-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UFVUFK1jYfi4BqL8JwWYTR7C50qLGAgYjD0nTMDLUxzp7vbpnVLLJKs8wuefIyqZ lNq6vZtpniuBNQI+5ita2g== 0000950124-97-001992.txt : 19970401 0000950124-97-001992.hdr.sgml : 19970401 ACCESSION NUMBER: 0000950124-97-001992 CONFORMED SUBMISSION TYPE: 10-K405 PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970331 SROS: NYSE 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-K405 SEC ACT: 1934 Act SEC FILE NUMBER: 001-12335 FILM NUMBER: 97569737 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-K405 1 10-K 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K Annual Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 (Fee Required) FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996 BUTLER MANUFACTURING COMPANY BMA TOWER, PENN VALLEY PARK (P.O. BOX 419917) KANSAS CITY, MISSOURI 64141-0917 TELEPHONE: (816) 968-3000 Incorporated in the State of Delaware COMMISSION FILE NO. 0-603 IRS NO. 44-0188420 The Company has no securities registered pursuant to Section 12(b) of the Act. The only class of stock outstanding consists of Common Stock having no par value, 7,561,465 shares of which were outstanding at December 31, 1996. The Common Stock is registered pursuant to Section 12(g) of the Act. The aggregate market value of the Common Stock of the Company held by non-affiliates, based upon the last sales price of such stock on February 21, 1997 was $284,606,469. The Registrant 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 has been subject to such filing requirements for the past 90 days. As indicated by the following check mark, disclosure of delinquent filers pursuant to Rule 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: X The following documents are incorporated herein by reference: (1) Butler Manufacturing Company 1996 Annual Report, pages 14 through 32 (the "Annual Report" incorporated into Part II). (2) Butler Manufacturing Company Notice of Annual Meeting of Stockholders and Proxy Statement, dated March 10, 1997 (the "Proxy Statement" incorporated into Parts I and III). 2 BUTLER MANUFACTURING COMPANY FORM 10-K ___________ FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996 3 CONTENTS PART I Page ---- Item 1. Business 3 Item 2. Properties 7 Item 3. Legal Proceedings 7 Item 4. Submission of Matters to a Vote of Security Holders 7 PART II Item 5. Market for Registrant's Common Equity and Related Stockholder Matters 8 Item 6. Selected Financial Data 8 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 8 Item 8. Financial Statements and Supplementary Data 8 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 8 PART III Item 10. Directors and Executive Officers of the Registrant 8 Item 11. Executive Compensation 10 Item 12. Security Ownership of Certain Beneficial Owners and Management 10 Item 13. Certain Relationships and Related Transactions 10 PART IV Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K 10 SIGNATURES 13 CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS 14 FINANCIAL STATEMENT SCHEDULES S-1 2 4 PART I Item 1.Business (a) General Development of Business The Company was founded as a partnership in 1901. It was incorporated in Missouri in 1902 and reincorporated in Delaware in 1969. Its corporate headquarters are located in Kansas City, Missouri, and principal plants and offices are operated throughout the continental United States. Principal international operations are conducted through Butler Building Systems, Ltd., a wholly owned United Kingdom subsidiary acquired in 1991, Butler Shanghai Inc., a Chinese wholly owned subsidiary, Butler do Brasil Limitada, a South American wholly owned subsidiary and a Saudi Arabian joint venture. The Company and its subsidiaries are primarily engaged in the marketing, design, and production of systems and components for nonresidential structures. Products and services fall into three principal business segments: (1) Building Systems, consisting primarily of custom designed and pre-engineered steel and wood frame building systems for commercial, community, industrial and agricultural uses; (2) Construction and construction management services for purchasers of large, complex or multiple site building projects; and (3) Other Building Products, consisting primarily of curtain wall and storefront systems, skylights and roof vents for low, medium and high-rise nonresidential buildings. This segment also includes the manufacture and sale of grain storage bins and the distribution of grain handling and conditioning equipment. The Company's products are sold primarily through numerous independent dealers. Other Company products are sold through a variety of distribution arrangements. (b) Financial Information about Industry Segments The information required by Item 1(b) is hereby incorporated by reference to pages 23 through 24 of the Company's Annual Report furnished to the Commission pursuant to Rule 14a-3(b) and attached as Exhibit 13.0 to this report (see also items 6, 7, and 8 of this report). (c) Narrative Description of Business Building Systems The Company's largest segment, Building Systems, includes the U.S. steel and wood frame pre-engineered building systems; Butler European operations consisting of wholly owned subsidiaries in the United Kingdom, France, and Germany, and a 90% owned joint venture in Hungary; Butler Shanghai Inc., a wholly owned subsidiary in China; Butler do Brasil Limitada, a wholly owned South American subsidiary; Beker Kft., and a 30% owned Saudi Arabian joint venture (Saudi Building Systems, Ltd.), all of which manufacture and/or market pre-engineered steel frame building systems; Butler World Trade, an export marketing organization for metal building systems; Butler Real Estate, Inc. a real estate developer; and a 45% owned Japanese joint venture marketing pre-engineered building systems to Japanese firms which will be liquidated in 1997. In subsequent years pre-engineered building systems will be marketed to Japanese firms through a Japanese representative sales office. 3 5 The Company's building systems consist primarily of custom designed and pre-engineered one to five-story steel and one to two-story wood framed buildings for commercial, community, industrial and agricultural uses such as office buildings, manufacturing facilities, warehouses, schools, shopping centers and farm buildings. Principal product components of the systems are structural members and a variety of pre-engineered wall and roof components. These are fabricated according to standard or customer specifications and shipped to building sites for assembly by independent dealers. Building components are manufactured in plants located at Galesburg and Charleston, Illinois; Laurinburg, North Carolina; Birmingham, Alabama; Visalia, California; Annville, Pennsylvania; San Marcos, Texas; Lester Prairie, Minnesota; Ottawa, Kansas; and Clear Brook, Virginia. In 1996 Advanced Buildings Systems, a 50% owned joint venture with the McDonald's Corporation, became fully operational. The venture .c1.;manufactures modular restaurant buildings exclusively for McDonald's at a plant in Clear Brook, Virginia. Butler Building Systems, Ltd. manufactures and markets the Company's pre-engineered steel frame buildings primarily for the United Kingdom and European markets from its facility in Kirkcaldy, Scotland. Saudi Building Systems, Ltd. manufactures and markets pre-engineered steel frame buildings for Middle Eastern markets at manufacturing facilities located in Jeddah, Saudi Arabia. The Company serves the Canadian market through a branch office in Burlington, Ontario. In late 1996 the Company acquired a 90% interest in Beker Kft, a small building systems fabricator located in Nyiregyhaza, Hungary. Beker markets and fabricates building systems to Central and Eastern Europe from its facility in Hungary. Butler World Trade functions as an export marketing organization for metal building systems. Shipments are sourced primarily from Butler's U.S., U.K., and Saudi Arabian plants, and in the latter part of 1996 from the Company's new manufacturing facility in Shanghai, China. Butler World Trade also has contracts with steel fabricators in China, Mexico, Poland and South America to produce primary structurals in order to maintain competitive prices and delivery schedules. Butler World Trade has sales offices in Argentina, Brazil, Chile, South Korea and Mexico and representative offices in China and Vietnam. Building Systems' products are distributed throughout the world by independent Butler dealers. The dealers provide construction services and in many cases complete design and engineering capabilities. Nonresidential pre-engineered buildings compete with ordinary forms of building construction in the low-rise commercial, community, industrial and agricultural markets. Competition is primarily based upon cost, time of construction, appearance, thermal efficiency and other specific customer requirements. The Company also competes with numerous pre-engineered steel frame building manufacturers doing business within the United States, Canada and the United Kingdom. Approximately five of these manufacturers account for the majority of industry sales. The Company believes that its 1996 sales of steel frame pre-engineered buildings within the United States exceeded those of any other nonresidential steel frame pre-engineered buildings manufacturer, with its next largest competitors being NCI Building Systems, Inc., Varco-Pruden Buildings division of United Dominion Industries Ltd., American Buildings 4 6 Company and Ceco and Star Buildings Systems combined, a division of Robertson - - Ceco Corporation. Competition among manufacturers of pre-engineered buildings is based primarily upon price, service, product design and performance and marketing capabilities. The Company's Lester wood frame buildings business ranks second in sales to the industry leader, Morton Buildings, Inc., a major manufacturer which sells direct to the end user. Butler Real Estate, Inc., a wholly-owned subsidiary of the Company, provides real estate development services in cooperation with Butler dealers. On the basis of commitments to lease obtained from credit worthy customers, Butler Real Estate, Inc. acquires building sites, arranges with Butler dealers for construction of project improvements, and then sells the completed projects to investors. BMC Real Estate, Inc., a wholly-owned subsidiary of the Company, participates solely in land development ventures. Construction Services The Company's Construction Services segment consists of a wholly-owned construction subsidiary, BUCON, Inc. which provides comprehensive design, planning, execution and construction management services to major purchasers of construction. Revenues of the segment are derived primarily from general contracting. In addition, the Construction Services segment performs "furnish and erect" and "materials only" subcontracts using products from several Company divisions, predominantly the Company's Buildings Division. Competition is primarily based upon price, time necessary to complete a project, design and product performance. BUCON, Inc. competes with international, national, regional and local general contracting firms, and whenever possible, performs projects in conjunction with independent Butler dealers. Other Building Products This segment includes the operations of the Vistawall and Grain Systems Divisions. The Vistawall business designs, manufactures and markets architecturally oriented component systems for the nonresidential construction market. The Grain Systems' business manufactures and markets grain storage bins and also distributes grain conditioning and handling equipment. The Vistawall Division designs, manufactures and sells aluminum curtain wall systems for mid and high-rise office markets, and entry doors and other standard storefront products for low-rise retail and commercial markets. In early 1997 the Vistawall Division acquired the assets of Rebco West, Inc., a west coast manufacturer and distributor of entrance doors and storefront products. Vistawall's products are distributed on a material supply basis to either curtain wall erection subcontractors or general contractors, and through distribution warehouses to glazing contractors for storefront and entry door applications. Manufacturing and distribution facilities are located in Lincoln, Rhode Island; Atlanta, Georgia; Modesto, Hayward and Rancho Cucamonga, California; Cincinnati and Cleveland, Ohio; Terrell, Houston and Dallas, Texas; Tampa, Florida; Washington, D.C.; Chicago, Illinois; St. Louis, Missouri; and Seattle, Washington. In 1996 the Vistawall Division expanded its facility in Terrell, Texas with the addition of a 5 7 46,000 square foot warehouse and distribution facility. The Division operates in highly competitive markets with other national manufacturers which operate multiple plants and distribution facilities, and with regional manufacturers. Competition is primarily based on cost, delivery capabilities, appearance and other specific customer requirements. The Vistawall Division at its Terrell, Texas location also designs, manufactures and installs Naturalite/EPI skylights of all types, from the more standard designs used in commercial and industrial buildings, to highly complex engineered solutions for monumental building projects. In addition, the Division designs and manufactures roof accessories, such as smoke and heat vents, for conventional and pre-engineered buildings, and the Skywall product line of translucent roof and wall systems. The Division markets its Naturalite/EPI and Skywall products through its existing independent representative organization. There are numerous competitors in this industry with competition primarily based on price, engineering and installation capabilities, delivery and other specific customer requirements. The Grain Systems Division manufactures and markets grain storage bins from its Kansas City, Missouri plant. It also distributes grain conditioning and handling equipment. The Division's products are sold primarily to farmers and commercial grain elevators through a nationwide network of independent dealers. Products are also manufactured for export. Grain systems are sold in highly competitive markets in direct competition with national companies and smaller regional manufacturers. Competition is principally based on price, delivery schedules and product performance. Manufacturing and Materials The Company's manufacturing operations include most conventional metal fabricating operations, such as punching, shearing, welding, extruding and forming of sheet and structural steel and aluminum. The Company also operates painting and anodizing lines for structural steel and aluminum components, respectively. Wood frame manufacturing operations include sawing and truss fabrication. The principal materials used in the manufacture of the Company's products include steel, aluminum, wood and purchased parts. All materials are presently available to the Company in sufficient quantities to meet current needs. Seasonal Business Historically, the Company's sales and net earnings have been affected by cycles in the general economy which influence nonresidential construction markets (see in particular Item 7 of this report). The Company experienced peak seasonal demand for products and services, and the sale of real estate projects during the second half of 1996. Sales for the first, second, third and fourth quarters of 1996 were $176 million, $193 million, $229 million and $272 million, respectively. Backlog The Company's backlog of orders believed to be firm was $253 million at December 31, 1996 and $251 million at December 31, 1995. The Construction Services segment, where margins are significantly lower than those associated with product sales, accounted for $37 million and $75 million of year-end backlog for 1996 and 1995, respectively. 6 8 Employees At December 31, 1996 the Company employed 4,350 persons, 3,120 of whom were non-union employees, and 1,230 were hourly paid employees who were members of four unions. At December 31, 1995 the Company employed 3,966 persons. A new three year labor agreement was ratified in early 1997 for the Grain Systems Division's Kansas City, Missouri plant labor union. Item 2.Properties The principal plants and physical properties of the Company consist of the manufacturing facilities described under Item 1, and the Company's executive offices in Kansas City. The 142,000 square foot Vistawall facility located in Lincoln, Rhode Island which has light manufacturing and fabrication operations is classified under "Assets held for sale". Through a subsidiary, the Company also owns a land development venture with property located on a 108 acre site in San Marcos, Texas. The property is recorded in "Assets held for sale" and described in the "Real Estate Subsidiaries" footnote on page 23 in the Company's Annual Report. All other plants and offices described under Item 1 are utilized by the Company and are generally suitable and adequate for the business activity conducted therein. The Company's manufacturing facilities described under Item 1, along with current outsourcing agreements with various fabricators, have production capabilities sufficient to meet current and foreseeable needs. Except for leased facilities listed below, all of the Company's principal plants and offices are owned: (1) Leased space used for the Company's executive offices in Kansas City, Missouri (120,000 sq. ft. lease expiring in the year 2001 with an option to renew). (2) Leased space used for the Vistawall Division plant in Terrell, Texas (145,000 sq. ft. and 121,000 sq. ft. with leases expiring in 2000 and 2006, respectively, both containing options to renew), and fabrication and distribution facilities in Dallas and Houston, Texas; St. Louis, Missouri; Chicago, Illinois; Washington, D.C.; Cincinnati and Cleveland, Ohio; Atlanta, Georgia; Tampa, Florida; Seattle, Washington; and Modesto, Hayward, and Rancho Cucamonga, California (293,000 sq. ft. leased with various expiration dates). (3) The Company also leases various small sales and national account offices throughout the world. Item 3. Legal Proceedings. There are no material legal or environmental proceedings pending as of March 13, 1997, nor does the Company have any known material environmental contingencies as of this date. Proceedings which are pending consist of matters normally incident to the business conducted by the Company and taken together do not appear to be material. Item 4. Submissions of Matters to a Vote of Security Holders. No matters have been submitted to a vote of stockholders since the last annual meeting of stockholders on April 16, 1996. 7 9 PART II Item 5. Market for Registrant's Common Equity and Related Stockholder Matters. Incorporated by reference to the information under "Quarterly Financial Information (Unaudited)", "Price Range of Common Stock (Unaudited)" and "Historical Review 1996-1992" on pages 30 and 32 of the Annual Report. In September, 1994 the Board of Directors approved the resumption of a regular cash dividend, at an indicated annual rate of 40 cents per share. The initial 10 cent quarterly payment was made in October 1994. In June, 1995 the Board of Directors approved a 3-for-2 stock split and a 50% increase in the quarterly cash dividend. The stock split was paid July 17, 1995 to shareholders of record on June 30, 1995. In September 1996 the Company increased its cash dividend from 10 cents to 12 cents per share to shareholders of record as of September 27. The Company has limited restrictions on the payment of dividends based on certain debt covenants of the Note Agreement dated June 1, 1994, between the Company and four insurance companies (incorporated by reference to the Form 10-Q for the quarter ended June 30, 1994, as indicated under Item 14). As of December 31, 1996 the Company had approximately $22 million of retained earnings available for cash dividends. Item 6. Selected Financial Data. Incorporated by reference to the information under "Historical Review 1996-1992" on page 32 of the Annual Report. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations. Incorporated by reference to the information under "Management's Discussion and Analysis of Financial Condition and Results of Operations" on pages 14 through 16 of the Annual Report. Item 8. Financial Statements and Supplementary Data. Incorporated by reference to the consolidated financial statements and related notes on pages 17 through 31 of the Annual Report. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. Not applicable. PART III Item 10. Directors and Executive Officers of the Registrant. Information as to Directors is incorporated herein by reference to pages 2 through 5 of the Proxy Statement. The Executive Officers, their ages, their positions and offices with the Company and their principal occupations during the past five years are shown below: 8 10 Corporate Executive Officers Robert H. West - age 58, Chairman of the Board and Chief Executive Officer; Chairman of the Executive Committee and member of the Board Organization Committee. He joined the Company in 1968, became President in 1978 and Chairman of the Board in 1986. Mr. West is a director of Commerce Bancshares, Inc., Burlington Northern Santa Fe Corporation, Kansas City Power & Light Company, and St. Luke's Hospital. He is a trustee of the University of Missouri at Kansas City. Donald H. Pratt - age 59, President; member of the Executive Committee. He joined Butler in 1965, became Executive Vice President in 1980, and President of the Company in 1986. Mr. Pratt is also a director of American Century Mutual Funds and is a trustee of the Kansas City Art Institute and Midwest Research Institute. He serves on the FFA Sponsors Advisory Board. Richard O. Ballentine - age 60, Vice President, General Counsel, and Secretary since 1978. He joined Butler in 1975 as Vice President-Legal. John T. Cole - age 46, Controller since 1990. He joined Butler in 1977 and previously was Corporate Audit Manager. Larry D. Hayes - age 58, Vice President - Corporate Development since 1996. He joined Butler in 1975 and previously was President, Lester Building Systems Division since 1991. John J. Holland - age 46, Vice President-Finance since 1990. He joined Butler in 1980 and became Vice President - Controller in 1986. John W. Huey - age 49, Vice President-Administration since 1993 and Assistant General Counsel and Assistant Secretary since 1987. He joined Butler in 1978. Larry C. Miller - age 40, Treasurer since 1989. He joined Butler in 1980 and became Assistant Treasurer in 1985. Division Executive Officers Moufid (Mike) Alossi - age 54, President, Butler World Trade since 1996. He joined Butler in 1968 and previously was Vice President-International Sales and Marketing. Hans G. Berger - age 49, Managing Director, Butler Europe since 1995. He previously was Managing Director, Butler Bausysteme GmbH from 1993 to 1995 and Vice President - Engineering, Butler Canada from 1992. From 1986 to 1992 he was Vice President - Engineering, Canadian Building Systems, Inc. William D. Chapman - age 54, President, International Operations since 1992. He joined Butler in 1979 and was previously Vice President, International Operations. Marc S. Hafer - age 39, President, Lester Building Systems since 1996. From 1993 to 1996 he was President of Walker Systems, Inc., a subsidiary of Wiremold, Inc. He was Vice President-Sales and Marketing of the Company's Walker Division from 1991 to 1993. He joined Butler in 1988. 9 11 Thomas J. Hall - age 51, President, Butler Real Estate, Inc. since 1991. He joined Butler in 1969, and was named Vice President and General Manager of Butler Real Estate, Inc. in 1987. Richard S. Jarman - age 50, President, Buildings Division since 1986. He joined Butler in 1974. William L. Johnsmeyer - age 49, President Butler Construction (Bucon, Inc.) since 1990. He joined Butler in 1982 and became President, Walker Division in 1984. Robert J. Kronschnabel - age 61, President, Grain Systems Division since 1994. He joined Butler in 1979 and was previously President, Naturalite/EPI in 1988 and became Vice President and General Manager, Grain Systems Division in 1991. Ronald F. Rutledge - age 55, President Vistawall Division since 1984 when he joined Butler. Item 11. Executive Compensation. Incorporated by reference to the information under "Report on Executive Compensation", "Summary Compensation Table", "Aggregated Option/SAR Exercises and Fiscal Year-End Option/SAR Value Table", and Pension Plan Table on pages 9 through 13 of the Proxy Statement. Item 12. Security Ownership of Certain Beneficial Owners and Management. Incorporated by reference to the information under "Beneficial Ownership Table" on pages 7 through 8 of the Proxy Statement. Item 13. Certain Relationships and Related Transactions. Incorporated by reference to the information under "Election of Class A Directors" on pages 2 through 10 and "Report on Executive Compensation" in the Proxy Statement. PART IV Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K. The following documents are filed as part of this report: (a) Financial Statements: Consolidated Balance Sheets as of December 31, 1996 and 1995. Consolidated Statements of Earnings and Retained Earnings - Years Ended December 31, 1996, 1995 and 1994. Consolidated Statements of Cash Flow - Years Ended December 31, 1996, 1995 and 1994. Notes to Consolidated Financial Statements. The foregoing have been incorporated by reference to the Annual Report as indicated under Item 8. 10 12 (b) Financial Statement Schedules: Auditors' Report on Financial Statement and Schedule IX - Valuation and Qualifying Accounts. All other schedules are omitted because they are not applicable or the information is contained in the consolidated financial statements or notes thereto. (c) Exhibits: 3.1 Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to Company's form 10-Q for the quarter ended, March 31, 1996). 3.2 Bylaws of Butler Manufacturing Company (incorporated by reference to Exhibit 3.8 to Company's Form 10-Q for quarter ended September 30, 1990). 4.1 Note Agreement between the Company and four Insurance Companies dated as of June 1, 1994 (incorporated by reference to Exhibit 4 of the Company's Form 10-Q for the quarter ended June 30, 1994). 10.1 Butler Manufacturing Company Executive Deferred Compensation Plan as amended (incorporated by reference to Exhibit 10.2 to the Company's Form 10-K for the year ended December 31, 1989). 10.2 Butler Manufacturing Company Stock Incentive Plan for 1987, as amended (incorporated by reference to Exhibit 10.1 to the Company's Form 10-K for the year ended December 31, 1990). 10.3 Butler Manufacturing Company Stock Incentive Plan of 1979, as amended (incorporated by reference to Exhibit 10.2 to the Company's Form 10-K for the year ended December 31, 1990). 10.4 Form of Change of Control Employment Agreements, as amended, between the Company and each of six executive officers (incorporated by reference to Exhibit 10.3 to the Company's Form 10-K for the year ended December 31, 1990). 10.5 Copy of Butler Manufacturing Company Supplemental Benefit Plan as amended and restated (incorporated by reference to Exhibit 10.5 to the Company's Form 10-K for the year ended December 31, 1994). 10.6 Form of Butler Manufacturing Company Split Dollar Life Insurance Agreement (Collateral Assignment Method; Bonus Arrangement) entered into between the Company and certain executive officers (incorporated by reference to Exhibit 10.6 to the Company's Form 10-K for the year ended December 31, 1994). 10.7 Form of Butler Manufacturing Company Split Dollar Life Insurance Agreement (Collateral Assignment Method; Roll Out Arrangement) entered into between the Company and certain executive officers (incorporated by reference to Exhibit 10.7 to the Company's Form 10-K for the year ended December 31, 1994). 11 13 10.8 Butler Manufacturing Company Stock Incentive Plan of 1996 (incorporated by reference to Exhibit 4(a) to the Company's Registration Statement Number 333-02557 on S-8 filed April 17, 1996). 10.9 Butler Manufacturing Company Director Stock Compensation Program. 10.10 Butler Manufacturing Company Restricted Stock Compensation Program of 1996. 13.0 Butler Manufacturing Company 1996 Annual Report Pages 14 through 32 only (the information expressly incorporated herein by reference). 22.0 Set forth below is a list as of March 13, 1997 of subsidiaries of the Company and their respective jurisdictions of incorporation. Subsidiaries not listed, when considered in the aggregate as a single subsidiary, do not constitute a significant subsidiary.
Jurisdiction of Subsidiary Incorporation - ------------------------------------------------------- Butler Argentina, S.A. Argentina Butler do Brasil Limitada Brazil Butler Export, Inc. Barbados Butler Building Systems, Ltd. Scotland Butler Europe GmbH Germany Butler Systemes de Construction SARL France BMC Real Estate, Inc. Delaware BUCON, Inc. Delaware Butler Pacific, Inc. Delaware Butler Real Estate, Inc. Delaware Butler, S.A. de C.V. Mexico Butler (Shanghai) Inc. China Butler Holdings, Inc. Delaware Beker Kft Hungary Comercial Butler Limitada Chile Lester's of Minnesota, Inc. Minnesota Lester Holdings, Inc. Delaware
24.0 Power of Attorney to sign this Report by each director. 27.0 Financial Data Schedule. No reports on Form 8-K were filed by the Company during the quarter ended December 31, 1996. The calculation of the aggregate market value the Company's Common Stock held by non-affiliates shown on the front of the cover page assumes that directors are affiliates. Such assumption does not reflect a belief by the Company or any director that any director is an affiliate of the Company. 12 14 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 on this 19th day of March, 1997. BUTLER MANUFACTURING COMPANY BY /S/ Robert H. West ---------------------------- Robert H. West Chairman of the Board 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 in the capacities indicated on the dates indicated. /S/ Robert H. West Chairman of the Board March 19, 1997 ----------------------------- (Principal Executive Robert H. West Officer) /S/ John J. Holland Vice President-Finance March 19, 1997 ----------------------------- (Principal Financial John J. Holland Officer) /S/ John T. Cole Controller March 19, 1997 ----------------------------- (Principal Accounting John T. Cole Officer) /S/ Harold G. Bernthal * Director March 24, 1997 ----------------------------- Harold G. Bernthal /S/ Robert E. Cook * Director March 24, 1997 ----------------------------- Robert E. Cook /S/ Alan M. Hallene * Director March 24, 1997 ----------------------------- Alan M. Hallene /S/ C.L. William Haw * Director March 24, 1997 ----------------------------- C.L. William Haw /S/ Robert J. Novello * Director March 24, 1997 ----------------------------- Robert J. Novello /S/ George E. Powell, Jr. * Director March 24, 1997 ----------------------------- George E. Powell, Jr. /S/ Donald H. Pratt Director March 19, 1997 ------------------------------ Donald H. Pratt /S/ Robert J. Reintjes, Sr. * Director March 24, 1997 ----------------------------- Robert J. Reintjes, Sr. /S/ Judith A. Rogala * Director March 24, 1997 ----------------------------- Judith A. Rogala Richard O. Ballentine, by signing his name hereto, does hereby sign this report on Form 10-K on behalf of each of the directors of the Registrant pursuant to a power of attorney executed by each of such directors. * By /S/ Richard O. Ballentine, Attorney-in-fact March 24, 1997 -------------------------------------------- Richard O. Ballentine, Attorney-in-fact 13 15 CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS The Board of Directors Butler Manufacturing Company We consent to the incorporation by reference in Registration Statements Nos. 33-14464, 2-63830, 2-55753, 333-02285, 333-02557 and 2-36370 on Form S-8 and the related Prospectus of June 11, 1987, with Appendix dated March 8, 1996, of Butler Manufacturing Company of our report dated February 3, 1997 relating to the consolidated balance sheets of Butler Manufacturing Company and subsidiaries as of December 31, 1996, and 1995, and the related consolidated statements of earnings and retained earnings and cash flows and the related schedule for each of the years in the three-year period ended December 31, 1996, which reports appear in or are incorporated by reference in the Annual Report on Form 10-K of Butler Manufacturing Company for the fiscal year ended December 31, 1996. We also consent to the reference to our firm under the heading "Experts" in the Prospectus to the Registration Statements. /S/ KPMG PEAT MARWICK LLP ------------------------- KPMG PEAT MARWICK LLP Kansas City, Missouri March 25,1997 14 16 BUTLER MANUFACTURING COMPANY AND SUBSIDIARIES KANSAS CITY, MISSOURI Consolidated Financial Statement Schedule (Form 10-K) December 31, 1996, 1995 and 1994 (With Auditors' Report Thereon) 15 17 INDEPENDENT AUDITORS' REPORT The Board of Directors Butler Manufacturing Company: Under date of February 3, 1997, we reported on the consolidated balance sheets of Butler Manufacturing Company and subsidiaries as of December 31, 1996 and 1995, and the related consolidated statements of earnings and retained earnings and cash flows for each of the years in the three-year period ended December 31, 1996, as contained in the 1996 Annual Report. These consolidated financial statements and our report thereon are incorporated by reference in the Annual Report on Form 10-K for the year 1996. In connection with our audits of the aforementioned consolidated financial statements, we also audited the related consolidated financial statement schedule as listed in item 14. This consolidated financial statement schedule is the responsibility of the Company's management. Our responsibility is to express an opinion on this consolidated financial statement schedule based on our audits. In our opinion, such schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material aspects, the information set forth therein. /S/ KPMG PEAT MARWICK LLP ------------------------- KPMG PEAT MARWICK LLP Kansas City, Missouri February 3, 1997 S-1 18 SCHEDULE IX BUTLER MANUFACTURING COMPANY AND SUBSIDIARIES Valuation and Qualifying Accounts (Thousands of Dollars)
Additions Deductions --------------- ----------- Balance at Charged Charged off Balance beginning to net of at close Description of year earnings Other recoveries of year ----------- ---------- -------- ----- ----------- -------- (A) Year ended December 31, 1996: For possible losses on accounts receivable $2,348 $1,344 $470 $1,244 $2,918 ====== ====== ==== ====== ====== Year ended December 31, 1995: For possible losses on accounts receivable $1,364 $1,154 $326 $ 496 $2,348 ====== ====== ==== ====== ====== Year ended December 31, 1994: For possible losses on accounts receivable $1,088 $ 990 $ 10 $ 724 $1,364 ====== ====== ==== ======= ======
(A) Includes transfers from other reserve accounts. S-2 19 EXHIBIT INDEX EXHIBITS DESCRIPTION - -------- ----------- 3.1 Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to Company's form 10-Q for the quarter ended, March 31, 1996). 3.2 Bylaws of Butler Manufacturing Company (incorporated by reference to Exhibit 3.8 to Company's Form 10-Q for quarter ended September 30, 1990). 4.1 Note Agreement between the Company and four Insurance Companies dated as of June 1, 1994 (incorporated by reference to Exhibit 4 of the Company's Form 10-Q for the quarter ended June 30, 1994). 10.1 Butler Manufacturing Company Executive Deferred Compensation Plan as amended (incorporated by reference to Exhibit 10.2 to the Company's Form 10-K for the year ended December 31, 1989). 10.2 Butler Manufacturing Company Stock Incentive Plan for 1987, as amended (incorporated by reference to Exhibit 10.1 to the Company's Form 10-K for the year ended December 31, 1990). 10.3 Butler Manufacturing Company Stock Incentive Plan of 1979, as amended (incorporated by reference to Exhibit 10.2 to the Company's Form 10-K for the year ended December 31, 1990). 10.4 Form of Change of Control Employment Agreements, as amended, between the Company and each of six executive officers (incorporated by reference to Exhibit 10.3 to the Company's Form 10-K for the year ended December 31, 1990). 10.5 Copy of Butler Manufacturing Company Supplemental Benefit Plan as amended and restated (incorporated by reference to Exhibit 10.5 to the Company's Form 10-K for the year ended December 31, 1994). 10.6 Form of Butler Manufacturing Company Split Dollar Life Insurance Agreement (Collateral Assignment Method; Bonus Arrangement) entered into between the Company and certain executive officers (incorporated by reference to Exhibit 10.6 to the Company's Form 10-K for the year ended December 31, 1994). 20 10.7 Form of Butler Manufacturing Company Split Dollar Life Insurance Agreement (Collateral Assignment Method; Roll Out Arrangement) entered into between the Company and certain executive officers (incorporated by reference to Exhibit 10.7 to the Company's Form 10-K for the year ended December 31,1994). 10.8 Butler Manufacturing Company Stock Incentive Plan of 1996 (incorporated by reference to Exhibit 4(a) to the Company's Registration Statement Number 333-02557 on S-8 filed April 17, 1996). 10.9 Butler Manufacturing Company Director Stock Compensation Program. 10.10 Butler Manufacturing Company Restricted Stock Compensation Program of 1996. 13.0 Butler Manufacturing Company 1996 Annual Report Pages 14 through 32 only (the information expressly incorporated herein by reference). 22.0 Set forth below is a list as of March 13, 1997 of subsidiaries of the Company and their respective jurisdictions of incorporation. Subsidiaries not listed, when considered in the aggregate as a single subsidiary, do not constitute a significant subsidiary.
Jurisdiction of Subsidiary Incorporation ---------- ---------------- Butler Argentina, S.A. Argentina Butler do Brasil Limitada Brazil Butler Export, Inc. Barbados Butler Building Systems, Ltd. Scotland Butler Europe GmbH Germany Butler Systemes de Construction SARL France BMC Real Estate, Inc. Delaware BUCON, Inc. Delaware Butler Pacific, Inc. Delaware Butler Real Estate, Inc. Delaware Butler, S.A. de C.V. Mexico Butler (Shanghai) Inc. China Butler Holdings, Inc. Delaware Beker Kft Hungary Comercial Butler Limitada Chile Lester's of Minnesota, Inc. Minnesota Lester Holdings, Inc. Delaware
24.0 Power of Attorney to sign this Report by each director. 27.0 Financial Data Schedule. EX-10.9 2 DIRECTOR STOCK COMPENSATION PROGRAM 1 EXHIBIT 10.9 BUTLER MANUFACTURING COMPANY DIRECTOR STOCK COMPENSATION PROGRAM AS AMENDED ON JANUARY 21, 1997 1. PURPOSE. The purpose of this Director Stock Compensation Program ("Program") is to enable members of the Board of Directors (the "Board") of Butler Manufacturing Company (the "Company") who are not employees of the Company ("Outside Directors") to increase their proprietary interest in the success and progress of the Company through their ownership of additional shares of the Common Stock, no par value, of the Company (the "Common Stock"). 2. PARTICIPATION. Each person becoming an Outside Director of the Company shall participate in the Program commencing on the later of the date of adoption of this Program by the stockholders or the date the person becomes an Outside Director and shall continue to participate until the resignation, non-reelection, death or disability of any such Outside Director ("Participant"). 3. PAYMENT OF ANNUAL CASH RETAINER IN STOCK. (a) PAYMENT OF RETAINER. The dollar amount of the annual retainer payable to Outside Directors as established by the Board from time to time shall be credited in Common Stock to accounts for each Participant ("Stock Account") maintained by the Board Organization Committee of the Board of Directors ("the Committee"). The amount of the credit for each calendar quarter for each Participant shall be such number of shares of Common Stock of the Company as is equal to one fourth of the dollar amount of the annual retainer payable to each Participant divided by the Fair Market Value of one share of Common Stock on the date the credit is made. The credit shall be made on the fifth (5th) Business Day of each calendar quarter. (b) DIVIDENDS, ETC. An amount equal to any cash dividends payable on shares of Common Stock shall also be credited to a Participant's Stock Account in shares of Common Stock on the payment date for such dividend on all shares of Common Stock. The amount of such credit to each Participant's Stock Account for cash dividends shall be such number of shares of Common Stock as is equal to the amount of the cash dividend payable on shares of Common Stock credited to the Participant's Stock Account divided by the Fair Market Value of one share of Common Stock on the date the credit is made. The number of shares credited to Participant Stock Accounts shall be adjusted to reflect any stock split, stock dividend, the issuance of stock purchase rights or similar transactions effected prior to the issuance of stock certificates. (c) FAIR MARKET VALUE. The Fair Market Value of a share of Common Stock shall mean the last sale price for the Company's Common Stock on the New York Stock Exchange, or if the Company's Common Stock is not traded on that day, on the next preceding day on which the Common Stock was so traded. 4. ISSUE OF STOCK CERTIFICATES. The Company shall issue from the Treasury or from authorized but unissued shares a certificate to each Participant in the amount of whole shares of Common Stock credited to the Participant's Stock Account (a) upon written request of the Participant, (b) annually on the 10th Business Day of the last calendar quarter of each year, (c) upon termination of participation or (d) upon termination of the Program. Until the issuance of the stock certificate, no right to vote or receive dividends or other rights as a stockholder shall exist as to the shares of Common Stock credited to a Participant's Stock Account, except to the extent specified in Section 3. Upon any termination of Participation, termination of the Program or any other distribution of a Participant's Stock Account in whole, any fraction of a share of Common Stock shall be distributed in cash equal to the Fair Market Value of the fractional share. Any other property credited to the Participant's Stock Account other than shares of Common Stock shall be distributed in kind or in cash equal to the fair market value thereof as determined by the Committee. 5. AMOUNT OF ANNUAL RETAINER. The amount of the Annual Retainer shall be determined by the full Board of Directors from time to time, but not more frequently than annually. 2 6. ADMINISTRATION. The Program shall be administered by the Committee, which shall have full power and authority to construe and administer the Program. Any action taken under the provisions of the Program by the Committee arising out of or in connection with the administration, construction, or effect of the Program or any rules adopted thereunder shall, in each case, lie within the discretion of the Committee and shall be conclusive and binding upon the Company and upon all Participants, and all persons claiming under or through any of them. 7. BENEFICIARY DESIGNATION. A Participant shall designate a beneficiary or beneficiaries who, upon the Participant's death, shall receive the Shares and any other items credited to a Participant's Stock Accounts that otherwise would have been delivered to the Participant. All designations shall be in writing and signed by the Participant. The designation shall be effective only if an when delivered to the Company during the lifetime of the Participant. The Participant also may change beneficiaries by a signed, written instrument delivered to the Company. The delivery of Shares shall be in accordance with the last unrevoked written designation of beneficiary that has been signed and delivered to the Secretary of the Company. In the event the Participant does not designate a beneficiary, in the event that all of the beneficiaries named pursuant to this section predecease the Participant, or if for any reason such designation is ineffective in whole or in part, the Shares and other items credited to the Participant's account that otherwise would have been delivered to the Participant shall be delivered to the Participant's estate, and in such event, the term "beneficiary" shall include such estate. 8. TRANSFERABILITY. The rights and privileges conferred under this Program shall not be subject to execution, attachment or similar process and may not be transferred, assigned, pledged or hypothecated in any manner (whether by operation of law or otherwise) other than by will or the laws of descent and distribution or a "qualified domestic relations order" as defined in the Internal Revenue Code, as amended from time to time. 9. APPROVAL; EFFECTIVE DATE. This Program shall become effective when approved by the holders of a majority of the Common Stock present or represented and entitled to vote at a meeting of stockholders. 10. AMENDMENT AND TERMINATION. Subject to the provisions of Section 5, this Program may be amended by the Board of Directors of the Company from time to time, and may be terminated by the Board of Directors or Stockholders, except that any such action shall not adversely affect any Participant's rights under the Program that had accrued prior to such amendment or termination. 11. EXPENSES OF THE PROGRAM. All costs and expenses of the Program shall be borne by the Company and none of such expense shall be charged to any Participant. 12. COMPLIANCE WITH RULE 16B-3. It is the intention of the Company that the operation of the Program comply in all respects with Rule 16b-3 under Section 16(b) of the Securities Exchange Act of 1934, as amended, and that all Participants remain Disinterested Persons as defined by such Rule. Accordingly, if any Program provision is later found to cause any crediting of Common Stock to fail to qualify under Rule 16b-3 for an exemption from the operation of Section 16(b) or if any Program provision would disqualify Participants from remaining Disinterested Directors under Rule 16b-3, that provision shall be deemed null and void, and in all events the Program shall be construed in favor of its meeting the requirements of Rule 16b-3. 3 CERTIFICATION The undersigned Secretary of Butler Manufacturing Company, hereby certifies that the foregoing Program was duly adopted by the Board of Directors at a regular meeting of the Board duly called, noticed, convened and held on December 12, 1995, in accordance with the Certificate of Incorporation, Bylaws and applicable laws of the State of Delaware. ________________________________ Richard O. Ballentine Vice President, Secretary and General Counsel The undersigned Secretary of Butler Manufacturing Company, hereby certifies that the foregoing Program was duly approved by the holders of a majority of the Common Stock present or represented and entitled to vote at the Annual Meeting of Stockholders duly called, noticed, convened and held on April 16, 1996, in accordance with the Certificate of Incorporation, Bylaws and applicable laws of the State of Delaware. ________________________________ Richard O. Ballentine Vice President, Secretary and General Counsel The undersigned Secretary of Butler Manufacturing Company, hereby certifies that the foregoing Program incorporates the amendments duly adopted by the Board of Directors at a regular meeting of the Board duly called, noticed and convened and held on January 21, 1997, in accordance with the Certificate of Incorporation, Bylaws and applicable laws of the State of Delaware. ________________________________ Richard O. Ballentine Vice President, Secretary and General Counsel EX-10.10 3 RESTRICTED STOCK BONUS PLAN 1 EXHIBIT 10.10 BUTLER MANUFACTURING COMPANY RESTRICTED STOCK BONUS PROGRAM OF 1996 Effective as of December 17, 1996 THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING SECURITIES THAT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 This Program Document is Dated December 17, 1996 2 BUTLER MANUFACTURING COMPANY RESTRICTED STOCK BONUS PROGRAM OF 1996 Pursuant to the Stock Incentive Plan of 1996 1. GENERAL. The Butler Manufacturing Company Restricted Stock Bonus Program of 1996 ("Program") is hereby adopted. The Program is being implemented per the Stock Awards Feature of the Butler Manufacturing Company Stock Incentive Plan of 1996 (the "Plan") by the Compensation and Benefits Committee of the Board of Directors of Butler Manufacturing Company (the "Committee"). Its purpose is to encourage eligible Senior Executives of the Company to acquire and retain equity ownership in the Company. For definitions of capitalized terms see Section 16. 2. ELIGIBILITY. Only a Senior Executive of the Company, who is a salaried employee and who is deemed by the Committee to be a person who will contribute significantly to the growth and successful operations of the Company will be eligible to participate in the Program. Each person that the Committee designates for Participation shall be deemed to be a Senior Executive for purposes of this Program. 3. DESIGNATION OF PARTICIPATION. From time to the time the Committee, in its discretion, shall designate Senior Executives of the Company to be eligible to participate in this Program with respect to the Annual Bonus awarded to each such Participant for the year covered by the designation ("Designation"). The Designation shall amount to the grant by the Committee of a Stock Purchase Right. On or after the Designation Date, the Chairman of the Company or his designee shall furnish to each Participant a form of Stock Bonus Agreement which shall offer participation in the Program with respect to the dollar amount of the Participant's Annual Bonus for the year (the "Announcement Date"). The form of Stock Bonus Agreement shall be in substantially the form appended to this Program as Exhibit A. 4. STOCK BONUS ELECTION. A Participant who receives a Designation and who desires to receive up to 50% of his Annual Bonus as a Stock Bonus shall: (a) specify in the Stock Bonus Agreement the amount of the Annual Bonus to be so applied, but not to exceed 50%, (b) complete the balance of the Stock Bonus Agreement, (c) sign the Stock Bonus Agreement and (d) deliver the properly completed and executed Stock Bonus Agreement to the Secretary of the Company on or before midnight on the Expiration Date. The Expiration Date shall be the tenth Business Day following the Announcement Date. All rights under the Designation shall expire at midnight Kansas City, Missouri time on the Expiration Date. A Stock Bonus Election shall entitle the Participant to receive Bonus Shares for the amount of the Annual Bonus applied to the Election and Matching Shares equal to 50% of the Bonus Shares. 3 The Election shall become effective as of the close of business on the Expiration Date if the Participant has delivered an unrevoked properly completed Stock Bonus Agreement to the Secretary or the designee of the Secretary on or before the Expiration Date. Any Stock Bonus Agreement so delivered shall be revocable by the Participant by delivering written notice of revocation to the Secretary at any time prior to midnight Kansas City, Missouri time on the Expiration Date. 5. TRANSFER RESTRICTIONS AND FORFEITURE PROVISIONS. The Bonus Shares and Matching Shares issued under the Program shall be subject to the Transfer Restrictions and Forfeiture Provisions set forth in the Stock Bonus Agreement. 6. SHARES COVERED BY THE PROGRAM. A total of 50,000 shares out of the 600,000 shares reserved under the Plan are reserved for issuance under this Program, subject to the adjustment provisions of the Plan. Pursuant to the provisions of Section 4(a) of the Plan, only Matching Shares which become fully vested shall be counted against that limitation. 7. TERM. This Program shall expire at such time as the Committee shall discontinue the same or the sooner expiration of the Plan. 8. ISSUE OF STOCK CERTIFICATES. The Company shall issue from its Treasury or from authorized but unissued shares certificates to Participants in the amount of whole shares of Common Stock for Bonus Shares and Matching Shares. Certificates covering Matching Shares shall bear the following legend until the occurrence of the Vesting Date for such shares: The Shares evidenced by this Certificate have been issued pursuant to the BUTLER MANUFACTURING COMPANY RESTRICTED STOCK BONUS PROGRAM of 1996 and a related agreement ("Agreement") between the Company and the Registered Holder which restricts the transfer of the Shares and subjects them to forfeiture to the Company upon the occurrence of any Forfeiture Event described in the Agreement. This legend may be removed upon occurrence of the Vesting Date under the Agreement. 9. ADMINISTRATION. The Program shall be administered by the Committee, which shall have full power and authority to construe and administer the Program. Any action taken under the provisions of the Program by the Committee arising out of or in connection with the administration, construction, or effect of the Program or any rules adopted thereunder shall, in each case, lie within the discretion of the Committee and shall be conclusive and binding upon the Company and upon all Participants, and all persons claiming under or through any of them. The members of the Committee, as of the date of the mailing of the Proxy Statement for the latest annual meeting of stockholders of the Company are listed in that Proxy Statement under "COMPENSATION AND BENEFITS COMMITTEE." The Proxy Statement is incorporated into this Prospectus and Program Document by reference. All members of the Committee are directors of the Company and each has an address at BMA Tower, P. 0. Box 419917, Penn Valley Park, Kansas City, Missouri 64141-0917. 4 10. EXPENSES OF THE PROGRAM. All costs and expenses of the Program shall be borne by the Company and none of such expense shall be charged to any Participant. 11. PROSPECTUS. This Program document also constitutes a part of a prospectus under the Securities Act of 1933. The securities being offered by the prospectus consist of shares of Common Stock of the Company which may be issued to Participants under the Program. 12. ERISA. The Program is not subject to any provisions of the Employee Retirement Income Security Act of 1974. 13. AVAILABLE DOCUMENTS AND INFORMATION The following documents are incorporated by reference herein: * The Plan. The descriptions in this document of various provision of the Plan do not purport to be complete and are qualified in their entirety by reference to the provisions of the Plan. * The Company's Annual Report on Form 10-K for the year ended December 31, 1995; * All other reports filed by the Company pursuant to Section 13(a) or 15(d) of the Securities and Exchange Act of 1934 since December 31, 1995; * The description of the Company's Common Stock and Preferred Share Purchase Rights contained in its Registration Statements on Form 8-A dated October 8, 1996; and * All documents subsequently filed by the Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended, prior to the filing of a post-effective amendment which indicates that all securities offered have been sold or which deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference into this Prospectus and to be a part hereof from the date of filing of such documents. The above-listed documents are available to Participants without charge, upon written or oral request, as are the following documents: * Periodic updates of this Prospectus and the other documents, if any, which from time to time constitute the prospectus meeting the requirements of Section 10(a) of the Securities Act of 1933. * All reports, proxy statements and other communications distributed by Butler Manufacturing Company generally to its stockholders. * Copies of the Registration Statement on Form S-8 filed with the Securities and Exchange Commission which registers the offering of securities described in this Prospectus, as well as any amendments thereto. Requests for any of the above-listed documents should be directed to the Secretary of the 5 Company at BMA Tower, Penn Valley Park, P.O. Box 419917, Kansas City, Missouri 64141-0917, telephone (816) 968-3000. Copies of documents publicly filed with the Securities and Exchange Commission may also be obtained from the Internet at http://www.sec.gov./cgi-bin/srch-edgar. 14. APPROVAL; EFFECTIVE DATE. This Program shall become effective when approved by the Committee as of December 17, 1996. 15. AMENDMENT AND TERMINATION. Subject to the provisions of the Plan, this Program may be amended by the Committee from time to time, and may be terminated by the Board of Directors or Stockholders, except that any such action shall not adversely affect any Participant's rights under the Program that had accrued prior to such amendment or termination. Subject to the provisions of the Plan, Agreements issued pursuant to this Program may be amended by or at the direction of the Committee with the consent of the Participant to such Agreement. 16. DEFINITIONS AND TERMS: Unless otherwise required by the context, the following terms and the terms set forth in Section 2 of the Plan, when used in this Program, shall have the meanings set forth in this Section 16 and in Section 2 of the Plan: ANNOUNCEMENT DATE: The date the Chairman of the Company or his designee shall furnish to each Participant a form of Stock Bonus Agreement which shall offer participation in the Program with respect to the dollar amount of the Participant's Annual Bonus for the year. BONUS SHARES: A whole number of shares of the Company's Common Stock which a Participant elects to purchase, subject to Transfer Restrictions, with up to 50% of the Participant's Annual Bonus, the number of which shall be the cash amount of the Annual Bonus to be applied toward the purchase of Bonus Shares divided by the Fair Market Value of the Common Stock as of close of business on the Election Date. ANNUAL BONUS: The bonus awarded to a Participant under the Company's Executive Bonus Program. COMMITTEE: The Committee which administers the Plan. DESIGNATION. A designation of eligibility to participate in the Program as contemplated by Section 3. DESIGNATION DATE. Date the Committee makes a Designation or such subsequent date as the Committee specifies in the Designation as the effective date of the Designation. ELECTION DATE. The effective date of an election to participate, which shall be the Expiration Date with respect to an unrevoked and properly delivered, completed and signed Stock Bonus Agreement. EXPIRATION DATE. Date of expiration of rights granted under a Designation. 6 FORFEITURE EVENT. An event, the occurrence of which will cause a forfeiture of Matching Shares under a Stock Bonus Agreement. FORFEITURE PROVISION. Provision contained in a Stock Bonus Agreement which directs the forfeiture of Matching Shares upon the occurrence of a Forfeiture Event. MATCHING SHARES: A whole number of shares of the Company's Common Stock which a Participant shall receive, subject to Transfer Restrictions and Forfeiture Provisions, under a Stock Bonus Agreement, in an amount equal to one half of the Bonus Shares purchased under the Stock Bonus Agreement. PARTICIPANT: A Senior Executive selected by the Committee in accordance with the terms of the Plan to participate in the Program. PLAN: The Stock Incentive Plan of 1996. PROGRAM: The Butler Manufacturing Company Restricted Stock Bonus Program of 1996 as herein set forth. PROGRAM DOCUMENT: This document, each Stock Bonus Agreement and the Plan. SECTION 83(B) ELECTION. The election of a Participant to include in the Participant's gross income under the Code for the taxable year in which a Stock Bonus Election is made the fair market value (as defined under the Code) of the Matching Shares as of the Election Date without regard to any Transfer Restriction or Forfeiture Provision, made in writing in accordance with IRS regulations not later than 30 days after the Election Date. STOCK BONUS: The grant by the Company to a Participant of a Stock Bonus consisting of Bonus Shares and Matching Shares pursuant to the terms of a Stock Bonus Agreement. STOCK BONUS AGREEMENT: The Award Agreement between the Company and a Participant with respect to the Participant's acquisition of Bonus Shares and Matching Shares under the Program as evidenced by a properly executed and delivered Stock Bonus Election and the Terms of the Program and the Plan. STOCK BONUS ELECTION: The written election of a Participant to apply up to 50% of the Participant's Annual Bonus for the purchase of Bonus Shares delivered to the Secretary of the Company in the form specified by the Committee. STOCK PURCHASE RIGHT: A Stock Purchase Right as contemplated by the Plan and granted under the Program which entitles a Participant to purchase Bonus Shares and acquire Matching Shares pursuant to a Stock Bonus Election. TRANSFER RESTRICTION: A provision of a Stock Bonus Agreement pursuant to which the Participant agrees not to voluntarily transfer Bonus Shares until the Vesting Date. VESTING DATE: Date Matching Shares become fully vested prior to a Forfeiture Event. 7 CERTIFICATION The undersigned Secretary of Butler Manufacturing Company, hereby certifies that as of this 17th day of December, 1996, the foregoing is a true copy of the Butler Manufacturing Company Restricted Stock Bonus Program of 1996, as amended (the "Program"), that the Program is in effect, and that the same has been duly adopted by the Committee in accordance with the terms of the Butler Manufacturing Company Stock Incentive Plan of 1966, as amended, the Certificate of Incorporation and Bylaws of the Company and the applicable laws of the State of Delaware. _____________________ Richard O. Ballentine Vice President, Secretary and General Counsel 8 EXHIBIT A STOCK BONUS AGREEMENT (and Part of a Prospectus) TO: FROM: Bob West DATE: January 21, 1997 (THE "ANNOUNCEMENT DATE") RE: BUTLER MANUFACTURING COMPANY RESTRICTED STOCK BONUS PROGRAM OF 1996, copy of which is being delivered with this Agreement (the "Program"). I am pleased to advise you that the Compensation and Benefits Committee of the Board of Directors has selected you to participate in the Program on the terms of this Agreement, the Program and the Butler Manufacturing Company Stock Incentive Plan of 1996 (the "Plan"). Under this Agreement you may make a Stock Bonus Election to convert up to 50% of your Annual Bonus (as shown below) to a Stock Bonus. Under a Stock Bonus you may receive a portion of your Annual Bonus for 1996 in Bonus Shares and Matching Shares. Announcement Date: Date shown above. Your Annual Bonus: $_______. Expiration Date: tenth Business Day following the Announcement Date (February 4, 1997). YOU MAY MAKE A STOCK BONUS ELECTION ONLY BY PROPERLY COMPLETING, SIGNING AND RETURNING THIS AGREEMENT TO THE SECRETARY ON OR BEFORE MIDNIGHT, KANSAS CITY, MISSOURI TIME, ON THE EXPIRATION DATE SPECIFIED ABOVE. Your Stock Bonus Election will become effective as of the close of Business on the Expiration Date if you have delivered this Agreement properly signed and completed to the office of the Secretary, and have not revoked the election, on or before the Expiration Date (the "Election Date"). You may revoke a prior delivered Election only by delivering a written notice of revocation to the Secretary on or before Midnight on the Election Date. For definitions of capitalized terms in this Agreement see Section 16 of the Program. 9 1. BONUS SHARES YOU WILL RECEIVE. The number of Bonus Shares that you will receive under your Stock Bonus Election shall be a whole number equal to (a) the dollar amount of the Annual Bonus you choose to apply to the Stock Bonus Election as shown immediately above your signature on this Agreement (not to exceed 50% of the Annual Bonus) divided by (b) the closing sales price of a share of Common Stock as reported by the NYSE on the Expiration Date. Any fraction will be paid in cash as a part of your Annual Bonus. 2. NUMBER OF MATCHING SHARES. The number of Matching Shares you will receive shall be a whole number (rounded up) equal to one half of the number of Bonus Shares. 3. ISSUE OF SHARE CERTIFICATES. The Matching Shares and the Bonus Shares will be issued in your name as soon as may be practicable following the Election Date. Certificates for the Bonus Shares will be delivered to you subject to a Transfer Restriction only. A certificate covering the Matching Shares will be delivered to the Secretary of the Company subject to a Transfer Restriction and a Forfeiture Provision and containing a legend referring to those Restrictions and Provisions (the "Legend"). You will deliver with this Agreement a properly completed stock power in blank that will authorize the Secretary to transfer to the Company the Matching Shares covered by the Certificate for the Matching Shares upon the occurrence of a Forfeiture Event. Upon the lapse of the Transfer Restrictions and Forfeiture Provisions on the Matching Shares, the Secretary shall deliver to you the Certificate covering the Matching Shares together with written instructions to the Transfer Agent for the Common Stock to remove the legend. 4. VESTING AND FORFEITURE: Matching Shares will become fully vested on the earlier of (a) the third anniversary of the Election Date or (b) the date of a Change-in-Control (the "Vesting Date"); provided, however all Matching Shares subject to this Agreement shall be forfeited to the Company in the event that prior to the Vesting Date (i) your employment with the Company terminates for any reason other than retirement, permanent and total disability, or death or (ii) any of the Bonus Shares subject to this Agreement are transferred by you in violation of the Transfer Restriction ("Forfeiture Event"). 5. TRANSFER RESTRICTIONS. You agree that prior to the Vesting Date you will not voluntarily sell, assign, pledge, hypothecate or otherwise transfer any of the Bonus or Matching Shares, except by operation of law and except to a trust for your benefit with respect to which you have during your life the sole voting and dispositive power over, and sole beneficial interest in the economic incidents of ownership of, the Shares contributed to such Trust. The Company believes that your Stock Purchase Election will be exempt from the short swing profits provisions of Section 16 of the Exchange Act. However you will be required to report the acquisition of the Matching and Bonus Shares on your next Form 5. So long as you are an affiliate of the Company and for a period of three months thereafter you will also be required to effect any public sales of the Shares that are not otherwise restricted by the Transfer Restrictions and Forfeiture Provisions in accordance with the provisions of SEC Rule 144. 6. VOTING, DIVIDENDS AND OTHER STOCK RIGHTS. Upon issuance of Bonus and Matching shares in your name, you will enjoy all rights of a stockholder, including voting, dividend and other stock rights, subject only to the Transfer Restriction and Forfeiture Provisions. 7. TAX CONSEQUENCES. Set forth below is a brief description of certain significant United States Federal income tax consequences of a Stock Bonus Election, under existing law as of the most recent April 1. It applies primarily if you are a citizen or resident alien of the United States whose tax home or abode is in the United States. The discussion is based on the Internal Revenue Code of 1986, as amended (the "Code") and applicable regulations thereunder in effect on the Designation Date. Any subsequent changes in the Code or those regulations may affect the accuracy of this discussion. In addition, this discussion does not consider any state, local or foreign tax consequences or any circumstances that are unique to you that may affect the accuracy or applicability of this discussion. The BONUS SHARES you receive under a Stock Bonus Election will subject you to tax at ordinary income rates on the fair market value of the Bonus Shares at the Election Date. HOWEVER, the MATCHING SHARES that you receive under a Stock Bonus Election will subject you to tax at ordinary income rates on the fair market value of the Matching Shares AT the time the stock is either transferable or is no longer subject to forfeiture, which will ordinarily be THE VESTING DATE. The Company will receive a tax 10 deduction with respect to the amount of income recognized by you on the Bonus Shares and the Matching Shares. Under the Code you are entitled to make a Section 83(b) Election and be currently taxed on the fair market value of the Matching Shares in the taxable year in which the Election Date occurs. If you choose to make that Election and the Matching Shares are forfeited due to the occurrence of a Forfeiture Event, then current provisions of the Code do not entitle you to a corresponding deduction or capital loss with respect to the amount of taxes paid with respect to the Matching Shares and the Company will have no liability with respect thereto even though it may have enjoyed a tax deduction in the amount covered by your Section 83(b) Election. If you choose to make a Section 83(b) Election, make a check mark in the appropriate blank space indicated below for that choice and the Company will provide you with the necessary form. THIS IS A MATTER THAT YOU SHOULD DISCUSS WITH YOUR TAX ADVISOR. The holding period to determine whether you will have long-term or short-term capital gain or loss upon sale of Shares begins on the Election Date for Bonus Shares and on the Vesting Date for Matching Shares [or upon the Election Date for the Matching Shares, if you make a Section 83(b) Election]. Under Section 162(m) of the Code, certain compensation payments in excess of $1 million are subject to a limitation on deductibility for the Company. This limitation on deductibility applies with respect to that portion of a compensation payment for a taxable year in excess of $1 million to either the chief executive officer of the Company or any one of the other four highest paid executive officers who are employed by the Company on the last day of the taxable year. Under certain circumstances, accelerated vesting of Matching Shares in connection with a "change in control" of the Company might be deemed an "excess parachute payment" for purposes of the golden parachute tax provisions of Section 280G of the Code. To the extent it is so considered, you may be subject to a 20% excise tax and the Company may be denied a tax deduction. 8. WITHHOLDING TAXES. The Company will withhold, as of the date of your Stock Bonus Election, all federal, state and local income taxes generated by such Election in the taxable year in which the Election is made and which the Company is required to withhold. If a Section 83(b) Election is made, the amount of income you will be required to include in your gross income for Federal Income Tax purposes will be the full amount of your Annual Bonus plus the fair market value of the Matching Shares on the Election Date. If a Section 83(b) Election is not made, the amount of income you will be required to include in your gross income for Federal Income Tax purposes will be the full amount of your Annual Bonus. No withholding may be satisfied by the withholding of Bonus Shares or Matching Shares or the delivery of pre-owned shares, except that, if you do not make a Section 83(b) Election, then you may satisfy withholding taxes on the Matching Shares for the taxable year in which the Vesting Date occurs by delivering to the Company pre-owned shares to satisfy the withholding taxes. 9. CONSULT YOUR TAX ADVISOR. The discussion in this Agreement and Program Document of the effects of Federal income taxation is merely a general discussion. It is not intended to be relied upon by you in determining the income tax consequences of making a Stock Bonus Election or Section 83(b) Election or of disposing of the stock so acquired. State and local income tax rules which may apply are not discussed. Because the applicability of the tax laws will depend upon a number of factors personal to you and because of the complexity of the income tax laws and regulations relating to this subject, it is suggested that you consult with your tax advisor prior to (a) the making of a Stock Bonus Election, (b) the making of a Section 83(b) Election or (c) making a subsequent disposition of Matching or Bonus shares acquired. 10. PROSPECTUS. This Agreement also constitutes a part of a prospectus under the Securities Act of 1933. The securities being offered by the prospectus consist of shares of Common Stock of the Company which may be issued to Participants under the Program. See Section 13 of the Program with respect to documents available under the Registration Statement for the shares of Common Stock covered by the Prospectus. 11 11. RECEIPT OF DOCUMENTS. It is agreed that you have received copies of the Plan, the Program, and the Company's most current Annual Report to Stockholders. You also agree that copies of those documents and additional documents and information referred to in this Agreement and in the Program are available from the Corporate Secretary at the principal offices of the Company, BMA Tower (P.O. Box 419917), Penn Valley Park, Kansas City, Missouri 64141-0917, and at the office of the Securities and Exchange Commission. See "Available Information" in the Program. 12. MISCELLANEOUS. This Agreement shall inure to the benefit of and be binding upon the Company, its successors and assigns and upon you and your heirs, executors, administrators, successors, assigns and legal representatives. All elections, notices, requests and other communications shall be in writing and shall be deemed to have been duly given when delivered by hand, by telecopy or mailed by First Class, Certified Mail, Return Receipt Requested, with postage prepaid and addressed (a) if to you, at your office with the Company or at such other address as you may specify in writing to the Company and (b) if to the Company, to the office of the Secretary of the Company. If any provision of this Agreement shall, for any reason, be adjudged by any court of competent jurisdiction to be invalid or unenforceable, such judgment shall not affect, impair or invalidate the remainder of this Agreement, but shall be confined in its operation to the provision of this Agreement determined invalid or unenforceable. This Agreement shall be governed, interpreted, and enforced in accordance with the laws of the State of Missouri and the corporate laws of the State of Delaware, including the provisions of the Delaware General Corporation Code. The rights, covenants, and obligations made in this Agreement are assignable by the Company but may not be assigned by you, except by operation of law, and except as otherwise provided herein, without the signed, written consent of both parties. If the above terms are satisfactory to you and you wish to make a Stock Bonus Election for up to 50% of your Annual Bonus, then please complete the items shown below, sign where indicated and return the same to Dick Ballentine on or before the Expiration Date. _________________ Robert H. West Chairman 12 I agree with the above and hereby make a Stock Bonus Election as to $_________ of my Annual Bonus for 1996. I understand that I may revoke this election by delivering a written notice of revocation to Dick Ballentine, Corporate Secretary on or before midnight of the Election Date. I do ___ do not ___ wish to make a Section 83(b) Election. I acknowledge receipt of a copy of all the Program Documents and a copy of the latest Annual Report of the Company to its Stockholders. Signature of Participant: __________________________ Name: ___________________ Title: ___________________ Date: ___________________ The undersigned Secretary of Butler Manufacturing Company hereby acknowledges receipt of the foregoing Stock Bonus Election on this ____ day of __________, 19__. ______________________ Richard O. Ballentine, EX-13 4 PGS 14-32 OF 1996 ANNUAL REPORT Financial Review Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations Company sales for 1996 were $870 million compared with $827 million in 1995, an increase of 5.2%. Revenues of the Building Systems Segment decreased slightly as compared with the prior year while the Construction Services and Other Building Products segments both attained higher revenues. Sales in the Building Systems Segment were $583 million in 1996 compared with $586 million in 1995. Sales increases were recorded by Butler Building Systems Limited, the company's United Kingdom subsidiary which had particular success with sales to large strategic alliance customers, and by Butler Real Estate, Inc., the company's build-to-suit-to-lease real estate development operation. Revenues of the domestic metal buildings business were about even with the previous year while revenues of wood frame building systems declined, due primarily to severe winter weather which slowed construction. The Construction Services Segment reported sales of $167 million in 1996 compared to $121 million in 1995, an increase of 38%, due primarily to increased construction activity with strategic alliance accounts. Sales in the Other Building Products Segment were $164 million in 1996 and $147 million in 1995, an increase of 11.6%. Greater demand for engineered curtain wall products and the addition of the new Skywall product line contributed to the increase in sales. Grain Systems' sales increased 36% over 1995 as demand was strong in commercial, on-farm, and export markets. The company's consolidated sales in 1995 were $827 million compared to $692 million in 1994, an increase of 19.5%. The Building Systems Segment was the primary contributor to the increase in 1995 revenue due to generally higher levels of market demand in the domestic metal building business and the real estate subsidiary. The Other Building Products Segment reported sales in 1995 of $147 million as compared to $123 million in 1994, primarily due to increased demand for products of the Vistawall Division. Gross profit in 1996 was $156 million or 17.9% of sales compared to $151 million or 18.3% of sales in 1995. Slightly increased margins as a percentage of sales in the Building Systems Segment and in the Grain Systems business were offset by lower margins in Construction Services, the latter due to cost overruns incurred on specific projects. The dollar increase in gross profits was due primarily to greater sales volume in the Construction Services Segment and Grain Systems Division. The company generally values its inventories at the lower of cost or market. During 1996, increasing inventory levels were offset by lower prices causing no significant change in the current year LIFO provision. Gross profit was $120 million or 17.3% of sales in 1994. Gross profit improved in 1995 due to greater sales volume and improved pricing in the Building Systems and Other Building Products segments and an improved nonresidential construction market. During 1995 rising prices partially offset by decreasing inventory levels resulted in a $2.1 million increase in the required LIFO provision. Selling, general, and administrative expenses were $107 million in 1996 compared to $103 million in 1995 or 12.2% and 12.5% of 1996 and 1995 sales, respectively. The dollar increase in selling, general, and administrative expenses was in the Construction Services Segment, to support strategic alliance and international business development, and in the Other Building Products Segment to support the increased sales volume and new product marketing. In 1994 selling, general, and administrative expenses were $87 million or 12.6% of sales. Selling, general, and administrative expenses as a percent of sales in 1994 was comparable to 1995. Decreases in the percentage in the Building Systems and Other Building Products segments were offset by increases in Construction Services, the latter due to investments in sales, service, and project management personnel. Page 14 In 1996 the company recorded net other income of $.9 million compared with expense of $1.4 million in 1995. The favorable variance between years was due to rental income earned on several real estate development projects and the sale of real estate related to the company's former Walker Division sold in 1993, both partially offset by the write-off of the company's investment in Butler Japan Inc., a Japanese joint venture which will be dissolved in 1997. In 1995 the company recorded net other expense of $1.4 million compared to net other expense of $.9 million in 1994. Earnings realized from the Saudi Building Systems joint venture were $.4 million less in 1995 compared to 1994. Interest expense in 1996 increased to $4.3 million from $4.1 million in 1995 due to greater domestic short-term borrowings to support working capital needs. Interest expense increased $.2 million from 1994 to 1995 due to a full year's interest expense on the $35 million private placement notes issue in 1994, and interest on the San Marcos Industrial Revenue Bonds issued during 1995. The company's effective tax rates were 44% in 1996, 44.6% in 1995, and 46.4% in 1994. The tax rates were higher than statutory rates in all three years primarily due to nondeductible operating losses incurred by the European metal building subsidiary and other international start-up operations. Liquidity and Capital Resources The company's cash balance decreased $5.2 million in 1996 compared to an increase of $2 million in 1995 and a decrease of $9.6 million in 1994. Principal sources of cash in 1996 were earnings and depreciation which generated $35.5 million. Principal uses of funds in 1996 were capital expenditures of $22.7 million, increased working capital net of short-term debt of $11.8 million, and dividend payments of $3.2 million. In 1995 the company acquired the translucent panel systems assets of Skywall, Inc. for $1 million cash and the assumption of $1.2 million debt. In 1994 the company paid $8.5 million in taxes related to the sale of the Walker Division in 1993. Cash flow from operations was $24.4 million in 1996 compared with $19.1 million in 1995 and $9.7 million in 1994. In 1996, 1995, and 1994 working capital increased to accommodate the higher sales levels. The company's total debt to total capital ratio was 26.1% in 1996, compared with 31.5% in 1995 and 35.1% in 1994. The company maintains $50 million in committed credit lines from four banking institutions to meet the needs of both the company and the company's subsidiaries. As of December 31, 1996 $9 million of the credit line was utilized to provide a bank letter of credit arrangement to secure insurance obligations. Butler Building Systems Limited maintains a separate bank line of credit of approximately $2.5 million at current exchange rates. In 1995 and 1994 the company invested cash of $4.3 million and $2.1 million, respectively, in its European operations to reduce debt and increase equity. In April, 1995 the company obtained $6.3 million of Industrial Revenue Bond financing to fund the expansion of its San Marcos, Texas facility. As of December 31, 1996 all of the $6.3 million in proceeds had been drawn upon. The bonds are secured by a bank letter of credit. Capital expenditures were $22.7 million in both 1996 and 1995 and $13.7 million in 1994. The majority of expenditures in 1996, 1995, and 1994 were used to increase capacity in both the domestic and international metal building systems businesses. Investments in the company's Chinese subsidiary, Butler (Shanghai) Inc., were $6.9 million and $4.1 million in 1996 and 1995, respectively. An additional $3.7 million in 1996 was invested in Butler do Brasil Limitada, the company's South American subsidiary. Page 15 In 1995 the company's Board of Directors approved a 500,000 share stock repurchase authorization for its common stock, replacing the previous authorization granted in 1989. The company repurchased 87,822 of its common shares in 1996, 194,301 shares in 1995, and 23,853 shares in 1994. Shares repurchased in all three years were used for stock options or were deposited in the company's treasury. The company issued 84,349, 454,366, and 245,252 treasury shares in connection with stock option exercises in 1996, 1995, and 1994, respectively. In June, 1995 the Board of Directors approved a 3-for-2 stock split. The stock split was paid July 17, 1995 to shareholders of record on June 30, 1995. The company believes that working capital needs and capital requirements for the foreseeable future can be met by funds from operations and current credit arrangements. Other The U.S. inflation rate grew at a moderate pace in 1996. The company accounts for inventory at LIFO cost, which in general allows for current earnings to approximate the earnings which would be reported if measured in terms of current value dollars. There are no pending accounting pronouncements that will have a significant effect on the company's consolidated financial statements. Outlook A number of economic indicators remain positive for 1997. Growth may slow domestically due to the maturity of the business cycle, nevertheless the company is well positioned in the domestic markets it serves. In addition, continued expansion into the metal buildings business internationally, primarily in Asia and Latin America, is expected to soften the impact of any domestic economic decline. The growth in strategic alliances with major corporations is another factor that may lessen the effect of an economic slowdown on the company's operations. Finally, the company's systems approach to construction solutions continues to gain share of the total nonresidential market. Order backlog at the end of 1996 remained strong at $253 million. Higher margin product backlog increased 27% while lower margin construction backlog declined 51% compared to a year ago, the latter primarily due to greater selectivity in the construction projects being pursued. Forward Looking Information This Report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which may include statements concerning projection of revenues, income or loss, capital expenditures, capital structure, or other financial items, statements regarding the plans and objectives of management for future operations, statements of future economic performance, statements of the assumptions underlying or relating to any of the foregoing statements, and other statements which are other than statements of historical fact. These statements appear in a number of places in this Report and include statements regarding the intent, belief, or current expectations of the company and its management with respect to (i) the cost and timing of the completion of new or expanded facilities, (ii) the company's competitive position, (iii) the supply and price of materials used by the company, (iv) the demand and price for the company's products and services, or (v) other trends affecting the company's financial condition or results of operations. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially as a result of these various factors. Page 16 Consolidated Statements of Earnings and Retained Earnings
(Thousands of dollars, except per share amounts) Years ended December 31 1996 1995 1994 -------- -------- -------- Net sales $870,162 $826,538 $692,190 Cost of sales 714,116 675,671 572,227 -------- -------- -------- Gross profit 156,046 150,867 119,963 Selling, general, and administrative expenses 106,548 103,093 86,506 -------- -------- -------- Operating income 49,498 47,774 33,457 Other income (expense): International joint venture income (loss) (137) 563 998 Interest and finance charges earned 440 437 403 Sundry, net 547 (2,365) (2,302) -------- -------- -------- 850 (1,365) (901) -------- -------- -------- Operating and other income 50,348 46,409 32,556 Interest expense 4,344 4,100 3,895 -------- -------- -------- Pretax earnings 46,004 42,309 28,661 Income taxes 20,241 18,877 13,306 -------- -------- -------- Net earnings 25,763 23,432 15,355 Retained earnings at beginning of year 119,395 99,579 86,332 -------- -------- -------- 145,158 123,011 101,687 Dividends declared: Common stock, $.44, $.37, and $.13 per share (3,335) (2,750) (972) Net change in retained earnings due to treasury stock transactions 77 (866) (1,136) -------- -------- -------- Retained earnings at end of year $141,900 $119,395 $ 99,579 ======== ======== ======== Earnings per common share $ 3.35 $ 3.07 $ 2.09 ======== ======== ======== See Accompanying Notes to Consolidated Financial Statements.
Page 17 Consolidated Balance Sheets
(Thousands of dollars) At December 31 1996 1995 -------- -------- Assets Current assets: Cash and cash equivalents $ 2,013 $ 7,253 Receivables: Trade 107,480 90,401 Other 5,574 3,104 -------- -------- 113,054 93,505 Less allowance for possible losses 2,918 2,348 -------- -------- Net receivables 110,136 91,157 Inventories 60,090 51,168 Real estate developments in progress 33,803 20,123 Deferred tax assets 8,878 8,348 Other current assets 7,141 9,254 -------- -------- Total current assets 222,061 187,303 -------- -------- Investments and other assets 24,701 18,899 Assets held for sale 13,260 13,260 Property, plant, and equipment, at cost: Land 4,971 3,794 Buildings 56,749 52,987 Machinery, tools, and equipment 126,259 115,358 Office furniture and fixtures 38,095 32,837 Transportation equipment 1,977 1,445 -------- -------- 228,051 206,421 Less accumulated depreciation 150,653 143,014 -------- -------- Net property, plant, and equipment 77,398 63,407 -------- -------- $337,420 $282,869 ======== ======== See Accompanying Notes to Consolidated Financial Statements. Page 18 At December 31 1996 1995 -------- -------- Liabilities and Shareholders' Equity Current liabilities: Notes payable to banks $ 9,237 $ 2,553 Current maturities of long-term debt 5,464 4,451 Accounts payable 74,549 53,047 Dividends payable 907 756 Accrued taxes and other expenses 36,051 37,401 Accrued payroll and pension expense 15,456 14,573 Billings in excess of costs and estimated earnings 10,715 7,188 Taxes on income 8,500 6,163 -------- -------- Total current liabilities 160,879 126,132 -------- -------- Deferred tax liabilities 3,837 2,582 Other noncurrent liabilities 9,865 9,119 Long-term debt, less current maturities 38,397 42,613 Shareholders' equity: Common stock, no par value, authorized 20,000,000 shares, issued 9,088,200 shares, at stated value 12,623 12,623 Foreign currency translation adjustment 551 154 Retained earnings 141,900 119,395 -------- -------- 155,074 132,172 Less cost of common stock in treasury, 1,526,735 shares in 1996 and 1,523,262 shares in 1995 30,632 29,749 -------- -------- Total shareholders' equity 124,442 102,423 Commitments and contingencies -------- -------- $337,420 $282,869 ======== ========
Page 19 Consolidated Statements of Cash Flows
(Thousands of dollars) Years ended December 31 1996 1995 1994 -------- -------- -------- Cash flows from operating activities: Net earnings $ 25,763 $ 23,432 $ 15,355 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 9,737 8,861 7,776 Equity in (earnings) loss of international joint ventures 720 (91) (495) Change in assets and liabilities, net of sale or purchase of new businesses: Receivables (18,979) 4,120 (34,477) Inventories (8,922) 8,123 (21,480) Real estate developments in progress (13,680) (4,138) (12,998) Deferred taxes 725 (2,913) (238) Other current assets 2,113 (3,583) (1,480) Current liabilities excluding short-term debt 26,899 (14,677) 57,719 -------- -------- -------- Net cash provided by operating activities 24,376 19,134 9,682 -------- -------- -------- Cash flows from investing activities: Capital expenditures (22,670) (22,663) (13,663) Cash paid on sale of business - - (8,651) Acquisition of new businesses (805) (994) - Net change in other noncurrent assets (6,275) 1,811 119 Distributions from international joint ventures - 800 1,000 -------- -------- -------- Net cash used by investing activities (29,750) (21,046) (21,195) -------- -------- -------- Cash flows from financing activities: Proceeds from issuance of long-term debt 771 5,516 35,490 Repayment of long-term debt (5,384) (4,248) (25,572) Net change in short-term debt 7,597 4,220 (10,380) Dividends paid (3,184) (2,481) (485) Sale and issuance of treasury stock 1,660 8,616 3,442 Purchase of treasury stock (2,543) (5,071) (443) Net change in other noncurrent liabilities 820 (2,631) (119) -------- -------- -------- Net cash provided (used) by financing activities (263) 3,921 1,933 Effect of exchange rate changes 397 (40) 11 -------- -------- -------- Net change in cash and cash equivalents (5,240) 1,969 (9,569) Cash and cash equivalents at beginning of year 7,253 5,284 14,853 -------- -------- -------- Cash and cash equivalents at end of year $ 2,013 $ 7,253 $ 5,284 ======== ======== ======== See Accompanying Notes to Consolidated Financial Statements.
Page 20 Notes to Consolidated Financial Statements Significant Accounting Policies Principles of Consolidation. The consolidated financial statements include all subsidiaries which are more than 50% owned. Corporations in which the company has stock ownership up to but not over 50% are accounted for using the equity method. All significant intercompany profits, account balances, and transactions are eliminated in consolidation. Management of the company has made a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities to prepare these consolidated financial statements in conformity with generally accepted accounting principles. Actual results could differ from those estimates. Cash and Cash Equivalents. Cash and cash equivalents are defined as all demand deposits and overnight investments. Inventories. Inventories are valued at the lower of cost or market. The last- in, first-out (LIFO) method of determining cost is used for substantially all domestic inventories. If the first-in, first-out method had been used for all locations, inventories would have been $11.3 million, $11.5 million, and $9.4 million higher than those reported at December 31, 1996, 1995, and 1994, respectively. The use of the LIFO method increased net earnings by $.1 million ($.01 per share) in 1996 and decreased net earnings by $1.1 million ($.15 per share) in 1995 and $1.1 million ($.15 per share) in 1994. Inventories by Component
(Thousands of dollars) 1996 1995 ------- ------- Raw materials $37,292 $31,735 Work in process 6,460 5,696 Finished goods 27,590 25,190 ------- ------- 71,342 62,621 LIFO reserve (11,252) (11,453) ------- ------- $60,090 $51,168 ======= =======
Property, Plant, and Equipment. Depreciation is calculated using the straight- line method over the estimated useful lives of the assets. Expenditures for maintenance and repairs are charged to expense as incurred. Upon sale or retirement of assets, the cost and the accumulated depreciation amounts are removed from the accounts. Long-Lived Assets. In 1996, the Financial Accounting Standards Board issued Statement of Financial Accounting Standard No. 121, "Accounting for Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of", requiring long-lived assets to be reviewed for impairment and reflect the effect of any impairment in the carrying amount of the asset. The adoption of this standard by the company in 1996 had no effect on the company's financial statements. Research and Development Costs. Costs incurred in the creation and start-up of new products or changes of existing products are charged to expense as incurred. The company expended $2.7 million of research and development costs in 1996, $2.5 million in 1995, and $2.2 million in 1994. Stock Option Plans. In October, 1995 the Financial Accounting Standards Board issued Financial Accounting Standard No. 123, "Accounting for Stock-Based Compensation" (SFAS 123), effective for the company's fiscal year beginning in 1996. SFAS 123 establishes a fair value-based method of accounting for stock compensation plans. The company has chosen to adopt the disclosure requirements of SFAS 123, and continue to record stock compensation in accordance with Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" (APB 25). Under APB 25 no charges are made to earnings in accounting for stock options granted because all options are granted at fair market value. If the amounts received when options are exercised are different than the carrying value of treasury stock issued, the difference is recorded in retained earnings. Page 21 Deferred Charges. Incremental costs related to the development of major computer programs expected to reduce costs in future periods have been capitalized, are included in "Investments and other assets" in the consolidated balance sheets ($7.1 million and $4.6 million at December 31, 1996 and 1995, respectively), and are being amortized on a straight-line basis over periods not exceeding seven years ($1 million in 1996 and $.9 million in 1995). Earnings Per Share. Earnings per common share are based upon the average common and common equivalent shares outstanding during each year. Employee stock options are the company's only common stock equivalents; there are no other potentially dilutive securities. Earnings per common share were based on 7,692,803, 7,629,816, and 7,354,173 common equivalent shares for the years 1996, 1995, and 1994, respectively. The 1994 per share and common equivalent share amounts have been restated to reflect the effect of the June, 1995 3- for-2 stock split. Foreign Currency Translation. The value of the U.S. dollar fluctuates on foreign currency exchanges which creates exchange gains or losses on the company's international investments. These investments and the related equity earnings (loss) are translated into U.S. dollars at year-end and average exchange rates, respectively. The gains or losses that result from translation are shown in the shareholders' equity section of the consolidated balance sheets. Foreign currency exchange transaction gains or losses for 1996, 1995, and 1994 were insignificant. Financial Instruments. The fair value of long-term debt is determined by comparing interest rates for debt with similar terms and maturities. At December 31, 1996 and 1995 the fair value of the company's long-term debt was not materially different than its carrying value. Other financial instruments, consisting of cash and cash equivalents, net receivables, notes payable, and accounts payable are carried at cost, which approximates fair value, as a result of the short-term nature of these instruments. The company has entered into derivative transactions for purposes other than trading as a means of managing risk of loss of underlying assets. Aluminum metal hedge contracts of less than one year's duration are utilized to hedge architectural aluminum product backlog against losses caused by changes in aluminum costs. Certain foreign currency forward contracts of less than one year's duration are used to hedge the company's foreign currency exposure. The fair values of open aluminum metal hedge contracts and foreign currency hedges at December 31, 1996 and 1995 were immaterial. The company has no significant off-balance sheet risks or concentrations of credit. Construction Contracts. The company recognizes earnings on construction contracts using the percentage of completion method based upon its estimate of the completion of each project. Costs and estimated earnings in excess of billings at December 31, 1996 and 1995 were $1.7 million and $2 million, respectively, and are reflected in the consolidated balance sheets under the caption "Inventories." Total receivables due under construction contracts, which are included as trade receivables, were $27.2 million and $23.9 million at December 31, 1996 and 1995, respectively. Included in the contract receivables were $5 million and $2.1 million at December 31, 1996 and 1995, respectively, for amounts billed but not collected pursuant to retainage provisions. These amounts are due upon completion of the contracts. Acquisition of New Businesses. In December, 1996 the company purchased a 90% interest in Beker Kft for cash and a deferred payment. The consideration paid was immaterial to the financial statements. In June, 1995 the company purchased certain assets of Skywall, Inc. for $1 million in cash and $1.2 million in notes, payable in five annual installments through 2000. The results of the Skywall operation have been included in the consolidated results of the company since acquisition with an immaterial impact on net sales and net earnings. Page 22 All acquisitions to date have been accounted for as purchases. The excess of cost over net assets of businesses acquired, which is classified as "Investments and other assets" in the consolidated balance sheets, is being amortized over twenty years or less, and at December 31, 1996 was not material. Sale and Dissolution of Businesses. In December, 1996 the company recorded a $.6 million pretax loss resulting from Butler Japan, Inc. discontinuing its business. The company also recognized a $.2 million tax benefit relating to the write-off of this investment. Real Estate Subsidiaries. Butler Real Estate, Inc. (BRE) is a wholly-owned subsidiary providing real estate development services in cooperation with Butler dealers. In 1996, 1995, and 1994 BRE generated net earnings of $2.2 million, $1.6 million, and $.3 million, respectively, from project related activities. In a separate activity, BMC Real Estate, Inc. (BMCRE) participates in land development joint ventures which are accounted for using the equity method. At December 31, 1996 the company guaranteed $.3 million of joint venture borrowings. BMCRE also owns land for development which is included in "Assets held for sale" in the consolidated balance sheets with a net carrying value of $9.9 million at December 31, 1996 and 1995. Management believes the recovery of its investment in this property may take several years and that the ultimate realizable value approximates the carrying value. International Joint Venture Operations. The company had interests in two international joint ventures in 1996. The ventures, Saudi Building Systems (30%-owned), and Butler Japan, Inc. (45%-owned), are involved in the design, manufacture, and/or marketing of pre-engineered metal buildings for nonresidential use in their respective markets. The company provided for the write-off of its investment in Butler Japan, Inc. at December 31, 1996 due to its pending dissolution in 1997. The financial results of the joint ventures are reported using the equity method of accounting. Total net sales of the joint ventures in 1996, 1995, and 1994 were $29.3 million, $32 million, and $32.6 million, respectively. The joint ventures' operating earnings in 1996, 1995, and 1994 were $.4 million, $.5 million, and $2.9 million, respectively. In 1996 and 1995 total assets were $19.8 million and $20.6 million, respectively. Total liabilities for 1996 and 1995 were $7.5 million and $8.6 million, respectively. The company received distributions from the international joint ventures in 1995 and 1994 of $.8 million and $1 million, respectively. Business Segments The company groups its operations into three business segments, Building Systems, Construction Services, and Other Building Products. The Building Systems Segment includes the U.S. and foreign building systems businesses, the company's international joint venture operations, and real estate subsidiaries. These business units supply steel and wood frame pre- engineered building systems and financial services for a wide variety of commercial, community, industrial, and agricultural applications. The Construction Services Segment provides comprehensive design and construction planning, execution, and management services for major purchasers of construction. Projects are usually executed in conjunction with the dealer representatives of other Butler divisions. The Other Building Products Segment includes the operations of the Vistawall Architectural Products and Grain Systems divisions. These businesses design, manufacture, and market architecturally oriented component systems for nonresidential construction, including aluminum curtain wall, storefront systems and doors, skylights, and roof accessories, in addition to the design, manufacture, and sale of commercial and on-farm grain storage to independent Agri-Contractor and Agri-Builder dealer organizations. Page 23 Net Sales
(Thousands of dollars) 1996 1995 1994 -------- -------- -------- Building Systems $582,756 $586,377 $481,833 Construction Services 167,069 120,501 122,493 Other Building Products 164,457 146,656 123,050 Intersegment eliminations (44,120) (26,996) (35,186) -------- -------- -------- $870,162 $826,538 $692,190 ======== ======== ========
Net sales represent revenues from sales to affiliated and unaffiliated customers before elimination of intersegment sales which are separately disclosed. Intersegment eliminations are primarily sales from the Building Systems and Other Building Products segments to Construction Services. The Building Systems and Construction Services segments had sales to one customer which accounted for approximately 6% of the company's net sales in 1996, 5% in 1995, and 10% in 1994. Export Sales by Domestic Operations
(Thousands of dollars) 1996 1995 1994 -------- -------- -------- North & South America $ 58,645 $ 57,799 $ 65,328 Far East 32,514 31,579 28,564 Other 14,576 13,875 11,799 -------- -------- -------- $105,735 $103,253 $105,691 ======== ======== ========
Pretax Earnings (Loss)
(Thousands of dollars) 1996 1995 1994 -------- -------- -------- Building Systems $ 41,882 $ 40,354 $ 28,187 Construction Services 735 1,318 3,178 Other Building Products 15,712 14,146 9,348 Corporate (7,981) (9,409) (8,157) Interest expense (4,344) (4,100) (3,895) -------- -------- -------- $ 46,004 $ 42,309 $ 28,661 ======== ======== ========
Assets (Thousands of dollars) 1996 1995 1994 -------- -------- -------- Building Systems $224,258 $174,446 $167,351 Construction Services 27,333 25,998 21,504 Other Building Products 53,244 43,919 41,023 Corporate 32,585 38,506 41,258 -------- -------- -------- $337,420 $282,869 $271,136 ======== ======== ========
Assets represent both tangible and intangible assets used by the segments. Corporate assets represent cash and cash equivalents, assets held for sale, corporate equipment, and miscellaneous other assets which are not related to a specific business segment. Capital Expenditures (Thousands of dollars) 1996 1995 1994 -------- -------- -------- Building Systems $ 19,106 $ 19,253 $ 11,901 Construction Services 639 676 485 Other Building Products 2,621 2,479 1,182 Corporate 304 255 95 -------- -------- -------- $ 22,670 $ 22,663 $ 13,663 ======== ======== ========
Capital expenditures exclude property, plant, and equipment acquired through acquisition of new businesses. Depreciation
(Thousands of dollars) 1996 1995 1994 -------- -------- -------- Building Systems $ 6,447 $ 5,958 $ 4,811 Construction Services 399 343 278 Other Building Products 1,490 1,402 1,520 Corporate 144 99 72 -------- -------- -------- $ 8,480 $ 7,802 $ 6,681 ======== ======== ========
Page 24 Debt, Leases, and Commitments Long-Term Debt Net of Current Maturities (Thousands of dollars) 1996 1995 -------- -------- Private Placement Notes (A) $ 30,000 $ 35,000 Industrial Revenue Bonds (B) 6,250 5,516 Other debt 2,147 2,097 -------- -------- $ 38,397 $ 42,613 ======== ======== (A) In June, 1994 the company entered into a Private Placement Note Agreement ("Private Placement Notes") with a group of insurance companies. The proceeds from the financing of $35 million were used to retire short- and long-term debt and for other corporate purposes. The Private Placement Notes carry a fixed interest rate of 8.02%. Annual principal payments of $5 million are required beginning in December, 1997 and continuing through 2003. (B) In April, 1995 the Development Authority of San Marcos, Texas issued $6.3 million of Industrial Revenue Bonds. Proceeds from the issue were used to finance the expansion of the existing San Marcos plant. The bonds mature in 2015 and bear interest at a variable rate which averaged 3.8% in 1996 and 4.2% in 1995. The bonds are secured by a bank letter of credit.
In November, 1995 the company retired Industrial Revenue Bonds of $4 million bearing a 13% interest rate. The bond issues are guaranteed by the company. The weighted average interest rate on the bond issues was 3.8% for 1996 and 9% for 1995. Total principal payments due on all debt in each of the five years subsequent to December 31, 1996 are $5.5 million in 1997, $5.5 million in 1998, $5.5 million in 1999, $5.4 million in 2000, $5.1 million in 2001, and $16.9 million thereafter. Cash payments for interest on long-term debt were $3.6 million, $3.7 million, and $3.4 million in 1996, 1995, and 1994, respectively. Short-Term Borrowings. During 1996 and 1995 the company borrowed to meet working capital needs and other requirements. At December 31, 1996 the company and its subsidiaries, including Butler Building Systems Limited, had short- term credit facilities at several banks totaling $52.5 million. Borrowings outstanding at December 31, 1996 were $9.2 million. The company has committed $9 million of its credit facilities under a letter of credit for insurance obligations. At December 31, 1996 the company had approximately $34 million of available borrowing capacity. The company's credit agreements contain certain limitations on additional borrowings, the payment of cash dividends, and the purchase of company stock, as well as covenants related to the maintenance of certain financial ratios. As of December 31, 1996 the company was in compliance with all covenants, and at that date approximately $22 million of retained earnings was available for cash dividends and share repurchases. Leases. Rental expense under operating leases was $8.5 million, $7.7 million, and $6.1 million in 1996, 1995, and 1994, respectively. Minimum rental commitments under noncancelable operating leases are $3.9 million in 1997, $3.2 million in 1998, $2.6 million in 1999, $2 million in 2000, and $1.5 million in 2001. Commitments. As a service to its independent dealers, the company assists in obtaining performance bonds on certain construction contracts in the ordinary course of business. An irrevocable letter of credit is generally required for a portion of the contract amount to reduce the possible liability of the company. At December 31, 1996 such performance bonds exceeded the related letters of credit by $4.1 million. The contracts are in various stages of completion and management believes that there will be no liability to the company. Page 25 Taxes on Income The components of the provision for income taxes are shown in Table A. The provisions for income taxes were $20.2 million, $18.9 million, and $13.3 million for 1996, 1995, and 1994, respectively. Cash payments for income taxes were $15.9 million, $17.8 million, and $17.6 million in 1996, 1995, and 1994, respectively. The foreign components of pretax earnings were losses of $2.4 million, $2.8 million, and $2.7 million in 1996, 1995, and 1994, respectively. A reconciliation of the statutory federal income tax and the income tax expense is shown in Table B. Deferred income tax expense or benefit arises from differences between financial reporting and tax reporting of assets and liabilities, which most often result from the differences in timing of income and expense recognition. Differences between financial reporting and tax bases also arise due to business acquisition activity as tax laws can result in significant differences in values assigned to assets and liabilities. Previously recorded deferred tax assets and liabilities are adjusted for any changes in enacted tax rates. Detail of deferred tax assets and liabilities as of December 31, 1996, 1995, and 1994 is shown in Table C. Table A: Components of Income Taxes
(Thousands of dollars) 1996 1995 1994 -------- -------- -------- Current: Federal $ 15,881 $ 18,539 $ 11,295 Foreign 168 - - State and local 3,467 3,251 2,251 -------- -------- -------- 19,516 21,790 13,546 -------- -------- -------- Deferred: Federal 668 (2,683) (220) State and local 57 (230) (20) -------- -------- -------- 725 (2,913) (240) -------- -------- -------- Total income tax expense $ 20,241 $ 18,877 $ 13,306 ======== ======== ========
Table B: Reconciliation of Income Tax Expense
(Thousands of dollars) 1996 1995 1994 -------- -------- -------- Expected income tax expense $ 16,101 $ 14,808 $ 10,031 State and local income tax, net of federal benefits 2,253 2,113 1,463 Nondeductible operating losses of foreign subsidiaries 823 964 951 Other 1,064 992 861 -------- -------- -------- Actual income tax expense $ 20,241 $ 18,877 $ 13,306 ======== ======== ========
Table C: Deferred Tax Assets and Liabilities
(Thousands of dollars) 1996 1995 1994 -------- -------- -------- Current deferred tax assets: Operating expenses $ 7,213 $ 5,901 $ 4,626 Inventory 893 808 619 Restructuring reserves 648 1,354 1,786 Other 124 285 507 -------- -------- -------- Net current deferred tax assets $ 8,878 $ 8,348 $ 7,538 ======== ======== ======== Noncurrent deferred tax assets (liabilities): Depreciation $ (7,769) $ (5,735) $ (6,595) Operating expenses 4,057 3,890 3,368 Minority investments (72) (242) (968) Foreign net operating loss carryforward 4,338 3,515 2,552 Other (53) (495) (490) -------- -------- -------- Net noncurrent deferred tax assets (liabilities) 501 933 (2,133) Valuation allowance (4,338) (3,515) (2,552) -------- -------- -------- Net noncurrent deferred tax liabilities $ (3,837) $ (2,582) $ (4,685) ======== ======== ========
The valuation allowance offsets the deferred tax asset relating to the foreign net operating loss carryforwards. Depending on future profitability, the carryforwards may be realized in later years. The valuation allowance increased $.8 million, $1 million, and $1 million in 1996, 1995, and 1994, respectively, relating to foreign operating losses. The company has sufficient taxable income in the three year carryback period to support the recognition of its other deferred tax assets. Page 26 The company and its domestic subsidiaries file a consolidated federal income tax return. The company's consolidated federal income tax returns have been examined by the Internal Revenue Service and settled through 1990. Employee Benefit Plans Retirement Plans. The company provides retirement benefits for substantially all employees, either through a defined benefit plan, the defined contribution Employee Stock Ownership Plan (ESOP), or a combination of both types of plans. Pension contributions are based on funding standards established by the Employee Retirement Income Security Act of 1974. The majority of the company's salaried and nonunion hourly employees are covered by both a defined benefit plan and the ESOP. These plans are linked as to retirement benefits, and benefits are based on the employees' highest five consecutive years' compensation. Bargaining unit employees are covered by defined benefit retirement plans. Benefits are based upon the number of years of service. The funded status and accrued pension cost at December 31, 1996 and 1995 for the defined benefit plans are presented in Table D. While the market value of the ESOP assets is not included in the amounts in Table D, the effect of the ESOP offset has been recognized in the accumulated and projected benefit obligations. Assets held by the defined benefit plans are primarily equities, bonds, and government securities. The net pension cost of these plans in 1996, 1995, and 1994 is presented in Table E. Table D: Funded Status and Accrued Pension Cost
(Thousands of dollars) 1996 1995 -------- -------- Actuarial present value of benefit obligations: Vested benefit obligation $ 41,323 $ 37,913 ======== ======== Accumulated benefit obligation $ 42,151 $ 38,375 ======== ======== Projected benefit obligation $ 61,625 $ 48,806 Plan assets at fair value 48,431 42,427 -------- -------- Projected benefit obligation (greater than) less than plan assets (13,194) (6,379) Unrecognized net (gain) loss 15,556 9,234 Unrecognized net transition (asset) liability 866 1,064 -------- -------- Prepaid (accrued) pension cost $ 3,228 $ 3,919 ======== ========
Table E: Components of Net Pension Cost (Thousands of dollars) 1996 1995 1994 -------- -------- -------- Service cost - benefits earned during the period $ 2,268 $ 1,622 $ 1,983 Interest cost on the projected benefit obligation 4,096 3,715 3,141 Actual return on assets - (gain) loss (4,997) (9,497) 2,231 Net amortization and deferral 2,771 8,143 (4,090) -------- -------- -------- Net pension cost $ 4,138 $ 3,983 $ 3,265 ======== ======== ======== Assumptions used in determining net pension cost and all benefit obligations were: Expected long-term rate of return on assets 8.5% 8.5% 8.5% Discount rate 7.5% 7.5% 8.5% Long-term rate of increase in compensation levels 5.5% 5.5% 5.5%
The ESOP assets include the company's common stock, and fixed income securities which are primarily debt instruments of the U.S. Government. At both December 31, 1996 and 1995 the ESOP had net assets of $67 million, and held 1,017,443 shares and 1,056,325 shares of company stock at December 31, 1996 and 1995, respectively. The company expensed $.5 million for ESOP contributions in 1996 and $.4 million in 1995 and 1994. Page 27 Other Benefit Plans. The company sponsors the Butler Employees Savings Trust, a savings plan under section 401(k) of the Internal Revenue Code. All salaried and nonunion hourly employees are eligible to participate in this Plan. Under its terms the company will match 25% of the first 6% of employees' contributions to the Plan if certain profitability levels are attained. In 1996, 1995, and 1994 the company reached the defined profitability goals and accordingly expensed $1.1 million, $.9 million, and $.7 million, respectively, as a matching contribution to the Plan. The company sponsors a supplemental retirement plan for certain executives. Life insurance arrangements have been purchased which name the company as beneficiary to meet the liabilities of the plan. The company expensed $.3 million, $.5 million, and $.2 million in 1996, 1995, and 1994, respectively, related to this plan. Postretirement Benefits. The company currently provides certain health care and life insurance benefits for retired employees and their dependents. Substantially all employees become eligible for these benefits if they reach retirement age while still working for the company and have at least ten years of service. Contributions toward these benefits have been set to fixed amounts per participant based on 1993 costs. Election of health care and life insurance benefit coverage for retirees and dependents is optional, and requires contributions by the retiree towards the cost of these coverages. The company reserves the right to change or terminate all employee benefits, including postretirement benefits. The company accrues estimated future postretirement benefit costs during the years that employees perform services and earn benefits. Prior to 1993, the company recognized retiree health and benefits expense when paid. The company elected to amortize the resulting transition obligation over a 20 year period. The transition obligation was $8.1 million, $8.6 million, and $9.1 million at December 31, 1996, 1995, and 1994, respectively. Table F: Accumulated Postretirement Benefit Obligation (Thousands of dollars) 1996 1995 1994 -------- -------- -------- Retirees $ 6,562 $ 7,582 $ 6,448 Active participants fully eligible to retire 1,912 2,237 2,425 Other active participants 4,199 3,457 1,944 -------- -------- -------- 12,673 13,276 10,817 Unrecognized net loss for changes in assumptions (1,895) (2,906) (477) Remaining accumulated post retirement benefit obligation (8,064) (8,567) (9,071) -------- -------- -------- Accrued postretirement benefit liability $ 2,714 $ 1,803 $ 1,269 ======== ======== ========
Net postretirement benefit costs was $1.9 million in 1996 and $1.6 million in 1995 and 1994. Table G: Net Postretirement Benefit Costs
(Thousands of dollars) 1996 1995 1994 -------- -------- -------- Service cost, benefits attributed to employee service during the year $ 295 $ 182 $ 229 Interest cost on accumulated postretirement benefit obligation 956 879 863 Amortization of accumulated postretirement benefit obligation 504 504 504 Deferred loss 100 - 48 -------- -------- -------- Net postretirement benefit costs $ 1,855 $ 1,565 $ 1,644 ======== ======== ========
The discount rate assumption was 7.5% in 1996 and 1995 and 8.5% in 1994. The health care cost trend rate used in the actuarial computation was a blend of rates between 5% and 8% through 1999. The company's costs are limited to a fixed dollar amount per participant in future years not to exceed 175% of 1993 costs. The effect of a 1% increase in the health care cost trend rate on the accumulated postretirement benefit obligation would be $.2 million, with an immaterial effect on net postretirement benefit costs. Page 28 Stock Incentive Plans Stock options are presently outstanding under the Stock Incentive Plans of 1996, 1987, and 1979. The 1996 Plan covering 600,000 shares was approved on April 16, 1996. Both the 1987 and 1979 plans were terminated upon the approval of the respective successor plan except for outstanding qualified and nonstatutory stock options and stock appreciation rights. Options are granted at a price equal to the fair market value of Butler stock at the date of grant for terms of up to ten years. At December 31, 1996, 1995, and 1994, 222,281, 290,780, and 725,891 shares, respectively, under option were exercisable and 592,978, 94,877, and 17,073 shares, respectively, were available for grant. Table H presents a summary of stock option activity for the three years ended December 31, 1996. Table H: Summary of Stock Option Activity
1996 1995 1994 Weighted- Weighted- Weighted- average average average Exercise Exercise Exercise Shares Price Shares Price Shares Price ------- ------ ------- ------ ------- ------ Fixed Options Outstanding at beginning of year 320,113 $11.64 760,974 $11.24 991,472 $11.09 Granted 28,000 $31.59 16,500 $23.00 15,750 $17.50 Exercised (84,349) $10.84 (454,366) $11.39 (245,252) $11.03 Forfeited (1,000) $23.00 (2,995) $11.53 (996) $ 8.70 ------- ------- ------- Outstanding at end of year 262,764 $13.98 320,113 $11.64 760,974 $11.24 ======= ======= =======
Incentive stock options were granted by the company in 1996 and 1995 to key employees under the 1996 and 1987 stock option plans. Options are granted at fair market value, expire between five and ten years from the date of grant, and vest in three equal annual installments commencing one year from the date of grant. The per share weighted-average fair value of stock options granted during 1996 and 1995 was $32 and $23, respectively, on the date of grant using the Black Scholes option pricing model with the following weighted average assumptions: 1996 - expected dividend yield of 1.7%, risk-free interest rate of 6.4%, expected volatility factor of 43%, and an expected life of 5 years; 1995 - expected dividend yield of 1.4%, risk-free interest rate of 6.23%, expected volatility factor of 43%, and an expected life of 5 years. Since the company applies APB 25 in accounting for its plans, no compensation cost has been recognized for stock options in net income. Stock-based compensation cost if recorded under SFAS 123 would have decreased Butler's net income and earnings per share by $.2 million and $.02 per share in 1996 and $.1 million and $.01 per share in 1995. The pro forma net income reflects only options for 1996 and 1995. The full impact of calculating compensation costs for stock options under SFAS 123 is not reflected in the pro forma net income amounts presented above, as compensation cost is reflected over the option's vesting period of three years for both 1996 and 1995 options. Compensation cost for options granted prior to January 1, 1995 is not considered. Table I presents a summary of stock options outstanding. Table I: Stock Options Outstanding
Options Outstanding Options Exercisable Weighted- Average Weighted- Weighted- Range of Number Remaining Average Number Average Exercise Outstanding Contractual Exercise Exercisable Exercise Prices at 12/31/96 Life in Years Price at 12/31/96 Price - -------------- ------- --- ------ ------- ------ $ 7.83 - 11.75 204,704 2.8 $10.86 204,704 $10.86 $11.76 - 17.64 16,560 4.8 $15.46 13,077 $14.92 $17.65 - 26.48 13,500 8.0 $23.00 4,500 $23.00 $26.49 - 32.75 28,000 9.3 $31.59 0 $32.00 ------- ------- 262,764 3.9 $13.98 222,281 $11.34 ======= =======
Page 29 Treasury Stock Activity
(Thousands of dollars) 1996 1995 1994 -------- -------- -------- Common stock held in treasury: Balance January 1 $ 29,749 $ 33,294 $ 37,429 Purchases 2,543 5,071 443 Sales or issues (1,660) (8,616) (4,578) -------- -------- -------- Balance, December 31 $ 30,632 $ 29,749 $ 33,294 ======== ======== ========
Purchases of treasury stock were made in 1996, 1995, and 1994 of 87,822, 194,301, and 23,853 common shares, respectively. Sales or issues of treasury stock were 84,349, 454,366, and 245,252 common shares in 1996, 1995, and 1994, respectively. The company recognized a tax benefit of $.8 million, $2.7 million, and $.8 million in 1996, 1995, and 1994, respectively, which was credited directly to retained earnings in the treasury stock transactions. Quarterly Financial Information (Unaudited)
(Thousands of dollars except per share amounts) 1996 Quarter Ended March 31 June 30 Sept. 30 Dec. 31 Total -------- -------- -------- -------- -------- Net sales $175,692 $193,446 $229,019 $272,005 $870,162 Gross profit 31,712 36,432 41,527 46,375 156,046 Net earnings 3,259 5,808 8,778 7,918 25,763 Net earnings per common share .42 .75 1.14 1.04 3.35 Dividends per share .10 .10 .12 .12 .44 1995 Quarter Ended March 31 June 30 Sept. 30 Dec. 31 Total -------- -------- -------- -------- -------- Net sales $194,852 $206,771 $206,634 $218,281 $826,538 Gross profit 32,144 38,023 41,632 39,068 150,867 Net earnings 3,612 6,183 7,669 5,968 23,432 Net earnings per common share .48 .81 1.00 .78 3.07 Dividends per share .07 .10 .10 .10 .37
Price Range of Common Stock (Unaudited) The company's common stock is traded on the New York Stock Exchange (NYSE) following its listing on the Exchange on November 12, 1996. Prior to that date, the company's shares were traded in the NASDAQ Over-the-Counter Market. The table below summarizes the high and low closing prices as reported on the respective exchanges.
1996 1995 Quarter High Low High Low ------- ------- ------- ------- First $39 1/2 $30 1/8 $24 7/8 $20 1/8 Second 37 3/4 33 1/4 28 7/8 23 Third 35 25 1/4 29 24 1/8 Fourth 41 27 1/2 39 1/4 26 1/2
Page 30 Independent Auditors' Report To the Board of Directors Butler Manufacturing Company We have audited the consolidated balance sheets of Butler Manufacturing Company and subsidiaries as of December 31, 1996 and 1995 and the related consolidated statements of earnings and retained earnings and cash flows for each of the years in the three-year period ended December 31, 1996. These consolidated financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Butler Manufacturing Company and subsidiaries at December 31, 1996 and 1995, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 1996 in conformity with generally accepted accounting principles. /s/ KPMG Peat Marwick LLP Kansas City, Missouri February 3, 1997 Page 31 Historical Review 1996 - 1992
1996 1995 1994 1993 1992 -------- -------- -------- -------- -------- Income Statement Data Net sales $870,162 $826,538 $692,190 $575,847 $500,177 Net earnings 25,763 23,432 15,355 18,098 1,079 As a percent of sales 3.0% 2.8% 2.2% 3.1% 0.2% As a percent of average shareholders' equity 22.7% 25.8% 21.8% 35.4% 2.8% Per share of common stock: Net earnings 3.35 3.07 2.09 2.56 0.17 Cash dividends declared, per common share .44 .37 .13 - - Cash dividends paid, per common share .42 .33 .07 - - =============================================== Financial Position At Year-End Assets Current assets 222,061 187,303 188,652 128,266 115,425 Property, plant, and equipment, net 77,398 63,407 48,526 41,528 47,863 Total assets 337,420 282,869 271,136 205,487 195,810 Working capital Net working capital 61,182 61,171 52,572 30,072 44,286 Ratio of current assets to current liabilities 1.4 1.5 1.4 1.3 1.6 Financial structure Long-term debt, less current maturities 38,397 42,613 40,263 30,345 67,315 Total debt 43,861 47,064 42,737 41,713 68,797 Shareholders' equity 124,442 102,423 79,102 61,709 40,551 Per common share, year-end 16.46 13.54 10.83 8.71 5.92 Total debt as a percent of total capital 26.1% 31.5% 35.1% 40.3% 62.9% =============================================== General Statistics Depreciation 8,480 7,802 6,681 7,675 8,354 Capital expenditures 22,670 22,663 13,663 6,460 5,026 Common shares outstanding, average 7,693 7,630 7,354 7,074 6,854 Common shares outstanding, year-end 7,561 7,565 7,305 7,083 6,848 Common shareholders, year-end 2,345 2,411 2,473 2,562 2,725 Number of employees, year-end 4,162 3,966 3,564 3,064 3,169 =============================================== 1. Thousands of dollars, except per share amounts for common stock. 2. The 1993 net earnings include an after-tax gain on the sale of the Walker Division of $10.7 million or $1.51 per share. 3. All per share and common equivalent share amounts have been restated to reflect the effect of the June, 1995 3-for-2 stock split.
Page 32 EX-24 5 POWER OF ATTORNEY 1 EXHIBIT 24.0 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned hereby constitutes and appoints Richard O. Ballentine and John Huey, and each of them, his true and lawful attorneys-in-fact and agents, with full power of substitution and revocation in each, for him/her and in his/her name, place and stead, to sign any or all reports (including reports on Form 10-K, Form_3, Form 4, Form 5, Schedule 13-D, Schedule 13-G, and Form 144), and any amendments thereto, required or permitted to be filed by him under the Securities and Exchange Act of 1934, or the Securities Act of 1933, with respect to beneficial ownership of, and transactions in, equity securities of BUTLER MANUFACTURING COMPANY, a Delaware corporation (the "Company"), and with respect to other matters relating to the Company, and to file the same, with all documents required or permitted to be filed in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof. DATED: JANUARY 20, 1997 /S/ HAROLD G. BERNTHAL --------------------------- HAROLD G. BERNTHAL DATED: JANUARY 15, 1997 /S/ ROBERT E. COOK --------------------------- ROBERT E. COOK DATED: JANUARY 20, 1997 /S/ ALAN M. HALLENE --------------------------- ALAN M. HALLENE DATED: JANUARY 20, 1997 /S/ C.L. WILLIAM HAW --------------------------- C.L. WILLIAM HAW DATED: JANUARY 20, 1997 /S/ ROBERT J. NOVELLO --------------------------- ROBERT J. NOVELLO DATED: JANUARY 21, 1997 /S/ GEORGE E. POWELL, JR. --------------------------- GEORGE E. POWELL, JR. DATED: JANUARY 15, 1997 /S/ DONALD H. PRATT. --------------------------- DONALD H. PRATT DATED: JANUARY 20, 1997 /S/ ROBERT J. REINTJES, SR. --------------------------- ROBERT J. REINTJES, SR. DATED: JANUARY 28, 1997 /S/ JUDITH A. ROGALA --------------------------- JUDITH A. ROGALA DATED: JANUARY 20, 1997 /S/ ROBERT H. WEST --------------------------- ROBERT H. WEST EX-27 6 FDS
5 This schedule contains summary financial information extracted from Butler Manufacturing Company Consolidated Statements of Operations for the year ended December 31, 1996, and Consolidated Balance Sheet as of December 31,1996, and is qualified in its entirety by reference to such financial statements. 1,000 YEAR DEC-31-1996 JAN-01-1996 DEC-31-1996 2,013 0 113,054 2,918 60,090 222,061 228,051 150,653 337,420 160,879 38,397 0 0 12,623 141,900 337,420 870,162 871,012 714,116 714,116 106,548 0 4,344 46,004 20,241 25,763 0 0 0 25,763 3.35 3.35 Reflects long-term debt, less current maturities. Reflects other stockholders' equity before deduction of $30.6 million cost of treasury stock and foreign currency translation adjustments. Reflects net sales plus net international joint venture income less net other expense. Consists of selling, general, and administrative expense.
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