1
F O R M 1 0 - Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1994
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to _________
Commission File Number 1-6948
SPX CORPORATION
(Exact Name of Registrant as Specified in its Charter)
Delaware 38-1016240
(State of Incorporation) (I.R.S. Employer Identification No.)
700 Terrace Point Drive, Muskegon, Michigan 49443
(Address of Principal Executive Office)
Registrant's Telephone Number including Area Code (616) 724-5000
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 12 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
Common shares outstanding October 31, 1994 -- 14,000,706
2
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
SPX CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(000s omitted)
(Unaudited)
September 30 December 31
1994 1993
ASSETS
Current assets:
Cash and temporary cash investments $ 22,467 $ 117,843
Receivables 136,978 123,081
Lease finance receivables - current 35,772 33,834
Inventories 163,496 159,223
Deferred income tax asset and refunds 54,489 54,489
Prepaid expenses and other current assets 19,278 29,726
Total current assets $ 432,480 $ 518,196
Investments 15,637 13,446
Property, plant and equipment (at cost) 391,681 367,832
Accumulated depreciation (189,889) (169,687)
$ 201,792 $ 198,145
Lease finance receivables - long-term 45,824 51,013
Costs in excess of net assets of
businesses acquired 200,702 204,149
Other assets 46,463 39,452
$ 942,898 $1,024,401
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable and current maturities
of long-term debt $ 1,203 $ 93,975
Accounts payable 68,880 62,968
Accrued liabilities 149,254 229,998
Income taxes payable 3,638 11,864
Total current liabilities $ 222,975 $ 398,805
Long-term liabilities 123,693 123,235
Deferred income taxes 19,294 20,787
Long-term debt 416,568 336,187
Shareholders' equity:
Common stock $ 156,067 $ 155,558
Paid in capital 57,751 58,926
Retained earnings 29,656 20,282
$ 243,474 $ 234,766
Common stock held in treasury (50,000) (50,000)
Unearned compensation - ESOP (32,449) (35,900)
Minority interest (2,280) (1,080)
Cumulative translation adjustments 1,623 (2,399)
Total shareholders' equity $ 160,368 $ 145,387
$ 942,898 $1,024,401
3
SPX CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(In thousands of dollars except per share amounts)
(Unaudited)
Three months ended Nine months ended
September 30 September 30
1994 1993 1994 1993
Revenues $252,967 $195,079 $819,472 $586,791
Costs and expenses
Cost of products sold 187,499 129,814 609,576 393,290
Selling,general,administrative 49,117 57,152 155,937 163,813
Other expense, net 85 2,711 1,549 6,507
Restructuring charge 0 27,500 0 27,500
SPT equity losses 0 908 0 1,156
Operating income (loss) $ 16,266 $(23,006) $ 52,410 $ (5,475)
Interest expense, net 10,566 5,502 30,310 13,681
Income(loss) before income taxes $ 5,700 $(28,508) $ 22,100 $(19,156)
Provision (benefit) for income
taxes 2,500 (8,252) 8,900 (4,685)
Income (loss) before cumulative effect
of change in accounting methods $ 3,200 $(20,256) $ 13,200 $(14,471)
Cumulative effect of change in
accounting methods, net of
income taxes 0 0 0 (31,800)
Net income (loss) $ 3,200 $(20,256) $ 13,200 $(46,271)
Net income (loss) per share:
Before cumulative effect of
change in accounting methods $ 0.25 $ (1.61) $ 1.03 $ (1.15)
Cumulative effect of change in
accounting methods $ (2.52)
Net income (loss) $ 0.25 $ (1.61) $ 1.03 $ (3.67)
Dividends per share $ 0.10 $ 0.10 $ 0.30 $ 0.30
Weighted average number of
common shares outstanding 12,828 12,617 12,775 12,587
4
SPX CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(000s omitted)
(Unaudited)
Nine Months Ended
September 30
1994 1993
Cash flows from operating activities:
Net income (loss) from operating activities $ 13,200 $ (46,271)
Adjustments to reconcile net income (loss)
to net cash from operating activities -
Cumulative effect of change in accounting methods 0 31,800
Depreciation and amortization 29,057 19,592
Increase (decrease) in deferred income taxes (1,493) (6,269)
(Increase) decrease in accounts receivable (13,897) 4,725
(Increase) decrease in inventories (4,273) 8,297
Decrease in prepaid and other current assets 10,448 8,875
Increase (decrease) in accounts payable 5,912 (1,458)
Increase (decrease) in accrued liabilities (11,798) (3,114)
Decrease in income taxes payable (8,226) (7,513)
(Increase) decrease in lease finance receivables 3,251 (6,743)
Increase in long-term liabilities 458 9,803
Special charge 0 27,500
Other, net (312) (4,140)
Net cash provided by (used by) operating activities $ 22,327 $ 35,084
Cash flows used by investing activities:
Capital expenditures $ (28,478) $ (10,608)
Advance to SP Europe 0 (13,583)
Purchase of Lowener Gmbh 0 (7,014)
Payments for purchase of Allen Testproducts
and Allen Group Leasing 0 (101,715)
Net cash used by investing activities $ (28,478) $(132,920)
Cash flows provided by financing activities:
Net borrowings (payments) under debt agreements $ (12,391) $ 110,058
Payment of debt restructuring costs (34,008) 0
Payment for interest in SPT (39,000) 0
Dividends paid (3,826) (4,171)
Net cash provided by (used by) financing activities $ (89,225) $ 105,887
Net increase (decrease) in cash and
temporary cash investments $ (95,376) $ 8,051
Cash and temporary cash investments, beg. of period 117,843 9,729
Cash and temporary cash investments, end of period $ 22,467 $ 17,780
5
SPX CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 1994 (Unaudited)
1. The interim financial statements reflect all adjustments
which are, in the opinion of management, necessary to a fair
statement of the results of the interim periods presented.
All adjustments are of a normal recurring nature. Amounts
in the 1993 consolidated financial statements have been
restated to reflect the company's previous 49% share of
Sealed Power Technologies Limited Partnership ("SPT") income
or loss and the effect of amortizing the difference between
its investment balance and its share of SPT's initial
partnership capital deficit and to reflect new accounting
for the company's ESOP.
2. Information regarding the company's segments was as follows:
Three months Nine months
ended September 30 ended September 30
1994 1993 1994 1993
(in millions)
Revenues:
Specialty Service Tools $ 126.2 $ 119.8 $ 412.8 $ 364.0
SPX Credit Corporation 3.2 3.3 9.8 5.6
Original Equipment Components 123.6 6.2 396.9 18.8
Businesses sold in 1993 0.0 65.8 0.0 198.4
Total $ 253.0 $ 195.1 $ 819.5 $ 586.8
Operating income (loss):
Specialty Service Tools $ 7.6 $ (28.7) $ 23.4 $ (18.9)
SPX Credit Corporation 1.7 1.7 5.6 3.0
Original Equipment Components 12.0 (0.4) 37.9 (0.2)
Businesses sold in 1993 0.0 8.3 0.0 22.3
General Corporate (5.0) (3.9) (14.5) (11.7)
Total $ 16.3 $ (23.0) $ 52.4 $ (5.5)
Capital Expenditures:
Specialty Service Tools $ 2.1 $ 1.7 $ 6.3 $ 4.3
SPX Credit Corporation 0.0 0.0 0.0 0.0
Original Equipment Components 5.8 0.2 20.4 0.3
Businesses sold in 1993 0.0 1.7 0.0 5.9
General Corporate 0.1 0.0 1.8 0.1
Total $ 8.0 $ 3.6 $ 28.5 $ 10.6
Depreciation and Amortization:
Specialty Service Tools $ 3.8 $ 3.7 $ 11.5 $ 11.0
SPX Credit Corporation 0.0 0.0 0.0 0.0
Original Equipment Components 5.6 0.5 17.1 1.4
Businesses sold in 1993 0.0 2.2 0.0 6.7
General Corporate 0.0 0.2 0.5 0.5
Total $ 9.4 $ 6.6 $ 29.1 $ 19.6
September 30 December 31
1994 1993
Identifiable Assets:
Specialty Service Tools $ 403.0 $ 383.3
SPX Credit Corporation 83.1 85.2
Original Equipment Components 365.8 343.8
General Corporate 91.0 212.1
Total $ 942.9 $1,024.4
6
Item 2. Management's Discussion and Analysis of Results of
Operations and Financial Condition
The accompanying unaudited 1993 third quarter and nine months
ending September 30, 1993 consolidated statements of income
include the results of the Sealed Power Replacement division
which was sold October 22, 1993, the results of the Truth
division which was sold November 5, 1993, the company's 49% share
of the earnings or losses of Sealed Power Technologies Limited
Partnership ("SPT") accounted for on the equity basis, the losses
of Sealed Power Technologies Limited Partnership Europe ("SP
Europe"), and the acquisition and results of Allen Testproducts
and Allen Group Leasing beginning with their acquisition on June
10, 1993. The 1994 consolidated statements of income reflect SPT
and SP Europe in their entirety.
For purposes of comparison, certain selected unaudited pro
forma 1993 information is presented in the following discussion
to enhance understanding. The unaudited pro forma 1993
information reflects the acquisition of Allen Testproducts and
Allen Group Leasing and the related restructuring, the
divestiture of the Sealed Power Replacement and Truth divisions,
the acquisition of the remaining 51% of SPT, and the
consolidation of SP Europe as if they had occurred as of January
1, 1993.
Third Quarter 1994 vs. Third Quarter 1993
Revenues
The following were revenues by business segment:
Three months ended September 30,
Historical Pro Forma
1994 1993 1993
(dollars in millions)
Specialty Service Tools....... $ 126.2 $ 119.8 $ 119.8
SPX Credit Corporation........ 3.2 3.3 3.3
Original Equipment Components. 123.6 6.2 107.6
Businesses sold in 1993....... - 65.8 -
Total....................... $ 253.0 $ 195.1 $ 230.7
Total revenues for the third quarter of 1994 were up
significantly over historical third quarter 1993 revenues due to
the inclusion of SPT and SP Europe revenues in 1994 (SPT and SP
Europe were consolidated as of December 31, 1993). Offsetting
these increases in revenues was the loss of revenues of the
Sealed Power Replacement and Truth divisions ("Businesses sold in
1993), which were sold in the fourth quarter of 1993.
Third quarter 1994 revenues of Specialty Service Tools
increased 5.3% over third quarter 1993 revenues. This increase
was attributable to continued improvement in sales of aftermarket
specialty service tools and strength in sales of dealer equipment
and warranty tools, hand-held diagnostic testers, and high-
pressure hydraulic specialty service tools. Sales of refrigerant
recovery and recycling systems and engine diagnostic equipment
were down slightly from 1993, which moderated the overall
increase in revenues.
Third quarter 1994 revenues of SPX Credit Corporation were
approximately the same as the third quarter 1993.
7
Third quarter 1994 revenues of Original Equipment Components
increased 14.9% over pro forma third quarter 1993. This
significant increase was the result of increased light vehicle
production. The segment's aftermarket revenues also increased.
Pro forma 1993 revenues reflect the revenues of SPT and SP Europe
which were consolidated as of December 31, 1993.
Gross Profit
In the third quarter of 1994, gross profit was $65.5 million,
or 25.9% of revenues. In the third quarter of 1993, gross profit
was $65.3 million, or 33.5% of revenues. Due to the significant
acquisition and divestiture activity of 1993, these figures are
not comparable. Pro forma third quarter 1993 gross profit was
$56.8 million, or 24.6% of revenues with the revenue mix
influencing the comparable quarter comparisons.
Selling, General and Administrative Expense ("SG&A")
SG&A was $49.1 million, or 19.4% of revenues, in the third
quarter of 1994 compared to $57.2 million, or 29.3% of revenues,
in the third quarter of 1993. Due to the significant acquisition
and divestiture activity in 1993, the figures are not comparable.
Pro forma third quarter 1993 SG&A would have been $50.8 million,
or 22.0% of revenues with strong revenue levels in 1994
contributing to the favorable quarterly percentage comparisons.
Operating Income (loss)
The following was operating income (loss) by business
segment:
Three months ended September 30,
Historical Pro Forma
1994 1993 1993
(dollars in millions)
Specialty Service Tools....... $ 7.6 $ (28.7) $ (25.3)
SPX Credit Corporation........ 1.7 1.7 1.7
Original Equipment Components. 12.0 (.4) 4.9
Businesses sold in 1993.... - 8.3 -
General corporate expenses.... (5.0) (3.9) (4.5)
Total....................... $ 16.3 $ (23.0) $ (23.2)
Total operating income for the third quarter of 1994 was up
significantly over historical third quarter 1993 operating loss
due to the inclusion of SPT in 1994 (SPT and SP Europe were
consolidated as of December 31, 1993). Offsetting these increases
in operating income was the loss of operating income of the
Sealed Power Replacement and Truth divisions, which were sold in
the fourth quarter of 1993. The third quarter of 1993 included
the $27.5 million restructuring charge associated with the
combination of the Bear Automotive division with Allen
Testproducts.
Specialty Service Tool third quarter 1994 operating income of
$7.6 million increased $5.4 million over pro forma third quarter
1993 operating income, excluding the restructuring charge. The
increase was attributable to strong specialty tool programs. Pro
forma third quarter 1993 operating income reflects the June 10,
1993 acquisition of Allen Testproducts and related cost
reductions through the combination with the Bear Automotive
division as if they had occurred at the beginning of 1993 and
includes the $27.5 million restructuring charge associated with
the combination of the Bear Automotive division with Allen
Testproducts.
8
Operating income of SPX Credit Corporation for the third
quarter was comparable to the third quarter of 1993.
Original Equipment Components third quarter 1994 operating
income of $12.0 million increased $7.1 million over pro forma
third quarter 1993 operating income. The increase was
attributable to continued increases in customer demand in both
the original equipment and aftermarket sectors. Pro forma third
quarter 1993 operating income includes the operating results of
SPT and SP Europe which were consolidated as of December 31,
1993.
Interest Expense, net
Third quarter 1994 interest expense, net was $10.6 million
compared to $5.5 million in the third quarter of 1993. The
increase was attributable to higher debt levels associated with
the purchase of SPT and Allen Testproducts which were partially
offset by proceeds from the divestitures of the Sealed Power
Replacement and Truth divisions.
Provision for Income Taxes
The third quarter 1994 effective income tax rate was
approximately 43.9% which reflects higher than anticipated losses
at non U.S. subsidiaries that cannot be benefited for income tax
purposes. As a result, the full year income tax rate is expected
to approximate 40 to 41% with the third quarter rate increased to
accommodate a portion of the necessary year to date increase.
First Nine Months of 1994 vs. First Nine Months of 1993
Revenues
The following were revenues by business segment:
Nine months ended September 30,
Historical Pro Forma
1994 1993 1993
(dollars in millions)
Specialty Service Tools....... $ 412.8 $ 364.0 $ 389.7
SPX Credit Corporation........ 9.8 5.6 12.4
Original Equipment Components. 396.9 18.8 347.6
Businesses sold in 1993....... - 198.4 -
Total....................... $ 819.5 $ 586.8 $ 749.7
Total revenues for the first nine months of 1994 were up
significantly over historical first nine months 1993 revenues due
to the inclusion of SPT and SP Europe revenues in 1994 (SPT and
SP Europe were consolidated as of December 31, 1993). Also
effecting first nine months 1994 revenues was the inclusion of
the revenues of Allen Testproducts and Allen Group Leasing (now
called SPX Credit Corporation), whereas in 1993, the revenues of
Allen Testproducts and Allen Group Leasing were not included
until the June 10, 1993 acquisition. Offsetting these increases
in revenues was the loss of revenues of the Sealed Power
Replacement and Truth divisions ("Businesses sold in 1993), which
were sold in the fourth quarter of 1993.
First nine months of 1994 revenues of Specialty Service Tools
increased 5.9% over pro forma first nine months of 1993 revenues.
This increase was attributable to continued improvement in sales
of aftermarket specialty service tools and strength in sales of
dealer equipment and warranty tools, hand-held diagnostic
testers, and high-pressure hydraulic specialty service tools.
Sales of engine diagnostic equipment were down slightly from
1993, which moderated the overall increase in revenues. Pro
forma first nine months of 1993 revenues reflect $25.7 million of
Allen Testproducts revenues that are not included in the
historical revenues, as that business was acquired at June 10,
1993.
First nine months of 1994 revenues of SPX Credit Corporation
were down $2.6 million from pro forma first nine months of 1993.
The second quarter of 1993 included approximately $1.0 million of
revenue on the sale of a $5.0 portfolio of leases to a third
party. The first nine months of 1994 revenue level was
reflective of levels of the last half of 1993, which include the
combination of Allen Group Leasing with existing leasing
activities.
9
First nine months of 1994 revenues of Original Equipment
Components increased 14.2% over pro forma first nine months of
1993. This significant increase was attributable to strong
increases in sales to OEMs as production of new vehicles was up
from 1993. The segment's aftermarket revenues also increased.
Pro forma 1993 revenues reflect the revenues of SPT and SP Europe
which were consolidated as of December 31, 1993.
Gross Profit
In the first nine months of 1994, gross profit was $209.9
million, or 25.6% of revenues. In the first nine months of 1993,
gross profit was $193.5 million, or 33.0% of revenues. Due to
the significant acquisition and divestiture activity of 1993,
these figures are not comparable. Pro forma first nine months of
1993 gross profit was $192.5 million, or 25.7% of revenues with
revenue mix influencing the comparable nine month comparisons.
Selling, General and Administrative Expense ("SG&A")
SG&A was $155.9 million, or 19.0% of revenues, in the first
nine months of 1994 compared to $163.8 million, or 27.9% of
revenues, in the first nine months of 1993. Due to the
significant acquisition and divestiture activity in 1993, the
figures are not comparable. Pro forma first nine months of 1993
SG&A would have been $162.6 million, or 21.7% of revenues with
strong revenue levels in 1994 contributing to the favorable nine
month comparisons.
Operating Income (loss)
The following was operating income (loss) by business
segment:
Nine months ended September 30,
Historical Pro Forma
1994 1993 1993
(dollars in millions)
Specialty Service Tools....... $ 23.4 $ (18.9) $ (11.1)
SPX Credit Corporation........ 5.6 3.0 7.2
Original Equipment Components. 37.9 (.2) 17.1
Businesses sold in 1993....... - 22.3 -
General corporate expenses.... (14.5) (11.7) (13.5)
Total....................... $ 52.4 $ (5.5) $ (.3)
Total operating income for the first nine months of 1994 was
up significantly over historical first nine months 1993 operating
loss due to the inclusion of SPT in 1994 (SPT and SP Europe were
consolidated as of December 31, 1993). Also effecting the first
nine months of 1994 operating income was the inclusion of the
operating results of Allen Testproducts and Allen Group Leasing
(now called SPX Credit Corporation), whereas in 1993, operating
results were not included until the June 10, 1993 acquisition.
Offsetting these increases in operating income was the loss of
operating income of the Sealed Power Replacement and Truth
divisions, which were sold in the fourth quarter of 1993. The
first nine months of 1993 includes the $27.5 million
restructuring charge associated with the combination of the Bear
Automotive division with Allen Testproducts.
10
Specialty Service Tools first nine months of 1994 operating
income of $23.4 million increased $7.0 million over pro forma
first nine months of 1993 operating income, excluding the $27.5
million restructuring charge. The increase was attributable to
strong specialty tool programs. Pro forma first nine months of
1993 operating income reflects the June 10, 1993 acquisition of
Allen Testproducts and related cost reductions through the
combination with the Bear Automotive division as if they had
occurred at the beginning of 1993 and includes the $27.5 million
restructuring charge associated with the combination of the Bear
Automotive division with Allen Testproducts.
Operating income of SPX Credit Corporation for the first nine
months was down $1.6 million from pro forma first nine months of
1993, primarily resulting from a $.7 million gain recorded in
1993 from the sale of a $5 million lease portfolio.
Original Equipment Components first nine months of 1994
operating income of $37.9 million increased $20.8 million over
pro forma first nine months of 1993 operating income. The
increase was attributable to continued increases in customer
demand. Pro forma first nine months of 1993 operating income
reflect the operating results of SPT and SP Europe which were
actually consolidated as of December 31, 1993.
Interest Expense, net
First nine months of 1994 interest expense, net was $30.3
million compared to $13.7 million in the first nine months of
1993. The increase was attributable to higher debt levels
associated with the purchase of SPT and Allen Testproducts which
were partially offset by proceeds from the divestitures of the
Sealed Power Replacement and Truth divisions.
Provision for Income Taxes
The first nine months of 1994 effective income tax rate was
approximately 40.3% which reflects higher than anticipated losses
at non U.S. subsidiaries that cannot be benefited for income tax
purposes. As a result, the full year income tax rate is expected
to approximate 40 to 41%.
Cumulative Effect of Change in Accounting Methods, net of Tax
In the first quarter of 1993, the company adopted new
accounting for its Employee Stock Ownership Plan and adopted SFAS
No. 106 - "Employers' Accounting for Postretirement Benefits
Other Than Pensions" for its then existing 49% share of SPT,
resulting in a $31.8 million aftertax charge.
Liquidity and Financial Condition
As a result of the company's acquisition activity in 1993,
the company is more leveraged than in the past. This financial
leverage requires the company to focus on cash flows to meet
higher interest costs and to maintain dividends. Management
believes that cash flows generated from operations and the credit
arrangements established in the first six months of 1994 will be
sufficient to supply the future funding needed by the company.
11
Cash Flow
Nine months ended September 30,
1994 1993
(in millions)
Cash flow from:
Operating activities...... $ 22.3 $ 35.1
Investing activities...... (28.5) (132.9)
Financing activities...... (89.2) 105.9
Net Cash Flow............ $ (95.4) $ 8.1
Cash flow from operating activities was a $22.3 million
inflow for the first nine months of 1994 compared to a $35.1
million inflow for the first nine months of 1993. Working
capital levels at the end of the third quarter tend to be higher
than the previous year end levels as higher revenue levels are
experienced during the third quarter when compared to the fourth
quarter. This was particularly the case with accounts receivable
levels which were $13.9 million higher at September 30, 1994
compared to December 31, 1993. Also effecting first nine months
1994 cash flow from operating activities was an approximately $8
million payment to finalize the dispute with the Internal Revenue
Service regarding the company's tax deferred treatment of the
1989 transaction in which several operating units were contrib
uted to SPT and to finalize certain other tax matters related to
the 1989 tax year. The first nine months of 1994 cash flow from
operating activities also included the reduction of accrued
liabilities, much of which was continued utilization of the
Automotive Diagnostic restructuring reserve. During the first
nine months of 1994, approximately $10.5 million of this reserve
was utilized leaving a September 30, 1994 balance of
approximately $4 million, which is required for remaining work
force reductions and facility closing costs.
Cash flow from investing activities in 1994 consists of
capital expenditures. In addition to capital expenditures, 1993
cash flow from investing activities included $13.6 million of
advances to SP Europe which was not consolidated until December
31, 1993 and $102 million for the June 10, 1993 purchase of Allen
Testproducts and Allen Group Leasing from the Allen Group.
First nine months of 1993 cash flow from financing activities
consisted primarily of debt borrowings to finance the purchase of
Allen Testproducts and Allen Group Leasing. The first nine
months of 1994 cash flow from financing activities reflects the
$39 million payment to Riken Corporation to acquire the
additional 49% of SPT and payment of approximately $34 million of
debt restructuring costs related to the new revolving credit
agreement and the $260 million of senior subordinated notes.
As of June 30, 1994, the company had substantially completed
the expenditures to acquire the additional 51% of SPT and
refinance its debt structure.
Capitalization
September 30, December 31,
1994 1993
(in millions)
Notes payable and current maturities
of long-term debt.................. $ 1.2 $ 94.0
Long-term debt...................... 416.6 336.2
Total debt........................ $ 417.8 $ 430.2
Shareholders' equity................ 160.4 145.4
Total capitalization................ $ 578.2 $ 575.6
Total debt to capitalization ratio.. 72.3% 74.7%
12
As of June 30, 1994, the company had completed its
Refinancing Plan. In May, $260 million of 11 3/4% senior
subordinated notes, due June 1, 2002 and redeemable after four
years, were issued. In the first quarter, a $250 million
revolving credit facility was obtained. This revolving credit
facility's maximum credit availability was reduced to $225
million concurrent with the issuance of the notes. Proceeds from
these new credit facilities and existing cash balances were used
to extinguish most debt instruments existing at December 31, 1993
and to pay certain debt restructuring costs.
At September 30, 1994, the following summarizes the debt
outstanding (in millions):
Senior subordinated notes $ 260.0
Revolving credit facility 134.0
Industrial revenues bonds 15.2
Other 8.6
Total debt $ 417.8
At September 30, 1994, the maximum availability on the
revolving credit facility would have been $91 million.
Management believes that the additional availability is
sufficient to meet operational cash requirements, working capital
requirements and capital expenditures for 1994 and thereafter.
The revolving credit agreement contains covenants which cover
leverage, interest expense coverage, fixed charge coverage,
dividends, capital expenditures, investments and transactions
with affiliates. At September 30, 1994, the company was in
compliance with all covenants. The following summarizes the
September 30, 1994 status versus the more restrictive covenants:
(a) maintain a leverage ratio, as defined, of 78% or less, the
company's leverage ratio was 73%, (b) maintain an interest
expense coverage ratio, as defined, of 2.0 to 1.0 or greater, the
company's interest expense coverage ratio was 2.69 to 1.0, and
(c) maintain a fixed charge coverage ratio, as defined, of 1.75
to 1.0 or greater, the company's fixed charge coverage ratio was
1.92 to 1.0.
Capital Expenditures
Capital expenditures for the first nine months of 1994 were
$28.5 million compared to $10.6 million in 1993. Full year 1994
estimated capital expenditures will likely approximate $45
million. 1993 capital expenditures did not include SPT.
13
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(2) None.
(4) None.
(11) None.
(15) None.
(18) None.
(19) None.
(20) None.
(23) None.
(24) None.
(25) None.
(28) None.
(b) Reports on Form 8-K
None.
14
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.
SPX CORPORATION
(Registrant)
Date: November 3, 1994 By s/s Dale A. Johnson
Dale A. Johnson
Chairman and
Chief Executive Officer
Date: November 3, 1994 By s/s R. Budd Werner
R. Budd Werner
Vice President, Finance and
Chief Financial Officer
5
1,000
9-MOS
DEC-31-1994
SEP-30-1994
22,467
0
144,312
(7,334)
163,496
432,480
391,681
(189,889)
942,898
222,975
260,000
156,067
0
0
4,301
942,898
809,696
819,472
209,896
765,513
1,549
0
30,310
22,100
8,900
13,200
0
0
0
13,200
1.03
1.03
