0000950124-95-002428.txt : 19950811 0000950124-95-002428.hdr.sgml : 19950811 ACCESSION NUMBER: 0000950124-95-002428 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19950630 FILED AS OF DATE: 19950810 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: BUTLER MANUFACTURING CO CENTRAL INDEX KEY: 0000015840 STANDARD INDUSTRIAL CLASSIFICATION: PREFABRICATED METAL BUILDINGS & COMPONENTS [3448] IRS NUMBER: 440188420 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-00603 FILM NUMBER: 95560462 BUSINESS ADDRESS: STREET 1: BMA TOWER PENN VALLEY PARK STREET 2: P O BOX 419917 CITY: KANSAS CITY STATE: MO ZIP: 64141 BUSINESS PHONE: 8169683000 MAIL ADDRESS: STREET 1: BMA TOWER PENN VALLEY MALL STREET 2: P O BOX 419917 CITY: KANSAS CITY STATE: MO ZIP: 64141 10-Q 1 FORM 10-Q (6-30-95) 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 Commission File No. 0-603 FOR QUARTER ENDED JUNE 30, 1995 BUTLER MANUFACTURING COMPANY Incorporated in State of Delaware BMA Tower - Penn Valley Park Post Office Box 419917 Kansas City, Missouri 64141-0917 Phone: (816) 968-3000 I.R.S. Employer Identification Number: 44-0188420 Shares of common stock outstanding at JUNE 30, 1995: 7,497,575 The name, address and fiscal year of the Registrant have not changed since the last report. 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. 2 INDEX
PART I. - FINANCIAL INFORMATION Page Number ITEM 1. Financial Statements (1) Condensed Consolidated Financial Statements (unaudited): Consolidated Statements of Earnings for the Three and Six Month Periods Ended June 30, 1995 and 1994. 3 Consolidated Balance Sheets as of June 30, 1995 and December 31, 1994. 4 Consolidated Statements of Cash Flows for the Six Month Periods Ended June 30, 1995 and 1994. 5 (2) Statement as to Review and Presentation. 5 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. 6-7 PART II. - OTHER INFORMATION ITEM 6. Exhibits and Reports on Form 8-K 8
Page 2 3 PART I. FINANCIAL INFORMATION ITEM 1. Financial Statements BUTLER MANUFACTURING COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS For the three and six month periods ended June 30, 1995 and 1994 (unaudited) ($000's omitted except for per share data)
Three months ended Six months ended June 30, June 30, ---------------------- ---------------------- 1995 1994 1995 1994 --------- --------- --------- --------- Net sales $ 206,771 $ 175,422 $ 401,623 $ 292,489 Cost of sales 168,748 143,936 331,456 243,139 --------- --------- --------- --------- Gross profit 38,023 31,486 70,167 49,350 Selling, general, and administrative expenses 25,352 20,613 49,668 39,571 --------- --------- --------- --------- Operating income 12,671 10,873 20,499 9,779 International joint venture income (loss), net 151 220 544 770 Other income (expense), net (378) (468) (922) (1,070) --------- --------- --------- --------- Earnings before interest and taxes 12,444 10,625 20,121 9,479 Interest expense 1,181 1,030 2,217 1,761 --------- --------- --------- --------- Pretax earnings 11,263 9,595 17,904 7,718 Income tax expense 5,080 4,514 8,109 4,038 --------- --------- --------- --------- Net earnings $ 6,183 $ 5,081 $ 9,795 $ 3,680 ========= ========= ========= ========= Earnings per common share* $ .81 $ .70 $ 1.29 $ .51 ========= ========= ========= =========
*Earnings per common share are based on net earnings and the average number of common shares outstanding during each period. The earnings per share amounts for 1995 and 1994 have been restated to reflect the effect of the 3 for 2 stock split for stockholders of record on June 30, 1995. The weighted average number of shares outstanding used in the computation of earnings per common share are as follows: Three months ended June 30, 1995 7,630,113 Three months ended June 30, 1994 7,304,501 Six months ended June 30, 1995 7,595,268 Six months ended June 30, 1994 7,216,095
Page 3 4 BUTLER MANUFACTURING COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS June 30, 1995 and December 31, 1994 (unaudited) (000's omitted)
1995 1994 --------- --------- ASSETS Current assets: Cash $ 3,068 $ 5,284 Receivables, net 95,519 95,277 Inventories: Raw materials 40,151 34,732 Work in process 6,301 5,462 Finished goods 22,170 28,105 Lifo reserve (10,288) (9,393) --------- --------- Total inventory 58,334 58,906 Real estate developments in progress 10,054 15,985 Deferred tax assets 7,538 7,538 Other current assets 8,917 5,662 --------- --------- Total current assets 183,430 188,652 Investments and other assets, at cost 18,820 20,371 Assets held for sale 13,260 13,587 Property, plant and equipment, at cost 193,462 184,576 Less accumulated depreciation (139,132) (136,050) --------- --------- Net property, plant and equipment 54,330 48,526 --------- --------- $ 269,840 $ 271,136 ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Notes payable $ 4,227 $ 70 Current maturities of long-term debt 698 2,474 Accounts payable 68,117 81,092 Dividends payable 750 487 Accrued liabilities 41,759 46,987 Taxes on income 4,006 4,970 --------- --------- Total current liabilities 119,557 136,080 Deferred taxes on income 4,685 4,685 Other noncurrent liabilities 10,609 11,006 Long-term debt, less current maturities 45,185 40,263 Shareholders' equity: Common stock, no par value, authorized 13,000,000 shares, issued 9,088,200 shares, at stated value 12,623 12,623 Cumulative foreign currency translation adjustment 272 194 Retained earnings 107,384 99,579 --------- --------- 120,279 112,396 Less cost of common stock in treasury, 1,591,114 shares in 1995 and 1,783,328 shares in 1994 30,475 33,294 --------- --------- Total shareholders' equity 89,804 79,102 --------- --------- $ 269,840 $ 271,136 ========= =========
Page 4 5 BUTLER MANUFACTURING COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS For the six month periods ended June 30, 1995 and 1994 (unaudited) (000's omitted)
1995 1994 -------- -------- Cash flows from operating activities: Net earnings $ 9,795 $ 3,680 Adjustments to reconcile net earnings to net cash (used in) provided by operating activities: Depreciation, amortization, other 4,056 3,896 Equity in (earnings) loss of international joint ventures (83) (387) Change in assets and liabilities: Receivables (242) (20,063) Inventories 957 (13,177) Real estate developments in progress 5,931 (4,138) Other current assets (3,246) (409) Current liabilities excluding short-term debt (19,167) 29,393 -------- -------- Net cash used in operating activities (1,999) (1,205) Cash flows from investing activities: Capital expenditures (9,211) (3,490) Sale of Walker -- (8,487) Acquisition of new business (994) -- Net changes in other noncurrent assets 2,313 1,316 Common stock dividend from international joint venture 799 1,000 -------- -------- Net cash used in investing activities (7,093) (9,661) Cash flows from financing activities: Payment of dividends (978) -- Proceeds from issuance of long-term debt 4,011 35,000 Repayment of long-term debt (177) (24,857) Net change in short-term debt 2,141 (8,134) Sale and issuance of treasury stock 5,978 1,709 Purchase of treasury stock (3,159) (106) Net changes in other noncurrent liabilities (1,019) 4 -------- -------- Net cash provided by financing activities 6,797 3,616 Effect of exchange rate changes on cash 79 22 -------- -------- Net decrease in cash and cash equivalents (2,216) (7,228) Cash and cash equivalents at beginning of year 5,284 14,853 -------- -------- Cash and cash equivalents at end of period $ 3,068 $ 7,625 ======== ========
REVIEW AND PRESENTATION The information included in the foregoing consolidated financial statements has been reviewed by KPMG Peat Marwick LLP, independent public accountants, in accordance with established standards and procedures for a limited review of interim financial statements. The statements include all adjustments which were, in the opinion of management, necessary to present a fair statement of the results for the period, and include all adjustments and additional disclosures proposed by independent public accountants. Page 5 6 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations LIQUIDITY AND CAPITAL RESOURCES Cash and equivalents decreased $2.2 million in the first six months of 1995 primarily due to a significant decrease in payables due to the timing of vendor payments and increased capital expenditures. The increase in capital expenditures was due largely to the expansion of the San Marcos, Texas metal buildings facility. For the six months ended June 30, 1995, domestic short-term borrowings averaged $8.0 million for 124 days compared to $7.1 million for 59 days in 1994. The Company currently has revolving credit facilities aggregating $50 million, provided by four banking institutions, to meet the needs of both the Company and the Company's subsidiary, Butler Real Estate, Inc. As of June 30, 1995, $9 million of the credit line was utilized to provide a bank letter of credit to secure insurance obligations. In the second quarter the Company obtained $6.25 million of Industrial Revenue Bond financing to fund expansion of its San Marcos, Texas facility. The bonds mature in the year 2015, and pay a floating interest rate. The bonds are also secured by a bank letter of credit issued by NationsBank of Texas subject to a reimbursement agreement. Butler Building Systems, Ltd., the Company's United Kingdom subsidiary, maintains a separate line of credit with its local bank for approximately $2.4 million at current exchange rates. In the second quarter, the Company invested $2.0 million in its United Kingdom subsidiary to reduce bank debt. Management believes a combination of funding from the bank line of credit and additional investment from the Company, as required, will be sufficient to meet liquidity requirements. At its meeting in June, the Board of Directors approved a 3 for 2 stock split and a 50% increase in the quarterly cash dividend. Both the stock split and the quarterly dividend at the new rate of 15 cents per share on a pre-split basis were paid July 17, 1995, to stockholders of record on June 30, 1995. In June 1995, the Vistawall Division completed the purchase of certain assets of Skywall, Inc., a producer of translucent panel systems sold into the architectural and industrial markets. This product line complements the existing Naturalite skylight and Vistawall curtain wall glass systems. Capital expenditures were $9.2 million for the first six months of 1995 compared to $3.5 million a year ago. The increase is due in large part to the expansion of the San Marcos, Texas facility. Total capital expenditures are expected to be approximately $25.0 million in 1995 compared to actual expenditures of $13.7 million in 1994. The majority of 1995 capital expenditures will be invested in the Buildings Systems Segment. RESULTS OF OPERATIONS Net sales of $206.8 million for the quarter ended June 30, 1995 were 18% higher than a year ago. The majority of the increase is due in large part to increases in volume in the Building Systems Segment and Other Buildings Segment due to an improved non-residential construction market. For the six months ended June 30, 1995, net sales were $401.6 million, or a 37% increase over a year ago. The Buildings Systems Segment and Other Building Products Segment contributed to the majority of the increase. More specifically, the Buildings Division's U.S. metal buildings business and Vistawall Division's sales were both sharply higher than during the same period last year. The second quarter 1995 consolidated gross profit was $38.0 million compared to $31.5 million a year ago. The major contributor to the improvement was the Buildings Systems Segment through increased volume and improved margins. For the six months ended June 30, 1995, consolidated gross profit was $70.2 million, or a 42% increase over a year ago. The increase was due to improved results in the Buildings Systems Segment and Other Building Products Segment. Net earnings for the quarter ended June 30, 1995 were $6.2 million or $.81 per common share, compared to net earnings of $5.1 million or $.70 per common share a year ago. The improvement in net earnings was due to the increase in sales and improved margins of the Building Systems Segment and increased sales of the Other Building Products Segment. The net earnings for the six months ended June 30, 1995 were $9.8 million or $1.29 per common share, compared to $3.7 million or $.51 per common share a year ago. The improvement was primarily due to the increase in volume of business and improved margins in the Building Systems Segment. The Other Building Products Segment's sales also increased Page 6 7 dramatically with margin as a percent of sales remaining relatively constant. The Company's European buildings business reported a loss for the six months ended June 30, 1995 approximately equal to that of a year ago. For additional information, see the letter to shareholders at Exhibit 19. Page 7 8 PART II. - OTHER INFORMATION ITEM 6. Exhibits and Reports on Form 8-K. (a) Exhibits. (15) Letter from independent public accountants pursuant to paragraph (d) of Rule 10-01 of Regulation S-X and related letter. (19) July 17, 1995 letter to shareholders (without financial statements). (27) Financial Data Schedule (b) Reports on Form 8-K. The Company has not filed any reports on Form 8-K during the quarter ended June 30, 1995. Agreements relating to the Industrial Revenue Bond issue referred to in the Management Discussion and Analysis section are not being filed as exhibits pursuant to Rule 601(b) (4) (iii) (A) of Regulation S-K. The agreements will be furnished to the Commission upon request. Page 8 9 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. BUTLER MANUFACTURING COMPANY 08/04/95 /s/ John J. Holland ---------- -------------------------------------------------------------- Date John J. Holland Vice President - Finance and Chief Financial Officer 08/04/95 /s/ Richard O. Ballentine ---------- ---------------------------------------------------------------- Date Richard O. Ballentine Vice President, General Counsel and Secretary Page 9 10 EXHIBIT INDEX Exhibit Number Description ------- ----------------------------------------------------------- 15 Letter from independent public accountants pursuant to paragraph (d) of Rule 10-01 of Regulation S-X and related letter. 19 July 17, 1995 letter to shareholders (without financial statements). 27 Financial Data Schedule Page 10 EX-15 2 ACCOUNTANTS' REPORT 1 Exhibit 15 INDEPENDENT ACCOUNTANTS' REPORT The Board of Directors Butler Manufacturing Company: We have reviewed the condensed consolidated balance sheet of Butler Manufacturing Company and subsidiaries as of June 30, 1995 and the related condensed consolidated statements of earnings and cash flows for the three-month and six month periods ended June 30, 1995 and 1994. These financial statements are the responsibility of Company's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the condensed consolidated financial statements referred to above for them to be in conformity with generally accepted accounting principles. We have previously audited, in accordance with generally accepted auditing standards, the consolidated balance sheet as of December 31, 1994 and the related consolidated statements of earnings and retained earnings and cash flows for the year then ended (not included herein); and in our report dated February 3, 1995, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 1994 is fairly stated in all material respects in relation to the consolidated balance sheet from which it has been derived. /s/ KPMG Peat Marwick LLP July 14, 1995 2 Exhibit 15 The Board of Directors Butler Manufacturing Company: RE: Registration Statement No. 2-55753, 2-36370 and 2-63830 With respect to the subject registration statements, we acknowledge our awareness of the use therein of our report dated July 14, 1995 related to our review of interim financial information. Pursuant to Rule 436(c) under the Securities Act of 1933, such report is not considered a part of a registration statement prepared or certified by an accountant or a report prepared or certified by an accountant within meaning of Sections 7 and 11 of the Act. /s/ KPMG Peat Marwick LLP Kansas City, Missouri July 14, 1995 EX-19 3 SHAREHOLDER LETTER 1 Exhibit 19 Butler Manufacturing Company SECOND QUARTER REPORT 1995 Six Months Ended June 30, 1995 BMA TOWER PENN VALLEY PARK KANSAS CITY, MO 64108 To Our Shareholders: Butler's upward trend in sales and earnings continued in the second quarter of 1995. Quarterly sales of $207 million increased 18% from last year's second quarter, and net income of $6.2 million, or $.81 per share, was 16% above the level of 1994. For the first six months of this year, sales were $402 million, up 37% from a year ago. Year-to-date net earnings of $9.8 million, or $1.29 per share, compare with earnings of $3.7 million, or $.51 per share, for the first half of 1994. As a result of our continuing good financial results, and reflecting confidence in our market position and outlook for future earnings and cash flow, the Board of Directors at their June meeting approved a 3-for-2 stock split and a 50% increase in the quarterly cash dividend. All per share amounts above reflect the effects of the stock split. As previously announced and communicated to shareholders, both the stock split, and the quarterly dividend at the new rate of $.15 per share on a pre-split basis, are being paid July 17 to stockholders of record on June 30. The improvement in Butler's earnings for the first six months of 1995 was mostly the result of strong performance by our U.S. metal buildings business. Their sales and profitability were both sharply higher than during the same period last year. While we expect this division to continue its sales and profit growth in the second half of the year, we anticipate that the rate of improvement will begin to slow as this business was operating at record levels during the same period in 1994. Current backlog is higher than the exceptional levels at this time last year, and order rates remain very encouraging. Butler's Vistawall architectural aluminum business is also achieving outstanding results in 1995. In June they completed the acquisition of the Skywall product line from its previous private ownership. The Skywall product line includes translucent fiberglass panel systems that ideally complement the existing Naturalite skylight and Vistawall curtain wall glass systems. From the vantage point of mid-year it is now apparent that our European operations will not recover in 1995 to the full extent anticipated earlier. Their year-to-date loss is about equivalent to last year, and, while their backlog is up 66% and their second half will show definite improvement, they will not achieve break-even profitability for the year, as we had planned. Butler's total backlog at the close of the second quarter was $270 million, up 6% from the same time last year. While we are monitoring closely the sometimes conflicting signals being given by external economic indicators, it is clear from our own prospect activity, proposal levels, order rates, and current backlog, that 1995 will be another excellent year for Butler. Cordially yours, /s/ Robert H. West Robert H. West Chairman and Chief Executive Officer July 17, 1995 Butler Manufacturing Company EX-27 4 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM BUTLER MANUFACTURING COMPANY CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1995 AND CONSOLIDATED BALANCE SHEET AS OF JUNE 30, 1995, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 6-MOS DEC-31-1995 JAN-01-1995 JUN-30-1995 3,068 0 95,519 0 58,334 183,430 193,462 139,132 269,840 119,557 45,185 12,623 0 0 107,384 269,840 401,623 401,245 331,436 331,436 49,668 0 2,217 17,904 8,109 9,795 0 0 0 9,795 1.29 1.29 REFLECTS LONG-TERM DEBT, LESS CURRENT MATURITIES. REFLECTS OTHER STOCKHOLDERS' EQUITY BEFORE DEDUCTION OF $30.5 MILLION COST OF TREASURY STOCK. REFLECTS NET SALES PLUS NET INTERNATIONAL JOINT VENTURE INCOME LESS NET OTHER EXPENSE. CONSISTS OF SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES.