10-Q 1 c71152e10vq.txt QUARTERLY REPORT 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 JUNE 30, 2002 BUTLER MANUFACTURING COMPANY Incorporated in the State of Delaware 1540 Genessee Street Post Office Box 419917 Kansas City, Missouri 64102 Phone: (816) 968-3000 I.R.S. Employer Identification Number: 44-0188420 Shares of common stock outstanding at June 30, 2002: 6,310,002 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 30 days. INDEX PART I. - FINANCIAL INFORMATION Page Number ITEM 1. Financial Statements (1) Consolidated Financial Statements (unaudited): Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2002 and 2001. 3 Consolidated Statements of Comprehensive Income (Loss) for the Three and Six Months Ended June 30, 2002 and 2001. 4 Consolidated Balance Sheets as of June 30, 2002 and December 31, 2001. 5 Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2002 and 2001. 6 (2) Notes to Consolidated Financial Statements 7 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 10 ITEM 3. Quantitative and Qualitative Disclosure About Market Risk 12 ITEM 4. Submission of Matters to a Vote Of Security Holders 13 PART II. OTHER INFORMATION ITEM 6. Exhibits and Reports on Form 8-K 13 Signatures 14 Exhibits Index 15 2 BUTLER MANUFACTURING COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS For the three and six months ended June 30, 2002 and 2001 (unaudited) ($000's omitted except for per share data)
Three months ended June 30 Six months ended June 30 2002 2001 2002 2001 ----------- ----------- ----------- ----------- Net sales $ 213,421 $ 213,672 $ 396,273 $ 408,531 Cost of sales 184,210 180,014 344,943 350,108 ----------- ----------- ----------- ----------- Gross profit 29,211 33,658 51,330 58,423 Selling, general and administrative expenses 27,909 27,131 55,746 55,318 ----------- ----------- ----------- ----------- Operating income (loss) 1,302 6,527 (4,416) 3,105 Other income, net 686 220 616 706 ----------- ----------- ----------- ----------- Income (loss) before interest and taxes 1,988 6,747 (3,800) 3,811 Interest expense 1,975 1,594 3,933 3,073 ----------- ----------- ----------- ----------- Pretax income (loss) 13 5,153 (7,733) 738 Income tax expense (benefit) (281) 1,728 (2,659) 116 ----------- ----------- ----------- ----------- Net income (loss) $ 294 $ 3,425 $ (5,074) $ 622 =========== =========== =========== =========== Basic earnings (loss) per common share $ 0.05 $ 0.55 $ (0.81) $ 0.10 =========== =========== =========== =========== Diluted earnings (loss) per common share $ 0.05 $ 0.54 $ (0.81) $ 0.10 =========== =========== =========== =========== Basic weighted average number of shares 6,315,046 6,282,620 6,302,643 6,278,123 Diluted weighted average number of shares 6,324,684 6,290,487 6,302,643 6,282,057
See Accompanying Notes to Consolidated Financial Statements 3 BUTLER MANUFACTURING COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) For the three and six months ended June 30, 2002 and 2001 (unaudited) ($000's omitted)
Three months ended June 30 Six months ended June 30 2002 2001 2002 2001 ------- ------- ------- ------- Net income (loss) $ 294 $ 3,425 $(5,074) $ 622 Other comprehensive income (loss): Foreign currency translation and hedging activity (62) 206 182 (501) ------- ------- ------- ------- Comprehensive income (loss) $ 232 $ 3,631 $(4,892) $ 121 ======= ======= ======= =======
See Accompanying Notes to Consolidated Financial Statements. 4 BUTLER MANUFACTURING COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS June 30, 2002 and December 31, 2001 ($000's omitted)
2002 2001 --------- --------- (unaudited) (audited) ASSETS Current assets: Cash and cash equivalents $ 44,431 $ 52,569 Receivables, net 116,583 109,522 Inventories: Raw materials 27,268 20,132 Work in process 9,842 13,692 Finished goods 30,802 32,100 LIFO reserve (8,926) (8,489) --------- --------- Total inventory 58,986 57,435 Real estate developments in progress 18,459 23,966 Net current deferred tax assets 16,635 16,636 Other current assets 8,468 14,939 --------- --------- Total current assets 263,562 275,067 Investments and other assets 52,777 48,741 Assets held for sale 3,684 3,684 Property, plant and equipment, at cost 297,669 302,360 Less accumulated depreciation (159,334) (159,090) --------- --------- Net property, plant and equipment 138,335 143,270 --------- --------- $ 458,358 $ 470,762 ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Notes payable $ 2,413 $ 2,100 Current maturities of long-term debt 5,567 5,617 Accounts payable 76,179 70,362 Dividends payable 1,136 1,131 Accrued liabilities 91,386 98,237 Taxes on income 3,960 8,659 --------- --------- Total current liabilities 180,641 186,106 Net noncurrent deferred tax liabilities 3,683 3,683 Other noncurrent liabilities 18,041 18,254 Long-term debt, less current maturities 97,916 98,244 Shareholders' equity: Common stock, no par value, authorized 20,000,000 shares, issued 9,088,200 shares, at stated value, outstanding 6,310,002 in 2002 and 6,282,783 in 2001 12,623 12,623 Foreign currency translation, hedging activity, and minimum pension liability, net of tax (6,609) (6,791) Retained earnings 216,341 223,594 --------- --------- 222,355 229,426 Less cost of common stock in treasury, 2,778,198 shares in 2002 and 2,805,417 shares in 2001 64,278 64,951 --------- --------- Total shareholders' equity 158,077 164,475 --------- --------- $ 458,358 $ 470,762 ========= =========
See Accompanying Notes to Consolidated Financial Statements. 5 BUTLER MANUFACTURING COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS For the six months ended June 30, 2002 and 2001 (unaudited) ($000's omitted)
2002 2001 -------- -------- Cash flows from operating activities: Net earnings (loss) $ (5,074) $ 622 Adjustments to reconcile net earnings (loss) provided by operating activities: Depreciation and amortization 9,000 8,282 Equity earnings (loss) of joint ventures 55 (19) Change in asset and liabilities: Receivables (7,061) 72 Inventories (1,551) 4,286 Real estate developments in progress 5,507 10,132 Other current assets and liabilities 846 (17,512) Other noncurrent operating assets and liabilities (441) 285 -------- -------- Net cash provided by operating activities 1,281 6,148 Cash flows from investing activities: Capital expenditures (3,068) (18,656) Capital expenditures - software (4,770) (1,148) -------- -------- Net cash used by investing activities (7,838) (19,804) Cash flows from financing activities: Payment of dividends (2,264) (2,131) Proceeds from issuance of long-term debt -- 50,523 Repayment of long-term debt (328) (547) Net change in short-term debt 263 (33,095) Issuance of treasury stock 698 639 Purchase of treasury stock (25) (19) -------- -------- Net cash provided (used) by financing activities (1,656) 15,370 Effect of exchange rate changes 75 (299) -------- -------- Net increase (decrease) in cash and cash equivalents (8,138) 1,415 Cash and cash equivalents at beginning of year 52,569 16,855 -------- -------- Cash and cash equivalents at June 30 $ 44,431 $ 18,270 ======== ========
See Accompanying Notes to Consolidated Financial Statements. 6 BUTLER MANUFACTURING COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 - BASIS OF PRESENTATION The accompanying unaudited consolidated 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 2001 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 - GOODWILL In June 2001, the Financial Accounting Standards Board (FASB) issued Statements of Financial Accounting Standards No. 141, "Business Combinations" (SFAS No. 141), and No. 142, "Goodwill and Other Intangible Assets" (SFAS No. 142), effective for fiscal years beginning after December 15, 2001. These Statements eliminated the pooling-of-interests method of accounting for business combinations and the systematic amortization of goodwill. SFAS No. 141 applies to all business combinations with a closing date after June 30, 2001, of which the Company had no such activity. At the beginning of fiscal 2002, the Company adopted SFAS No. 142. Under the new standard, purchased goodwill is no longer amortized over its useful life, but will be subject to annual impairment tests. Therefore, the Company did not incur any goodwill amortization expense during the first or second quarter of 2002. Goodwill amortization expense recorded in the first and second quarters of 2001 was less than $.1 million, respectively, or an after tax effect of less than $.01 per share. As of January 1, 2002 the Company tested its Architectural Products business segment using an estimate of fair value rather than an undiscounted cash flow approach performed under prior accounting standards. It was determined that its fair value exceeded its carrying value and no impairment was recognized. The Company has elected to perform an annual test for goodwill impairment in the third quarter. NOTE 3 - BUSINESS SEGMENTS The Company groups its operations into five business segments: North American Building Systems, International Building Systems, Architectural Products, Construction Services, and Real Estate. The North American Building Systems segment includes the North American metal buildings and the wood buildings businesses. These business units supply steel and wood frame pre-engineered building systems for a wide variety of commercial, community, industrial, and agricultural applications. The International Buildings Systems segment includes the Company's Asian metal buildings business. The European metal buildings business was sold on July 25, 2002. These businesses supply pre-engineered metal buildings for commercial, community, industrial, and agricultural applications primarily for the Chinese and European markets. The Architectural Products segment includes the operations of the Vistawall Group. The group's businesses design, manufacture, and market architectural aluminum systems for nonresidential construction, including curtain wall, storefront systems, windows, doors, skylights, and roof accessories. 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 Real Estate segment provides real estate build-to-suit-to-lease development services in cooperation with Butler dealers. The accounting policies for the segments are the same as those described in the summary of significant accounting policies as included in the Company's 2001 Form 10-K. Butler Manufacturing Company's reportable segments are strategic business units that offer products and services for different markets. They are managed separately because each business requires different technology and expertise. 7 The Other classification represents unallocated corporate expenses and unallocated assets, including corporate offices, deferred taxes, pension accounts, interest expense, and intersegment eliminations. Three Months Six Months NET SALES Ended June 30, Ended June 30, (Thousands of dollars) 2002 2001 2002 2001 -------------------------------------------------------------------------------- North American Building Systems $ 97,725 $ 110,703 $ 176,212 $ 201,776 International Building Systems 31,980 19,327 53,572 35,131 Architectural Products 56,102 57,728 107,683 115,999 Construction Services 27,387 33,155 65,137 51,388 Real Estate 6,075 -- 6,075 15,953 Other (5,848) (7,241) (12,406 (11,716) ------------------------ -------------------- $ 213,421 $ 213,672 $ 396,273 $ 408,531 ======================== ==================== Net sales represent revenues from sales to affiliated and unaffiliated customers before elimination of intersegment sales, which is included in Other. Intersegment eliminations are primarily sales between North American Building Systems and Architectural Products segments to the International Building Systems and Construction Services segments. Three Months Six Months PRETAX EARNINGS (LOSSES) Ended June 30, Ended June 30, (Thousands of dollars) 2002 2001 2002 2001 -------------------------------------------------------------------------------- North American Building Systems $ (1,589) $ 3,891 $ (5,841) $ (754) International Building Systems 1,957 245 1,928 (404) Architectural Products 3,022 3,864 3,931 7,445 Construction Services 311 337 1,088 732 Real Estate 927 1,064 1,482 2,555 Other (4,615) (4,248) (10,321) (8,836) ---------------------- -------------------- $ 13 $ 5,153 $ (7,733) $ 738 ====================== ==================== TOTAL ASSETS June 30, December 31, (Thousands of dollars) 2002 2001 --------------------------------------------------------------------------- North American Building Systems $ 143,847 $ 138,690 International Building Systems 69,559 67,064 Architectural Products 110,600 112,785 Construction Services 22,558 22,465 Real Estate 33,416 28,406 Other 78,378 101,352 --------- --------- $ 458,358 $ 470,762 ========= ========= Total assets represent assets used by each business segment. Other represents cash and cash equivalents, assets held for sale, corporate equipment, and miscellaneous other assets which are not related to a specific business segment. In prior periods the North American Building Systems and International Building Systems segments were reported as a single segment. Because of reorganization and management changes, two segments were formed. NOTE 4 - RESTRUCTURING AND ASSET IMPAIRMENT CHARGES In December 2001, the Company's board of directors approved the disposition of its European metal buildings business. As a result, the Company recorded a $3.8 million pretax charge in connection with this decision. In addition, the Company recorded a $4.3 million pretax charge for the impairment of certain assets. During 2001, 8 $1.7 million of the restructuring reserve was utilized, and in the second quarter of 2002, $.6 million was utilized for severance and employee separation costs and other costs related to the disposition of the business. At June 30, 2002, $1.5 million remains in the restructuring reserve. NOTE 5 - INDEBTEDNESS In June 2001, the Company entered into a $50 million bank credit facility and issued $50 million of senior unsecured notes pursuant to a note agreement, allowing domestic bank borrowings to be reduced to zero. Interest on advances under the new credit facility are based on either (a) the higher of the federal funds rate plus .50% or the prime rate, which is payable quarterly, or (b) LIBOR, which is payable at the end of periods ranging from one to six months. The credit agreement provides for a commitment fee on unused advances ranging from .20% to .30%. Commitments under the credit facility expire on June 30, 2004, at which time any outstanding advances are payable. The agreement contains certain operating covenants, including restrictions on liens, investments, acquisitions, asset sales and mergers. The agreement also requires the Company to maintain a capitalization ratio, as defined, of .5 to 1, a fixed charge coverage ratio, as defined, of 1.7 to 1, and a leverage ratio, as defined, of 3.25 to 1, through June 30, 2002 and 3.0 to 1 thereafter. The senior notes bear interest, payable semi-annually on June 30 and December 30, at the effective rate of 7.91% per annum. Principal of the senior notes is payable in annual installments of $4.55 million on December 30th of each year, commencing December 30, 2006, with the final installment due on December 30, 2016. The note agreement contains certain operating covenants, including restrictions on liens, additional indebtedness and asset sales, and requires the Company to maintain adjusted consolidated net worth, as defined, of $125 million plus the cumulative sum of 50% of consolidated net income for each fiscal quarter after June 30, 2001 and a fixed charge coverage ratio, as defined, of 1.5 to 1.0. NOTE 6 - EARNINGS PER SHARE Basic and diluted earnings per common share were comparable for the three and six month periods ending June 30, 2002 and 2001. Under the treasury stock method the diluted weighted average number of shares outstanding vary from the basic weighted average number of shares outstanding due to dilutive stock options which are "in the money" at the end of the second quarter 2002. 9 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS Net sales were $213 million for the second quarter 2002, comparable with a year ago. The International Building Systems segment's sales increased$12.7 million or 65% during the second quarter compared with the prior year, due to continuing strong sales demand in China. Their positive result helped dampen the sales decreases within the North American Building Systems, Architectural Products and Construction Services segments. The continued decline in the domestic nonresidential construction market followed the general decline in the U.S. economy. Sales in the North American Building Systems segment decreased 14% in the second quarter to $98 million compared with $111 million a year ago, while the Construction Services segment's sales decreased 17% to $27 million, both due to a decline in the nonresidential construction market. The Architectural Products segment's sales decreased 3% to $56 million in the second quarter due primarily to a decline in the office and retail construction markets. The Real Estate segment, whose revenue stream is more erratic than the manufacturing operations due to the project nature of this business, recorded the sale of a development project held in inventory during the second quarter. The Company's sales for the first six months of the year decreased 3% to $396 million. International Building Systems segment sales were $54 million, an increase of 52% compared with a year ago, due to increased demand in China. Construction Services segment sales increased 27% to $65 million due to a strong backlog at beginning of the year. The remaining segments reported sales decreases which more than offset sales increases in the International Building Systems and Construction Services segments mentioned above. North American Building Systems segment's sales for the six months ending June 30, 2002 were $176 million, a decrease of 17% compared with a year ago., while the Architectural Products segment sales were $108 million, a decrease of 7%. Gross profit was $29 million in the second quarter, a decline of 13% compared to a year ago, and $51 million for the six months ending June 30, 2002, a decline of 12%. The significant decline in the nonresidential construction market has heightened price competition in the Company's domestic markets depressing gross profit margins. Sales, general and administrative expenses of $28 million and $56 million for the three and six month periods ending June 30, 2002, were comparable to a year ago. The positive impact of several cost cutting measures was offset by increased health care and pension costs compared with a year ago. A portion of the North American Building Systems segment manufacturing capacity, which was temporarily idled last year, remains off-line until signs of a market rebound is underway. Interest expense was $2.0 million and $3.9 million for the three and six month periods ending June 30, 2002, higher than amounts in the corresponding periods in 2001 due primarily to greater capitalized interest on the Company's headquarters project in 2001, and a higher average interest rate in 2002. The Company reported pretax earnings for the second quarter at breakeven levels compared with earnings of $5.2 million a year ago, and year-to-date pretax losses of $7.7 million compared with $.7 million pretax earnings for the same period a year ago primarily due to the decline in the U.S. economy generally and in nonresidential construction specifically. An income tax benefit was recorded for the second quarter of 2002 due to the domestic loss and a lower effective tax rate in China. Net earnings for the second quarter 2002 were $.05 per share. The Company reported a net loss for the six month period ending June 30, 2002 of $.81 per share. During July, the Company completed the previously announced sale of assets of its European metal buildings business to the Lindab AB Group headquartered in Sweden. LIQUIDITY AND CAPITAL RESOURCES Since December 2001, cash and cash equivalents decreased $8 million to $44 million. During the period, cash was primarily used for investments, specifically for general factory capital expenditures, and for the development of a scalable enterprise system (ERP) in the North American metal buildings business. Cash flow from operations increased slightly as noncash depreciation and amortization expenses and a reduction in real estate developments in progress offset seasonal increases in receivables in China and the Architectural Products segment. Inventory increased at the end of June due to the North American metal buildings business hedge buy of steel inventory in anticipation of July steel price increases. Taxes payable declined due to lower earnings. Cash from financing activities was used for payment of dividends. 10 During 2001, the Company entered into a $50 million bank credit facility to fund future working capital requirements, and signed a $50 million private placement agreement. For the six months ended June 30, 2002, there were no domestic short-term borrowings. At June 30, 2002, approximately $20 million of the domestic credit line was utilized to provide standby letters of credit to backstop various short and long term liabilities of the Company. This compares with $9 million at June 30, 2001. The Company's foreign operations maintain separate lines of credit with local banks of approximately $6 million, with $2.4 million utilized at current exchange rates at June 30, 2002. Management believes the Company's operating cash flow, cash balances, along with the bank credit lines, are sufficient to meet future foreseen liquidity requirements. Cash paid for interest was $1.2 million through the second quarter 2002, while cash paid for taxes was $.8 million through June 2002. A $4.2 million tax refund related to the disposition of the European operation was received during the first quarter 2002. Cash paid for interest and taxes was $3.0 million and $1.8 million, respectively, for the same period a year ago. Treasury stock purchases for 2002 and 2001 were minimal, and dividends were $2 million. On June 18, 2002 the Company's Board of Directors declared a regular quarterly dividend of $.18 per share of the Company's common stock payable on July 16, 20002 to shareholders of record on July 1, 2002. OUTLOOK. F.W. Dodge reported nonresidential construction orders through May, 2002 declined 11% compared with a year ago. The nonresidential construction economy continues to trend downward nearing the lows set in early 1990's. Against this backdrop, the Company is balancing near-term operating environment with careful management of expenses and selective investment in growth strategies. It is difficult to predict market conditions for the balance of the year, although some seasonal pick-up in the third quarter is anticipated as this is typically the strongest quarter of the year. However, pricing conditions are expected to remain very competitive, and that, combined with higher steel costs will keep the pressure on gross margins and operating profitability. Total backlog at June 30, 2002 was $332 million, 3% lower than the prior year. Higher margin product backlog was approximately 14% lower, while construction backlog was 15% lower compared to the same period a year ago. MARKET PRICE RISK The Company's principal exposure to market risk is from changes in commodity prices, interest rates, and currency exchange rates. To limit exposure and to manage volatility related to these risks, the Company enters into select commodity and currency hedging transactions, as well as forward purchasing arrangements. The Company does not use financial instruments for trading purposes. Commodity Price Exposure: The Company's primary commodities are steel, aluminum, and wood. Steel is the Company's largest purchased commodity. The Company enters into forward steel purchase arrangements in its metal buildings business for periods of less than one years duration to protect against potential price increases. To the extent there are increases in the Company's steel costs, they are generally recaptured in the Company's product sales prices. Steel prices in 2002 have risen sharply and are expected to increase early into the third quarter 2002, partly due to recent tariffs imposed by the U.S. Government on certain imported steel products. Recent investments and increased operating efficiencies in Company operations have helped to dampen the impact of the increase, nevertheless, in April, 2002, the Company's U.S. metal buildings business announced a price increase on most of its products to partially mitigate the impact of rising steel prices. The Company's wood frame building business enters into forward purchase arrangements for commercial grade lumber for periods of less than one year's duration. Lumber costs are generally more volatile than steel costs. To offset increases in lumber costs, the Company adjusts product prices accordingly. Aluminum hedge contracts of less than one year's duration are purchased to hedge the engineered products backlog of the Vistawall group against potential losses caused by increases in aluminum costs. This product line is sensitive to material cost movements due to the longer lead times from project quoting to manufacture. Gains or losses recorded on hedge contracts are offset against the actual aluminum costs charged to cost of sales when the underlying inventory is sold. At June 30, 2002 the fair value of open aluminum contracts recorded in its cumulative other comprehensive income was less than $.1 million. Mark to market gains on the Company's Canadian currency exchange contracts were recorded in earnings and were less than $.1 million at June 30, 2002. At June 30, 2002 a 10% change in both aluminum and Canadian currency contracts was immaterial. 11 Interest Rates: The majority of the Company's long-term debt carries a fixed interest rate, which limits the Company's exposure to increases in market rates. However, interest rate changes impacts the fair market value of such debt. As of June 30, 2002, holding other variables constant, including levels of indebtedness, a one percentage point increase in interest rates would result in approximately a $5 million change in the fair value of the Company's fixed rate debt. Foreign Currency Fluctuation: The majority of the Company's business is transacted in U.S. dollars, limiting the Company's exposure to foreign currency fluctuations. Where the Company has foreign-based operations, the local currency has been adopted as the functional currency. As such, the Company has both transaction and translation foreign exchange exposure in those operations. Due to relative cost and limited availability, the Company does not hedge its foreign net asset exposure. At June 30, 2002 the Company's net asset investment in foreign operations was $28 million. The Company does hedge its short-term foreign currency transaction exposures related to metal building sales in Canada. Forward exchange contracts are purchased to cover a portion of the exposure. 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 forgoing 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, including changes in manufacturing capacity utilization and corporate cash flow in both domestic and international markets. 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. For additional comments, refer to the July 17, 2002, letter to shareholders, which is attached as Exhibit 19. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK There are no material changes to the disclosure made in the Annual Report on Form 10-K for the year ended December 31, 2001 regarding this matter. See discussion about market risk under Item 2. Management Discussion and Analysis on page 12 above. 12 PART II - OTHER INFORMATION ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. The Company held its Annual Meeting of Shareholders on April 16, 2002. Three Class A Directors were elected at the Annual Meeting. In the election of directors there were 5,350,316 votes cast for Gary M. Christensen and 523,396 withheld; 5,344,185 votes cast for C.L. William Haw and 529,527 withheld; and 5,358,098 votes cast for John J. Holland and 515,614 withheld. Two other proposals were voted on and passed at the Annual Meeting; the Stock Incentive Plan of 2002 to provide additional incentives to senior management and other key employees of the Company, and the 2002 Stock Option Plan for Outside Directors to promote long-term success of the Company and enhance the Company's ability to attract qualified persons to serve as directors while enhancing the long-term mutuality of interest between the Outside Directors of the Company and the stockholders of the Company. Votes cast for the Stock Incentive Plan were 4,131,085, votes against were 745,014, those abstaining were 141,142 and those delivered with no vote totaled 856,481. Votes cast for the Outside Director Stock option were 3,917,497, votes against were 924,958, those abstaining were 174,776, and those delivered with no vote totaled 856,481. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits. (19) July 17, 2002 Letter to Shareholders. (99.1) Certification of Periodic Report-CEO (99.2) Certification of Periodic Report-CFO (b) Reports on Form 8-K On May 16, 2002 the Company filed form 8-K for change in the registrants certified accountants. The Board of Directors of the Company approved the dismissal of Arthur Andersen LLP and the appointment of KPMG LLP as independent auditors for the Company effective May 16, 2002. 13 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 August 14, 2002 /s/ Larry C. Miller --------------------- ------------------------------ Date Larry C. Miller Vice President - Finance, and Chief Financial Officer August 14, 2002 /s/ John W. Huey --------------------- ------------------------------ Date John W. Huey Vice President, General Counsel and Secretary 14 EXHIBIT INDEX Exhibit Number Description ------ ----------- 19 July 17, 2002 Letter to Shareholders 99.1 Certification of Periodic Report-CEO 99.2 Certification of Periodic Report-CFO 15