-----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, V4sEjOgpz/ooZtxzxYJeAxBNyuNfAqPWNObkm5G/2RGoyo/Fi/Qv45Hc1dyhAOsC 0U1MJS2rZOUJAMx6U9qmtQ== 0000950137-97-002614.txt : 19970808 0000950137-97-002614.hdr.sgml : 19970808 ACCESSION NUMBER: 0000950137-97-002614 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970807 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-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-12335 FILM NUMBER: 97652740 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 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 JUNE 30, 1997 BUTLER MANUFACTURING COMPANY Incorporated in State of Delaware BMA Tower - Penn Valley Park Post Office Box 419917 Kansas City, Missouri 64141-0917 Phone: (816) 968-3000 I.R.S. Employer Identification Number: 44-0188420 Shares of common stock outstanding at JUNE 30, 1997: 7,781,198 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 Six Month Periods Ended June 30, 1997 and 1996. 3 Consolidated Balance Sheets as of June 30, 1997 and December 31, 1996. 4 Consolidated Statements of Cash Flows for the Six Month Periods Ended June 30, 1997 and 1996. 5 (2) Notes to Consolidated Financial Statements 6 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 7-8 PART II. - OTHER INFORMATION ITEM 5. Other Information 9 ITEM 6. Exhibits and Reports on Form 8-K 9
Page 2 3 BUTLER MANUFACTURING COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS For the three and six month periods ended June 30, 1997 and 1996 (unaudited) ($000's omitted except for per share data)
Three months ended Six months ended June 30, June 30, ----------------------- --------------------- 1997 1996 1997 1996 -------- -------- -------- -------- Net sales $241,078 $193,446 $429,180 $369,138 Cost of sales 199,752 157,014 355,777 300,994 -------- -------- -------- -------- Gross profit 41,326 36,432 73,403 68,144 Selling, general and administrative expenses 30,226 25,505 57,653 50,060 -------- -------- -------- -------- Operating income 11,100 10,927 15,750 18,084 International joint venture income (loss), net --- 101 156 300 Other income (expense), net 363 224 73 (409) Gain on sale of Grain Systems 22,000 --- 22,000 --- -------- -------- -------- -------- Earnings before interest and taxes 33,463 11,252 37,979 17,975 Interest expense 1,631 1,124 2,910 2,165 -------- -------- -------- -------- Pretax earnings 31,832 10,128 35,069 15,810 Income tax expense 12,840 4,320 14,181 6,743 -------- -------- -------- -------- Net earnings $ 18,992 $ 5,808 $ 20,888 $ 9,067 ======== ======== ======== ======== Earnings per common share* $ 2.46 $ .75 $ 2.71 $ 1.18 ======== ======== ======== ========
*Earnings per common share are based on net earnings and the average number of common shares and common share equivalents outstanding during each period. The weighted average number of shares outstanding used in the computation of earnings per share are as follows: Three months ended June 30, 1997 7,716,113 Three months ended June 30, 1996 7,718,410 Six months ended June 30, 1997 7,693,786 Six months ended June 30, 1996 7,710,305 See Accompanying Notes to Consolidated Financial Statements. Page 3 4 BUTLER MANUFACTURING COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS June 30, 1997 and December 31, 1996 (unaudited) ($000's omitted)
1997 1996 -------- -------- ASSERTS Current assets: Cash and cash equivalents $ 15 $ 2,013 Receivables, net 126,888 110,136 Inventories: Raw materials 35,680 37,292 Work in process 6,926 6,460 Finished goods 43,177 27,590 Lifo reserve (10,770) (11,252) -------- -------- Total inventory 75,013 60,090 Real estate developments in progress 27,365 33,803 Deferred tax assets 8,878 8,878 Other current assets 12,294 7,141 -------- -------- Total current assets 250,453 222,061 Investments and other assets 36,387 24,701 Assets held for sale 9,942 13,260 Property, plant and equipment, at cost 224,307 228,051 Less accumulated depreciation (142,034) (150,653) -------- -------- Net property, plant and equipment 82,273 77,398 -------- -------- $379,055 $337,420 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Notes payable $ 13,236 $ 9,237 Current maturities of long-term debt 5,860 5,464 Accounts payable 76,917 74,549 Dividends payable 934 907 Accrued liabilities 60,354 62,222 Taxes on income 17,258 8,500 -------- -------- Total current liabilities 174,559 160,879 Deferred tax liabilities 3,837 3,837 Other noncurrent liabilities 10,604 9,865 Long-term debt, less current maturities 39,287 38,397 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 (31) 551 Retained earnings 164,399 141,900 -------- -------- 176,991 155,074 Less cost of common stock in treasury, 1,307,002 shares in 1997 and 1,526,735 shares in 1996 26,223 30,632 -------- -------- Total shareholders' equity 150,768 124,442 -------- -------- $379,055 $337,420 ======== ========
See Accompanying Notes to Consolidated Financial Statements. Page 4 5 BUTLER MANUFACTURING COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS For the six month periods ended June 30, 1997 and 1996 (unaudited) ($000's omitted)
1997 1996 ------- ------- Cash flows from operating activities: Net earnings $20,888 $ 9,067 Adjustments to reconcile net earnings to net cash used in operating activities: Depreciation and amortization 5,965 4,704 Gain on sale of Grain Systems (13,299) --- Equity (earnings) loss on joint ventures (87) (58) Change in asset and liabilities, net of businesses acquired and sold: Receivables (16,092) (5,518) Inventories (18,721) 2,588 Real estate developments in progress 6,438 (10,546) Other current assets (5,093) 2,046 Current liabilities excluding short-term debt 1,572 (6,977) ------- ------- Net cash used in operating activities (18,429) (4,694) Cash flows from investing activities: Capital expenditures (13,191) (10,753) Sale of Grain Systems 33,748 --- Acquisition of new businesses (7,697) --- Other, net (191) (2,270) ------- ------- Net cash provided (used) by investing activities 12,669 (13,023) Cash flows from financing activities: Payment of dividends (1,817) (1,515) Proceeds from issuance of long-term debt 767 771 Repayment of long-term debt (442) (311) Net change in short-term debt 4,238 9,962 Sale and issuance of treasury stock 561 1,293 Purchase of treasury stock --- (436) Other, net 1,037 765 ------- ------- Net cash provided by financing activities 4,344 10,529 Effect of exchange rate changes on cash (582) 32 ------- ------- Net increase (decrease) in cash and cash equivalents (1,998) (7,156) Cash and cash equivalents at beginning of year 2,013 7,253 ------- ------- Cash and cash equivalents at June 30 $ 15 $ 97 ======= =======
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES: The Company purchased all of the capital stock of Modu-Line, Inc. 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 1996 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 In March 1997, the Financial Accounting Standards Board released FASB Statement No. 128, "Earnings Per Share" which revises the calculation and presentation provisions of Accounting Principles Board Opinion 15 and related interpretations. Statement No. 128 is effective for the Company's fiscal year ending December 31, 1997. Retroactive application will be required. The Company expects the effect of adopting the new standard to be immaterial. 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 consists 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 an agreed upon price of 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 equivalents decreased $2 million in the first six months of 1997, primarily due to increased investments in domestic operations and in working capital. The increased working capital requirement was funded with short-term borrowings. For the six months ended June 30, 1997, domestic short term borrowings averaged $29 million for 181 days compared to $6 million for 134 days in 1996. The Company currently has revolving domestic bank credit facilities aggregating $50 million and a separate line of credit for approximately $2.5 million for its United Kingdom subsidiary. As of June 30, 1997, $9 million of the credit line was utilized to provide a bank letter of credit to secure insurance obligations. Management believes the Company's operating cash flow, along with the bank credit lines, is sufficient to meet future liquidity requirements. In June, the Company completed the sale of its Grain Systems division to CTB, Inc., for approximately $34 million in cash. The net cash proceeds from the sale of approximately $23 million will be used to fund investments in Butler's core building products businesses and repurchase shares of the Company's common stock. CTB, Inc. is a privately owned company that owns several agricultural equipment entities, including Brock Manufacturing Company, a grain storage business based in Indiana. In June, the Company's Board of Directors authorized the repurchase of up to 800,000 shares of the Company's common stock. This share repurchase authorization replaces a prior 500,000 share authorization granted in September, 1995. Capital expenditures were $13.1 million for the first six months of 1997 compared to $10.8 million a year ago. Total capital expenditures are projected to be approximately $31 million in 1997 compared to actual expenditures of $22.7 million in 1996. This year's anticipated capital expenditures are primarily for investments in Butler's domestic operations. Last year's expenditures included significant investments in new metal buildings plants in China and Brazil. RESULTS OF OPERATIONS Net sales of $241 million for the quarter ended June 30, 1997 were 25% higher than the same quarter last year. Each business unit, with the exception of Grain Systems, experienced higher quarterly sales. In addition, Butler Real Estate recorded two major project sales during the quarter as compared to none in the same period in 1996. For the six months ended June 30, 1997, net sales were $429 million, or a 16% increase from a year ago. The Building Systems Segment had increased volume as did the Other Building Products Segment. The second quarter 1997 consolidated gross profit was $41.3 million compared to $36.4 million a year ago. The increase was primarily due to increased volume in the Building Systems and Other Building Products segments. For the six months ended June 30, 1997, consolidated gross profit was $73.4 million compared to $68.1 million in 1996. The 8% increase was attributable to the Building Systems and Other Building Products segments. Net earnings from operations for the quarter ended June 30, 1997 were $5.7 million or $.74 per common share compared to $5.8 million or $.75 per common share in 1996. The decrease was primarily due to changes in the mix of business and slightly higher levels of price discounting in response to competition in our U.S. metal buildings business. Total second quarter net earnings of $19 million, or $2.46 per common share, includes $13.3 million, or $1.72 per common share, from the June 23 sale of our Grain Systems business. The net earnings from operations for the six months Page 7 8 ended June 30, 1997 were $7.6 million or $.99 per common share, compared to $9.1 million or $1.18 per common share a year ago. Total net earnings for the six months of $20.9 million or $2.71 per common share, includes the sale of our Grain Systems business. Earnings were affected by start-up costs of the new metal buildings plants in China and Brazil. The Construction Services Segment also experienced lower earnings than a year ago due to decreased volume. Total backlog of $301 million is up 6% above the June 30, 1996 level. FORWARD LOOKING INFORMATION 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 July 16, 1997 letter to shareholders, which is attached as exhibit 19. Page 8 9 PART II. - OTHER INFORMATION Item 5 Other Information Butler Manufacturing Company filed a Registration Statement on Form S-3 dated June 20, 1997, for 191,777 shares of the Company's common stock acquired by former shareholders of Modu-Line Windows, Inc. in connection with the Company's acquisition of Modu-Line. Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits (19) July 16, 1997 letter to shareholders (27) Financial Data Schedule (b) Reports on Form 8-K. Butler Manufacturing Company filed a Current Report on Form 8-K dated June 23, 1997, in which the Company confirmed the sale of its Grain Systems division to CTB, Inc., for approximately $34 million in cash. CTB, Inc. is a privately-owned company whose primary business focus is on related agricultural products and markets. Page 9 10 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 8/6/97 /s/ John J. Holland - ------ ------------------------------- Date John J. Holland Vice President - Finance and Chief Financial Officer 8/6/97 /s/ Richard O. Ballentine - ------ ------------------------------- Date Richard O. Ballentine Vice President, General Counsel and Secretary Page 10 11 EXHIBIT INDEX Exhibit Number Description - ------- ------------------------------------ 19 July 16, 1997 letter to shareholders 27 Financial Data Schedule Page 11 EX-19 2 LETTER TO SHAREHOLDERS 1 Exhibit 19 Butler Manufacturing Company SECOND QUARTER REPORT 1997 Six Months Ended June 30, 1997 BMA TOWER PENN VALLEY PARK KANSAS CITY, MO 64108 To Our Shareholders: Butler's second quarter sales of $241 million were 25% higher than a year ago. Net earnings from operations were $5.7 million, compared with $5.8 million for the second quarter of 1996. Our total reported second quarter earnings of $19 million, or $2.46 per share, includes $13.3 million, or $1.72 per share, from the sale of our Grain Systems business on June 23. Every business unit in the company except Grain Systems had increased quarterly sales, but operating income, as expected, was essentially flat. For the first six months of this year, sales of $429 million were 16% higher than 1996. Year-to-date net operating earnings of $7.6 million, or $.99 per share, compared with net operating earnings of $9.1 million, or $1.18 per share, for the first half of last year. Through the first five months of 1997, contract awards for new nonresidential building projects in the United States (as reported by F. W. Dodge) were up 3% based on square footage, and up 1% in dollar value, compared to 1996. Against this backdrop, our U.S. metal buildings business had a similarly modest increase in orders and achieved about 5% higher first half sales. Earnings, however, were lower, primarily because of changes in the mix of sales and slightly higher levels of price discounting in response to competitive conditions. Butler Real Estate successfully completed two major project sales in June which contributed significantly to quarterly and year-to-date earnings. Our European metal building systems business continues to make excellent progress in dealer development and manufacturing and engineering productivity improvement. The business recorded a larger loss in the first half of 1997 than in the comparable 1996 period, due almost entirely to the strength of the British pound against the German mark. We are investing over $1 million to produce structural frames at our new facility in Hungary, which will lower fabrication and transportation costs and address currency translation concerns. Production is scheduled to commence late this year. Sales activity at our new subsidiaries in China and Brazil is good, and backlog at both business units is on plan. We expect both operations to become profitable during the second half of the year. The Vistawall Architectural Products business is having another excellent year. Six month sales were up 23% from a year ago, and profitability was also higher. In June we announced the acquisition of Modu-Line Windows, Inc. for about 192,000 shares of Butler stock having a market value of approximately $7 million, and paid approximately $4.5 million cash, which was used to retire Modu-Line's existing bank debt. This company is a long-established leading manufacturer of high quality architectural windows for the nonresidential building market. 2 Modu-Line currently has annual sales of about $16 million, is highly synergistic with Vistawall's other products and distribution, and is expected to be accretive to Butler's earnings per share in 1997. The sale in June of Butler's grain storage business was a corporate milestone, since this was one of the company's earliest and most recognized product lines. The business's many strengths and attractive profit economics made it appealing to the purchaser, CTB, Inc., whose primary business focus is on related agricultural products and markets. On the cash sale price of about $34 million, Butler recorded an after tax gain of $13.3 million, and realized net cash proceeds of about $23 million. This transaction further increases our ability to invest in our core building product businesses. The Board of Directors also authorized the repurchase of up to 800,000 shares of Butler stock (about 10% of the outstanding shares), replacing an earlier repurchase authorization of 500,000 shares. Our total backlog on June 30, 1997 was $301 million, up 6% from a year ago. Product backlog was up 12% and construction backlog was down 15%. We expect a strong third quarter and second half for all of our businesses. However, because of larger than anticipated first half losses in Europe and the absence of Grain Systems in the second half, Butler's full year operating earnings will likely be slightly lower than the $3.35 per share we earned a year ago. Cordially yours, /s/ Robert H. West Robert H. West Chairman and Chief Executive Officer July 16, 1997 Butler Manufacturing Company EX-27 3 FDS
5 This schedule contains summary financial information extracted from Butler Manufacturing Company Consolidated Statements of Operations for the quarter ended June 30, 1997, and Consolidated Balance Sheet as of June 30, 1997, and is qualified in its entirety by reference to such financial statements. 0000015840 BUTLER MANUFACTURING COMPANY 1,000 6-MOS DEC-31-1997 JAN-01-1997 JUN-30-1997 15 0 126,888 0 75,013 250,453 224,307 142,034 379,055 174,559 39,287 0 0 12,623 164,399 379,055 429,180 429,409 355,777 355,777 57,653 0 2,910 35,069 14,181 7,589 0 13,299 0 20,888 2.71 2.71 Reflects long-term debt, less current maturities Reflects other stockholders' equity before deduction of $26.2 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
-----END PRIVACY-ENHANCED MESSAGE-----