<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d)
of The Securities Exchange Act of 1934
(Fee Required)
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995
BUTLER MANUFACTURING COMPANY
BMA TOWER, PENN VALLEY PARK
(P.O. BOX 419917)
KANSAS CITY, MISSOURI 64141-0917
TELEPHONE: (816) 968-3000
Incorporated in the State of Delaware
COMMISSION FILE NO. 0-603
IRS NO. 44-0188420
The Company has no securities registered pursuant to Section 12(b) of the
Act. The only class of stock outstanding consists of Common Stock having no
par value, 7,564,638 shares of which were outstanding at December 31, 1995.
The Common Stock is registered pursuant to Section 12(g) of the Act.
The aggregate market value of the Common Stock of the Company held by
non-affiliates, based upon the last sales price of such stock on February 21,
1996 was $242,928,594.
The Registrant 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 has been subject to such filing requirements for the past 90 days.
As indicated by the following check mark, disclosure of delinquent filers
pursuant to Rule 405 of Regulation S-K is not contained herein and will not be
contained to the best of Registrant's knowledge in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K: X
-
The following documents are incorporated herein by reference:
(1) Butler Manufacturing Company 1995 Annual Report, pages 14 through 32
(the "Annual Report" incorporated into Part II).
(2) Butler Manufacturing Company Notice of Annual Meeting of Stockholders
and Proxy Statement, dated March 11, 1996 (the "Proxy Statement"
incorporated into Parts I and III).
<PAGE> 2
BUTLER MANUFACTURING COMPANY
FORM 10-K
_______________
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995
<PAGE> 3
CONTENTS
<TABLE>
<CAPTION>
PART I Page
----
<S> <C>
Item 1. Business ............................................ 3
Item 2. Properties .......................................... 6
Item 3. Legal Proceedings ................................... 7
Item 4. Submission of Matters to a Vote of Security Holders.. 7
PART II
Item 5. Market for Registrant's Common Equity
and Related Stockholder Matters ...................... 7
Item 6. Selected Financial Data .............................. 8
Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations ........ 8
Item 8. Financial Statements and Supplementary Data .......... 8
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure ............... 8
PART III
Item 10. Directors and Executive Officers of the Registrant .. 8
Item 11. Executive Compensation .............................. 10
Item 12. Security Ownership of Certain Beneficial
Owners and Management ................................ 10
Item 13. Certain Relationships and Related Transactions ...... 10
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports
on Form 8-K ......................................... 10
SIGNATURES ...................................................... 13
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS ............. 14
FINANCIAL STATEMENT SCHEDULES ................................... S-1
</TABLE>
2
<PAGE> 4
PART I
Item 1.Business
(a) General Development of Business
The Company was founded as a partnership in 1901. It was incorporated in
Missouri in 1902 and reincorporated in Delaware in 1969. Its corporate
headquarters are located in Kansas City, Missouri, and principal plants and
offices are operated throughout the continental United States. Principal
international operations are conducted through Butler Building Systems, Ltd.,
a wholly owned United Kingdom subsidiary acquired in 1991, and a Saudi Arabian
joint venture.
The Company and its subsidiaries are primarily engaged in the marketing,
design, and production of systems and components for nonresidential
structures. Products and services fall into three principal business
segments: (1) Building Systems, consisting primarily of custom designed and
pre-engineered steel and wood frame building systems for commercial,
community, industrial and agricultural uses; (2) Construction and construction
management services for purchasers of large, complex or multiple site building
projects; and (3) Other Building Products, consisting primarily of curtain
wall and storefront systems, skylights and roof vents for low, medium and
high-rise nonresidential buildings. This segment also includes the
manufacture and sale of grain storage bins and the distribution of grain
handling and conditioning equipment.
The Company's products are sold primarily through numerous independent
dealers. Other Company products are sold through a variety of distribution
arrangements.
(b) Financial Information about Industry Segments
The information required by Item 1(b) is hereby incorporated by reference
to pages 22 through 24 of the Company's Annual Report furnished to the
Commission pursuant to Rule 14a-3(b) and attached as Exhibit 13.0 to this
report (see also items 6, 7, and 8 of this report).
(c) Narrative Description of Business
Building Systems
The Company's largest segment, Building Systems, includes the U.S. steel
and wood frame pre-engineered building systems; Butler European operations
consisting of 100% wholly owned subsidiaries in the United Kingdom, France,
and Germany; and a 30% owned Saudi Arabian joint venture (Saudi Building
Systems, Ltd.), all of which manufacture and/or market pre-engineered steel
frame building systems; Butler World Trade, an export marketing organization
for metal building systems; Butler Real Estate, Inc. a real estate developer;
and a 45% owned Japanese joint venture marketing pre-engineered building
systems to Japanese firms to meet their U.S. and international building
requirements.
The Company's building systems consist primarily of custom designed and
pre-engineered one to five-story steel and one to two-story wood framed
buildings for commercial, community, industrial and agricultural uses such as
office buildings, manufacturing facilities, warehouses, schools, shopping
centers and farm buildings. Principal product components of the systems are
structural members and a variety of pre-
3
<PAGE> 5
engineered wall and roof components. These are fabricated according to
standard or customer specifications and shipped to building sites for assembly
by independent dealers. Building components are manufactured in plants located
at Galesburg and Charleston, Illinois; Laurinburg, North Carolina; Birmingham,
Alabama; Visalia, California; Annville, Pennsylvania; San Marcos, Texas;
Lester Prairie, Minnesota; Ottawa, Kansas; and Clear Brook, Virginia.
Butler Building Systems, Ltd. manufactures and markets the Company's
pre-engineered steel frame buildings primarily for the United Kingdom and
European markets from its facility in Kirkcaldy, Scotland. Saudi Building
Systems, Ltd. manufactures and markets pre-engineered steel frame buildings
for Middle Eastern markets at manufacturing facilities located in Jeddah,
Saudi Arabia. The Company serves the Canadian market through a branch office
in Burlington, Ontario.
Butler World Trade functions as an export marketing organization for
metal building systems. Shipments are sourced primarily from Butler's U.S.,
U.K., and Saudi Arabian plants, and in the latter part of 1996 from the
Company's new manufacturing facility in Shanghai, China. Butler World Trade
also has contracts with steel fabricators in China, Mexico, Poland and South
America to produce primary structurals in order to maintain competitive prices
and delivery schedules. Butler World Trade has sales offices in Argentina,
Brazil, Chile, South Korea and Mexico and representative offices in China and
Vietnam.
Building Systems' products are distributed throughout the world by
independent Butler dealers. The dealers provide construction services and in
many cases complete design and engineering capabilities.
Nonresidential pre-engineered buildings compete with ordinary forms of
building construction in the low-rise commercial, community, industrial and
agricultural markets. Competition is primarily based upon cost, time of
construction, appearance, thermal efficiency and other specific customer
requirements.
The Company also competes with numerous pre-engineered steel frame
building manufacturers doing business within the United States, Canada, and
the United Kingdom. Approximately five of these manufacturers account for the
majority of industry sales. The Company believes that its 1995 sales of steel
frame pre-engineered buildings within the United States exceeded those of any
other nonresidential steel frame pre-engineered buildings manufacturer, with
its next largest competitors being Varco-Pruden Buildings, a division of
United Dominion Industries Ltd., American Buildings Company, NCI Building
Systems, Inc., and Ceco and Star Buildings Systems combined, a division of
Robertson - Ceco Corporation. Competition among manufacturers of
pre-engineered buildings is based primarily upon price, service, product
design and performance, and marketing capabilities.
The Company's Lester wood frame buildings business ranks second in sales
to the industry leader, Morton Buildings, Inc., a major manufacturer which
sells direct to the end user.
Butler Real Estate, Inc., a wholly-owned subsidiary of the Company,
provides real estate development services in cooperation with Butler dealers.
On the basis of commitments to lease obtained from credit worthy customers,
Butler Real Estate, Inc. acquires building sites, arranges with Butler dealers
for construction of project improvements, and then sells the completed
projects to investors.
4
<PAGE> 6
BMC Real Estate, Inc., a wholly-owned subsidiary of the Company,
participates solely in land development ventures.
Construction Services
The Company's Construction Services segment consists of a wholly-owned
construction subsidiary, BUCON, Inc. which provides comprehensive design,
planning, execution and construction management services to major purchasers
of construction. Revenues of the segment are derived primarily from general
contracting. In addition, the Construction Services segment performs "furnish
and erect" and "materials only" subcontracts using products from several
Company divisions, predominantly the Company's Buildings Division. Competition
is primarily based upon price, time necessary to complete a project, design,
and product performance. Construction Services competes with international,
national, regional and local general contracting firms, and whenever possible,
performs projects in conjunction with independent Butler dealers.
Other Building Products
This segment includes the operations of the Vistawall and Grain Systems
Divisions and, prior to December 1993, the Walker Division. The Walker
business was sold December 6, 1993. The Vistawall business designs,
manufactures and markets architecturally oriented component systems for the
nonresidential construction market. The Grain Systems' business manufactures
and markets grain storage bins and also distributes grain conditioning and
handling equipment.
The Vistawall Division designs, manufactures and sells aluminum curtain
wall systems for mid and high-rise office markets, and entry doors and other
standard storefront products for low-rise retail and commercial markets. The
products are distributed on a material supply basis to either curtain wall
erection subcontractors or general contractors, and through distribution
warehouses to glazing contractors for the storefront and entry door products.
Manufacturing and distribution facilities are located in Lincoln, Rhode
Island; Atlanta, Georgia; Modesto and Hayward, California; Cincinnati and
Cleveland, Ohio; Terrell, Houston and Dallas, Texas; Tampa, Florida;
Washington, D.C.; Chicago, Illinois; St. Louis, Missouri; and Seattle,
Washington. The Division operates in highly competitive markets with other
national manufacturers which operate multiple plants and distribution
facilities, and with regional manufacturers. Competition is primarily based
on cost, delivery capabilities, appearance and other specific customer
requirements.
The Vistawall Division at its Terrell, Texas location also designs,
manufactures and installs Naturalite/EPI skylights of all types, from the more
standard designs used in commercial and industrial buildings, to highly
complex engineered solutions for monumental building projects. In addition,
the Division designs and manufactures roof accessories, such as smoke and heat
vents, for conventional and pre-engineered buildings. In 1995 Vistawall
acquired the Skywall product line of translucent skylights and panels. The
Division markets its Naturalite/EPI and Skywall products through its existing
independent representative organization. There are numerous competitors in
this industry with competition primarily based on price, engineering and
installation capabilities, delivery and other specific customer requirements.
The Grain Systems Division manufactures and markets grain storage
5
<PAGE> 7
bins from its Kansas City, Missouri plant. It also distributes grain
conditioning and handling equipment. The Division's products are sold
primarily to farmers and commercial grain elevators through a nationwide
network of independent dealers. Products are also manufactured for export.
Grain systems are sold in highly competitive markets in direct competition
with national companies and smaller regional manufacturers. Competition is
principally based on price, delivery schedules, and product performance.
The Walker Division, which was sold to The Wiremold Company in December,
1993, manufactured a full array of power, lighting, electronics and
communication distribution systems for office, retail, and institutional
buildings. Principal products consisted of underfloor duct and cellular floor
systems.
Manufacturing and Materials
The Company's manufacturing operations include most conventional metal
fabricating operations, such as punching, shearing, welding, extruding and
forming of sheet and structural steel and aluminum. The Company also operates
painting and anodizing lines for structural steel and aluminum components,
respectively. Wood frame manufacturing operations include sawing and truss
fabrication. The principal materials used in the manufacture of the Company's
products include steel, aluminum, wood, and purchased parts. All materials are
presently available to the Company in sufficient quantities to meet current
needs.
Seasonal Business
Historically, the Company's sales and net earnings have been affected by
cycles in the general economy which influence nonresidential construction
markets (see in particular Item 7 of this report). In addition, the Company's
sales usually reach a peak during the summer when construction activity is
highest. Sales for the first, second, third and fourth quarters of 1995 were
$195 million, $207 million, $207 million and $218 million, respectively.
Backlog
The Company's backlog of orders believed to be firm was $251 million at
December 31, 1995 and $237 million at December 31, 1994. The Construction
Services segment, where margins are significantly lower than those associated
with product sales, accounted for $75 million of the year-end 1995 backlog and
$33 million of the year-end 1994 backlog.
Employees
At December 31, 1995 the Company employed 3,966 persons, 2,946 of whom
were non-union employees, and 1,020 were hourly paid employees who were
members of four unions. At December 31, 1994 the Company employed 3,564
persons. A five year labor agreement with the union at the Buildings Division
Galesburg, Illinois plant was renegotiated in 1995. A labor agreement with
the union at the Grain Systems Kansas City, Missouri plant will expire in
January, 1997.
Item 2.Properties
The principal plants and physical properties of the Company consist of
the manufacturing facilities described under Item 1, and the Company's
executive offices in Kansas City. The 142,000 square foot Vistawall facility
located in Lincoln, Rhode Island which has light manufacturing and fabrication
operations is classified under "Assets
6
<PAGE> 8
held for sale". The 144,000 square foot Garland, Texas facility previously
used for the operations of Naturalite was sold in January, 1995 and was
recorded in "Investments and other assets". The proceeds from the sale were
used to retire the existing mortgage on the property. Through a subsidiary,
the Company also owns a land development venture with property located on a
108 acre site in San Marcos, Texas. The property is recorded in "Assets held
for sale" and described in the "Real Estate Subsidiaries" footnote on page 22
in the Company's Annual Report. All other plants and offices described under
Item 1 are utilized by the Company and are generally suitable and adequate for
the business activity conducted therein. The Company's manufacturing
facilities described under Item 1, along with current outsourcing agreements
with various fabricators, have production capabilities sufficient to meet
current and foreseeable needs.
Except for leased facilities listed below, all of the Company's principal
plants and offices are owned:
(1) Leased space used for the Company's executive offices in Kansas City,
Missouri (112,000 sq. ft. lease expiring in the year 2001 with an option
to renew).
(2) Leased space used for the Vistawall Division plant in Terrell, Texas
(145,000 sq. ft. and 121,000 sq. ft. with leases expiring in 2000 and
2006, respectively, both containing options to renew), and fabrication and
distribution facilities in Dallas and Houston, Texas; St. Louis,
Missouri; Chicago, Illinois; Washington, D.C.; Cincinnati and
Cleveland, Ohio; Atlanta, Georgia; Tampa, Florida; Seattle, Washington;
and Modesto and Hayward, California (258,000 sq. ft. leased with various
expiration dates).
(3) The Company also leases various small sales and national account offices
throughout the world.
Item 3. Legal Proceedings.
There are no material legal or environmental proceedings pending as of
March 13, 1996. Proceedings which are pending consist of matters normally
incident to the business conducted by the Company and taken together do not
appear to be material.
Item 4. Submissions of Matters to a Vote of Security Holders.
No matters have been submitted to a vote of stockholders since the last
annual meeting of stockholders on April 18, 1995.
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters.
Incorporated by reference to the information under "Quarterly Financial
Information (Unaudited)", "Price Range of Common Stock (Unaudited)" and
"Historical Review 1995-1991" on pages 30 and 32 of the Annual Report.
In September, 1994 the Board of Directors approved the resumption of a
regular cash dividend, at an indicated annual rate of 40 cents per share. The
initial 10 cent quarterly payment was made in October 1994.
7
<PAGE> 9
In June, 1995 the Board of Directors approved a 3-for-2 stock split and a 50%
increase in the quarterly cash dividend. The stock split was paid July 17,
1995 to shareholders of record on June 30, 1995. The Company has limited
restrictions on the payment of dividends based on certain debt covenants of
the Note Agreement dated June 1, 1994, between the Company and four insurance
companies (incorporated by reference to the Form 10-Q for the quarter ended
June 30, 1994, as indicated under Item 14). As of December 31, 1995 the
Company had approximately $23 million of retained earnings available for cash
dividends.
Item 6. Selected Financial Data.
Incorporated by reference to the information under "Historical Review
1995-1991" on page 32 of the Annual Report.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Incorporated by reference to the information under "Management's
Discussion and Analysis of Financial Condition and Results of Operations" on
pages 14 and 15 of the Annual Report.
Item 8. Financial Statements and Supplementary Data.
Incorporated by reference to the consolidated financial statements and
related notes on pages 16 through 31 of the Annual Report.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
Not applicable.
PART III
Item 10. Directors and Executive Officers of the Registrant.
Information as to Directors is incorporated herein by reference to pages
3 through 5 of the Proxy Statement. The Executive Officers, their ages, their
positions and offices with the Company and their principal occupations during
the past five years are shown below:
Corporate Executive Officers
Robert H. West - age 57, Chairman of the Board and Chief Executive Officer;
Chairman of the Executive Committee and member of the Board Organization
Committee. He joined the Company in 1968, became President in 1978 and
Chairman of the Board in 1986. Mr. West is a director of Commerce Bancshares,
Inc., Burlington Northern Santa Fe Corporation, Kansas City Power & Light
Company, and St. Luke's Hospital. He is a trustee of the University of
Missouri at Kansas City.
Donald H. Pratt - age 58, President; member of the Executive Committee. He
joined Butler in 1965, became Executive Vice President in 1980, and President
of the Company in 1986. Mr. Pratt is also a director of Twentieth Century
Mutual Funds and is a trustee of the
8
<PAGE> 10
Kansas City Art Institute and Midwest Research Institute. He serves on the
FFA Sponsors Advisory Board.
Richard O. Ballentine - age 59, Vice President, General Counsel, and Secretary
since 1978. He joined Butler in 1975 as Vice President - Legal.
John T. Cole - age 45, Controller since 1990. He joined Butler in 1977 and
previously was Corporate Audit Manager.
John J. Holland - age 45, Vice President - Finance since 1990. He joined
Butler in 1980 and became Vice President - Controller in 1986.
John W. Huey - age 48, Vice President - Administration since 1993 and
Assistant Secretary since 1987. He joined Butler in 1978 and was previously
Assistant General Counsel.
Larry C. Miller - age 39, Treasurer since 1989. He joined Butler in 1980 and
became Assistant Treasurer in 1985.
Division Executive Officers
Moufid (Mike) Alossi - age 53, President, Butler (Shanghai) since 1995. He
joined Butler in 1968 and previously was Vice President-International Sales
and Marketing and was named President, Butler World Trade in 1993.
Hans G. Berger - age 48, Managing Director, Butler Europe since 1995. He
previously was Managing Director, Butler Bausysteme GmbH from 1993 to 1995 and
Vice President - Engineering, Butler Canada from 1992. From 1986 to 1992 he
was Vice President - Engineering, Canadian Building Systems, Inc.
William D. Chapman - age 53, President, International Operations since 1992.
He joined Butler in 1979 and was previously Vice President, International
Operations.
Thomas J. Hall - age 50, President, Butler Real Estate, Inc. since 1991. He
joined Butler in 1969, and was named Vice President and General Manager of
Butler Real Estate, Inc. in 1987.
Larry D. Hayes - age 57, President, Lester Building Systems Division since
1991. He joined Butler in 1975 and previously was President, Rural Systems
Division.
Richard S. Jarman - age 49, President, Buildings Division since 1986. He
joined Butler in 1974.
William L. Johnsmeyer - age 48, President Butler Construction (Bucon, Inc.)
since 1990. He joined Butler in 1982 and became President, Walker Division in
1984.
Robert J. Kronschnabel - age 60, President, Grain Systems Division since 1994.
He joined Butler in 1979 and was previously President, Naturalite/EPI in 1988
and became Vice President and General Manager, Grain Systems Division in 1991.
Ronald F. Rutledge - age 54, President Vistawall Division since 1984
9
<PAGE> 11
when he joined Butler.
Item 11. Executive Compensation.
Incorporated by reference to the information under "Report on Executive
Compensation", "Summary Compensation Table" and "Aggregated Option/SAR
Exercises and Fiscal Year-End Option/SAR Value Table" on pages 9 through 12 of
the Proxy Statement.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
Incorporated by reference to the information under "Beneficial Ownership
Table" on pages 7 through 9 of the Proxy Statement.
Item 13. Certain Relationships and Related Transactions.
Incorporated by reference to the information under "Election of Class A
Directors" on pages 2 through 10 and "Report on Executive Compensation" in
the Proxy Statement.
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
The following documents are filed as part of this report:
(a) Financial Statements:
Consolidated Balance Sheets as of December 31, 1995 and 1994.
Consolidated Statements of Earnings and Retained Earnings - Years Ended
December 31, 1995, 1994 and 1993.
Consolidated Statements of Cash Flow - Years Ended December 31, 1995,
1994 and 1993.
Notes to Consolidated Financial Statements.
The foregoing have been incorporated by reference to the Annual Report
as indicated under Item 8.
(b) Financial Statement Schedules:
Auditors' Report on Financial Statement Schedule
IX - Valuation and Qualifying Accounts
All other schedules are omitted because they are not applicable or the
information is contained in the consolidated financial statements or
notes thereto.
(c) Exhibits:
3.1 Certificate of Incorporation (incorporated by
reference to Exhibit 3.5 to Company's Form 10-K for year ended,
December 31, 1986).
10
<PAGE> 12
3.2 Bylaws of Butler Manufacturing Company (incorporated
by reference to Exhibit 3.7 to Company's Form 10-K for year
ended December 31, 1987).
4.1 Note Agreement between the Company and four Insurance
Companies dated as of June 1, 1994 (incorporated by reference to
Exhibit 4 of the Company's Form 10-Q for the quarter ended June
30, 1994).
10.1 Butler Manufacturing Company Executive Deferred
Compensation Plan as amended (incorporated by reference to
Exhibit 10.2 to the Company's Form 10-K for the year ended
December 31, 1989).
10.2 Butler Manufacturing Company Stock Incentive Plan for
1987, as amended (incorporated by reference to Exhibit 10.1 to
the Company's Form 10-K for the year ended December 31, 1990).
10.3 Butler Manufacturing Company Stock Incentive Plan of
1979, as amended (incorporated by reference to Exhibit 10.2 to
the Company's Form 10-K for the year ended December 31, 1990).
10.4 Form of Change of Control Employment Agreements, as
amended, between the Company and each of six executive officers
(incorporated by reference to Exhibit 10.3 to the Company's Form
10-K for the year ended December 31, 1990).
10.5 Copy of Butler Manufacturing Company Supplemental
Benefit Plan as amended and restated (incorporated by reference to
Exhibit 10.5 to the Company's Form 10-K for the year ended
December 31, 1994).
10.6 Form of Butler Manufacturing Company Split Dollar Life
Insurance Agreement (Collateral Assignment Method; Bonus
Arrangement) entered into between the Company and certain
executive officers (incorporated by reference to Exhibit 10.6 to
the Company's Form 10-K for the year ended December 31, 1994).
10.7 Form of Butler Manufacturing Company Split Dollar Life
Insurance Agreement (Collateral Assignment Method; Roll Out
Arrangement) entered into between the Company and certain
executive officers (incorporated by reference to Exhibit 10.7 to
the Company's Form 10-K for the year ended December 31, 1994).
13.0 Butler Manufacturing Company 1995 Annual Report (only
the information expressly incorporated herein by reference).
11
<PAGE> 13
22.0 Set forth below is a list as of March 13, 1996 of
subsidiaries of the Company and their respective jurisdictions of
incorporation. Subsidiaries not listed, when considered in the
aggregate as a single subsidiary, do not constitute a significant
subsidiary.
<TABLE>
<CAPTION>
Jurisdiction of
Subsidiary Incorporation
------------------------------------ ---------------
<S> <C>
Butler Argentina, S.A. Argentina
Butler do Brasil Comercio Limitada Brazil
Butler Export, Inc. Barbados
Butler Building Systems, Ltd. Scotland
Butler Bausysteme GmbH Germany
Butler Systemes de Construction SARL France
BMC Real Estate, Inc. Delaware
BUCON, Inc. Delaware
Butler Pacific, Inc. Delaware
Butler Real Estate, Inc. Delaware
Butler, S.A. de C.V. Mexico
Butler (Shanghai) Inc. China
Butler Holdings, Inc. Delaware
Comercial Butler Limitada Chile
Lester's of Minnesota, Inc. Minnesota
</TABLE>
24.0 Power of Attorney to sign this Report by each director.
27.0 Financial Data Schedule
No reports on Form 8-K were filed by the Company during the quarter ended
December 31, 1995.
The calculation of the aggregate market value of the Common Stock of the
Company held by non-affiliates as reflected on the front of the cover page is
based on the assumption that non-affiliates do not include directors. Such
assumption does not reflect a belief by the Company or any director that any
director is an affiliate of the Company.
12
<PAGE> 14
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized on this 14th day
of March, 1996.
BUTLER MANUFACTURING COMPANY
BY /S/ Robert H. West
-------------------------
Robert H. West
Chairman of the Board
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant in the capacities indicated on the dates indicated.
<TABLE>
<S> <C> <C>
/S/ Robert H. West Chairman of the Board March 14, 1996
- ------------------------------------- (Principal Executive Officer)
Robert H. West
/S/ John J. Holland Vice President-Finance March 14, 1996
- ------------------------------------- (Principal Financial Officer)
John J. Holland
/S/ John T. Cole Controller March 14, 1996
- ------------------------------------- (Principal Accounting Officer)
John T. Cole
/S/ Harold G. Bernthal * Director March 14, 1996
- -------------------------------------
Harold G. Bernthal
/S/ Robert E. Cook * Director March 14, 1996
- -------------------------------------
Robert E. Cook
/S/ Alan M. Hallene * Director March 14, 1996
- -------------------------------------
Alan M. Hallene
/S/ C.L. William Haw * Director March 14, 1996
- -------------------------------------
C.L. William Haw
/S/ George E. Powell, Jr. * Director March 14, 1996
- -------------------------------------
George E. Powell, Jr.
/S/ Donald H. Pratt * Director March 14, 1996
- -------------------------------------
Donald H. Pratt
/S/ Robert J. Reintjes, Sr. * Director March 14, 1996
- -------------------------------------
Robert J. Reintjes, Sr.
/S/ Judith A. Rogala * Director March 14, 1996
- -------------------------------------
Judith A. Rogala
</TABLE>
Richard O. Ballentine, by signing his name hereto, does hereby sign this
report on Form 10-K on behalf of each of the above directors of the Registrant
pursuant to a power of attorney executed by each of such directors.
* By /S/ Richard O. Ballentine, Attorney-in-fact March 14, 1996
- -------------------------------------------------
Richard O. Ballentine, Attorney-in-fact
13
<PAGE> 15
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors
Butler Manufacturing Company
We consent to the incorporation by reference in Registration Statements
Nos. 33-14464, 2-63830, 2-55753 and 2-36370 on Form S-8 and the related
Prospectus dated June 11, 1987, with Appendix dated March 8, 1996, of Butler
Manufacturing Company of our report dated February 2, 1996 which contained an
explanatory paragraph regarding the adoption of Statements of Financial
Accounting Standards No. 106, "Employers' Accounting for Postretirement
Benefits Other Than Pensions" and No. 109, "Accounting for Income Taxes",
relating to the consolidated balance sheets of Butler Manufacturing Company
and subsidiaries as of December 31, 1995, and 1994, and the related
consolidated statements of earnings and retained earnings and cash flows and
the related schedules for each of the years in the three-year period ended
December 31, 1995, which reports appear in or are incorporated by reference in
the Annual Report on Form 10-K of Butler Manufacturing Company for the fiscal
year ended December 31, 1995. We also consent to the reference to our firm
under the heading "Experts" in the Prospectus to the Registration Statements.
/S/ KPMG PEAT MARWICK LLP
-------------------------
KPMG PEAT MARWICK LLP
Kansas City, Missouri
March 22, 1996
14
<PAGE> 16
BUTLER MANUFACTURING COMPANY AND SUBSIDIARIES
KANSAS CITY, MISSOURI
Consolidated Financial Statement Schedule
(Form 10-K)
December 31, 1995, 1994 and 1993
(With Auditors' Report Thereon)
15
<PAGE> 17
INDEPENDENT AUDITORS' REPORT
The Board of Directors
Butler Manufacturing Company:
Under date of February 2, 1996, we reported on the consolidated balance sheets
of Butler Manufacturing Company and subsidiaries as of December 31, 1995 and
1994, and the related consolidated statements of earnings and retained
earnings and cash flows for each of the years in the three-year period ended
December 31, 1995, as contained in the 1995 Annual Report. That report
included an explanatory paragraph regarding the adoption of Statements of
Financial Accounting Standards No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions" and No. 109, "Accounting for
Income Taxes". These consolidated financial statements and our report thereon
are incorporated by reference in the Annual Report on Form 10-K for the year
1995. In connection with our audits of the aforementioned consolidated
financial statements, we also audited the related consolidated financial
statement schedule as listed in item 14. This consolidated financial
statement schedule is the responsibility of the Company's management. Our
responsibility is to express an opinion on this consolidated financial
statement schedule based on our audits.
In our opinion, such schedule, when considered in relation to the basic
consolidated financial statements taken as a whole, presents fairly, in all
material aspects, the information set forth therein.
/S/ KPMG PEAT MARWICK LLP
-------------------------
KPMG PEAT MARWICK LLP
Kansas City, Missouri
February 2, 1996
S-1
<PAGE> 18
SCHEDULE IX
BUTLER MANUFACTURING COMPANY AND SUBSIDIARIES
Valuation and Qualifying Accounts
(Thousands of Dollars)
<TABLE>
<CAPTION>
Additions Deductions
--------------- ----------------------------
Balance at Charged Credited Charged off Balance
beginning to to net of at close
Description of year earnings Other earnings recoveries Other of year
- ------------------------------- ---------- -------- ----- -------- ---------- ------ ---------
<S> <C> <C> <C> <C> <C> <C> <C>
(C) (B) (A)
Year ended December 31, 1995:
For possible losses on accounts
receivable $1,364 $1,154 $326 $0 $496 $ 0 $2,348
====== ====== ==== == ==== === ======
Year ended December 31, 1994:
For possible losses on accounts
receivable $1,088 $ 990 $ 10 $0 $724 $ 0 $1,364
====== ====== ==== == ==== === ======
Year ended December 31, 1993:
For possible losses on accounts
receivable $1,163 $ 767 $ 99 $0 $764 $177 $1,088
====== ====== ==== == ==== ==== ======
</TABLE>
(A) Includes acquisition and disposition of divisions and subsidiaries.
(B) "Credited to earnings" reflects adjustments to the original estimated loss
provision for receivables. This adjustment is due to a reassessment of the
collection status of trade receivables made during the year.
(C) Includes transfers from other reserve accounts.
S-2
<PAGE> 1
Financial Review
Management's Discussion and Analysis of Financial Condition
and Results of Operations
Results of Operations
Company sales for 1995 were $827 million compared with $692 million in 1994,
an increase of 19.5%. Revenues increased in the Building Systems and Other
Building Products segments and remained constant in the Construction Services
Segment.
Sales in the Building Systems Segment were $586 million in 1995 compared with
$482 million in 1994, an increase of 21.6%. Most of the increase is
attributable to the domestic metal building systems business which increased
its total market share and the real estate division which develops build-to-
suit lease projects and sells them to investors. Export building sales
declined modestly due to depressed economic conditions in Mexico.
The Construction Services Segment reported sales of $121 million in 1995
compared to $122 million in 1994.
Sales in the Other Building Products Segment were $147 million in 1995 and
$123 million in 1994, an increase of 19.5%. Sales of the Vistawall Division
increased substantially due to improved market demand and the continuing
consolidation of the architectural metals industry. Grain Systems' sales
improved slightly over 1994 primarily due to increased domestic commercial
grain storage demand.
The Company's consolidated sales in 1994 were $692 million compared to $576
million in 1993, an increase of 20.1%. Net of the Walker Division, which was
sold and recorded $40 million in sales for 1993, consolidated sales increased
$156 million or 29.1% in 1994 compared to 1993. The Building Systems Segment
was the primary contributor to the increase in 1994 revenue due to generally
higher levels of market demand in both the steel and wood frame product lines,
gains in domestic market share, and increased export sales. The Construction
Services Segment also contributed to the increase in 1994 revenue due
primarily to the continued formation and servicing of strategic alliances with
large multinational corporations.
Gross profit in 1995 was $151 million or 18.3% of sales compared to $120
million or 17.3% of sales in 1994. The increase was due primarily to greater
sales volume and improved pricing in the Building Systems and Other Building
Products segments and an improved nonresidential construction market. The
Company generally values its inventories at the lower of cost or market on a
LIFO basis. During 1995 rising prices partially offset by decreasing inventory
levels resulted in a $2.1 million increase in the required LIFO provision.
Gross profit in 1993 was $97 million or 16.8% of sales. Gross profit improved
in 1994 compared to 1993 due to improved sales and margins in all segments.
During 1994 the Company recorded a $2.1 million increase in the LIFO provision
due to an increase in inventory levels. In 1993 the change in the LIFO
provision was not significant.
In 1995 selling, general, and administrative expenses were $103 million
compared to $87 million in 1994, or 12.5% and 12.6% of 1995 and 1994 sales,
respectively. Selling, general, and administrative expenses decreased as a
percent of total sales in all segments except Construction Services.
Construction Services selling, general, and administrative expenses increased
due to investments in sales, service, and project management personnel to
support domestic and international construction management programs.
In 1993 selling, general, and administrative expenses were $81 million or
14.1% of 1993 sales. Selling, general, and administrative expenses as a
percent of total sales decreased between 1994 and 1993 due to good cost
controls and the relative fixed nature of these expenses to changes in sales
volume.
In 1995 the Company recorded net other expense of $1.4 million compared to net
other expense of $.9 million in 1994. Earnings realized from the Saudi
Building Systems joint venture were $.4 million less in 1995 compared to 1994.
In 1993 the Company recorded net other income of $18.4 million due primarily
to an $18 million pre-tax gain associated with the sale of the Walker
Division. Earnings realized from the Saudi Building Systems joint venture were
$.3 million less in 1994 compared to 1993.
Interest expense in 1995 increased to $4.1 million from $3.9 million in 1994
principally due to a full year's interest expense on the $35 million Private
Placement Notes issued in 1994 and interest on the San Marcos, Texas
Industrial Revenue Bonds issued during 1995. Interest expense declined $.7
million between 1994 and 1993 due primarily to a lower average debt balance
for all of 1994.
The Company's effective tax rates were 44.6% in 1995, 46.4% in 1994, and 39.2%
in 1993. The higher effective tax rate in 1995 and 1994 was primarily due to
nondeductible operating losses incurred by the European metal buildings
subsidiary.
Liquidity and Capital Resources
The Company's cash balance increased $2 million in 1995 compared to a decrease
of $9.6 million in 1994 and an increase of $7.2 million in 1993. Principal
sources of cash in 1995 were earnings and depreciation, which generated $32.3
million, and the proceeds from the issuance of $6.3 million of Industrial
Revenue Bond financing to fund the expansion of the Company's San Marcos,
Texas metal buildings facility. Principal uses of funds in 1995 were capital
expenditures of $22.7 million, increased working capital net of short-term
debt of $10.7 million, and dividend payments of $2.5 million. The Company also
acquired certain assets of Skywall, Inc. for $1 million cash and a $1.2
million note, payable over five years.
Page 14
<PAGE>
In December, 1993 the Company sold the business and substantially all of the
assets and liabilities of the Walker Division to The Wiremold Company for
$34.6 million in cash and the assumption of certain liabilities. The cash
proceeds after taxes and transaction expenses were used to reduce long-term
debt by $25 million. In 1994 the Company paid $8.5 million in taxes related to
the Walker Division sale.
Cash flow from operations was $19.1 million in 1995 compared with $9.7 million
in 1994 and $9.3 million in 1993. In 1995, 1994, and 1993 working capital
increased to accommodate the higher sales levels. The Company's total debt to
total capital ratio was 31.5% in 1995 compared with 35.1% in 1994 and 40.3% in
1993.
In 1993 the Company, as lessor, entered into a facility lease agreement where
the lessee was granted an option to purchase the leased facility for the
Company's book value of $2.2 million. The facility was previously recorded in
"Assets held for sale". The asset was transferred to "Investments and other
assets" at December 31, 1993 and was sold in January, 1995.
In June, 1994 the Company concluded a refinancing of its long-term bank debt
and bank credit facilities. The Company obtained $35 million through a private
placement of unsecured notes with four insurance companies. The notes carry a
fixed interest rate of 8.02%, and at issuance had an average life of six and
one-half years. The bulk of the proceeds of the borrowings were used to retire
existing bank debt.
The Company maintains $50 million in committed credit lines from four banking
institutions to meet the needs of both the Company and the Company's
subsidiaries. As of December 31, 1995 $9 million of the credit line was
utilized to provide a bank letter of credit arrangement to secure insurance
obligations. In April, 1995 the Company obtained $6.3 million of Industrial
Revenue Bond financing to fund the expansion of its San Marcos, Texas
facility. At year-end, all but $.8 million of the bond proceeds had been
drawn upon. The bonds are secured by a bank letter of credit.
Butler Building Systems Limited, a European subsidiary, maintains a separate
bank line of credit of approximately $2.3 million at current exchange rates.
In 1995 and 1994, the Company invested cash of $4.3 million and $2.1 million,
respectively, in the European operation to reduce debt and increase equity.
As of December 31, 1995 the Company was in compliance with the covenants of
all credit agreements.
Capital expenditures were $22.7 million in 1995, $13.7 million in 1994, and
$6.5 million in 1993. The majority of expenditures in 1995 and 1994 were used
to increase production capacity in the metal building systems business. In
1995 the Company also invested $4.1 million to establish a metal buildings
plant near Shanghai, China. An additional investment of $10.6 million in
capital expenditures and working capital is planned for the China operation in
1996. The plant is expected to be in production by the summer of 1996.
In 1995 the Company's Board of Directors approved a 500,000 share stock
repurchase authorization for its common stock, replacing the previous
authorization granted in 1989. The Company repurchased 194,301 of its common
shares in 1995, 23,853 shares in 1994, and 8,675 shares in 1993. Shares
repurchased in all three years were related to stock options exercised.
Repurchased shares were deposited in the Company's treasury. The Company
issued 454,366, 245,252, and 244,425 treasury shares in connection with stock
option exercises in 1995, 1994, and 1993, respectively.
In June, 1995 the Board of Directors approved a 3-for-2 stock split and a 50%
increase in the quarterly cash dividend. The stock split was paid July 17,
1995 to shareholders of record on June 30, 1995.
The Company believes that working capital needs and capital requirements for
the foreseeable future can be met by funds from operations and current credit
arrangements.
Other
The U.S. inflation rate grew at a moderate pace in 1995. The Company accounts
for inventory at LIFO cost, which in general allows for current earnings to
approximate the earnings which would be reported if measured in terms of
current value dollars.
At the annual meeting of shareholders to be held April 16, 1996, the Company
has proposed to amend the Restated Certificate of Incorporation of Butler
Manufacturing Company to increase the authorized number of shares of common
stock to 20 million shares from 13 million shares. This will provide the
Company with the flexibility to conduct the Company's future operations,
including the issuance, distribution, exchange, or reservation of shares of
common stock for stock dividends, acquisitions, financings, and stock
incentive plans. The Company has no present plans or commitments to issue
additional shares of common stock authorized by this proposed amendment other
than under existing stock incentive plans.
There are no pending accounting pronouncements that will have a significant
effect on the Company's consolidated financial statements.
Outlook
A number of forecasts predict a moderation in United States economic growth in
1996 relative to the past two years. Growth may slow domestically but the
Company is well positioned to continue its expansion into the metal buildings
business internationally, primarily in Asia and Latin America. In addition,
the growth in strategic alliances with major corporations is another factor
that may lessen the effect of an economic slowdown. And finally, the Company's
systems approach to construction solutions continues to gain share of the
total nonresidential market. Order backlog totaled $251 million at year-end,
compared with $237 million a year ago or an increase of 6%. However, higher
margin product backlog declined 17% compared with a year ago.
Page 15
<PAGE>
<TABLE>
Consolidated Balance Sheets
<CAPTION>
(Thousands of Dollars)
At December 31 1995 1994
-------- --------
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 7,253 $ 5,284
Receivables:
Trade 90,401 95,357
Other 3,104 1,284
-------- --------
93,505 96,641
Less allowance for possible losses 2,348 1,364
-------- --------
Net receivables 91,157 95,277
Inventories 51,168 58,906
Real estate developments in progress 20,123 15,985
Deferred tax assets 8,348 7,538
Other current assets 9,254 5,662
-------- --------
Total current assets 187,303 188,652
-------- --------
Investments and other assets 18,899 20,371
Assets held for sale 13,260 13,587
Property, plant, and equipment, at cost:
Land 3,794 2,583
Buildings 52,987 47,184
Machinery, tools, and equipment 115,358 105,378
Office furniture and fixtures 32,837 27,923
Transportation equipment 1,445 1,508
-------- --------
206,421 184,576
Less accumulated depreciation 143,014 136,050
-------- --------
Net property, plant, and equipment 63,407 48,526
-------- --------
$282,869 $271,136
======== ========
See Accompanying Notes to Consolidated Financial Statements.
Page 16
<PAGE>
At December 31 1995 1994
-------- --------
<S> <C> <C>
Liabilities and Shareholders' Equity
Current liabilities:
Notes payable to banks $ 2,553 $ 70
Current maturities of long-term debt 4,451 2,474
Accounts payable 53,047 81,092
Dividends payable 756 487
Accrued taxes and other expenses 37,401 27,019
Accrued payroll and pension expense 14,573 10,886
Billings in excess of costs and estimated earnings 7,188 9,082
Taxes on income 6,163 4,970
-------- --------
Total current liabilities 126,132 136,080
======== ========
Deferred tax liabilities 2,582 4,685
Other noncurrent liabilities 9,119 11,006
Long-term debt, less current maturities 42,613 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
Foreign currency translation adjustment 154 194
Retained earnings 119,395 99,579
-------- --------
132,172 112,396
Less cost of common stock in treasury,
1,523,262 shares in 1995 and
1,783,327 shares in 1994 29,749 33,294
-------- --------
Total shareholders' equity 102,423 79,102
-------- --------
Commitments and contingencies
$282,869 $271,136
======== ========
</TABLE>
Page 17
<PAGE>
<TABLE>
Consolidated Statements of Earnings and Retained Earnings
<CAPTION>
(Thousands of Dollars, Except Per Share Amounts)
Years ended December 31 1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
Net sales $826,538 $692,190 $575,847
Cost of sales 675,671 572,227 479,312
-------- -------- --------
Gross profit 150,867 119,963 96,535
Selling, general, and administrative expenses 103,093 86,506 80,603
-------- -------- --------
Operating income 47,774 33,457 15,932
Other income (expense):
International joint venture income 563 998 1,314
Interest and finance charges earned 437 403 660
Sundry, net (2,365) (2,302) (1,525)
Gain on sale of Walker Division - - 18,000
-------- -------- --------
(1,365) (901) 18,449
-------- -------- --------
Operating and other income 46,409 32,556 34,381
Interest expense 4,100 3,895 4,622
-------- -------- --------
Pretax earnings 42,309 28,661 29,759
Income taxes 18,877 13,306 11,661
-------- -------- --------
Net earnings 23,432 15,355 18,098
Retained earnings at beginning of year 99,579 86,332 69,711
-------- -------- --------
123,011 101,687 87,809
Dividends declared:
Common stock, $.37 and $.13 per share (2,750) (972) -
Net change in retained earnings due to
treasury stock transactions (866) (1,136) (1,477)
-------- -------- --------
Retained earnings at end of year $119,395 $ 99,579 $ 86,332
======== ======== ========
Earnings per common share $ 3.07 $ 2.09 $ 2.56
======== ======== ========
See Accompanying Notes to Consolidated Financial Statements.
</TABLE>
Page 18
<PAGE>
<TABLE>
Consolidated Statements of Cash Flows
<CAPTION>
(Thousands of Dollars)
Years ended December 31 1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
Cash flows from operating activities:
Net earnings $ 23,432 $ 15,355 $ 18,098
Adjustments to reconcile net earnings
to net cash provided by operating
activities:
Depreciation and amortization 8,861 7,776 9,605
Gain from sale of business - - (18,000)
Equity in earnings of international
joint ventures (91) (495) (890)
Change in assets and liabilities, net
of sale or purchase of new businesses:
Receivables 4,120 (34,477) (9,166)
Inventories 8,123 (21,480) (4,242)
Real estate developments in progress (4,138) (12,998) (2,987)
Deferred taxes (2,913) (238) 618
Other current assets (3,583) (1,480) (968)
Current liabilities excluding
short-term debt (14,677) 57,719 17,222
-------- -------- --------
Net cash provided by
operating activities 19,134 9,682 9,290
-------- -------- --------
Cash flows from investing activities:
Capital expenditures (22,663) (13,663) (6,460)
Cash received (paid) on sale of business - (8,651) 34,600
Acquisition of new business (994) - -
Net change in other noncurrent assets 1,811 119 (6,704)
Distributions from international
joint ventures 800 1,000 1,440
-------- -------- --------
Net cash provided (used) by
investing activities (21,046) (21,195) 22,876
-------- -------- --------
Cash flows from financing activities:
Proceeds from issuance of long-term debt 5,516 35,490 906
Repayment of long-term debt (4,248) (25,572) (37,681)
Net change in short-term debt 4,220 (10,380) 9,376
Dividends paid (2,481) (485) -
Sale and issuance of treasury stock 8,616 3,442 3,091
Purchase of treasury stock (5,071) (443) (152)
Net change in other noncurrent liabilities (2,631) (119) (673)
-------- -------- --------
Net cash provided (used) by
financing activities 3,921 1,933 (25,133)
Effect of exchange rate changes (40) 11 121
-------- -------- --------
Net change in cash and
cash equivalents 1,969 (9,569) 7,154
Cash and cash equivalents at
beginning of year 5,284 14,853 7,699
-------- -------- --------
Cash and cash equivalents
at end of year $ 7,253 $ 5,284 $ 14,853
======== ======== ========
See Accompanying Notes to Consolidated Financial Statements.
</TABLE>
Page 19
<PAGE>
Notes to Consolidated Financial Statements
Significant Accounting Policies
Principles of Consolidation.
The consolidated financial statements include all subsidiaries which are more
than 50% owned. Corporations in which the Company has stock ownership of at
least 20% but not over 50% are accounted for using the equity method. All
significant intercompany profits, account balances, and transactions are
eliminated in consolidation.
Management of the Company has made a number of estimates and assumptions
relating to the reporting of assets and liabilities and the disclosure of
contingent assets and liabilities to prepare these consolidated financial
statements in conformity with generally accepted accounting principles. Actual
results could differ from those estimates.
Cash and Cash Equivalents.
Cash and cash equivalents are defined as all demand deposits and overnight
investments.
Inventories.
Inventories are valued at the lower of cost or market. The last-in, first-out
(LIFO) method of determining cost is used for substantially all domestic
inventories. If the first-in, first-out method had been used for all
locations, inventories would have been $11.5 million, $9.4 million, and $7.3
million higher than those reported at December 31, 1995, 1994, and 1993,
respectively.
The use of the LIFO method decreased net earnings by $1.1 million ($.15 per
share) in 1995 and $1.1 million ($.15 per share) in 1994 and increased net
earnings $.3 million ($.03 per share) in 1993. Included in these amounts are
the effects of decreased inventory levels at certain divisions in 1993,
causing results of operations to be charged with prior years' inventory costs.
These costs were lower than current year costs. The effect of the decreased
inventory levels had no effect on net earnings in 1993.
<TABLE>
Inventories by Component
<CAPTION>
(Thousands of dollars) 1995 1994
-------- --------
<S> <C> <C>
Raw materials $ 31,735 $ 34,732
Work in process 5,696 5,462
Finished goods 25,190 28,105
-------- --------
62,621 68,299
LIFO reserve (11,453) (9,393)
-------- --------
$ 51,168 $ 58,906
======== ========
</TABLE>
Property, Plant, and Equipment.
Depreciation is calculated using the straight-line method over the estimated
useful lives of the assets. Expenditures for maintenance and repairs are
charged to expense as incurred. Upon sale or retirement of assets, the cost
and the accumulated depreciation amounts are removed from the accounts.
Research and Development Costs.
Costs incurred in the creation and start-up of new products or changes of
existing products are charged to expense as incurred. The Company expended
$2.5 million of research and development costs in 1995, $2.2 million in 1994,
and $2.3 million in 1993.
Stock Option Plans.
No charges are made to earnings in accounting for stock options granted
because all options are granted at fair market value. If the amounts received
when options are exercised are different than the carrying value of treasury
stock issued, the difference is recorded in retained earnings.
Deferred Charges.
Incremental costs related to the development of major computer programs
expected to reduce costs in future periods have been capitalized, are included
in "Investments and other assets" in the consolidated balance sheets ($4.6
million and $3.6 million at December 31, 1995 and 1994, respectively), and are
being amortized on a straight-line basis over periods not ex-
Page 20
<PAGE>
ceeding seven years ($.9 million in 1995). In 1989 certain debt origination
and issuance costs were capitalized. In 1993 the remaining balance of $2.3
million was charged to expense due to a substantial repayment of the debt.
Earnings Per Share.
Earnings per common share are based upon the average common and common
equivalent shares outstanding during each year. Employee stock options are the
Company's only common stock equivalents; there are no other potentially
dilutive securities. Earnings per common share were based on 7,629,816,
7,354,173, and 7,073,990 common equivalent shares for the years 1995, 1994,
and 1993, respectively. All per share and common equivalent share amounts have
been restated to reflect the effect of the June, 1995 3-for-2 stock split.
Foreign Currency Translation.
The value of the U.S. dollar fluctuates on foreign currency exchanges which
creates exchange gains or losses on the Company's international investments.
These investments and the related equity earnings (loss) are translated into
U.S. dollars at year-end and average exchange rates, respectively. The gains
or losses that result from translation are shown in the shareholders' equity
section of the consolidated balance sheets. Foreign currency exchange
transaction gains or losses for 1995, 1994, and 1993 were insignificant.
Financial Instruments.
The fair value of long-term debt is determined by comparing interest rates for
debt with similar terms and maturities. At December 31, 1995 and 1994 the fair
value of the Company's long-term debt was not materially different than its
carrying value. Other financial instruments, consisting of cash and cash
equivalents, net receivables, notes payable, and accounts payable are carried
at cost, which approximates fair value, as a result of the short-term nature
of these instruments. The Company has entered into derivative transactions for
purposes other than trading as a means of managing risk of loss of underlying
assets. Aluminum metal hedge contracts of less than one year's duration are
utilized to hedge architectural aluminum product backlog against losses caused
by changes in aluminum costs. Certain foreign currency forward contracts of
less than one year's duration are used to hedge the Company's limited foreign
currency exposure. The fair values of open aluminum metal hedge contracts and
foreign currency hedges at December 31, 1995 and 1994 were immaterial.
The Company has no significant off-balance sheet risks or concentrations of
credit.
Construction Contracts.
The Company recognizes earnings on construction contracts using the percentage
of completion method based upon its estimate of the completion of each
project. Costs and estimated earnings in excess of billings at December 31,
1995 and 1994 were $2 million and $1.5 million, respectively, and are
reflected in the consolidated balance sheets under the caption "Inventories."
Total receivables due under construction contracts, which are included as
trade receivables, were $23.9 million and $22.2 million at December 31, 1995
and 1994, respectively. Included in the contract receivables were $2.1 million
and $2.3 million at December 31, 1995 and 1994, respectively, for amounts
billed but not collected pursuant to retainage provisions. These amounts are
due upon completion of the contracts.
Acquisition of New Businesses.
In June, 1995 the Company purchased certain assets of Skywall, Inc. for $1
million in cash and $1.2 million in notes, payable in five annual installments
through 2000. The results of the Skywall operation have been included in the
consolidated results of the Company since acquisition with an insignificant
impact on net sales and net earnings.
All acquisitions to date have been accounted for as purchases. The excess of
cost over net assets of businesses acquired, which is classified as
"Investments and other assets" in the consolidated balance sheets, is being
amortized over twenty years or less, and at December 31, 1995 was not
material.
Page 21
<PAGE>
Sale and Dissolution of Businesses.
In December, 1993 the Company sold the business and substantially all of the
assets and liabilities used in the business of the Walker Division for the
selling price of $34.6 million in cash and the assumption of certain
liabilities. The net proceeds after taxes were used to reduce long-term debt
by $25 million. The Company recorded a net gain after taxes of $10.7 million
from the sale. Net sales and pretax earnings for the Walker Division for 1993
were $39.9 million and $4.9 million, respectively.
Real Estate Subsidiaries.
Butler Real Estate, Inc. (BRE) is a wholly-owned subsidiary providing real
estate development services in cooperation with Butler dealers. In 1995, 1994,
and 1993 BRE generated net earnings of $1.6 million, $.3 million, and $.4
million, respectively, from project related activities.
In a separate activity, BMC Real Estate, Inc. (BMCRE) participates in land
development joint ventures which are accounted for using the equity method. At
December 31, 1995 the Company guaranteed $.4 million of joint venture
borrowings. BMCRE also owns land for development which is included in "Assets
held for sale" in the consolidated balance sheets with a net carrying value of
$9.9 million and $10.3 million at December 31, 1995 and 1994, respectively.
Management believes the recovery of its investment in this property may take
several years and that the ultimate realizable value approximates the carrying
value.
International Joint Venture Operations.
The Company has interests in two international joint ventures. The ventures,
Saudi Building Systems, Ltd. (30%-owned), and Butler Japan, Inc.
(45%-owned), are involved in the design, manufacture, and/or marketing of pre-
engineered metal buildings for nonresidential use in their respective markets.
The financial results of the joint ventures are reported using the equity
method of accounting. Total net sales of the joint ventures in 1995, 1994, and
1993 were $32 million, $32.6 million, and $32.2 million, respectively. The
joint ventures' operating earnings in 1995, 1994, and 1993 were $.5 million,
$2.9 million, and $5.4 million, respectively. In 1995 and 1994 total assets
were $20.6 million and $21.1 million, respectively. Total liabilities for 1995
and 1994 were $8.6 million and $6.9 million, respectively.
The Company received distributions from the international joint ventures in
1995, 1994, and 1993 of $.8 million, $1 million, and $1.4 million,
respectively.
Business Segments
The Company groups its operations into three business segments, Building
Systems, Construction Services, and Other Building Products.
The Building Systems Segment includes the U.S. and foreign building systems
businesses, the Company's international joint venture operations, and real
estate subsidiaries. These business units supply steel and wood frame pre-
engineered building systems and financial services for a wide variety of
commercial, community, industrial, and agricultural applications.
The Construction Services Segment provides comprehensive design and
construction planning, execution, and management services for major purchasers
of construction. Projects are usually executed in conjunction with the dealer
representatives of other Butler divisions.
The Other Building Products Segment includes the operations of the Vistawall
and Grain Systems divisions. These businesses design, manufacture, and market
architecturally oriented component systems for nonresidential construction,
including aluminum curtain wall, storefront systems and doors, skylights, and
roof accessories, in addition to the design, manufacture, and sale of
commercial and on-farm grain storage to independent Agri-Contractor and Agri-
Builder dealer organizations. The results of the former Walker Division are
included in the Other Building Products Segment table amounts until its sale
in December, 1993.
Page 22
<PAGE>
<TABLE>
Net sales
<CAPTION>
(Thousands of dollars) 1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
Building Systems $586,377 $481,833 $367,028
Construction Services 120,501 122,493 93,350
Other Building Products 146,656 123,050 140,807
Intersegment eliminations (26,996) (35,186) (25,338)
-------- -------- --------
$826,538 $692,190 $575,847
======== ======== ========
</TABLE>
Net sales represent revenues from sales to affiliated and unaffiliated
customers before elimination of intersegment sales which are separately
disclosed. Intersegment eliminations are primarily sales from the Building
Systems and Other Building Products segments to Construction Services.
The Building Systems Segment and Construction Services Segment had sales to
one customer which accounted for approximately 5% of the Company's net sales
in 1995, 10% in 1994, and 9% in 1993.
<TABLE>
Export sales by domestic operations
<CAPTION>
(Thousands of dollars) 1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
North & South America $ 57,799 $ 65,328 $ 34,467
Far East 31,579 28,564 14,441
Other 13,875 11,799 21,553
-------- -------- --------
$103,253 $105,691 $ 70,461
======== ======== ========
</TABLE>
<TABLE>
Pretax earnings (loss)
<CAPTION>
(Thousands of dollars) 1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
Building Systems $ 40,354 $ 28,187 $ 9,120
Construction Services 1,318 3,178 3,248
Other Building Products 14,146 9,348 9,893
Corporate (9,409) (8,157) (5,880)
Interest expense (4,100) (3,895) (4,622)
-------- -------- --------
$ 42,309 $ 28,661 $ 11,759
======== ======== ========
</TABLE>
Pretax earnings in 1993 excludes the $18 million gain on the sale of the
Walker Division.
Prior year results have been restated to reflect certain segment reclasses.
<TABLE>
Assets
<CAPTION>
(Thousands of dollars) 1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
Building Systems $174,446 $167,351 $111,570
Construction Services 25,998 21,504 12,279
Other Building Products 43,919 41,023 35,769
Corporate 38,506 41,258 45,869
-------- -------- --------
$282,869 $271,136 $205,487
======== ======== ========
</TABLE>
Assets represent both tangible and intangible assets used by the segments.
Corporate assets represent cash and cash equivalents, assets held for sale,
corporate equipment, and miscellaneous other assets which are not related to a
specific business segment.
Prior year amounts have been restated to reflect certain segment reclasses.
Page 23
<PAGE>
<TABLE>
Capital expenditures
<CAPTION>
(Thousands of dollars) 1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
Building Systems $ 19,253 $ 11,901 $ 4,931
Construction Services 676 485 290
Other Building Products 2,479 1,182 1,160
Corporate 255 95 79
-------- -------- --------
$ 22,663 $ 13,663 $ 6,460
======== ======== ========
</TABLE>
Capital expenditures exclude property, plant, and equipment acquired through
acquisition of new businesses.
<TABLE>
Depreciation
<CAPTION>
(Thousands of dollars) 1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
Building Systems $ 5,958 $ 4,811 $ 4,610
Construction Services 343 278 224
Other Building Products 1,402 1,520 2,761
Corporate 99 72 80
-------- -------- --------
$ 7,802 $ 6,681 $ 7,675
======== ======== ========
</TABLE>
Debt, Leases, and Commitments
<TABLE>
Long-Term Debt Net of Current Maturities
<CAPTION>
(Thousands of dollars) 1995 1994
-------- --------
<S> <C> <C>
Private Placement Notes (A) $ 35,000 $ 35,000
Industrial Revenue Bonds (B) 5,516 4,000
Other debt 2,097 1,263
-------- --------
$ 42,613 $ 40,263
======== ========
<FN>
(A) In June, 1994 the Company entered into a Private Placement Note Agreement
("Private Placement Notes") with a group of insurance companies. The proceeds
from the financing of $35 million were used to retire short and long-term debt
and for other corporate purposes. The Private Placement Notes carry a fixed
interest rate of 8.02%. Annual principal payments of $5 million are required
beginning in December, 1997 and continuing through 2003.
(B) In April, 1995 the Development Authority of San Marcos, Texas issued $6.3
million of Industrial Revenue Bonds. Proceeds from the issue are being used to
finance the expansion of the existing San Marcos plant, and at year end, $5.5
million of the bond proceeds had been drawn upon. The bonds mature in 2015,
and bear interest at a variable rate which averaged 4.16% in 1995. The bonds
are secured by a bank letter of credit.
In November, 1995 Industrial Revenue Bonds of $4 million bearing a 13%
interest rate became current. In September, 1994 the Company retired a
separate Industrial Revenue Bond issue.
The bond issues are guaranteed by the Company. The weighted average interest
rate on the combined bond issues was 9% for 1995 and 12.4% for 1994.
Total principal payments due on all debt in each of the five years subsequent
to December 31, 1995 are $4.5 million in 1996, $5.4 million in 1997, $5.4
million in 1998, $5.4 million in 1999, $5.3 million in 2000, and $21.1 million
thereafter. Cash payments for interest on long-term debt were $3.7 million,
$3.4 million, and $4.1 million in 1995, 1994, and 1993, respectively.
</TABLE>
Short-Term Borrowings.
During 1995 and 1994 the Company borrowed to meet working capital needs and
other requirements. At December 31, 1995 the Company and its subsidiaries,
including Butler Building Systems Limited, had short-term credit facilities at
several banks totaling
Page 24
<PAGE>
$52.3 million. Borrowings outstanding at December 31, 1995 were $2.6 million.
The Company has committed $9 million of its credit facilities under a letter
of credit for insurance obligations. At December 31, 1995 the Company had
approximately $41 million of available borrowing capacity.
The Company's credit agreements contain certain limitations on additional
borrowings, the payment of cash dividends, and the purchase of Company stock,
as well as covenants related to the maintenance of certain financial ratios.
As of December 31, 1995 the Company was in compliance with all covenants, and
at that date approximately $23 million of retained earnings was available for
cash dividends and share repurchases.
Leases.
Rental expense under operating leases was $7.7 million, $6.1 million, and $5.6
million in 1995, 1994, and 1993, respectively. Minimum rental commitments
under noncancelable operating leases are $3.8 million in 1996, $3.5 million in
1997, $3.1 million in 1998, $2.2 million in 1999, and $1.7 million in 2000.
Commitments.
As a service to its independent dealers, the Company assists in obtaining
performance bonds on certain construction contracts in the ordinary course of
business. An irrevocable letter of credit is generally required for a portion
of the contract amount to reduce the possible liability of the Company. At
December 31, 1995 such performance bonds exceeded the related letters of
credit by $3 million. The contracts are in various stages of completion and
management believes that there will be no liability to the Company.
Taxes on Income
Effective January 1, 1993 the Company adopted SFAS No. 109, "Accounting for
Income Taxes." Under this standard, deferred income tax expense or benefit
arises from differences between financial reporting and tax reporting of
assets and liabilities, which most often result from the differences in timing
of income and expense recognition. Differences between financial reporting and
tax bases also arise due to business acquisition activity as tax laws can
result in significant differences in values assigned to assets and
liabilities. Previously recorded deferred tax assets and liabilities are
adjusted for any changes in enacted tax rates.
The components of the provision for income taxes are shown in Table A. The
provisions for income taxes were $18.9 million, $13.3 million, and $11.7
million for 1995, 1994, and 1993, respectively. Cash payments for income taxes
were $17.8 million, $17.6 million, and $4.1 million in 1995, 1994, and 1993,
respectively. The foreign components of pretax earnings were losses of $(2.8)
million, $(2.7) million, and $(.6) million in 1995, 1994, and 1993,
respectively. A reconciliation of the statutory federal income tax and the
income tax expense is shown in Table B. Detail of deferred tax assets and
liabilities as of December 31, 1995, 1994, and 1993 is shown in Table C.
<TABLE>
Table A: Components of Income Taxes
<CAPTION>
(Thousands of dollars) 1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
Current:
Federal $ 18,539 $ 11,295 $ 11,821
State and local 3,251 2,251 2,146
-------- -------- --------
21,790 13,546 13,967
-------- -------- --------
Deferred:
Federal (2,683) (220) (2,124)
State and local (230) (20) (182)
-------- -------- --------
(2,913) (240) (2,306)
-------- -------- --------
Total income tax expense $ 18,877 $ 13,306 $ 11,661
======== ======== ========
</TABLE>
Page 25
<PAGE>
<TABLE>
Table B: Reconciliation of Income Tax Expense
<CAPTION>
(Thousands of dollars) 1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
Expected income tax expense $ 14,808 $ 10,031 $ 10,416
State and local income tax,
net of federal benefits 2,113 1,463 1,395
Nondeductible operating losses
of foreign subsidiaries 964 951 204
Other 992 861 (354)
-------- -------- --------
Actual income tax expense $ 18,877 $ 13,306 $ 11,661
======== ======== ========
</TABLE>
<TABLE>
Table C: Deferred Tax Assets and Liabilities
<CAPTION>
(Thousands of dollars) 1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
Current deferred tax assets:
Operating expenses $ 5,901 $ 4,626 $ 4,037
Inventory 808 619 575
Restructuring reserves 1,354 1,786 2,326
Other 285 507 278
-------- -------- --------
Net current deferred tax assets $ 8,348 $ 7,538 $ 7,216
======== ======== ========
Noncurrent deferred tax assets (liabilities):
Depreciation $ (5,735) $ (6,595) $ (6,415)
Operating expenses 3,890 3,368 3,399
Minority investments (242) (968) (1,151)
Foreign net operating loss carryforward 3,515 2,552 1,600
Other (495) (490) (434)
-------- -------- --------
Net noncurrent deferred
tax assets (liabilities) 933 (2,133) (3,001)
Valuation allowance (3,515) (2,552) (1,600)
-------- -------- --------
Net noncurrent deferred tax liabilities $ (2,582) $ (4,685) $ (4,601)
======== ======== ========
</TABLE>
The valuation allowance offsets the deferred tax asset relating to the foreign
net operating loss carryforwards. Depending on future profitability, the
carryforwards may be realized in later years. The valuation allowance
increased $1 million, $1 million, and $.2 million in 1995, 1994, and 1993,
respectively, relating to foreign operating losses. The Company has sufficient
taxable income in the three year carryback period to support the recognition
of its other deferred tax assets.
The Company and its domestic subsidiaries file a consolidated federal income
tax return. The Company's consolidated federal income tax returns have been
examined by the Internal Revenue Service and settled through 1990.
Employee Benefit Plans
Retirement Plans.
The Company provides retirement benefits for substantially all employees,
either through a defined benefit plan, the defined contribution Employee Stock
Ownership Plan (ESOP), or a combination of both types of plans. The Company
bases pension contributions on funding standards established by the Employee
Retirement Income Security Act of 1974.
The majority of the Company's salaried and nonunion hourly employees are
covered by both a defined benefit plan and the ESOP. These plans are linked as
to retirement benefits, and benefits are based on the employees' highest five
consecutive years' compensation. The Company's bargaining unit employees are
covered by defined benefit retirement plans. Benefits are based upon the
number of years of service.
Page 26
<PAGE>
The funded status and accrued pension cost at December 31, 1995 and 1994 for
the defined benefit plans are presented in Table D. While the market value of
the ESOP assets is not included in the amounts in Table D, the effect of the
ESOP offset has been recognized in the accumulated and projected benefit
obligations. At December 31, 1994 an intangible asset of $2.6 million was
recorded as "Investments and other assets" in the consolidated balance sheets,
as an offset to the adjustment required to recognize the minimum liability. No
such adjustment was required at December 31, 1995. Assets held by the defined
benefit plans are generally debt instruments of the U.S. Government and debt
and equity securities issued by domestic corporations. The net pension cost of
these plans in 1995, 1994, and 1993 is presented in Table E.
<TABLE>
Table D: Funded Status and Accrued Pension Cost
<CAPTION>
1995 1994
-------- ---------------------
Assets Assets Accumulated
Exceed Exceed Benefits
Accumulated Accumulated Exceed
(Thousands of dollars) Benefits Benefits Assets
-------- -------- --------
<S> <C> <C> <C>
Actuarial present value of
benefit obligations:
Vested benefit obligation $ 37,913 $ 18,986 $ 12,757
======== ======== ========
Accumulated benefit obligation $ 38,375 $ 19,060 $ 12,885
======== ======== ========
Projected benefit obligation $ 48,806 $ 19,064 $ 21,601
Plan assets at fair value 42,427 20,507 12,607
-------- -------- --------
Projected benefit obligation
(greater than) less than plan assets (6,379) 1,443 (8,994)
Unrecognized net (gain) loss 9,234 807 8,889
Unrecognized net transition
(asset) liability 1,064 (1,168) 2,429
Adjustment required to recognize
minimum liability - - (2,602)
-------- -------- --------
Prepaid (accrued) pension cost $ 3,919 $ 1,082 $ (278)
======== ======== ========
</TABLE>
<TABLE>
Table E: Components of Net Pension Cost
<CAPTION>
(Thousands of dollars) 1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
Service cost - benefits earned
during the period $ 1,622 $ 1,983 $ 1,299
Interest cost on the projected
benefit obligation 3,715 3,141 3,140
Actual return on assets - (gain) loss (9,497) 2,231 (3,488)
Net amortization and deferral 8,143 (4,090) 1,377
-------- -------- --------
Net pension cost $ 3,983 $ 3,265 $ 2,328
======== ======== ========
Assumptions used in determining net pension
cost and all benefit obligations were:
Expected long-term rate of return
on assets 8.5% 8.5% 8.5%
Discount rate 7.5% 8.5% 7.5%
Long-term rate of increase
in compensation levels 5.5% 5.5% 5.5%
</TABLE>
The ESOP assets include the Company's common stock, and fixed income
securities which are primarily debt instruments of the U.S. Government. At
December 31, 1995 and 1994, the ESOP had net assets of $67 million and $45.7
million, respectively, and held 1,056,325 shares and 1,104,322 shares,
respectively, of Company stock. The Company expensed $.4 million for ESOP
contributions in each of the years 1995, 1994, and 1993.
Page 27
<PAGE>
Other Benefit Plans.
The Company sponsors the Butler Employees Savings Trust, a savings plan under
section 401(k) of the Internal Revenue Code. All salaried and nonunion hourly
employees are eligible to participate in this Plan. Under its terms the
Company will match 25% of the first 6% of employees' contributions to the
Plan, given that certain Company profitability levels are attained. In 1995,
1994, and 1993 the Company reached the defined profitability goals and
accordingly expensed $.8 million, $.7 million, and $.6 million, respectively,
as a matching contribution to the Plan.
The Company has a supplemental employee retirement plan. The Company has
purchased life insurance arrangements which name the Company as beneficiary to
meet the liabilities of the plan. The Company expensed $.5 million in 1995 and
$.2 million in 1994 related to this plan.
Postretirement Benefits.
The Company currently provides certain health care and life insurance benefits
for retired employees and their dependents. Substantially all of the Company's
employees become eligible for these benefits if they reach retirement age
while still working for the Company and have at least ten years of service.
The Company's contribution towards these benefits has been set to fixed
amounts per participant based on 1993 costs. Election of health care and life
insurance benefit coverage for retirees and dependents is optional, and
requires contributions by the retiree towards the cost of these coverages. The
Company has reserved the right to change or terminate all employee benefits,
including postretirement benefits.
In 1993 the Company adopted SFAS No. 106, "Employers' Accounting for
Postretirement Benefits Other than Pensions." This standard requires companies
to accrue for estimated future postretirement benefit costs during the year
that employees perform services and earn the benefits. The Company had
previously recognized retiree health and benefits expense when paid. As such,
the transition obligation in adopting the standard equaled the accumulated
postretirement benefit obligation. As of January 1, 1993 the accumulated
postretirement benefit obligation was $11.5 million, which the Company elected
to amortize over a 20 year period beginning in 1993. The Company sold its
Walker Division in 1993 which had the effect of reducing the transition
obligation by $1.3 million in that year. The transition obligation was $8.6
million, $9.1 million, and $9.6 million at December 31, 1995, 1994, and 1993,
respectively.
<TABLE>
Table F: Accumulated Postretirement Benefit Obligation
<CAPTION>
(Thousands of dollars) 1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
Retirees $ 7,582 $ 6,448 $ 7,037
Active participants fully eligible to retire 2,237 2,425 2,925
Other active participants 3,457 1,944 2,063
-------- -------- --------
13,276 10,817 12,025
Unrecognized net loss for changes
in assumptions (2,906) (477) (1,961)
Remaining accumulated postretirement
benefit obligation (8,567) (9,071) (9,576)
-------- -------- --------
Accrued postretirement benefit liability $ 1,803 $ 1,269 $ 488
======== ======== ========
</TABLE>
Net postretirement benefit costs were $1.6 million in each of the years 1995,
1994, and 1993.
Page 28
<PAGE>
<TABLE>
Table G: Net Postretirement Benefit Costs
<CAPTION>
(Thousands of dollars) 1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
Service cost, benefits attributed to
employee service during the year $ 182 $ 229 $ 160
Interest cost on accumulated postretirement
benefit obligation 879 863 911
Amortization of accumulated postretirement
benefit obligation 504 504 574
Deferred (gain) loss - 48 (83)
-------- -------- --------
Net postretirement benefit costs $ 1,565 $ 1,644 $ 1,562
======== ======== ========
</TABLE>
The Company revised its discount rate assumption in 1995 to 7.5% from 8.5% in
1994 and 7.5% in 1993. The health care cost trend rate used in the actuarial
computation was a blend of rates between 5% and 8% through 1999. The Company's
costs are limited to a fixed dollar amount per capita in future years not to
exceed 175% of 1993 costs. The effect of a 1% increase in the health care cost
trend rate on the accumulated postretirement benefit obligation would be $.3
million, with an immaterial effect on net postretirement benefit costs.
Stock Incentive Plans
Stock options are presently outstanding under the Stock Incentive Plans of
1979 and 1987. The 1987 Plan covering 1,468,815 shares was approved on April
21, 1987 and it terminated the 1979 Plan except for outstanding qualified and
nonstatutory stock options and stock appreciation rights.
Options are granted at a price equal to the fair market value of Butler stock
at the date of grant for terms of up to ten years. At December 31, 1995, 1994,
and 1993, 290,780, 725,891, and 866,633 shares, respectively, under option
were exercisable and 94,877, 17,073, and 32,823 shares, respectively, were
available for grant. Table H presents a summary of stock option activity for
the three years ended December 31, 1995.
<TABLE>
Table H: Summary of Stock Option Activity
<CAPTION>
Number Option
Options of Shares Price Range
- ------- --------- -----------
<S> <C> <C>
Unexercised at December 31, 1992 1,213,394 $7.83-14.73
Granted 28,500 10.33
Exercised (244,425) 7.83-14.73
Terminated (5,997) 9.17-11.17
--------- -----------
Unexercised at December 31, 1993 991,472 $7.83-12.43
Granted 15,750 17.50
Exercised (245,252) 7.83-12.43
Terminated (996) 8.70
--------- -----------
Unexercised at December 31, 1994 760,974 $7.83-17.50
Granted 16,500 23.00
Exercised (454,366) 7.83-17.50
Terminated (2,995) 10.33-17.50
--------- -----------
Unexercised at December 31, 1995 320,113 $7.83-23.00
========= ===========
</TABLE>
Page 29
<PAGE>
<TABLE>
Treasury Stock Activity
<CAPTION>
(Thousands of dollars) 1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
Common stock held in treasury:
Balance January 1 $ 33,294 $ 37,429 $ 41,845
Purchases 5,071 443 152
Sales or issues (8,616) (4,578) (4,568)
-------- -------- --------
Balance December 31 $ 29,749 $ 33,294 $ 37,429
======== ======== ========
</TABLE>
Purchases of treasury stock were made in 1995, 1994, and 1993 of 194,301,
23,853, and 8,675 common shares, respectively. Sales or issues of treasury
stock were 454,366, 245,252, and 244,425 common shares in 1995, 1994, and
1993, respectively. The Company recognized a tax benefit of $2.7 million, $.8
million, and $.7 million in 1995, 1994, and 1993, respectively, which was
credited directly to retained earnings in the treasury stock transactions.
<TABLE>
Quarterly Financial Information (Unaudited)
<CAPTION>
(Thousands of dollars except per share amounts)
1995 Quarter Ended March 31 June 30 Sept. 30 Dec. 31 Total
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net sales $194,852 $206,771 $206,634 $218,281 $826,538
Gross profit 32,144 38,023 41,632 39,068 150,867
Net earnings 3,612 6,183 7,669 5,968 23,432
Net earnings
per common share .48 .81 1.00 .78 3.07
Dividends per share .07 .10 .10 .10 .37
<CAPTION>
1994 Quarter Ended March 31 June 30 Sept. 30 Dec. 31 Total
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net sales $117,067 $175,422 $189,645 $210,056 $692,190
Gross profit 17,864 31,486 34,987 35,626 119,963
Net earnings (loss) (1,401) 5,081 6,635 5,040 15,355
Net earnings (loss)
per common share (.19) .70 .89 .67 2.09
Dividends per share - - .07 .07 .13
</TABLE>
Annual earnings per share amounts may not equal the sum of the quarterly
earnings per share amounts because of the timing of net earnings and the
issuance of common shares during the years.
<TABLE>
Price Range of Common Stock (Unaudited)
The Company's common stock is traded in the Over-the-Counter Market. The table
below summarizes the high and low closing prices as reported on the NASDAQ
National Market System.
<CAPTION>
1995 1994
Quarter High Low High Low
------- ------- ------- -------
<S> <C> <C> <C> <C>
First $24 7/8 $20 1/8 $19 1/2 $16
Second 28 7/8 23 17 1/8 14 3/8
Third 29 24 1/8 21 5/8 16 1/8
Fourth 39 1/4 26 1/2 23 1/2 20 1/8
</TABLE>
Page 30
<PAGE>
Independent Auditors' Report
To the Board of Directors
Butler Manufacturing Company
We have audited the consolidated balance sheets of Butler Manufacturing
Company and subsidiaries as of December 31, 1995 and 1994 and the related
consolidated statements of earnings and retained earnings and cash flows for
each of the years in the three-year period ended December 31, 1995. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatements. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Butler
Manufacturing Company and subsidiaries at December 31, 1995 and 1994, and the
results of their operations and their cash flows for each of the years in the
three-year period ended December 31, 1995 in conformity with generally
accepted accounting principles.
As discussed in the Notes to Consolidated Financial Statements, in 1993 the
Company adopted the provisions of Statements of Financial Accounting
Standards No. 106, "Employers' Accounting for Postretirement Benefits Other
Than Pensions" and No. 109, "Accounting for Income Taxes."
/s/ KPMG Peat Marwick LLP
Kansas City, Missouri
February 2, 1996
Page 31
<PAGE>
<TABLE>
Historical Review 1995-1991
<CAPTION>
1995 1994 1993 1992 1991
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Income Statement Data
Net sales $826,538 $692,190 $575,847 $500,177 $460,828
Net earnings (loss) 23,432 15,355 18,098 1,079 (11,954)
As a percent of sales 2.8% 2.2% 3.1% 0.2% (2.6%)
As a percent of
average shareholders'
equity 25.8% 21.8% 35.4% 2.8% (27.6%)
Per share of common stock:
Net earnings (loss) 3.07 2.09 2.56 0.17 (1.75)
Cash dividends declared,
per common share .37 .13 - - -
Cash dividends paid,
per common share .33 .07 - - -
Financial Position At year-end
Assets
Current assets 187,303 188,652 128,266 115,425 110,785
Property, plant, and
equipment, net 63,407 48,526 41,528 47,863 54,407
Total assets 282,869 271,136 205,487 195,810 198,389
Working capital
Net working capital 61,171 52,572 30,072 44,286 27,053
Ratio of current
assets to current
liabilities 1.5 1.4 1.3 1.6 1.3
Financial structure
Long-term debt,
less current
maturities 42,613 40,263 30,345 67,315 67,856
Total debt 47,064 42,737 41,713 68,797 69,612
Shareholders' equity 102,423 79,102 61,709 40,551 37,624
Per common share,
year-end 13.54 10.83 8.71 5.92 5.51
Total debt as a
percent of total
capital 31.5% 35.1% 40.3% 62.9% 64.9%
General Statistics
Depreciation 7,802 6,681 7,675 8,354 9,909
Capital expenditures 22,663 13,663 6,460 5,026 5,737
Common shares
outstanding, average 7,630 7,354 7,074 6,854 6,854
Common shares outstanding,
year-end 7,565 7,305 7,083 6,848 6,834
Common shareholders,
year-end 2,411 2,473 2,562 2,725 2,754
Number of employees,
year-end 3,966 3,564 3,064 3,169 3,040
<FN>
1. Thousands of dollars, except per share amounts for common stock.
2. The 1993 net earnings include an after-tax gain on the sale of the
Walker Division of $10.7 million or $1.51 per share.
3. The 1991 net earnings include an after-tax restructuring charge of $4
million.
4. All per share and common equivalent share amounts have been restated to
reflect the effect of the June, 1995 3-for-2 stock split.
</TABLE>
Page 32
<PAGE> 1
EXHIBIT 24.0
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned hereby
constitutes and appoints Richard O. Ballentine and John Huey, and each of
them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and revocation in each, for him/her and in his/her name, place
and stead, to sign any or all reports (including reports on Form 10-K, Form 3,
Form 4, Form 5, Schedule 13-D, Schedule 13-G, and Form 144), and any
amendments thereto, required or permitted to be filed by him under the
Securities and Exchange Act of 1934, or the Securities Act of 1933, with
respect to beneficial ownership of, and transactions in, equity securities of
BUTLER MANUFACTURING COMPANY, a Delaware corporation (the "Company"), and with
respect to other matters relating to the Company, and to file the same, with
all documents required or permitted to be filed in connection therewith, with
the Securities and Exchange Commission, granting unto said attorneys-in-fact
and agents, and each of them, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or any of them, or their substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.
DATED: JANUARY 16, 1996 /S/ HAROLD G. BERNTHAL
---------------------------
HAROLD G. BERNTHAL
DATED: JANUARY 12, 1996 /S/ ROBERT E. COOK
---------------------------
ROBERT E. COOK
DATED: JANUARY 12, 1996 /S/ ALAN M. HALLENE
---------------------------
ALAN M. HALLENE
DATED: JANUARY 10, 1996 /S/ C.L. WILLIAM HAW
---------------------------
C.L. WILLIAM HAW
DATED: JANUARY 16, 1996 /S/ GEORGE E. POWELL, JR.
---------------------------
GEORGE E. POWELL, JR.
DATED: JANUARY 15, 1996 /S/ DONALD H. PRATT.
---------------------------
DONALD H. PRATT
DATED: JANUARY 10, 1996 /S/ ROBERT J. REINTJES, SR.
---------------------------
ROBERT J. REINTJES, SR.
DATED: JANUARY 13, 1996 /S/ JUDITH A. ROGALA
---------------------------
JUDITH A. ROGALA
DATED: JANUARY 9, 1996 /S/ ROBERT H. WEST
---------------------------
ROBERT H. WEST
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Butler
Manufacturing Company Consolidated Statements of Operation for the year ended
December 31, 1995, and Consolidated Balance Sheet as of December 31, 1995, and
its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000015840
<NAME> BUTLER MANUFACTURING COMPANY
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<CASH> 7,253
<SECURITIES> 0
<RECEIVABLES> 91,157
<ALLOWANCES> 0
<INVENTORY> 51,168
<CURRENT-ASSETS> 187,303
<PP&E> 206,421
<DEPRECIATION> 143,014
<TOTAL-ASSETS> 282,869
<CURRENT-LIABILITIES> 126,132
<BONDS> 42,613<F1>
0
0
<COMMON> 12,623
<OTHER-SE> 119,395<F2>
<TOTAL-LIABILITY-AND-EQUITY> 282,869
<SALES> 826,538
<TOTAL-REVENUES> 825,173<F3>
<CGS> 675,671
<TOTAL-COSTS> 675,671
<OTHER-EXPENSES> 103,093<F4>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,100
<INCOME-PRETAX> 42,309
<INCOME-TAX> 18,877
<INCOME-CONTINUING> 23,432
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 23,432
<EPS-PRIMARY> 3.07
<EPS-DILUTED> 3.07
<FN>
<F1>Reflects long-term debt, less current maturities
<F2>Reflects other stockholders' equity before deduction of $29.7 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 expense
</FN>
</TABLE>
