-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, eKh/Xl5fdYZlEZbVU8vovwZXVtrX/TV83lrxRlXP5hwltdxaOF5xeA8NZCYCpvbU 78QXM6hUPBmxV6zE4d8hxA== 0000030067-95-000010.txt : 19950814 0000030067-95-000010.hdr.sgml : 19950814 ACCESSION NUMBER: 0000030067-95-000010 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19950630 FILED AS OF DATE: 19950811 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: DRAVO CORP CENTRAL INDEX KEY: 0000030067 STANDARD INDUSTRIAL CLASSIFICATION: MINING, QUARRYING OF NONMETALLIC MINERALS (NO FUELS) [1400] IRS NUMBER: 250447860 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-05642 FILM NUMBER: 95561929 BUSINESS ADDRESS: STREET 1: 3600 ONE OLIVER PLZ CITY: PITTSBURGH STATE: PA ZIP: 15222-2651 BUSINESS PHONE: 2054322651 MAIL ADDRESS: STREET 1: P O BOX 2068 CITY: MOBILE STATE: AL ZIP: 36652 10-Q 1 10-Q 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 For Quarter Ended: June 30, 1995 Commission File Number: 1-5642 DRAVO CORPORATION (Exact name of registrant as specified in its charter) Pennsylvania 25-0447860 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) One Oliver Plaza, Pittsburgh, Pennsylvania 15222 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (412) 566-3000 Indicate by check mark whether 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 (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No The number of shares outstanding of each of the registrant's classes of common stock as of July 31, 1995: Title of Class Shares Outstanding Common Stock, $1.00 par value 14,700,296 DRAVO CORPORATION AND SUBSIDIARIES INDEX PART I - FINANCIAL INFORMATION Page No. Consolidated Balance Sheets at June 30, 1995 and December 31, 1994 3, 4 Consolidated Statements of Operations for the Quarters ended June 30, 1995 and 1994 5 Consolidated Statements of Operations for the Six months ended June 30, 1995 and 1994 6 Consolidated Statements of Cash Flows for the Quarters ended June 30, 1995 and 1994 7, 8 Notes to Consolidated Financial Statements 9 - 14 Management's Discussion and Analysis of Financial Condition and Results of Operations 15, 16 PART II - OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders 17 Item 6. Exhibits and Reports on Form 8-K 17 SIGNATURES 18 -2- DRAVO CORPORATION AND SUBSIDIARIES Consolidated Balance Sheets ($ in 000's) June 30, December 31, 1995 1994 (unaudited)
ASSETS Current assets: Cash and cash equivalents $ 399 $ 2,027 Accounts receivable, net 24,811 140,602 Notes receivable, net 1,421 2,803 Inventories 13,433 12,638 Other current assets 2,409 2,067 Total current assets 42,473 160,137 Advances to and equity in joint ventures 2,384 2,536 Notes receivable 3,614 5,061 Other assets 19,805 21,281 Deferred income taxes 24,853 24,853 Property, plant and equipment 215,084 195,333 Less: accumulated depreciation and amortization 104,678 101,872 Net property, plant and equipment 110,406 93,461 Total assets $203,535 $307,329
See accompanying notes to consolidated financial statements. -3- DRAVO CORPORATION AND SUBSIDIARIES Consolidated Balance Sheets ($ in 000's) June 30, December 31, 1995 1994 (unaudited) LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities: Current portion of long-term notes $ 6,080 $ 85,077 Accounts payable - trade 18,213 36,257 Income taxes 621 352 Accrued insurance 1,226 2,265 Accrued retirement contribution 909 2,388 Net liabilities of discontinued operations 8,859 13,547 Other current liabilities 7,683 13,912 Total current liabilities 43,591 153,798 Long-term notes 49,438 42,440 Net liabilities of discontinued operations 5,904 8,445 Other liabilities 6,091 5,900 Redeemable preference stock: Par value $1, issued 200,000 shares: Series D, $12.35 cumulative, convertible, exchangeable (entitled in liquidation to $20.0 million) 20,000 20,000 Shareholders' equity: Preference stock, par value $1, authorized 1,878,870: Series B, $2.475 cumulative, convertible; issued 27,386 and 28,386 shares (entitled in liquidation to $1.5 million and $1.6 million); 26 28 Series D, reported above Common stock, par value $1, authorized 35,000,000 shares; issued 15,038,771 and 14,985,839 15,039 14,986 Other capital 63,920 63,554 Retained earnings 4,005 18 Treasury stock at cost: Common shares 345,691 and 119,221 (4,479) (1,840) Total shareholders' equity 78,511 76,746 Total liabilities and shareholders' equity $203,535 $307,329
See accompanying notes to consolidated financial statements. -4- DRAVO CORPORATION AND SUBSIDIARIES Consolidated Statements of Operations (unaudited, $ in 000's, except per share data) Quarters ended June 30, 1995 1994
Revenue $ 35,697 $ 72,628 Cost of revenue 26,217 59,982 Gross profit 9,480 12,646 Selling, general and administrative expenses 5,502 7,337 Earnings from operations 3,978 5,309 Other income (expense): Equity in earnings of joint ventures 234 441 Other income 3 210 Interest income 0 212 Interest expense (1,291) (2,397) Net other income (expense) (1,054) (1,534) Earnings before taxes 2,924 3,775 Provision for income taxes 206 626 Net earnings 2,718 3,149 Preference dividends 634 636 Net earnings available for common shares $ 2,084 $ 2,513 Earnings per share: Operations $ 0.14 $ 0.17 Weighted average shares outstanding 14,896 14,923
See accompanying notes to consolidated financial statements. -5- DRAVO CORPORATION AND SUBSIDIARIES Consolidated Statements of Operations (unaudited, $ in 000's, except per share data) Six Months ended June 30, 1995 1994
Revenue $ 69,602 $ 130,309 Cost of revenue 51,421 110,089 Gross profit 18,181 20,220 Selling, general and administrative expenses 10,693 14,816 Earnings from operations 7,488 5,404 Other income (expense): Equity in earnings of joint ventures 468 778 Other income 182 616 Interest income 75 344 Interest expense (2,564) (4,638) Net other income (expense) (1,839) (2,900) Earnings before taxes 5,649 2,504 Provision for income taxes 396 626 Earnings before cumulative accounting change 5,253 1,878 Cumulative effect of accounting change -- (1,361) Net earnings 5,253 517 Preference dividends 1,268 1,273 Net earnings (loss) available for common shares $ 3,985 $ (756) Earnings (loss) per share: Operations $ 0.27 $ 0.04 Cumulative effect of accounting change -- (0.09) Total $ 0.27 $ (0.05) Weighted average shares outstanding 14,908 14,855
See accompanying notes to consolidated financial statements. -6- DRAVO CORPORATION AND SUBSIDIARIES Consolidated Statements of Cash Flows (unaudited, $ in 000's) Six Months ended June 30, 1995 1994
CASH FLOWS FROM OPERATING ACTIVITIES: Net earnings $ 5,253 $ 1,878 Adjustments to reconcile net earnings to net cash provided (used) by continuing operations activities: Depreciation and amortization 4,297 8,722 Change in accounting principle -- (1,361) Gain on sale of assets -- (616) Equity in joint ventures 152 (194) Changes in assets and liabilities: Increase in accounts receivable (4,673) (1,448) Decrease in notes receivable 329 670 Decrease (increase) in inventories (795) 2,594 Increase in other current assets (68) (2,575) Increase (decrease) in accounts payable and accrued expenses (26,111) 12,332 Increase in taxes payable 269 346 Decrease (increase) in other assets 1,476 (2,870) Decrease in deferred tax asset -- 413 Increase in other liabilities 191 75 Net cash provided (used) by continuing operations activities (19,680) 17,966 Decrease in net liabilities of discontinued operations (6,929) (3,866) Proceeds from repayment of notes receivable from sale of discontinued operations 2,200 800 Net cash used by discontinued operations activities (4,729) (3,066) Net cash provided (used) by operating activities (24,409) 14,900 CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from sale of assets 120,464 1,021 Additions to property, plant and equipment (22,196) (18,079) Other, (net) 1 1 Net cash provided (used) by investing activities $ 98,269 $(17,057)
See accompanying notes to consolidated financial statements. -7- DRAVO CORPORATION AND SUBSIDIARIES Consolidated Statements of Cash Flows (unaudited, $ in 000's) Six Months ended June 30, 1995 1994
CASH FLOWS FROM FINANCING ACTIVITIES: Net borrowing under revolving credit agreements $ 13,148 $ 4,700 Principal payments under long-term notes (85,148) (1,016) Proceeds from issuance of common stock 419 41 Purchase of treasury stock (2,639) -- Dividends on preference stock (1,268) (1,273) Net cash provided (used) by financing activities (75,488) 2,452 Net increase (decrease) in cash and cash equivalents (1,628) 295 Cash and cash equivalents at beginning of period 2,027 808 Cash and cash equivalents at end of period $ 399 $ 1,103 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid (received) during the period for: Interest (net of amount capitalized) $ 3,073 $ 4,558 Income tax 127 (133)
See accompanying notes to consolidated financial statements. -8- DRAVO CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements (1) Basis of Presentation The accompanying consolidated financial statements include the accounts of Dravo Corporation and its majority-owned subsidiaries (the company). The principal subsidiaries are Dravo Lime company, one of the nation's largest lime producers, and Dravo Basic Materials Company, Inc. (DBM). The company completed a transaction on December 30, 1994 in which it sold substantially all the assets and certain liabilities of DBM. The assets and liabilities sold have been removed from the company's June 30, 1995 and December 31, 1994 balance sheets. The June 30, 1994 statement of operations includes the results of DBM for the quarter. Significant intercompany balances and transactions have been eliminated in the consolidation process. These unaudited consolidated financial statements include all adjustments, consisting only of normal, recurring accruals, which management considers necessary for a fair presentation of the company's consolidated financial position, results of operations, and cash flows for the interim periods presented. Certain reclassifications of previously reported balances have been made to conform to the current period's presentation. (2) Inventories Inventories are classified as follows: ($ in 000's) June 30, December 31, 1995 1994
Finished goods $ 1,751 $ 1,834 Materials and supplies 11,682 10,804 Net inventories $13,433 $12,638
Inventories are valued at average production cost or market, whichever is lower. The cost of products produced includes raw materials, direct labor, and operating overhead. -9- DRAVO CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements (3) Contingent Liabilities The company has been notified by the federal Environmental Protection Agency (EPA) that the EPA believes the company is a potentially responsible party (PRP) for the clean-up of soil and groundwater contamination at four subsites in Hastings, Nebraska. The Hastings site is one of the EPA's priority sites for taking remedial action under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA). At one of these subsites, a municipal landfill, the company believes it could not have disposed of hazardous wastes at the particular subsite because the landfill was closed prior to the time the company and its predecessor initiated the operation which generated the type of hazardous substances found at this subsite. Other PRPs, including the local municipality, have agreed to perform the remedial investigation and to design soil and groundwater remedies at this subsite. The company has agreed to participate in an EPA initiated allocation proceeding for this subsite. The company has also been notified by EPA that EPA considers it a PRP at another municipal landfill in Hastings. At least three other parties (including the City of Hastings) are considered by EPA to be PRPs at this second subsite. At this subsite, the company has concluded that the City of Hastings is responsible for a proper closure of the landfill and the remediation of any release of hazardous substances. In January, 1994, EPA invited the company and the other PRPs to make an offer to conduct a remedial investigation and feasibility study (RI/FS) of this subsite and stated that the EPA was in the process of preparing a work plan for the RI/FS. None of the PRPs has volunteered to undertake the RI/FS. With respect to the third subsite, the company and two other PRPs have been served with administrative orders directing them to undertake soil remediation and interim groundwater remediation at that subsite. The company is currently complying with these orders while reserving its right to seek reimbursement from the United States for its costs if it is determined it is not liable for response costs or if it is required to incur costs because of arbitrary, capricious or unreasonable requirements imposed by the EPA. The EPA has taken no legal action with respect to its demand that the company and the other PRPs pay its past response costs. A total of five parties have been named by the EPA as PRPs at this subsite, but two of them have been granted de minimis status. The company believes other persons should also be named as PRPs. The fourth subsite is a former naval ammunition depot which was subsequently converted to an industrial park. The company and its predecessor owned and operated an HVAC facility in this industrial park. To date the company's investigation indicates that it did not cause the release of hazardous substances in this subsite during the time it owned and operated the facility. The United States has undertaken to conduct the remediation of this subsite. -10- DRAVO CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements (3) Contingent Liabilities (continued) In addition to subsite clean-up, the EPA is seeking a clean-up of area- wide contamination associated with all of the subsites in and around Hastings, Nebraska. The company, along with other Hastings PRPs, has recommended that the EPA adopt institutional controls as the area-wide remedy in Hastings. EPA has indicated some interest in this proposal but has decided to first conduct an area-wide remedial investigation before choosing a remedy. On August 10, 1992 the company filed suit in the Alabama District Court against its primary liability insurance carriers and one of its predecessor's insurers, seeking a declaratory judgment that the company is entitled to a defense and indemnity under its contracts of insurance (including certain excess policies provided by one of the primary carriers) with regard to the third Hastings subsite. The company recently settled the claim against its predecessor's insurer, but the case against the company's insurers is still in litigation. An award of punitive damages is also being sought against the company's insurers for their bad faith in failing to investigate the company's claim and/or denying the company's claim. The company has notified its primary and excess general liability carrier, as well as the excess carrier of its predecessor, of the receipt of its notice of potential liability at the first, second and fourth subsites. Estimated total clean-up costs, including capital outlays and future maintenance costs for soil and groundwater remediation of approximately $18 million, are based on independent engineering studies. Included in the discontinued operations provision is the company's estimate that it will participate in 33 percent of these remediation costs. The company's estimated share of the costs is based on its assessment of the total clean-up costs, its potential exposure, and the viability of other named PRPs. In 1990, the company filed an action now pending in Luzerne County, Pennsylvania alleging breach of contract and unjust enrichment arising out of the termination of a construction contract for the Hazleton Gasification Facility Expansion. The suit named as defendants Continental Energy Associates (CEA), the project owner; Continental Cogeneration Corporation (CCC), the general partner of CEA; and Swiss Bank Corporation, the project lender. CEA and CCC filed a separate suit against the company which, as amended, seeks damages for breach of contract, negligent design and construction, negligent misrepresentation, fraud and tortious interference with the contract of surety. The two suits, along with a third action commenced by CEA and CCC against the company's surety, the Insurance Company of North America, have been consolidated. Documents produced by CEA and CCC during the course of discovery allege claims at an amount from approximately $10 million to approximately $35 million. However, the construction contract contains a provision limiting damages to the value of the contract (a net of approximately $10 million) which the company would seek to have specifically enforced. -11- DRAVO CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements (3) Contingent Liabilities (continued) In late 1994, both CEA and CCC filed for protection from creditors under Chapter 11 of the United States Bankruptcy Code. In January 1995, the Bankruptcy Court entered an order approving non-binding mediation of the dispute with the company. As a result of the mediation, CEA, CCC and the company have reached an agreement setting forth the terms of a full and final settlement of the dispute. The settlement is subject to approval of the Bankruptcy Court and payment by the company of $2.8 million. The Court will conduct a hearing on the proposed agreement August 14, 1995. The company's contribution to the settlement will be charged against the previously established reserve for discontinued operations. Other claims and assertions made against the company will be resolved, in the opinion of management, without material additional charges to earnings. The company has asserted claims that management believes to be meritorious, but no estimate can be made at present of the timing or the amount of recovery. -12- DRAVO CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements (4) Discontinued Operations In December, 1987, Dravo's Board of Directors approved a major restructuring program which concentrated the company's future direction exclusively on opportunities involving its natural resources business. The plan included the sale or other disposition of the former Engineering and Construction segment. The remaining discontinued operations' assets and liabilities at June 30, 1995 and December 31, 1994 relate to non-cancelable leases, insurance, environmental, legal and other matters associated with exiting the engineering and construction business and are presented below: ($ in 000's) June 30, December 31, 1995 1994
Current assets: Accounts and retainers receivable $ -- $ 24 Total current assets -- 24 Accounts and retainers receivable 444 444 Other 5,121 5,121 Total assets $ 5,565 $ 5,589 Current liabilities: Accounts and retainers payable $ 63 $ 63 Accrued loss on leases 2,279 2,315 Other 6,517 11,193 Total current liabilities 8,859 13,571 Accrued loss on leases 4,534 5,632 Other 6,935 8,378 Total liabilities $ 20,328 $ 27,581 Net liabilities and accrued loss on leases of discontinued operations $(14,763) $(21,992)
-13- DRAVO CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements (5) Pro forma Information The company completed a transaction on December 30, 1994 in which it sold to Martin Marietta Materials, Inc. (Martin Marietta), effective January 3, 1995, substantially all the assets of its construction aggregates business. Assets sold included the assets, properties and leases of Dravo Basic Materials Company, Inc. (DBM), a wholly-owned subsidiary of the company, and Atchafalaya Mining Company, Inc. (AMC), a wholly-owned subsidiary of DBM, used in the production, marketing, distribution and sale of various aggregate products. Also sold was the capital stock of Dravo Bahama Rock Limited (DBR), a wholly-owned foreign subsidiary of DBM. Pro forma data is provided below for comparative purposes only and does not purport to be indicative of the results which actually would have been obtained if the disposition had been effected on the pro forma dates, or other results which may be obtained in the future. The following pro forma statement of operations presents the results of operations assuming the disposition had been completed as of the beginning of 1994. Adjustments have been made to exclude the results of DBM, to decrease interest expense for loans prepaid in early 1995 from the sale proceeds, and to record interest income at overnight investment rates for cash received in excess of liabilities paid. ($ in 000's, except per share data) Quarters ended Six Months ended June 30, June 30, 1995 1994 1995 1994 Actual Pro Forma Actual Pro Forma
Revenue $ 35,697 $ 31,238 $ 69,602 $ 61,301 Gross profit 9,480 8,552 18,181 15,381 Selling, general and administrative expenses 5,502 4,321 10,693 8,767 Other income 237 825 725 1,660 Interest expense (1,291) (1,176) (2,564) (2,303) Earnings before taxes 2,924 3,880 5,649 5,971 Income tax expense 206 272 396 418 Earnings from continuing operations 2,718 3,608 5,253 5,553 Earnings per share, continuing operations 0.14 0.20 0.27 0.29
-14- DRAVO CORPORATION AND SUBSIDIARIES Management's Discussion and Analysis of Financial Condition and Results of Operations The company completed a transaction on December 30, 1994 in which it sold to Martin Marietta Materials, Inc., effective January 3, 1995, substantially all the assets of its construction aggregates business, Dravo Basic Materials Company, Inc. (DBM). As a result, the company has one principal operating subsidiary, Dravo Lime Company, a major U. S. lime producer. The statements of operations for the quarter and six month periods ending June 30, 1994 include DBM. For a more meaningful comparison, the current year's results should be compared to last year's results on a pro forma basis. The pro forma results assume the DBM sales transaction occurred prior to 1994 and are presented in Note 5 of the Notes to Consolidated Financial Statements. Second quarter earnings were $2.7 million, or 14 cents per common share, compared to $3.1 million, or $.17 per share, last year. Gross profit from lime operations was up $725,000 over the year ago quarter as the demand for lime continues to be very strong. While selling, administrative and interest expenses were significantly lower than last year, they did not offset the income generated by DBM in the second quarter of 1994. The second quarter typically was a strong period for DBM. Administrative expenses were higher than anticipated due to costs in closing the company's offices in Mobile, Alabama and start-up costs associated with outsourcing of the company's mainframe computer and payroll functions. Year-to-date earnings of $5.3 million, or 27 cents per share, far exceeded last year's earnings of $517,000, or a loss of five cents per share after payment of preferred dividends. The improvement reflects strong demand for lime from electric utilities and key non-utility markets, particularly steel and pulp & paper. Also contributing to the net earnings improvement was a substantial reduction in general and administrative expenses due to reduced personnel levels and interest expense as the company used the proceeds from the DBM sale to reduce debt. Last year's results included a $1.4 million charge, nine cents per share, related to adoption of Statement of Financial Accounting Standards No. 112, "Employers' Accounting for Postemployment Benefits". Significant changes in the company's balance sheet from year-end 1994 to June 30, 1995 occurred as a result of the collection of $120.5 million on January 3, 1995 from the sale of DBM's assets. The proceeds were used to reduce debt over $85 million, satisfy DBM's accounts payable and finance ongoing capital projects. Capital expenditures of $17 million are primarily due to construction of two new lime kilns and related material handling equipment at the company's Black River lime facility in northern Kentucky. The expansion of the Black River facility is nearly complete. Delays in the completion of the product handling and loadout phases of the project and a prolonged start-up period for the new kilns are currently being resolved. -15- DRAVO CORPORATION AND SUBSIDIARIES Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) Also, an aggregates plant is currently under construction at the company's Longview lime facility near Birmingham, Alabama. The plant will enable Longview to convert overburden that is unsuitable for lime production into marketable material, thus reducing lime production costs. In July, the company's Board of Directors approved a $20 million expansion project for a new kiln and upgrade of underground limestone mining operations at the company's lime facility located near Maysville, Kentucky. The expansion is expected to be completed by the end of 1996 and will increase production capacity by 350,000 tons. On May 15, 1995, the company reached an agreement to settle a long- standing dispute with Continental Energy Associates (CEA), the owner of a coal gasification facility built by Dravo in Hazleton, Pennsylvania. Currently in reorganization, CEA has committed as part of this agreement to seek approval for the settlement from the U. S. Bankruptcy Court. The Court will conduct a hearing on the proposed agreement August 14, 1995. If approved, all disputes between the various parties involved in the matter would be resolved. The agreement calls for the company to make a $2.8 million lump sum payment to CEA. The payment will be charged against the previously established reserve for discontinued operations and, therefore, will not impact current earnings. -16- DRAVO CORPORATION AND SUBSIDIARIES PART II - Other Information Item 4. Submission of Matters to a Vote of Security Holders The annual meeting of shareholders was held on April 27, 1995 in Pittsburgh, Pennsylvania. Listed below are the proposals submitted to shareholders in the company's Proxy Statement dated March 27, 1995 and the results of the shareholder votes. Election of two directors for a three year term: For Withheld Carl A. Gilbert 12,831,092 148,702 William G. Roth 12,746,494 180,100 Following the election, the company' Board of Directors consisted of Mr. Gilbert, Mr. Roth, Mr. Arthur E. Byrnes, Mr. James C. Huntington, Jr., Mr. William E. Kassling, and Mr. Konrad M. Weis. Election of Certified Public Accountants: For Against Abstain KPMG Peat Marwick 12,856,573 62,089 34,532 Shareholder proposal to amend the company's bylaws regarding presentation of individuals nominated by a shareholder to be a Director: For Against Abstain 982,955 6,412,186 362,766 Item 6. Exhibits and Reports on Form 8-K (a) Exhibits The following is filed as an exhibit to Part I of this Form 10-Q: Exhibit No. 11 - Statement re computation of per share earnings. (b) Reports on Form 8-K The Company filed a Form 8-K reporting a change in accountants auditing the company's qualified savings plan. -17- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. DRAVO CORPORATION (Registrant) Date: August 11, 1995 /s/ERNEST F. LADD III Ernest F. Ladd III Executive Vice President and Chief Financial Officer Date: August 11, 1995 /s/LARRY J. WALKER Larry J. Walker Vice President and Controller (Principal Accounting Officer) -18- EX-11 2 EARNINGS PER SHARE CALCULATION Exhibit 11. Statement Re Computation of Per Share Earnings (In 000's, except per share data)
Quarters ended June 30, 1995 1994 Primary Earnings: Net earnings $ 2,718 $3,149 Deduct dividends on preference stock 634 636 Net earnings applicable to common stock $ 2,084 $ 2,513 Shares: Weighted average number of common shares outstanding 14,750 14,858 Dilutive effect of outstanding options and rights (as determined by the application of the treasury stock method at the average market price for the period) 146 65 Weighted average number of shares outstanding, as adjusted 14,896 14,923 Primary earnings per share: $ 0.14 $ 0.17 Fully diluted Earnings: Net earnings $ 2,718 $ 3,149 Deduct dividends on preference stock (1) 634 636 Net earnings applicable to common stock $ 2,084 $ 2,513 Shares: Weighted average number of common shares outstanding 14,750 14,858 Dilutive effect of outstanding options and rights (as determined by the application of the treasury stock method at the higher of the closing or the average market price for the period) 226 65 Weighted average number of shares outstanding, as adjusted 14,976 14,923 Fully diluted earnings per share $ 0.14 $ 0.17
-19- Exhibit 11. Statement Re Computation of Per Share Earnings (continued) (In 000's, except per share data) Quarters ended June 30, Additional Fully Diluted Computation (2) 1995 1994
Earnings: Net earnings $ 2,718 $ 3,149 Shares: Weighted average number of common shares outstanding 14,750 14,858 Dilutive effect of outstanding options and rights (as determined by the application of the treasury stock method at the higher of the closing or average market price for the period) 226 65 Shares issuable from assumed exercise of convertible preference stock 1,686 1,699 Weighted average number of shares outstanding, as adjusted 16,662 16,622 Fully diluted earnings per share $ 0.16 $ 0.19
(1) The inclusion of preference stock in the fully dilutive computation would have an anti-dilutive effect on earnings per share. (2) This calculation is submitted in accordance with Securities Exchange Act of 1934, Regulation S-K, paragraph 229.601 (b)(11) although it is contrary to paragraph 40 of APB Opinion No. 15 because it produces an anti-dilutive result. -20- Exhibit 11. Statement Re Computation of Per Share Earnings (In 000's, except per share data) Six Months ended June 30, 1995 1994
Primary Earnings: Earnings before cumulative effect of accounting change $ 5,253 $ 1,878 Deduct dividends on preference stock 1,268 1,273 Earnings before cumulative effect of accounting change applicable to common stock 3,985 605 Cumulative effect of accounting change -- (1,361) Net earnings (loss) applicable to common stock $ 3,985 $ (756) Shares: Weighted average number of common shares outstanding 14,800 14,855 Dilutive effect of outstanding options and rights (as determined by the application of the treasury stock method at the average market price for the period) 108 --(1) Weighted average number of shares outstanding, as adjusted 14,908 14,855 Primary earnings (loss) per share: Operations $ 0.27 $ 0.04 Cumulative effect of accounting change -- (0.09) Net earnings (loss) per share $ 0.27 $ (0.05) Fully diluted Earnings: Net earnings $ 5,253 $ 517 Deduct dividends on preference stock (2) 1,268 1,273 Net earnings (loss) applicable to common stock $ 3,985 $ ( 756) Shares: Weighted average number of common shares outstanding 14,800 14,855 Dilutive effect of outstanding options and rights (as determined by the application of the treasury stock method at the higher of the closing or the average market price for the period) 226 --(1) Weighted average number of shares outstanding, as adjusted 15,026 14,855
-21- Exhibit 11. Statement Re Computation of Per Share Earnings (continued) (In 000's, except per share data) Six Months ended June 30, 1995 1994
Fully diluted earnings (loss) per share: Operations $ 0.27 $ 0.04 Cumulative effect of accounting change -- (0.09) Net earnings (loss) per share $ .27 $ (0.05) Additional Fully Diluted Computation (3) Earnings: Net earnings $ 5,253 $ 517 Shares: Weighted average number of common shares outstanding 14,800 14,855 Dilutive effect of outstanding options and rights (as determined by the application of the treasury stock method at the higher of the closing or average market price for the period) 226 76 Shares issuable from assumed exercise of convertible preference stock 1,688 1,700 Weighted average number of shares outstanding, as adjusted 16,714 16,631 Fully diluted earnings per share $ 0.31 $ 0.03
(1) The inclusion of outstanding options and rights in the computation would have an anti-dilutive effect on earnings per share. (2) The inclusion of preference stock in the fully dilutive computation would have an anti-dilutive effect on earnings per share. (3) This calculation is submitted in accordance with Securities Exchange Act of 1934, Regulation S-K, paragraph 229.601 (b)(11) although it is contrary to paragraph 40 of APB Opinion No. 15 because it produces an anti-dilutive result. -22- EX-27 3 FINANCIAL DATA SCHEDULE WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM DRAVO CORPORATION'S JUNE 30, 1995 FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 QTR-2 6-MOS DEC-31-1995 DEC-31-1995 JUN-30-1995 JUN-30-1995 399 399 0 0 26340 26340 108 108 13433 13433 42473 42473 215084 215084 104678 104678 203535 203535 43591 43591 0 0 15039 15039 20000 20000 26 26 63446 63446 203535 203535 35697 69602 35697 69602 26217 51421 26217 51421 0 0 0 0 1291 2564 2924 5649 206 396 2718 5253 0 0 0 0 0 0 2718 5253 .14 .27 .14 .27
-----END PRIVACY-ENHANCED MESSAGE-----