-----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, GTzjoGqB1YXVLQbF1Cd+iaXdc2/r9lYShL6jJCFfEQ2Ff2qER6oCQAqLmYp5oH50 60qPqfYR//Q0G/AfU6uJFQ== 0000950124-98-006651.txt : 19981116 0000950124-98-006651.hdr.sgml : 19981116 ACCESSION NUMBER: 0000950124-98-006651 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19980930 FILED AS OF DATE: 19981113 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BUTLER MANUFACTURING CO CENTRAL INDEX KEY: 0000015840 STANDARD INDUSTRIAL CLASSIFICATION: PREFABRICATED METAL BUILDINGS & COMPONENTS [3448] IRS NUMBER: 440188420 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-12335 FILM NUMBER: 98749405 BUSINESS ADDRESS: STREET 1: BMA TOWER PENN VALLEY PARK STREET 2: P O BOX 419917 CITY: KANSAS CITY STATE: MO ZIP: 64141 BUSINESS PHONE: 8169683000 MAIL ADDRESS: STREET 1: BMA TOWER PENN VALLEY MALL STREET 2: P O BOX 419917 CITY: KANSAS CITY STATE: MO ZIP: 64141 10-Q 1 FORM 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 Commission File No. 001-12335 FOR THE QUARTER ENDED SEPTEMBER 30, 1998 BUTLER MANUFACTURING COMPANY Incorporated in State of Delaware BMA Tower - Penn Valley Park Post Office Box 419917 Kansas City, Missouri 64141-0917 Phone: (816) 968-3000 I.R.S. Employer Identification Number: 44-0188420 Shares of common stock outstanding at September 30, 1998: 7,460,048 The name, address and fiscal year of the Registrant have not changed since the last report. The Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. 2 INDEX
PART I. - FINANCIAL INFORMATION Page Number ITEM 1. Financial Statements (1) Consolidated Financial Statements (unaudited): Consolidated Statements of Operations for the Three and Nine Month Periods Ended September 30, 1998 and 1997. 3 Consolidated Balance Sheets as of September 30, 1998 and December 31, 1997. 4 Consolidated Statements of Cash Flows for the Nine Month Periods Ended September 30, 1998 and 1997. 5 (2) Notes to Consolidated Financial Statements 6 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 7-9 PART II. - OTHER INFORMATION ITEM 6. Exhibits and Reports on Form 8-K 10
In addition to historical information included herein, this report contains forward-looking statements and information that are based on management's beliefs as well as on assumptions made by and information currently available to management. These forward-looking statements and information are within the meaning of the Private Securities Litigation Reform Act of 1995. When used in this report, the words "anticipate," "intend," "plan," "believe," "estimate," "project," and similar expressions are intended to identify forward-looking statements. Such statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions which could cause the company's future results and stockholder values to differ materially from those expressed in such forward-looking statements. For additional comments, refer to the October 15, 1998 letter to shareholders, which is attached as exhibit 19. Page 2 3 BUTLER MANUFACTURING COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS For the three and nine month periods ended September 30, 1998 and 1997 (unaudited) ($000's omitted except for per share data)
Three months ended Nine months ended September 30, September 30, ----------------------- ---------------------- 1998 1997 1998 1997 --------- --------- --------- --------- Net sales $ 268,054 $ 241,031 $ 700,355 $ 670,211 Cost of sales 222,809 197,149 582,121 552,926 --------- --------- --------- --------- Gross profit 45,245 43,882 118,234 117,285 Selling, general and administrative expenses 32,007 30,513 91,611 88,166 --------- --------- --------- --------- Operating income 13,238 13,369 26,623 29,119 Other income (expense), net (245) 68 406 297 Gain on sale of Grain Systems --- --- --- 22,000 --------- --------- --------- --------- Earnings before interest and taxes 12,993 13,437 27,029 51,416 Interest expense 1,420 950 4,288 3,860 --------- --------- --------- --------- Pretax earnings 11,573 12,487 22,741 47,556 Income tax expense 4,840 5,681 9,931 19,862 --------- --------- --------- --------- Net earnings $ 6,733 $ 6,806 $ 12,810 $ 27,694 ========= ========= ========= ========= Basic earnings per common share $ .89 $ .87 $ 1.68 $ 3.61 ========= ========= ========= ========= Diluted earnings per common share $ .88 $ .86 $ 1.67 $ 3.57 ========= ========= ========= ========= Basic weighted average number of shares 7,564,700 7,786,297 7,627,038 7,662,786 Diluted weighted average number of shares 7,618,435 7,871,803 7,691,510 7,753,125
Net earnings from operations, which excludes the gain on the sale of the Grain Systems division, was $14,395 or $1.85 per share, for the nine months ended September 30, 1997. See Accompanying Notes to Consolidated Financial Statements. Page 3 4 BUTLER MANUFACTURING COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS September 30, 1998 and December 31, 1997 (unaudited) ($000's omitted)
1998 1997 ------------ ------------ ASSETS Current assets: Cash and cash equivalents $ 26,762 $ 5,515 Receivables, net 135,096 106,882 Inventories: Raw materials 45,269 38,622 Work in process 9,547 7,304 Finished goods 32,134 43,223 Lifo reserve (11,893) (10,858) ------------ ------------ Total inventory 75,057 78,291 Real estate developments in progress 21,653 22,401 Deferred tax assets 7,811 7,812 Other current assets 11,785 12,422 ------------ ------------ Total current assets 278,164 233,323 Investments and other assets 40,900 35,887 Assets held for sale 9,423 9,423 Property, plant and equipment, at cost 247,244 239,747 Less accumulated depreciation (149,872) (143,408) ------------ ------------ Net property, plant and equipment 97,372 96,339 ------------ ------------ $ 425,859 $ 374,972 ============ ============ LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Notes payable $ 1,515 $ 21,280 Current maturities of long-term debt 5,861 5,862 Accounts payable 94,236 72,266 Dividends payable 1,119 1,069 Accrued liabilities 65,469 55,846 Taxes on income 9,179 8,181 ------------ ------------ Total current liabilities 177,379 164,504 Deferred tax liabilities 3,561 3,561 Other noncurrent liabilities 15,851 16,423 Long-term debt, less current maturities 68,097 33,918 Shareholders' equity: Common stock, no par value, authorized 20,000,000 shares, issued 9,088,200 shares, at stated value 12,623 12,623 Cumulative foreign currency translation adjustment (372) 26 Retained earnings 185,517 175,373 ------------ ------------ 197,768 188,022 Less cost of common stock in treasury, 1,628,152 shares in in 1998 and 1,451,205 shares in 1997 36,797 31,456 ------------ ------------ Total shareholders' equity 160,971 156,566 ------------ ------------ $ 425,859 $ 374,972 ============ ============
See Accompanying Notes to Consolidated Financial Statements. Page 4 5 BUTLER MANUFACTURING COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS For the nine month periods ended September 30, 1998 and 1997 (unaudited) ($000's omitted)
1998 1997 ----------- ----------- Cash flows from operating activities: Net earnings $ 12,810 $ 27,694 Adjustments to reconcile net earnings to net cash used in operating activities: Depreciation and amortization 11,012 9,127 Gain on sale of Grain Systems --- (13,299) Equity in earnings of joint ventures (156) (207) Change in asset and liabilities, net of businesses acquired and sold: Receivables (28,214) (7,606) Inventories 3,234 (18,207) Real estate developments in progress 748 592 Other current assets 638 (3,721) Current liabilities excluding short-term debt 32,591 5,745 ----------- ----------- Net cash provided by operating activities 32,663 118 Cash flows from investing activities: Capital expenditures (10,301) (20,140) Sale of Grain Systems --- 33,748 Acquisition of new businesses --- (7,697) Other, net (6,512) (1,611) ----------- ----------- Net cash provided (used) by investing activities (16,813) 4,300 Cash flows from financing activities: Payment of dividends (3,214) (2,751) Proceeds from issuance of long-term debt 35,000 790 Repayment of long-term debt (821) (533) Net change in short-term debt (19,766) (4,031) Sale and issuance of treasury stock 781 783 Purchase of treasury stock (6,121) (1,035) Other, net (64) 2,618 ----------- ----------- Net cash provided (used) by financing activities 5,795 (4,159) Effect of exchange rate changes on cash (398) (860) ----------- ----------- Net increase (decrease) in cash and cash equivalents 21,247 (601) Cash and cash equivalents at beginning of year 5,515 2,013 ----------- ----------- Cash and cash equivalents at September 30 $ 26,762 $ 1,412 =========== ===========
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES: The company purchased all of the capital stock of Modu-Line Windows, Inc. on June 11, 1997 for 191,777 shares of the company's common stock issued from the treasury, plus deferred cash payments and closing costs totaling $.5 million. The company also retired Modu-Line's existing bank debt of $4.5 million. In conjunction with the acquisition, the value of treasury stock issued is shown below: Fair value of assets acquired $11,982 Cash paid 4,982 ------- Treasury stock issued for purchase of capital stock $ 7,000 ======= See Accompanying Notes to Consolidated Financial Statements. Page 5 6 BUTLER MANUFACTURING COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 - BASIS OF PRESENTATION The accompanying unaudited consolidated condensed financial statements have been prepared in accordance with the accounting policies described in the consolidated financial statements and related notes included in Butler Manufacturing Company's 1997 Form 10-K. It is suggested that those consolidated statements be read in conjunction with this report. The year-end financial statements presented were derived from the company's audited financial statements. In the opinion of management, the accompanying consolidated financial statements reflect all adjustments necessary for a fair presentation of the financial position of Butler Manufacturing Company and the results of its operations. NOTE 2 - NEW ACCOUNTING PRONOUNCEMENT Derivative Instruments and Hedging Activities In June, 1998 the Financial Accounting Standards Board issued Statement No. 133, "Accounting for Derivative Instruments and Hedging Activities." This new statement replaces existing pronouncements and practices with an integrated accounting and reporting standard for derivatives and hedging activities. It requires that every derivative instrument be recorded in the balance sheet as either an asset or liability at its fair value, and changes in a derivative's fair value be recognized in current earnings or other comprehensive income. The company is required to adopt Statement No. 133 starting January 1, 2000. The company does not expect adoption of this standard to have a material impact on the company's financial statements. Comprehensive Income In June, 1997 the Financial Accounting Standards Board issued FASB Statement No. 130, "Reporting of Comprehensive Income" which requires reporting and display of comprehensive income and its components in a full set of financial statements. The company has adopted this statement as of January 1, 1998 as required. "Foreign Currency Translation Adjustment" is the company's only comprehensive income item as defined by the statement. Comprehensive income, including after tax adjustments for foreign currency translation losses, was $6.8 million and $6.7 million, for the quarters ending September 30, 1998 and 1997, respectively, and $12.6 million and $27.1 million for the nine month periods ending September 30, 1998 and September 30, 1997, respectively. NOTE 3 - ACQUISITION AND DISPOSITION OF BUSINESS On June 11, 1997 the company announced the acquisition of Modu-Line Windows, Inc. for 191,777 shares of Butler stock having a market value of approximately $7 million, plus deferred cash payments and closing costs totaling $.5 million. The company also retired Modu-Line's existing bank debt of approximately $4.5 million. The fair value of assets acquired of $12 million consisted primarily of receivables, inventory, and equipment valued at $6.2 million with the remaining amount allocated to goodwill which will be amortized over 40 years. On June 23, 1997 the company sold the business and substantially all of the assets and liabilities used in the business of the Grain Systems division, an unincorporated division of the company, to CTB, Inc., a privately owned company in Indiana. The business was sold for approximately $34 million in cash. The sale of the Grain Systems division generated an after-tax gain of $13.3 million, or $1.72 per share. Net cash proceeds to the company were approximately $23 million. Page 6 7 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS LIQUIDITY AND CAPITAL RESOURCES Cash and cash equivalents increased $21.2 million in the first nine months of 1998, primarily due to the $35 million private placement of senior notes secured at the end of the first quarter and used to pay down the company's short-term line of credit and fund working capital requirements. For the nine months ended September 30, 1998 domestic short term borrowings averaged $20 million for 118 days compared to $23 million for 242 days in 1997. In June, 1998 the company amended its existing bank credit agreement to extend its expiration date to June, 2001 and to reduce the credit available to $40 million from $50 million. As of September 30, 1998 $1.8 million of the domestic credit line was utilized to provide a bank letter of credit to secure insurance obligations. The company also maintains a separate line of credit of approximately $2.5 million for its United Kingdom subsidiary. Management believes the company's operating cash flow, along with bank credit lines, is sufficient to meet future liquidity requirements. Capital expenditures were $10.3 million for the first nine months of 1998 compared to $20.1 million a year ago. Total capital expenditures are projected to be approximately $16 million in 1998 compared to actual expenditures of $30 million in 1997. Capital expenditures were greater a year ago due to costs incurred to increase capacity in the domestic and international metal buildings businesses, as well as the Architectural Products segment. Through early October, 1998 the company had repurchased 312,000 shares of its common stock and had 299,000 shares remaining under the current repurchase authorization. On September 15, 1998 the Board of Directors voted to increase the company's regular quarterly dividend to $.15 per share of common stock payable on October 15, 1998 to shareholders of record as of the close of business on October 1, 1998. The Board also declared a dividend distribution of one preferred share purchase right for each outstanding share of common stock, to replace its rights plan which expired on September 30, 1998. The dividend was made to holders of record of common shares on October 1, 1998 upon expiration of the outstanding rights. The rights will be exercisable only if a person or group acquires 15% or more of Butler's common stock or announces a tender offer, the consummation of which will result in ownership by a person or group of 15% or more of the common stock. The rights will expire on September 30, 2008. RESULTS OF OPERATIONS Net sales of $268 million for the quarter ended September 30, 1998 increased 11% compared to the same quarter a year ago. The Building Systems, Architectural Products, and Construction Services segments all contributed to the increase in sales. For the nine months ended September 30, 1998 net sales were $700 million, an increase of 8% from last year excluding prior year sales of Grain Systems which was sold in June, 1997. The third quarter 1998 consolidated gross profit of $45.2 million compared to $43.8 million recorded a year ago. For the nine months ended June 30, 1998 consolidated gross profit was $118.2 million compared to $117.3 million in 1997. The increase in gross profit in the Building Systems, Construction Services and Architectural Products segments, offset the loss of gross profits from the Grain Systems division sale. Page 7 8 The Building Systems segment's earnings increased on modestly higher sales due to a 10.7% increase in the domestic metal buildings division's earnings during the first nine months of the year. Improved results from the domestic metal buildings business, Lester wood framed buildings division, and export operations offset losses in the company's Brazilian building systems business. The Construction Services segment reported higher earnings for the nine month period due in part to more effective project execution. Earnings were also higher for the continuing operations in the Architectural Products group. Net earnings from operations for the quarter ended September 30, 1998 were $6.7 million or $.88 per common share, which were comparable with the same period a year ago. Net earnings from operations for the nine months ended September 30, 1998 were $12.8 million or $1.67 per common share compared to net operating income of $14.4 million or $1.85 per common share last year, excluding $13.3 million or $1.72 per common share from the gain on the sale of the Grain Systems division. Third quarter and year-to-date 1998 net earnings from operations were lower due to a delay in closing the sale of sizable Butler Real Estate projects anticipated to be accomplished in September. One of these projects closed in October. Total backlog of $327 million on September 30, 1998 was up 3% from a year ago. Product backlog was 5% higher which balanced the construction backlog which was 10% lower. YEAR 2000 UPDATE Many computer systems used by companies, governments and individuals around the world use only the last two digits to refer to a year ("98" for 1998). Therefore, these computer programs may not properly distinguish between a year that begins with "20" versus one beginning with "19". If not corrected, many computer applications could fail or create erroneous results. This has come to be known as the "Year 2000 (Y2K) problem." The company believes it has identified, or has processes in place to identify, and will be able to address all of its critical Information Technology, Other Technology, and Business Issues Year 2000 problems in a timely manner. Costs incurred and expected to be incurred in remediation of the company's Year 2000 problems are expected to be immaterial. In 1997 the company reviewed its principal business, manufacturing, and engineering computer systems and applications to determine the impact of the Year 2000 problem on these systems, and to establish a plan to address critical issues ("Compliance Plan"). In early 1998, the company engaged a consultant to assess the company's Compliance Plan and its progress toward effecting the Plan in a timely manner. The consultant looked at three areas: Information Technology ("IT"), such as the company's business, telecommunications, manufacturing and engineering systems; Other Technology ("Non-IT") such as manufacturing equipment which contained embedded micro-controllers; and Business Issues related to service providers, vendors and customers. The consultant advised the company that nothing was identified that in and of itself would indicate that the company would not be successful with its Year 2000 compliance efforts. In mid-1998 the company established a Year 2000 Project Office responsible for the day-to-day oversight and coordination of the Y2K Compliance Plan, including assessment, remediation or compliance (which includes testing), and reporting efforts. This office reports to the Executive Vice President of the Company and the Company's Board of Directors. A manager at each company business unit has been assigned the responsibility for coordination and reporting on "IT", "Non-IT", and "Business Issue" compliance efforts, including any contingency plans if needed. Status reports are reviewed, evaluated and summarized monthly by the Y2K Project Office. INFORMATION TECHNOLOGY: The assessment phase of the IT process was completed in 1997. The company is currently in the remediation or compliance phase. Currently, individual business units are at various stages of compliance. However, it is estimated that in total the company is approximately 40% complete with the compliance phase of the project. Page 8 9 OTHER TECHNOLOGY: The assessment phase of the Non-IT process began in 1998. This started with an inventory of all computer controlled and networked manufacturing equipment to determine if date functions existed in their controllers and whether they were compliant. This phase of the Non-IT process is substantially complete. Subsequent phases include remediation of equipment controls which are non-compliant. To-date it is estimated that in total the company is approximately 60% complete with all phases of the Non-IT plan, including remediation. BUSINESS ISSUES: The assessment of the Business Issues portion of the Y2K plan began in 1998. This phase of the company's plan began with identification of key service providers, vendors, and customers by each business unit. Company business units have begun to contact key service providers, vendors, and customers to assess their Y2K readiness. To-date the company is approximately 10% complete with all phases of its Business Issues plan. Successful completion of the company's Y2K Compliance Plan is dependent upon timely Year 2000 compliance by key third parties. If they are not compliant there could be a material adverse effect on the company's business, results of operations, or financial condition. The Compliance Plan also requires the company to consider its potential liability to third parties if it is not Year 2000 compliant. These determinations and assessments are still underway as noted above. Finally, the Compliance Plan requires the company to identify its most reasonably likely worst case Year 2000 problem scenarios and to develop a contingency plan to handle them. These scenarios have yet to be identified or contingency plans, if needed, created. MANAGEMENT TRANSITION In September, 1998 the Board of Directors elected Paul F. Liljegren Treasurer of the company. Mr. Liljegren, previously Vice President - Controller of the company's Lester Building Systems Division, replaces Larry C. Miller who was elected Vice President - Finance in June, 1998. Page 9 10 PART II. - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits (19) October 15, 1998 letter to shareholders (27) Financial Data Schedule (b) Reports on Form 8-K The company filed a report on Form 8-K on September 23, 1998 disclosing the declaration of a dividend of one preferred share purchase right for each outstanding share of common stock. Page 10 11 SIGNATURES Pursuant to the requirement of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. BUTLER MANUFACTURING COMPANY November 12, 1998 /s/ Larry C. Miller - ----------------- ----------------------------------- Date Larry C. Miller Vice President - Finance and Chief Financial Officer November 12, 1998 /s/ Richard O. Ballentine - ----------------- ----------------------------------- Date Richard O. Ballentine Vice President, General Counsel and Secretary Page 11 12 Exhibit 99 EXHIBIT INDEX Exhibit Number Description - ------- --------------------------------------- 19 October 15, 1998 Letter to Shareholders 27 Financial Data Schedule EX-19 2 LETTER TO SHAREHOLDER 1 Exhibit 19 Butler Manufacturing Company THIRD QUARTER REPORT 1998 Nine Months Ended September 30, 1998 BMA TOWER PENN VALLEY PARK KANSAS CITY, MO 64108 To Our Shareholders: Third quarter sales of $268 million were up 11% compared to a year ago. Quarterly net earnings of $6.7 million were about the same as in 1997, although per share earnings increased 2% because of a smaller number of shares currently outstanding. Third quarter 1998 net earnings were somewhat reduced from expectations because of the delay in closing the sale of sizable Butler Real Estate projects anticipated to be accomplished in September. The effect of these on after tax profit was about $1.1 million, or $.14 per share, which now is expected to be realized in the fourth quarter. One of these projects has already closed in October. For the nine month period, Butler's sales were $700 million, an increase of 8% from last year (excluding prior year sales of Grain Systems, which was sold in June 1997). Year-to-date net earnings of $12.8 million were slightly higher than comparable operating net income a year ago. The U.S. operations that comprise our Building Systems group are achieving excellent results in 1998. The core metal building systems division had good increases in both sales and earnings for the quarter and nine months, and their September 30 backlog was up about 7% from a year ago. Sales in the Lester wood frame buildings business were slightly lower for the quarter and nine months, reflecting more difficult conditions in agricultural markets in general and in the hog confinement market in particular. Lester profitability recovered nicely, however, in both periods, primarily because of better management this year of raw material costs. Innovative Building Technologies, our start-up panelized building products division, had a loss of about $.06 per share for the nine months, and is gradually expanding its base of market opportunities and customer prospects. Butler Real Estate is achieving another very strong year in 1998. As communicated previously, Butler's international operations are having decidedly mixed results. Our export operations are exceeding expectations and last year's profit contribution. Our buildings business in China is making excellent progress, was solidly profitable for the third quarter, and had a much smaller loss for the nine months. Similarly, Butler Europe had lower losses in both accounting periods, compared to 1997, but weak U.K. market conditions are the major factor causing European results to be lower than planned this year. Our Brazilian metal building systems business had a loss for the nine months of about $4 million, or $.50 per share, resulting from operating problems and difficult local economic conditions. We have made progress in resolving the operating problems, and we are pursuing several initiatives to reposition our business in South America. We expect our operations in that sector will have little, if any, effect on Butler's earnings in 1999. Butler Construction had slightly reduced third quarter earnings, but their profitability year-to-date is nicely ahead of last year. They continue to perform well, but because of timing variations with their large construction contracts, specific quarterly comparisons are usually not very meaningful. 2 The Vistawall Architectural Products group achieved third quarter increases in both sales and earnings. For the nine months, their sales were 21% higher than last year, but earnings were up only 8%, largely as a result of industry price competition and expenses associated with their expanded facilities and scope of operations. Enclosed with this report is a communication describing the renewal of Butler's Shareholder Rights Plan, which your Board of Directors approved at its September meeting. The rationale for, and provisions of, the Plan are virtually identical with the predecessor plan which was originally adopted in 1988. In recent weeks, we have increased the level of share repurchases, partially in response to the decline in Butler's stock price. Through early October we have repurchased this year a total of about 312,000 shares and have approximately 299,000 shares remaining under the current repurchase authorization. At its September meeting, the Board of Directors also approved a 7% increase in the cash dividend to a new annual rate of $.60 per share -- further reflection of the confidence we have in the future prospects for your company. Despite obvious apprehension about the global economic outlook, Butler's near-term order activity remains encouraging. Total backlog of $327 million was 3% higher than a year ago. Product backlog was 5% higher and balanced the construction backlog which was down 10%. Cordially yours, Robert H. West Chairman and Chief Executive Officer EX-27 3 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM BUTLER MANUFACTURING COMPANY CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE QUARTER ENDED SEPTEMBER 30, 1998, AND CONSOLIDATED BALANCE SHEET AS OF SEPTEMBER 30, 1998, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 0000015840 BUTLER MANUFACTURING COMPANY 1,000 9-MOS DEC-31-1998 JAN-01-1998 SEP-30-1998 26,762 0 135,096 0 75,057 278,164 247,244 149,872 425,859 177,379 68,097 0 0 12,623 185,517 425,859 700,355 700,761 582,121 582,121 91,611 0 4,288 22,741 9,931 12,810 0 0 0 12,810 1.68 1.68 REFLECTS LONG-TERM DEBT, LESS CURRENT MATURITIES. REFLECTS OTHER STOCKHOLDERS' EQUITY BEFORE DEDUCTION OF $36.8 MILLION COST OF TREASURY STOCK. REFLECTS NET SALES PLUS NET INTERNATIONAL JOINT VENTURE INCOME LESS NET OTHER EXPENSE. CONSISTS OF SELLING, GENERAL AND ADMINISTRATIVE EXPENSE.
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