-----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, VUOzm26Lv7bYak41WvrFRxhTyLU+J6VFxjdO95ehpzNz2aC27yDiEr43rdjcnzFY rGfA5AepfWfnZ0XN/uCkIQ== 0000099780-97-000014.txt : 19971117 0000099780-97-000014.hdr.sgml : 19971117 ACCESSION NUMBER: 0000099780-97-000014 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971114 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: TRINITY INDUSTRIES INC CENTRAL INDEX KEY: 0000099780 STANDARD INDUSTRIAL CLASSIFICATION: RAILROAD EQUIPMENT [3743] IRS NUMBER: 750225040 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-06903 FILM NUMBER: 97718353 BUSINESS ADDRESS: STREET 1: 2525 STEMMONS FREEWAY CITY: DALLAS STATE: TX ZIP: 75207-2401 BUSINESS PHONE: 2146314420 FORMER COMPANY: FORMER CONFORMED NAME: TRINITY STEEL CO INC DATE OF NAME CHANGE: 19720407 10-Q 1 10-Q, 2ND QUARTER FY98 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 September 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 1-6903 TRINITY INDUSTRIES, INC. (Exact name of Registrant as specified in its charter) Incorporated Under the Laws 75-0225040 of the State of Delaware (I.R.S. Employer Identification No.) 2525 Stemmons Freeway Dallas, Texas 75207-2401 (Address of Principal (Zip Code) Executive Offices) 214) 631-4420 (Registrant's Telephone Number, Including Area Code) 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 and (2) has been subject to such filing requirements for the past 90 days. Yes X No 43,231,588 (Number of shares of common stock outstanding as of September 30, 1997) Part I Item 1 - Financial Statements Trinity Industries, Inc. Consolidated Balance Sheet (unaudited) (in millions except per share data) September 30 March 31 Assets 1997 1997 Cash and cash equivalents . . . . . . . . . $ 3.4 $ 12.2 Receivables . . . . . . . . . . . . . . . . 292.3 236.9 Inventories: Raw materials and supplies. . . . . . . . 233.6 216.7 Work in process . . . . . . . . . . . . . 49.0 41.9 Finished goods . . . . . . . . . . . . . 58.1 55.9 340.7 314.5 Property, plant and equipment, at cost. . . 1,195.2 1,136.5 Less accumulated depreciation . . . . . . . (451.0) (424.9) 744.2 711.6 Other assets. . . . . . . . . . . . . . . . 104.2 81.2 $1,484.8 $1,356.4 Liabilities and Stockholders' Equity Short-term debt . . . . . . . . . . . . . . $ 190.0 $ 64.0 Accounts payable and accrued liabilities. . 262.9 261.2 Long-term debt. . . . . . . . . . . . . . . 162.4 178.6 Deferred income taxes . . . . . . . . . . . 22.2 22.8 Other liabilities . . . . . . . . . . . . . 21.4 20.3 658.9 546.9 Stockholders' equity: Common stock - par value $1 per share; authorized 100.0 shares; shares issued and outstanding at September 30, 1997 - 43.2 and March 31, 1997 - 43.0 . . . . . . . . . . 43.2 43.0 Capital in excess of par value. . . . . . 278.2 273.3 Retained earnings . . . . . . . . . . . . 504.5 493.2 825.9 809.5 $1,484.8 $1,356.4 Trinity Industries, Inc. Consolidated Income Statement (unaudited) (in millions except per share data) Six Months Ended September 30 1997 1996 Revenues. . . . . . . . . . . . . . . . . . . . . . $1,120.4 $1,125.0 Operating costs: Cost of revenues. . . . . . . . . . . . . . . . . 917.6 946.8 Selling, engineering and administrative expenses. 72.1 61.2 Retirement plans expense. . . . . . . . . . . . . 9.2 8.7 998.9 1,016.7 Operating profit. . . . . . . . . . . . . . . . . . 121.5 108.3 Other (income) expenses: Litigation settlement . . . . . . . . . . . . . . 70.0 - Interest income . . . . . . . . . . . . . . . . . (1.2) (0.5) Interest expense. . . . . . . . . . . . . . . . . 10.2 12.4 Other, net. . . . . . . . . . . . . . . . . . . . 1.0 (2.1) 80.0 9.8 Income from continuing operations before income taxes . . . . . . . . . . . . . . . 41.5 98.5 Provision (benefit) for income taxes: Current . . . . . . . . . . . . . . . . . . . . . 14.5 38.1 Deferred. . . . . . . . . . . . . . . . . . . . . 1.1 (0.6) 15.6 37.5 Income from continuing operations . . . . . . . . . 25.9 61.0 Income from discontinued operations (net of income taxes of $4.8). . . . . . . . . . . . . . . . . . - 7.2 Net income. . . . . . . . . . . . . . . . . . . . . $ 25.9 $ 68.2 Income per common and common equivalent share from continuing operations. . . . . . . . . . . . $ 0.59 $ 1.45 Income per common and common equivalent share from discontinued operations. . . . . . . . . . . - 0.17 Net income per common and common equivalent share . $ 0.59 $ 1.62 Weighted average number of common and common equivalent shares outstanding. . . . . . . . . . . 43.8 42.2 Trinity Industries, Inc. Consolidated Income Statement (unaudited) (in millions except per share data) Three Months Ended September 30 1997 1996 Revenues. . . . . . . . . . . . . . . . . . . . . . $ 560.3 $ 548.5 Operating costs: Cost of revenues. . . . . . . . . . . . . . . . . 458.3 459.8 Selling, engineering and administrative expenses. 34.7 30.6 Retirement plans expense. . . . . . . . . . . . . 4.1 3.7 497.1 494.1 Operating profit. . . . . . . . . . . . . . . . . . 63.2 54.4 Other (income) expenses: Litigation settlement . . . . . . . . . . . . . . 70.0 - Interest income . . . . . . . . . . . . . . . . . (0.6) (0.3) Interest expense. . . . . . . . . . . . . . . . . 5.2 6.0 Other, net. . . . . . . . . . . . . . . . . . . . (0.3) (0.7) 74.3 5.0 Income (loss) from continuing operations before income taxes . . . . . . . . . . . . . . . (11.1) 49.4 Provision (benefit) for income taxes: Current . . . . . . . . . . . . . . . . . . . . . (3.8) 17.1 Deferred. . . . . . . . . . . . . . . . . . . . . - 1.8 (3.8) 18.9 Income (loss) from continuing operations. . . . . . (7.3) 30.5 Income from discontinued operations (net of income taxes of $2.5). . . . . . . . . . . . . . . . . . - 3.9 Net income (loss) . . . . . . . . . . . . . . . . . $ (7.3) $ 34.4 Income (loss) per common and common equivalent share from continuing operations. . . . . . . . . . . . $ (0.17) $ 0.72 Income per common and common equivalent share from discontinued operations. . . . . . . . . . . - 0.09 Net income (loss) per common and common equivalent share . . . . . . . . . . . . . . . . . . . . . . $ (0.17) $ 0.81 Weighted average number of common and common equivalent shares outstanding. . . . . . . . . . . 43.2 42.4 Trinity Industries, Inc. Consolidated Statement of Cash Flows (unaudited) (in millions) Six Months Ended September 30 1997 1996 Cash flows from operating activities: Net income. . . . . . . . . . . . . . . . . . . . . $ 25.9 $ 68.2 Less: Income from discontinued operations. . . . . - (7.2) Income from continuing operations. . . . . . . . . 25.9 61.0 Adjustments to reconcile net income to net cash provided (required) by operating activities: Depreciation. . . . . . . . . . . . . . . . . . . 40.5 43.4 Deferred provision (benefit) for income taxes . . 1.1 (0.6) Gain on sale of property, plant and equipment . . (0.7) (1.8) Other . . . . . . . . . . . . . . . . . . . . . . 1.5 0.8 Change in assets and liabilities: (Increase) decrease in receivables . . . . . . . (51.8) 70.3 (Increase) decrease in inventories . . . . . . . (2.2) 4.6 Increase in other assets . . . . . . . . . . . . (22.1) (27.1) Increase (decrease) in accounts payable and accrued liabilities . . . . . . . . . . . . . . (2.7) 1.3 Increase (decrease) in other liabilities . . . . 1.2 (6.6) Total adjustments . . . . . . . . . . . . . . . (35.2) 84.3 Net cash provided (required) by operating activities. . . . . . . . . . . . . . . . . . . (9.3) 145.3 Cash flows from investing activities: Proceeds from sale of property, plant and equipment. . . . . . . . . . . . . . . . . . . 15.1 15.9 Capital expenditures. . . . . . . . . . . . . . . . (50.0) (100.8) Payment for purchase of acquisitions, net of cash acquired . . . . . . . . . . . . . . . (57.2) - Cash of acquired subsidiary . . . . . . . . . . . . - 2.3 Net cash required by investing activities . . . . (92.1) (82.6) Cash flows from financing activities: Issuance of common stock. . . . . . . . . . . . . . 0.7 1.4 Net borrowings (repayments) under short-term debt . 126.0 (27.0) Payments to retire long-term debt . . . . . . . . . (19.5) (19.9) Dividends paid. . . . . . . . . . . . . . . . . . . (14.6) (14.1) Net cash provided (required) by financing activities . . . . . . . . . . . . . . 92.6 (59.6) Cash flows provided by discontinued operations . . . - 0.7 ______ ______ Net increase (decrease) in cash and cash equivalents (8.8) 3.8 Cash and cash equivalents at beginning of period . . 12.2 14.7 Cash and cash equivalents at end of period . . . . . $ 3.4 $ 18.5 Trinity Industries, Inc. Consolidated Statement of Stockholders' Equity (unaudited) (in millions except share and per share data)
Common Capital Common Stock in Total Shares $1.00 Excess Stock- (100,000,000) Par of Par Retained holders' (Authorized) Value Value Earnings Equity Balance at March 31, 1996 . . . . 41,596,037 $41.6 $239.6 $464.8 $746.0 Other. . . . . . . . . . . . . . 1,386,220 1.4 42.2 - 43.6 Net income . . . . . . . . . . . - - - 68.2 68.2 Cash dividends ($0.34 per share) . . . . . . - - - (14.4) (14.4) Balance September 30, 1996. . . . 42,982,257 $43.0 $281.8 $518.6 $843.4 Balance at March 31, 1997 . . . . 43,046,365 $43.0 $273.3 $493.2 $809.5 Other. . . . . . . . . . . . . . 185,223 0.2 4.9 - 5.1 Net income . . . . . . . . . . . - - - 25.9 25.9 Cash dividends ($0.34 per share) . . . . . . - - - (14.6) (14.6) Balance September 30, 1997. . . . 43,231,588 $43.2 $278.2 $504.5 $825.9
The foregoing consolidated financial statements are unaudited and have been prepared from the books and records of the Registrant. In the opinion of the Registrant, all adjustments, consisting only of normal and recurring adjustments necessary to a fair presentation of the financial position of the Registrant as of September 30, 1997 and March 31, 1997, the results of operations for the six and three month periods ended September 30, 1997 and 1996 and cash flows for the six month periods ended September 30, 1997 and 1996, in conformity with generally accepted accounting principles, have been made. Trinity Industries, Inc. Notes to Consolidated Financial Statements September 30, 1997 Acquisitions and Divestitures At the close of business on March 31, 1997, the Registrant completed the divestiture of Halter Marine Group, Inc. ("Halter"), previously a wholly-owned subsidiary of the Registrant, with the distribution of its 15 million shares of Halter common stock to its stockholders in the form of a tax-free property distribution. Prior year's financial statements have been reclassified to reflect the divestiture of the Halter business as a discontinued operation. On August 12, 1997, a wholly-owned subsidiary of the Registrant, merged with and into Differential Holdings, Inc., a holding company for Difco, Inc. ("Difco"). Difco manufactures and sells special purpose rail cars and mine hauling equipment. On August 22, 1997, an Asset Purchase Agreement was entered into and by a wholly-owned subsidiary of the Registrant and Buffalo Specialty Products, Inc. ("Buffalo"). Buffalo manufactures and sells cold roll formed steel highway safety and industrial products and timber highway safety products. Contingencies In September 1997, the Registrant settled a thirteen year old lawsuit brought against a former subsidiary of the Company by Morse/Diesel Inc. Pursuant to such settlement, the Registrant paid $70 million. The Company has not participated in the business associated with this matter since 1989. The Registrant is involved in various other claims and lawsuits incidental to its business. In the opinion of management, these claims and suits in the aggregate will not have a material adverse affect on the Registrant's consolidated financial statements. New Accounting Standard In February 1997, Statement of Financial Accounting Standards No. 128, "Earnings Per Share," was issued. Adoption is required by the Registrant beginning with the interim financial statements issued for the third quarter of fiscal 1998. The pro forma effect of applying this statement to the six and three month periods ended September 30, 1997 is not material. Item 2 - Management's Discussion and Analysis of Consolidated Financial Condition and Statement of Operations The increase in 'Receivables' at September 30, 1997 compared to March 31, 1997 is due primarily to increased business in the Construction Products and Industrial Products segment from improved seasonal revenues. The increase in 'Property, plant and equipment' at September 30, 1997 compared to March 31, 1997 is due primarily to acquisitions finalized in the second quarter. Short-term debt increased due primarily to the litigation settlement in the second fiscal quarter and the acquisition of assets of Ladish Co., Inc. in the first fiscal quarter. Statement of Operations Six Months Ended September 30, 1997 vs. Six Months Ended September 30, 1996 Operating profit from continuing operations in the current six month period increased $13.2 million, or 12.2%, compared to the same period last year on a slight decrease in revenues due to improved operating profit margins across all segments. Operating profit for the Transportation Products segment increased by $6.2 million or 7.2% in the current six month period on a 7.7% decrease in revenues when compared to the prior year period as a result of improving margins attained from cost reduction programs put in place in prior periods. Revenues decreased primarily due to a reduction in railcar deliveries. The replacement cycle for railcars and barges coupled with strong traffic on the nation's rails and rivers continues to drive this segment. The number of orders on hand in this segment are at record levels and it is anticipated that a healthy order pattern and replacement demand will continue throughout the fiscal year. Construction Products revenues and operating profit for the current six month period were higher by 12.5% and 24.4%, respectively, due to increased governmental, residential, and commercial construction that utilizes the Company's highway guardrail and safety systems products and its ready-mix concrete and aggregate businesses. The federal government continues to emphasize roadside safety and the upgrade of America's highway system to higher standards to reflect changes in vehicle mix. In addition the overall economic outlook across industries has led to strong activity levels in construction markets served by the Registrant. These factors should continue to provide a favorable market demand for the Company's Construction Products. The Industrial Products segment's revenues and operating profit increased by $26.8 and $2.8 million, respectively, in the current six month period as compared to the prior year. This segment continues to benefit from a global increase in energy and petrochemical demand as well as the level of housing starts in markets served by the Company's LPG business. Three Months Ended September 30, 1997 vs. Three Months Ended September 30, 1996 Operating profit from continuing operations in the current quarter increased $8.8 million, or 16.2%, compared to the same period last year on a slight increase of revenues due to improved operating profit margins across all segments. Operating profit for the Transportation Products segment increased $2.7 million or 6.3% in the current three month period when compared to the prior year quarter. It is anticipated that the replacement cycle for railcars and barges will continue to drive this segment throughout the fiscal year. Construction Products revenues and operating profit for the current quarter increased by $21.2 and $4.4 million, respectively, due to the same factors stated above. The overall demand for the Company's Construction Products continues to look favorable. The Industrial Products segment's revenues and operating profit were higher in the current quarter by $20.8 and $1.5 million, respectively, when compared to the prior year quarter. This segment continues to benefit from a global increase in energy and petrochemical demand as well as the level of housing starts in markets served by the Company's LPG business. The Industrial Products segment has also benefited from the addition of assets of Ladish Co., Inc. in the first fiscal quarter. Net income for the six and three month periods decreased by $42.3 and $41.7 million, respectively, due to the litigation settlement recorded in the second quarter of fiscal 1997. Any statements contained herein that are not historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, and involve risks and uncertainties. These forward-looking statements include expectations, beliefs, plans, objectives, future financial performance, estimates, projections, goals and forecasts. Potential factors which could cause the Company's actual results of operations to differ materially from those in the forward-looking statements include market conditions and demand for the Company's products; competition; technologies; steel prices; interest rates and capital costs; taxes; unstable governments and business conditions in emerging economies; and legal, regulatory and environmental issues. Any forward-looking statement speaks only as of the date on which such statement is made. The Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made. Part II Item 5 - Other Information On November 11, 1997, the Registrant announced that it had indefinitely suspended negotiations to acquire the stock of American Railcar Industries, Inc. (ARI) and certain assets of ACF Industries, Inc. The Registrant had announced on August 28, 1997 an agreement in principal to acquire ARI and certain ACF assets. Item 6 - Exhibits and Reports on Form 8-K. (a) Exhibits Exhibit Number Description 27 Financial Data Schedule (b) No Form 8-K was filed during the quarter. Pursuant to the requirements of Section 13 or 15(d) 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. Trinity Industries, Inc. By: \S\ John M. Lee John M. Lee Vice President November 14, 1997 Index to Exhibits No. Description Page 27 Financial Data Schedule * EX-27 2
5 1000 6-MOS MAR-31-1998 SEP-30-1997 3,400 0 292,300 0 340,700 0 1,195,200 (451,000) 1,484,800 0 0 43,200 0 0 782,700 1,484,800 0 1,120,400 0 917,600 81,300 0 10,200 41,500 15,600 25,900 0 0 0 25,900 .59 0
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