GLOBAL INFORMATION XCHANGE

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Shareholders, Customers, Employees

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Vol. 1, Issue 7
August/September, 1997
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Global Roundup

Third Quarter Update
Global reported earnings for the fiscal third quarter ended July 31, 1997, of $13.7 million, or $.61 per share, before special charges disclosed previously. While this represents a 20% increase over 1996's third quarter, it also includes the positive impact of a near zero percent tax rate, a result of the charges.

For the nine months ended July 31, 1997, Global reported earnings of $27.9 million, or $1.24 per share, excluding special charges. These results do not reflect approximately $26 million in previously disclosed charges to earnings for the third quarter, $23 million of which were related to the disposition of The Marion Power Shovel Company. An additional $3 million write-down was taken for overstated inventory and other assets at the Specialty Equipment Products segment. After these charges, Global recorded a loss for the fiscal third quarter of $.64 per share, and for the nine months ended July 31, 1997 of $.69 per share.

Revenues for the third fiscal quarter were $155.1 million, versus $171.1 million in the same period last year. Revenues for the nine months ended July 31, 1997 were $441 million versus $476.2 million for the same 1996 period. The 1996 revenues included sales from Marion.

Global's previous estimate of fiscal 1997 earnings in the range of $1.60 to $1.75 assumed an effective tax rate of 25%. Results now expected make no provision for taxes due to the effects of the loss on the Marion disposition. Adjusting the previous estimate for this development results in an expected earnings range of $2.13 to $2.33 for fiscal 1997.

Here is a summary of division operations to date.

Refractory Products (www.HWR.com) Harbison-Walker is having a record year reporting strong third quarter revenues of $88.8 million, 17.3% ahead of 1996 and $246.5 million for the year-to-date, an increase of 12.5% over the same period a year ago. Operating profits for the third quarter were $8.9 million, a 21.9% increase compared to the same time last year.

Industrial Tool (www.intool-inc.com; www.ITDAutomation.com; www.airetoolcom)

Sales and operating profits are at record levels with third quarter revenues of $28.7 million, 7.9% ahead of 1996 and $80.6 million for the year-to-date, an improvement of 15.8%. Segments within Industrial Tool serving the motor vehicle and aircraft markets are showing strong results on broad-based market demand with particularly significant increases at its ITD-Automation profit center. Third quarter operating profits of $4.6 million are up 7.0% compared to the same time last year, and $11.3 million for the year-to-date, an improvement of 20.5%.

Ameri-Forge While third quarter revenues at $12.1 million, are 4.7% behind 1996, the subsidiary is rebounding as replacement equipment begins to restore production levels. Operating profits for the third quarter, hampered by production equipment problems, were $2 million versus $3.7 million in the same period last year, and $8.2 million for the year-to-date versus $10 million for the first three fiscal quarters of 1996.

Minerals Third quarter operating earnings are $1.3 million on revenues of $12.3 million. These revenues are 8.2% less than those for the same time last year. Minerals reported year-to-date operating earnings of $4.9 million, 43% lower than 1996 due primarily to a strong U. S. dollar versus European currencies, as well as weak domestic demand early in the year. Deutschemark based competitors have benefited from the 30% currency swing as the dollar strengthened during the last 12 months. This has negatively impacted Mineral's European sales and operating profits.

Specialty Equipment Products (www.ctipacific.com.au) Third quarter revenues for the segment are up 23.2% over 1996. Year-to-date revenues of $50.5 million reflect an improvement of 33.6% over last year. This segment reported, however, an operating loss of $1.2 million on revenues of $18.6 million for the quarter versus operating profits of $1.8 million for the prior year reflecting a previously announced write-down of certain assets (primarily inventory).

Other News

H-W Record Contract and More
Global's Harbison-Walker subsidiary signed a record $27 million refractories contract with Chile's Compania Siderurgica Huachipato. And, H-W has entered into an agreement with Birmingham Steel Company to supply exclusively a full line of refractory products for Birmingham's new million ton capacity electric furnace steel mill being built in Memphis, Tennessee. The multi-year contract is valued at $6 to $8 million annually. H-W will provide some 13,000 tons of refractory products annually as linings for electric furnaces, ladles, tundishes and other equipment. The first refractories shipment is scheduled for delivery in September.

Enhanced Stock Buy-Back Program Global has commenced an enhanced stock buy-back program that to date has resulted in the purchase of approximately 400,000 shares representing 18% of the Board's authorization in August to buy up to 10% of all outstanding shares of record as of June 30, 1997.

The Marion Power Shovel Company Sale Completed The sale of The Marion Power Shovel Company to Bucyrus International Inc. for $40.1 million was given Hart-Scott-Rodino antitrust clearance in early August and closed August 26.

Corporate HR Addition James (Jim) Alleman is Global's new Vice President of Human Resources. His Vitae lists 20 years in HR, most recently at Lomas Financial Corp where he served as Senior Vice President reporting to the CEO. He has a Bachelors and Masters in communication from Oklahoma State University.

Rotor Tool Changes The Rotor Tool Company has merged with INTOOL, Inc. It is now designated as The Rotor Tool Division of INTOOL, Inc.

_____________________________________________________________________________________ Global Culture

Walking The Talk Honors
Winners of Global's Walking the Talk Award Gary Bolton, Production Supervisor at Harbison-Walker's Fairfield plant; Kathy Bridgeman, Supervisor - Cost Analysis from Harbison-Walker's Pittsburgh office; Raul Rodriguez Ruiz, Head of Warehouse Department located in REFMEX's Guadalajara office, and Jeanette Quay, Senior Litigation Counsel at Global's corporate office, are as hot as Dallas in August.

Chairman and CEO J. L. Jackson awarded each winner 50 shares of Global's stock, a gold Global pin and a marble engraved plaque following an outstanding group dinner recently in Dallas. Harbison-Walker President Juan Bravo, Refractarios Mexicanos President Julio Labadie, Harbison-Walker Vice President-Administration Steve Ross, Harbison-Walker Fairfield Plant Manager Mike McNeal, and Global's Senior Vice President and General Counsel Graham Adelman were on hand to share stories about these outstanding performers. The deadline for submission of nominations for the next round of awards will be November 21, 1997. Awards will be presented in February of 1998.

We Print Success Stories

For Example ...
If you want to know if it works, it's been confirmed! Yvonne Lenzo and her shipping department team at Harbison-Walker's Hammond, Indiana plant have proven it. With a "zero" variance on a physical inventory conducted July 24-25, Preston Williams, Manuel Keeton, Ralph Reid, David McKinney, and James Davis knocked this task out with aplomb. Special thanks also to Dawn Weis and Julie Sells who also pitched in. This group definitely knows "The Way."

Send In Yours!
We know that successes like this one are occurring throughout Global. We're eager to let other Global employees know about these accomplishments. Stories are needed that illustrate The Way We Do Things Around Here. Like honesty, training, coaching, and mentoring programs. If you have a story but no time for writing it, let us know. We'll compose it for you. Call 800/843-1929 and talk to either Kim, Sandra or Carmen. __________________________________________________________________________________ Global Tech
Becomeng Computur Literut

"Are we a player in the contemporary "Garden of Eden," The World Wide Web (WWW), The Internet, The Home Page?" Some of us, yes. Global has a site but it is not yet published. Here's the latest. The days of writing some copy, adding a "grip-and-grin" and publishing are over. Today's corporate communication effort is database driven, customized rivers of information packaged in lights, video, and talking heads, depending on the capabilities of your computer, and the corporation's Webmaster budget. It's estimated that 50 to 100 businesses are added every day to that one global open telephone party line, the World Wide Web. By 1998, 77 percent of U.S. business will be "surf." Why? To sell product, disseminate information, in short, "to be the best communicator a Corp. can be."

If you've been reading these revered pages over the past few months, you've learned by now that Harbison-Walker, Intool, and CTI all have a "homepage." Global's corporate version of same is being developed in-house as we write. Each corporate division's "home page" minimally informs customers, shareholders and employees either extensive or modest things about the company, products, and a list of people to contact for more information. At some sites, customers can order whatever they need right off an order page. Also, they can ask questions and get electronic mail (E-mail) responses. Extant web sites are repositories of huge amounts of valuable and sometimes worthless research material (depending on the source), along with wonderful and worthless dazzling graphics (also depending). In the best of all possible worlds, corporate subsidiary and multiple product sites are styled to communicate an universal, agreed upon message, consistent in format and style.

What all this technology means to Global and its subsidiaries is that we have the opportunity of quickly and efficiently sharing information about our businesses, and the way we do business, with one another and the world. This happens when web tools are developed, managed and maintained within a flexible web environment, one that can be changed and updated quickly and easily. A well designed and managed web site is the key to dealing with change, and the demands of communicating change of all kinds, to investors, customers, and employees. Next episode: Can Data Processing Make You Paranoid?

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Global Talk: Word of the Month
Parameter: Computing jargon for a line of computer programming code. Also, a set within a math statement. "Parameter" is used consistently (out of context and incorrectly) for "perimeter."

^{Forward-looking statements concerning divestitures, earnings and results from operations are contained in this newsletter. The following important factors could cause actual results to differ materially from those described in such statements: timing of completion of divestitures and their effects upon the Company; recouping delayed business on a schedule different than anticipated; development of new products; changes in currency exchange rates; litigation; timing of additions to manufacturing capacity; unanticipated production or shipment delays; and significant variances in sales or costs at a major business unit. Global Information Exchange is published monthly at Global Industrial Technologies, 2121 San Jacinto Street, Suite 2500, Dallas, TX.; Fax/E-mail news items to: GIX, Attn: Larry Nance, 214/953-4595; LNANCE@GIX-GLOBAL}