-----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, WOze6nDky4GKmDgPU61aZ2bhgEGoB4OduNovMY6/4SajquljbAKCsBQj24PEZA3b tlyYl4uxr4byLL9z+qX3uQ== 0000078890-97-000009.txt : 19970425 0000078890-97-000009.hdr.sgml : 19970425 ACCESSION NUMBER: 0000078890-97-000009 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19970331 ITEM INFORMATION: Changes in control of registrant FILED AS OF DATE: 19970424 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: PITTSTON CO CENTRAL INDEX KEY: 0000078890 STANDARD INDUSTRIAL CLASSIFICATION: BITUMINOUS COAL & LIGNITE MINING [1220] IRS NUMBER: 541317776 STATE OF INCORPORATION: VA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-09148 FILM NUMBER: 97586594 BUSINESS ADDRESS: STREET 1: 100 FIRST STAMFORD PLACE STREET 2: PO BOX 120070 CITY: STAMFORD STATE: CT ZIP: 06912-0070 BUSINESS PHONE: 2039785200 MAIL ADDRESS: STREET 1: P O BOX 120070 CITY: STAMFORD STATE: CT ZIP: 06912-0070 8-K 1 FORM 8-K - 1ST QUARTER 1997 EARNINGS ANNOUNCEMENT SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 8-K Current Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): April 24, 1997 THE PITTSTON COMPANY (Exact Name of registrant as specified in its charter) Virginia 1-9148 54-1317776 (State or other (Commission (I.R.S. Employer jurisdiction File Number) Identification No.) of Incorporation) 1000 Virginia Center Parkway P. O. Box 4229 Glen Allen, VA 23058-4229 (Address of principal (Zip Code) executive offices) (804)553-3600 (Registrant's telephone number, including area code) 1 Item 5. Other Events The Pittston Company ("Registrant") has announced earnings for the first quarter of 1997 for its Brink's Group, Burlington Group and Minerals Group. Press releases dated April 24, 1997, are filed as exhibits to this report and are incorporated herein by reference. EXHIBITS 99(a) Registrant's Brink's Group press release dated April 24, 1997. 99(b) Registrant's Burlington Group press release dated April 24, 1997. 99(c) Registrant's Minerals Group press release dated April 24, 1997. SIGNATURE 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 hereunto duly authorized. THE PITTSTON COMPANY (Registrant) Gary R. Rogliano By _________________________ Senior Vice President Date: April 24, 1997 2 EXHIBITS Exhibit Description 99(a) Registrant's Brink's Group press release dated April 24, 1997 99(b) Registrant's Burlington Group press release dated April 24, 1997 99(c) Registrant's Minerals Group press release dated April 24, 1997 3 EX-99 2 99 (A) REGISTRANT'S BRINK'S GROUP PRESS RELEASE Pittston Brink's Group Earns $.40 Per Share in the First Quarter Richmond, VA - April 24, 1997 - The Pittston Brink's Group (NYSE-PZB), The Pittston Company's class of common stock which reflects the performance of Brink's, Incorporated and Brink's Home Security, Inc., recorded net income of $15.3 million, or $.40 per share, in the first quarter, a 30% improvement over the $11.8 million, or $.31 per share, earned in the first quarter of 1996. Brink's, Incorporated (Brink's) Brink's worldwide consolidated revenues totaled $209.2 million in the first quarter of 1997, a 19% increase over the $175.9 million in the comparable period in 1996. Operating profits totaled $15.8 million, 68% higher than the $9.4 million recorded in the prior year's quarter. Revenues from North American operations (U. S. and Canada) rose to $110.8 million in the first quarter, 13% higher than in the comparable period in 1996. First quarter operating profits of $7.8 million were 31% above the prior year's quarter due to the improved results achieved by the armored car operations, which includes ATM servicing, and improved currency processing operations. Brink's continues to benefit from the consolidation of the U. S. banking industry, greater demand for its security services (in particular ATM servicing requirements) and more efficient utilization of its asset base. Consolidated international subsidiaries' revenues of $98.4 million were 27% higher than the $77.7 million generated in the first quarter of 1996. More than one-half of the increase in revenues reflects the first quarter 1997 acquisition of a majority interest in Brink's Venezuelan affiliate, in which Brink's previously owned a 15% interest. Brink's now owns 61% of the Venezuelan operation. Operating profits from international subsidiaries and affiliates of $8.0 million were 135% higher than the $3.4 million earned in the 1996 period. The strong improvement in operating profits was attributable to Latin American operations, particularly Venezuela, Colombia and, to a lesser extent, Mexico. Europe's results were in line with the prior year as improvements in Holland and Belgium were largely offset by the unfavorable results of the 38%-owned affiliate in France. Interest expense and minority interest associated with the Venezuelan acquisition amounted to approximately $2 million and largely offset operating profits from this operation. The Venezuelan operation's results are consistent with the plan announced at the time of the acquisition. Interest expense is expected to decline substantially as the acquisition debt is reduced during the next few years. Brink's Home Security, Inc. (BHS) Brink's Home Security's revenues totaled $42.2 million in the first quarter, a 15% increase over the comparable period in 1996. Operating profits of $12.8 million were also up 15%. Monitoring revenues increased as a result of the greater number of subscribers and higher monitoring fees. Installation revenues declined and marketing and sales costs increased from the first quarter of 1996 reflecting aggressive pricing and marketing by competitors. As a result, net installation and marketing costs incurred and expensed increased approximately $1.4 million from 1996's first quarter. Brink's Home Security installed 25,590 new subscribers during the quarter and the subscriber base totaled 464,007 customers on March 31, 1997, a 17% increase from the number of subscribers at the end of the first quarter of 1996. As a result, annualized service revenues increased 20% to $132.6 million as of March 31, 1997. Brink's Home Security expanded operations into two new markets in the first quarter - Montgomery, Alabama and Little Rock, Arkansas. BHS continues to experience what it believes is one of the highest customer retention rates in the industry as evidenced by the 93% annualized retention rate in the first quarter. Almost 50% of its customers installed more than ten years ago remain as subscribers. BHS's depreciation practices, which were established early in BHS's experience, had the effect of essentially entirely depreciating capitalized subscriber installation expenditures within eight years. Accordingly, many subscribers were no longer being depreciated, while other subscribers were being depreciated on an accelerated basis. In order to more accurately match depreciation expense with revenue generated from customers over the demonstrated customer experience, BHS adjusted its annual depreciation rate for capitalized subscribers' installation costs beginning in 1997. BHS will continue its practice of fully depreciating any remaining capitalized costs in the year subscribers disconnect. This change in accounting estimate reduced depreciation expense for capitalized installation costs in the first quarter by $2.1 million. Financial - Consolidated The Pittston Company reported net income of $21.3 million in the first quarter compared to $18.6 million recorded in the comparable period in 1996. Results in 1996 included a net after tax benefit of $5.1 million from three non-recurring items: a benefit from the settlement of a lawsuit, the reversal of excess restructuring liabilities and a charge related to the implementation of SFAS 121. Consolidated cash flow from operating activities amounted to $23.8 million in 1997's first quarter. Total debt at March 31, 1997 increased to $276.5 million from $196.0 million at year-end 1996, primarily as a result of the acquisition by Brink's, Incorporated of a majority interest in its Venezuelan affiliate. During the first quarter of 1997, the Company purchased 153,000 shares of Pittston Brink's Group Common Stock and 132,100 shares of Pittston Burlington Group Common Stock at a total cost of $6.5 million. The Company has the remaining authority to repurchase over time up to 1.1 million shares of Pittston Brink's Group Common Stock, 1.3 million shares of Pittston Burlington Group Common Stock, 1.0 million Pittston Minerals Group Common Stock, and an additional $15 million of The Pittston Company Series C Convertible Preferred Stock. ********** Pittston Brink's Group Common Stock (NYSE-PZB), Pittston Burlington Group Common Stock (NYSE-PZX) and Pittston Minerals Group Common Stock (NYSE- PZM) represent the three classes of common stock of The Pittston Company, a diversified company with interests in security services through Brink's, Incorporated and Brink's Home Security, Inc. (Pittston Brink's Group), global freight transportation and logistics management services through Burlington Air Express Inc. (Pittston Burlington Group) and mining and minerals exploration through Pittston Coal Company and Pittston Mineral Ventures (Pittston Minerals Group). Copies of the Pittston Burlington Group and Pittston Minerals Group earnings releases are available upon request. Pittston Brink's Group Supplemental Financial Data (Unaudited) BRINK'S, INCORPORATED
Quarter Ended March 31 (In thousands) 1997 1996 - ------------------------------------------------------------------------------- OPERATING REVENUES North America (United States and Canada) $ 110,772 98,180 International subsidiaries 98,427 77,674 - ------------------------------------------------------------------------------- Total operating revenues $ 209,199 175,854 - ------------------------------------------------------------------------------- OPERATING PROFIT North America (United States and Canada) 7,754 5,930 International operations 8,047 3,448 - ------------------------------------------------------------------------------- Total operating profit $ 15,801 9,378 - ------------------------------------------------------------------------------- Depreciation and amortization 7,547 6,029 - ------------------------------------------------------------------------------- BRINK'S HOME SECURITY, INC. Quarter Ended March 31 (Dollars in thousands) 1997 1996 - ------------------------------------------------------------------------------- OPERATING REVENUES $ 42,185 36,706 OPERATING PROFIT $ 12,779 11,102 DEPRECIATION AND AMORTIZATION $ 6,666 6,822 Annualized recurring revenues* $ 132,598 110,191 Number of Subscribers: Beginning of period 446,505 378,659 Installations 25,590 24,256 Disconnects (8,088) (7,239) - ------------------------------------------------------------------------------- End of period 464,007 395,676 - ------------------------------------------------------------------------------- - ------------- * Annualized recurring revenues are calculated based on the number of subscribers at period end multiplied by the average fee per subscriber received in the last month for monitoring, maintenance and related services.
Pittston Brink's Group STATEMENTS OF OPERATIONS (Unaudited)
(In thousands, except Quarter Ended March 31 per share data) 1997 1996 - ----------------------------------------------------------------------------------- Operating revenues $ 251,384 212,560 - ----------------------------------------------------------------------------------- Operating expenses 187,908 162,566 Selling, general and administrative expenses 36,063 30,575 - ----------------------------------------------------------------------------------- Total costs and expenses 223,971 193,141 - ----------------------------------------------------------------------------------- Other operating expense, net (621) (494) - ----------------------------------------------------------------------------------- Operating profit 26,792 18,925 Interest income 653 234 Interest expense (2,239) (467) Other expense, net (1,658) (1,017) - ----------------------------------------------------------------------------------- Income before income taxes 23,548 17,675 Provision for income taxes 8,242 5,836 - ----------------------------------------------------------------------------------- Net income $ 15,306 11,839 - ----------------------------------------------------------------------------------- Net income per common share $ .40 .31 - ----------------------------------------------------------------------------------- Average common shares outstanding 38,189 38,057 - ----------------------------------------------------------------------------------- SEGMENT INFORMATION Operating revenues: Brink's $ 209,199 175,854 BHS 42,185 36,706 - ----------------------------------------------------------------------------------- Total operating revenues $ 251,384 212,560 - ----------------------------------------------------------------------------------- Operating profit: Brink's $ 15,801 9,378 BHS 12,779 11,102 - ----------------------------------------------------------------------------------- Segment operating profit 28,580 20,480 General corporate expense (1,788) (1,555) - ----------------------------------------------------------------------------------- Total operating profit $ 26,792 18,925 - ----------------------------------------------------------------------------------- See accompanying notes.
Pittston Brink's Group CONDENSED BALANCE SHEETS
March 31 December 31 (In thousands) 1997 1996 - ----------------------------------------------------------------------------------------------- (Unaudited) Assets Current assets: Cash and cash equivalents $ 28,957 20,012 Accounts receivable, net of estimated amounts uncollectible 138,230 124,928 Inventories and other current assets 41,034 45,117 - ----------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------- Total current assets 208,221 190,057 Property, plant and equipment, at cost, net of accumulated depreciation and amortization 289,273 256,759 Intangibles, net of amortization 23,555 28,162 Other assets 85,722 76,687 - ----------------------------------------------------------------------------------------------- Total assets $606,771 551,665 - ----------------------------------------------------------------------------------------------- Liabilities and Shareholder's Equity Current liabilities $140,585 139,392 Long-term debt, less current maturities 45,254 5,542 Other liabilities 97,550 93,353 - ----------------------------------------------------------------------------------------------- Total liabilities 283,389 238,287 Shareholder's equity 323,382 313,378 - ----------------------------------------------------------------------------------------------- Total liabilities and shareholder's equity $606,771 551,665 - ----------------------------------------------------------------------------------------------- See accompanying notes.
Pittston Brink's Group STATEMENTS OF CASH FLOWS (Unaudited)
Quarter Ended March 31 (In thousands) 1997 1996 - -------------------------------------------------------------------------------------------- Cash flows from operating activities: Net income $ 15,306 11,839 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 14,260 12,886 Other, net 5,036 1,174 Changes in operating assets and liabilities: Decrease in receivables 2,572 6,811 Increase in inventories and other current assets (3,888) (3,666) Decrease in current liabilities (6,015) (1,227) Other, net (4,461) (414) - -------------------------------------------------------------------------------------------- Net cash provided by operating activities 22,810 27,403 - -------------------------------------------------------------------------------------------- Cash flows from investing activities: Additions to property, plant and equipment (26,367) (21,715) Proceeds from disposal of property, plant and equipment 2,291 110 Acquisitions, net of cash acquired (53,303) -- Other, net 10,558 762 - -------------------------------------------------------------------------------------------- Net cash used by investing activities (66,821) (20,843) - -------------------------------------------------------------------------------------------- Cash flows from financing activities: Net additions to (reductions of) debt 45,080 (3,530) Payments from (to) Minerals Group 11,685 (5,049) Share and other equity activity (3,809) (1,569) - -------------------------------------------------------------------------------------------- Net cash provided (used) by financing activities 52,956 (10,148) - -------------------------------------------------------------------------------------------- Net increase (decrease) in cash and cash equivalents 8,945 (3,588) Cash and cash equivalents at beginning of period 20,012 21,977 - -------------------------------------------------------------------------------------------- Cash and cash equivalents at end of period $ 28,957 18,389 - -------------------------------------------------------------------------------------------- See accompanying notes.
The Pittston Company and Subsidiaries CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(In thousands, except Quarter Ended March 31 per share amounts) 1997 1996 - ----------------------------------------------------------------------------------- Net sales $ 158,883 170,252 Operating revenues 622,793 560,655 - ----------------------------------------------------------------------------------- Net sales and operating revenues 781,676 730,907 - ----------------------------------------------------------------------------------- Cost of sales 153,412 195,885 Operating expenses 518,819 473,066 Restructuring and other credits, including litigation accrual -- (37,758) Selling, general and administrative expenses 75,643 72,296 - ----------------------------------------------------------------------------------- Total costs and expenses 747,874 703,489 - ----------------------------------------------------------------------------------- Other operating income 3,576 2,815 - ----------------------------------------------------------------------------------- Operating profit 37,378 30,233 Interest income 1,019 525 Interest expense (5,564) (3,745) Other expense, net (2,389) (2,397) - ----------------------------------------------------------------------------------- Income before income taxes 30,444 24,616 Provision for income taxes 9,103 5,996 - ----------------------------------------------------------------------------------- Net income 21,341 18,620 Preferred stock dividends, net (901) (1,065) - ----------------------------------------------------------------------------------- Net income attributed to common shares $ 20,440 17,555 - ----------------------------------------------------------------------------------- Pittston Brink's Group: Net income attributed to common shares $ 15,306 11,839 - ----------------------------------------------------------------------------------- Net income per common shares $ .40 .31 - ----------------------------------------------------------------------------------- Average common shares outstanding 38,189 38,057 - ----------------------------------------------------------------------------------- Pittston Burlington Group: Net income attributed to common shares $ 5,088 3,761 - ----------------------------------------------------------------------------------- Net income per common shares $ .26 .20 - ----------------------------------------------------------------------------------- Average common shares outstanding 19,406 19,040 - ----------------------------------------------------------------------------------- Pittston Minerals Group: Net income attributed to common shares $ 46 1,955 - ----------------------------------------------------------------------------------- Net income per common shares $ .01 .25 - ----------------------------------------------------------------------------------- Average common shares outstanding 8,002 7,822 - ----------------------------------------------------------------------------------- See accompanying notes.
The Pittston Company and Subsidiaries CONDENSED CONSOLIDATED BALANCE SHEETS
March 31 December 31 (In thousands) 1997 1996 - -------------------------------------------------------------------------------------------- (Unaudited) Assets Current assets: Cash and cash equivalents $ 50,827 41,217 Accounts receivable, net of estimated amounts uncollectible 485,471 456,135 Inventories and other current assets 138,196 121,338 - -------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------- Total current assets 674,494 618,690 Property, plant and equipment, at cost, net of accumulated depreciation, depletion and amortization 575,497 540,851 Intangibles, net of amortization 309,388 317,062 Other assets 339,701 336,276 - -------------------------------------------------------------------------------------------- Total assets $1,899,080 1,812,879 - -------------------------------------------------------------------------------------------- Liabilities and Shareholders' Equity Current liabilities $ 568,903 568,967 Long-term debt, less current maturities 234,711 158,837 Postretirement benefits other than claims 227,586 226,697 Workers' compensation and other claims 114,636 116,893 Other liabilities 135,276 134,778 - -------------------------------------------------------------------------------------------- Total liabilities 1,281,112 1,206,172 Shareholders' equity 617,968 606,707 - -------------------------------------------------------------------------------------------- Total liabilities and shareholders' equity $1,899,080 1,812,879 - -------------------------------------------------------------------------------------------- See accompanying notes.
The Pittston Company and Subsidiaries CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)
Quarter Ended March 31 (In thousands) 1997 1996 ------------------------------------------------------------------------------------------------------------------- Cash flows from operating activities: Net income $ 21,341 18,620 Adjustments to reconcile net income to net cash provided by operating activities: Noncash charges and other write-offs -- 29,948 Depreciation, depletion and amortization 30,139 27,051 Provision for aircraft heavy maintenance 8,186 7,718 Provision for deferred income taxes 2,328 4,470 Other, net 5,309 1,700 Changes in operating assets and liabilities net of effects of acquisitions and dispositions: Increase in receivables (14,285) (3,169) Increase in inventories and other current assets (17,107) (11,210) Decrease in current liabilities (4,083) (19,309) Other, net (8,033) (37,869) ------------------------------------------------------------------------------------------------------------------- Net cash provided by operating activities 23,795 17,950 ------------------------------------------------------------------------------------------------------------------- Cash flows from investing activities: Additions to property, plant and equipment (40,032) (31,877) Proceeds from disposal of property, plant and equipment 3,940 4,709 Aircraft heavy maintenance (9,473) (4,131) Acquisitions and related contingent payments, net of cash acquired (54,094) (746) Other, net 13,901 3,565 ------------------------------------------------------------------------------------------------------------------- Net cash used by investing activities (85,758) (28,480) ------------------------------------------------------------------------------------------------------------------- Cash flows from financing activities: Additions to debt 100,885 11,981 Reductions of debt (20,051) (10,006) Share and other equity activity (9,261) (5,639) ------------------------------------------------------------------------------------------------------------------- Net cash provided (used) by financing activities 71,573 (3,664) ------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in cash and cash equivalents 9,610 (14,194) Cash and cash equivalents at beginning of period 41,217 52,823 ------------------------------------------------------------------------------------------------------------------- Cash and cash equivalents at end of period $ 50,827 38,629 ------------------------------------------------------------------------------------------------------------------- See accompanying notes.
The Pittston Company and Subsidiaries Pittston Brink's Group NOTES TO FINANCIAL INFORMATION (1) The Company has three classes of common stock: Pittston Brink's Group Common Stock, Pittston Burlington Group Common Stock and Pittston Minerals Group Common Stock, which were designated to provide shareholders with separate securities reflecting the performance of the Pittston Brink's Group (the "Brink's Group"), Pittston Burlington Group (the "Burlington Group") and Pittston Minerals Group (the "Minerals Group"), respectively, without diminishing the benefits of remaining a single corporation or precluding future transactions affecting any of the Groups. The financial information for the Brink's Group includes the results of the Company's Brink's, Incorporated and Brink's Home Security, Inc. businesses. It is prepared using the amounts included in the Company's consolidated financial statements. Accordingly, the Company's consolidated financial statements must be read in connection with the Brink's Group's financial data. (2) In 1988, the trustees of certain pension and benefit trust funds (the "Trust Funds") established under collective bargaining agreements with the United Mine Workers of America ("UMWA") brought an action (the "Evergreen Case") against the Company and a number of its coal subsidiaries, claiming that the defendants were obligated to contribute to such Trust Funds in accordance with the provisions of the 1988 and subsequent National Bituminous Coal Wage Agreements, to which neither the Company nor any of its subsidiaries were a signatory. In March 1996, a settlement was reached in the Evergreen Case. Under the terms of the settlement, the coal subsidiaries which had been signatories to earlier National Bituminous Coal Wage Agreements agreed to make various lump sum payments in full satisfaction of all amounts allegedly due to the Trust Funds through January 31, 1996, to be paid over time as follows: approximately $25.8 million upon dismissal of the Evergreen Case and the remainder of $24 million in installments of $7.0 million in 1996 and $8.5 million in each of 1997 and 1998. The first payment was entirely funded through an escrow account previously established by the Company. The second payment of $7.0 million was paid in 1996 and was funded from cash provided by operating activities. In addition, the coal subsidiaries agreed to future participation in the UMWA 1974 Pension Plan. As a result of the settlement of the Evergreen Case at an amount lower than previously accrued, the Company recorded a pretax gain of $35.7 million ($23.2 million after tax) in the first quarter of 1996 in its consolidated financial statements. (3) In 1996, the Company adopted Statement of Financial Accounting Standards ("SFAS") No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of". SFAS No. 121 requires companies to review assets for impairment whenever circumstances indicate that the carrying amount of an asset may not be recoverable. SFAS No. 121, resulted in a pretax charge to earnings in the first quarter of 1996 for the Company and the Minerals Group of $29.9 million ($19.5 million after-tax), of which $26.3 million was included in cost of sales and $3.6 million was included in selling, general and administrative expenses. SFAS No. 121 had no impact on the Brink's Group or the Burlington Group. (4) As of January 1, 1997, BHS adjusted its annual depreciation rate for capitalized subscribers' installation costs to more accurately match depreciation expense with revenue generated from demonstrated customer experience. This change in accounting estimate reduced depreciation expense for capitalized installation costs in the first quarter of 1997 by $2.1 million. (5) Certain prior period amounts have been reclassified to conform to the current period's financial statement presentation. (6) Financial information for the Minerals Group, which includes the results of the Company's Coal and Mineral Ventures operations, and the Burlington Group which includes the results of the Company's Burlington Air Express Inc. business, is available upon request. EX-99 3 99 (B) REGISTRANT'S BURLINGTON GROUP PRESS RELEASE Pittston Burlington Group Earns $.26 Per Share in the First Quarter Richmond, VA - April 24, 1997 - The Pittston Burlington Group (NYSE-PZX), The Pittston Company's class of common stock which reflects the performance of Burlington Air Express Inc. ("Burlington"), a global freight transportation and logistics management services company, recorded net income of $5.1 million, or $.26 per share in the first quarter, a 34% increase over the $3.8 million, or $.20 per share earned in the first quarter of 1996. Burlington's worldwide revenues totaled $371.4 million in the first quarter, a 7% increase over the $348.1 million reported in the first quarter of 1996. Burlington's operating profits were $10.8 million in the first quarter compared to $8.7 million in the prior year's quarter. International International revenues in the first quarter rose 7% to $233.0 million from the comparable 1996 period. Expedited freight services revenues were $180.9 million, customs clearance revenues totaled $27.6 million and other international revenues reached $24.5 million. International operating profits amounted to $6.6 million in the quarter, a 32% increase over the $5.0 million earned in the first quarter of 1996. Burlington was awarded several new contracts during the first quarter involving its global logistics services including programs with Nortel, GM/Saab, and NEC. Burlington's Brussels, Belgium operations achieved ISO 9002 certification, bringing the global total to 149 certified locations in 17 countries. All remaining Burlington locations anticipate obtaining certification before year-end. Domestic In the first quarter, domestic expedited freight service revenues increased 6% to $136.7 million, reflecting higher volumes coupled with higher average yields. Domestic operating profits grew 11% to $4.1 million compared to the first quarter of 1996. First quarter domestic weight shipped per day increased by 2% over the comparable period in 1996 while average yield per pound increased 5%. Significant service enhancements were put in place during the quarter. Two flights were added to the North American overnight system, increasing capacity by approximately 160,000 lbs. These flights, known as TexWest Direct, bypass Burlington's Toledo, Ohio hub and fly routes between Seattle, San Francisco, Los Angeles and Dallas. Customers in these western markets now enjoy later departure times, allowing processing of late orders, while also benefitting from earlier next day delivery of their inbound freight. In addition, Burlington now delivers overnight to Guadalajara, Monterrey and Chihuahua, Mexico from virtually any location in the U. S. and Canada. Direct service to Mexico City is also offered with freight available the second morning. The impact of these service adjustments and additional capacity have helped Burlington to further improve its service performance. Burlington also introduced a new premium overnight product called "Constant Surveillance Service" (CSS). CSS was initially implemented in limited locations to handle highly sensitive U. S. Government shipments that must be constantly monitored. The CSS product is expected to expand later this year to serve more government locations. Recently, Burlington won a three-year contract beginning in April 1997 to handle all second day air shipments for RPS, Inc., one of the nation's largest small package delivery companies. The agreement will provide RPS customers with more reliable delivery and result in a substantial increase in Burlington's second day system volume, allowing Burlington to expand its current capabilities and improve service to its own customers. As part of its ongoing efforts to further enhance service quality and improve efficiencies, Burlington has formed a Global Innovation Team composed of senior management from various regions and assisted by two independent consulting firms. The team is reviewing Burlington's operating activities to better ensure that Burlington provides the highest possible level of customer service in a cost efficient manner. A key component of this process is a review of Burlington's current information systems and technology needs on a global basis. The innovation team is responsible for optimizing Burlington's investment in technology to assure delivery of "state of the art" information systems for both customer and operational requirements. Other cost and service improvement programs have been identified through this process and are expected to be implemented during the balance of 1997. Financial - Consolidated The Pittston Company reported net income of $21.3 million in the first quarter compared to $18.6 million recorded in the comparable period in 1996. Results in 1996 included a net after tax benefit of $5.1 million from three non-recurring items: a benefit from the settlement of a lawsuit, the reversal of excess restructuring liabilities and a charge related to the implementation of SFAS 121 Consolidated cash flow from operating activities amounted to $23.8 million in the first quarter. Total debt at March 31, 1997 increased to $276.5 million from $196.0 million at year-end 1996, primarily as a result of the acquisition by Brink's, Incorporated of a majority interest in its Venezuelan affiliate. During the first quarter of 1997, the Company purchased 153,000 shares of Pittston Brink's Common Stock and 132,100 shares of Pittston Burlington Group Common Stock at a total cost of $6.5 million. The Company has the remaining authority to repurchase over time up to 1.1 million shares of Pittston Brink's Group Common Stock, 1.3 million shares of Pittston Burlington Group Common Stock, 1.0 million shares of Pittston Minerals Group Common Stock, and an additional $15 million of The Pittston Company Series C Convertible Preferred Stock. ********** Pittston Burlington Group Common Stock (NYSE-PZX), Pittston Brink's Group Common Stock (NYSE-PZB), and Pittston Minerals Group Common Stock (NYSE- PZM), represent the three classes of common stock of The Pittston Company, a diversified company with interests in global freight transportation and logistics management services through Burlington Air Express Inc. (Pittston Burlington Group), security services through Brink's, Incorporated and Brink's Home Security, Inc. (Pittston Brink's Group) and mining and minerals exploration through Pittston Coal Company and Pittston Mineral Ventures (Pittston Minerals Group). Copies of the Pittston Brink's Group and Pittston Minerals Group earnings releases are available upon request. Pittston Burlington Group Supplemental Financial Data (Unaudited) BURLINGTON AIR EXPRESS INC.
(In thousands, except Quarter Ended March 31 per pound/shipment amounts) 1997 1996 - -------------------------------------------------------------------------------- OPERATING REVENUES Expedited freight services: Domestic U.S. $ 136,672 128,780 International 180,891 169,715 - -------------------------------------------------------------------------------- Total expedited freight services $ 317,563 298,495 Customs clearances 27,637 28,414 Ocean and other (a) 26,209 21,186 - -------------------------------------------------------------------------------- Total operating revenues 371,409 348,095 - -------------------------------------------------------------------------------- OPERATING PROFIT Domestic U.S. $ 4,117 3,708 International 6,639 4,978 - -------------------------------------------------------------------------------- Total operating profit $ 10,756 8,686 - -------------------------------------------------------------------------------- Expedited freight services shipment growth rate (b) (1.8%) 5.5% Expedited freight services weight growth rate (b): Domestic U.S. 0.8% 2.9% International 2.5% 9.4% Worldwide 1.7% 6.2% - -------------------------------------------------------------------------------- Expedited freight services weight (millions of pounds) 350.5 344.7 Expedited freight services shipments (thousands) 1,275 1,298 - -------------------------------------------------------------------------------- Expedited freight services average: Yield (revenue per pound) $ .906 .866 Revenue per shipment $ 249 230 Weight per shipment (pounds) 275 266 - -------------------------------------------------------------------------------- (a) Primarily includes international ocean freight revenues. Ocean and other includes domestic revenues of $1,721 and $668 for the quarter ended March 31, 1997 and 1996, respectively. (b) Compared to the same period in the prior year.
Pittston Burlington Group STATEMENTS OF OPERATIONS (Unaudited)
(In thousands, except Quarter Ended March 31 per share data) 1997 1996 - --------------------------------------------------------------------- Operating revenues $ 371,409 348,095 - --------------------------------------------------------------------- Operating expenses 330,911 310,500 Selling, general and administrative expenses 32,171 30,687 - --------------------------------------------------------------------- Total costs and expenses 363,082 341,187 - --------------------------------------------------------------------- Other operating income, net 649 223 - --------------------------------------------------------------------- Operating profit 8,976 7,131 Interest income 330 892 Interest expense (946) (1,052) Other expense, net (281) (1,007) - --------------------------------------------------------------------- Income before income taxes 8,079 5,964 Provision for income taxes 2,991 2,203 - --------------------------------------------------------------------- Net income $ 5,088 3,761 - --------------------------------------------------------------------- Net income per common share $ .26 .20 - --------------------------------------------------------------------- Average common shares outstanding 19,406 19,040 - --------------------------------------------------------------------- SEGMENT INFORMATION Operating revenues: Burlington $ 371,409 348,095 - --------------------------------------------------------------------- Operating profit: Burlington $ 10,756 8,686 General corporate expense (1,780) (1,555) - --------------------------------------------------------------------- Operating profit $ 8,976 7,131 - --------------------------------------------------------------------- See accompanying notes.
Pittston Burlington Group CONDENSED BALANCE SHEETS
March 31 December 31 (In thousands) 1997 1996 - ----------------------------------------------------------------------------------------------- (Unaudited) Assets Current assets: Cash and cash equivalents $ 20,191 17,818 Accounts receivable, net of estimated amounts uncollectible 258,397 242,654 Inventories and other current assets 24,114 22,557 - ----------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------- Total current assets 302,702 283,029 Property, plant and equipment, at cost, net of accumulated depreciation, depletion and amortization 112,778 113,283 Intangibles, net of amortization 175,483 177,797 Other assets 40,312 41,565 - ----------------------------------------------------------------------------------------------- Total assets $631,275 615,674 - ----------------------------------------------------------------------------------------------- Liabilities and Shareholder's Equity Current liabilities $272,747 258,877 Long-term debt, less current maturities 28,227 28,723 Other liabilities 23,659 23,085 - ----------------------------------------------------------------------------------------------- Total liabilities 324,633 310,685 Shareholder's equity 306,642 304,989 - ----------------------------------------------------------------------------------------------- Total liabilities and shareholder's equity $631,275 615,674 - ----------------------------------------------------------------------------------------------- See accompanying notes.
Pittston Burlington Group STATEMENTS OF CASH FLOWS (Unaudited)
Quarter Ended March 31 (In thousands) 1997 1996 - -------------------------------------------------------------------------------------------- Cash flows from operating activities: Net income $ 5,088 3,761 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 6,959 5,437 Provision for aircraft heavy maintenance 8,186 7,718 Other, net 1,632 516 Changes in operating assets and liabilities: (Increase) decrease in receivables (16,443) 5,464 Increase in inventories and other current assets (1,863) (1,562) Increase (decrease) in current liabilities 10,059 (9,118) Other, net 182 466 - -------------------------------------------------------------------------------------------- Net cash provided by operating activities 13,800 12,682 - -------------------------------------------------------------------------------------------- Cash flows from investing activities: Additions to property, plant and equipment (6,207) (4,782) Proceeds from disposal of property, plant and equipment 115 3,155 Aircraft heavy maintenance (9,473) (4,131) Other, net 2,106 1,903 - -------------------------------------------------------------------------------------------- Net cash used by investing activities (13,459) (3,855) - -------------------------------------------------------------------------------------------- Cash flows from financing activities: Net reductions of debt (603) (3,150) Payments from (to) Minerals Group 6,002 (13,177) Share and other equity activity (3,367) (1,737) - -------------------------------------------------------------------------------------------- Net cash provided (used) by financing activities 2,032 (18,064) - -------------------------------------------------------------------------------------------- Net increase (decrease) in cash and cash equivalents 2,373 (9,237) Cash and cash equivalents at beginning of period 17,818 25,847 - -------------------------------------------------------------------------------------------- Cash and cash equivalents at end of period $ 20,191 16,610 - -------------------------------------------------------------------------------------------- See accompanying notes.
The Pittston Company and Subsidiaries CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(In thousands, except Quarter Ended March 31 per share amounts) 1997 1996 - ------------------------------------------------------------------------------------------------------------------- Net sales $ 158,883 170,252 Operating revenues 622,793 560,655 - ----------------------------------------------------------------------------------- Net sales and operating revenues 781,676 730,907 - ----------------------------------------------------------------------------------- Cost of sales 153,412 195,885 Operating expenses 518,819 473,066 Restructuring and other credits, including litigation accrual -- (37,758) Selling, general and administrative expenses 75,643 72,296 - ----------------------------------------------------------------------------------- Total costs and expenses 747,874 703,489 - ----------------------------------------------------------------------------------- Other operating income 3,576 2,815 - ----------------------------------------------------------------------------------- Operating profit 37,378 30,233 Interest income 1,019 525 Interest expense (5,564) (3,745) Other expense, net (2,389) (2,397) - ----------------------------------------------------------------------------------- Income before income taxes 30,444 24,616 Provision for income taxes 9,103 5,996 - ----------------------------------------------------------------------------------- Net income 21,341 18,620 Preferred stock dividends, net (901) (1,065) - ----------------------------------------------------------------------------------- Net income attributed to common shares $ 20,440 17,555 - ----------------------------------------------------------------------------------- Pittston Brink's Group: Net income attributed to common shares $ 15,306 11,839 - ----------------------------------------------------------------------------------- Net income per common shares $ .40 .31 - ----------------------------------------------------------------------------------- Average common shares outstanding 38,189 38,057 - ----------------------------------------------------------------------------------- Pittston Burlington Group: Net income attributed to common shares $ 5,088 3,761 - ----------------------------------------------------------------------------------- Net income per common shares $ .26 .20 - ----------------------------------------------------------------------------------- Average common shares outstanding 19,406 19,040 - ----------------------------------------------------------------------------------- Pittston Minerals Group: Net income attributed to common shares $ 46 1,955 - ----------------------------------------------------------------------------------- Net income per common shares $ .01 .25 - ----------------------------------------------------------------------------------- Average common shares outstanding 8,002 7,822 - ----------------------------------------------------------------------------------- See accompanying notes.
The Pittston Company and Subsidiaries CONDENSED CONSOLIDATED BALANCE SHEETS
March 31 December 31 (In thousands) 1997 1996 - ------------------------------------------------------------------------------------------------------------------- (Unaudited) Assets Current assets: Cash and cash equivalents $ 50,827 41,217 Accounts receivable, net of estimated amounts uncollectible 485,471 456,135 Inventories and other current assets 138,196 121,338 - -------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------- Total current assets 674,494 618,690 Property, plant and equipment, at cost, net of accumulated depreciation, depletion and amortization 575,497 540,851 Intangibles, net of amortization 309,388 317,062 Other assets 339,701 336,276 - -------------------------------------------------------------------------------------------- Total assets $1,899,080 1,812,879 - -------------------------------------------------------------------------------------------- Liabilities and Shareholders' Equity Current liabilities $ 568,903 568,967 Long-term debt, less current maturities 234,711 158,837 Postretirement benefits other than claims 227,586 226,697 Workers' compensation and other claims 114,636 116,893 Other liabilities 135,276 134,778 - -------------------------------------------------------------------------------------------- Total liabilities 1,281,112 1,206,172 Shareholders' equity 617,968 606,707 - -------------------------------------------------------------------------------------------- Total liabilities and shareholders' equity $1,899,080 1,812,879 - -------------------------------------------------------------------------------------------- See accompanying notes.
The Pittston Company and Subsidiaries CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)
Quarter Ended March 31 (In thousands) 1997 1996 ------------------------------------------------------------------------------------------------------------------- Cash flows from operating activities: Net income $ 21,341 18,620 Adjustments to reconcile net income to net cash provided by operating activities: Noncash charges and other write-offs -- 29,948 Depreciation, depletion and amortization 30,139 27,051 Provision for aircraft heavy maintenance 8,186 7,718 Provision for deferred income taxes 2,328 4,470 Other, net 5,309 1,700 Changes in operating assets and liabilities net of effects of acquisitions and dispositions: Increase in receivables (14,285) (3,169) Increase in inventories and other current assets (17,107) (11,210) Decrease in current liabilities (4,083) (19,309) Other, net (8,033) (37,869) ------------------------------------------------------------------------------------------------------------------- Net cash provided by operating activities 23,795 17,950 ------------------------------------------------------------------------------------------------------------------- Cash flows from investing activities: Additions to property, plant and equipment (40,032) (31,877) Proceeds from disposal of property, plant and equipment 3,940 4,709 Aircraft heavy maintenance (9,473) (4,131) Acquisitions and related contingent payments, net of cash acquired (54,094) (746) Other, net 13,901 3,565 ------------------------------------------------------------------------------------------------------------------- Net cash used by investing activities (85,758) (28,480) ------------------------------------------------------------------------------------------------------------------- Cash flows from financing activities: Additions to debt 100,885 11,981 Reductions of debt (20,051) (10,006) Share and other equity activity (9,261) (5,639) ------------------------------------------------------------------------------------------------------------------- Net cash provided (used) by financing activities 71,573 (3,664) ------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in cash and cash equivalents 9,610 (14,194) Cash and cash equivalents at beginning of period 41,217 52,823 ------------------------------------------------------------------------------------------------------------------- Cash and cash equivalents at end of period $ 50,827 38,629 ------------------------------------------------------------------------------------------------------------------- See accompanying notes.
The Pittston Company and Subsidiaries Pittston Burlington Group NOTES TO FINANCIAL INFORMATION (1) The Company has three classes of common stock: Pittston Brink's Group Common Stock, Pittston Burlington Group Common Stock and Pittston Minerals Group Common Stock, which were designated to provide shareholders with separate securities reflecting the performance of the Pittston Brink's Group (the "Brink's Group"), Pittston Burlington Group (the "Burlington Group") and Pittston Minerals Group (the "Minerals Group"), respectively, without diminishing the benefits of remaining a single corporation or precluding future transactions affecting any of the Groups. The financial information for the Burlington Group includes the results of the Company's Burlington Air Express Inc. business. It is prepared using the amounts included in the Company's consolidated financial statements. Accordingly, the Company's consolidated financial statements must be read in connection with the Burlington Group's financial data. (2) In 1988, the trustees of certain pension and benefit trust funds (the "Trust Funds") established under collective bargaining agreements with the United Mine Workers of America ("UMWA") brought an action (the "Evergreen Case") against the Company and a number of its coal subsidiaries, claiming that the defendants were obligated to contribute to such Trust Funds in accordance with the provisions of the 1988 and subsequent National Bituminous Coal Wage Agreements, to which neither the Company nor any of its subsidiaries were a signatory. In March 1996, a settlement was reached in the Evergreen Case. Under the terms of the settlement, the coal subsidiaries which had been signatories to earlier National Bituminous Coal Wage Agreements agreed to make various lump sum payments in full satisfaction of all amounts allegedly due to the Trust Funds through January 31, 1996, to be paid over time as follows: approximately $25.8 million upon dismissal of the Evergreen Case and the remainder of $24 million in installments of $7.0 million in 1996 and $8.5 million in each of 1997 and 1998. The first payment was entirely funded through an escrow account previously established by the Company. The second payment of $7.0 million was paid in 1996 and was funded from cash provided by operating activities. In addition, the coal subsidiaries agreed to future participation in the UMWA 1974 Pension Plan. As a result of the settlement of the Evergreen Case at an amount lower than previously accrued, the Company recorded a pretax gain of $35.7 million ($23.2 million after tax) in the first quarter of 1996 in its consolidated financial statements. (3) In 1996, the Company adopted Statement of Financial Accounting Standards ("SFAS") No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of". SFAS No. 121 requires companies to review assets for impairment whenever circumstances indicate that the carrying amount of an asset may not be recoverable. SFAS No. 121, resulted in a pretax charge to earnings in the first quarter of 1996 for the Company and the Minerals Group of $29.9 million ($19.5 million after-tax), of which $26.3 million was included in cost of sales and $3.6 million was included in selling, general and administrative expenses. SFAS No. 121 had no impact on the Brink's Group or the Burlington Group. (4) Certain prior period amounts have been reclassified to conform to the current period's financial statement presentation. (5) Financial information for the Minerals Group, which includes the results of the Company's Coal and Mineral Ventures operations, and the Brink's Group, which includes the results of the Company's Brink's, Incorporated and Brink's Home Security, Inc. businesses, is available upon request. EX-99 4 99 (C) REGISTRANT'S MINERALS GROUP PRESS RELEASE Pittston Minerals Group Earns $.01 Per Share in the First Quarter Richmond, VA - April 24, 1997 - The Pittston Minerals Group (NYSE-PZM), The Pittston Company's class of common stock which reflects the performance of Pittston Coal Company and Pittston Mineral Ventures, recorded net income of $0.9 million in the traditionally difficult first quarter. This represents a $3.0 million improvement over the net loss of $2.1 million (before the favorable impact of $5.1 million from three non-recurring items) incurred in the first quarter of 1996. Earnings per share amounted to $.01 (primary and fully diluted) in the most recent quarter. This represents a significant improvement over last year's $.25 per share (primary and fully diluted) as $.65 per share from the above mentioned non-recurring items was included in 1996's results. Pittston Coal Company The coal segment's operating profit was $3.6 million in the first quarter compared to $4.4 million in the same period in 1996. Operating profit in the 1996 first quarter reflected the net benefit of $7.8 million resulting from a gain from the settlement of a lawsuit and the reversal of excess restructuring liabilities partially offset by the implementation of SFAS 121. Gross coal margin for the 1997 first quarter was nearly twice that recorded in the first quarter of 1996, which was adversely impacted by severe weather conditions. Inactive employee costs and administrative expenses declined by 10% and 5%, respectively, from the prior year. First quarter coal sales volume was 5.1 million tons compared to 5.6 million tons in the prior year quarter. Steam and metallurgical coals sales amounted to 3.2 million and 1.9 million tons compared to 3.6 million and 2.0 million tons sold, respectively, in last year's first quarter. Coal production totaled 4.1 million tons in the quarter, virtually the same as in the comparable period of 1996. Surface production accounted for 64% of total company production compared to 65% in the first quarter of 1996. Mine costs substantially improved at the company's surface mines while certain of the company's deep mines experienced higher than expected costs due to adverse geological conditions, the majority of which are expected to be short lived. Pittston Mineral Ventures (PMV) Pittston Mineral Ventures (PMV) reported a $0.5 million operating loss in the first quarter compared to a $1.2 million operating profit reported in the prior year quarter. The Stawell gold mine in western Victoria, Australia, in which PMV has a 67% direct and indirect interest, produced 21,900 ounces of gold in the first quarter compared to 24,200 ounces in the prior year quarter. The average cash cost per ounce sold was US $327 in the first quarter of 1997 compared to US $242 in the prior year quarter. The deterioration in the year-on-year performance in the operating profit of PMV was caused by higher operating costs at the Stawell gold mine. While adverse ground conditions resulted in significantly increased ore dilution and mining costs in January and February, conditions have subsequently improved. In-mine exploration at Stawell continues to achieve positive results. PMV is continuing gold exploration projects in Nevada and Australia with its joint venture partner. Exploration expenditures in 1997 are expected to increase to US $3.1 million compared to US $2.3 million in 1996. Development of the Black Swan nickel project in western Australia continues on plan and within budget. Production at the Silver Swan orebody is expected to commence in June 1997. As previously reported, exploration drilling has encountered additional high-grade nickel at the Silver Swan orebody at depth and in a satellite zone known as White Swan. The deepest intersection of Silver Swan is 800 meters below surface and the high grade ore zone remains open at depth. Financial - Consolidated The Pittston Company reported net income of $21.3 million in the first quarter compared to $18.6 million recorded in the comparable period in 1996. Results in 1996 included a net after tax benefit of $5.1 million from three non-recurring items: a benefit from the settlement of a lawsuit, the reversal of excess restructuring liabilities and a charge related to the implementation of SFAS 121. Consolidated cash flow from operating activities amounted to $23.8 million in the first quarter. Total debt at March 31, 1997 increased to $276.5 million from $196.0 million at year-end 1996, primarily as a result of the acquisition by Brink's, Incorporated of a majority interest in its Venezuelan affiliate. During the first quarter of 1997, the Company purchased 153,000 shares of Pittston Brink's Common Stock and 132,100 shares of Pittston Burlington Group Common Stock at a total cost of $6.5 million. The Company has the remaining authority to repurchase over time up to 1.1 million shares of Pittston Brink's Group Common Stock, 1.3 million shares of Pittston Burlington Group Common Stock, 1.0 million shares of Pittston Minerals Group Common Stock and an additional $15 million of The Pittston Company Series C Convertible Preferred Stock. ********** Pittston Minerals Group Common Stock (NYSE-PZM), Pittston Brink's Group Common Stock (NYSE-PZB) and Pittston Burlington Group Common Stock (NYSE-PZX) represent the three classes of common stock of The Pittston Company, a diversified company with interests in mining and minerals exploration through Pittston Coal Company and Pittston Mineral Ventures (Pittston Minerals Group), security services through Brink's, Incorporated and Brink's Home Security, Inc. (Pittston Brink's Group) and global freight transportation and logistics management services through Burlington Air Express Inc. (Pittston Burlington Group). Copies of the Pittston Brink's Group and Pittston Burlington Group earnings releases are available upon request. Pittston Minerals Group Supplemental Financial Data (Unaudited) PITTSTON COAL COMPANY
Quarter Ended March 31 (In thousands) 1997 1996 - ------------------------------------------------------------------------------------------------------------------- Net sales $154,593 165,468 Operating profit $ 3,623 4,377 COAL SALES (Tons) Metallurgical 1,891 2,045 Utility and industrial 3,229 3,572 - ------------------------------------------------------------------------------------- Total coal sales 5,120 5,617 - ------------------------------------------------------------------------------------- PRODUCTION/PURCHASED (Tons) Deep 1,102 1,062 Surface 2,659 2,716 Contract 363 395 - ------------------------------------------------------------------------------------- 4,124 4,173 Purchased 1,340 1,608 - ------------------------------------------------------------------------------------- Total 5,464 5,781 - ------------------------------------------------------------------------------------- Quarter Ended March 31 (In thousands) 1997 1996 - ------------------------------------------------------------------------------------- Net coal sales (a) $152,698 163,907 Current production cost of coal sold (a) 141,572 157,971 - ------------------------------------------------------------------------------------- Coal margin 11,126 5,936 Non-coal margin 717 608 Other operating income, net 3,705 2,941 - ------------------------------------------------------------------------------------- Margin and other income 15,548 9,485 - ------------------------------------------------------------------------------------- Other costs and expenses: Idle equipment and closed mines 307 258 Inactive employee cost 6,683 7,424 Selling, general and administrative expenses 4,935 5,236 - ------------------------------------------------------------------------------------- Total other costs and expenses 11,925 12,918 - ------------------------------------------------------------------------------------- Operating profit (loss) (before restructuring and other credits and SFAS No. 121) (b) $ 3,623 (3,433) - ------------------------------------------------------------------------------------- Coal margin per ton: Realization $ 29.82 29.18 Current production costs 27.65 28.13 - ------------------------------------------------------------------------------------- Coal margin $ 2.17 1.05 - ------------------------------------------------------------------------------------- (a) Excludes non-coal components. (b) Restructuring and other (credits) charges in 1996 consist of an impairment loss related to the adoption of SFAS No. 121 of $29,948 ($26,312 in cost of sales and $3,636 in selling, general and administrative expenses), a gain from the settlement of the Evergreen Case of $35,650 and a benefit from excess restructuring liabilities of $2,108. Both the gain from the Evergreen Case and the benefit from excess restructuring liabilities are included in the operating profit of the Pittston Coal Company as "Restructuring and other credits, including litigation accrual".
PITTSTON MINERAL VENTURES COMPANY (Unaudited)
Quarter Ended March 31 (In thousands, except ounce data) 1997 1996 - ------------------------------------------------------------------------------------- Stawell Gold Mine: Gold sales $ 4,281 4,702 Other revenue 9 82 - ------------------------------------------------------------------------------------- Net sales 4,290 4,784 Cost of sales (a) 3,631 2,966 Selling, general and administrative expenses (a) 298 262 - ------------------------------------------------------------------------------------- Total costs and expenses 3,929 3,228 - ------------------------------------------------------------------------------------- Operating profit-Stawell Gold Mine 361 1,556 Other operating expense, net (816) (382) - ------------------------------------------------------------------------------------- Operating (loss) profit $ (455) 1,174 - ------------------------------------------------------------------------------------- Stawell Gold Mine: Mineral Ventures' 50% direct share: Ounces sold 10,576 11,759 Ounces produced 10,951 12,114 Average per ounce sold (US$): Realization $ 405 400 Cash cost 327 242 - ------------------------------------------------------------------------------------- (a) Excludes $42 and $617 of non-Stawell related cost of sales and selling, general and administrative expenses, respectively. Such costs are reclassified to cost of sales and selling, general and administrative expenses in the Minerals Group income statement.
Pittston Minerals Group STATEMENTS OF OPERATIONS (Unaudited)
(In thousands, except Quarter Ended March 31 per share data) 1997 1996 - ------------------------------------------------------------------------------------------- Net sales $ 158,883 170,252 - ------------------------------------------------------------------------------------------- Cost of sales 153,412 195,885 Restructuring and other charges (credits), including litigation accrual -- (37,758) Selling, general and administrative expenses 7,409 11,034 - ------------------------------------------------------------------------------------------- Total costs and expenses 160,821 169,161 Other operating income, net 3,548 3,086 - ------------------------------------------------------------------------------------------- Operating profit 1,610 4,177 Interest income 282 125 Interest expense (2,625) (2,952) Other expense, net (450) (373) - ------------------------------------------------------------------------------------------- (Loss) income before income taxes (1,183) 977 Credit for income taxes (2,130) (2,043) - ------------------------------------------------------------------------------------------- Net income 947 3,020 Preferred stock dividends, net (901) (1,065) - ------------------------------------------------------------------------------------------- Net income attributed to common shares $ 46 1,955 - ------------------------------------------------------------------------------------------- Net income per common share $ .01 .25 - ------------------------------------------------------------------------------------------- Average common shares outstanding 8,002 7,822 - ------------------------------------------------------------------------------------------- SEGMENT INFORMATION Net sales: Coal Operations $ 154,593 165,468 Mineral Ventures 4,290 4,784 - ------------------------------------------------------------------------------------------- Net sales $ 158,883 170,252 - ------------------------------------------------------------------------------------------- Operating profit (loss): Coal Operations $ 3,623 4,377 Mineral Ventures (455) 1,174 - ------------------------------------------------------------------------------------------- Segment operating profit 3,168 5,551 General corporate expense (1,558) (1,374) - ------------------------------------------------------------------------------------------- Operating profit $ 1,610 4,177 - ------------------------------------------------------------------------------------------- See accompanying notes.
Pittston Minerals Group CONDENSED BALANCE SHEETS
March 31 December 31 (In thousands) 1997 1996 - ---------------------------------------------------------------------------------- (Unaudited) Assets Current assets: Cash and cash equivalents $ 1,679 3,387 Accounts receivable, net of estimated amounts uncollectible 88,844 88,552 Inventories and other current assets 82,311 67,691 - ---------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------- Total current assets 172,834 159,630 Property, plant and equipment, at cost, net of accumulated depreciation, depletion and amortization 173,446 170,809 Coal supply contracts, net of amortization 50,033 52,696 Intangibles, net of amortization 110,350 111,103 Other assets 215,324 212,743 - ---------------------------------------------------------------------------------- Total assets $ 721,987 706,981 - ---------------------------------------------------------------------------------- Liabilities and Shareholder's Equity Current liabilities $ 164,834 184,725 Long-term debt, less current maturities 161,230 124,572 Postretirement benefits other than pensions 220,425 219,717 Workers' compensation and other claims 103,580 105,837 Other liabilities 83,974 83,790 - ---------------------------------------------------------------------------------- Total liabilities 734,043 718,641 Shareholder's equity (12,056) (11,660) - ---------------------------------------------------------------------------------- Total liabilities and shareholder's equity $ 721,987 706,981 - ---------------------------------------------------------------------------------- See accompanying notes.
Pittston Minerals Group STATEMENTS OF CASH FLOWS (Unaudited)
Quarter Ended March 31 (In thousands) 1997 1996 - ------------------------------------------------------------------------------------------------------------------ Cash flows from operating activities: Net income $ 947 3,020 Adjustments to reconcile net income to net cash used by operating activities: Noncash charges and other write-offs -- 29,948 Depreciation, depletion and amortization 8,920 8,728 Provision for deferred income taxes 2,001 5,094 Other, net (1,032) (614) Changes in operating assets and liabilities net of effects of acquisitions and dispositions: Increase in receivables (414) (15,444) Increase in inventories and other current assets (11,356) (5,982) Decrease in current liabilities (8,127) (8,964) Other, net (3,754) (37,921) - ------------------------------------------------------------------------------------------------------------------ Net cash used by operating activities (12,815) (22,135) - ------------------------------------------------------------------------------------------------------------------ Cash flows from investing activities: Additions to property, plant and equipment (7,458) (5,380) Proceeds from disposal of property, plant and equipment 1,534 1,444 Other, net 446 154 - ------------------------------------------------------------------------------------------------------------------ Net cash used by investing activities (5,478) (3,782) - ------------------------------------------------------------------------------------------------------------------ Cash flows from financing activities: Net additions to debt 36,357 8,655 Payments (to) from - Burlington Group/Brink's Group (17,687) 18,226 Other share activity (2,085) (2,333) - ------------------------------------------------------------------------------------------------------------------ Net cash provided by financing activities 16,585 24,548 - ------------------------------------------------------------------------------------------------------------------ Net decrease in cash and cash equivalents (1,708) (1,369) Cash and cash equivalents at beginning of period 3,387 4,999 - ------------------------------------------------------------------------------------------------------------------ Cash and cash equivalents at end of period $ 1,679 3,630 - ------------------------------------------------------------------------------------------------------------------ See accompanying notes.
The Pittston Company and Subsidiaries CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(In thousands, except Quarter Ended March 31 per share amounts) 1997 1996 - ----------------------------------------------------------------------------------- Net sales $ 158,883 170,252 Operating revenues 622,793 560,655 - ----------------------------------------------------------------------------------- Net sales and operating revenues 781,676 730,907 - ----------------------------------------------------------------------------------- Cost of sales 153,412 195,885 Operating expenses 518,819 473,066 Restructuring and other credits, including litigation accrual -- (37,758) Selling, general and administrative expenses 75,643 72,296 - ----------------------------------------------------------------------------------- Total costs and expenses 747,874 703,489 - ----------------------------------------------------------------------------------- Other operating income 3,576 2,815 - ----------------------------------------------------------------------------------- Operating profit 37,378 30,233 Interest income 1,019 525 Interest expense (5,564) (3,745) Other expense, net (2,389) (2,397) - ----------------------------------------------------------------------------------- Income before income taxes 30,444 24,616 Provision for income taxes 9,103 5,996 - ----------------------------------------------------------------------------------- Net income 21,341 18,620 Preferred stock dividends, net (901) (1,065) - ----------------------------------------------------------------------------------- Net income attributed to common shares $ 20,440 17,555 - ----------------------------------------------------------------------------------- Pittston Brink's Group: Net income attributed to common shares $ 15,306 11,839 - ----------------------------------------------------------------------------------- Net income per common shares $ .40 .31 - ----------------------------------------------------------------------------------- Average common shares outstanding 38,189 38,057 - ----------------------------------------------------------------------------------- Pittston Burlington Group: Net income attributed to common shares $ 5,088 3,761 - ----------------------------------------------------------------------------------- Net income per common shares $ .26 .20 - ----------------------------------------------------------------------------------- Average common shares outstanding 19,406 19,040 - ----------------------------------------------------------------------------------- Pittston Minerals Group: Net income attributed to common shares $ 46 1,955 - ----------------------------------------------------------------------------------- Net income per common shares $ .01 .25 - ----------------------------------------------------------------------------------- Average common shares outstanding 8,002 7,822 - ----------------------------------------------------------------------------------- See accompanying notes.
The Pittston Company and Subsidiaries CONDENSED CONSOLIDATED BALANCE SHEETS
March 31 December 31 (In thousands) 1997 1996 - -------------------------------------------------------------------------------------------- (Unaudited) Assets Current assets: Cash and cash equivalents $ 50,827 41,217 Accounts receivable, net of estimated amounts uncollectible 485,471 456,135 Inventories and other current assets 138,196 121,338 - -------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------- Total current assets 674,494 618,690 Property, plant and equipment, at cost, net of accumulated depreciation, depletion and amortization 575,497 540,851 Intangibles, net of amortization 309,388 317,062 Other assets 339,701 336,276 - -------------------------------------------------------------------------------------------- Total assets $1,899,080 1,812,879 - -------------------------------------------------------------------------------------------- Liabilities and Shareholders' Equity Current liabilities $ 568,903 568,967 Long-term debt, less current maturities 234,711 158,837 Postretirement benefits other than claims 227,586 226,697 Workers' compensation and other claims 114,636 116,893 Other liabilities 135,276 134,778 - -------------------------------------------------------------------------------------------- Total liabilities 1,281,112 1,206,172 Shareholders' equity 617,968 606,707 - -------------------------------------------------------------------------------------------- Total liabilities and shareholders' equity $1,899,080 1,812,879 - -------------------------------------------------------------------------------------------- See accompanying notes.
The Pittston Company and Subsidiaries CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)
Quarter Ended March 31 (In thousands) 1997 1996 ------------------------------------------------------------------------------------------------------------------- Cash flows from operating activities: Net income $ 21,341 18,620 Adjustments to reconcile net income to net cash provided by operating activities: Noncash charges and other write-offs -- 29,948 Depreciation, depletion and amortization 30,139 27,051 Provision for aircraft heavy maintenance 8,186 7,718 Provision for deferred income taxes 2,328 4,470 Other, net 5,309 1,700 Changes in operating assets and liabilities net of effects of acquisitions and dispositions: Increase in receivables (14,285) (3,169) Increase in inventories and other current assets (17,107) (11,210) Decrease in current liabilities (4,083) (19,309) Other, net (8,033) (37,869) ------------------------------------------------------------------------------------------------------------------- Net cash provided by operating activities 23,795 17,950 ------------------------------------------------------------------------------------------------------------------- Cash flows from investing activities: Additions to property, plant and equipment (40,032) (31,877) Proceeds from disposal of property, plant and equipment 3,940 4,709 Aircraft heavy maintenance (9,473) (4,131) Acquisitions and related contingent payments, net of cash acquired (54,094) (746) Other, net 13,901 3,565 ------------------------------------------------------------------------------------------------------------------- Net cash used by investing activities (85,758) (28,480) ------------------------------------------------------------------------------------------------------------------- Cash flows from financing activities: Additions to debt 100,885 11,981 Reductions of debt (20,051) (10,006) Share and other equity activity (9,261) (5,639) ------------------------------------------------------------------------------------------------------------------- Net cash provided (used) by financing activities 71,573 (3,664) ------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in cash and cash equivalents 9,610 (14,194) Cash and cash equivalents at beginning of period 41,217 52,823 ------------------------------------------------------------------------------------------------------------------- Cash and cash equivalents at end of period $ 50,827 38,629 ------------------------------------------------------------------------------------------------------------------- See accompanying notes.
The Pittston Company and Subsidiaries Pittston Minerals Group NOTES TO FINANCIAL INFORMATION (1) The Company has three classes of common stock: Pittston Brink's Group Common Stock, Pittston Burlington Group Common Stock and Pittston Minerals Group Common Stock, which were designated to provide shareholders with separate securities reflecting the performance of the Pittston Brink's Group (the "Brink's Group"), Pittston Burlington Group (the "Burlington Group") and Pittston Minerals Group (the "Minerals Group"), respectively, without diminishing the benefits of remaining a single corporation or precluding future transactions affecting any of the Groups. The financial information for the Minerals Group includes the results of the Coal and Minerals Ventures operations of the Company. It is prepared using the amounts included in the Company's consolidated financial statements. Accordingly, the Company's consolidated financial statements must be read in connection with the Minerals Group's financial data. (2) In 1988, the trustees of certain pension and benefit trust funds (the "Trust Funds") established under collective bargaining agreements with the United Mine Workers of America ("UMWA") brought an action (the "Evergreen Case") against the Company and a number of its coal subsidiaries, claiming that the defendants were obligated to contribute to such Trust Funds in accordance with the provisions of the 1988 and subsequent National Bituminous Coal Wage Agreements, to which neither the Company nor any of its subsidiaries were a signatory. In March 1996, a settlement was reached in the Evergreen Case. Under the terms of the settlement, the coal subsidiaries which had been signatories to earlier National Bituminous Coal Wage Agreements agreed to make various lump sum payments in full satisfaction of all amounts allegedly due to the Trust Funds through January 31, 1996, to be paid over time as follows: approximately $25.8 million upon dismissal of the Evergreen Case and the remainder of $24 million in installments of $7.0 million in 1996 and $8.5 million in each of 1997 and 1998. The first payment was entirely funded through an escrow account previously established by the Company. The second payment of $7.0 million was paid in 1996 and was funded from cash provided by operating activities. In addition, the coal subsidiaries agreed to future participation in the UMWA 1974 Pension Plan. As a result of the settlement of the Evergreen Case at an amount lower than previously accrued, the Company recorded a pretax gain of $35.7 million ($23.2 million after tax) in the first quarter of 1996 in its consolidated financial statements and the financial statements of the Minerals Group. (3) In 1996, the Minerals Group implemented a new accounting standard, Statement of Financial Accounting Standards ("SFAS") No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of". SFAS No. 121 requires companies to review assets for impairment whenever circumstances indicate that the carrying amount of an asset may not be recoverable. SFAS No. 121 resulted in a pretax charge to earnings in the first quarter of 1996 for the Minerals Group's Coal operations of $29.9 million ($19.5 million after tax) , of which $26.3 million was included in cost of sales and $3.6 million was included in selling, general and administrative expenses. Assets for which the impairment loss was recognized consisted of property, plant and equipment, advanced royalties and goodwill. (4) Certain prior period amounts have been reclassified to conform to the current period's financial statement presentation. (5) Financial information for the Brink's Group, which includes the results of the Company's Brink's, Incorporated and Brink's Home Security, Inc. businesses, and the Burlington Group, which includes the results of the Company's Burlington Air Express Inc. business, is available upon request. -----END PRIVACY-ENHANCED MESSAGE-----