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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13
or 15(d) of the
Securities Exchange Act of 1934
Commission File No. 0-603
FOR QUARTER ENDED JUNE 30, 1995
BUTLER MANUFACTURING COMPANY
Incorporated in State of Delaware
BMA Tower - Penn Valley Park
Post Office Box 419917
Kansas City, Missouri 64141-0917
Phone: (816) 968-3000
I.R.S. Employer Identification Number: 44-0188420
Shares of common stock outstanding at
JUNE 30, 1995: 7,497,575
The name, address and fiscal year of the Registrant have not changed since the
last report.
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.
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INDEX
<TABLE>
<CAPTION>
PART I. - FINANCIAL INFORMATION Page Number
<S> <C>
ITEM 1. Financial Statements
(1) Condensed Consolidated Financial Statements (unaudited):
Consolidated Statements of Earnings for the Three and Six Month
Periods Ended June 30, 1995 and 1994. 3
Consolidated Balance Sheets as of June 30, 1995 and
December 31, 1994. 4
Consolidated Statements of Cash Flows for the Six Month
Periods Ended June 30, 1995 and 1994. 5
(2) Statement as to Review and Presentation. 5
ITEM 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations. 6-7
PART II. - OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K 8
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PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
BUTLER MANUFACTURING COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
For the three and six month periods ended June 30, 1995 and 1994
(unaudited)
($000's omitted except for per share data)
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30, June 30,
---------------------- ----------------------
1995 1994 1995 1994
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net sales $ 206,771 $ 175,422 $ 401,623 $ 292,489
Cost of sales 168,748 143,936 331,456 243,139
--------- --------- --------- ---------
Gross profit 38,023 31,486 70,167 49,350
Selling, general, and administrative expenses 25,352 20,613 49,668 39,571
--------- --------- --------- ---------
Operating income 12,671 10,873 20,499 9,779
International joint venture income (loss), net 151 220 544 770
Other income (expense), net (378) (468) (922) (1,070)
--------- --------- --------- ---------
Earnings before interest and taxes 12,444 10,625 20,121 9,479
Interest expense 1,181 1,030 2,217 1,761
--------- --------- --------- ---------
Pretax earnings 11,263 9,595 17,904 7,718
Income tax expense 5,080 4,514 8,109 4,038
--------- --------- --------- ---------
Net earnings $ 6,183 $ 5,081 $ 9,795 $ 3,680
========= ========= ========= =========
Earnings per common share* $ .81 $ .70 $ 1.29 $ .51
========= ========= ========= =========
</TABLE>
*Earnings per common share are based on net earnings and the average number of
common shares outstanding during each period. The earnings per share amounts
for 1995 and 1994 have been restated to reflect the effect of the 3 for 2 stock
split for stockholders of record on June 30, 1995. The weighted average number
of shares outstanding used in the computation of earnings per common share are
as follows:
<TABLE>
<S> <C>
Three months ended June 30, 1995 7,630,113
Three months ended June 30, 1994 7,304,501
Six months ended June 30, 1995 7,595,268
Six months ended June 30, 1994 7,216,095
</TABLE>
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BUTLER MANUFACTURING COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
June 30, 1995 and December 31, 1994
(unaudited)
(000's omitted)
<TABLE>
<CAPTION>
1995 1994
--------- ---------
<S> <C> <C>
ASSETS
Current assets:
Cash $ 3,068 $ 5,284
Receivables, net 95,519 95,277
Inventories:
Raw materials 40,151 34,732
Work in process 6,301 5,462
Finished goods 22,170 28,105
Lifo reserve (10,288) (9,393)
--------- ---------
Total inventory 58,334 58,906
Real estate developments in progress 10,054 15,985
Deferred tax assets 7,538 7,538
Other current assets 8,917 5,662
--------- ---------
Total current assets 183,430 188,652
Investments and other assets, at cost 18,820 20,371
Assets held for sale 13,260 13,587
Property, plant and equipment, at cost 193,462 184,576
Less accumulated depreciation (139,132) (136,050)
--------- ---------
Net property, plant and equipment 54,330 48,526
--------- ---------
$ 269,840 $ 271,136
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable $ 4,227 $ 70
Current maturities of long-term debt 698 2,474
Accounts payable 68,117 81,092
Dividends payable 750 487
Accrued liabilities 41,759 46,987
Taxes on income 4,006 4,970
--------- ---------
Total current liabilities 119,557 136,080
Deferred taxes on income 4,685 4,685
Other noncurrent liabilities 10,609 11,006
Long-term debt, less current maturities 45,185 40,263
Shareholders' equity:
Common stock, no par value, authorized 13,000,000 shares,
issued 9,088,200 shares, at stated value 12,623 12,623
Cumulative foreign currency translation adjustment 272 194
Retained earnings 107,384 99,579
--------- ---------
120,279 112,396
Less cost of common stock in treasury, 1,591,114 shares in 1995
and 1,783,328 shares in 1994 30,475 33,294
--------- ---------
Total shareholders' equity 89,804 79,102
--------- ---------
$ 269,840 $ 271,136
========= =========
</TABLE>
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BUTLER MANUFACTURING COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the six month periods ended June 30, 1995 and 1994
(unaudited)
(000's omitted)
<TABLE>
<CAPTION>
1995 1994
-------- --------
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 9,795 $ 3,680
Adjustments to reconcile net earnings to net cash (used in)
provided by operating activities:
Depreciation, amortization, other 4,056 3,896
Equity in (earnings) loss of international joint ventures (83) (387)
Change in assets and liabilities:
Receivables (242) (20,063)
Inventories 957 (13,177)
Real estate developments in progress 5,931 (4,138)
Other current assets (3,246) (409)
Current liabilities excluding short-term debt (19,167) 29,393
-------- --------
Net cash used in operating activities (1,999) (1,205)
Cash flows from investing activities:
Capital expenditures (9,211) (3,490)
Sale of Walker -- (8,487)
Acquisition of new business (994) --
Net changes in other noncurrent assets 2,313 1,316
Common stock dividend
from international joint venture 799 1,000
-------- --------
Net cash used in investing activities (7,093) (9,661)
Cash flows from financing activities:
Payment of dividends (978) --
Proceeds from issuance of long-term debt 4,011 35,000
Repayment of long-term debt (177) (24,857)
Net change in short-term debt 2,141 (8,134)
Sale and issuance of treasury stock 5,978 1,709
Purchase of treasury stock (3,159) (106)
Net changes in other noncurrent liabilities (1,019) 4
-------- --------
Net cash provided by financing activities 6,797 3,616
Effect of exchange rate changes on cash 79 22
-------- --------
Net decrease in cash and cash equivalents (2,216) (7,228)
Cash and cash equivalents at beginning of year 5,284 14,853
-------- --------
Cash and cash equivalents at end of period $ 3,068 $ 7,625
======== ========
</TABLE>
REVIEW AND PRESENTATION
The information included in the foregoing consolidated financial statements has
been reviewed by KPMG Peat Marwick LLP, independent public accountants, in
accordance with established standards and procedures for a limited review of
interim financial statements. The statements include all adjustments which
were, in the opinion of management, necessary to present a fair statement of
the results for the period, and include all adjustments and additional
disclosures proposed by independent public accountants.
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ITEM 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
LIQUIDITY AND CAPITAL RESOURCES
Cash and equivalents decreased $2.2 million in the first six months of 1995
primarily due to a significant decrease in payables due to the timing of vendor
payments and increased capital expenditures. The increase in capital
expenditures was due largely to the expansion of the San Marcos, Texas metal
buildings facility. For the six months ended June 30, 1995, domestic short-term
borrowings averaged $8.0 million for 124 days compared to $7.1 million for 59
days in 1994.
The Company currently has revolving credit facilities aggregating $50 million,
provided by four banking institutions, to meet the needs of both the Company
and the Company's subsidiary, Butler Real Estate, Inc. As of June 30, 1995, $9
million of the credit line was utilized to provide a bank letter of credit to
secure insurance obligations. In the second quarter the Company obtained $6.25
million of Industrial Revenue Bond financing to fund expansion of its San
Marcos, Texas facility. The bonds mature in the year 2015, and pay a floating
interest rate. The bonds are also secured by a bank letter of credit issued by
NationsBank of Texas subject to a reimbursement agreement.
Butler Building Systems, Ltd., the Company's United Kingdom subsidiary,
maintains a separate line of credit with its local bank for approximately $2.4
million at current exchange rates. In the second quarter, the Company invested
$2.0 million in its United Kingdom subsidiary to reduce bank debt. Management
believes a combination of funding from the bank line of credit and additional
investment from the Company, as required, will be sufficient to meet liquidity
requirements.
At its meeting in June, the Board of Directors approved a 3 for 2 stock split
and a 50% increase in the quarterly cash dividend. Both the stock split and the
quarterly dividend at the new rate of 15 cents per share on a pre-split basis
were paid July 17, 1995, to stockholders of record on June 30, 1995.
In June 1995, the Vistawall Division completed the purchase of certain assets
of Skywall, Inc., a producer of translucent panel systems sold into the
architectural and industrial markets. This product line complements the
existing Naturalite skylight and Vistawall curtain wall glass systems.
Capital expenditures were $9.2 million for the first six months of 1995
compared to $3.5 million a year ago. The increase is due in large part to the
expansion of the San Marcos, Texas facility. Total capital expenditures are
expected to be approximately $25.0 million in 1995 compared to actual
expenditures of $13.7 million in 1994. The majority of 1995 capital
expenditures will be invested in the Buildings Systems Segment.
RESULTS OF OPERATIONS
Net sales of $206.8 million for the quarter ended June 30, 1995 were 18% higher
than a year ago. The majority of the increase is due in large part to increases
in volume in the Building Systems Segment and Other Buildings Segment due to an
improved non-residential construction market. For the six months ended June 30,
1995, net sales were $401.6 million, or a 37% increase over a year ago. The
Buildings Systems Segment and Other Building Products Segment contributed to
the majority of the increase. More specifically, the Buildings Division's U.S.
metal buildings business and Vistawall Division's sales were both sharply
higher than during the same period last year.
The second quarter 1995 consolidated gross profit was $38.0 million compared to
$31.5 million a year ago. The major contributor to the improvement was the
Buildings Systems Segment through increased volume and improved margins. For
the six months ended June 30, 1995, consolidated gross profit was $70.2
million, or a 42% increase over a year ago. The increase was due to improved
results in the Buildings Systems Segment and Other Building Products Segment.
Net earnings for the quarter ended June 30, 1995 were $6.2 million or $.81 per
common share, compared to net earnings of $5.1 million or $.70 per common share
a year ago. The improvement in net earnings was due to the increase in sales
and improved margins of the Building Systems Segment and increased sales of the
Other Building Products Segment. The net earnings for the six months ended June
30, 1995 were $9.8 million or $1.29 per common share, compared to $3.7 million
or $.51 per common share a year ago. The improvement was primarily due to the
increase in volume of business and improved margins in the Building Systems
Segment. The Other Building Products Segment's sales also increased
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dramatically with margin as a percent of sales remaining relatively constant.
The Company's European buildings business reported a loss for the six months
ended June 30, 1995 approximately equal to that of a year ago.
For additional information, see the letter to shareholders at Exhibit 19.
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PART II. - OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
(15) Letter from independent public accountants pursuant to
paragraph (d) of Rule 10-01 of Regulation S-X and related
letter.
(19) July 17, 1995 letter to shareholders (without financial
statements).
(27) Financial Data Schedule
(b) Reports on Form 8-K.
The Company has not filed any reports on Form 8-K during the
quarter ended June 30, 1995.
Agreements relating to the Industrial Revenue Bond issue referred to in the
Management Discussion and Analysis section are not being filed as exhibits
pursuant to Rule 601(b) (4) (iii) (A) of Regulation S-K. The agreements will be
furnished to the Commission upon request.
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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.
BUTLER MANUFACTURING COMPANY
08/04/95 /s/ John J. Holland
---------- --------------------------------------------------------------
Date John J. Holland
Vice President - Finance
and Chief Financial Officer
08/04/95 /s/ Richard O. Ballentine
---------- ----------------------------------------------------------------
Date Richard O. Ballentine
Vice President, General Counsel
and Secretary
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EXHIBIT INDEX
Exhibit
Number Description
------- -----------------------------------------------------------
15 Letter from independent public accountants pursuant to
paragraph (d) of Rule 10-01 of Regulation S-X and related
letter.
19 July 17, 1995 letter to shareholders (without financial
statements).
27 Financial Data Schedule
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Exhibit 15
INDEPENDENT ACCOUNTANTS' REPORT
The Board of Directors
Butler Manufacturing Company:
We have reviewed the condensed consolidated balance sheet of Butler
Manufacturing Company and subsidiaries as of June 30, 1995 and the related
condensed consolidated statements of earnings and cash flows for the
three-month and six month periods ended June 30, 1995 and 1994. These financial
statements are the responsibility of Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit in
accordance with generally accepted auditing standards, the objective of which
is the expression of an opinion regarding the financial statements taken as a
whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the condensed consolidated financial statements referred to above
for them to be in conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet as of December 31, 1994 and the
related consolidated statements of earnings and retained earnings and cash
flows for the year then ended (not included herein); and in our report dated
February 3, 1995, we expressed an unqualified opinion on those consolidated
financial statements. In our opinion, the information set forth in the
accompanying condensed consolidated balance sheet as of December 31, 1994 is
fairly stated in all material respects in relation to the consolidated balance
sheet from which it has been derived.
/s/ KPMG Peat Marwick LLP
July 14, 1995
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Exhibit 15
The Board of Directors
Butler Manufacturing Company:
RE: Registration Statement No. 2-55753, 2-36370 and 2-63830
With respect to the subject registration statements, we acknowledge our
awareness of the use therein of our report dated July 14, 1995 related to our
review of interim financial information.
Pursuant to Rule 436(c) under the Securities Act of 1933, such report is not
considered a part of a registration statement prepared or certified by an
accountant or a report prepared or certified by an accountant within meaning of
Sections 7 and 11 of the Act.
/s/ KPMG Peat Marwick LLP
Kansas City, Missouri
July 14, 1995
<PAGE> 1
Exhibit 19
Butler
Manufacturing
Company
SECOND
QUARTER
REPORT 1995
Six Months Ended
June 30, 1995
BMA TOWER PENN VALLEY PARK KANSAS CITY, MO 64108
To Our Shareholders:
Butler's upward trend in sales and earnings continued in the second quarter of
1995. Quarterly sales of $207 million increased 18% from last year's second
quarter, and net income of $6.2 million, or $.81 per share, was 16% above the
level of 1994.
For the first six months of this year, sales were $402 million, up 37% from a
year ago. Year-to-date net earnings of $9.8 million, or $1.29 per share,
compare with earnings of $3.7 million, or $.51 per share, for the first half of
1994.
As a result of our continuing good financial results, and reflecting confidence
in our market position and outlook for future earnings and cash flow, the Board
of Directors at their June meeting approved a 3-for-2 stock split and a 50%
increase in the quarterly cash dividend. All per share amounts above reflect
the effects of the stock split. As previously announced and communicated to
shareholders, both the stock split, and the quarterly dividend at the new rate
of $.15 per share on a pre-split basis, are being paid July 17 to stockholders
of record on June 30.
The improvement in Butler's earnings for the first six months of 1995 was
mostly the result of strong performance by our U.S. metal buildings business.
Their sales and profitability were both sharply higher than during the same
period last year. While we expect this division to continue its sales and
profit growth in the second half of the year, we anticipate that the rate of
improvement will begin to slow as this business was operating at record levels
during the same period in 1994. Current backlog is higher than the exceptional
levels at this time last year, and order rates remain very encouraging.
Butler's Vistawall architectural aluminum business is also achieving
outstanding results in 1995. In June they completed the acquisition of the
Skywall product line from its previous private ownership. The Skywall product
line includes translucent fiberglass panel systems that ideally complement the
existing Naturalite skylight and Vistawall curtain wall glass systems.
From the vantage point of mid-year it is now apparent that our European
operations will not recover in 1995 to the full extent anticipated earlier.
Their year-to-date loss is about equivalent to last year, and, while their
backlog is up 66% and their second half will show definite improvement, they
will not achieve break-even profitability for the year, as we had planned.
Butler's total backlog at the close of the second quarter was $270 million, up
6% from the same time last year. While we are monitoring closely the sometimes
conflicting signals being given by external economic indicators, it is clear
from our own prospect activity, proposal levels, order rates, and current
backlog, that 1995 will be another excellent year for Butler.
Cordially yours,
/s/ Robert H. West
Robert H. West
Chairman and
Chief Executive Officer
July 17, 1995
Butler Manufacturing Company
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<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM BUTLER
MANUFACTURING COMPANY CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE SIX MONTHS
ENDED JUNE 30, 1995 AND CONSOLIDATED BALANCE SHEET AS OF JUNE 30, 1995, AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
<CASH> 3,068
<SECURITIES> 0
<RECEIVABLES> 95,519
<ALLOWANCES> 0
<INVENTORY> 58,334
<CURRENT-ASSETS> 183,430
<PP&E> 193,462
<DEPRECIATION> 139,132
<TOTAL-ASSETS> 269,840
<CURRENT-LIABILITIES> 119,557
<BONDS> 45,185<F1>
<COMMON> 12,623
0
0
<OTHER-SE> 107,384<F2>
<TOTAL-LIABILITY-AND-EQUITY> 269,840
<SALES> 401,623
<TOTAL-REVENUES> 401,245<F3>
<CGS> 331,436
<TOTAL-COSTS> 331,436
<OTHER-EXPENSES> 49,668<F4>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,217
<INCOME-PRETAX> 17,904
<INCOME-TAX> 8,109
<INCOME-CONTINUING> 9,795
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,795
<EPS-PRIMARY> 1.29
<EPS-DILUTED> 1.29
<FN>
<F1>REFLECTS LONG-TERM DEBT, LESS CURRENT MATURITIES.
<F2>REFLECTS OTHER STOCKHOLDERS' EQUITY BEFORE DEDUCTION OF $30.5 MILLION COST OF
TREASURY STOCK.
<F3>REFLECTS NET SALES PLUS NET INTERNATIONAL JOINT VENTURE INCOME LESS NET OTHER
EXPENSE.
<F4>CONSISTS OF SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES.
</FN>
</TABLE>
