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CLARK EQUIPMENT THIRD QUARTER RESULTS HURT BY JOINT VENTURE COMPANY LOSSES

 CLARK EQUIPMENT THIRD QUARTER RESULTS HURT
 BY JOINT VENTURE COMPANY LOSSES
 SOUTH BEND, Ind., Oct. 23 /PRNewswire/ -- Clark Equipment Co. (NYSE: CKL) recorded a net loss of $4.0 million or $0.23 per share, on sales of $209.2 million for the three months ended Sept. 30, 1992. This includes a loss of $21.0 million from Clark's 50-percent-owned construction machinery company, VME. The VME loss includes a charge of $8.5 million related to restructuring its North American operations. This charge offsets a gain of $8.5 million from the sale of Clark Material Handling Co. in July. The announcement was made by Leo McKernan, Clark chairman, president and chief executive officer.
 In making the announcement, McKernan said, "Third quarter results reflect continued profitability in Clark's consolidated operations which include Melroe Company, Clark-Hurth Components and Clark Automotive Products. However, this was more than offset by Clark's share of the losses of VME which continues to suffer from the severe depression in world construction industry markets."
 Clark's third quarter net results compare to a loss of $32.9 million, or $1.90 per share, on sales of $175.8 million in third quarter 1991. Included in the prior-year results was a loss of $15.4 million from discontinued forklift truck operations.
 Third quarter incoming orders for continuing consolidated operations were $201 million compared to $212 million in second quarter 1992 and $166 million in third quarter 1991. The order backlog at Sept. 30, 1992 was $164 million compared to $172 million in the second quarter and $164 million in the comparable prior-year period.
 VME PERFORMANCE AND STRATEGIC PROGRAMS
 In discussing VME performance, McKernan said, "Several factors contributed to VME's current losses: weak construction machinery markets, declining equipment utilization, production cuts required to balance inventories, competitive pricing pressure and costs associated with VME's worldwide program to rationalize its operations."
 The third quarter special charge related to closing VME's St. Thomas, Ontario, plant and restructuring its North American production operations. It encompasses employee termination costs, the write-down of certain assets, and moving and start-up costs for production transferred to Asheville, N.C., from St. Thomas.
 Discussing VME efforts to improve its performance, McKernan said, "VME took important actions during the quarter to strengthen its North American cost structure. These have been costly to undertake, but both the closing and restructuring are part of VME's program to rationalize its worldwide operations. During 1991 and 1992, VME announced the closing of four production facilities and reconfigured production flows in four others. Manpower is being reduced by approximately 30 percent worldwide. These stringent cost reduction efforts will substantially reduce VME's breakeven point, and we expect to see future operating improvement. During this period, VME continued to invest in the business, introduced new products and maintained market share."
 Clark also reported that during the quarter it contributed $15 million to VME. Additional capital contributions of approximately $35 million are anticipated in the fourth quarter.
 RESULTS FROM CONTINUING CONSOLIDATED OPERATIONS
 Discussing Clark's operating performance, McKernan reported that continuing consolidated operations produced a profit of $8.1 million in the third quarter.
 Discussing specific Clark operations, McKernan said "Though Clark- Hurth Components sales improved somewhat on a year-to-year basis, shipments were flat for all three quarters of 1992 reflecting poor world construction machinery markets. On a positive note, Clark-Hurth operating margins continued to improve due to tight expense control and cost reduction activity." He added that third quarter order rates remained flat.
 "Following a normal seasonal pattern, Melroe sales declined slightly in the third quarter from second quarter levels," said McKernan. "However, sales and earnings improved substantially over the third quarter of 1991. North American sales were better than expected, due to business generated by Hurricane Andrew and improving Melroe market share. European sales remained firm, and margins were aided by the continued strength of the European currencies versus the U.S. dollar."
 Noting that Clark Automotive sales increased substantially in the third quarter, McKernan said, "Seasonal increases in unit volume for auto and light-truck transmissions in Brazil more than offset continued weakness in the off-highway markets. Sales of medium-duty transmissions for export were about even with last year. Net income and margins improved in the third quarter compared to second quarter. We have not seen any negative effects on economic performance from the recent change in Brazil's government."
 OUTLOOK
 Discussing the prospects for the future, Mr. McKernan said "We see little evidence of sustained improvement in the markets our businesses serve, and our current planning process for 1993 does not call for significant changes in sales volumes. While we hope markets do improve, we expect to see better Clark performance, even at today's depressed sales levels. VME's financial performance is expected to benefit from the forceful actions taken to bring cost structures into balance with economic activity."
 Clark Equipment Company's business is the design, manufacture and sale of skid-steer loaders, construction machinery, transmissions for on-highway vehicles, and axles and transmissions for off-highway equipment.
 CLARK EQUIPMENT CO. AND CONSOLIDATED SUBSIDIARIES
 STATEMENT OF INCOME AND RETAINED EARNINGS
 (amounts in thousands, except per share data)
 Third Quarter Nine Months
 Period ended Sept. 30 1992 1991(a) 1992 1991(a)
 Net sales $209,223 $175,831 $ 611,446 $ 545,630
 OPERATING COSTS
 AND EXPENSES:
 Cost of goods sold 173,321 159,569 506,702 473,788
 Selling, general &
 adminis. expenses 25,572 27,308 73,329 78,180
 Total $198,893 $186,877 $ 580,031 $ 551,968
 Operating income 10,330 (11,046) 31,415 (6,338)
 Other income, net 5,273 (288) 12,817 5,328
 Interest expense (6,575) (6,925) (19,970) (19,133)
 Pre-tax income (loss)
 from consolidated
 operations 9,028 (18,259) 24,262 (20,143)
 Provision for
 income taxes 907 (4,636) 8,625 (1,985)
 Income(loss) from con-
 solidated operations 8,121 (13,623) 15,637 (18,158)
 Equity in net loss of
 associated company (21,013) (3,963) (40,720) (13,166)
 Loss from continuing
 operations (12,892) (17,586) (25,083) (31,324)
 DISCONTINUED OPERATIONS:
 Income (loss) from
 operations 355 (15,389) (6,701) (29,031)
 Gain on sale 8,519 -- 8,519 --
 Income (loss) from dis-
 continued operations 8,874 (15,389) 1,818 (29,031)
 Loss before extraordinary
 credit and effect of
 changes in accounting
 principle (4,018) (32,975) (23,265) (60,355)
 Income tax benefit from
 loss carryforward -- 77 -- 392
 Effect of accounting changes:
 Postretirement benefits -- -- -- (244,900)
 Income taxes -- -- 92,000 --
 Net Income (loss) (4,018) (32,898) 68,735 (304,863)
 Add: Income retained
 (accumulated deficit)
 at beginning of
 period 51,854 44,656 (20,899) 316,621
 Income retained at
 end of period $ 47,836 $ 11,758 $ 47,836 $ 11,758
 INCOME (LOSS) PER SHARE:
 From continuing
 operations $(.74) $(1.02) $(1.44) $(1.81)
 From discontinued
 operations .51 (.89) .10 (1.68)
 Extraordinary credit - .01 - .02
 From effect of account-
 ing change - - 5.31 (14.16)
 Net income (loss) $(.23) $(1.90) $ 3.97 $(17.63)
 Avg. no. of shares 17,338 17,300 17,328 17,288
 No. of shares outstand-
 ing at end of period 17,340 17,303 17,340 17,303
 (a) Restated to reflect the deconsolidation of the Material Handling Company business.
 CLARK EQUIPMENT CO. AND CONSOLIDATED SUBSIDIARIES
 CONDENSED BALANCE SHEET
 (Amounts in Thousands)
 Sept. 30, Dec. 31,
 Assets 1992 1991
 Current Assets:
 Cash, equivalents and
 short-term investments $ 235,983 $ 183,296
 Accounts and notes receivable 89,323 116,769
 Accounts receivable from
 associated companies 3,010 2,731
 Refundable income taxes 0 7,400
 Inventories 104,578 184,023
 Investment in discontinued
 operations-remaining
 finance operations 9,648 9,111
 Prepaid income taxes-net 20,605 4,200
 Other current assets 7,291 12,880
 TOTAL CURRENT ASSETS 470,438 520,410
 Investments and advances -
 associated companies 110,531 137,695
 Prepaid income taxes-net 104,665 --
 Property, plant and
 equipment - net 234,036 299,942
 Goodwill and acquired
 intangibles-net 92,168 199,469
 Other assets 25,566 42,434
 TOTAL ASSETS $1,037,404 $1,119,950
 LIABILITIES AND STOCKHOLDER'S EQUITY
 Current Liabilities:
 Notes payable $ 44,249 $ 57,311
 Accounts payable and
 accrued liabilities 137,963 226,979
 Income taxes payable 4,330 4,295
 Accrued postretirement
 benefits-current 17,800 17,800
 Deferred income taxes-current 1,152 --
 Current installment on
 long-term debt 20,048 21,271
 Total current liabilities 225,542 327,656
 Long-term borrowings 191,889 216,949
 Other non-current
 liabilities 85,449 106,336
 Accrued postretirement
 benefits 229,850 230,100
 Deferred income taxes 15,137 1,410
 TOTAL LIABILITIES 747,867 882,451
 STOCKHOLDERS' EQUITY:
 Capital stock 323,050 322,950
 Retained earnings (accumulated
 deficit) 47,836 (20,899)
 Cumulative translation &
 other adjustment 10,456 28,054
 Common stock held in
 treasury at cost (51,248) (52,049)
 LEVERAGED EMPLOYEE STOCK
 OWNERSHIP
 Plan shares (40,557) (40,557)
 Total stockholders' equity 289,537 237,499
 TOTAL LIABILITIES AND
 STOCKHOLDERS' EQUITY $1,037,404 $1,119,950
 Debt/Capitalization ratio 46.9 Pct. 55.4 Pct.
 Current year capital
 expenditures $ 27,122
 Current year depreciation
 charges $ 35,397
 -0- 10/23/92
 /CONTACT: Joe Fimbianti, 219-239-0176, for Clark Equipment/
 (CKL) CO: Clark Equipment Co. ST: Indiana IN: SU: ERN


LR -- NY044 -- 4197 10/23/92 13:26 EDT
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