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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
/X/ Annual report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 for the fiscal year ended
October 31, 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 1-9299
HARNISCHFEGER INDUSTRIES, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 39-1566457
(State of (I.R.S. Employer
Jurisdiction of Identification No.)
Incorporation or
Organization)
13400 Bishops Lane, Brookfield, Wisconsin 53005
(Address of Principal Executive Office)
Registrant's Telephone Number, Including Area Code:
(414) 671-4400
Securities registered pursuant to Section 12(b) of the
Act:
Name of Each Exchange On
Title of Each Class Which Registered
Common Stock, $1 Par Value New York and Pacific Stock
Exchanges
Preferred Stock Purchase Rights New York and Pacific
Stock Exchanges
Securities registered pursuant to Section 12(g) of the
Act: None
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, and (2) has been subject to such
filing requirements for the past 90 days. Yes /X/ No / /
Indicate by check mark if disclosure of delinquent
filers pursuant to Item 405 of Regulation S-K is not
contained herein, and will not be contained, to the best
of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part
III of this Form 10-K or any amendment to this Form 10-K.
/X/
The aggregate market value of Registrant's Common
Stock held by non-affiliates, as of January 25, 1995,
based on a closing price of $ 27.88, was approximately
$1,308.0 million.
The number of shares outstanding of Registrant's
Common Stock, as of January 25, 1995, was 47,671,432.
DOCUMENTS INCORPORATED BY REFERENCE
1994 Annual Report to Shareholders (Parts I, II and IV).
Proxy statement for the 1995 annual meeting of
stockholders to be filed within 120 days of the end of the
Company's fiscal year (Part III).
HARNISCHFEGER INDUSTRIES, INC.
INDEX TO
ANNUAL REPORT ON FORM 10-K
For The Year Ended October 31, 1994
Page
----
Part I
Item 1. Business................................................. 3
Item 2. Properties............................................... 11
Item 3. Legal Proceedings........................................ 14
Item 4. Submission of Matters to a Vote of Security Holders...... 14
Part II
Item 5. Market for the Registrant's Common Stock and Related
Stockholder Matters...................................... 15
Item 6. Selected Financial Data for the Registrant for Each of the
Last Five Fiscal Years................................... 15
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations................................ 15
Item 8. Financial Statements and Supplementary Data.............. 15
Item 9. Disagreements on Accounting and Financial Disclosure..... 15
Part III
Item 10. Directors and Executive Officers of the Registrant....... 16
Item 11. Executive Compensation................................... 16
Item 12. Security Ownership of Certain Beneficial Owners and
Management............................................... 16
Item 13. Certain Relationships and Related Transactions........... 16
Part IV
Item 14. Exhibits, Financial Statement Schedules, and Reports
on Form 8-K.............................................. 16
Signatures ......................................................... 21
PART I
Item 1. Business
SEGMENTS OF BUSINESS
Harnischfeger Industries, Inc. ("Harnischfeger
Industries" or the "Company") is a holding company for
subsidiaries involved in the worldwide manufacture and
distribution of: paper machinery (Beloit Corporation);
surface mining and material handling equipment
(Harnischfeger Corporation); underground mining equipment
(Joy Technologies Inc.); and systems integration services
(Syscon Corporation). The Company expects that Syscon
Corporation, the remaining unit in the Systems Group, will
be divested in the first half of 1995. See Part IV Item
14(b)(6). The operating results of the Systems Group
have therefore been reclassified as discontinued
operations in the Company's Consolidated Statement of
Income for each year presented. The Company completed
its acquisition of Joy Technologies Inc.("Joy"), a world
leader in underground mining equipment and environmental
products, in an exchange of common stock on November 29,
1994. Harnischfeger Industries is the direct successor to
a business begun over 100 years ago which, at October 31,
1994, through its subsidiaries, manufactures and markets
products classified into three industry segments:
Papermaking Machinery and Systems, Mining Equipment, and
Material Handling Equipment. A fourth segment, the
Environmental Group, was added in fiscal 1995 as a result
of the acquisition of Joy.
PAPERMAKING MACHINERY AND SYSTEMS
The Papermaking Machinery and Systems Group is
comprised of the Company's 80% interest in Beloit
Corporation ("Beloit") and the Company's interest in
Measurex Corporation ("Measurex"). On December 29, 1994,
Measurex repurchased 2,026,900 shares of its stock held by
the Company, reducing the Company's ownership interest
from 20% to 10%. Beloit is consolidated, while Measurex
is accounted for on the equity basis (cost basis
subsequent to December 29, 1994). Mitsubishi Heavy
Industries, Ltd. ("Mitsubishi") is the owner of the other
20% interest in Beloit. The Company and Mitsubishi have
entered into certain agreements that provide Mitsubishi
with the right to designate one of Beloit's five
directors. These agreements also place certain
restrictions on the transfer of Beloit stock. In the event
of a change in control of the Company, Mitsubishi has the
right to sell its 20% interest back to the Company for the
greater of $60 million or the book value of its equity
interest.
Beloit is a leader in the design and manufacture of
papermaking machinery and related products used in the
pulp and paper industries. Beloit operates on a global
basis with major manufacturing facilities in six countries
and sales and service offices located throughout the
world. In addition, licensing arrangements exist with
several major foreign companies.
Beloit's activities are divided into the following
categories: complete installations involving the design,
manufacture and installation of equipment and systems;
major rebuilds and servicing of existing systems; and the
sale of ancillary equipment and replacement parts. This
machinery is custom designed to meet the specific needs of
each customer. In 1994, Beloit expanded its service
business through the acquisition of OASIS (Optical
Alignment Systems and Inspection Services, Inc.), the
leading supplier of in-mill optical alignment services.
Beloit is known for the quality and dependability of
its products and is a leader in product innovation and
development. Beloit has made a continuous commitment to
research and development activities, and has been granted
numerous patents on its designs. Beloit systems and
equipment are used by a substantial number of paper
producers, both domestic and foreign, and Beloit's
installed base of equipment exceeds that of any of its
competitors.
A major factor in Beloit's success in the paper
machinery industry has been its international
manufacturing operations. Beloit's overseas facilities
have been used to support both domestic and foreign sales
and have provided Beloit with the flexibility to shift its
manufacturing to more favorable locations as appropriate.
In addition, Beloit has been able to take advantage of
favorable export financing provided by certain foreign
governments. Beloit's manufacturing facilities are
supported by a domestic and international marketing
network staffed by experienced sales engineers.
Measurex provides its customers with
computer-integrated manufacturing through design,
production, marketing and servicing of sensor-based
information and control systems. Measurex products provide
improved results for customers by increasing productivity,
reducing raw material usage and energy consumption, and
improving product quality and uniformity.
Measurex's primary marketplace is within the
manufacturing industries that produce products by
continuous or batch processes. Over 79% of Measurex's
business is with the pulp and paper industry, with the
remaining business being with the plastic, metal, rubber,
chemicals, glass and pharmaceutical industries.
Beloit has entered into an agreement with Jagenberg
Papiertechnik, GmbH, a German paper finishing and coating
equipment manufacturer. Under the Jagenberg agreement,
Beloit's Lenox Division will become the major supplier of
parts and service for all winder products in the Americas.
The agreement is currently being reviewed by regulatory
authorities with final approval expected to be received in
the first half of 1995.
MINING EQUIPMENT
Harnischfeger Corporation, through its Mining
Equipment Division, is the world's largest producer of
electric mining shovels and is a significant producer of
electric and diesel-electric crawler and walking
draglines, hydraulic mining excavators, blasthole drills,
and electric, dredge and dragline bucket products.
Electric mining shovels range in capacity from 18 to 80
cubic yards, crawler draglines from 10 to 20 cubic yards,
and hydraulic mining excavators from 12 to 27 cubic yards.
Capacities for the walking draglines range from 20 to 150
cubic yards.
In 1991, Harnischfeger Corporation expanded its
product lines by acquiring the large rotary blasthole
drill product line from the Gardner-Denver Mining and
Construction Division of Cooper Industries, Inc. There
are three drill models currently in the active product
line, with drilling diameters ranging from 9 to 22 inches
and bit load capacities from 70,000 to 150,000 pounds.
The products of the Mining Equipment segment are used
in mines, quarries and earth-moving operations in the
digging and loading of such minerals and other ores as
coal, copper, gold, iron ore, lead, zinc, bauxite,
uranium, phosphate, stone and clay.
Harnischfeger Corporation has a significant
relationship in the mining shovel business with Kobe
Steel, Ltd. ("Kobe") pursuant to which Harnischfeger
Corporation licenses Kobe to manufacture certain electric
mining shovels and related replacement parts in Japan.
Harnischfeger Corporation has the exclusive right to
market Kobe-manufactured mining shovels and parts outside
Japan (except in the case of certain government sales).
In addition, Harnischfeger Corporation is party to an
agreement, through 1996, with a corporate unit of the
People's Republic of China, licensing the manufacture and
sale of two models of electric mining shovels and related
components. This relationship provides Harnischfeger
Corporation with an opportunity to sell component parts
for shovels built in China.
On November 29, 1994, the Company completed its
acquisition of Joy, a world leader in underground mining
equipment and environmental products, in an exchange of
common stock. Joy manufactures and services mining
equipment for the underground extraction of coal and other
bedded deposits and has facilities in Australia, South
Africa, the United Kingdom and the United States, as well
as sales offices in both Poland and the People's Republic
of China. Joy's Mining Machinery Group designs,
manufactures and distributes continuous miners, entry
drivers and sump shearers; long-wall shearers; shuttle
cars; and continuous haulage systems for use in
underground mining. The Mining Machinery Group's products
are used to extract bedded materials from underground
deposits. They are not sold into the general construction
industry, and demand for them is not tied to cycles in
that industry. Joy also maintains an extensive network of
service and spare parts distribution centers to rebuild
and service equipment and sell spare parts in support of
its installed base. This network includes six service
centers in the United States and four outside of the
United States, all of which are strategically located in
major underground mining regions. Joy's Mining Machinery
Group accounts for approximately 74% of total Joy sales.
The financial position and results of operations of
Harnischfeger Industries and Joy will be combined in
fiscal 1995 retroactive to November 1, 1994. Financial
information with respect to the acquisition of Joy is
presented in Note 17 to the Financial Statements, on Page
43 of the 1994 Annual Report to Shareholders and is
incorporated herein by reference.
MATERIAL HANDLING EQUIPMENT
The Material Handling Equipment Division of
Harnischfeger Corporation produces lines of
through-the-air material handling equipment designed for a
variety of users as well as container handling cranes for
use in ports. The Division is comprised of six business
groups: P&H(TM) Equipment, Product Support, PHoenix(TM),
Distribution and Service, Morris - Engineered Products
Division and Morris - Standard Products Division.
P&H(TM) Equipment
The P&H(TM) Equipment group is comprised of the
overhead crane, hoist and electrical product lines in the
United States. It was formed from the core of what made up
the Material Handling Equipment Division in prior years.
The new crane portion of the group is comprised of
several product lines: engineered cranes, standard cranes,
portal cranes and crane components. Cranes are designed
for installation in a wide range of industrial settings.
Each crane is engineered to the customer's specifications,
using standard components wherever possible. Engineered
cranes are marketed for moderate to severe duty cycle
applications in capacities from 3 to 800 tons.
Standard overhead cranes are available in capacities
from 5 to 100 tons. Stacker cranes, ranging in capacities
from 2 to 50 tons, are particularly suitable for factory
automation projects. Portal cranes range in lifting
capacities from 5 to 100 tons and are used outdoors to load
and unload materials.
The large installed base of cranes and increasing
sensitivity of customers to opportunities for improved
manufacturing efficiency from upgrading their material
handling equipment provides this product line an
opportunity for growth.
The component products portion of this group consists
of electric wire rope and chain hoists, manual chain
hoists, ratchet lever hoists, and electrical products.
Hoists range in capacities from 1/8 ton to 60 tons. These
hoists use state-of-the-art materials and manufacturing
techniques and feature a wide variety of controls.
Product Support
The Product Support group markets replacement products
and parts through Material Handling Centers, both
independent and company owned, in domestic markets and
through licensees or agents in international markets. This
group differentiates itself from the competition through
reliable and responsive delivery performance.
PHoenix(TM)
The PHoenix group markets pre-owned cranes under the
PHoenix trademark which have been remanufactured and
modernized to meet customer requirements. It also markets
pre-owned parts to its customers. The PHoenix group
provides a cost effective solution with reduced lead times
to customers. The group's products are marketed direct and
through both independent and company owned Material
Handling Centers.
Distribution and Service
This group provides installation, erection and repair
and maintenance services under the ProCare(TM) trademark
through the growing network of company owned Material
Handling Centers. The group responds to customers'
increased desire to outsource the repair and maintenance of
overhead cranes and hoists.
Morris - Engineered Products Division
The Morris - Engineered Products Division is the
larger portion of the recently acquired Morris Mechanical
Handling business based in the United Kingdom. It
manufactures high integrity special purpose heavy lifting
equipment, principally container handling cranes. In
addition, its operations in South Africa are involved in
the manufacture and service of cranes and other lifting
equipment.
Morris - Standard Products Division
The Morris - Standard Products Division manufactures
hoists, cranes, linear motors, and controls. The hoist
division manufactures a range of electric wire rope hoists
and both electric and hand chain hoists. The industrial
cranes division manufactures electric overhead cranes all
to standardized designs. Linear Motors manufactures crane
and general industrial controls and linear motors for
special and general application.
ENVIRONMENTAL GROUP
Joy's Environmental Group supplies flue gas
desulfurization systems for reducing levels of sulfur
dioxide in smokestack emissions which otherwise might react
with other chemicals in the atmosphere to form acid rain.
The Environmental Group also designs, fabricates, and
installs systems for the collection and removal of ash
accumulated at the bottom of coalburning boilers and ash
carried up the exhaust flues of these boilers. These
products and services are used worldwide by various
electric utilities and industrial companies. The
Environmental Group accounts for approximately 26% of total
Joy sales.
SYSTEMS
The Systems Group consists of Syscon Corporation
("Syscon").
Syscon is engaged principally in providing systems
development, systems integration and systems services to
the United States Government, government agencies and
commercial enterprises.
The Company expects that Syscon will be divested in
the first half of 1995. Syscon has been presented as a
discontinued operation in the Company's Consolidated
Financial Statements.
Syscon develops complex systems for the federal
government, including the Department of Defense and federal
civil agencies. As a software engineering firm, Syscon
provides sophisticated computer programs used by the
military in their mission critical systems, training,
logistics and business management systems. In addition,
Syscon develops application-specific management information
systems software for other federal departments and agencies
and for commercial clients.
Syscon develops, integrates and supports
business/resource management information systems for
defense and federal agencies and the commercial sector.
Syscon provides cost-effective solutions to a particular
client's needs using commercial off-the-shelf computer
hardware and software to meet systems requirements. Syscon
also performs a wide range of engineering and management
services to assist clients responsible for projects that
field complex military and space systems, and business
management systems.
INTERNATIONAL OPERATIONS
Export sales from the United States were approximately
15% of net sales in 1994, 15% in 1993 and 15% in 1992.
Typically, the profit margin on export sales does not
differ substantially from the profit margin on domestic
sales.
In 1994, 1993 and 1992, Beloit's manufacturing
subsidiaries outside the United States (principally in the
United Kingdom, Italy, Canada, Brazil and Poland) generated
approximately 12%, 17% and 29%, respectively, of
Harnischfeger Industries' consolidated net sales.
Harnischfeger Corporation's manufacturing subsidiaries
outside the United States (principally in Australia, South
Africa, Brazil, Canada, United Kingdom, Mexico and Germany)
generated approximately 11% of Harnischfeger Industries'
consolidated net sales in 1994, 9% in 1993 and 12% in 1992.
Joy's Mining Machinery Group has been active in major
coal mining markets outside the United States with
development, manufacturing, distribution and service
facilities in Australia, South Africa and the United
Kingdom. More than 30% of Joy's mining revenues are
derived from countries outside the United States.
Joy's Environmental Group has been increasing its
participation in global markets such as the Far East.
Appoximately 40% of the Groups revenues are derived from
sources outside of the United States.
Beloit has granted licensing agreements to serve
certain foreign markets to companies located in Australia,
France, India, Italy, Japan, China and Spain. The licensing
agreement with Mitsubishi in Japan represents the majority
of Beloit's license income. Beloit maintains sales and
service offices throughout the world to remain competitive
in foreign markets.
In general, sales of licensed mining products are
managed within the country of manufacture by the foreign
licensee. Licensee exports, together with exports from the
United States, are sold through Harnischfeger Corporation's
subsidiaries, which directly or through subsidiaries or
affiliates maintain regional sales offices in: Brisbane,
Melbourne and Perth, Australia; Toronto and Vancouver,
Canada; Mexico City, Mexico; Belo Horizonte and Sao Paulo,
Brazil; Antofagasta, Chile; Lima, Peru; Weiterstadt,
Germany; Aylesbury, United Kingdom; Johannesburg, South
Africa; Caracas and Maracaibo, Venezuela; and Beijing,
China.
Harnischfeger Industries' international operations are
subject to certain risks not generally applicable to its
domestic businesses, including currency fluctuations,
changes in tariff restrictions, restrictive regulations of
foreign governments (including price and exchange
controls), and other governmental actions. Harnischfeger
Industries has entered into various foreign currency
exchange contracts with major international financial
institutions designed to minimize its exposure to exchange
rate fluctuations on foreign currrency transactions.
GENERAL
Seasonality
No significant portion of Harnischfeger Industries'
business is subject to or influenced by seasonal factors;
however, Harnischfeger Industries' business is influenced
by the cyclical nature of the paper machinery, mining, and
capital goods industries, and for Syscon, the federal
spending programs of the U.S. Government, particularly the
Department of Defense.
Distribution
Sales of Beloit products are principally made directly
to the end user. On a worldwide basis, each manufacturing
facility is responsible for a designated market area.
Beloit also maintains a worldwide marketing group to
coordinate and support worldwide facilities in marketing
strategies, technical sales support and participation in
major projects including interface with engineering firms
and financial institutions. Beloit offers systems and
turnkey alternatives to assist in related business
development throughout the world. Agents are used in
certain foreign countries to augment Beloit's sales force
stationed in the segment's manufacturing facilities and in
sales offices worldwide.
In the United States, mining equipment, overhead
cranes and certain electrical products are marketed
directly from Harnischfeger Corporation's headquarters and
regional sales offices. Electric wire rope and chain hoists
and crane modernizations are sold through dealers and
distributors, assisted and coordinated by corporate and
regional office personnel. The Material Handling Equipment
Division has a dealer network of regional distributorships
(referred to as Material Handling Centers).
Joy's mining machinery sales are made mostly through
sales offices located in major coal-producing areas. Joy's
worldwide sales force has marketing responsibility for new
machine sales, as well as for parts, components and rebuild
services provided to customers. A segment of the sales
force in the United States is dedicated to manning a truck
fleet which visits customer sites on a regular basis in
order to deliver components and parts. Joy's environmental
sales are handled by direct sales contacts with the
customer by employees as well as manufacturers'
representatives.
The manufacture and sale of repair and replacement
parts and the servicing of equipment are important aspects
of Harnischfeger Corporation operations. Harnischfeger
Corporation maintains mining parts warehouses in Arizona,
Minnesota, Nevada, Wisconsin, West Virginia and Wyoming and
in Australia, Brazil, Canada, Chile, Germany, South Africa
and Venezuela. These warehouses facilitate shipment of
customers' orders for parts, and some also function as
regional service centers.
A majority of Syscon's business currently is performed
under contracts obtained through negotiated procurement. To
obtain a contract through negotiated procurement, Syscon
typically submits a proposal for the production of a
certain system, performance of a particular task or
rendering of a particular service. If the proposal is
accepted, Syscon and its customer enter into a contract for
payment on a cost-plus-fee or fixed-price basis.
Government contracts may be terminated for convenience
at the Government's option at any time, in which event the
Government would reimburse all allowable costs to the date
of termination and those profits relating to work performed
to such date.
Competition
Harnischfeger Industries conducts its domestic and
foreign operations under highly competitive market
conditions, requiring that its products and services be
competitive in price, quality, service and delivery.
The pulp and paper capital machinery market is
globally competitive; Beloit's two major competitors are
foreign-owned companies. The principal competitors are
Valmet Paper Machinery, Inc., with controlling interest
held by Valmet Corporation, Finland, and J. M. Voith GmbH,
with headquarters in Germany.
The Mining Equipment Division's principal competitors
in electric mining shovels are B-E Holdings, Inc. and
Marion, a division of Indresco, Inc. Harnischfeger
Industries believes its Mining Equipment Division is the
leading participant in this market. The Mining Equipment
Division is committed to continue in its leadership
position in providing surface mining equipment by competing
aggressively against the other principal participants in
the hydraulic mining excavator market: Orenstein & Koppel,
Demag, Hitachi and Caterpillar. In draglines, the main
competitors are B-E Holdings, Inc. and Marion. The
Division's main competitors in drills are Ingersoll-Rand
and B-E Holdings, Inc.
In the underground coal mining industry, Joy competes
primarily on the basis of the quality and reliability of
its products and its ability to provide rapid, extensive
and cost-effective repair and rebuild services and delivery
of spare parts. Joy's primary competitors in the
continuous mining machinery industry are EIMCO(a Tampella
Tamrock Company), the Jeffrey division of Indresco Inc.,
Simmons-Rand Company(a subsidiary of Long Airdox Company),
and Voest Alpine. In the longwall shearer new equipment
market, Joy competes primarily with Anderson Longwall PLC,
Eickhoff Corporation, and Mitsui Miike Machinery Company,
Ltd. In the continuous haulage market, Joy competes with
Long Airdox, Fairchild International, and Jeffrey. In the
sale of spare parts for Joy's equipment, Joy competes with
EIMCO and various small suppliers.
Joy's competition in the environmental industry can be
divided into two markets: wet scrubber and dry scrubber.
In the wet scrubber market, Joy competes against ABB
Environmental Systems Inc. (a subsidiary of Asea Brown
Boveri Inc. which now includes ABB Flakt Inc.); G.E.
Environmental (a subsidiary of General Electric Co.); and
the Babcock & Wilcox Company (a subsidiary of McDermott
Incorporated). In the dry scrubber market, Joy has the
largest installed base of dry scrubbers at United States
electric utilities. The primary competitors in this market
are: ABB Environmental Systems Inc.; Research-Cottrell;
Environmental Elements Corporation; and Wheelabrator
Technologies, Inc. Joy Environmental Group's primary
competitors in electrostatic precipitators (ESP's) and
baghouses are G.E. Environmental; Research-Cottrell; ABB
Environmental Systems Inc.; and Environmental Elements
Corporation. In the ash handling business, the
Environmental Group has competed mainly with United
Conveyor Corp. and Fuller Company.
There are more than 50 manufacturers of overhead and
portal cranes in the United States, although many tend to
specialize in certain products or regional segments of the
market. There are approximately ten major United States
manufacturers of electric wire rope and chain hoists.
Syscon has numerous competitors in all areas of its
business. Its principal competitors are those companies
with significant engineering and computer hardware/software
development capabilities. Additionally, numerous agencies
of the Government maintain their own internal computer
systems and engineering staffs.
Customers
Sales of services and equipment to agencies of the
United States Government approximated $128.3 million,
$185.2 million and $179.7 million in 1994, 1993 and 1992,
respectively. The sales of services and equipment relate
primarily to Syscon which is reported as a discontinued
operation in the consolidated financial statements for
1994, 1993 and 1992, respectively.
Backlog
Backlog by business segment for the Company's
continuing operations (in thousands of dollars) as of the
end of fiscal years 1994 and 1993 was as follows:
October 31,
------------------------
1994 1993
---------- ----------
Papermaking Machinery and Systems.................... $ 633,770 $ 550,660
Mining Equipment..................................... 70,880 102,165
Material Handling Equipment.......................... 107,112 43,112
---------- ----------
$ 811,762 $ 695,937
========== ==========
Supply of Materials and Purchased Components
The Papermaking Machinery and Systems Group purchases
raw materials used in its products which include: plates,
sheets, shapes, carbon and alloy steel, stainless steel,
brass and bronze, nickel alloy, and aluminum. Purchases of
semi-processed and component parts include: castings,
valves, filters, pumps, dryers, electrical equipment, and
various vacuum, drying, hydraulic, combustion,
material-handling and temperature control systems. Beloit
has approximately 4,700 suppliers of which approximately
1,000 are most commonly used. No single source is dominant.
The Mining and Material Handling Equipment Divisions
manufacture machines and heat-treated gears, pinions,
shafts, structural fabrications, electrical motors,
generators, and other electrical parts. They purchase raw
and semi-processed steel, castings, forgings, copper and
other materials for these parts and components from
approximately 400 suppliers. In addition, component parts,
such as engines, bearings, controls, hydraulic components,
and a wide variety of mechanical and electrical items are
purchased from approximately 1,500 suppliers. Purchases of
materials and components are made on a competitive basis
with no single source being dominant.
Joy purchases electric motors, gears, hydraulic
parts, electronic components, forgings, steel, clutches and
other components and raw materials from outside suppliers.
Although Joy purchases certain components and raw materials
from a single supplier, alternative sources of supply are
available for all such quantities. Joy believes that it
has adequate sources of supplies of component parts and raw
materials for its manufacturing requirements.
Patents and Licenses
Patents are quite important in the papermaking
industry. All major machinery manufacturers use patents
extensively to protect the technology base that results
from research and development. Beloit has been granted
numerous patents on its designs and more are pending. Most
are registered in all of the major countries into which
Beloit and its licensees sell.
On May 21, 1993, a Federal court jury in Madison,
Wisconsin awarded Beloit $17.2 million following a patent
infringement trial against J.M. Voith GmbH of Germany and
its subsidiary, Voith, Inc. The jury determined that
Beloit's patents on its new Bel-Champ(TM) technology for
the drying section of large paper manufacturing machines
were valid and infringed by Voith in connection with
Voith's sale of a paper machine dryer section. The verdict
of this patent infringement trial has been appealed by
Voith. The award has not been recorded in the Company's
financial statements.
In addition, on November 23, 1994, a Federal court
jury, in Madison, Wisconsin, returned a verdict finding
Valmet Corporation of Finland guilty of infringing a key
patent held by Beloit Corporation on the same Bel-Champ
paper machine drying technology. In connection with this
suit, the jury awarded Beloit $7.9 million in damages. It
is expected that the verdict in this case will be appealed
by Valmet and the award has not been recorded in the
Company's financial statements.
The Mining and Material Handling Equipment Divisions
have numerous domestic and foreign patents, patent
applications and patent licensing agreements. Harnischfeger
Corporation does not consider these businesses materially
dependent upon any patent or patent license agreement.
Joy and its subsidiaries own numerous patents and
trademarks and have patent licenses from others relating to
its products and manufacturing methods. Also, patent and
trademark licenses are granted to others throughout the
world and royalties are received under most of these
licenses. While Joy does not consider any particular
patent or license or group of patents or licenses to be
essential to its business as a whole, Joy considers its
patents and licenses significant to the conduct of its
business in certain product areas.
The Systems Group does not consider its business
materially dependent upon any patent or patent license
agreement.
Research and Development
Harnischfeger Industries maintains a strong commitment
to research and development with engineering staffs that
are engaged in full-time research and development of new,
and improvement of existing, products. Beloit maintains
research and development facilities in Rockton, Illinois,
Pittsfield, Massachusetts, Bolton, United Kingdom, Clarks
Summit, Pennsylvania, Portland, Oregon and Waukesha,
Wisconsin. Harnischfeger Corporation maintains research and
development facilities in Milwaukee, Wisconsin. Joy pursues
technological development through the engineering of new
products, systems and applications; the improvement and
enhancement of licensed technology; and synergistic
acquisitions of technology. Syscon conducts research and
development activities on a decentralized basis, thereby
effectively utilizing the technology base that resides
within the operating units. Research and development
expenses were $25.0 million in 1994, $24.2 million in 1993,
and $25.1 million in 1992.
Environmental and Health and Safety Matters
The activities of the Company are regulated by
federal, state and local statutes, regulations and
ordinances relating to both environmental protection and
worker health and safety. These laws govern current
operations, require remediation of environmental impacts
associated with past or current operations, and under
certain circumstances provide for civil and criminal
penalties and fines, as well as injunctive and remedial
relief. The Company's foreign operations are subject to
similar requirements as established by their respective
countries.
The Company has expended substantial managerial and
financial resources in developing and implementing actions
for continued compliance with these requirements. The
Company believes that it has substantially satisfied these
diverse requirements. However, because these requirements
are complex and, in many areas, rapidly evolving, there can
be no guarantee against the possibility of sizeable
additional costs for compliance in the future. These same
requirements must also be met by the Company's competitors
and, therefore, the costs for present and future compliance
with these laws should not create a competitive
disadvantage. Further, these laws have not had, and are not
presently expected to have, a material adverse effect on
the Company.
The Company's operations or facilities have been and
may become the subject of formal or informal enforcement
actions or proceedings for alleged noncompliance with
either environmental or worker health and safety laws or
regulations. Such matters have typically been resolved
through direct negotiations with the regulatory agency and
have typically resulted in corrective actions or abatement
programs. However, in some cases, fines or other penalties
have been paid. Historically, neither such commitments nor
such penalties have been material.
Employees
As of October 31, 1994, Harnischfeger Industries
employed approximately 11,200 persons, of which
approximately 7,400 were employed in the United States.
Approximately 2,375 of the United States employees are
represented by local unions under collective bargaining
agreements with expiration dates from September 1, 1995 to
April, 1996. Harnischfeger Industries believes that it
maintains generally good relationships with its employees.
Financial Information about Industry Segments
The financial information on industry segments
presented in Note 15 to the Financial Statements, on pages
40 through 42 of the 1994 Annual Report to Shareholders, is
incorporated herein by reference.
Item 2. Properties
As of October 31, 1994, the following principal
properties were owned, except as indicated. All of these
plants are generally suitable for operations.
Harnischfeger Industries owns a 120,000 square foot
office building in Brookfield, Wisconsin, which is used as
its worldwide corporate headquarters. The Company leases
more than half of this building to Harnischfeger Engineers,
Inc. and will continue to do so through October 1995.
Syscon has 25 offices located in 12 states and
currently leases all the principal facilities used in its
business except that it owns an engineering development
facility of 11,000 square feet in Virginia Beach, Virginia
and a building of 20,000 square feet that houses its
product development operations in Middletown, Rhode Island.
Syscon leases facilities containing 80,000 square feet of
space for its headquarters and principal computer
installation in Falls Church, Virginia. Syscon also
maintains major computer installations at offices in
Middletown, Rhode Island and San Diego, California
containing an aggregate of 77,000 square feet.
MINING EQUIPMENT LOCATIONS
Floor Space Land Area
Plant and Location (Sq. Ft.) (Acres) Principal Operations
- ------------------------- ----------- --------- ----------------------------
Milwaukee, Wisconsin..... 1,067,000 46 Electric mining shovels,
hydraulic mining excavators,
electric and diesel-electric
draglines and large rotary
blasthole drills. Crane
welding.
Milwaukee, Wisconsin..... 180,000 13 Electrical products, heavy
duty overhead and portal crane
components and service parts
warehouse. Crane assembly.
Bassendean, Australia.... 75,500 5 Components and parts for
mining shovels.
Mt. Thorley, Australia... 20,000 6 Components and parts for
mining shovels.
Johannesburg, So.
Africa................. 103,000 6 Components and parts for
mining shovels.
Johannesburg, So.
Africa................. 27,000(1) 1 Electrical products and
components for mining shovels.
Belo Horizonte, Brazil... 37,700 1 Components and parts for
mining shovels.
Weiterstadt, Germany..... 31,200(1) 1 Components and parts for
mining shovels.
- -------------------------
(1) Under a lease expiring in 1995.
This division operates warehouses in Casper, Wyoming;
Hibbing, Minnesota; Charleston, West Virginia; Milwaukee,
Wisconsin; Phoenix, Arizona; Reno, Nevada; Hinton,
Sparwood, Toronto and Vancouver, Canada; Bayswater and Mt.
Thorley, Australia; Belo Horizonte, Brazil; Weiterstadt,
Germany; Johannesburg, South Africa; Stobswood, United
Kingdom and Maracaibo, Venezuela. The warehouses in Casper,
Hibbing, Milwaukee, Mt. Thorley, Belo Horizonte and
Johannesburg are owned; the others are leased. In addition,
the division leases sales offices throughout the United
States and in principal locations in foreign countries.
MATERIAL HANDLING EQUIPMENT LOCATIONS
Floor Space Land Area
Plant and Location (Sq. Ft.) (Acres) Principal Operations
- ------------------------- ----------- --------- --------------------------
Milwaukee, Wisconsin..... 130,000 (1) 8 Remanufacture of overhead
cranes, hoists and material
handling equipment.
Oak Creek, Wisconsin..... 277,000 36 Standard overhead cranes,
hoists and material handling
equipment.
Loughborough, UK......... 420,000 36 Engineered and standard overhead
cranes, hoists, controls and
material handling equipment.
Johannesburg, S. Africa.. 124,000 7 Standard overhead cranes, hoists
and material handling
equipment.
Mexico City, Mexico...... 65,000 3 Standard overhead cranes,
hoists and
material handling
equipment.
(1) Under a lease expiring in 1995.
This division has leased facilities for its company
owned Material Handling Centers in San Leandro, California;
Pittsburg, California; Portland, Oregon; Reno, Nevada;
Dallas, Texas; Houston, Texas; New Orleans, Louisiana;
Chicago, Illinois; Detroit, Michigan; Pittsburgh,
Pennsylvania; and Cleveland, Ohio. In addition, the
division leases sales offices throughout the United States
and in principal locations in foreign countries.
PAPERMAKING MACHINERY AND SYSTEMS LOCATIONS
Floor Space Land Area
Plant and Location (Sq. Ft.) (Acres) Principal Operations
- -------------------------- ----------- --------- --------------------------------------
Beloit, Wisconsin......... 928,000 40 Papermaking machinery and
finished product processing
equipment.
Beloit, Wisconsin......... 230,000 15 Castings, pattern shop.
Waukesha, Wisconsin....... 57,000 10 Castings, pattern shop and
finished product processing.
Waukesha, Wisconsin....... 76,000(1) 13 Refiner plate machining, finished
product processing and warehousing.
Rockton, Illinois......... 469,000 203 Papermaking machinery, finished
product processing equipment and
R&D center.
South Beloit, Illinois.... 163,000 11 Castings.
Dalton, Massachusetts..... 277,000 55 Stock and pulp preparation
equipment and specialized processing
systems.
Lenox, Massachusetts...... 127,000 19 Winders.
Pittsfield,
Massachusetts........... 36,000 30 Research and development
facility and pilot
plant for process simulation.
Aiken, South Carolina..... 92,000 17
Columbus, Mississippi..... 133,000 22 Rubber and polymeric covers for rolls;
Federal Way, Washington... 55,000 3 rubber blankets; rubber linings and
Neenah, Wisconsin......... 77,000 10 metal roll repairs.
Clarks Summit, PA......... 88,000 10
Renfrew, Canada........... 145,000 22
Kalamazoo, Michigan....... 23,500 1 Filled rolls for supercalenders and
specialty rolls.
Portland, Oregon.......... 41,000 5 Bulk materials handling and drying
systems.
Rochester, New Hampshire.. 15,650 5 Specialty services provided
principally to the paper industry.
Pensacola, Florida........ 7,250 2 Specialty services provide
principally to the paper industry.
Sandusky, Ohio............ 254,000 13 Centrifugal castings.
Glenrothes, United Kingdom 56,000 8 Centrifugal castings.
Campinas, Brazil.......... 202,000 33 Papermaking machinery and finished
product processing equipment;
stock and pulp preparation equipment;
woodyard and pulp plant equipment.
Bolton, United Kingdom.... 465,400 73 Papermaking machinery and finished
product processing equipment; stock
and pulp preparation equipment.
Pinerolo, Italy........... 517,400 18 Papermaking machinery and finished
product processing equipment; stock
and pulp preparation equipment.
Jelenia Gora, Poland...... 650,000 40 Papermaking machinery and finished
product processing equipment; stock
and pulp preparation equipment.
Swiecie, Poland........... 37,000 (2) 4 Components and parts for papermaking
machinery equipment.
- -------------------------
(1) Under a lease expiring in 2007.
(2) Under a lease expiring in 2019.
The papermaking machinery and systems business has
warehouse space at the above facilities and in addition
maintains leased facilities in Memphis, Tennessee; Swiecie,
Poland; and Montreal, Canada. Sales offices are also
maintained at various locations throughout the world.
Information relating to lease commitments is presented
in Note 11 to the Financial Statements on page 38 of the
1994 Annual Report to Shareholders, which is incorporated
herein by reference.
Item 3. Legal Proceedings
The Company is a party to litigation matters and
claims which are normal in the course of its operations
and, while the results of litigation and claims cannot be
predicted with certainty, management believes that the
final outcome of such matters will not have a materially
adverse effect on the Company's consolidated financial
position or results of operations.
The Company is also involved in a number of
proceedings and potential proceedings relating to
environmental matters. Although it is difficult to estimate
the potential exposure to the Company related to these
environmental matters, the Company believes that these
matters will not have a materially adverse effect on its
consolidated financial position or results of operations.
As a prime contractor and subcontractor with various
agencies of the U.S. Government, principally the Department
of Defense, Syscon is subject to strict procurement
regulations, with non-compliance found by any one agency
possibly resulting in fines, penalties, debarment or
suspension from receiving additional contracts with all
agencies. In July, 1993, the U.S. Air Force rescinded a
contract with Syscon following a post-award protest of the
contract by another bidder. As a result of internal
reviews, Syscon determined that evidence exists to indicate
that an inaccurate certificate of compliance may have been
submitted in connection with the contract. The outcome of
the government investigation of this matter is not
presently determinable. Management believes that the final
outcome will not have a significant future effect on the
Company's consolidated financial position or results of
operations.
Item 4. Submission of Matters to a Vote of Security-Holders
No matters were submitted to a vote of security-
holders during the fourth quarter of fiscal 1994. The
following two matters were submitted to a vote of security-
holders at a special meeting held November 29, 1994:
1. Approval of the acquisition of Joy Technologies
Inc. through a stock-for-stock merger, and
2. Approval of an amendment to the Company's
Restated Certificate of Incorporation increasing the number
of authorized shares from 50,000,000 to 100,000,000.
In the vote to approve the merger, the following
number of shares of Common Stock were voted.
23,788,845 For
92,680 Against
63,089 Abstained
917,270 Non-Votes
In the vote to approve the amendment to the
Certificate of Incorporation, the following number of
shares of Common Stock were voted:
24,419,225 For
369,619 Against
73,040 Abstained
-- Non-Votes
Executive Officers of the Registrant
The following table sets forth, through the date of
filing this 10-K report, the executive officers of
Harnischfeger Industries and its major subsidiaries, their
ages, their offices with Harnischfeger Industries and the
period during which they have held such offices.
Number
of Years
Name Age Current Office and Principle Occupation as Officer
- ---------------------------- --- ---------------------------------------- ----------
Jeffery T. Grade............ 51 Chairman of the Board and Chief Executive 12
Officer since 1993; Chief Executive Officer
since 1992; President and Chief Operating
Officer since 1986; Director since 1983;
Senior Vice President, Finance and
Administration and Chief Financial Officer
from 1983 to 1986.
John A. McKay............... 61 President and Chief Operating Officer since 9
1993; Senior Vice President and Chief
Operating Officer from 1992 to 1993.
Chief Executive Officer, Beloit Corporation
since 1986. President, Beloit Corporation,
from 1986 to 1992.
Francis M. Corby, Jr........ 50 Executive Vice President for Finance and 9
Administration since December 1994; Senior
Vice President, Finance and Chief Financial
Officer from 1986 to December 1994.
K. Thor Lundgren............ 47 Executive Vice President for Law and 3
Government Affairs since December 1994;
Senior Vice President and General Counsel
from 1991 to December 1994.
Richard W. Schulze.......... 57 Senior Vice President and Special 13
Assistant to the Chairman and CEO since
December 1994; Senior Vice President,
Human Resources and Public Relations from
1982 to December 1994.
James C. Benjamin........... 42 Vice President and Controller since 1986. 9
Ian Lambert................. 48 Vice President and Treasurer since 1989. 5
Mr. Lundgren joined the Company in September, 1991.
Prior to joining the Company, Mr. Lundgren was a partner
with the law firm of Michael, Best & Friedrich.
The business address of each such person is 13400
Bishops Lane, Brookfield, Wisconsin 53005. All officers
listed above are citizens of the United States of America
except for Mr. Lambert who is a citizen of the United
Kingdom. Officers are elected annually but may be removed
at any time at the discretion of the Board of Directors.
There are no family relationships between the foregoing
officers.
PART II
The information required by Items 5 through 8 is
incorporated by reference from the 1994 Annual Report to
Shareholders. The following is a cross reference guide to
the incorporated information:
Form 10-K Applicable Page(s)
Item Number in Annual Report
- ----------- ------------------
Item 5. Market for the Registrant's Common Stock and Related Stockholder
Matters........................................................... 49
Item 6. Selected Financial Data for the Registrant for Each of the Last
Five Fiscal Years...................................................... 45-46
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations............................................. 17-25
Item 8. Financial Statements and Supplementary Data....................... 26-44,47
Item 9. Disagreements on Accounting and Financial Disclosure: None
PART III
All information required by Items 10 through 13 of
Part III, with the exception of information on the
Executive Officers which appears on page 15 of Part I of
this report, is incorporated by reference to the Company's
Proxy Statement for its 1995 Annual Meeting of Shareholders
to be filed with the Securities and Exchange Commission
within 120 days after the close of the fiscal year.
PART IV
Applicable Page(s)
in Annual Report*
-------------------
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
(a) The following documents are filed as part of this report:
(1) Financial Statements
Statement of Income for the years ended October 31, 1994, 1993 and
1992............................................................... 26
Balance Sheet at October 31, 1994 and 1993.............................. 27
Statement of Cash Flows for the years ended October 31, 1994, 1993 and
1992............................................................... 28
Statement of Shareholders' Equity for the years ended October 31, 1994,
1993 and 1992...................................................... 29
Notes to Consolidated Financial Statements.............................. 30-44
Report of Independent Accountants....................................... 47
- -------------------------
* Incorporated by reference from the indicated pages of the 1994 Annual Report
to Shareholders.
Applicable Page
in Form 10-K
--------------
(2) Financial Statement Schedules
Report of Independent Accountants on Financial Statement Schedule........ 20
For the Years Ended October 31, 1994, 1993 and 1992:
Schedule VIII. Valuation and Qualifying Accounts......................... 23
All other schedules are omitted because they are either not applicable or
the required information is shown in the financial statements or notes
thereto.
Financial statements of 50% or less-owned companies have been omitted
because the proportionate share of their profit before income taxes and total
assets are less than 20% of the respective consolidated amounts and
investments in such companies are less than 20% of consolidated total assets.
(3) Exhibits
Exhibit
Number Exhibit
------- -------------------------------------------------------------------
3(a) Certificate of Incorporation of Harnischfeger Industries, Inc. (incorporated
by reference to Exhibit 3(a) of the Registration Statement on Form S-4, File
No. 33-8821).
(b) Bylaws of Harnischfeger Industries, Inc., as amended on December 5, 1994
(incorporated by reference to Exhibit 4.3 to Registration Statement
on Form S-8, File No. 33-57209).
(c) Certificate of Designations of Preferred Stock, Series D (incorporated by
reference to Exhibit 28.1(b) to Registrant's Current Report on Form 8-K dated
March 25, 1992).
(d) Amendment to Certificate of Incorporation of Harnischfeger Industries, Inc.
dated November 29, 1994 (incorporated by reference to Exhibit 4.1(c) to
Registration Statement on Form S-8, File No. 33-57209).
4(a) Revolving Credit Facility dated as of November 18, 1993 among Harnischfeger
Industries, Inc. as borrower, Chemical Bank as Agent, First National Bank of
Chicago and Royal Bank of Canada as Co-Agents and certain financial
institutions (incorporated by reference to Exhibit 4(a) to Report of
Harnischfeger Industries, Inc on Form 10-K for the year ended October 31,
1993, File No. 1-9299).
(b) 9.1% Series A Senior Note Agreement dated as of September 15, 1989
(incorporated by reference to Exhibit 4(b) to Report of Harnischfeger
Industries, Inc. on Form 10-K for the year ended October 31, 1991, File No.
1-9299).
(c) 9.1% Series B Senior Note Agreement dated as of October 15, 1989
(incorporated by reference to Exhibit 4(c) to Report of Harnischfeger
Industries, Inc. on Form 10-K for the year ended October 31, 1991, File No.
1-9299).
(d) 8.95% Series C Senior Note Agreement dated as of February 15, 1991
(incorporated by reference to Exhibit 4(d) to Report of Harnischfeger
Industries, Inc. on Form 10-K for the year ended October 31, 1991, File No.
1-9299).
(e) 8.9% Series D Senior Note Agreement dated as of October 1, 1991 (incorporated
by reference to Exhibit 4(e) to Report of Harnischfeger Industries, Inc. on
Form 10-K for the year ended October 31, 1991, File No. 1-9299).
(f) Indenture for Debentures issued March 3, 1992 between Harnischfeger
Industries, Inc. and Continental Bank, National Association, Trustee, dated
March 1, 1992 (incorporated by reference to Exhibit 4(f) to Report of
Harnischfeger Industries, Inc. on Form 10-K for the year ended October 31,
1992, File No. 1-9299).
(g) First Supplemental Indenture for Debentures issued June 22, 1992 between
Harnischfeger Industries, Inc. and Continental Bank, National Association,
Trustee, dated June 12, 1992 (incorporated by reference to Exhibit 4(g) to
Report of Harnischfeger Industries, Inc. on Form 10-K for the year ended
October 31, 1992, File No. 1-9299).
(h) Registration Statement filed on Form S-3, for issuance of Debt Securities of
up to $150,000,000 dated August 22, 1992, File No. 33-51436 (incorporated by
reference to Exhibit 4(h) to Report of Harnischfeger Industries, Inc. on Form
10-K for the year ended October 31, 1992, File No. 1-9299).
(i) Rights Agreement dated as of February 8, 1989 between the Registrant and the
First National Bank of Boston, as Rights Agent, which includes as Exhibit A
the Certificate of Designations of Preferred Stock, Series D, setting forth
the terms of the Preferred Stock, Series D; as Exhibit B the Form of Rights
Certificate; and as Exhibit C the Summary of Rights to Purchase Preferred
Stock, Series D (Incorporated by reference to Exhibit 1 to Registrant's
Registration Statement on Form 8-A filed on February 9, 1989).
(j) Harnischfeger Industries, Inc. Stock Employee Compensation Trust Agreement
effective as of March 23, 1993 (incorporated by reference to Exhibit 4(k) to
Report of Harnischfeger Industries, Inc. on Form 10-K for the year ended
October 31, 1993, File No.1-9299).*
(k) $240,000,000 Amended and Restated Credit Agreement dated as of November 25,
1994 among Harnischfeger Industries Inc. as borrower and the financial
institutions from time to time thereto as lenders, the First National Bank of
Chicago and Royal Bank of Canada, as co-agents and Chemical Bank as Agent.
(l) Form of Indenture, dated as of September 1, 1993, between Joy Technologies
Inc. and The Bank of Montreal Trust Company, as Trustee for Joy Technologies
Inc.'s 10 1/4% Senior Notes due 2002 (incorporated by reference to Exhibit 4.1
to Joy Technologies Inc.'s Report on Form 10-Q for the quarter ended August
27, 1993, filed October 7, 1993).
10(a) Harnischfeger Industries, Inc. 1988 Incentive Stock Plan, as amended on
February 3, 1992.*
(b) Harnischfeger Industries Deferred Compensation Trust dated November 1, 1988
(incorporated by reference to Exhibit 10(d) to Report of Harnischfeger
Industries, Inc. on Form 10-K for the year ended October 31, 1988, File No.
01-9299).*
(c) First Amendment of the Deferred Compensation Trust dated December 19, 1990.*
(d) Harnischfeger Industries, Inc. Executive Incentive Plan, as amended as of
January 17, 1992 (incorporated by reference to Exhibit 10(d) to Report of
Harnischfeger Industries, Inc. on Form 10-K for the year ended October 31,
1991, File No. 1-9299).*
(e) Harnischfeger Industries, Inc. Supplemental Retirement and Stock Funding
Plan, as amended as of January 17, 1992 (incorporated by reference to Exhibit
10(e) to Report of Harnischfeger Industries, Inc. on Form 10-K for the year
ended October 31, 1991, File No. 1-9299).*
(f) Directors Stock Compensation Plan effective as of March 2, 1992 (incorporated
by reference to Exhibit 10(f) to Report of Harnischfeger Industries, Inc. on
Form 10-K for the year ended October 31, 1991, File No. 1-9299).*
(g) Service Compensation Agreement for Directors effective as of June 1, 1992
(incorporated by reference to Exhibit 10(g) to Report of Harnischfeger
Industries, Inc. on Form 10-K for the year ended October 31, 1992, File No.
1-9299).*
(h) Key Executive Employment and Severance Agreement (Restated), entered into as
of January 31, 1992, between Harnischfeger Industries, Inc. and Jeffery T.
Grade (incorporated by reference to Exhibit 10(h) to Report of Harnischfeger
Industries, Inc. on Form 10-K for the year ended October 31, 1992, File No.
1-9299).*
(i) Key Executive Employment and Severance Agreement (Restated), entered into as
of January 31, 1992, between Harnischfeger Industries and John R. Teitgen
(incorporated by reference to Exhibit 10(i) to Report of Harnischfeger
Industries, Inc. on Form 10-K for the year ended October 31, 1992, File No.
1-9299).*
(j) Key Executive Employment and Severance Agreement (Restated), entered into as
of March 2, 1992, between Harnischfeger Industries, Inc. and John A. McKay
(incorporated by reference to Exhibit 10(j) to Report of Harnischfeger
Industries, Inc. on Form 10-K for the year ended October 31, 1992, File No.
1-9299).*
(k) Supplement to and Modification of Key Executive Employment and Severance
Agreement (Restated) effective as of November 6, 1992 between Harnischfeger
Industries, Inc. and John A. McKay (incorporated by reference to Exhibit
10(k) to Report of Harnischfeger Industries, Inc. on Form 10-K for the year
ended October 31, 1992, File No. 1-9299).*
(l) Key Executive Employment and Severence Agreement (Restated), entered into as
of March 2, 1992, between Harnischfeger Industries, Inc. and Francis M.
Corby, Jr. (incorporated by reference to Exhibit 10(m) to Report of
Harnischfeger Industries, Inc. on Form 10-K for the year ended October
31,1992, File No. 1-9299).*
(m) Key Executive Employment and Severence Agreement, entered into as of
March 2, 1992, between Harnischfeger Industries, Inc. and K. Thor Lundgren.*
(n) Purchase and Sale Agreement by and among HEI Systems, Inc. and HEI
Acquisition, Inc. and Harnischfeger Industries, Inc., dated as of October 28,
1993 (incorporated by reference to Exhibit 10(p) to Report of Harnischfeger
Industries, Inc. on Form 10-K for the year ended October 31, 1993, File No. 1-
9299).
(o) Agreement and Plan of Merger, dated as of August 17, 1994 among Harnischfeger
Industries, Inc., Harnischfeger Acquisition Corporation and Joy Technologies
Inc. (incorporated by reference to Exhibit 2.1 to Registration Statement on
Form S-4, File No.1-9299).
(p) Joy Technologies Inc. 1991 Stock Option and Equity Incentive Plan dated
November 12, 1991 (incorporated by reference to Exhibit 99.1 to
Registration Statement on For S-8, File No. 33-57209).*
(q) Amendment to Joy Technologies Inc. 1991 Stock Option and Equity Incentive
Plan dated November 29, 1994 (incorporated by reference to Exhibit 99.2
to Registration Statement on Form S-8, File No. 33-57209).*
11 Statement Re Computation of Earnings Per Share.
13 1994 Annual Report to Shareholders, filed solely to the extent portions are
incorporated herein by reference.
21 Subsidiaries of the Registrant.
23 Consent of Independent Accountants.
24 Powers of Attorney.
27 Financial Data Schedule
- -------------------------
* Represents a management contract or compensatory plan
or arrangement required to be filed as an exhibit pursuant
to Item 14(c) of Form 10-K.
(b) Reports on Form 8-K
(1)Current Report on Form 8-K dated August 18, 1994
relating to the announcement of the signing of the
definitive agreement with Joy Technologies
Inc.("Joy") pursuant to which Harnischfeger
Industries, Inc. will acquire Joy in a stock-for-
stock merger.
(2)Current Report on Form 8-K dated September 8, 1994
relating to the announcement of the private sale of
2,000,000 shares of common stock.
(3)Current Report on Form 8-K dated September 12, 1994
relating to the announcement that Harnischfeger
Industries, Inc. has entered into an agreement in
principle to acquire all of the outstanding shares of
MMH(Holdings) Limited.
(4)Current Report on Form 8-K dated November 29, 1994
relating to the announcement of the completion of
Harnischfeger Industries, Inc.'s previously announced
acquisition of Joy Technologies Inc. through a stock-
for-stock merger.
(5)Current Report on Form 8-K dated January 16, 1995
relating to the announcement of financial information
on combined sales and net income of Harnischfeger
Industries, Inc. and Joy Technologies Inc. for more
than thirty(30) days of post-merger combined
operations for purposes of complying with pooling
accounting requirements.
(6)Current Report on Form 8-K/A dated January 26, 1995
relating to the announcement by Harnischfeger
Industries, Inc. that it has entered into an
agreement (subject to closing conditions and
regulatory approval) providing for the sale of Syscon
Corporation to Logicon, Inc.
REPORT OF INDEPENDENT ACCOUNTANTS ON
FINANCIAL STATEMENT SCHEDULE
To the Directors and Shareholders
of Harnischfeger Industries, Inc.
Our audits of the consolidated financial statements
referred to in our report dated December 5, 1994 appearing
on page 47 of the 1994 Annual Report to Shareholders of
Harnischfeger Industries, Inc. (which report and
consolidated financial statements are incorporated by
reference in this Annual Report on Form 10-K) also included
an audit of the Financial Statement Schedule listed in Item
14(a) of this Form 10-K. In our opinion, this Financial
Statement Schedule presents fairly, in all material
respects, the information set forth therein when read in
conjunction with the related consolidated financial
statements.
As discussed in Note 6 to the consolidated financial
statements, the Company changed its method of accounting
for income taxes effective November 1, 1993. The
consolidated financial statements and the Financial
Statement Schedule referred to above have been restated to
reflect the retroactive application of the change.
PRICE WATERHOUSE LLP
Milwaukee, Wisconsin
December 5, 1994
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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, in the City of
Brookfield, Wisconsin, on the 27th day of January, 1995.
HARNISCHFEGER INDUSTRIES, INC.
(Registrant)
/s/FRANCIS M. CORBY, JR.
Francis M. Corby, Jr.
Executive Vice President for
Finance and Administration
Pursuant to the requirements of the Securities
Exchange Act of 1934, this report has been signed below by
the following persons on behalf of the registrant and in
the capacities indicated on January 27, 1995.
Signature Title
- ------------------------------------------ ------------------------------------------
/s/JEFFERY T. GRADE Chairman and Chief Executive
Jeffery T. Grade Officer
/s/FRANCIS M. CORBY, JR. Executive Vice President for
Francis M. Corby, Jr. Finance and Administration
(Chief Financial Officer)
/s/JAMES C. BENJAMIN Vice President and Controller
James C. Benjamin (Chief Accounting Officer)
(1) Director
Donna M. Alvarado
(1) Director
John D. Correnti
(1) Director
Don H. Davis, Jr.
(1) Director
Harry L. Davis
(1) Director
Robert M. Gerrity
(1) Director
Robert B. Hoffman
(1) Director
Ralph C. Joynes
(1) Director
Herbert V. Kohler, Jr.
(1) Director
Jean-Pierre Labruyere
(1) Director
Robert F. Schnoes
(1) Director
Donald Taylor
(1) Director
C.R. Whitney
- -------------------------
(1) Jeffery T. Grade, by signing his name hereto, does hereby sign and execute
this report on behalf of each of the above-named Directors of
Harnischfeger Industries, Inc. pursuant to powers of attorney executed by
each of such Directors and filed with the Securities and Exchange
Commission as an exhibit to this report.
January 27, 1995
By: /s/JEFFERY T. GRADE
Jeffery T. Grade,
Attorney-in-fact
HARNISCHFEGER INDUSTRIES, INC.
SCHEDULE VIII
VALUATION AND QUALIFYING ACCOUNTS
(Thousands of Dollars)
Balance at Additions Additions
Beginning by Charged
Classification of Year Acquisition to Expense Deductions(1)
- ------------------------------ ---------- ----------- ----------- -------------
Allowances Deducted in Balance Sheet
from Accounts Receivable:
For the year ended October 31, 1994
Doubtful accounts $ 8,624 $ 532 $ 474 $ (4,656)
Possible contract losses 2,687 - - -
------ ------ ------ -------
$11,311 $ 532 $ 474 $ (4,656)
====== ====== ====== =======
For the year ended October 31, 1993
Doubtful accounts $ 4,986 - $ 7,017 $(3,101)
Possible contract losses 2,890 -
------ ------ ------ -------
$ 7,876 - $ 7,017 $(3,101)
====== ====== ====== =======
For the year ended October 31, 1992
Doubtful accounts $ 6,298 - $ 2,171 $(3,504)
Possible contract losses 2,774 - - -
------ ------ ------ -------
$ 9,072 - $ 2,171 $(3,504)
====== ====== ====== =======
Transactions
Currency of Balance
Translation Discontinued at End
Classification Effects Operations of Year
- ------------------------------ ---------- ----------- -----------
Allowances Deducted in Balance Sheet
from Accounts Receivable:
For the year ended October 31, 1994
Doubtful accounts $ 235 - $ 5,209
Possible contract losses - (2,687) -
------ ------ ------
$ 235 $(2,687) $ 5,209
====== ======= =======
For the year ended October 31, 1993
Doubtful accounts $ (224) $ (54) $ 8,624
Possible contract losses (203) 2,687
------ ------- ------
$ (224) $ (257) $11,311
====== ======= =======
For the year ended October 31, 1992
Doubtful accounts $ 17 $ 4 $ 4,986
Possible contract losses - 116 2,890
------ ------- -------
$ 17 $ 120 $ 7,876
====== ======= =======
(1) Represents write-off of bad debts, net of recoveries.
Allowance Deducted in Balance Sheet from Deferred Tax Assets:
Balance at Additions Balance
Beginning Charged at end
of Year to Expense of Year
---------- ---------- --------
For the year ended October 31, 1994 $ 12,371 $ 1,763 $ 14,134
For the year ended October 31, 1993 $ 7,566 $ 4,805 $ 12,371
For the year ended October 31, 1992 $ - $ 7,566 $ 7,566