<PAGE>
<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Period ended March 31, 1994
Commission File Number: 1-7795
UNC INCORPORATED
(Exact name of registrant as specified in its charter)
Delaware 54-1078297
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
175 Admiral Cochrane Drive
Annapolis, MD 21401
(Address of principal executive offices) (Zip Code)
Registrants' telephone number, including area code (410) 266-7333
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
Number of shares of Common Stock, par $0.20, outstanding as of May 6,
1994: 17,492,134 (excluding 700,000 treasury shares held by a subsidiary).
<PAGE>
<PAGE> 2
UNC Incorporated, and Subsidiaries
INDEX
Page No.
--------
Part I. Financial Information
Consolidated Statements of Earnings
Three Months Ended March 31, 1994 and 1993 1
Consolidated Balance Sheets
March 31, 1994 and December 31, 1993 2
Consolidated Statements of Cash Flows
Three Months Ended March 31, 1994 and 1993 4
Notes to Consolidated Financial Statements 6
Management's Discussion and Analysis of Financial
Condition and Results of Operations 14
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K 17
Signature Page 18
Exhibit Index 19
<PAGE>
<PAGE> 3
UNC Incorporated and Subsidiaries
Consolidated Statements of Earnings
(Dollars in thousands except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------------------
1994 1993
--------- ---------
<S> <C> <C>
Sales and operating revenues $ 138,412 $ 82,971
Costs and expenses:
Cost and operating expenses 113,659 64,840
Selling, general and
administrative expenses 16,003 12,102
--------- --------
129,662 76,942
--------- --------
Operating income 8,750 6,029
Other income (expense):
Interest income 7 31
Interest expense (4,954) (2,962)
Other (286) (329)
--------- --------
(5,233) (3,260)
--------- --------
Earnings before income taxes 3,517 2,769
Income tax provision (1,055) (554)
--------- --------
Net earnings $ 2,462 $ 2,215
========= ========
Net earnings per share $ .14 $ .13
========= ========
</TABLE>
1
<PAGE>
<PAGE> 4
UNC Incorporated and Subsidiaries
Consolidated Balance Sheets
(Dollars in thousands)
<TABLE>
<CAPTION>
March 31, December 31,
1994 1993
---------- -----------
<S> <C> <C>
Assets
- -------
Current assets:
Cash and short-term investments $ 869 $ 1,494
Accounts receivable, less allowance for
doubtful accounts of $5,711 and $6,366,
respectively 97,465 91,058
Unbilled costs and accrued profits on
contracts in progress 28,659 28,384
Inventories 111,928 109,766
Other 14,797 18,378
-------- --------
Total current assets 253,718 249,080
Net assets of discontinued operations 20,589 20,600
Property, plant and equipment, at cost 104,568 99,068
Less accumulated depreciation 34,021 32,037
-------- --------
Net property, plant and equipment 70,547 67,031
Cost in excess of net assets of acquired com-
panies, less accumulated amortization of $20,438
and $19,257, respectively. 141,162 141,718
Other assets 27,692 27,704
-------- --------
Total assets $513,708 $506,133
======== ========
</TABLE>
2
<PAGE>
<PAGE> 5
UNC Incorporated and Subsidiaries
Consolidated Balance Sheets
(Dollars in thousands) (cont.)
<TABLE>
<CAPTION>
March 31, December 31,
1994 1993
---------- -----------
<S> <C> <C>
Liabilities and Shareholders' Equity
- ------------------------------------
Current liabilities:
Current portion of long-term debt $ 6,708 $ 6,529
Accounts payable 27,145 38,625
Income taxes 2,246 2,062
Accruals and other current liabilities 46,462 51,664
-------- --------
Total current liabilities 82,561 98,880
Long-term debt, less current portion:
Revolving Senior Bank Debt, prime plus 1/2% due 1995 39,000 16,500
9 1/8% Senior Notes due 2003 100,000 100,000
7 1/2% Convertible Subordinated Debentures due 2006 69,000 69,000
Other 4,841 5,254
-------- --------
Total long-term debt, less current portion 212,841 190,754
Other long-term liabilities 50,290 51,013
-------- --------
Total liabilities 345,692 340,647
Shareholders' equity:
Series preferred stock, par value $1.00 per share;
Authorized 12,000,000 shares; 250,000 designated
Series A Junior Participating Preferred Stock,
none issued
Common stock, par value $0.20 per share; authorized
50,000,000 shares; issued 18,095,134 and
18,085,334 shares, respectively 3,619 3,617
Additional paid-in capital 121,792 121,746
Retained earnings 53,021 50,559
-------- --------
178,432 175,922
Less:
Treasury stock, at cost (700,000 shares) 8,750 8,750
Minimum pension liability adjustment 1,345 1,345
Unearned compensation-restricted stock 321 341
-------- --------
Total shareholders' equity 168,016 165,486
-------- --------
Total liabilities and shareholders' equity $513,708 $506,133
======== ========
</TABLE> 3
<PAGE>
<PAGE> 6
UNC Incorporated and Subsidiaries
Consolidated Statements of Cash Flows
(Dollars in thousands)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
--------------------
1994 1993
-------- --------
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 2,462 $ 2,215
Adjustments to reconcile net income to net
cash provided (used) by operating activities:
Depreciation and amortization 3,456 2,446
Provision for losses on accounts receivable 334 367
Income from leveraged lease (652)
Changes in assets and liabilities:
(Increase) in accounts receivable (6,741) (9)
(Increase) in unbilled costs & accrued
profits on contracts in progress (275) (439)
(Increase) in inventories (2,162) (4,986)
(Increase) decrease in other current assets 3,601 (535)
(Increase) decrease in other noncurrent assets 921 (407)
(Decrease) in accounts payable (11,480) (8,749)
(Decrease) in accruals and other current
liabilities (5,202) (3,176)
Increase in income taxes payable 184 325
Increase (decrease) in other noncurrent
liabilities (197) 212
(Decrease) in discontinued operations
liabilities (526) (563)
-------- --------
Total adjustments (18,739) (15,514)
-------- --------
Net cash and short-term investments
provided (used) by operating activities (16,277) (13,299)
-------- --------
</TABLE>
4
<PAGE>
<PAGE> 7
UNC Incorporated and Subsidiaries
Consolidated Statements of Cash Flows
(Dollars in thousands)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
--------------------
1994 1993
-------- --------
<S> <C> <C>
Cash flows from investing activities:
Net proceeds from sale of assets 4,747
Additions to property, plant and equipment (6,662) (1,059)
Naval Products phase out 1,930
Other transactions (4)
-------- --------
Net cash and short-term investments
provided (used) by investing activities (6,662) 5,614
-------- --------
Cash flows from financing activities:
Additions to debt 62,500 38,500
Reductions in debt (40,234) (31,098)
Other transactions 48 9
-------- --------
Net cash and short-term investments
provided (used) by financing activities 22,314 7,411
-------- --------
Net (decrease) in cash and short-term
investments (625) (274)
Cash and short-term investments at beginning of year 1,494 1,968
-------- --------
Cash and short-term investments at end of period $ 869 $ 1,694
======== ========
</TABLE>
5
<PAGE>
<PAGE> 8
UNC Incorporated and Subsidiaries
Notes to Consolidated Financial Statements
1. The accompanying financial statements, which should be read in conjunction
with the Consolidated Financial Statements included in the Annual Report
filed on Form 10-K for the year ended December 31, 1993, are unaudited.
The statements have been prepared in the ordinary course of business for
the purpose of providing information with respect to the interim periods,
and are subject to audit at the close of the year. It is the opinion of
the management of the Company that all adjustments (none of which were
other than normal recurring accruals) necessary for a fair presentation
of such periods have been included. Results of interim periods are not
necessarily indicative of results to be expected for the full year.
2. Inventories at March 31, 1994 and December 31, 1993:
<TABLE>
<CAPTION>
(Dollars in thousands)
1994 1993
-------- --------
<S> <C> <C>
Component parts and materials $ 78,843 $ 84,016
Work in process 30,581 23,429
Supplies 2,504 2,321
-------- --------
$111,928 $109,766
======== ========
</TABLE>
3. In July 1993, the Company issued $100 million principal amount of 9-1/8%
Senior Notes due 2003. The notes are guaranteed by all of the Company's
subsidiaries in the manner described below. The combined guarantors are
jointly and severally liable under the subsidiary guarantees.
The Company's obligations under the Notes are unconditionally guaranteed
by each of the Company's subsidiaries (the "Guarantees"). Each Guarantee
is a senior unsecured obligation of the subsidiary providing such
Guarantee and ranks pari passu with all senior unsecured indebtedness of
such subsidiary. The subsidiaries also have guaranteed the indebtedness
outstanding under the Company's revolving credit facility (the "Subsidiary
Bank Guarantees"). The Subsidiary Bank Guarantees are collateralized, in
general, by the accounts receivable and inventory of the subsidiaries and
therefore effectively rank senior to the Guarantees. The Guarantees are
in effect only for as long as the Subsidiary Bank Guarantees remain in
effect. If the Guarantees are terminated the Notes will be obligations
solely of the Company and will be effectively subordinated to all existing
and future indebtedness of the subsidiaries.
6
<PAGE>
<PAGE> 9
The following condensed consolidating information presents:
(1) Condensed financial statements as of March 31, 1994 and for the three
months ended March 31, 1994 and 1993 of (a) the Company on a parent
company only basis (Parent Company), (b) the Combined Guarantors, and
(c) the Company on a consolidated basis.
(2) The Parent Company with its investments in subsidiaries accounted for
on the equity method.
(3) Elimination entries necessary to consolidate the Parent Company and its
subsidiaries.
7
<PAGE>
<PAGE> 10
UNC INCORPORATED
Condensed Consolidating Balance Sheet
As of March 31, 1994
(Dollars in thousands)
<TABLE>
<CAPTION>
Parent Combined
Company Guarantors Eliminations Consolidated
------- ---------- ------------ ------------
<S> <C> <C> <C> <C>
Assets
- ------
Current assets:
Cash & short-term investments $ 254 $ 615 $ 869
Accounts receivable, net 705 96,760 97,465
Unbilled costs and accrued
profits on contracts in progress 28,659 28,659
Inventories 111,928 111,928
Other 1,262 13,535 14,797
-------- -------- ---------
Total current assets 2,221 251,497 253,718
-------- -------- ---------
Net assets of discontinued operations 18,000 2,589 20,589
Property, plant & equipment, net 3,179 67,368 70,547
Cost in excess of net assets
of acquired companies, net 141,162 141,162
Other noncurrent assets 15,773 11,919 27,692
Investments in and advances
to subsidiaries 353,962 $(353,962)
-------- -------- --------- ---------
Total assets $393,135 $474,535 $(353,962) $ 513,708
======== ======== ========= =========
</TABLE>
8
<PAGE>
<PAGE> 11
UNC INCORPORATED
Condensed Consolidating Balance Sheet
As of March 31, 1994
(Dollars in thousands)
<TABLE>
<CAPTION>
Parent Combined
Company Guarantors Eliminations Consolidated
------- ---------- ------------ ------------
<S> <C> <C> <C> <C>
Liabilities and Shareholders' Equity
- ------------------------------------
Current liabilities:
Current portion of long-term debt $ 1,000 $ 5,708 $ 6,708
Accounts payable 178 26,967 27,145
Accruals and other current liabilities 11,109 37,599 48,708
-------- -------- ---------
Total current liabilities 12,287 70,274 82,561
-------- -------- ---------
Long-term debt 191,500 21,341 212,841
Other noncurrent liabilities 12,582 37,708 50,290
-------- -------- ---------
Total liabilities 216,369 129,323 345,692
-------- -------- ---------
Common stock and additional paid
in capital 125,411 125,411
Retained earnings 53,021 53,021
Equity of subsidiaries and
advances of parent 353,962 $(353,962)
-------- -------- --------- ---------
178,432 353,962 (353,962) 178,432
Less:
Treasury stock at cost
(700,000 shares) 8,750 8,750
Minimum pension liability adjustment 1,345 1,345
Unearned compensation-restricted
stock 321 321
-------- -------- --------- ---------
Total shareholders' equity 176,766 345,212 (353,962) 168,016
-------- -------- --------- ---------
Total liabilities and
shareholders' equity $393,135 $474,535 $(353,962) 513,708
======== ======== ========= =========
</TABLE>
9
<PAGE>
<PAGE> 12
UNC INCORPORATED
Condensed Consolidating Statement of Earnings
Three Months Ended March 31, 1994
(Dollars in thousands)
<TABLE>
<CAPTION>
Parent Combined
Company Guarantors Eliminations Consolidated
------- ---------- ------------ ------------
<S> <C> <C> <C> <C>
Sales and operating revenues $ $ 138,412 $ 138,412
Costs and expenses:
Costs and operating expenses 113,659 113,659
Selling, general and administrative
expenses 4,279 11,724 16,003
Allocated expenses (1,776) 1,776
--------- --------- ---------
2,503 127,159 129,662
--------- --------- ---------
Operating income (2,503) 11,253 8,750
Other income (expense):
Interest income 3 4 7
Interest expense (3,791) (1,163) (4,954)
Other (287) 1 (286)
Equity in income of subsidiaries 7,890 $ (7,890)
--------- --------- --------- ---------
3,815 (1,158) (7,890) (5,233)
--------- --------- --------- ---------
Earnings before income taxes 1,312 10,095 (7,890) 3,517
Income tax benefit (provision) 1,150 (2,205) (1,055)
--------- --------- --------- ---------
Net earnings $ 2,462 $ 7,890 $ (7,890) $ 2,462
========= ========= ========= =========
</TABLE>
10
<PAGE>
<PAGE> 13
UNC INCORPORATED
Condensed Consolidating Statement of Earnings
Three Months Ended March 31, 1993
(Dollars in thousands)
<TABLE>
<CAPTION>
Parent Combined
Company Guarantors Eliminations Consolidated
------- ---------- ------------ ------------
<S> <C> <C> <C> <C>
Sales and operating revenues $ $ 82,971 $ 82,971
Costs and expenses:
Costs and operating expenses 64,840 64,840
Selling, general and administrative
expenses 3,366 8,736 12,102
Allocated expenses (3,366) 3,366
--------- --------- ---------
76,942 76,942
--------- --------- ---------
Operating income 6,029 6,029
Other income (expense):
Interest income 24 7 31
Interest expense (2,356) (606) (2,962)
Other (335) 6 (329)
Equity in income of subsidiaries 4,922 $ (4,922)
--------- --------- --------- ---------
2,255 (593) (4,922) (3,260)
--------- --------- --------- ---------
Earnings before income taxes 2,255 5,436 (4,922) 2,769
Income tax provision (40) (514) (554)
--------- --------- --------- ---------
Net earnings $ 2,215 $ 4,922 $ (4,922) $ 2,215
========= ========= ========= =========
</TABLE>
11
<PAGE>
<PAGE> 14
UNC INCORPORATED
Condensed Consolidating Statement of Cash Flows
Three Months Ended March 31, 1994
(Dollars in thousands)
<TABLE>
<CAPTION>
Parent Combined
Company Guarantors Consolidated
------- ---------- ------------
<S> <C> <C> <C>
Net cash flow from (used by) operations $ 4,507 $ (20,784) $(16,277)
Cash flows from investing activities:
Additions to property, plant and
equipment (6,662) (6,662)
--------- --------- ---------
Net cash and short-term investments
provided (used) by investing
activities (6,662) (6.662)
--------- --------- ---------
Cash flows from financing activities:
Additions to debt 41,500 21,000 62,500
Reductions in debt (30,500) (9,734) (40,234)
Other transactions, net 48 48
Net cash transfers to (from) parent (16,158) 16,158
--------- --------- ---------
Net cash and short-term investments
provided (used) by financing
activities (5,110) 27,424 22,314
--------- --------- ---------
Net decrease in cash and
short-term investments (603) (22) (625)
Cash and short-term investments at
beginning of year 857 637 1,494
--------- --------- ---------
Cash and short-term investments at
end of period $ 254 $ 615 $ 869
========= ========= =========
</TABLE>
12
<PAGE>
<PAGE> 15
UNC INCORPORATED
Condensed Consolidating Statement of Cash Flows
Three Months Ended March 31, 1993
(Dollars in thousands)
<TABLE>
<CAPTION>
Parent Combined
Company Guarantors Consolidated
------- ---------- ------------
<S> <C> <C> <C>
Net cash flow from (used by) operations $ (1,569) $ (11,730) $(13,299)
Cash flows from investing activities:
Net proceeds from sales of assets 4,747 4,747
Additions to property, plant and
equipment (10) (1,049) (1,059)
Naval Products phase out 1,930 1,930
Other transactions, net (4) (4)
--------- --------- --------
Net cash and short-term investments
provided (used) by investing
activities 1,920 3,694 5,614
--------- --------- ---------
Cash flows from financing activities:
Additions to debt 38,500 38,500
Reductions in debt (30,969) (129) (31,098)
Other transactions, net 9 9
Net cash transfers to (from) parent (8,511) 8,511
--------- --------- ---------
Net cash and short-term investments
provided (used) by financing
activities (971) 8,382 7,411
--------- --------- ---------
Net decrease in cash and
short-term investments (620) 346 (274)
Cash and short-term investments at
beginning of year 1,646 322 1,968
--------- --------- ---------
Cash and short-term investments at
end of period $ 1,026 $ 688 $ 1,694
========= ========= =========
</TABLE>
13
<PAGE>
<PAGE> 16
UNC Incorporated and Subsidiaries
Management's Discussion and Analysis of Financial
Condition and Results of Operations
Results of Continuing Operations
Overview
The Company's operations are conducted in one business segment which
includes: the manufacture and remanufacture of jet engine and aircraft
components, the overhaul of aircraft accessories, aircraft engines, the
refurbishment and overhaul of helicopters, and providing maintenance and
training, repair and logistical contract services.
In January 1994 the Company acquired the contract backlog of the Aerospace
Products Division of Anadite, Inc. The contract backlog acquired is directly
related to long term contracts extending to the year 2005 to manufacture
various aerostructure components for several prime aircraft companies. Also
certain equipment was acquired in connection with the acquisition of the
contract backlog.
Quarter Ended March 31, 1994 Compared with Quarter Ended March 31, 1993
- -----------------------------------------------------------------------
Revenues were $138.4 million for the first quarter of 1994 compared with
$83.0 million in the 1993 quarter, an increase of $55.4 million (66.8%).
Operating income was $8.7 million in the 1994 quarter compared with $6.0
million in the 1993 quarter an increase of $2.7 million (45.1%).
The Company's Manufacturing Division revenues for the 1994 quarter of $30.4
million increased $16.7 million compared with the 1993 quarter and operating
income increased $1.7 million to $3.3 million. The increase in revenues in
the 1994 quarter is due to activities on new contracts received during 1993
and revenues of $13.5 million generated by the businesses acquired in 1993,
UNC Artex, UNC Johnson Technology, and UNC All Fab. The increase in
operating income is principally attributable to the businesses acquired in
1993, partially offset by lower margins in other manufacturing operations.
Revenues for the Overhaul Division in the 1994 quarter increased $0.7 million
(1.5%) to $45.7 million and operating income increased $1.0 million (26.4%)
to $48 million. The improvement in revenues is due to an increase in
business aviation and regional airline engine overhauls, revenues of $1.1
million generated by UNC Metcalf acquired in 1993 and $0.6 million from a
leveraged lease transaction. Partially offsetting these increases were
decreases in JT8 overhaul revenues due to the Company's decision to withdraw
from the third-party JT8 overhaul business in late 1993 and a reduction in
accessory overhauls due to increased pricing pressures from existing
competition. The improvement in operating income is due to increased volume
in business aviation and regional airline engine overhauls, income provided
by UNC Metcalf, improved margins due to the elimination of the JT8 business
and income generated by a leveraged lease transaction. These increases were
partially offset by lower accessory overhaul service income due to
competitive pricing pressures.
14
<PAGE>
<PAGE> 17
Aviation Services Division revenues of $62.3 million increased $38.1 million
in the 1994 quarter. UNC Lear Siegler, acquired in October 1993, generated
revenues of $35.0 million while revenues of UNC Helicopter decreased $0.5
million on lower volume. Revenues under U.S. government contracts to provide
aviation training and maintenance increased $5.6 million after adjusting for
a $2.0 million nonrecurring claim against the U.S. government (for costs
incurred prior to 1993) which was recorded in the first quarter of 1993. The
improvement in revenues is principally due to increased activities on new
contracts received in 1993. Operating income increased $2.2 million after
adjusting for a $2.0 million nonrecurring claim against the U.S. government
recorded in the 1993 first quarter. The increase in operating income is
principally due to earnings contributed by UNC Lear Siegler and higher volume
of maintenance on U.S. government contracts.
Selling, general and administrative expenses in the 1994 quarter were $16.0
million or 11.7% of sales compared with $12.1 million or 14.6% of sales in
the 1993 quarter. Although selling, general and administrative expenses
decreased as a percentage of revenues, total costs increased in the 1994
quarter due to the expenses associated with companies acquired during 1993
and increased international marketing efforts.
Activity under the Company's contract service operations, which principally
involve basic aviation training and maintenances of aircraft, appears to have
stabilized in the short term after having declined in recent years as a
result of reduction in defense spending. Continuation of this trend,
however, cannot be assured as the Defense Department is continuing to close
various military bases where the Company provides contract services. A
portion of the workload of these bases is being relocated to bases where the
Company already performs aircraft maintenance functions. Further
consolidation of military training and maintenance contracts is expected as
bases are eliminated and other defense cuts reduce the value of individual
contracts. However, the Company expects that continued pressures on defense
spending could increase the outsourcing of services currently being provided
by military and other government personnel to lower costs contractors.
Additional opportunities for work from Army, Air Force and Navy depots may
result from the recommendations made by the Congressionally-mandated DoD-
Industry Depot Maintenance Task Force on which UNC was represented. In
February, the Company was low bidder on a contract to provide maintenance and
logistic support to the Royal Saudi Naval Forces. This contract with total
potential revenues over a three year period of approximately $20 million,
will expand the Company's presence in Saudi Arabia and offset possible
additional future reductions in defense spending.
Continued effort on the part of the U.S. government to further reduce defense
spending is affecting the demand for aircraft engines used in military
applications and could have an impact on the Company's manufacturing
operations. In an effort to reduce the potential effect of these reduction,
the Company's manufacturing operation have focused their marketing efforts
for the past several years more on commercial rather than military products.
15
<PAGE>
<PAGE> 18
The Company's original equipment manufacturer customers continue to reduce
significantly their number of suppliers and their own procurement staffs.
The Company's manufacturing operations remain a part of the reduced
subcontractor base and as such have obtained new contracts that the Company
believes may have not been available to the Company in the past when the base
of suppliers was much larger. Although the Company's Manufacturing Division
provided its principal customers with price concessions during 1992, 1993,
and 1994 in anticipation of receiving additional future orders, the Company
believes that increased volume from these anticipated additional orders,
together with on-going productivity enhancement and cost reduction programs
should compensate for the effect of the price concession. Furthermore,
during the second half of the 1993 and the first quarter of 1994 the Company
expanded its backlog as well as its customer base, by acquiring the contract
backlog of two distressed or financially pressured competitors. The work-in-
process of these contracts has been transferred to existing Company
facilities along with the required tooling and inventories. The Company is
continuing its efforts to acquire additional backlog from "carve-out"
situations.
Interest expenses increased $2.0 million principally due to higher average
debt levels.
Liquidity and Capital Resources
- -------------------------------
Long-term debt, including current portion, was $219.5 million at March 31,
1994 compared to $197.3 million at December 31, 1993. The increase in long-
term debt of $22.2 million was a result of operating cash requirements of the
first quarter, equipment acquired in connection with the acquisition of the
Anadite contract backlog, completion of the expansion of facilities in
connection with the award of the contract backlog previously performed by the
Heintz Corporation, equipment purchases to implement new and improved
manufacturing techniques and the purchase of tooling related to the engine
overhaul business. The Company's debt-to-capitalization ratio at March 31,
1994 was 56.6% compared with 54.4% at December 31, 1993. The Company has a
Revolving Credit Facility which provides for the availability of $65 million,
reduced by outstanding letters of credit which aggregated $10.3 million at
March 31, 1994. The unused availability under the facility was $15.7 million
at March 31, 1994. The Company is currently negotiating with its bank group
to increase its Revolving Credit capacity. At March 31, 1994, the Company's
working capital was $171.2 million with a current ratio of 3.1 to 1 compared
with $150.2 million with a current ratio of 2.5 to 1 at December 31, 1993.
Capital expenditures in the first quarter of 1994 amounted to $6.7 million
compared with $1.1 million in the first quarter of 1993. It is anticipated
that capital expenditures for the remainder of 1994 will be less than
depreciation and amortization expense and will be financed from internally
generated funds, lease arrangements and revolving credit borrowings.
16
<PAGE>
<PAGE> 19
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
(a) Exhibits Description
- ------------ -----------------------------------------------
Exhibit 11 Computation of Earnings Per Common Share
(b) Reports on Form 8-K:
- ------------------------
Report on Form 8-K dated March 1, 1994 concerning the decision reached
between the Company and KPMG Peat Marwick that KPMG Peat Marwick would cease
to serve as the Company's auditors effective February 22, 1994.
Report on Form 8-K dated March 24, 1994 concerning the appointment of Coopers
& Lybrand to succeed the firm of KPMG Peat Marwick as the Company's
independent accountants, subject to ratification by the shareholders at the
annual meeting of shareholders held on April 29, 1994. (The appointment of
Coopers & Lybrand was ratified by the shareholders at the annual meeting).
17
<PAGE>
<PAGE> 20
UNC Incorporated and Subsidiaries
SIGNATURE
Pursuant to requirements of the Securities Exchange Act of 1934, the Company
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
UNC Incorporated
Date: May 13, 1994 By: /s/ Robert L. Pevenstein
-----------------------------
Robert L. Pevenstein
Senior Vice President and
Chief Financial Officer
(Principal Financial and
Accounting Officer)
18
<PAGE>
<PAGE> 21
UNC Incorporated and Subsidiaries
SEQUENTIAL EXHIBIT INDEX
Exhibit
Number Description
- ---------- --------------------------------------------------
Exhibit 11 Computation of Earnings Per Common Share
19
<PAGE>
<PAGE> 22
EXHIBIT 11
UNC INCORPORATED AND SUBSIDIARIES
Earnings Per Share
(In thousands except per share amounts)
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Three Months Ended
March 31,
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1994 1993
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<S> <C> <C>
Net earnings $ 2,462 $ 2,215
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Calculation of primary earnings per share:
Average common shares outstanding
during the year primary (1) 17,390 17,303
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Earnings per share, primary:
Net earnings $ .14 $ .13
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Calculation of fully diluted
earnings per share:
Average common shares outstanding
during the year (1) 17,390 17,303
Increase in common stock equivalents:
Stock options under treasury stock method 559 368
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Adjusted average shares outstanding for
the year fully diluted 17,949 17,671
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Earnings per share, fully diluted:
Net earnings $ .14 $ .13
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(1) Exclusive of 700,000 treasury shares for all years presented.
