UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
_______________
FORM 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 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 1-5483
WHITEHALL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 41-0838460
(State or Other Jurisdiction of (IRS Employer
Incorporation or Organization) Identification Number)
2659 Nova Drive, Dallas, Texas
Mailing Address: P.O. Box 29709, Dallas, Texas 75229
(Address of Principal Executive Offices)
(Zip Code)
972-247-8747
Registrant's Telephone Number, Including Area Code
N/A
(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
ofcommon stock, as of the close of the latest practicable date.
Class Outstanding at August 14, 1997
Common Stock, $0.10 par value 5,522,000 Shares
<PAGE>
INDEX
QUARTERLY REPORT ON FORM 10-Q
For Quarter Ended June 30, 1997
WHITEHALL CORPORATION AND SUBSIDIARIES
Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets
June 30, 1997 and December 31, 1996 3
Condensed Consolidated Statements of Operations
Three and Six months ended June 30, 1997
and 1996 4
Consolidated Statements of Cash Flows
Three and Six months ended June 30, 1997
and 1996 5
Notes to Condensed Consolidated Financial Statements
June 30, 1997 6
Item 2. Management`s Discussion and Analysis of Financial
Condition and Results of Operations 8
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 11
Item 4. Submission of Matters to a vote of Security Holders 11
Item 6. Exhibits and Reports on Form 8-K 12
SIGNATURES 13
Certain items in the report that follows are marked with an asterisk ("*"),
indicating that they are subject to the "Safe Harbor" Statement under the
Private Securities Litigation Reform Act of 1995 found on page 11 of this
report.
<PAGE>
ITEM 1 OF PART I - FINANCIAL INFORMATION
WHITEHALL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS - (UNAUDITED)
<TABLE>
<S> <C> <C>
June 30, December 31,
ASSETS 1997 1996
CURRENT ASSETS
Cash and cash equivalents $ 709,000 $ 2,656,000
Accounts receivable, net 30,773,000 18,461,000
Income taxes receivable 458,000 458,000
Current portion of notes receivable 141,000 -
Inventories:
Finished products - 1,175,000
Products in process - 5,000
Materials and supplies 6,353,000 5,260,000
-------------- --------------
6,353,000 6,440,000
Prepaid expenses and other 521,000 656,000
-------------- --------------
TOTAL CURRENT ASSETS 38,955,000 28,671,000
INVESTMENT IN CAPITAL STOCK OF AFFILIATE 4,815,000 4,611,000
PROPERTY, PLANT AND EQUIPMENT 22,474,000 22,192,000
Less allowances for depreciation and amortization (11,249,000) (12,538,000)
-------------- --------------
11,225,000 9,654,000
NOTES RECEIVABLE 2,723,000 2,000,000
-------------- --------------
$ 57,718,000 $ 44,936,000
============== ==============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 8,787,000 $ 6,239,000
Notes payable to bank 9,367,000 2,550,000
Long term debt due in one year 280,000 280,000
Accrued environmental costs 277,000 379,000
Federal income tax liability 1,136,000 -
-------------- --------------
TOTAL CURRENT LIABILITIES 19,847,000 9,448,000
NON-CURRENT LIABILITIES 77,000 117,000
LONG TERM DEBT 405,000 546,000
SHAREHOLDERS' EQUITY
Common stock, $.10 par value:
Authorized shares - 20,000,000
Issued shares (1997 - 7,683,312; 1996 - 7,666,712) 769,000 767,000
Additional paid-in capital 1,864,000 1,766,000
Retained earnings 50,901,000 48,437,000
-------------- --------------
53,534,000 50,970,000
Less treasury shares at cost
(1997 and 1996 - 2,161,312) (16,145,000) (16,145,000)
-------------- --------------
37,389,000 34,825,000
-------------- --------------
$ 57,718,000 $ 44,936,000
============== ==============
</TABLE>
See notes to condensed consolidated financial statements
<PAGE>
WHITEHALL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - (UNAUDITED)
<TABLE>
<S> <C> <C> <C> <C>
For the Three Months Ended For the Six Months Ended
June 30, June 30, June 30, June 30,
1997 1996 1997 1996
Net Sales
Services $ 19,035,000 $ 19,247,000 $ 31,914,000 $ 36,921,000
Products - 974,000 672,000 3,487,000
------------ ------------ ------------ -------------
19,035,000 20,221,000 32,586,000 40,408,000
Cost of Sales
Services 15,511,000 16,632,000 26,091,000 31,780,000
Products - 710,000 411,000 2,657,000
------------ ------------ ------------ -------------
15,511,000 17,342,000 26,502,000 34,437,000
------------ ------------ ------------ -------------
GROSS PROFIT 3,524,000 2,879,000 6,084,000 5,971,000
Operating expenses:
Selling, general and administrative 1,365,000 1,543,000 2,864,000 3,077,000
------------ ------------ ------------ -------------
Total operating expenses 1,365,000 1,543,000 2,864,000 3,077,000
------------ ------------ ------------ -------------
INCOME/(LOSS) FROM OPERATIONS 2,159,000 1,336,000 3,220,000 2,894,000
Other income, net 57,000 375,000 887,000 428,000
------------ ------------ ------------ -------------
INCOME/(LOSS) BEFORE INCOME TAXES 2,216,000 1,711,000 4,107,000 3,322,000
Income tax 887,000 582,000 1,643,000 1,129,000
------------ ------------ ------------ -------------
NET INCOME/(LOSS) $ 1,329,000 $ 1,129,000 $ 2,464,000 $ 2,193,000
============ ============ ============ =============
NET INCOME PER SHARE $ 0.23 $ 0.20 $ 0.43 $ 0.39
============ ============ ============ =============
WEIGHTED AVERAGE SHARES
OUTSTANDING 5,757,105 5,694,946 5,746,356 5,682,502
============ ============ ============ =============
</TABLE>
1996 amounts have been adjusted for the two-for-one stock split
paid during April of 1997.
See notes to condensed consolidated financial statements
<PAGE>
WHITEHALL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS - (UNAUDITED)
<TABLE>
<S> <C> <C>
For the Six Months Ended
June 30, June 30,
1997 1996
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 2,464,000 $ 2,193,000
Adjustments to reconcile net income to net cash
used in operating activities:
Depreciation and amortization 610,000 470,000
Gain on sale of Electronics segment (727,000) -
Equity in earnings of equity investment (204,000) -
Changes in assets and liabilities provided(used)
cash, net of sale of Electronics segment:
Accounts receivable, net (12,717,000) (1,151,000)
Income taxes payable 1,136,000 -
Inventories (1,310,000) (2,247,000)
Prepaid expenses and other 102,000 (430,000)
Accounts payable and other accrued liabilities 2,673,000 (377,000)
Accrued environmental costs (102,000) (176,000)
Non-current liabilities (40,000) (35,000)
------------ ------------
Net cash used in operating activities (8,115,000) (1,753,000)
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (2,328,000 (1,281,000)
Proceeds from sale of Electronics segment 1,720,000 -
------------ ------------
Net cash provided used in investing activities (608,000) (1,281,000)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in bank line of credit loan, net of repayments 6,817,000 -
Payments on long-term debt (141,000) -
Net proceeds from the exercise of stock options 100,000 333,000
------------ ------------
Net cash provided by financing activities 6,776,000 333,000
------------ ------------
NET DECREASE IN CASH AND CASH EQUIVALENTS (1,947,000) (2,701,000)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 2,656,000 7,382,000
------------ ------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 709,000 $ 4,681,000
============ ============
</TABLE>
See notes to condensed consolidated financial statements
<PAGE>
ITEM 1 OF PART I - FINANCIAL INFORMATION
WHITEHALL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
June 30, 1997
1. Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with Form 10-Q instructions and thus 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 considered necessary for a fair presentation have
been included.
Operating results for the three and six month periods ending June 30, 1997,
are not necessarily indicative of the results that may be expected for the
entire year.
During February 1997, the Financial Accounting Standards Board issued SFAS
No. 128, Earnings per Share, which will become effective for all financial
statements issued for periods ending after December 15, 1997, including
interim periods. SFAS No. 128 provides for the presentation of basic and
diluted earnings per share on the face of the financial statements and
supersedes Accounting Principles Board (APB) Opinion No. 15, Earnings per
Share. SFAS No. 128 requires the restatement of earnings per share for prior
periods presented after its effective date. SFAS No. 128 does not
have a material effect upon the three and six month periods ended June 30,
1997 and June 30, 1996. However, the impact on other prior periods has not
yet been determined.
Net income per share is computed by dividing net earnings by the weighted
average number of shares of common stock outstanding during the three
and six months ending June 30, 1997 after giving effect to the equivalent
shares which are issuable upon the exercise of stock options determined by
the treasury stock method in accordance with APB No. 15.
For further information, refer to the consolidated financial statements and
footnotes thereto included in the Registrant's Annual Report on Form 10-K for
the year ended December 31, 1996.
2. Notes Receivable
During 1994, the Company obtained 40% ownership of a joint venture involved
in the development of aircraft-related technology for an initial investment of
$1,000. The Company accounts for its investment in the joint venture under
the equity method. In 1994, the Company obtained a promissory note for an
advance of $2,000,000 to the joint venture. The principal balance of the
promissory note accrues interest at a maximum rate of 5%, and the principal
balance together with accrued interest are due January 5, 1999. The note is
secured by certain assets of the joint venture. During 1997, 1996 and 1995
the Company advanced an additional $476,000, $75,000 and $1,020,000 to the
joint venture, net of repayments. These advances are included in accounts
receivable.
3. Commitments and Contingencies
On May 10, 1991, an action was filed in the District Court of Dallas County,
Texas, by Lee D. Webster, former Chairman, Chief Executive Officer and
President of Whitehall, against the Company, each of its directors (other than
Mr. Webster) and Cambridge Capital Fund, L.P., alleging, among other things,
that ( i ) the defendants' actions, both individually and in concert,
constituted willful interference with Mr. Webster's employment relationship
with the Company and were the direct cause of Mr. Webster's termination as its
President and Chairman of the Board, and (ii) the defendants' actions forced
Mr. Webster into retirement without providing Mr. Webster with retirement
benefits which Mr. Webster was purportedly promised. On August 17, 1994, the
defendants were granted a partial summary judgment. On October 24, 1994, Mr.
Webster filed a third amended petition and alleged the following causes of
action: tortious interference with contractual relations against Cambridge
Capital Fund, L.P., and directors
<PAGE>
ITEM 1 OF PART I - FINANCIAL INFORMATION
WHITEHALL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
June 30, 1997
3. Commitments and Contingencies - Continued
George F. Baker and John J. McAtee; intentional infliction of emotional
distress; and breach of oral contracts. The third amended petition sought
compensatory and punitive damages in excess of $35 million. On January 12,
1995, the Court entered an abatement on one of the breach of oral contract
claims against the Company and entered a summary judgment in the defendants'
favor on all remaining claims alleged by Mr. Webster. On February 26, 1996,
the Court granted a summary judgment in favor of the defendants on Mr.
Webster's remaining claim and entered a take nothing final judgment which
dismissed all of Mr. Webster's claims with prejudice to refiling. On March 26,
1996, Mr. Webster appealed the final judgment to the Dallas Court of Appeals.
Management has vigorously defended the appeal.
A subsidiary of the Company, Aero Corporation ("Aero"), is taking remedial
action pursuant to Environmental Protection Agency ("EPA") regulations at the
Lake City, Florida facility. The Company does not anticipate any material
direct effects upon the capital expenditures, earnings and competitive
position of the Company from compliance with present Federal, State and local
provisions which have been enacted or adopted regulating the discharge of
materials into the environment, or otherwise relating to the protection of the
environment. The Company does expect, however, that compliance with such
regulations will require, from time to time, both increased operating costs
and capital expenditures which may be substantial. As of June 30, 1997 and
December 31, 1996, the Company had reserved approximately $277,000 and
$379,000 respectively for anticipated environmental remediation costs at the
Aero facility. The decrease in accrued environmental remediation costs was
due to expenditures. Other remaining costs to be incurred will include
testing and monitoring to be performed over a 20 to 30 year period. Actual
costs to be incurred in future periods may vary from the estimate, given the
inherent uncertainties in evaluating environmental exposures. These
uncertainties include the extent of required remediation based on testing
and evaluation not yet completed and the varying costs and effectiveness of
remediation methods.
The Company is also involved in certain legal proceedings in the normal course
of its business.
After consultation with counsel, management is of the opinion that the outcome
of the above-mentioned proceedings will not have a material effect on the
financial position or results of operations of the Company.
<PAGE>
ITEM 1 OF PART I - FINANCIAL INFORMATION
WHITEHALL CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
June 30, 1997
General
The principal business of the Company is the third party repair and
maintenance of jet and other aircraft for its customers. The Company's
business is in part seasonal in nature and is influenced by many of the same
factors that affect the aircraft industry as a whole.
The Company has increased its capacity to better take advantage of growth in
the industry by recently purchasing an additional aircraft repair and
maintenance facility located in Macon, Georgia as well as disposing of those
segments of its business which do no fit with the Company's expansion plans.
Additionally, the Company owns a 40% interest in AvAero, a joint venture that
manufactures FAA-certified hush kits for jet engines.
Results of Operations
The following tables set forth, for the periods and dates indicated,
certain financial data including, as applicable, the percentage of net
sales:
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF INCOME SUMMARY
For the Quarter Ended
June 30, 1997 June 30, 1996 Change from Prior Period
(Dollars in Thousands)
Net Sales $19,035 100.0% $20,221 100.0% $(1,186) (5.9%)
Cost of Sales 15,511 81.5% 17,342 85.8% $(1,831) (10.6%)
-------- ------- -------- ------- -------- -------
Gross Profit on Sales $ 3,524 18.5% $ 2,879 14.2% $ 645 22.4%
======== ======== ======== ======= ======== =======
Selling, General and Administrative $ 1,365 7.2% $ 1,543 7.6% $ (178) (11.5%)
Income from Operations $ 2,159 11.3% $ 1,336 6.6% $ 823 61.6%
Net Income $ 1,329 7.0% $ 1,129 5.6% $ 200 17.7%
For the Six Months Ended
June 30, 1997 June 30, 1996 Change from Prior Period
(Dollars in Thousands)
Net Sales $32,586 100.0% $40,408 100.0% $(7,822) (19.4%)
Cost of Sales 26,502 81.3% 34,437 85.2% $(7,935) (23.0%)
-------- ------- -------- ------- -------- -------
Gross Profit on Sales $ 6,084 18.7% $ 5,971 14.8% $ 113 1.9%
======== ======== ======== ======= ======== =======
Selling, General and Administrative $ 2,864 15.0% $ 3,077 15.2% $ (213) (6.9%)
Income from Operations $ 3,220 16.9% $ 2,894 14.3% $ 326 11.3%
Net Income $ 2,464 12.9% $ 2,193 10.8% $ 271 12.4%
</TABLE>
Sales. Whitehall Corporation's consolidated sales for the three and six months
ended June 30, 1997 of $19.0 and $32.6 million, respectively, represented a
5.9% and 19.4% decrease from the sales reported in the comparable periods of
1996. Sales for the first and second quarters of 1996 include $1.0 and $3.5
million, respectively, related to the Ocean Systems segment which was sold in
the fourth quarter of 1996 and its Electronics segment which was sold in the
first quarter of 1997. Sales in the Aircraft Maintenance segment during the
three and six months ended June 30, 1997 of $19.0 and $31.9 million,
respectively, were lower than aircraft maintenance sales during the
comparable 1996 periods primarily because hangar space was reserved in
anticipation of the U.S. Air Force C-130 maintenance contract which wasn't
awarded to the Company until April of 1997 and was subsequently canceled at
the convenience of the government in June of 1997. The C-130 contract provides
for reimbursement by theU.S. Air force of costs incurred during its operation
and the Company has recorded a claim against the government for these costs.
In March of 1997, the Company completed the sale of its Electronics business
to a private group of investors for $1.7 million in cash and $864,000 in
promissory notes bearing interest at 10% per annum for an aggregate sales
price of $2.6 million.
<PAGE>
ITEM 1 OF PART I - FINANCIAL INFORMATION
WHITEHALL CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
June 30, 1997
Gross Profit on Sales. The increase in gross profit on sales (derived by
deducting cost of sales from sales) during the current quarter by 22.4% over
the comparable quarter in the previous year is primarily attributable to
improved aircraft maintenance efficiencies and removal of costs of sales
associated with sales by the Company's disposed Ocean Systems and Electronics
segments. The increase in gross profit during the current six month period of
1.9% over the comparable period in the previous year is consistent with the
increase in maintenance efficiencies described above coupled with disposal of
the Ocean Systems and Electronics segments.
Selling, General and Administrative. The decrease in selling, general and
administrative expenses during the current three and six month periods of
11.5% and 6.9%, respectively, over the comparable periods in the previous
year is consistent with the disposal of its Ocean Systems and Electronic
segments and the decrease in sales.
Net Income. The increase in net income of 17.7% and 12.4%, respectively, during
the current three and six month periods over the comparable periods in the
previous year is primarily attributable to the increased gross profit and
decreased selling, general and administrative expenses.
Financial Condition
During the six months ended June 30, 1997, cash used in operations totaled
$8.1 million as compared to cash used in operations of $1.8 million in the
same period of 1996. The cash used in operations was primarily a result of
the increase in accounts receivable of $12.7 million, which primarily related
to aircraft maintenance work that billed and collected until after the close
of the current six month period and advances to its AvAero joint venture of
$476,000, net of repayments. The Company's capital expenditures totaled $2.3
million during the first six months of 1997 compared to $1.3 million during
the same period of 1996. The capital expenditures are a part of the continuing
program to improve the Lake City, Florida Aircraft Maintenance facility. The
Company received advances under its line of credit agreement totaling $6.8
million during the first six months of 1997 to cover operating costs while
aircraft maintenance work was being completed, capital expenditures and
advances to the joint venture.
The Company believes its cash generated from its operations coupled with its
current cash balances and line of credit facility are sufficient to meet its
short and long-term capital and liquidity requirements *. In order to provide
additional funds for continued pursuit of the Company's growth strategies and
for operations over the longer term, the Company may incur, from time to
time, additional short and long-term bank indebtedness and may issue, in
public or private transactions, its equity and debt securities, the
availability and terms of which may depend upon market and other conditions.
There can be no assurance that such possible additional financing will be
available on terms acceptable to the Company.
During the three and six month periods ended June 30, 1997, the Company did
not acquire any additional shares of its common stock. At June 30, 1997 there
were approximately 242,200 additional shares available for repurchase under
the Company's current repurchase authorization. The Company may continue to
acquire stock as market conditions warrant *.
____________________________
* See "Safe Harbor" statement located on page 10.
<PAGE>
ITEM 1 OF PART I - FINANCIAL INFORMATION
WHITEHALL CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
June 30, 1997
Safe Harbor" Statement under the Private Securities
Litigation Reform Act of 1995
With the exception of historical factual information, the matters and
statements discussed, made or incorporated by reference in this Quarterly
Report on Form 10-Q (including statements regarding trends in the industry and
the business and growth and financing strategies of the Company), as well as
those statements specifically designated with an asterisk ("*"), constitute
forward-looking statements, contain the words "believes," "anticipates,"
"expects," and words of similar import, are based upon current expectations
and are made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements and words
involve known and unknown assumptions, risks, uncertainties and other factors
which may cause the actual results, performance or achievements of the Company
to be materially different from any future results, performance, or
achievements expressed or implied by such forward-looking statements or words.
Such assumptions, risks, uncertainties and factors include those associated
with general economic and business conditions; aircraft and aerospace industry
trends, cyclicality and/or seasonality; availability of financing; changes and
volatility in interest rates; warranty, product liability or other
litigation arising in the course of the Company's aircraft repair and
maintenance services business; dependence on key personnel; demographic
changes; competition; material and labor costs and availability;
relationships with and dependence on customers; changes in the business
strategy or development plans of the Company; the availability, terms and
deployment of capital; changes in or the failure to comply with government
regulations; and the inability or failure to identify or consummate successful
acquisitions or to assimilate the operations of any acquired businesses with
those of the Company. The Company expressly disclaims any obligation to update
any forward-looking statements as a result of developments occurring after the
filing of this report.
<PAGE>
PART II - OTHER INFORMATION
WHITEHALL CORPORATION AND SUBSIDIARIES
June 30, 1997
Item 1. Legal Proceedings
The information contained in Item 3 of the Registrant's Annual Report on Form
10-K for the year ended December 31, 1996, is incorporated herein by
reference.
On May 10, 1991, an action was filed in the District Court of Dallas County,
Texas, by Lee D. Webster, former Chairman, Chief Executive Officer and
President of Whitehall, against the Company, each of its directors (other than
Mr. Webster) and Cambridge Capital Fund, L.P., alleging, among other things,
that ( i ) the defendants' actions, both individually and in concert,
constituted willful interference with Mr. Webster's employment relationship
with the Company and were the direct cause of Mr. Webster's termination as its
President and Chairman of the Board, and (ii) the defendants' actions forced
Mr. Webster into retirement without providing Mr. Webster with retirement
benefits which Mr. Webster was purportedly promised. On August 17, 1994, the
defendants were granted a partial summary judgment. On October 24, 1994, Mr.
Webster filed a third amended petition and alleged the following causes of
action: tortious interference with contractual relations against Cambridge
Capital Fund, L.P., and directors George F. Baker and John J. McAtee;
intentional infliction of emotional distress; and breach of oral contracts.
The third amended petition sought compensatory and punitive damages in excess
of $35 million. On January 12, 1995, the Court entered an abatement on one of
the breach of oral contract claims against the Company and entered a summary
judgment in the defendants' favor on all remaining claims alleged by Mr.
Webster. On February 26, 1996, the Court granted a summary judgment in favor
of the defendants on Mr. Webster's remaining claim and entered a take nothing
final judgment which dismissed all of Mr. Webster's claims with prejudice to
refiling. On March 26, 1996, Mr. Webster appealed the final judgment to the
Dallas Court of Appeals. Management has vigorously defended the appeal.
Item 4. Submission of Matters to a vote of Security Holders
The Company held its Annual Meeting of Stockholders on May 12, 1997 . Each
person who was then serving as a member of the Board of Directors was
re-elected for another year. The votes for each nominee were cast as follows:
Shares Voting
Name For Against Withheld
George F. Baker 2,351,328 -0- 7,018
Bruce C. Conway 2,351,328 -0- 7,018
Arthur H. Hutton 2,351,328 -0- 7,018
John J. McAtee, Jr. 2,351,328 -0- 7,018
Jack S. Parker 2,351,328 -0- 7,018
Lewis S. White 2,351,328 -0- 7,018
John H. Wilson 2,351,328 -0- 7,018
The Stockholders ratified the Board of Directors' appointment of Arthur
Andersen LLP as Independent Certified Public Accountants for the Company. The
appointment was ratified by a vote of 2,353,225 shares for and 1,330 shares
against, with 3,791 shares abstaining.
<PAGE>
PART II - OTHER INFORMATION
WHITEHALL CORPORATION AND SUBSIDIARIES
June 30, 1997
Item 6. Exhibits and Reports on Form 8-K
The following Exhibits are included herein:
(a)
(10) Material Contracts
i. First Amended and Restated Credit
Agreement, dated April 15, 1997,
between Whitehall Corporation and
Comerica Bank - Texas
ii. Promissory Note, in the principal
amount of $12,000,000 and dated
April 15, 1997, of Whitehall Corporation
to Comerica Bank - Texas
(11) Computation of Net Income per Common Share.
(27) Article 5 - Financial Data Schedule for Form 10-Q
submitted as exhibit 27 as an EDGAR filing only.
(b) The Company did not file a Current Report on Form 8-K during
the quarter ended June 30, 1997.
<PAGE>
PART II - OTHER INFORMATION
WHITEHALL CORPORATION AND SUBSIDIARIES
June 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.
WHITEHALL CORPORATION
Registrant
Date August 15, 1997 By /s/ John H. Wilson
John H. Wilson, President
Date August 15, 1997 By /s/ Michael G. Brinkley
Michael G. Brinkley, Controller
<PAGE>
Exhibit 11 - Computation of Net Income per Common Share
WHITEHALL CORPORATION AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE - UNAUDITED
<TABLE>
<S> <C> <C> <C> <C>
For the Three Months Ended For the Six Months Ended
June 30, June 30, June 30, June 30,
1997 1996 1997 1996
PRIMARY AND FULLY DILUTED
Net Income $ 1,329,000 $ 1,129,000 $ 2,464,000 $ 2,193,000
============= ============= ============= =============
SHARES:
Primary
Average common shares
outstanding 5,509,969 5,485,754 5,509,185 5,483,700
Dilutive effect if stock
options were exercised 247,136 209,192 237,171 198,802
------------- ------------- ------------- -------------
Average common shares
outstanding as
adjusted (primary) 5,757,105 5,694,946 5,746,356 5,682,502
Fully Diluted
Average common shares
outstanding 5,757,105 5,694,946 5,746,356 5,682,502
Additional Dilutive effect
if stock options
were exercised (fully) - - - -
------------- ------------- ------------- -------------
Average common shares
outstanding as adjusted
(fully diluted) 5,757,105 5,694,946 5,746,356 5,682,502
============= ============= ============= =============
Primary and fully diluted
net income per common share $ 0.23 $ 0.20 $ 0.43 $ 0.39
============= ============= ============= =============
</TABLE>
1996 amounts have been adjusted for the two-for-one stock split paid during
April of 1997.
First Amended and Restated Credit Agreement, dated April 15, 1997,
between Whitehall Corporation and Comerica Bank - Texas
(To be furnished by amendment when available)
Promissory Note, in the principal amount of $12,000,000 and dated
April 15, 1997, of Whitehall Corporation to Comerica Bank - Texas
(To be furnished by amendment when available)
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<CIK> 0000106827
<NAME> WHITEHALL CORPORATION
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<CURRENCY> U.S. DOLLARS
<S> <C>
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<PERIOD-START> MAR-31-1997
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0
0
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<INCOME-PRETAX> 2,216,000
<INCOME-TAX> 887,000
<INCOME-CONTINUING> 1,329,000
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<EXTRAORDINARY> 0
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<NET-INCOME> 1,329,000
<EPS-PRIMARY> 0.230
<EPS-DILUTED> 0.230
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