiaries have paid approximately $2,709,000 of the charges incurred
to date.
F. COMPREHENSIVE LOSS
The components of comprehensive loss for the three months and nine months ended
September 30, 2001 and 2000 are as follows:
Three months ended Nine months ended
September 30 September 30
2001 2000 2001 2000
---------------------------------- -----------------------------------
Net loss $ (1,908,439) $ (2,247,305) $ (4,213,806) $ (8,611,438)
Other comprehensive loss:
Foreign currency translation
adjustment (96,699) (1,048,208) (1,099,157) (2,360,922)
---------------------------------- -----------------------------------
Comprehensive loss $ (2,005,138) $ (3,295,513) $ (5,312,963) $ (10,972,360)
================================== ===================================
G. INCOME TAXES
Effective October 6, 2000, the Company and its domestic subsidiaries elected C
Corporation status for United States income tax purposes. Since that date,
income taxes have been provided using the liability method in accordance with
FASB Statement No. 109, "Accounting for Income Taxes". Prior to October 6, 2000,
the Company and its domestic subsidiaries had elected Subchapter S Corporation
Status for United States income tax purposes. Accordingly, the Company's United
States operations were not subject to income taxes as separate entities. The
Company's United States income, through October 6, 2000, was included in the
income tax returns of the sole stockholder.
For tax reporting purposes, the Company will be included in the consolidated
federal tax return of N.E.S. Investment Co. However, for financial reporting
purposes, the Company's tax provision has been calculated on a stand-alone
basis.
The Company has subsidiaries located in Australia, the United Kingdom, and South
Africa, which are subject to income taxes in their respective countries.
6
Continental Global Group, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
September 30, 2001
H. SEGMENT INFORMATION
While the Company primarily manages its operations on a geographical basis, the
Company operates in two principal business segments: conveyor equipment and
manufactured housing products. The conveyor equipment business markets its
products in four main business areas. The mining equipment business area
includes the design, manufacture and testing (and, outside the United States,
installation and maintenance) of complete belt conveyor systems and components
for mining application primarily in the coal industry. The conveyor components
business area manufactures and sells components for conveyor systems primarily
for resale through distributor networks. The engineered systems business area
uses specialized project management and engineering skills to combine mining
equipment products, purchased equipment, steel fabrication and other outside
services for sale as complete conveyor equipment systems that meet specific
customer requirements. The bulk conveyor equipment business area designs and
manufactures a complete range of conveyor equipment sold to transport bulk
materials, such as cement, lime, food products and industrial waste.
The Company's manufactured housing products business manufactures and/or
refurbishes axle components sold directly to the manufactured housing industry.
As part of this segment the Company also sells mounted tires and rims to the
manufactured housing industry. Included in the other category is primarily the
manufacture and sale of air filtration equipment for use in enclosed
environments, principally in the textile industry. The manufacturing
requirements for these products are generally compatible with conveyor equipment
production and thus maximize utilization of the Company's manufacturing
facilities for its primary products.
Three months ended Nine months ended
September 30 September 30
2001 2000 2001 2000
-------------------------------------------------------------------
(in thousands) (in thousands)
Net sales:
Conveyor equipment $ 46,747 $ 36,695 $ 130,990 $ 107,016
Manufactured housing products 5,534 3,770 11,113 15,380
Other 218 635 963 1,834
-------------------------------------------------------------------
Total net sales $ 52,499 $ 41,100 $ 143,066 $ 124,230
===================================================================
Segment operating income (loss):
Conveyor equipment $ 2,125 $ 2,131 $ 8,414 $ 4,250
Manufactured housing products 111 (163) 111 (135)
Other (95) 72 (83) 158
-------------------------------------------------------------------
Total segment operating income 2,141 2,040 8,442 4,273
Management fee 128 119 472 252
Amortization expense 146 152 440 462
Restructuring charges - 1 - 212
Corporate expense 148 282 682 907
-------------------------------------------------------------------
Total operating income 1,719 1,486 6,848 2,440
Interest expense 3,962 3,966 11,902 11,831
Interest income (142) (265) (546) (763)
Miscellaneous, net 161 32 991 (17)
-------------------------------------------------------------------
Loss before income taxes $ (2,262) $ (2,247) $ (5,499) $ (8,611)
===================================================================
7
Continental Global Group, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
September 30, 2001
I. GUARANTOR AND NON-GUARANTOR SUBSIDIARIES
The Company's domestic subsidiaries, Continental Conveyor & Equipment Company
(CCE) and Goodman Conveyor Company (GCC), and certain of its Australian
subsidiaries, all of which are wholly owned, are the guarantors of the $120
million Senior Notes. The guarantees are full, unconditional, and joint and
several. Separate financial statements of these guarantor subsidiaries are not
presented as management has determined that they would not be material to
investors. The Company's United Kingdom and South African subsidiaries are not
guarantors of the Senior Notes.
Summarized consolidating balance sheets as of September 30, 2001 and December
31, 2000 for the Company, the guarantor subsidiaries, and the non-guarantor
subsidiaries are as follows (in thousands):
Combined Combined
Guarantor Non-Guarantor
September 30, 2001: The Company Subsidiaries Subsidiaries Eliminations Total
-------------------------------------------------------------------------------
Current assets:
Cash and cash equivalents $ 15,430 $ 922 $ 121 $ - $ 16,473
Accounts receivable, net - 26,910 8,409 (20) 35,299
Inventories - 24,660 3,070 - 27,730
Other current assets 9 1,141 188 (533) 805
-------------------------------------------------------------------------------
Total current assets 15,439 53,633 11,788 (553) 80,307
Property, plant, and
equipment, net - 9,651 3,777 - 13,428
Goodwill, net - 16,359 609 - 16,968
Investment in subsidiaries 60,009 16,800 - (76,809) -
Deferred financing costs 2,859 - - - 2,859
Deferred income taxes 5,809 - 245 (5,373) 681
Other assets 45 2,197 61 (2,126) 177
-------------------------------------------------------------------------------
Total assets $ 84,161 $ 98,640 $ 16,480 $ (84,861) $ 114,420
===============================================================================
Current liabilities:
Notes payable $ - $ 15,867 $ 3,428 $ (917) $ 18,378
Trade accounts payable 287 14,721 5,393 (58) 20,343
Accrued compensation and
employee benefits - 4,273 653 - 4,926
Accrued interest 6,600 - - - 6,600
Deferred income taxes - 1,409 - - 1,409
Other accrued liabilities 521 3,337 2,085 (564) 5,379
Current maturities of
long-term obligations - 1,313 16 - 1,329
-------------------------------------------------------------------------------
Total current liabilities 7,408 40,920 11,575 (1,539) 58,364
Deferred income taxes - 5,373 - (5,373) -
Senior Notes 120,000 - - - 120,000
Other long-term obligations - 2,402 1,136 (1,106) 2,432
Stockholder's equity
(deficit) (43,247) 49,945 3,769 (76,843) (66,376)
-------------------------------------------------------------------------------
Total liabilities and
stockholder's equity
(deficit) $ 84,161 $ 98,640 $ 16,480 $ (84,861) $ 114,420
===============================================================================
8
Continental Global Group, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
September 30, 2001
I. GUARANTOR AND NON-GUARANTOR SUBSIDIARIES (CONTINUED)
Combined Combined
Guarantor Non-Guarantor
December 31, 2000: The Company Subsidiaries Subsidiaries Eliminations Total
-------------------------------------------------------------------------------
Current assets:
Cash and cash equivalents $ 16,257 $ 565 $ 120 $ - $ 16,942
Accounts receivable, net - 23,981 4,534 (47) 28,468
Inventories - 23,971 4,105 - 28,076
Other current assets 15 1,509 77 (969) 632
-------------------------------------------------------------------------------
Total current assets 16,272 50,026 8,836 (1,016) 74,118
Property, plant, and
equipment, net - 10,218 4,369 - 14,587
Goodwill, net - 17,193 730 - 17,923
Investment in subsidiaries 60,009 17,399 - (77,408) -
Deferred financing costs 3,249 - - - 3,249
Other assets 1,424 1,951 358 (3,474) 259
-------------------------------------------------------------------------------
Total assets $ 80,954 $ 96,787 $ 14,293 $ (81,898) $ 110,136
===============================================================================
Current liabilities:
Notes payable $ - $ 13,831 $ 3,270 $ (1,470) $ 15,631
Trade accounts payable 385 11,777 5,646 (345) 17,463
Accrued compensation and
employee benefits - 4,086 563 - 4,649
Accrued interest 3,300 - - - 3,300
Deferred income taxes - 1,594 - - 1,594
Other accrued liabilities 171 2,534 1,687 (993) 3,399
Current maturities of
long-term obligations - 1,883 49 - 1,932
-------------------------------------------------------------------------------
Total current liabilities 3,856 35,705 11,215 (2,808) 47,968
Deferred income taxes - 2,052 - (1,611) 441
Senior Notes 120,000 - - - 120,000
Other long-term obligations - 2,747 43 - 2,790
Stockholder's equity
(deficit) (42,902) 56,283 3,035 (77,479) (61,063)
-------------------------------------------------------------------------------
Total liabilities and
stockholder's equity
(deficit) $ 80,954 $ 96,787 $ 14,293 $ (81,898) $ 110,136
===============================================================================
9
Continental Global Group, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
September 30, 2001
I. GUARANTOR AND NON-GUARANTOR SUBSIDIARIES (CONTINUED)
Summarized consolidating statements of operations for the three months and nine
months ended September 30, 2001 and 2000, respectively, for the Company, the
guarantor subsidiaries, and the non-guarantor subsidiaries are as follows (in
thousands):
Combined Combined
Guarantor Non-Guarantor
The Company Subsidiaries Subsidiaries Eliminations Total
------------- ------------- --------------- ------------- -------------
Three months ended September 30, 2001:
Net sales $ - $ 44,615 $ 7,902 $ (18) $ 52,499
Cost of products sold - 38,353 7,019 (18) 45,354
------------- ------------- --------------- ------------- -------------
Gross profit - 6,262 883 - 7,145
Total operating expenses 160 4,430 836 - 5,426
------------- ------------- --------------- ------------- -------------
Operating income (loss) (160) 1,832 47 - 1,719
Interest expense 3,442 460 60 - 3,962
Interest income (142) - - - (142)
Miscellaneous, net (2) 179 (16) - 161
------------- ------------- --------------- ------------- -------------
Income (loss) before income taxes (3,458) 1,193 3 - (2,262)
Income tax expense (benefit) (1,383) 1,029 - - (354)
------------- ------------- --------------- ------------- -------------
Net income (loss) $ (2,075) $ 164 $ 3 $ - $ (1,908)
============= ============= =============== ============= =============
Combined Combined
Guarantor Non-Guarantor
The Company Subsidiaries Subsidiaries Eliminations Total
------------- ------------- --------------- ------------- -------------
Three months ended September 30, 2000:
Net sales $ - $ 35,613 $ 5,487 $ - $ 41,100
Cost of products sold - 29,138 5,022 - 34,160
------------- ------------- --------------- ------------- -------------
Gross profit - 6,475 465 - 6,940
Total operating expenses 294 4,356 804 - 5,454
------------- ------------- --------------- ------------- -------------
Operating income (loss) (294) 2,119 (339) - 1,486
Interest expense 3,442 475 49 - 3,966
Interest income (265) - - - (265)
Miscellaneous, net - 35 (3) - 32
------------- ------------- --------------- ------------- -------------
Net income (loss) $ (3,471) $ 1,609 $ (385) $ - $ (2,247)
============= ============= =============== ============= =============
10
Continental Global Group, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
September 30, 2001
I. GUARANTOR AND NON-GUARANTOR SUBSIDIARIES (CONTINUED)
Combined Combined
Guarantor Non-Guarantor
The Company Subsidiaries Subsidiaries Eliminations Total
------------- ------------- --------------- ------------- -------------
Nine months ended September 30, 2001:
Net sales $ - $ 119,073 $ 24,011 $ (18) $ 143,066
Cost of products sold - 99,091 20,893 (18) 119,966
------------- ------------- --------------- ------------- -------------
Gross profit - 19,982 3,118 - 23,100
Total operating expenses 719 13,105 2,428 - 16,252
------------- ------------- --------------- ------------- -------------
Operating income (loss) (719) 6,877 690 - 6,848
Interest expense 10,325 1,415 162 - 11,902
Interest income (546) - - - (546)
Miscellaneous, net 698 318 (25) - 991
------------- ------------- --------------- ------------- -------------
Income (loss) before income taxes (11,196) 5,144 553 - (5,499)
Income tax expense (benefit) (4,476) 3,191 - - (1,285)
------------- ------------- --------------- ------------- -------------
Net income (loss) $ (6,720) $ 1,953 $ 553 $ - $ (4,214)
============= ============= =============== ============= =============
Combined Combined
Guarantor Non-Guarantor
The Company Subsidiaries Subsidiaries Eliminations Total
------------- ------------- --------------- ------------- -------------
Nine months ended September 30, 2000:
Net sales $ - $ 107,433 $ 16,797 $ (1) $ 124,229
Cost of products sold - 88,745 15,607 (1) 104,351
------------- ------------- --------------- ------------- -------------
Gross profit - 18,688 1,190 - 19,878
Total operating expenses 945 13,809 2,684 - 17,438
------------- ------------- --------------- ------------- -------------
Operating income (loss) (945) 4,879 (1,494) - 2,440
Interest expense 10,326 1,324 181 - 11,831
Interest income (763) - - - (763)
Miscellaneous, net - (6) (11) - (17)
------------- ------------- --------------- ------------- -------------
Net income (loss) $ (10,508) $ 3,561 $ (1,664) $ - $ (8,611)
============= ============= =============== ============= =============
11
Continental Global Group, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
September 30, 2001
I. GUARANTOR AND NON-GUARANTOR SUBSIDIARIES (CONTINUED)
Summarized consolidating cash flow statements for the nine months ended
September 30, 2001 and 2000, respectively, for the Company, the guarantor
subsidiaries, and the non-guarantor subsidiaries are as follows (in thousands):
Combined Combined
Guarantor Non-Guarantor
The Company Subsidiaries Subsidiaries Eliminations Total
------------- ------------- --------------- ------------- -------------
Nine months ended September 30, 2001:
Net cash provided by (used in)
operating activities $ (7,200) $ 7,549 $ (727) $ 17 $ (361)
Investing activities:
Purchases of property, plant, and
equipment - (638) (162) - (800)
Proceeds from sale of property,
plant, and equipment - 54 42 - 96
Acquisition of business - (1,607) - - (1,607)
------------- ------------- --------------- ------------- -------------
Net cash used in investing activities - (2,191) (120) - (2,311)
------------- ------------- --------------- ------------- -------------
Financing activities:
Net increase in borrowings on notes
payable - 2,238 782 - 3,020
Principal payments on long-term
obligations - (761) (36) - (797)
Distributions for interest on
senior notes 6,373 (6,373) - - -
Intercompany loan activity - (117) 117 - -
------------- ------------- --------------- ------------- -------------
Net cash provided by (used in)
financing activities 6,373 (5,013) 863 - 2,223
Exchange rate changes on cash - 12 (15) (17) (20)
------------- ------------- --------------- ------------- -------------
Increase (decrease) in cash and cash
equivalents (827) 357 1 - (469)
Cash and cash equivalents at beginning
of period 16,257 565 120 - 16,942
------------- ------------- --------------- ------------- -------------
Cash and cash equivalents at end of
period $ 15,430 $ 922 $ 121 $ - $ 16,473
============= ============= =============== ============= =============
12
Continental Global Group, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
September 30, 2001
I. GUARANTOR AND NON-GUARANTOR SUBSIDIARIES (CONTINUED)
Combined Combined
Guarantor Non-Guarantor
The Company Subsidiaries Subsidiaries Eliminations Total
------------- ------------- --------------- ------------- -------------
Nine months ended September 30, 2000:
Net cash provided by (used in)
operating activities $ (6,659) $ 4,334 $ (1,676) $ 4 $ (3,997)
Investing activities:
Purchases of property, plant, and
equipment - (1,242) (215) - (1,457)
Proceeds from sale of property,
plant, and equipment - 95 23 - 118
------------- ------------- --------------- ------------- -------------
Net cash used in investing activities - (1,147) (192) - (1,339)
------------- ------------- --------------- ------------- -------------
Financing activities:
Net increase in borrowings on notes
payable - 5,209 344 - 5,553
Proceeds from long-term obligations - 776 - - 776
Principal payments on long-term
obligations - (1,283) (41) - (1,324)
Distributions for interest on
senior notes 6,012 (6,012) - - -
Intercompany loan activity - (1,698) 1,698 - -
------------- ------------- --------------- ------------- -------------
Net cash provided by (used in)
financing activities 6,012 (3,008) 2,001 - 5,005
Exchange rate changes on cash - 25 (13) (4) 8
------------- ------------- --------------- ------------- -------------
Increase (decrease) in cash and cash
equivalents (647) 204 120 - (323)
Cash and cash equivalents at beginning
of period 17,244 955 101 - 18,300
------------- ------------- --------------- ------------- -------------
Cash and cash equivalents at end of
period $ 16,597 $ 1,159 $ 221 $ - $ 17,977
============= ============= =============== ============= =============
13
Continental Global Group, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
September 30, 2001
J. NEW ACCOUNTING PRONOUNCEMENTS
In July 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (SFAS) No. 141, "Business Combinations," and SFAS
No. 142, "Goodwill and Other Intangible Assets". The provisions of SFAS No. 141
are effective for all business combinations accounted for by the purchase method
that are completed after June 30, 2001. SFAS No. 142 is effective January 1,
2002 and applies to all goodwill and other intangible assets recognized in the
Company's statement of financial position at that date, regardless of when those
assets were initially recognized. Under SFAS No. 142, goodwill and intangible
assets deemed to have indefinite lives will no longer be amortized but will be
subject to annual impairment tests. Other intangible assets will continue to be
amortized over their useful lives. The transition provisions in SFAS No. 142
provide that goodwill and intangible assets with indefinite lives acquired in a
business combination completed after June 30, 2001 will not be amortized.
The Company will apply the new rules on accounting for goodwill and other
intangible assets beginning in the first quarter of 2002. Application of the
non-amortization provisions of SFAS No. 142 is expected to result in a decrease
in net loss of approximately $550,000 per year.
During 2002, the Company will perform the first of the required impairment tests
under SFAS No. 142 of goodwill and indefinite lived intangible assets as of
January 1, 2002. The Company's current policy for measuring goodwill impairment
is based upon an analysis of undiscounted cash flows. Under SFAS No. 142,
goodwill must be assigned to reporting units and measured for impairment based
upon the fair values of the reporting units. The Company has not yet determined
its reporting units under SFAS No. 142 and what the effect of these new
impairment tests will be on its consolidated financial position or results of
operations.
In October 2001, SFAS No. 144, "Accounting for the Impairment or Disposal of
Long-Lived Assets", was issued. This statement, which supersedes SFAS No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of", provides a single accounting model for long-lived assets to be
disposed of. Although retaining many of the fundamental recognition and
measurement provisions of SFAS No. 121, the statement significantly changes the
criteria that would have to be met to classify an asset as held-for-sale. This
distinction is important because assets held-for-sale are stated at the lower of
their fair values or carrying amounts and depreciation is no longer recognized.
The Company is analyzing the effect of this statement and does not expect it to
have a material effect on the Company's consolidated financial position, results
of operations or cash flows.
14
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion should be read in conjunction with the Consolidated
Financial Statements and related notes included in the Company's Form 10-K dated
March 28, 2001.
GENERAL
The Company, through its subsidiaries, is primarily engaged in the manufacture
and distribution of bulk material handling and replacement equipment, primarily
for use in the mining industry. The Company is a holding company organized under
the Delaware General Corporation law and conducts all of its business through
its direct and indirect operating subsidiaries. The Company's direct operating
subsidiaries are Continental Conveyor and Equipment Company and Goodman Conveyor
Company. The Company also owns indirectly all of the capital stock of
Continental Conveyor & Equipment Pty. Ltd., an Australian holding company that
owns all of the capital stock of four Australian operating companies. The
Company also owns indirectly all of the capital stock of Continental Conveyor
Ltd., a U.K. operating company, and Continental MECO (Pty.) Ltd., a South
African operating company. During 1998, the Company purchased the majority of
the assets and assumed certain liabilities constituting a majority of the
operations of Huwood International, a U.K. belt conveyor business. The
operations of the Company's existing U.K. facilities were merged with the Huwood
operations. During 2001, the Company acquired certain assets in Alabama from
Lippert Tire & Axle, Inc. The Company's existing Alabama operations of its
manufactured housing products segment have been combined with the Lippert
operations.
RESULTS OF OPERATIONS
The following table sets forth, on a comparative basis, selected income
statement data as a percentage of net sales for the three months and nine months
ended September 30, 2001 and 2000.
Three months ended Nine months ended
September 30 September 30
-------------------------- -------------------------
2001 2000 2001 2000
Net sales 100.0% 100.0% 100.0% 100.0%
Cost of products sold 86.4 83.1 83.9 84.0
Gross profit 13.6 16.9 16.1 16.0
SG&A expenses 9.8 12.6 10.7 13.3
Management fee 0.2 0.3 0.3 0.2
Amortization expense 0.3 0.4 0.3 0.4
Restructuring charges - - - 0.1
Operating income 3.3 3.6 4.8 2.0
THREE MONTHS ENDED SEPTEMBER 30, 2001, COMPARED TO THREE MONTHS ENDED SEPTEMBER
30, 2000:
NET SALES
Net sales for the quarter increased $11.4 million, or 28%, from $41.1 million in
2000 to $52.5 million in 2001. Net sales in the domestic operations of the
Company's conveyor equipment segment increased $8.9 million primarily due to
increased spending by the Company's mining equipment customers for replacement
equipment and capital projects. Net sales in the foreign operations of the
conveyor equipment segment increased $1.2 million. This increase resulted
15
primarily from a $1.9 million increase at the Company's United Kingdom
subsidiary partially offset by a $1.2 million decrease at the Company's
Australian subsidiary. The increase in the United Kingdom is due to increased
sales of complete conveyor systems in the third quarter. The decrease in
Australia was due to the shipment of a major components order in the third
quarter of 2000 that was not repeated in the third quarter of 2001. Net sales in
the Company's manufactured housing segment increased $1.7 million due to the
July 2001 acquisition from Lippert Tire & Axle Inc., which had sales for the
quarter of approximately $2.9 million. Net sales in the other segment decreased
$0.4 million.
GROSS PROFIT
Gross profit for the quarter increased $0.2 million, or 3%, from $6.9 million
in 2000 to $7.1 million in 2001. Gross profit in the domestic operations of the
conveyor equipment segment increased $1.3 million primarily due to increased
sales volumes. Gross profit in the foreign operations of the conveyor equipment
segment decreased $1.2 million. Gross profit in the Company's United Kingdom
and South African subsidiaries increased $0.4 million due to increased sales
volume. Gross profit in the Company's Australian subsidiary decreased $1.6
million. As a result of a physical inventory conducted by the Company's
Australian subsidiary in July 2001, the Company incurred a charge to cost of
products sold of approximately $0.8 million. The decline in gross profit in
Australia was also a result of decreases in sales volume and lower margins on
contracts. Gross profit in the manufactured housing and other segments
increased $0.1 million due to increased sales volume.
Gross profit as a percentage of sales decreased from 16.9% in 2000 to 13.6% in
2001. This decrease is primarily the result of the $0.8 million Australian
physical inventory adjustment and an unfavorable change in product mix in the
domestic operations. The change in domestic operations is mainly due to an
unfavorable mixture of the business areas within the conveyor equipment segment
and an increase in manufactured housing products sales which had a lower gross
profit percentage than conveyor equipment sales.
SG&A EXPENSES
SG&A expenses for the quarter decreased by less than 1% from 2000 to 2001 and
were approximately $5.2 million in both years.
OPERATING INCOME
Operating income for the quarter increased $0.2 million, or 13%, from $1.5
million in 2000 to $1.7 million in 2001. This increase resulted from the $0.2
million increase in gross profit.
NINE MONTHS ENDED SEPTEMBER 30, 2001, COMPARED TO NINE MONTHS ENDED SEPTEMBER
30, 2000:
NET SALES
Net sales for the nine-month period increased $18.9 million, or 15%, from $124.2
million in 2000 to $143.1 million in 2001. Net sales in the domestic operations
of the Company's conveyor equipment segment increased $16.6 million primarily
due to increased spending by the Company's mining equipment customers for
replacement equipment and capital projects. Net sales in the foreign operations
of the Company's conveyor equipment segment increased $7.4 million. This
increase was primarily attributable to increases in net sales at the Company's
United Kingdom and South African subsidiaries of $5.9 million and $1.3 million,
respectively. The United Kingdom increase was due to an increase in sales of
standard manufactured products combined with the sales increase of complete
conveyor systems in the third quarter. The South African increase was due to an
increase in the standard manufactured products business. Net sales in the
Company's manufactured housing segment decreased $4.2 million due to the
decrease by the Company's customers in the
16
production and shipment of manufactured homes as a result of excess finished
home inventory and the tight credit market. Net sales in the other segment
decreased $0.9 million.
GROSS PROFIT
Gross profit for the nine-month period increased $3.2 million, or 16%, from
$19.9 million in 2000 to $23.1 million in 2001. Gross profit in the domestic
operations of the conveyor equipment segment increased $2.6 primarily due to
increased sales volume in the mining equipment business. Gross profit in the
foreign operations of the conveyor equipment segment increased $0.7 million.
Gross profit in the Company's United Kingdom and South African subsidiaries
increased $1.9 million primarily due to increased sales volume. Gross profit in
the Company's Australian subsidiary decreased $1.2 million, of which $0.8
million resulted from the third quarter physical inventory adjustment. The
decline in gross profit in Australia was also a result of lower margins on
contracts. Gross profit in the manufactured housing and other segments decreased
$0.1 million.
SG&A EXPENSES
SG&A expenses for the nine-month period decreased $1.2 million, or 7%, from
$16.5 million in 2000 to $15.3 million in 2001. Approximately $1.0 million of
the decrease occurred in the foreign operations of the Company's conveyor
equipment segment due to the favorable impact of the restructuring initiatives.
OPERATING INCOME
Operating income for the nine-month period increased $4.4 million, or 183%, from
$2.4 million in 2000 to $6.8 million in 2001. This increase was the result of
the $3.2 million increase in gross profit combined with the $1.2 million
decrease in SG&A expenses.
BACKLOG
Backlog at September 30, 2001 was $37.7 million, an increase of $1.9 million, or
5%, from $35.8 million at December 31, 2000. The increase was attributable to a
$4.1 million increase in the Company's domestic operations of the conveyor
equipment segment and a $2.2 million decrease in the Company's foreign
operations of the conveyor equipment segment. Management believes that
approximately 75% of the backlog will be shipped in 2001.
LIQUIDITY AND CAPITAL RESOURCES
Net cash used in operating activities was $0.4 million and $4.0 million for the
nine months ending September 30, 2001 and 2000, respectively. Net cash used in
operating activities in 2001 resulted from a net loss of $4.2 million, offset by
a net decrease in operating assets and liabilities of $2.6 million and non-cash
expenses such as depreciation, amortization, and deferred income taxes of $1.2
million. Net cash used in operating activities in 2000 resulted primarily from a
net loss of $8.6 million, offset by a net decrease in operating assets and
liabilities of $1.9 million and depreciation and amortization of $2.7 million.
Net cash used in investing activities was $2.3 million and $1.3 million for the
nine months ending September 30, 2001 and 2000, respectively. The net cash used
in investing activities in 2001 represents net purchases of property, plant, and
equipment of $0.7 million and the acquisition of certain assets from Lippert
Tire & Axle, Inc. for $1.6 million. Lippert manufactures new axles and
refurbishes used axles and tires for the manufactured housing industry. The net
cash used in investing activities in 2000 represents net purchases of property,
plant, and equipment.
Net cash provided by financing activities was $2.2 million and $5.0 million for
the nine months ending September 30, 2001 and 2000, respectively. Net cash
provided by financing activities in 2001 represents a net increase in borrowings
on notes payable of $3.0 million offset by principal
17
payments on long-term obligations of $0.8 million. The increase in borrowings on
notes payable was due to an increase of $2.4 million at the Company's domestic
operations and an increase of $0.6 million at the Company's foreign operations.
The Company financed the $1.6 million acquisition of Lippert Tire & Axle, Inc.
with funds from its domestic credit facility. Net cash provided by financing
activities in 2000 resulted from a net increase in borrowings on notes payable
of $5.5 million and proceeds from long-term obligations of $0.8 million, offset
by principal payments on long-term obligations of $1.3 million. The increase in
borrowings on notes payable was due to an increase of $4.2 million at the
Company's domestic operations and an increase of $1.3 million at the Company's
foreign operations. The proceeds from long-term obligations of $0.8 million
completed the financing for the new idler line at the Company's domestic
operations which began in 1999.
At September 30, 2001, the Company had cash and cash equivalents of
approximately $16.5 million and approximately $13.3 million available for use
under its domestic credit facility, representing approximately $29.8 million of
liquidity.
INTERNATIONAL OPERATIONS
The Company transacts business in a number of countries throughout the world and
has facilities in the United States, Australia, the United Kingdom, and South
Africa. As a result, the Company is subject to business risks inherent in
non-U.S. operations, including political and economic uncertainty, import and
export limitations, exchange controls and currency fluctuations. The Company
believes that the risks related to its foreign operations are mitigated by the
relative political and economic stability of the countries in which its largest
foreign operations are located. As the U.S. dollar strengthens and weakens
against foreign currencies in which the Company transacts business, its
financial results will be affected. The principal foreign currencies in which
the Company transacts business are the Australian dollar, the British pound
sterling, and the South African rand. The fluctuation of the U.S. dollar versus
other currencies resulted in decreases to stockholder's equity of approximately
$1.1 million and $2.4 million for the nine months ended September 30, 2001 and
2000, respectively.
NEW ACCOUNTING PRONOUNCEMENTS
In July 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (SFAS) No. 141, "Business Combinations," and SFAS
No. 142, "Goodwill and Other Intangible Assets". The provisions of SFAS No. 141
are effective for all business combinations accounted for by the purchase method
that are completed after June 30, 2001. SFAS No. 142 is effective January 1,
2002 and applies to all goodwill and other intangible assets recognized in the
Company's statement of financial position at that date, regardless of when those
assets were initially recognized. Under SFAS No. 142, goodwill and intangible
assets deemed to have indefinite lives will no longer be amortized but will be
subject to annual impairment tests. Other intangible assets will continue to be
amortized over their useful lives. The transition provisions in SFAS No. 142
provide that goodwill and intangible assets with indefinite lives acquired in a
business combination completed after June 30, 2001 will not be amortized.
The Company will apply the new rules on accounting for goodwill and other
intangible assets beginning in the first quarter of 2002. Application of the
non-amortization provisions of SFAS No. 142 is expected to result in a decrease
in net loss of approximately $0.6 million per year.
During 2002, the Company will perform the first of the required impairment tests
under SFAS No. 142 of goodwill and indefinite lived intangible assets as of
January 1, 2002. The Company's current policy for measuring goodwill impairment
is based upon an analysis of undiscounted cash
18
flows. Under SFAS No. 142, goodwill must be assigned to reporting units and
measured for impairment based upon the fair values of the reporting units. The
Company has not yet determined its reporting units under SFAS No. 142 and what
the effect of these new impairment tests will be on its consolidated financial
position or results of operations.
In October 2001, SFAS No. 144, "Accounting for the Impairment or Disposal of
Long-Lived Assets", was issued. This statement, which supersedes SFAS No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of", provides a single accounting model for long-lived assets to be
disposed of. Although retaining many of the fundamental recognition and
measurement provisions of SFAS No. 121, the statement significantly changes the
criteria that would have to be met to classify an asset as held-for-sale. This
distinction is important because assets held-for-sale are stated at the lower of
their fair values or carrying amounts and depreciation is no longer recognized.
The Company is analyzing the effect of this statement and does not expect it to
have a material effect on the Company's consolidated financial position, results
of operations or cash flows.
CAUTIONARY STATEMENT FOR SAFE HARBOR PURPOSES
This Management's Discussion and Analysis of Financial Condition and Results of
Operations (MD&A) contains forward-looking statements within the meaning of the
federal securities laws. As a general matter, forward-looking statements are
those focused upon future plans, objectives or performance as opposed to
historical items and include statements of anticipated events or trends and
expectations and beliefs relating to matters that are not historical in nature.
Such forward looking statements are subject to uncertainties and factors
relating to the Company's operations and business environment, all of which are
difficult to predict and many of which are beyond the control of the Company,
that could cause actual results of the Company to differ materially from those
matters expressed in or implied by such forward-looking statements.
19
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The following table provides information about the Company's Senior Notes. The
table presents principal cash flows and interest rate by expected maturity date.
Interest Rate Sensitivity
Principal Amount by Expected Maturity
Average Interest Rate
Fair
Value,
(dollars in thousands) 2001 2002 2003 2004 2005 Thereafter Total 9/30/01*
- ---------------------------------------------------------------------------------------------------------
Long-Term Obligations,
including current
portion
Fixed Rate $ - $ - $ - $ - $ - $ 120,000 $ 120,000 $60,000
Average interest rate 11% 11% 11% 11% 11% 11%
The Company's interest income and expense are most sensitive to changes in the
general level of U.S. interest rates. In this regard, changes in U.S. interest
rates affect the interest earned on the Company's cash equivalents as well as
interest paid on its debt. To mitigate the impact of fluctuations in U.S.
interest rates, the Company generally borrows on a long-term basis to maintain a
debt structure that is fixed rate in nature.
A portion of the Company's operations consists of manufacturing and sales
activities in foreign jurisdictions. The Company manufactures and sells its
products in the United States, Australia, the United Kingdom, and South Africa.
As a result, the Company's financial results could be significantly affected by
factors such as changes in foreign currency exchange rates or weak economic
conditions in the foreign markets in which the Company distributes its products.
The Company's operating results are exposed to changes in exchange rates between
the U.S. dollar and the Australian dollar, the British pound sterling, and the
South African rand.
* Fair value as of September 30, 2001 as obtained from Credit Suisse First
Boston.
20
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits: Refer to the index of exhibits.
(b) No reports on Form 8-K were filed during the quarter ended
September 30, 2001.
21
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 thereunto duly authorized.
CONTINENTAL GLOBAL GROUP, INC.
By: /s/ Jimmy L. Dickinson
------------------------
Jimmy L. Dickinson
Vice President and Chief Financial Officer (As duly authorized
representative and as Principal Financial and Accounting Officer)
CONTINENTAL CONVEYOR & EQUIPMENT COMPANY
By: /s/ Jimmy L. Dickinson
------------------------
Jimmy L. Dickinson
Vice President - Finance (As duly authorized representative and
as Principal Financial and Accounting Officer)
GOODMAN CONVEYOR COMPANY
By: /s/ J. Mark Etchberger
------------------------
J. Mark Etchberger
Controller (As duly authorized representative and as Principal
Financial and Accounting Officer)
Date: November 14, 2001
22
Continental Global Group, Inc.
Form 10-Q
Index of Exhibits
Exhibit
Number Description of Exhibit
------ ----------------------
3.1
(a) Certificate of Incorporation of Continental Global Group, Inc., as currently in effect. *
(b) Certificate of Amendment of Certificate of Incorporation of Continental Global Group,
Inc. (Filed as Exhibit 3.1(b) to the Company's Form 10-Q for the quarter ended September
30, 2000, and is incorporated herein by reference.)
3.2 By-Laws of Continental Global Group, Inc., as currently in effect. *
3.3 Certificate of Incorporation of Continental Conveyor & Equipment Company, as currently *
in effect.
3.4 By-Laws of Continental Conveyor & Equipment Company, as currently in effect. *
3.5 Certificate of Incorporation of Goodman Conveyor Company, as currently in effect. *
3.6 By-Laws of Goodman Conveyor Company, as currently in effect. *
4.1 Indenture, dated as of April 1, 1997, among Continental Global *
Group, Inc., Continental Conveyor & Equipment Company, Goodman
Conveyor Company, and the Trustee (containing, as exhibits,
specimens of the Series A Notes and the Series B Notes).
10.1
(a) Revolving Credit Facility, dated as of September 14, 1992, as *
amended by Amendments I, II, and III, among Continental Conveyor
& Equipment Company, Goodman Conveyor Company, and Bank One,
Cleveland, NA.
(b) Amendment IV, dated as of December 31, 1998, to the Revolving
Credit Facility, dated as of September 14, 1992, among Continental
Conveyor & Equipment Company, Goodman Conveyor Company, and Bank
One, Cleveland, NA. (Filed as Exhibit 10.1 (b) to the Company's
Form 10-Q for the quarter ended March 31, 1999, and is
incorporated herein by reference.)
(c) Letter of Amendment, dated as of July 26, 1999, to the Revolving
Credit Facility, dated as of September 14, 1992, among Continental
Conveyor & Equipment Company, Goodman Conveyor Company, and Bank
One, Cleveland, NA. (Filed as Exhibit 10.1 (c) to the Company's
Form 10-Q for the quarter ended June 30, 1999, and is incorporated
herein by reference.)
(d) Letter of Amendment, dated as of November 4, 1999, to the
Revolving Credit Facility, dated as of September 14, 1992, among
Continental Conveyor & Equipment Company, Goodman Conveyor
Company, and Bank One, Cleveland, NA. (Filed as Exhibit 10.1 (d)
to the Company's Form 10-Q for the quarter ended September 30,
1999, and is incorporated herein by reference.)
(e) Amendment VI, dated as of March 28, 2000, to the Revolving Credit
Facility, dated as of September 14, 1992, among Continental
Conveyor & Equipment Company, Goodman Conveyor Company, and Bank
One, Cleveland, NA. (Filed as Exhibit 10.1 (e) to the Company's
Form 10-K for the year ended December 31, 1999, and is
incorporated herein by reference.)
23
Continental Global Group, Inc.
Form 10-Q
Index of Exhibits (Continued)
10.1
(f) Letter of Amendment, dated as of March 29, 2001, to the Revolving
Credit Facility, dated as of September 14, 1992, among Continental
Conveyor & Equipment Company, Goodman Conveyor Company, and Bank
One, Cleveland, NA. (Filed as Exhibit 10.1(f) to the Company's
Form 10-K for the year ended December 31, 2000, and is
incorporated herein by reference.)
10.2 Management Agreement, dated as of April 1, 1997, between Continental Global Group, Inc. *
and Nesco, Inc.
Certain instruments with respect to long-term debt have not been filed as
exhibits as the total amount of securities authorized under any one of such
instruments does not exceed 10 percent of the total assets of the registrant and
its subsidiaries on a consolidated basis. The registrant agrees to furnish to
the Commission a copy of each such instrument upon request.
* Incorporated by reference from Form S-4 Registration Number 333-27665 filed
under the Securities Act of 1933.
24