-----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, T2dDy4UETi/q9XPxVxpCCoZ3e55h61vc5Ik+MVUJo7HWi3L4mHtbyUgSmj43mXIR ZrNsurceuPwIr+gW67oyzg== 0000094328-97-000012.txt : 19970616 0000094328-97-000012.hdr.sgml : 19970616 ACCESSION NUMBER: 0000094328-97-000012 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970430 FILED AS OF DATE: 19970613 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: STEWART & STEVENSON SERVICES INC CENTRAL INDEX KEY: 0000094328 STANDARD INDUSTRIAL CLASSIFICATION: ENGINES & TURBINES [3510] IRS NUMBER: 741051605 STATE OF INCORPORATION: TX FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-11443 FILM NUMBER: 97623371 BUSINESS ADDRESS: STREET 1: 2707 N LOOP W CITY: HOUSTON STATE: TX ZIP: 77008 BUSINESS PHONE: 7138687700 MAIL ADDRESS: STREET 1: P O BOX 1637 CITY: HOUSTON STATE: TX ZIP: 77251-1637 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended April 30, 1997 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 0-8493 STEWART & STEVENSON SERVICES, INC. (Exact name of registrant as specified in its charter) Texas 74-1051605 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 2707 North Loop West, Houston, Texas 77008 (Address of principal executive offices) (Zip Code) (713) 868-7700 (Registrant's telephone number, including area code) 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 the latest practicable date. Common Stock, Without Par Value 33,190,468 Shares (Class) (Outstanding at April 30, 1997) PART I. FINANCIAL INFORMATION Item 1. Financial Statements. The following information required by Rule 10-01 of Regulation S-X is provided herein for Stewart & Stevenson Services, Inc. and Subsidiaries (the "Company"): Consolidated Condensed Statement of Financial Position -- April 30, 1997 and January 31, 1997. Consolidated Condensed Statement of Earnings -- Three Months Ended April 30, 1997 and 1996. Consolidated Condensed Statement of Cash Flows -- Three Months Ended April 30, 1997 and 1996. Notes to Consolidated Condensed Financial Statements.
STEWART & STEVENSON SERVICES, INC. CONSOLIDATED CONDENSED STATEMENT OF FINANCIAL POSITION (Dollars in thousands) April 30 January 31 1997 1997 ---------- ---------- ASSETS (Unaudited) CURRENT ASSETS Cash and equivalent $ 56,151 $ 9,132 Accounts and notes receivable, net 247,836 237,062 Recoverable costs and accrued profits not yet billed 332,202 326,952 Inventories: Engineered Power Systems 305,727 306,946 Distribution 161,891 149,238 Excess of current cost over LIFO values (56,176) (55,202) ----------- ----------- 411,442 400,982 ----------- ----------- TOTAL CURRENT ASSETS 1,047,631 974,128 PROPERTY, PLANT AND EQUIPMENT 273,328 262,192 Allowances for depreciation and amortization (147,120) (138,759) ----------- ----------- 126,208 123,433 INVESTMENTS AND OTHER ASSETS 51,018 47,724 ----------- ----------- $1,224,857 $1,145,285 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Notes payable $ 78,000 $ 28,000 Accounts payable 110,961 165,999 Billings on uncompleted contracts in excess of incurred costs 20,871 9,354 Current income taxes 76,531 65,881 Other current liabilities 44,912 51,325 ----------- ----------- TOTAL CURRENT LIABILITIES 331,275 320,559 COMMITMENTS AND CONTINGENCIES (SEE NOTE B) LONG-TERM DEBT 380,540 319,700 DEFERRED INCOME TAXES 4,547 5,127 ACCRUED POSTRETIREMENT BENEFITS 15,120 15,091 DEFERRED COMPENSATION 5,680 5,573 SHAREHOLDERS' EQUITY Common Stock, without par value, 100,000,000 shares authorized; 33,202,280 and 33,132,280 shares issued at April 30, 1997 and January 31, 1997, respectively, including 11,820 shares held in treasury 166,358 164,959 Retained earnings 321,370 314,309 ----------- ----------- 487,728 479,268 Less cost of treasury stock (33) (33) ----------- ----------- TOTAL SHAREHOLDERS' EQUITY 487,695 479,235 ----------- ----------- $1,224,857 $1,145,285 =========== =========== See accompanying notes to consolidated condensed financial statements.
STEWART & STEVENSON SERVICES, INC. CONSOLIDATED CONDENSED STATEMENT OF EARNINGS (In thousands, except per share data) Three Months Ended April 30 ------------------ 1997 1996 ---- ---- (Unaudited) Sales $ 329,413 $ 219,540 Cost of sales 283,646 181,437 ---------- ---------- Gross profit 45,767 38,103 Selling and administrative expenses 25,739 24,332 Interest expense 6,922 4,745 Other income, net (1,758) (999) ---------- ---------- 30,903 28,078 ---------- ---------- Earnings before income taxes 14,864 10,025 Income taxes 4,953 3,279 ---------- ---------- Earnings of consolidated companies 9,911 6,746 Equity in net earnings (loss) of unconsolidated affiliates (29) (33) ---------- ---------- Net earnings $ 9,882 $ 6,713 ========== ========== Weighted average number of shares of Common Stock outstanding 33,156 33,057 ========== ========== Net earnings per share $ .30 $ .20 ========== ========== Cash dividends per share $ .085 $ .08 ========== ========== See accompanying notes to consolidated condensed financial statements.
STEWART & STEVENSON SERVICES, INC. CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS (Dollars in thousands) Three Months Ended April 30 ------------------ 1997 1996 ---- ---- (Unaudited) Operating Activities Net earnings $ 9,882 $ 6,713 Adjustments to reconcile net earnings to net cash provided by (used in) operating activities: Accrued postretirement benefits 29 30 Depreciation and amortization 7,019 6,924 Deferred income taxes, net (1,701) 590 Change in operating assets and liabilities net of the effect of acquisition: Accounts and notes receivable, net (4,840) (33,263) Recoverable costs and accrued profits not yet billed (5,250) 5,971 Inventories (3,279) (19,442) Accounts payable (55,832) (23,276) Billings on uncompleted contracts in excess of incurred costs 11,517 (2,839) Current income taxes 10,650 1,988 Other current liabilities (8,162) (3,148) Other--principally long-term assets and liabilities (1,393) (1,961) ----------- ----------- Net Cash Used In Operating Activities (41,360) (61,713) Investing Activities Expenditures for property, plant and equipment (7,034) (5,275) Acquisition of business (5,029) 0 Disposal of property, plant and equipment 1,928 520 ----------- ----------- Net Cash Used In Investing Activities (10,135) (4,755) Financing Activities Additions to long-term borrowings 50,000 0 Payments on long-term borrowings (70) (25) Net borrowings and payments on short-term notes payable 50,000 69,000 Dividends paid (2,815) (2,645) Exercise of stock options 1,399 264 ----------- ----------- Net Cash Provided By Financing Activities 98,514 66,594 Increase in cash and equivalents 47,019 126 Cash and equivalents, February 1 9,132 6,325 ----------- ----------- Cash and equivalents, April 30 $ 56,151 $ 6,451 =========== =========== Supplemental disclosure of cash flow information: Net cash paid during the period for: Interest payments $ 4,202 $ 4,741 Income tax payments $ 352 $ 1,380 See accompanying notes to consolidated condensed financial statements.
STEWART & STEVENSON SERVICES, INC. NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS Note A--Basis of Presentation and Significant Accounting Policies The accompanying consolidated condensed financial statements have been prepared in accordance with Rule 10-01 of Regulation S-X for interim financial statements required to be filed with the Securities and Exchange Commission and do not include all information and footnotes required by generally accepted accounting principles for complete financial statements. However, the information furnished reflects all normal recurring adjustments which are, in the opinion of management, necessary for a fair statement of the results for the interim periods. The results of operations for the three months ended April 30, 1997 are not necessarily indicative of the results that will be realized for the fiscal year ending January 31, 1998. The accounting policies followed by the Company in preparing interim consolidated financial statements are similar to those described in the "Notes to Consolidated Financial Statements" in the Company's January 31, 1997 Form 10-K. The Company's fiscal year begins on February 1 of the year indicated and ends on January 31 of the following year. For example, "Fiscal 1997" commenced on February 1, 1997 and ends on January 31, 1998. Net earnings per share of Common Stock are computed by dividing net earnings by the weighted average number of shares outstanding. Common Stock equivalents (outstanding options to purchase shares of Common Stock) are excluded from the computations as they are insignificant. The weighted average number of shares outstanding for the three months ended April 30, 1997 includes 70,000 shares issued pursuant to exercise of stock options. Note B--Commitments and Contingencies On May 3, 1995, an indictment was returned by a federal Grand Jury in Houston, Texas, accusing the Company and four employees, including the Company's President, of one count of major fraud against the United States, four counts of false statements and one count of conspiracy to commit major fraud, make false statements and interfere with the administration of a foreign military sale. All of the counts arise from a 1987 subcontract to supply diesel generator sets for installation at long-range radar sites in Saudi Arabia (the "Peace Shield"). The indictment alleges that a former employee of the general contractor for the Peace Shield program, who later became a consultant to the Company, conspired with the Company and the other defendants to award the subcontract to the Company. The indictment also alleges that the government was defrauded out of approximately $5 million in connection with cost savings from a change order under the Peace Shield contract and that the Company made false statements relating to cost estimates in connection with such change order. The Company and each individual have denied all charges under the indictment and the case is pending in the United States District Court, Southern District of Texas, Houston Division. The Company is not able to make a reasonable estimate of the fines or penalties that could be imposed under the Federal Sentencing Guidelines in the event of a conviction under the indictment. Such fines and penalties could be substantial and adversely affect the Company's financial position and results of operations. If the Company or any of the individuals are convicted of any charges under the indictment, the Company could also be suspended or debarred from entering into new contracts or subcontracts with agencies of the U.S. Government or receiving the benefit of federal assistance payments for the duration of such suspension or debarment. Any such suspension could prevent the Company from receiving future modifications to the Family of Medium Tactical Vehicle ("FMTV") contract unless the Secretary of the Army finds a compelling need to enter into such modification. The Company would also be unable to sell equipment and services to customers that depend on loans or financial commitments from the Export Import Bank ("EXIM Bank"), Overseas Private Investment Corporation ("OPIC") and similar government agencies during a suspension or debarment. The Engineered Power Systems segment frequently sells equipment to customers that rely on financial commitments from EXIM Bank and/or OPIC. Any such suspension or debarment could have a material adverse impact on the Company's financial condition and results of operations. Also in connection with the Peace Shield contract, the Company has been advised that the former consultant of the Company referred to above filed a suit in the United States District Court, Southern District of Texas, Houston Division, for himself and the United States of America alleging that the Company supplied false information in violation of the False Claims Act (the "Act"), engaged in common law fraud and misapplied costs. Under the provisions of the Act, the suit has not been served upon the Company pending an investigation of the case by the U.S. Department of Justice and a determination as to whether the Department of Justice will intervene and pursue the matter on behalf of the United States. The suit alleges treble damages of $21 million plus unspecified penalties. Proceedings in this case have been stayed pending resolution of the criminal matter referred to above. The Company cannot predict the outcome of this action or the likelihood that substantial damages will result. However, the Company intends to vigorously defend this case if it is served upon the Company. The Company is a defendant in a number of other lawsuits relating to contractual, product liability, personal injury and warranty matters and otherwise of the type normally incident to the Company's business. Management is of the opinion that such lawsuits will not result in any material liability to the Company. The Company has not established any reserves or accruals for any potential liability that may be subsequently found in any of the foregoing cases. Item #2 Management's Discussion and Analysis of Financial Condition and Results of Operations The following discussion contains forward-looking statements which are based on assumptions such as timing, volume and pricing of customers' orders. These forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those outlined in the forward-looking statements, including the risk of cancellation or adjustment of specific orders, termination of significant government programs, decrease in demand in the markets served, the outcome of pending and future litigation and governmental proceedings, increasing product/service competition, or lower-than-anticipated penetration of markets served. This discussion should be read in conjunction with the attached condensed consolidated financial statements and notes thereto, and with the Company's audited financial statements and notes thereto for the fiscal year ended January 31, 1997. RESULTS OF OPERATIONS The following table sets forth for the periods indicated the percentage of sales represented by certain items reflected in the Company's Consolidated Condensed Statement of Earnings.
Three Months Ended April 30 ------------------ 1997 1996 ---- ---- Sales 100.0% 100.0% Cost of sales 86.1 82.6 ------ ------ Gross profit 13.9 17.4 Selling and administrative expenses 7.8 11.1 Interest expense 2.1 2.2 Other income, net (.5) (.5) ------ ------ 9.4 12.8 ------ ------ Earnings before income taxes 4.5 4.6 Income taxes 1.5 1.5 ------ ------ Earnings of consolidated companies 3.0 3.1 Equity in net earnings of unconsolidated affiliates .0 .0 ------ ------ Net earnings 3.0% 3.1% ====== ======
Sales for the first quarter of the year ending January 31, 1998 ("Fiscal 1997") increased 50% to $329,413,000 compared to sales of $219,540,000 for the same period of the year ended January 31, 1997 ("Fiscal 1996"). The Distribution segment's Fiscal 1997 sales increased $9,148,000 (8%) in the first quarter of Fiscal 1997 compared to the same period in Fiscal 1996. A strengthening oil and gas market served by the Company's Distribution territory contributed to these sales improvement. On April 12, 1997, the Company completed the acquisition of all of the outstanding common stock of Sierra Detroit Diesel Allison, Inc. ("Sierra"). Sales attributable to Sierra in the first quarter of Fiscal 1997 are not significant. The Tactical Vehicle Systems (TVS) segment sales increased $63,718,000 (457%) for the first quarter of Fiscal 1997 compared to the same period in Fiscal 1996. The increase in TVS segment sales reflects the increase in truck production under the "Family of Medium Tactical Vehicles" (FMTV) contract during the first quarter of Fiscal 1997 compared to the same period in Fiscal 1996. This increase also reflects the minimal production during the first quarter of Fiscal 1996, which resulted from the scheduled retrofit program of previously produced vehicles. See "Government Contract Status" below. The Engineered Power Systems (EPS) segment sales increased to $127 million in the first quarter of Fiscal 1997 compared to $90 million in the same period in Fiscal 1996. Turbine-driven equipment sales increased $7 million compared to the first quarter of Fiscal 1996, and gas turbine product support group (consisting of the servicing of customers' equipment and the long-term contracting for the operation and maintenance of customers' power plants) sales increased $10 million during the first quarter of Fiscal 1997 compared to the same period in Fiscal 1996. Engineered Power Systems diesel driven products sales increased $8 million in the first quarter of Fiscal 1997 compared to the same period in Fiscal 1996. The gross profit margin of 13.9% for the first quarter of Fiscal 1997 decreased compared to the 17.4% gross profit margin for the same period in Fiscal 1996. This decrease primarily reflects a change in the product mix of sales and lower margins in the Turbine-driven equipment sales. Selling and administrative expenses for the first quarter of Fiscal 1997 decreased as a percentage of sales to 7.8% compared to 11.1% for the same period in Fiscal 1996. Selling and administrative expense increased (6%) during the first quarter of Fiscal 1997, but at a much slower rate than the increase in revenue, reflecting the semi-variable nature of those expenses. Interest expense for the first quarter of Fiscal 1997 increased to $6,922,000, up from $4,745,000 for the same period in Fiscal 1996. The increase in interest expense over the comparable period of the prior year was the result of increases in both borrowings and interest rates. The average interest rate increase reflects primarily the conversion of a large block of debt from floating rates to higher fixed rates, during the second quarter of Fiscal 1996. During the first quarter of Fiscal 1997, long-term debt increased $61 million due to (i)increased working capital requirements caused by a reduction in trade payables and (ii) the acquisition of Sierra. Other income increased to $1,758,000 in the first quarter of Fiscal 1997 compared to $999,000 for the same period in Fiscal 1996 due to increased interest income. Net earnings of $9,882,000 ($.30 per share) were recorded for the three months ended April 30, 1997 as compared to earnings of $6,713,000 ($.20 per share) for the three months ended April 30, 1996. GOVERNMENT CONTRACT STATUS The FMTV contract is a firm fixed-price multi-year contract whereby the price paid to the Company is not subject to adjustment to reflect the Company's actual costs, except costs incurred as a result of actions or inactions of the government. As of April 30, 1997, the Company has completed approximately 5,396 of the 11,197 vehicles covered by the original contract plus options and additional requirements to date. Revenues and profits realized on the FMTV contract are based on the Company's estimates of total contract sales value and costs at completion. Stewart & Stevenson has incurred significant cost overruns and delivery schedule delays on the FMTV contract which the Company believes are primarily due to the government's decision to delay the testing of trucks and other government directed changes to the contract. The Company has and will continue to submit a series of Requests for Equitable Adjustments (REAs), under the FMTV contract, seeking increases in the FMTV contract price for those additional costs that relate to government caused delays and changes. Amounts in excess of agreed upon contract price for government caused delays, disruptions, unpriced change orders and government caused additional contract costs are recognized in contract value when the Company believes it is probable that the claim for such amounts will result in additional contract revenue and the amount can be reasonably estimated. At April 30, 1997, the Company's FMTV contract accounting position reflects the expected recovery of substantial amounts in excess of the contract price for government caused delays, disruptions, unpriced change orders and other government caused additional contract costs. These claims are in varying stages of negotiation. Although management believes that the contract provides a legal basis for the claims and its estimates are based on reasonable assumptions and on a reasonable analysis of contract costs, due to uncertainties inherent in the estimation and claims negotiations process, no assurances can be given that its estimates will be accurate, and variances between such estimates and actual results could be material. In the event that the Company is unable to recover a substantial portion of the additional costs, the Company may suffer a material adverse effect on its earnings during the accounting period in which such contract issues are resolved. The funding of the contract is subject to the inherent uncertainties of congressional appropriations. As is typical of multi-year defense contracts, the FMTV contracts must be funded annually by the Department of the Army and may be terminated at any time for the convenience of the government. The Company has received full funding for the production of approximately 10,155 vehicles through August 1997. It is anticipated that the remaining 1,042 vehicles will be funded after October 1997 when the 1998 Government fiscal year funding is approved. If the FMTV contract is terminated other than for default, the FMTV contract provides for termination charges that will reimburse the Company for allowable costs, but not necessarily all costs. EFFECT OF CERTAIN LITIGATION On May 3, 1995, the Company and four employees, including the Company's President, were indicted by a federal Grand Jury on six counts arising out of a 1987 subcontract to supply diesel generator sets for installation in Saudi Arabia. On May 12, 1995, the U.S. Air Force suspended the Company from contracting with any agency of the U.S. Government and from receiving the benefit of federal assistance programs. This suspension was temporarily terminated on November 8, 1995, pending the resolution of the charges covered by by the indictment, pursuant to an Interim Administrative Agreement between the Company and the U.S. Air Force. The Interim Administrative Agreement does not have any effect on the indictment. The Interim Administrative Agreement requires the Company to maintain various internal procedures and policies intended to assure the U.S. Government that the Company is a responsible contractor. In the event that the Company or any of the indicted employees are convicted of the charges contained in the indictment, the U.S. Air Force may re-evaluate whether the Company should be suspended or debarred based on all of the facts and circumstances then known. An acquittal of all parties of the charges does not terminate the Interim Administrative Agreement and any failure by the Company to perform its obligations thereunder may also be grounds for suspension or debarment. If the Company is suspended or debarred, either because of a conviction pursuant to the indictment or as a result of a breach of the Interim Administrative Agreement, it would be ineligible to enter into new contracts or subcontracts with agencies of the U.S. Government or receive the benefit of federal assistance payments for the duration of such suspension or debarment. Any such suspension could also prevent the Company from receiving future modifications to the FMTV contract unless the Secretary of the Army finds a compelling need to enter into such modification. The Company would also be unable to sell equipment and services to customers that depend on loans or financial commitments from the Export Import Bank ("EXIM Bank"), Overseas Private Investment Corporation ("OPIC") and similar government agencies during a suspension or debarment. The Engineered Power Systems segment frequently sells equipment to customers that rely on financial commitments from EXIM Bank and/or OPIC. Any such suspension or debarment could have a material adverse impact on the Company's future financial condition and results of operations. UNFILLED ORDERS The Company's unfilled orders consist of written purchase orders, letters of intent, and oral commitments. These unfilled orders are generally subject to cancellation or modification due to customer relationships or other conditions. Purchase options are not included in unfilled orders until exercised. Unfilled orders at April 30, 1997 and at the close of Fiscal 1996 were as follows: - ------------------------------------------------------------------------------------------------- April 30 January 31 1997 1997 - ------------------------------------------------------------------------------------------------- (Dollars in millions) Engineered Power Systems Equipment $ 372.2 $ 324.0 Operations and Maintenance 291.6 296.7 ---------- ---------- $ 663.8 $ 620.7 Distribution 97.5 92.2 Tactical Vehicle Systems 741.7 817.3 ---------- ---------- Total $ 1,503.0 $ 1,530.2 ========== ==========
Although no assurance can be given, the Company expects sales of the Engineered Power Systems segment to continue to be weighted in favor of turbine-driven equipment based on the number of unfilled orders for these units, the number of proposals that are presently outstanding and the current worldwide need for additional electrical generating capacity. Unfilled orders of the Tactical Vehicle Systems segment consists principally of the contracts awarded in October 1991, by the United States Department of the Army, to manufacture medium tactical vehicles, and options under the FMTV contract that have been exercised by the U.S. Army to purchase additional vehicles. CAPITAL EXPENDITURES AND COMMITMENTS Capital spending for property, plant and equipment of $7,034,000 for the first quarter of Fiscal 1997 was comparable to $5,275,000 for the same period in Fiscal 1996. These amounts are consistent with the historical capital expenditure levels of the Company. LIQUIDITY AND SOURCES OF CAPITAL Long-term borrowings at April 30, 1997 increased from the end of Fiscal 1996. The Company has $225,000,000 in committed credit facilities which were fully utilized at April 30, 1997 compared to utilization of $175,000,000 at the end of Fiscal 1996. The Company has additional banking relationships which provide uncommitted borrowing arrangements. These short- term borrowings increased to $78,000,000 at April 30, 1997 from $28,000,000 at the end of Fiscal 1996. In addition, the acquisition of Sierra Detroit Diesel Allison, Inc. increased long-term debt by $11 million. In the event that any acquisition of additional operations, growth in existing operations, changes in inventory levels, new capital investments, accounts receivable or other working capital items create a permanent need for working capital or capital expenditures in excess of existing committed lines of credit, the Company may seek to convert additional uncommitted borrowing arrangements to committed credit facilities or to issue additional equity securities. Management believes that the Company's current credit facilities and available options for external sources of funds are adequate to meet its foreseeable cash requirements. PART II. OTHER INFORMATION Item 1. Legal Proceedings. See Note B to the Consolidated Condensed Financial Statements and Management's Discussion and Analysis of Financial Condition and Results of Operations. Item 6. Exhibits and Reports on Form 8-K. (a) The following exhibits are filed as a part of this report pursuant to Item 601 of Regulation S-K. 3.1 Third Restated Articles of Incorporation of Stewart & Stevenson Services, Inc., effective as of September 13, 1995 (incorporated by reference to Exhibit 3(a) of the Form 10-Q of Stewart & Stevenson for the quarterly period ended October 31, 1995 under the Commission File No. 001-11443). 3.2 Fourth Restated Bylaws of Stewart & Stevenson Services, Inc., effective as of September 13, 1995 (incorporated by reference to Exhibit 3(b) of the Form 10-Q of Stewart & Stevenson for the quarterly period ended October 31, 1995 under the Commission File No. 001-11443). 4.1 Revolving Credit Agreement effective December 20, 1996 (incorporated by reference to Exhibit 4.1 of the Form 10-K of Stewart & Stevenson for the Fiscal year ended January 31, 1997 under Commission File No. 0-8493). 4.2 Note Purchase Agreement effective May 30, 1996, between Stewart & Stevenson Services, Inc. and the Purchasers named therein (incorporated by reference to Exhibit 4 of the Form 10-Q of Stewart & Stevenson for the quarterly period ended July 31, 1996 under the Commission File No. 0-8493). 4.3 Rights Agreement effective March 13, 1995, between Stewart & Stevenson Services, Inc. and The Bank of New York (incorporated by reference to Exhibit 1 of the Form 8-A Registration Statement of Stewart & Stevenson under the Commission File No. 001-11443). 10.1 Lease Agreement effective April 15, 1997, between Miles McInnes and Faye Manning Tosch, as Lessors, and the Company, as Lessee (incorporated by reference to Exhibit 10.1 of the Form 10-K of Stewart & Stevenson for the fiscal year ended January 31, 1997 under Commission File No. 0-8493). 10.2 Distributor Sales and Service Agreement effective January 1, 1996, between the Company and Detroit Diesel Corporation (incorporated by reference to Exhibit 10.2 of the Form 10-K of Stewart & Stevenson for the fiscal year ended January 31, 1996 under Commission File No. 0-8493). 10.3 Contract Number DAAE07-92-R001 dated October 11, 1991 between Stewart & Stevenson Services, Inc. and the United States Department of Defense, U.S. Army Tank-Automotive Command, as modified (incorporated by reference to Exhibit 28.1 of the Form S-3 Registration Statement of Stewart & Stevenson under the Commission File No. 33-44149). 10.4 Contract Number DAAE07-92-R002 dated October 15, 1991 between Stewart & Stevenson Services, Inc. and the United States Department of Defense, U.S. Army Tank-Automotive Command, as modified (incorporated by reference to Exhibit 28.2 of the Form S-3 Registration Statement of Stewart & Stevenson under the Commission File No. 33-44149). 10.5 Stewart & Stevenson Services, Inc. Deferred Compensation Plan dated as of December 31, 1979 (incorporated by reference to Exhibit 10.8 of the Form 10-K of Stewart & Stevenson for the fiscal year ended January 31, 1994 under the Commission File No. 0-8493). 10.6 Stewart & Stevenson Services, Inc. 1988 Nonstatutory Stock Option Plan (incorporated by reference to Exhibit 10.9 of the Form 10-K of Stewart & Stevenson for the fiscal year ended January 31, 1994 under the Commission File No. 0-8493). 10.7 Amendment No. 1 to Stewart & Stevenson Services, Inc. 1988 Nonstatutory Stock Option Plan, dated September 11, 1990 (incorporated by reference to Exhibit 10.10 of the Form 10-K of Stewart & Stevenson for the fiscal year ended January 31, 1994 under the Commission File No. 0-8493). 10.8 Stewart & Stevenson Services, Inc. Supplemental Executive Retirement Plan (incorporated by reference to Exhibit 10.11 of the Form 10-K of Stewart & Stevenson for the fiscal year ended January 31, 1994 under the Commission File No. 0-8493). 10.9 Stewart & Stevenson Services, Inc. 1994 Director Stock Option Plan (incorporated by reference to Exhibit 4.1 of the Form S-8 Registration Statement of Stewart & Stevenson under the Commission File No. 33-58685). 23.1 Consent of Arthur Andersen LLP, Independent Public Accountants (incorporated by reference to Exhibit 23.1 of the Form 10-K of Stewart & Stevenson for the Fiscal year ended January 31, 1997 under Commission File No. 0-8493). *27.1 Financial Data Schedule. __________ *Filed with this report. (b) No reports on Form 8-K were filed during the three months ended April 30, 1997. 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. STEWART & STEVENSON SERVICES, INC. Date: June 12, 1997 By: /s/ Robert L. Hargrave Robert L. Hargrave Chief Executive Officer Chief Financial Officer and Chief Accounting Officer EXHIBIT INDEX Exhibit Number and Description 3.1 Third Restated Articles of Incorporation of Stewart & Stevenson Services, Inc. 3.2 Fourth Restated Bylaws of Stewart & Stevenson Services, Inc. 4.1 Revolving Credit Agreement. 4.2 Note Purchase Agreement. 4.3 Rights Agreement. 10.1 Lease Agreement. 10.2 Distributor Sales and Services Agreement. 10.3 Contract Number DAAE07-92-R001. 10.4 Contract Number DAAE07-92-R002. 10.5 Stewart & Stevenson Services, Inc. Deferred Compensation Plan. 10.6 Stewart & Stevenson Services, Inc. 1988 Nonstatutory Stock Option Plan. 10.7 Amendment No. 1 to Stewart & Stevenson Services, Inc. 1988 Nonstatutory Stock Option Plan. 10.8 Stewart & Stevenson Services, Inc. Supplemental Executive Retirement Plan. 10.9 Stewart & Stevenson Services, Inc. 1994 Director Stock Option Plan. 23.1 Consent of Arthur Andersen LLP, Independent Public Accountants. 27.1 Financial data schedule. EX-27 2
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM SEC FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 3-MOS JAN-31-1998 APR-30-1997 56,151 0 249,826 (1,990) 743,644 1,047,631 273,328 (147,120) 1,224,857 331,275 380,540 166,358 0 0 321,370 1,224,857 329,413 329,413 283,646 283,646 30,903 0 6,922 14,864 4,953 9,882 0 0 0 9,882 .30 .30
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