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 March 31, 1998
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 of common stock, as of the close of the
latest practicable date.
Class Outstanding at May 14, 1998
Common Stock, $0.10 par value 5,530,000 Shares
INDEX
QUARTERLY REPORT ON FORM 10-Q
For Quarter Ended March 31, 1998
WHITEHALL CORPORATION AND SUBSIDIARIES
Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets
March 31, 1998 and December 31, 1997 3
Condensed Consolidated Statements of Operations
Three months ended March 31, 1998 and 1997 4
Consolidated Statements of Cash Flows
Three months ended March 31, 1998 and 1997 5
Notes to Condensed Consolidated Financial Statements
March 31, 1998 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 6. Exhibits and Reports on Form 8-K 11
SIGNATURES 12
PART I - FINANCIAL INFORMATION
<TABLE>
WHITEHALL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS - (UNAUDITED)
<S> <C> <C>
March 31, December 31,
ASSETS 1998 1997
CURRENT ASSETS
Cash and cash equivalents $ 1,140,000 $ 1,251,000
Accounts receivable, net 17,057,000 16,234,000
Income taxes receivable 2,590,000 2,590,000
Inventories 6,342,000 6,029,000
Prepaid expenses and other 576,000 636,000
Current deferred income tax 1,053,000 1,053,000
Notes receivable 549,000 516,000
TOTAL CURRENT ASSETS 29,307,000 28,309,000
INVESTMENTS 560,000 -
PROPERTY, PLANT AND EQUIPMENT 30,105,000 29,767,000
Less allowances for depreciation and amortization (12,669,000) (12,200,000)
17,436,000 17,567,000
NOTES RECEIVABLE 2,723,000 2,723,000
$ 50,026,000 $ 48,599,000
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 6,233,000 $ 6,618,000
Notes payable to bank 11,600,000 9,713,000
Current portion of Long term debt 283,000 283,000
Current portion of obligations under capital lease 84,000 84,000
Accrued environmental costs 3,954,000 3,954,000
TOTAL CURRENT LIABILITIES 22,154,000 20,652,000
NON-CURRENT LIABILITIES 4,645,000 4,645,000
LONG TERM DEBT 192,000 263,000
SHAREHOLDERS' EQUITY
Common stock, $.10 par value:
Authorized shares - 20,000,000
Issued shares (1998 - 7,691,312; 1997 - 7,691,312) 770,000 770,000
Additional paid-in capital 1,914,000 1,914,000
Retained earnings 36,496,000 36,500,000
39,180,000 39,184,000
Less treasury shares at cost
(1998 and 1997 - 2,161,312) (16,145,000) (16,145,000)
23,035,000 23,039,000
$ 50,026,000 $ 48,599,000
See notes to condensed consolidated financial statements
</TABLE>
<TABLE>
WHITEHALL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - (UNAUDITED)
<S> <C> <C>
For the Three Months Ended
March 31, March 31,
1998 1997
Net Sales
Services $ 19,766,000 $ 12,879,000
Products - 672,000
19,766,000 13,551,000
Cost of Sales
Services 19,088,000 10,580,000
Products - 411,000
19,088,000 10,991,000
GROSS PROFIT 678,000 2,560,000
Operating expenses:
Selling, general and administrative 934,000 1,499,000
Total operating expenses 934,000 1,499,000
INCOME/(LOSS) FROM OPERATIONS (256,000) 1,061,000
Other income, net 249,000 830,000
INCOME/(LOSS) BEFORE INCOME TAXES (7,000) 1,891,000
Income tax (3,000) 756,000
NET INCOME/(LOSS) $ (4,000) $ 1,135,000
NET INCOME/(LOSS) PER SHARE - BASIC $ (0.00) $ 0.21
NET INCOME/(LOSS) PER SHARE - DILUTED $ (0.00) $ 0.20
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC 5,530,000 5,682,502
WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED 5,530,000 5,735,307
See notes to condensed consolidated financial statements
</TABLE>
<TABLE>
WHITEHALL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS - (UNAUDITED)
<S> <C> <C>
For the Three Months Ended
March 31, March 31,
1998 1997
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income(Loss) $ (4,000) $ 1,135,000
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization 469,000 292,000
Gain on sale of Electronics segment - (710,000)
Equity in earnings of equity investment (560,000) (134,000)
Changes in assets and liabilities net of sale of Electronics:
segment
Accounts receivable, net (823,000) (4,636,000)
Income taxes receivable - 458,000
Inventories (313,000) (604,000)
Prepaid expenses and other 60,000 139,000
Accounts payable and other accrued liabilities (385,000) 1,242,000
Accrued environmental costs - (75,000)
Other assets and liabilities (33,000) 277,000
Net cash used in operating activities (1,589,000) (2,616,000)
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (338,000) (1,082,000)
Notes receivable - (846,000)
Proceeds from sale of Electronics segment - 2,566,000
Net cash used in investing activities (338,000) 638,000
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in bank line of credit loan, net of repayments 1,887,000 2,450,000
Payments on long-term debt (71,000) (70,000)
Net proceeds from the exercise of stock options - 18,000
Net cash provided by financing activities 1,816,000 2,398,000
NET DECREASE IN CASH AND CASH EQUIVALENTS (111,000) 420,000
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 1,251,000 2,656,000
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,140,000 $ 3,076,000
See notes to condensed consolidated financial statements
</TABLE>
PART I - FINANCIAL INFORMATION
WHITEHALL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
March 31, 1998
1. Basis of Presentation
The accompanying unaudited condensed consolidated
financial statements include the accounts of
Whitehall Corporation and those of all of its
majority-owned subsidiaries ("Whitehall" or the
"Company") and 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 month period ending
March 31, 1998, are not necessarily indicative of
the results that may be expected for the entire
year.
During February of 1997, the Financial Accounting
Standards Board issued SFAS No. 128, Earnings per
Share, which became 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. Earnings per share for the three
month periods ended March 31, 1998 and 1997 have
been computed under SFAS No. 128.
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, 1997.
2. Joint Venture
During 1994, the Company obtained a 40% ownership
in AvAero Noise Reduction Joint Venture ("AvAero"),
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 AvAero 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 AvAero. During 1997, 1996 and 1995 the
Company advanced an additional $476,000, $75,000
and $1,020,000 to AvAero, net of repayments. The
Company has made no further advances since 1997.
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
PART I - FINANCIAL INFORMATION
WHITEHALL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
March 31, 1998
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,
Texas Court of Appeals. On April 10, 1998 the
Texas Court of Appeals affirmed the trial court's
summary judgement ruling in favor of the defendants
on each of Mr. Webster's claims.
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. In addition,
the Company was required to perform an
environmental site assessment at the facility of a
subsidiary in connection with the sale of the
facility during the first quarter of 1997. 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 in excess of the Company's reserves.
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 March
31, 1998 and December 31, 1997, the Company had
reserved ,in the aggregate, approximately $3.95
million for anticipated environmental remediation
costs. Included among the remaining costs to be
incurred are anticipated expenditures for 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 beyond the amounts currently reserved.*
4. Acquisitions and Mergers
In March of 1998, the Company entered into a
definitive merger agreement (the "Merger
Agreement") with Aviation Sales Company ("AVS")
pursuant to which a wholly-owned subsidiary of AVS
will merge (the "Merger") with and into the
Company. As a result of the Merger, the Company
will become a wholly owned subsidiary of AVS. The
Merger is expected to be accounted for as a pooling
of interests. Under the terms of the Merger
Agreement, each share of the Company's common stock
outstanding at the effective time of the Merger
will be converted into the right to receive .5143
shares of common stock of AVS. Consummation of the
Merger, which is expected to occur at the end of
the second quarter of 1998, is subject to customary
closing conditions, including, without limitation,
approval of the Company's and AVS's stockholders.
No assurance can be given that the Merger will
ultimately be consummated or that it will be
consummated on the terms set forth in the Merger
Agreement.
In July 1997, Whitehall purchased from Zantop
International Airlines, Inc. ("Zantop") certain
assets (the "Acquired Assets") used in connection
with the operation of Zantop's third party aircraft
maintenance business located in Macon, Georgia.
Among the Acquired Assets were all of Zantop's
leasehold interest in the properties located at its
Macon facility (the "Leased Facilities"). The
purchase price for the Acquired Assets was $1.5
million in cash plus assumption of certain
liabilities, including approximately $4.3 million
in future lease obligations relating to the Leased
Facilities.
* See "Safe Harbor" statement located on page 10.
PART I - FINANCIAL INFORMATION
WHITEHALL CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION
AND RESULTS OF OPERATIONS
March 31, 1998
General
The Company is an independent provider of maintenance and
modification services for commercial, military and
freighter aircraft. The Company focuses primarily on two
categories of commercial customers: established
traditional commercial carriers that view outsourcing as
a way to reduce operating expenses and increase their
competitiveness, and new entrant, low-cost air carriers
that rely on outsourcing for scheduled heavy maintenance.
The Company operates two United States Federal Aviation
Administration ("FAA") and Joint Aviation Authority of the
European Economic Community certified repair stations that
specialize in heavy maintenance and modification of Boeing
707, 727, 737, McDonnell Douglas DC-8, DC-9, DC-10 and
Lockheed L-100, L-188 and C-130 aircraft. The Company
offers its customers a comprehensive range of aviation
services, including scheduled "A," "B," "C" and "D" level
inspections, block overhauls and repairs, corrosion
prevention and control programs and exterior stripping and
painting. Modification services provided by the Company
include interior reconfiguration, cargo conversions and
avionics installations. Through its 40% interest in
AvAero, the Company also designs, and markets hushkits
designed to reduce the noise created by Boeing 737-100 and
737-200 series aircraft to levels which comply with FAA-
mandated Stage 3 noise reduction standards. The Company
was incorporated under the laws of Delaware in 1963 as a
successor to a Minnesota corporation organized in 1960.
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 not fit with the
Company's expansion plans.
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>
STATEMENT OF INCOME SUMMARY
<S> <C> <C> <C> <C> <C> <C>
For the Quarter Ended
March 31, 1998 March 31, 1997 Change from Prior Period
(Dollars in Thousands)
Net Sales 19,766 100.0% 13,551 100.0% 6,215 45.9%
Cost of Sales 19,088 96.6% 10,991 81.1% 8,097 73.7%
Gross Profit on Sales 678 3.4% 2,560 18.9% (1,882) (73.5%)
Selling, General and Administrative 934 4.7% 1,499 11.1% (565) (37.7%)
Income(Loss) from Operations (256) (1.3%) 1,061 7.8% (1,317) (124.1%)
Other Income, Net 249 1.3% 830 6.1% (581) (70.0%)
Net Income(Loss) (4) - 1,135 8.4% (1,139) (100.4%)
</TABLE>
Sales. Whitehall Corporation's consolidated sales for the
three months ended March 31, 1998 of $19.8 million, represented
a 45.9% increase from the sales reported in the comparable
periods of 1997. Sales for the first quarter of 1997 include
$1.0 million related to the Electronics segment which was sold
in the first quarter of 1997. Sales in the Aircraft Maintenance
segment during the three months ended March 31, 1998 of
$19.8 million were higher than aircraft maintenance sales
during the comparable periods in 1997. The increase was
primarily due to(i) the current quarter's use of hangar
space that was unused in the corresponding quarter of 1997
in anticipation of the U.S. Air Force C-130 maintenance
contract awarded during April of 1997 (subsequently
canceled at the convenience of the government in June of
1997) and (ii) sales from the Macon, Georgia facility
which was acquired in July of 1997.
PART I - FINANCIAL INFORMATION
WHITEHALL CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION
AND RESULTS OF OPERATIONS
March 31, 1998
Gross Profit(Loss) on Sales. Gross profit on sales
(derived by deducting cost of sales from sales) during the
current three month period of $678,000, was lower than the
$2.56 million earned during the comparable period in the
previous year. The decline was primarily attributable to
the capitalizing of certain cost of sales overhead costs
relating to the C-130 contract awarded during 1997.These
capitalized costs were subsequently expensed in the third
and fourth quarter of 1997 upon cancellation of the C-130
contract at the convenience of the government in June of 1997.
Selling, General and Administrative. The decrease in
selling, general and administrative expenses during the
current three month period of 37.7% over the comparable
period in the previous year was primarily due to decreased
legal expenses relating to the Company's previous
acquisition activities and disposal of the Company's
Electronic Segment during the first quarter of 1997.
Other Income(Net). The current three month other
income(net) of $249,000 as compared to the Company's other
income of $830,000 during the comparable period in 1997 is
primarily attributable to increased interest expense
during the first quarter of 1998 as compared to the first
quarter of 1997.
Net Income(Loss). The Company's net loss during the
current three month period of $4,000 is primarily
attributable to the decreased gross profit as described
above.
Financial Condition
During the three months ended March 31, 1998, cash used in
operations totaled $1.59 million as compared to cash used
in operations of $2.62 million in the same period of 1997.
The cash used in operations was primarily a result of
increases in trade accounts receivable and decreases in
accounts payable and other accrued liabilities. The
Company's capital expenditures totaled $338,000 during the
first three months of 1998 compared to $1.08 million
during the same period of 1997. The capital expenditures
are a part of the continuing program to maintain the
Company's aircraft maintenance facilities.
The Company believes that despite the loss from operations
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 business
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.
* See "Safe Harbor" statement located on page 10.
PART I - FINANCIAL INFORMATION
WHITEHALL CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION
AND RESULTS OF OPERATIONS
March 31, 1998
"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 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.
PART II - OTHER INFORMATION
WHITEHALL CORPORATION AND SUBSIDIARIES
March 31, 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, 1997, 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,
Texas Court of Appeals. On April 10, 1998 the
Texas Court of Appeals affirmed the trial court's
summary judgement ruling in favor of the defendants
on each of Mr. Webster's claims.
Item 6. Exhibits and Reports on Form 8-K
The following Exhibits are included herein:
(a)
(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 March
31, 1998.
PART II - OTHER INFORMATION
WHITEHALL CORPORATION AND SUBSIDIARIES
March 31, 1998
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 May 14, 1998 By /s/ John H. Wilson
John H. Wilson, President
Date May 14, 1998 By /s/ Garlan Braithwaite
Garlan Braithwaite, Chief Financial
Officer
(Principal Financial and Accounting
Officer)
Exhibit 11 - Computation of Net Income per Common Share
<TABLE>
WHITEHALL CORPORATION AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE - UNAUDITED
<S> <C> <C>
For the Three Months Ended
March 31, March 31,
1998 1997
BASIC AND FULLY DILUTED
Net Income(Loss) $ (4,000) $ 1,135,000
SHARES:
Basic
Average common shares outstanding 5,530,000 5,508,100
Dilutive effect if stock options were
exercised 271,314 227,207
Diluted 5,801,314 5,735,307
NET INCOME/(LOSS) PER SHARE - BASIC $ (0.00) $ 0.21
NET INCOME/(LOSS) PER SHARE - DILUTED $ (0.00) $ 0.20
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<S> <C>
<ARTICLE> 5
<CIK> 0000106827
<NAME> WHITEHALL CORPORATION
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-30-1997
<EXCHANGE-RATE> 1
<CASH> 1,140,000
<SECURITIES> 0
<RECEIVABLES> 17,057,000
<ALLOWANCES> 0
<INVENTORY> 6,342,000
<CURRENT-ASSETS> 29,307,000
<PP&E> 30,105,000
<DEPRECIATION> 12,669,000
<TOTAL-ASSETS> 50,026,000
<CURRENT-LIABILITIES> 22,154,000
<BONDS> 0
0
0
<COMMON> 770,000
<OTHER-SE> 22,265,000
<TOTAL-LIABILITY-AND-EQUITY> 50,026,000
<SALES> 19,766,000
<TOTAL-REVENUES> 19,766,000
<CGS> 19,088,000
<TOTAL-COSTS> 19,088,000
<OTHER-EXPENSES> 934,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
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<INCOME-TAX> -3,000
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<NET-INCOME> -4,000
<EPS-PRIMARY> -0.000
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</TABLE>
