-----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, mLC9g+3f/wMaUTWTeZGxHq7KBHRR38Zy+zb9/1S2VNOvxeifTcVdeQXq/jHNhu14 WOsIbUPz/o+hiZ+9mnVEyA== 0000950123-95-001377.txt : 19950517 0000950123-95-001377.hdr.sgml : 19950516 ACCESSION NUMBER: 0000950123-95-001377 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950512 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: FOSTER WHEELER CORP CENTRAL INDEX KEY: 0000038321 STANDARD INDUSTRIAL CLASSIFICATION: HEAVY CONSTRUCTION OTHER THAN BUILDING CONST - CONTRACTORS [1600] IRS NUMBER: 131855904 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-00286 FILM NUMBER: 95537814 BUSINESS ADDRESS: STREET 1: PERRYVILLE CORPORATE PARK CITY: CLINTON STATE: NJ ZIP: 08809 BUSINESS PHONE: 9087304090 10-Q 1 FOSTER WHEELER CORPORATION - FORM 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 _______________________ /X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the quarterly period ended March 31, 1995 OR / / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the transition period from _______ to _______ Commission File Number 1-286-2 FOSTER WHEELER CORPORATION (Exact name of registrant as specified in its charter) New York 13-1855904 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) Perryville Corporate Park, Clinton, N. J. 08809-4000 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (908) 730-4000 (Not Applicable) Former name, former address and former fiscal year, if changed since last report. 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 ( ) Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of March 31, 1995 was 35,828,610 shares. 2 FOSTER WHEELER CORPORATION INDEX
Page No. -------- Part I Financial Information: Item 1 - Financial Statements: Condensed Consolidated Balance Sheet at March 31, 1995 and December 30, 1994 2 Condensed Consolidated Statement of Earnings Three Months Ended March 31, 1995 and April 1, 1994 3 Condensed Consolidated Statement of Cash Flows Three Months Ended March 31, 1995 and April 1, 1994 4 Notes to Condensed Consolidated Financial Statements 5 - 7 Item 2 - Management's Discussion and Analysis of Results of Operations and Financial Condition 8 - 9 Part II Other Information: Item 2 - Changes in Securities 10 Item 4 - Submission of Matters to a Vote of Security Holders 10 Item 6 - Exhibits and Reports on Form 8-K 11
- 1 - 3 PART I. FINANCIAL INFORMATION FOSTER WHEELER CORPORATION AND SUBSIDIARIES ITEM 1. - FINANCIAL STATEMENTS CONDENSED CONSOLIDATED BALANCE SHEET (IN THOUSANDS OF DOLLARS)
March 31, 1995 December 30, ASSETS (Unaudited) 1994 - ------ -------------- ------------ Current Assets: Cash and cash equivalents $ 212,704 $ 235,801 Short-term investments 103,888 118,561 Accounts and notes receivable 538,122 496,981 Contracts in process 200,873 171,144 Inventories 33,195 27,634 Prepaid and refundable income taxes 45,954 47,543 Prepaid expenses 12,849 15,045 ---------- ---------- Total Current Assets 1,147,585 1,112,709 Notes and accounts receivable - long-term 55,187 51,658 Investments and advances 47,977 42,665 Land, buildings and equipment - at cost less accumulated depreciation: 1995 - $262,271; 1994 - $249,590 565,266 566,156 Cost in excess of net assets of subsidiaries acquired 68,100 68,629 Deferred charges and prepaid pension cost 220,605 215,616 Deferred income taxes 10,777 5,901 ---------- ---------- Total Assets $2,115,497 $2,063,334 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY - ------------------------------------ Current Liabilities: Current installments on long-term debt $ 32,435 $ 32,565 Bank loans 99,691 77,350 Accounts payable and accrued expenses 322,940 351,209 Estimated cost to complete long-term contracts 327,806 294,881 Advance payments by customers 90,610 104,239 Income taxes 36,096 30,335 ---------- ---------- Total Current Liabilities 909,578 890,579 Long-term debt, less current installments 488,962 466,637 Other long-term liabilities, deferred credits, postretirement benefits other than pensions and minority interest in subsidiary companies 224,641 229,973 Deferred income taxes 21,572 19,651 ---------- ---------- Total Liabilities 1,644,753 1,606,840 ---------- ---------- Stockholders' Equity: Common stock 35,839 35,833 Paid-in capital 38,398 38,266 Retained earnings 432,118 420,861 Accumulated translation adjustment (35,316) (37,915) ---------- ---------- 471,039 457,045 Less cost of treasury stock 295 551 ---------- ---------- Total Stockholders' Equity 470,744 456,494 ---------- ---------- Total Liabilities and Stockholders' Equity $2,115,497 $2,063,334 ========== ==========
See notes to financial statements. - 2 - 4 FOSTER WHEELER CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF EARNINGS (IN THOUSANDS OF DOLLARS, EXCEPT PER SHARE AMOUNTS) (UNAUDITED)
Three Months Ended ------------------------------- March 31, 1995 April 1, 1994 -------------- ------------- Revenues: Operating revenues $635,993 $469,645 Other income 7,652 8,331 -------- -------- Total revenues 643,645 477,976 -------- -------- Costs and expenses: Cost of operating revenues 546,227 392,526 Selling, general and administrative expenses 54,130 49,731 Other deductions 13,896 8,891 Minority interest 1,163 1,023 -------- -------- Total costs and expenses 615,416 452,171 -------- -------- Earnings before income taxes 28,229 25,805 Provision for income taxes 10,349 10,402 -------- -------- Net earnings $ 17,880 $ 15,403 ======== ======== Weighted average number of common shares outstanding 35,819,048 35,731,019 ========== ========== Earnings per share $ .50 $ .43 ===== ===== Cash dividends paid per common share $ .185 $ .165 ====== ====== See notes to financial statements.
- 3 - 5 FOSTER WHEELER CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (IN THOUSANDS OF DOLLARS) (UNAUDITED)
Three Months Ended ------------------------------------ March 31, 1995 April 1, 1994 ------------------------------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net earnings $ 17,880 $ 15,403 Adjustments to reconcile net earnings to cash flows from operating activities: Depreciation and amortization 12,011 10,351 Noncurrent deferred tax (3,553) 5,576 Other (1,134) (995) Changes in assets and liabilities: Receivables (41,273) (16,372) Contracts in process and inventories (34,967) (22,120) Accounts payable and accrued expenses (31,694) (21,242) Estimated cost to complete long-term contracts 29,808 13,710 Advance payments by customers (15,400) 4,727 Income taxes 6,850 (2,359) Other assets and liabilities (2,649) (3,646) --------- --------- NET CASH USED BY OPERATING ACTIVITIES (64,121) (16,967) --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (9,255) (11,632) Changes in short-term investments 10,544 873 Changes in investments and advances (3,542) (4,512) Partnership distribution (4,883) (3,053) Other 222 2,894 --------- --------- NET CASH USED BY INVESTING ACTIVITIES (6,914) (15,430) --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES: Dividends to stockholders (6,623) (5,891) Proceeds from the exercise of stock options 92 1,795 Proceeds from long-term debt 26,229 3,914 Repayment of long-term debt (4,013) (4,040) Changes in short-term debt 23,772 36,797 Treasury stock issued 302 - --------- --------- NET CASH PROVIDED BY FINANCING ACTIVITIES 39,759 32,575 --------- --------- Effect of exchange rate changes on cash and cash equivalents 8,179 6,100 --------- --------- (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS (23,097) 6,278 Cash and cash equivalents at beginning of year 235,801 249,514 --------- --------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 212,704 $ 255,792 ========= ========= Cash paid during period: - Interest (net of amount capitalized) $ 4,426 $ 2,424 - Income taxes $ 6,292 $ 3,566
See notes to financial statements. - 4 - 6 FOSTER WHEELER CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (IN THOUSANDS OF DOLLARS, EXCEPT PER SHARE AMOUNTS) (UNAUDITED) 1. The condensed consolidated balance sheet as of March 31, 1995, and the related condensed consolidated statements of earnings and cash flows for the three month periods ended March 31, 1995 and April 1, 1994 are unaudited. In the opinion of management, all adjustments necessary for a fair presentation of such financial statements have been included. Such adjustments only consisted of normal recurring items. Interim results are not necessarily indicative of results for a full year. The financial statements and notes are presented as permitted by Form 10-Q and do not contain certain information included in the Corporation's 1994 Annual Report, Form 10-K filed March 24, 1995, which should be read in conjunction with this report. 2. In the ordinary course of business the Corporation and its subsidiaries enter into contracts providing for assessment of damages for nonperformance or delays in completion. Suits and claims have been or may be brought against the Corporation by customers alleging deficiencies in either equipment design or plant construction. The Corporation and its subsidiaries also routinely become involved in litigation relating to patents and other intellectual property. There are several actions of that nature presently pending. If the presently pending suits described above were sustained in substantially the amounts asserted, they would have a material adverse effect on the Corporation's financial condition and results of operations. However, based on its knowledge of the facts and circumstances relating to the Corporation's liabilities, if any, and to its insurance coverage, management believes that the disposition of such suits will not result in charges against assets or earnings materially in excess of amounts provided in the accounts. The Corporation and its subsidiaries, along with many other companies, are codefendants in numerous lawsuits pending in the United States and Canada, in which plaintiffs claim damages for personal injury or property damage alleged to arise from exposure to or use of asbestos. At March 31, 1995 and April 1, 1994, the suits pending numbered approximately 57,000 and 43,900, respectively. It is anticipated that a substantial number of similar suits will be filed in the future. Since the inception of asbestos-related litigation against the Corporation and its subsidiaries, approximately 50,000 lawsuits have been terminated without any payment or with only nominal payments by the insurers for the Corporation and its subsidiaries. Based on its knowledge of relevant facts and circumstances, on its determination of the availability and extent of insurance coverage, and on the advice of the Corporation's special counsel, the management of the Corporation is of the opinion that the ultimate disposition of pending and future asbestos-related lawsuits will not result in material charges against assets or earnings. The asbestos litigation herein described does not relate to any activities currently being carried on by the Corporation or its subsidiaries. 3. The Corporation's unsecured debt contains the following restrictions: The Note Agreement pursuant to which the 8.58% notes were issued and the Revolving Credit Agreement require that consolidated Tangible Net Worth, as defined in the agreements, be at least $400,000 plus 25% of earnings from 1991 and thereafter. At March 31, 1995, the consolidated Tangible - 5 - 7 FOSTER WHEELER CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (IN THOUSANDS OF DOLLARS, EXCEPT PER SHARE AMOUNTS) (UNAUDITED) (Continued) Net Worth was $534,355. The Note Agreement and the Revolving Credit Agreement also require the maintenance of certain capitalization ratios. Both agreements require that the ratio of Indebtedness to Tangible Net Worth, as those terms are defined in the agreements, not exceed .65 to 1. At March 31, 1995 this ratio was .55 to 1. 4. A total of 1,079,290 shares were reserved for issuance under the stock option plans; of this total 70,878 were not under option. 5. Foster Wheeler Corporation had a backlog of firm orders as of March 31, 1995 of $5,425,077 as compared to a backlog as of April 1, 1994 of $4,210,098. 6. Earnings per share data have been computed on the weighted average number of shares of common stock outstanding. Outstanding stock options have been disregarded because their effect on earnings per share would not be significant. 7. Interest income and cost for the following periods are:
Three Months Ended --------------------------------- March 31, 1995 April 1, 1994 -------------- ------------- Interest income $5,896 $6,179 ====== ====== Interest cost $11,093 $8,216 ======= ======
8. The total tax provision equaled 36.7% of income before taxes for the three months ended March 31, 1995 and 40.3% for the three months ended April 1, 1994. The tax provision for both quarters exceeded the 35% federal statutory rate primarily as a result of state taxes. - 6 - 8 FOSTER WHEELER CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (IN THOUSANDS OF DOLLARS, EXCEPT PER SHARE AMOUNTS) (UNAUDITED) (Continued) 9. Changes in stockholders' equity for the three months ended March 31, 1995 were as follows:
Common Stock Accumulated Treasury Stock Total ------------------- Paid-in Retained Translation --------------- Stockholders' Shares Amount Capital Earnings Adjustment Shares Amount Equity ------ ------ ------- -------- ----------- ------ ------ ------ Balance December 30, 1994 35,832,664 $35,833 $38,266 $420,861 $(37,915) (20,129) $(551) $456,494 Net earnings 17,880 17,880 Dividends paid - common (6,623) (6,623) Sold under stock options 6,750 6 86 92 Current period translation adjustment 2,599 2,599 Treasury stock issued under incentive plans 46 9,325 256 302 ---------- ------- ------- -------- -------- ------- ----- -------- Balance March 31, 1995 35,839,414 $35,839 $38,398 $432,118 $(35,316) (10,804) $(295) $470,744 ========== ======= ======= ======== ======== ======= ===== ========
- 7 - 9 FOSTER WHEELER CORPORATION AND SUBSIDIARIES ITEM 2.- MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION (UNAUDITED) The following is Management's Discussion and Analysis of certain significant factors which have affected the results of operations and financial condition of the Corporation for periods indicated below. This discussion and analysis should be read in conjunction with the 1994 Annual Report, Form 10-K filed March 24, 1995. A. Consolidated results of operations for three months ended March 31, 1995 vs. three months ended April 1, 1994. The backlog of unfilled orders as of March 31, 1995 totaled $5.4 billion, the highest in the history of the Corporation. This represented an increase of approximately $1.2 billion (29%) over the amount reported at April 1, 1994. Approximately 70% of this increase was due to the acquisition of an environmental company in October of 1994. New orders booked for the first quarter of 1995 amounted to approximately $937 million, which represented a 12 percent increase over the first quarter of 1994. The primary reason for this increase was the significant amount of bookings reported by Foster Wheeler Environmental Corporation in the United States and Foster Wheeler Energia, S.A. in Spain. The increase reported by these two entities was partially offset by a reduction in new orders booked by the Italian and the United Kingdom subsidiaries in the Engineering and Construction Group and Foster Wheeler Energy Corporation in the Energy Equipment Group. Operating revenues for the first quarter of 1995 increased by 35% in comparison to the first quarter of 1994. The Engineering and Construction Group was primarily responsible for the increase in operating revenues. Approximately 60% of the increase reported by the Engineering and Construction Group was in the United States and the balance was reported in Europe. Other income decreased to $7.7 million in 1995 from $8.3 million in 1994, or approximately $.6 million. Approximately 77% of the other income for the first quarter of 1995 was due to interest income. Selling, general and administrative expenses increased by approximately 9% in comparison to the first quarter of 1994, primarily due to the acquisition of an environmental company in October 1994. Other deductions increased by $5 million to $13.9 million. This increase was primarily the result of increased amortization of cost in excess of net assets of subsidiary acquired and higher interest expense. Net earnings rose by approximately 16 percent to $17.9 million or $.50 per share, compared with $15.4 million or $.43 per share for the first quarter of 1994. The $2.5 million increase in net earnings reported by the Corporation was mainly due to the significant increase in net earnings reported by the Engineering and Construction Group in Italy, the United Kingdom and Foster Wheeler Environmental Corporation in the United States. - 8 - 10 FOSTER WHEELER CORPORATION AND SUBSIDIARIES ITEM 2.- MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION (UNAUDITED) (Continued) B. Consolidated Financial Condition Stockholders' equity at the end of the first quarter of 1995 increased $14.3 million from year end 1994. The increase from net earnings ($17.9 million) and accumulated translation adjustment ($2.6 million) was partially offset by dividends paid ($6.6 million). Since December 30, 1994, cash and cash equivalents have decreased by $23.1 million. Cash generated from earnings of $25.2 million reduced by an increase in funding of working capital, resulted in a use of cash from operating activities of $64.1 million. Cash was used to pay dividends of $6.6 million and long-term debt of $4.0 million. At the Board of Directors meeting on April 25, 1995, the quarterly cash dividend was increased from 18.5 cents per share to 19.5 cents per share. Existing cash balances, short-term investments and unused credit facilities with banks remain adequate to support increased backlog, expected operating levels and anticipated future investing and financing activities. -9- 11 PART II. OTHER INFORMATION FOSTER WHEELER CORPORATION AND SUBSIDIARIES ITEM 2. - CHANGES IN SECURITIES (b) Note 3 of the Notes to Condensed Consolidated Financial Statements which appears on Page 5 of Part I of this Report is incorporated herein by reference. ITEM 4. - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS (a) Date of Meeting The Annual Meeting of Stockholders of Foster Wheeler Corporation was held on April 25, 1995 at the Governor Morris Hotel, Two Whippany Road, Morristown, New Jersey. (b) Election of Directors
Directors Elected For Withheld ----------------- --- -------- Eugene D. Atkinson 28,789,216 173,328 Joseph J. Melone 28,818,521 144,023 David J. Roberts 28,755,027 207,517 Richard J. Swift 28,754,787 207,757
Other Directors continuing in office: Louis E. Azzato Frank E. Perkins Kenneth A. DeGhetto John Timko, Jr. E. James Ferland Charles Y. C. Tse Martha Clark Goss Robert Van Buren John A. Hinds
(c) Additional Matters Voted Upon Approval of 1995 Stock Option Plan For 26,348,886 Against 1,158,787 Abstain 1,398,312 Broker Non-Voters 56,559
Ratification of the appointment of Coopers & Lybrand, L.L.P. as auditors of the Corporation for 1995. For 28,796,607 Against 92,220 Abstain 73,717
- 10 - 12 PART II. OTHER INFORMATION FOSTER WHEELER CORPORATION AND SUBSIDIARIES ITEM 6. - EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits
Sequentially Exhibit Numbered Number Exhibit Page ------ ------- ------------ 27 Financial Data (For the informational purposes of the Securities Schedule and Exchange Commission only.)
(b) Reports on Form 8-K None. 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. FOSTER WHEELER CORPORATION (Registrant) Date: May 10, 1995 /S/ Richard J. Swift -------------------------- Richard J. Swift (Chairman, President and Chief Executive Officer) Date: May 10, 1995 /S/ David J. Roberts -------------------------- David J. Roberts (Vice Chairman and Chief Financial Officer) - 11 - 13 EXHIBIT INDEX ------------- Exhibit No. Description - ------- ----------- 27 Financial Data Schedule EX-27 2 FINANCIAL DATA SCHEDULE
5 This schedule contains summary of financial information extracted from the condensed consolidated balance sheet and statement of earnings for the 3 months ended March 31, 1995 and is qualified in its entirety by reference to such financial statements. 1,000 U.S. DOLLARS 3-MOS DEC-29-1995 DEC-31-1994 MAR-31-1995 1 212,704 103,888 538,122 0 234,068 1,147,585 827,537 262,271 2,115,497 909,578 488,962 35,839 0 0 434,905 2,115,497 635,993 643,645 546,227 546,227 0 0 10,922 28,229 10,349 17,880 0 0 0 17,880 .50 .50
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