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 March 31, 1997
--------------
[ ] 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 #1-4252
UNITED INDUSTRIAL CORPORATION
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 95-2081809
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Identification No.)
incorporation or organization)
18 East 48th Street, New York, NY 10017
- --------------------------------------------------------------------------------
(Address of principal executive offices)
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 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. 12,175,543
shares of common stock as of May 1, 1997.
<PAGE>
UNITED INDUSTRIAL CORPORATION
INDEX
Page #
Part I - Financial Information
Item 1. Financial Statements
Consolidated Condensed Balance Sheets - Unaudited
March 31, 1997 and December 31, 1996 1
Consolidated Condensed Statements of Operations -
Three Months Ended March 31, 1997 and 1996 2
Consolidated Condensed Statements of Cash Flows
Three Months Ended March 31, 1997 and 1996 3
Notes to Consolidated Condensed Financial Statements 4
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 5
PART II - Other Information 7
<PAGE>
PART I - FINANCIAL INFORMATION
UNITED INDUSTRIAL CORPORATION & SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(Dollars in Thousands)
<TABLE>
<CAPTION>
MARCH 31 DECEMBER 31
1997 1996
---------- -------------
(Unaudited)
<S> <C> <C>
ASSETS
Current Assets
Cash & cash equivalents $ 6,944 $ 13,427
Trade receivables 36,858 40,134
Inventories
Finished goods & work-in-process 31,252 35,423
Materials & supplies 4,224 4,084
-------- --------
35,476 39,507
Deferred income taxes 6,135 6,131
Prepaid expenses & other current assets 1,157 1,217
-------- --------
Total Current Assets 86,570 100,416
Other assets 37,245 38,018
Property & equipment - less allowances
for depreciation (1997-$91,390; 1996-$89,256) 41,175 41,534
-------- --------
$164,990 $179,968
-------- --------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable $ 8,091 $ 10,135
Accrued employee compensation & taxes 8,656 7,690
Customer advances 4,488 5,873
Federal income taxes 1,731 963
Current portion of long-term debt - 13,750
Other liabilities 8,547 8,105
Provision for contract losses 7,927 9,166
-------- --------
Total Current Liabilities 39,440 55,682
Long-term liabilities (less current maturities) 2,654 2,654
Deferred income taxes 9,803 9,662
Postretirement benefits other than pensions 22,025 21,825
Shareholders' Equity
Common stock $1.00 par value
Authorized - 15,000,000 shares; outstanding
12,175,543 and 12,173,743 shares -
1997 and 1996 (net of shares in treasury) 14,374 14,374
Additional capital 90,194 90,196
Retained earnings 3,787 2,876
Treasury stock, at cost, 2,198,605 at 1997
and 2,200,405 shares at 1996 (17,287) (17,301)
-------- --------
91,068 90,145
-------- --------
$164,990 $179,968
-------- --------
</TABLE>
See accompanying notes
1
<PAGE>
UNITED INDUSTRIAL CORPORATION & SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
Three Months Ended March 31
--------------------------------
1997 1996 *
------------ -----------
(Unaudited)
Net sales $ 58,444 $ 54,501
Operating costs & expenses
Cost of sales 45,268 39,990
Selling & administrative 9,811 11,663
Other expense 371 193
Interest expense 510 563
Interest income (335) (224)
-------- --------
55,625 52,185
-------- --------
Income before income taxes 2,819 2,316
Income taxes 1,056 885
-------- --------
Net income $ 1,763 $ 1,431
======== ========
Net earnings per share $ .14 $ .12
===== -----
See accompanying notes
*Restated to conform to
current year classifications
2
<PAGE>
UNITED INDUSTRIAL CORPORATION & SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31
---------------------------
1997 1996
-------- --------
(Unaudited)
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 1,763 $ 1,431
Adjustments to reconcile net income
to net cash provided by
operating activities:
Depreciation and amortization 2,514 2,057
Deferred income taxes 137 32
(Decrease) increase in contract loss provision (1,239) (514)
Changes in operating assets and liabilities 5,346 711
Increase in federal income taxes 768 692
-------- --------
NET CASH PROVIDED BY
OPERATING ACTIVITIES 9,289 4,409
INVESTING ACTIVITIES
Decrease in note receivable - -
Purchase of property and equipment (1,783) (1,358)
Decrease (increase) in other assets - net 413 37
-------- --------
NET CASH (USED IN) PROVIDED BY
INVESTING ACTIVITIES (1,370) (1,321)
FINANCING ACTIVITIES
Increase in long-term liabilities 200 31
Proceeds from borrowings - 3,000
Payments on long-term debt & borrowings (13,750) (3,000)
Dividends (852) (608)
-------- --------
NET CASH USED IN FINANCING ACTIVITIES (14,402) (577)
-------- --------
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (6,483) 2,511
CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIOD 13,427 11,915
-------- --------
CASH AND CASH EQUIVALENTS AT END
OF PERIOD $ 6,944 $ 14,426
======== ========
</TABLE>
See accompanying notes
3
<PAGE>
UNITED INDUSTRIAL CORPORATION AND SUBSIDIARIES
Notes to Consolidated Condensed Financial Statements
March 31, 1997
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited consolidated condensed financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Rule 10-01 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three month period ended March 31, 1997
are not necessarily indicative of the results that may be expected for the year
ending December 31, 1997. For further information, refer to the consolidated
financial statements and footnotes thereto included in the Company's annual
report on Form 10-K for the year ended December 31, 1996.
NOTE B - DIVIDENDS
A quarterly dividend of $.07 per share is payable May 30, 1997.
4
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Results of Operations
Three months ended March 31, 1997 compared to three months ended March 31, 1996:
Consolidated net sales increased $3,943,000 or 7.2% to $58,444,000 in 1997, as
compared to $54,501,000 in 1996. In the Defense segment, sales increased
$2,342,000 or 5.2%. Generally this resulted from a higher volume of contract
related work. In the Company's Energy segment, increased prices and volume
accounted for its $1,363,000 or 17.8% rise in sales.
Gross margin decreased to 22.5% in the first quarter of 1997 from 26.6% in the
first quarter of 1996 primarily due to the Defense segment and partially offset
by increases in other segments. A fluctuation in the mix of contracts from
"fixed price production" to "cost plus development" in the Defense segment
resulted in a 6.9% decrease in the gross margin percentage to 20.2% in the first
quarter of 1997 as compared to 27.1% in the like period in 1996. However, the
current contract mix includes lower risk programs which offer opportunities for
higher margin long-term sole source production awards. The gross margin
percentage in the Energy segment increased 9.8% to 37.0% for the three months
ended March 31, 1997 from 27.2% in 1996. This growth was generally attributable
to an improved pricing structure as well as continued operating efficiencies
realized at the Company's foundry operation. Included in the Defense segment's
costs in 1996 is a pretax charge of $900,000 related to the reduction of the
estimated net realizable value of certain non- contract inventories. At December
31, 1996, the Company estimated that the net realizable value of these
inventories was $6,800,000. The Company has agreed to sell approximately 80% of
these inventories at an amount in excess of its estimated net realizable value
to a customer and anticipates that it will enter into a contract in the near
term.
Selling and administrative expenses for the three months ended March 31, 1997
declined $1,852,000 or 15.9% to $9,811,000 from $11,663,000 during the three
months ended March 31, 1996. This savings primarily occurred in the Defense
segment and was substantially due to facilities consolidation, including
headcount reductions, and lower contract procurement costs related to the timing
of new program activity. As a percentage of sales, selling and administrative
expenses decreased to 16.8% for the first quarter of 1997, as compared to 21.4%
for the same period in 1996.
The increase in other expense represented primarily proposal costs during the
first quarter of 1997 incurred by Electric Transit, Inc. (ETI), a joint venture
between the Company's subsidiary AAI Corporation and the Czech Republic firm,
SKODA, associated with an opportunity to produce 250 electric trolley coaches
for the City and County of San Francisco. In April 1997, ETI was notified that
San Francisco's Public Transportation Department recommended ETI for this award.
Interest income increased due to increased investments.
Net income increased by 23.2% to $1,763,000 or $.14 per share in 1997, as
compared to net income of $1,431,000 or $.12 per share in 1996. The improvement
was primarily attributable to lower selling and administrative expenses,
partially offset by increased cost of sales.
5
<PAGE>
FASB statement No. 128, "Earnings Per Shares," is effective in the fourth
quarter of 1997. The impact of this FASB Statement on the calculation of
earnings per share is not expected to be material.
Liquidity and Capital Resources
Cash and cash equivalents decreased $6,483,000 from December 31, 1996. This
decrease included the payment of $13,750,000 in complete settlement of the
Company's long-term loan. Operating activities provided the partially offsetting
cash increase. The Company currently has no significant fixed commitment for
capital expenditures or for investments. The Company expects that available cash
and existing lines of credit will be sufficient to meet its cash requirements
for the remainder of the calendar year. Its cash requirements consists primarily
of its obligations to fund operations, and make interest and principal payments,
if necessary. The Company's credit agreement with a bank has been extended to
May 18, 1997. There were no borrowings under this agreement at March 31, 1997.
The Company has received a commitment letter from the bank for a replacement
credit agreement which is in the process of negotiation.
Contingent Matters
Reference is made to Item 3. Legal Proceedings, in the December 31, 1996 Form
10-K which is incorporated herein by reference.
6
<PAGE>
UNITED INDUSTRIAL CORPORATION AND SUBSIDIARIES
PART II - Other Information
ITEM 5 - Other Information
On May 6, 1997, the Company entered into a non-binding Letter of Intent
for the sale of its subsidiary, Neo Products Co.
ITEM 6 - Exhibits and Reports on Form 8-K
(a) Exhibits
10P - Fourth Amendment made as of March 18, 1997 to Agreement
dated October 13, 1994 between First Union Commercial
Corporation and AAI and AAI subsidiaries, UIC-Del Corporation,
Symtron and United Industrial Corporation as guarantors.
11 - Computation of Earnings per share
27 - Financial Data Schedule
(b) The Registrant did not file any reports on Form 8-K during the
quarter ended March 31, 1997.
7
<PAGE>
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, thereunto duly authorized.
UNITED INDUSTRIAL CORPORATION
Date May 14, 1997 By: /s/ James H. Perry
------------------------------
James H. Perry
Chief Financial Officer
and Treasurer
8
<PAGE>
UNITED INDUSTRIAL CORPORATION AND SUBSIDIARIES
INDEX OF EXHIBITS FILED HEREWITH
Exhibit No.
10P Fourth Amendment made as of March 18, 1997 to Agreement dated
October 13, 1994 between First Union Commercial Corporation
and AAI and AAI subsidiaries, UIC-Del Corporation, Symtron and
United Industrial Corporation
as guarantors.
11 Computation of Earnings Per Share
27 Financial Data Schedule
9
FOURTH AMENDMENT TO CREDIT AGREEMENT
THIS FOURTH AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is made
effective as of the 18th day of March, 1997, by and among AAI CORPORATION, a
Maryland corporation ("Borrower"), AAI SYSTEMS MANAGEMENT, INC., a Maryland
corporation ("Systems"), AAI/ACL TECHNOLOGIES, INC., a Maryland corporation
("Technologies"), AAI ENGINEERING SUPPORT, INC., a Maryland corporation
("Engineering"), AAI CALIFORNIA CARSHELL, INC., a Maryland corporation
("Carshell"), AAI MEDICAL CORPORATION, a Maryland corporation ("Medical"), UIC-
DEL. CORPORATION, a Delaware corporation ("UIC-DEL"), AAI INTERNATIONAL, INC., a
Delaware corporation ("International"), AAI MICROFLITE SIMULATION INTERNATIONAL
CORPORATION, a Maryland corporation ("Microflite"), SETI, INC., a Pennsylvania
corporation ("Seti"), SYMTRON SYSTEMS, INC., a New Jersey corporation
("Symtron"), UNITED INDUSTRIAL CORPORATION, a Delaware corporation ("UIC")
(Systems, Technologies, Engineering, Carshell, Medical, UIC-DEL, International,
Microflite, Seti, Symtron and UIC being hereinafter collectively referred to as
"Guarantors"), and FIRST UNION COMMERCIAL CORPORATION, as Lender (in such
capacity, "Lender"), as Issuing Bank (in such capacity, "Issuing Bank"), and as
Agent (in such capacity, "Agent"), under the Credit Agreement (as hereinafter
defined).
RECITALS
--------
R-1. Lender is the successor to First Fidelity Bank, National Association
("FFB") under that certain Credit Agreement dated October 13, 1995, as modified
by First Amendment and Additional Credit Agreement dated October 18, 1995, the
Second Amendment to Credit Agreement dated September 20, 1996, and the Third
Amendment to Credit Agreement dated January 17, 1997 (collectively, the "Credit
Agreement"), among Borrower, FFB, and another financial institution which
subsequently merged into FFB, as a consequence of which Lender now holds one
hundred percent (100%) of the Revolving Credit Commitments and the Notes, and
one hundred percent (100%) of the L/C Commitment.
R-2. Borrower has requested that Lender, Issuing Bank and Agent amend the
Credit Agreement, and Lender, Issuing Bank and Agent have agreed to do so upon
the terms and conditions set forth in this Amendment.
NOW, THEREFORE, in consideration of the premises stated, and other good and
valuable consideration, the receipt and sufficiency of which are acknowledged,
the parties hereto agree as follows:
1. Defined Terms. All capitalized terms used in this Amendment without other
express definitions being assigned herein, shall have the meanings assigned to
such terms in the Credit Agreement, giving effect to the modification of the
Credit Agreement contained in Section 2 of this Amendment.
<PAGE>
2. Amendment of the Credit Agreement. The Credit Agreement is hereby amended
by amending the definition of "Termination Date" contained in Section 1 to read
in its entirety as follows:
"Termination Date": the earlier of (a) May 18, 1997, or (b) the date
which is one hundred fifty (150) days after the date on which the Agent
shall have given written notice to the Borrower, at the direction of the
Required Lenders and whether or not an Event of Default shall have
occurred, that the Obligations shall be due in full on such date.
3. Representations and Warranties of Borrower. In order to induce Lender,
Issuing Bank and Agent to enter into this Amendment, Borrower represents and
warrants to Lender, Issuing Bank and Agent that:
(a) Each of Borrower and Guarantors has the power and authority to execute,
deliver and perform this Amendment. Each of Borrower and Guarantors has taken
all necessary action (including, without limitation, obtaining any required
approval of its Board of Directors or stockholders) to authorize its execution,
delivery and performance of this Amendment. No consent, approval or
authorization of, or filing with, any Governmental Authority, and no consent of
any other Person, is required in connection with the execution, delivery and
performance of this Amendment by each of Borrower and Guarantors, except for
those already duly obtained.
(b) This Amendment has been duly executed and delivered by each of Borrower
and Guarantors, and constitutes the legal, valid and binding obligation of each
of Borrower and Guarantors, enforceable against Borrower and Guarantors in
accordance with its terms without defense, setoff or counterclaim. The
execution, delivery and performance of this Amendment by each of Borrower and
Guarantors does not and will not conflict with, or constitute a violation or
breach of, or constitute a default under, or result in the creation or
imposition of any Lien upon any property of Borrower, any Subsidiary of Borrower
or any Guarantor by reason of the terms of (a) any mortgage, lease, agreement,
instrument or Contractual Obligation to which Borrower, any Subsidiary of
Borrower or any Guarantor is a party or which is binding upon it, or (b) any
Requirement of Law.
(c) Each of the representations and warranties of Borrower and Guarantors
contained in the Credit Agreement and the other Credit Documents are correct and
complete in all material respects as of the date hereof.
<PAGE>
(d) There has not occurred any material adverse change in the business,
operations, assets or financial or other condition of Borrower or UIC from those
indicated in the last financial statements delivered to Agent pursuant to
Subsection 6.1 of the Credit Agreement.
(e) There exists no Default or Event of Default as of the date hereof.
4. Condition to Effectiveness of Amendment. The modification of the Credit
Agreement contained in Section 2 of this Amendment shall be conditioned upon,
and shall not be effective until, the following condition precedent shall have
been satisfied as determined by Agent: As of the date hereof, all
representations and warranties of Borrower and Guarantors contained in the
Credit Agreement, this Amendment and the other Credit Documents shall be correct
and complete in all material respects, and no Default or Event of Default shall
have occurred and be continuing.
5. No Defenses or Claims: Release. In order to induce Lender, Issuing Bank
and Agent to enter into this Amendment, each of Borrower and Guarantors
acknowledges and represents to Lender, Issuing Bank and Agent that it has no
defense, setoff, cause of action or claim of any kind against Lender, Issuing
Bank or Agent on account of actions heretofore taken or not taken by Lender,
Issuing Bank or Agent or otherwise, which can be asserted as a basis to seek
affirmative relief or damages from Lender, Issuing Bank or Agent or to reduce or
eliminate any obligations of Borrower or such Guarantor to Lender, Issuing Bank
or Agent. Each of Borrower and Guarantors, on behalf of itself and its
successors and assigns, hereby forever and irrevocably releases Lender, Issuing
Bank and Agent, and each of their employees, officers, agents, attorneys,
successors and assigns, from any and all claims, demands, damages, liabilities,
obligations, penalties, suits and causes of action of any kind relating to,
resulting from or arising out of any fact, matter or occurrence known to
Borrower or any of Guarantors existing as of, or occurring prior to, the date of
this Amendment directly or indirectly relating to, resulting from or arising out
of any Revolving Credit Loans or Letters of Credit, any of the Credit Documents
or any obligations of Borrower or such Guarantor to Lender, Issuing Bank or
Agent.
6. Consents of Guarantors. Each of Guarantors hereby consents to the
modification of the Credit Agreement provided for in this Amendment.
7. No Novation or Waiver. Borrower, Guarantors, Lender, Issuing Bank and
Agent intend that the execution and delivery of this Amendment shall not
constitute or be construed to operate as a novation of the Credit Agreement,
<PAGE>
the Notes, the Deed of Trust, the Guaranty, the Borrower Security Agreement,
the Borrower Pledge Agreement, the Intellectual Property Assignments, the
Guarantor Security Agreement, the UIC Pledge Agreement, the UIC Subordination
Agreement, the UIC-DEL Subordination Agreement, the L/C Agreements or any other
of the Credit Documents or any obligations of Borrower or Guarantors evidenced
by any of the Credit Documents or as a novation of any security interests or
other Liens directly or indirectly securing any of such obligations. Nothing
contained in this Amendment or in any prior oral or written communications from
or on behalf of Lender, Issuing Bank or Agent to Borrower or any of Guarantors
shall constitute or be construed to operate as a waiver by Lender, Issuing Bank
or Agent of any Defaults or Events of Default which have occurred. Nor shall
anything contained in this Amendment or in any prior oral or written
communications from or on behalf of Lender, Issuing Bank or Agent to Borrower or
any of Guarantors constitute or be construed to operate as a waiver by Lender,
Issuing Bank or Agent of any rights or remedies heretofore or hereafter accruing
to Lender, Issuing Bank or Agent on account of any such Default or Event of
Default or any other Default or Event of Default.
8. Expenses. Whether or not the transactions contemplated hereby are
consummated, Borrower shall pay to Agent on demand all out-of-pocket costs and
expenses that Agent has paid or incurred or subsequently pays or incurs in
connection with the negotiation, preparation, consummation and administration of
this Amendment, all as further provided in Subsection 10.6 of the Credit
Agreement.
9. Ratification of Documents and Obligations. Borrower, Guarantors, Lender,
Issuing Bank and Agent hereby ratify and confirm the Credit Agreement (as
amended pursuant hereto), the Notes, the Deed of Trust, the Borrower Security
Agreement, the Borrower Pledge Agreement, the Guaranty, the Intellectual
Property Assignments, the Guarantor Security Agreement, the UIC Pledge
Agreement, the UIC Subordination Agreement, the UIC-DEL Subordination Agreement,
the L/C Agreements and the other Credit Documents, and agree that the same, and
all obligations of the parties thereunder, shall remain in full force and
effect.
10. Binding Nature, Merger, Counterparts and Choice of Law. This Amendment
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, and each reference in this Amendment to any
of the parties hereto shall be deemed to include the successors and assigns of
such party. This Amendment contains the entire agreement of the parties with
respect to the matters covered and the transactions contemplated hereby and
thereby, and no agreement, statement or promise made by any party, or by any
employee, officer, agent or attorney of any party, which is not contained herein
or therein, shall be valid or binding. This Amendment may be executed in any
<PAGE>
number of counterparts and by different parties on separate counterparts,
each of which, when so executed and delivered, shall be an original, but all
such counterparts shall together constitute one and the same agreement. This
Amendment, and the rights and obligations of the parties hereunder, shall be
governed by, and construed and interpreted in accordance with, the internal laws
of the State of Maryland, exclusive of principles of conflicts of laws.
IN WITNESS WHEREOF, the parties hereto have executed or caused to be
executed this Amendment under seal as of the date first above written.
ATTEST/WITNESS: UNITED INDUSTRIAL CORPORATION
AAI CORPORATION
AAI SYSTEMS MANAGEMENT, INC.
AAI/ACL TECHNOLOGIES, INC.
AAI ENGINEERING SUPPORT INC.
AAI CALIFORNIA CARSHELL, INC.
AAI MEDICAL CORPORATION
/s/ Paul J. Michaud By: /s/ Richard R. Erkeneff (SEAL)
- ------------------------- ----------------------------------------
Richard R. Erkeneff
Chief Executive Officer
UIC - DEL. CORPORATION
AAI INTERNATIONAL, INC.
AAI MICROFLITE SIMULATION
INTERNATIONAL CORPORATION
SETI, INC.
/s/ Nancy Greener By: /s/ Paul J. Michaud (SEAL)
- ------------------------- ----------------------------------------
Paul J. Michaud
Treasurer
SYMTRON SYSTEMS, INC.
/s/ Nancy Greener By: /s/ James H. Perry (SEAL)
- -------------------------- ----------------------------------------
James H. Perry
Chief Financial Officer
<PAGE>
Signatures continued:
- ---------------------
FIRST UNION COMMERCIAL CORPORATION,
successor to First Fidelity Bank,
National Association, as Lender,
Issuing Bank and Agent
_____________________ By:_________________________(SEAL)
Name:_______________________
Title:______________________
STATE OF ___________________, COUNTY OF ___________________, SS:
I HEREBY CERTIFY that on this ____ day of March, 1997, before me, the
undersigned, a Notary Public of said State, personally appeared Richard R.
Erkeneff, who acknowledged himself to be the President of each of AAI
CORPORATION, AAI SYSTEMS MANAGEMENT, INC., AAI/ACL TECHNOLOGIES, INC., AAI
ENGINEERING SUPPORT INC., AAI CALIFORNIA CARSHELL, INC., and AAI MEDICAL
CORPORATION, and the _______________________ of each of UIC - DEL. CORPORATION,
AAI INTERNATIONAL, INC., AAI MICROFLITE SIMULATION INTERNATIONAL CORPORATION,
and SETI, INC., and that he, as such, being authorized so to do, executed the
foregoing instrument for the purposes therein contained.
WITNESS my hand and Notarial Seal.
----------------------------
Notary Public
My Commission Expires: ______________
<PAGE>
STATE OF Maryland , COUNTY OF Baltimore , SS:
--------------------- ---------------------
I HEREBY CERTIFY that on this 26th day of March, 1997, before me, the
undersigned, a Notary Public of said State, personally appeared James H. Perry,
who acknowledged himself to be the Chief Financial Officer of SYMTRON SYSTEMS,
INC., and the President of UNITED INDUSTRIAL CORPORATION, and that he, as such,
being authorized so to do, executed the foregoing instrument for the purposes
therein contained.
WITNESS my hand and Notarial Seal.
/s/ Darlene J. Hastings
----------------------------
Notary Public
Darlene J. Hastings
My Commission Expires: __________ NOTARY PUBLIC STATE OF MARYLAND
My Commission Expires December 27, 1997
STATE OF ___________________, COUNTY OF ___________________, SS:
I HEREBY CERTIFY that on this ____ day of March, 1997, before me, the
undersigned, a Notary Public of said State, personally appeared
________________________, who acknowledged himself/herself to be the
________________________ of FIRST UNION COMMERCIAL CORPORATION, and that he/she,
as such, being authorized so to do, executed the foregoing instrument for the
purposes therein contained.
WITNESS my hand and Notarial Seal.
----------------------------
Notary Public
My Commission Expires: ______________
EXHIBIT 11 - Computation of Earnings Per Share
Item 6(a)
Exhibit 11
Computation of Earnings per Share
United Industrial Corporation and Subsidiaries
THREE MONTHS ENDED MARCH 31
1997 1996
-------- ------
Primary:
Average shares outstanding 12,284,695 12,177,898
========== ==========
Net income $ 1,763,000 $ 1,431,000
=========== ===========
Earnings per share $ .14 $ .12
===== =====
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS CONTAINED IN THE BODY OF THE ACCOMPANYING FORM 10-Q AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1997
<CASH> 6,944
<SECURITIES> 0
<RECEIVABLES> 36,858
<ALLOWANCES> 0
<INVENTORY> 35,476
<CURRENT-ASSETS> 86,570
<PP&E> 132,565
<DEPRECIATION> 91,390
<TOTAL-ASSETS> 164,990
<CURRENT-LIABILITIES> 39,440
<BONDS> 2,654
0
0
<COMMON> 14,374
<OTHER-SE> 76,694
<TOTAL-LIABILITY-AND-EQUITY> 164,990
<SALES> 58,444
<TOTAL-REVENUES> 58,779
<CGS> 45,268
<TOTAL-COSTS> 55,079
<OTHER-EXPENSES> 371
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 510
<INCOME-PRETAX> 2,819
<INCOME-TAX> 1,056
<INCOME-CONTINUING> 1,763
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,763
<EPS-PRIMARY> .14
<EPS-DILUTED> .14
</TABLE>
