SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d) of
the Securities Exchange Act of 1934
For Quarter Ended: September 30, 1995
Commission File Number: 1-5642
DRAVO CORPORATION
(Exact name of registrant as specified in its charter)
Pennsylvania 25-0447860
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
One Oliver Plaza, Pittsburgh, Pennsylvania 15222
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (412) 566-3000
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
The number of shares outstanding of each of the registrant's classes of common
stock as of October 31, 1995:
Title of Class Shares Outstanding
Common Stock, $1.00 par value 14,703,546
DRAVO CORPORATION AND SUBSIDIARIES
INDEX
PART I - FINANCIAL INFORMATION
Page No.
Consolidated Balance Sheets at September 30, 1995
and December 31, 1994 3, 4
Consolidated Statements of Operations for the
Quarters ended September 30, 1995 and 1994 5
Consolidated Statements of Operations for the
Nine Months ended September 30, 1995 and 1994 6
Consolidated Statements of Cash Flows for the
Nine Months ended September 30, 1995 and 1994 7, 8
Notes to Consolidated Financial Statements 9 - 14
Management's Discussion and Analysis of Financial
Condition and Results of Operations 15, 16
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 17
SIGNATURES 18
-2-
DRAVO CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
($ in 000's)
<TABLE>
September 30, December 31,
1995 1994
(unaudited)
<CAPTION>
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 176 $ 2,027
Accounts receivable, net 23,309 140,602
Notes receivable, net 1,280 2,803
Inventories 13,279 12,638
Net assets of disc. operations 692 --
Other current assets 1,453 2,067
Total current assets 40,189 160,137
Advances to and equity in joint ventures 2,469 2,536
Notes receivable 3,610 5,061
Other assets 25,639 21,281
Deferred income taxes 24,853 24,853
Property, plant and equipment 220,616 195,333
Less: accumulated depreciation and
amortization 107,236 101,872
Net property, plant and equipment 113,380 93,461
Total assets $210,140 $307,329
</TABLE>
See accompanying notes to consolidated financial statements.
-3-
DRAVO CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
($ in 000's)
<TABLE>
September 30, December 31,
1995 1994
(unaudited)
<CAPTION>
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term notes $ 6,087 $ 85,077
Accounts payable - trade 13,777 36,257
Income taxes 837 352
Accrued insurance 1,615 2,265
Accrued retirement contribution 4,509 2,388
Net liabilities of discontinued operations -- 13,547
Other current liabilities 6,818 13,912
Total current liabilities 33,643 153,798
Long-term notes 59,072 42,440
Net liabilities of discontinued operations 10,519 8,445
Other liabilities 6,034 5,900
Redeemable preference stock:
Par value $1, issued 200,000 shares:
Series D, $12.35 cumulative, convertible,
exchangeable (entitled in liquidation to
$20.0 million) 20,000 20,000
Shareholders' equity:
Preference stock, par value $1, authorized
1,878,870: Series B, $2.475 cumulative,
convertible; issued 25,386 and 28,386 shares
(entitled in liquidation to $1.5 million and
$1.6 million); 25 28
Series D, reported above
Common stock, par value $1, authorized
35,000,000 shares; issued 15,051,237
and 14,985,839 15,051 14,986
Other capital 64,003 63,554
Retained earnings 6,300 18
Treasury stock at cost:
Common shares 347,691 and 119,221 (4,507) (1,840)
Total shareholders' equity 80,872 76,746
Total liabilities and shareholders' equity $210,140 $307,329
</TABLE>
See accompanying notes to consolidated financial statements.
-4-
DRAVO CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
(unaudited, $ in 000's, except per share data)
<TABLE>
<CAPTION>
Quarters ended September 30,
1995 1994
<S> <C> <C>
Revenue $ 37,774 $ 75,305
Cost of revenue 28,310 62,636
Gross profit 9,464 12,669
Selling, general and administrative expenses 5,440 7,379
Earnings from operations 4,024 5,290
Other income (expense):
Equity in earnings of joint ventures 96 689
Other expense -- (50)
Interest income -- 224
Interest expense (970) (2,480)
Net other income (expense) (874) (1,617)
Earnings before taxes 3,150 3,673
Provision (benefit) for income taxes 220 (194)
Net earnings 2,930 3,867
Preference dividends 633 636
Net earnings available
for common shares $ 2,297 $ 3,231
Earnings per share:
Operations $ 0.15 $ 0.22
Weighted average shares outstanding 14,889 14,927
</TABLE>
See accompanying notes to consolidated financial statements.
-5-
DRAVO CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
(unaudited, $ in 000's, except per share data)
<TABLE>
Nine Months ended September 30,
1995 1994
<CAPTION>
<S> <C> <C>
Revenue $ 107,376 $ 205,614
Cost of revenue 79,731 172,725
Gross profit 27,645 32,889
Selling, general and administrative expenses 16,133 22,195
Earnings from operations 11,512 10,694
Other income (expense):
Equity in earnings of joint ventures 564 1,467
Other income 182 566
Interest income 75 568
Interest expense (3,534) (7,118)
Net other income (expense) (2,713) (4,517)
Earnings before taxes 8,799 6,177
Provision for income taxes 616 432
Earnings before cumulative
accounting change 8,183 5,745
Cumulative effect of accounting change -- (1,361)
Net earnings 8,183 4,384
Preference dividends 1,901 1,909
Net earnings available for
common shares $ 6,282 $ 2,475
Earnings (loss) per share:
Operations $ 0.42 $ 0.26
Cumulative effect of accounting change -- (0.09)
Total $ 0.42 $ 0.17
Weighted average shares outstanding 14,896 14,931
</TABLE>
See accompanying notes to consolidated financial statements.
-6-
DRAVO CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(unaudited, $ in 000's)
<TABLE>
<CAPTION>
Nine Months ended September 30,
1995 1994
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 8,183 $ 5,745
Adjustments to reconcile net earnings
to net cash provided (used) by continuing
operations activities:
Depreciation and amortization 6,869 13,139
Change in accounting principle -- (1,361)
Gain on sale of assets -- (566)
Equity in joint ventures 67 278
Changes in assets and liabilities:
Increase in accounts receivable (3,171) (3,626)
Decrease in notes receivable 472 757
Decrease (increase) in inventories (641) 6,581
Decrease (increase) in other current assets 888 (4,092)
Increase (decrease) in accounts payable
and accrued expenses (27,423) 16,136
Increase in taxes payable 485 485
Increase in other assets (4,358) (6,894)
Increase in other liabilities 134 12
Net cash provided (used) by continuing
operations activities (18,495) 26,594
Decrease in net liabilities of discontinued
operations (11,865) (4,738)
Proceeds from repayment of notes receivable
from sale of discontinued operations 2,200 1,200
Net cash used by discontinued operations
activities (9,665) (3,538)
Net cash provided (used) by operating
activities (28,160) 23,056
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of assets 120,464 1,456
Additions to property, plant and equipment (27,742) (39,018)
Other, (net) 51 --
Net cash provided (used) by investing activities $ 92,773 $(37,562)
</TABLE>
See accompanying notes to consolidated financial statements.
-7-
DRAVO CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(unaudited, $ in 000's)
<TABLE>
<CAPTION>
Nine Months ended September 30,
1995 1994
<S> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowing under revolving credit
agreements $ 22,749 $ 6,900
Principal payments under long-term notes (85,156) (1,477)
Proceeds from issuance of long-term notes 0 10,980
Proceeds from issuance of common stock 511 42
Purchase of treasury stock (2,667) --
Dividends on preference stock (1,901) (1,909)
Net cash provided (used) by financing activities (66,464) 14,536
Net increase (decrease) in cash and
cash equivalents (1,851) 30
Cash and cash equivalents at beginning of
period 2,027 808
Cash and cash equivalents at end of period $ 176 $ 838
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid (received) during the period for:
Interest (net of amount capitalized) $ 3,941 $ 6,970
Income tax 131 (53)
</TABLE>
See accompanying notes to consolidated financial statements.
-8-
DRAVO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(1) Basis of Presentation
The accompanying consolidated financial statements include the accounts
of Dravo Corporation and its majority-owned subsidiaries (the company).
The principal subsidiary is Dravo Lime company, one of the nation's
largest lime producers. The company completed a transaction on December
30, 1994 in which it sold substantially all the assets and certain
liabilities of Dravo Basic Materials Company, Inc. (DBM). The assets and
liabilities sold have been removed from the company's September 30, 1995
and December 31, 1994 balance sheets. DBM is inactive except for
activities associated with winding up its affairs. The statements of
operations include the results of DBM for the quarter and for the nine
months ended September 30, 1994. Significant intercompany balances and
transactions have been eliminated in the consolidation process.
These unaudited consolidated financial statements include all adjustments,
consisting only of normal, recurring accruals, which management considers
necessary for a fair presentation of the company's consolidated financial
position, results of operations, and cash flows for the interim periods
presented. Certain reclassifications of previously reported balances have
been made to conform to the current period's presentation.
(2) Inventories
Inventories are classified as follows:
($ in 000's)
<TABLE>
<CAPTION>
September 30, December 31,
1995 1994
<S> <C> <C>
Materials and supplies $ 11,460 $ 10,804
Finished goods 1,819 1,834
Net inventories $ 13,279 $ 12,638
</TABLE>
Inventories are valued at average production cost or market, whichever is
lower. The cost of products produced includes raw materials, direct
labor, and operating overhead.
-9-
DRAVO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(3) Contingent Liabilities
The company has been notified by the federal Environmental Protection
Agency (EPA) that the EPA believes the company is a potentially
responsible party (PRP) for the clean-up of soil and groundwater
contamination at four subsites in Hastings, Nebraska. The Hastings site
is one of the EPA's priority sites for taking remedial action under the
Comprehensive Environmental Response, Compensation and Liability Act
(CERCLA).
At one of these subsites, a municipal landfill, the company believes it
could not have disposed of hazardous wastes at the particular subsite
because the landfill was closed prior to the time the company and its
predecessor initiated the operation which generated the type of hazardous
substances found at this subsite. Other PRPs, including the local
municipality, have agreed to perform the remedial investigation and to
design soil and groundwater remedies at this subsite. The company has
agreed to participate in an EPA initiated allocation proceeding for this
subsite.
The company has also been notified by EPA that EPA considers it a PRP at
another municipal landfill in Hastings. At least three other parties
(including the City of Hastings) are considered by EPA to be PRPs at this
second subsite. At this subsite, the company has concluded that the City
of Hastings is responsible for a proper closure of the landfill and the
remediation of any release of hazardous substances. In January, 1994, EPA
invited the company and the other PRPs to make an offer to conduct a
remedial investigation and feasibility study (RI/FS) of this subsite and
stated that the EPA was in the process of preparing a work plan for the
RI/FS. None of the PRPs has volunteered to undertake the RI/FS.
With respect to the third subsite, the company and two other PRPs have
been served with administrative orders directing them to undertake soil
remediation and interim groundwater remediation at that subsite. The
company is currently complying with these orders while reserving its right
to seek reimbursement from the United States for its costs if it is
determined it is not liable for response costs or if it is required to
incur costs because of arbitrary, capricious or unreasonable requirements
imposed by the EPA.
The EPA has taken no legal action with respect to its demand that the
company and the other PRPs pay its past response costs. A total of five
parties have been named by the EPA as PRPs at this subsite, but two of
them have been granted de minimis status. The company believes other
persons should also be named as PRPs.
The fourth subsite is a former naval ammunition depot which was
subsequently converted to an industrial park. The company and its
predecessor owned and operated an HVAC facility in this industrial park.
To date the company's investigation indicates that it did not cause the
release of hazardous substances in this subsite during the time it owned
and operated the facility. The United States has undertaken to conduct
the remediation of this subsite.
-10-
DRAVO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(3) Contingent Liabilities (continued)
In addition to subsite clean-up, the EPA is seeking a clean-up of area-
wide contamination associated with all of the subsites in and around
Hastings, Nebraska. The company, along with other Hastings PRPs, has
recommended that the EPA adopt institutional controls as the area-wide
remedy in Hastings. EPA has indicated some interest in this proposal but
has decided to first conduct an area-wide remedial investigation before
choosing a remedy.
On August 10, 1992 the company filed suit in the Alabama District Court
against its primary liability insurance carriers and one of its
predecessor's insurers, seeking a declaratory judgment that the company
is entitled to a defense and indemnity under its contracts of insurance
(including certain excess policies provided by one of the primary
carriers) with regard to the third Hastings subsite. The company has
settled the claim against its predecessor's insurer, but the case against
the company's insurers is still in litigation. An award of punitive
damages is also being sought against the company's insurers for their bad
faith in failing to investigate the company's claim and/or denying the
company's claim. The company has notified its primary and excess general
liability carrier, as well as the excess carrier of its predecessor, of
the receipt of its notice of potential liability at the first, second and
fourth subsites.
Estimated total clean-up costs, including capital outlays and future
maintenance costs for soil and groundwater remediation of approximately
$18 million, are based on independent engineering studies. Included in
the discontinued operations provision is the company's estimate that it
will participate in 33 percent of these remediation costs. The company's
estimated share of the costs is based on its assessment of the total
clean-up costs, its potential exposure, and the viability of other named
PRPs.
In 1990, the company filed an action now pending in Luzerne County,
Pennsylvania alleging breach of contract and unjust enrichment arising out
of the termination of a construction contract for the Hazleton
Gasification Facility Expansion. The suit named as defendants Continental
Energy Associates (CEA), the project owner; Continental Cogeneration
Corporation (CCC), the general partner of CEA; and Swiss Bank Corporation,
the project lender. CEA and CCC filed a separate suit against the company
which, as amended, seeks damages for breach of contract, negligent design
and construction, negligent misrepresentation, fraud and tortious
interference with the contract of surety. The two suits, along with a
third action commenced by CEA and CCC against the company's surety, the
Insurance Company of North America, were consolidated.
-11-
DRAVO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(3) Contingent Liabilities (continued)
In late 1994, both CEA and CCC filed for protection from creditors under
Chapter 11 of the United States Bankruptcy Code. In January 1995, the
Bankruptcy Court entered an order approving non-binding mediation of the
dispute with the company.
As a result of the mediation, CEA, CCC and the company reached an
agreement setting forth the terms of a full and final settlement of the
dispute. The settlement which was approved by the Bankruptcy Court on
August 14, 1995 provided for payment by the company of $2.8 million. The
company's contribution to the settlement was charged against the
previously established reserve for discontinued operations.
Other claims and assertions made against the company will be resolved, in
the opinion of management, without material additional charges to
earnings.
The company has asserted claims that management believes to be
meritorious, but no estimate can be made at present of the timing or the
amount of recovery.
-12-
DRAVO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(4) Discontinued Operations
In December, 1987, Dravo's Board of Directors approved a major
restructuring program which concentrated the company's future direction
exclusively on opportunities involving its natural resources business.
The plan included the sale or other disposition of the former Engineering
and Construction segment.
The remaining discontinued operations' assets and liabilities at September
30, 1995 and December 31, 1994 relate to non-cancelable leases, insurance,
environmental, legal and other matters associated with exiting the
engineering and construction business and are presented below:
<TABLE>
($ in 000's) September 30, December 31,
<CAPTION>
1995 1994
<S> <C> <C>
Current assets:
Accounts and retainers receivable $ 107 $ 24
Other 5,347 --
Total current assets 5,454 24
Accounts and retainers receivable 328 444
Other 2,122 5,121
Total assets $ 7,904 $ 5,589
Current liabilities:
Accounts and retainers payable $ 158 $ 63
Accrued loss on leases 2,173 2,315
Other 2,431 11,193
Total current liabilities 4,762 13,571
Accounts and retainers payable 15 --
Accrued loss on leases 3,980 5,632
Other 8,974 8,378
Total liabilities $ 17,731 $ 27,581
Net liabilities and accrued loss
on leases of discontinued operations $ (9,827) $(21,992)
</TABLE>
-13-
DRAVO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(5) Pro forma Information
The company completed a transaction on December 30, 1994 in which it sold
to Martin Marietta Materials, Inc. (Martin Marietta), effective January
3, 1995, substantially all the assets of its construction aggregates
business. Assets sold included the assets, properties and leases of
Dravo Basic Materials Company, Inc. (DBM), a wholly-owned subsidiary of
the company, and Atchafalaya Mining Company, Inc. (AMC), a wholly-owned
subsidiary of DBM, used in the production, marketing, distribution and
sale of various aggregate products. Also sold was the capital stock of
Dravo Bahama Rock Limited (DBR), a wholly-owned foreign subsidiary of
DBM.
Pro forma data is provided below for comparative purposes only and does
not purport to be indicative of the results which actually would have
been obtained if the disposition had been effected on the pro forma
dates, or other results which may be obtained in the future.
The following pro forma statement of operations presents the results of
operations assuming the disposition had been completed as of the
beginning of 1994. Adjustments have been made to exclude the results of
DBM, to decrease interest expense for loans prepaid in early 1995 from
the sale proceeds, and to record interest income at overnight investment
rates for cash received in excess of liabilities paid.
<TABLE>
<CAPTION>
($ in 000's, Quarters ended Nine Months ended
except per share data) September 30, September 30,
1995 1994 1995 1994
Actual Pro Forma Actual Pro Forma
<S> <C> <C> <C> <C>
Revenue $ 37,774 $ 32,430 $107,376 $ 93,731
Gross profit 9,464 7,827 27,645 23,208
Selling, general and
administrative expenses 5,440 4,802 16,133 13,569
Other income (expense)
Equity in earnings of
joint ventures 96 405 564 985
Other income -- -- 182 199
Interest income -- 445 75 1,326
Interest expense (970) (1,210) (3,534) (3,513)
Net other income (expense) (874) (360) (2,713) (1,003)
Earnings before taxes 3,150 2,665 8,799 8,636
Income tax expense 220 187 616 605
Earnings from continuing
operations $ 2,930 $ 2,478 $ 8,183 $ 8,031
Earnings per share,
continuing operations $ 0.15 $ 0.12 $ 0.42 $ 0.32
</TABLE>
-14-
DRAVO CORPORATION AND SUBSIDIARIES
Management's Discussion and Analysis of Financial
Condition and Results of Operations
The company completed a transaction on December 30, 1994 in which it sold
to Martin Marietta Materials, Inc., effective January 3, 1995,
substantially all the assets of its construction aggregates business,
Dravo Basic Materials Company, Inc. (DBM). As a result, the company has
one principal operating subsidiary, Dravo Lime Company, a major U.S. lime
producer.
The statements of operations for the quarter and nine month periods ending
September 30, 1994 include DBM. For a more meaningful comparison, the
current year's results should be compared to last year's results on a pro
forma basis. The pro forma results assume the DBM sales transaction
occurred prior to 1994 and are presented in Note 5 of the Notes to
Consolidated Financial Statements.
Net earnings for the quarter were $2.9 million, or 15 cents per common
share, compared to $3.9 million, or 22 cents per share, in 1994. The
third quarter typically was DBM's strongest earnings period and last year
it contributed approximately $700,000 to net income, including income from
a joint venture shell dredging operation. Earnings from joint ventures
are down nearly $600,000 due to higher maintenance expense at a contract
mining facility and the sale of the shell dredging operation as part of
the DBM transaction. Both revenue and gross profit were significantly
higher for the lime business compared to last year. The increased
capacity provided by the expansion of the Black River facility and
continued strong demand for lime contributed to the improvement. Selling,
general and administrative expenses were lower than last year due to
personnel reductions and consolidation of the company's administrative
functions following the DBM sale. Interest expense is lower due to
capitalization of interest associated with the Black River construction
project and an overall lower debt level as the company used the proceeds
from the DBM sale to reduce debt.
Year-to-date earnings of $8.2 million, 42 cents per share, are $3.9
million, 25 cents per share, higher than last year. Higher tonnage,
revenue, gross profit and earnings before interest and tax from lime
operations caused part of the improvement. Interest expense was less than
half the $7.1 million expensed last year due to lower debt levels and
interest capitalization. Earnings from joint ventures are $903,000 lower
than last year, for the same reasons stated above in the quarter review,
with the contract mining operation accounting for $400,000 of the
variance. Last year's results included a $1.4 million charge, nine cents
per share, related to adoption of Statement of Financial Accounting
Standards No. 112, "Employers' Accounting for Postemployment Benefits."
On a pro forma basis, earnings slightly exceeded last year as the improved
lime earnings were offset by higher administrative expenses and lower
interest income. The variances occur because of differences between
actual experience and the assumptions used to calculate the pro forma
information. Certain general and administrative expenses that were
allocated to DBM last year were removed from expense for pro forma
purposes, however, a portion of those expenses must still be supported by
continuing operations. The interest variance results from the net
-15-
DRAVO CORPORATION AND SUBSIDIARIES
Management's Discussion and Analysis of Financial
Condition and Results of Operations (Continued)
proceeds received from the DBM sale, after debt reduction, actually being
used to finance capital improvements instead of being invested and
returning interest income at short-term rates as calculated in the pro
forma presentation.
Significant changes in the company's balance sheet from year-end 1994 to
September 30, 1995 resulted from the collection of $120.5 million on
January 3, 1995 from the sale of DBM's assets. The proceeds were used to
reduce debt more than $85 million, satisfy DBM's accounts payable and
finance ongoing capital projects.
In October, the company issued an order for a new kiln as part of a
previously announced $20 million expansion at its Maysville, Kentucky
operation. The expansion also includes an upgrade of underground
limestone mining operations and will increase production capacity 350,000
tons by early 1997. Construction and permanent financing for the
expansion is being negotiated with the company's current bank lenders.
In August 1995, the company paid $2.8 million as its share of a previously
announced settlement with Continental Energy Associates (CEA), the owner
of a coal gasification facility built by Dravo in Hazleton, Pennsylvania.
The payment was charged against the previously established reserve for
discontinued operations and, therefore, did not impact current earnings.
-16-
DRAVO CORPORATION AND SUBSIDIARIES
PART II - Other Information
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
The following is filed as an exhibit to Part I of this
Form 10-Q:
Exhibit No. 11 - Statement re computation of per share
earnings.
(b) Reports on Form 8-K
The Company filed no Reports on Form 8-K for the
quarter ended September 30, 1995.
-17-
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DRAVO CORPORATION
(Registrant)
Date: November 10, 1995 /s/ERNEST F. LADD III
Ernest F. Ladd III
Executive Vice President and
Chief Financial Officer
Date: November 10, 1995 /s/LARRY J. WALKER
Larry J. Walker
Vice President and Controller
(Principal Accounting Officer)
-18-
Exhibit 11. Statement Re Computation of Per Share Earnings
<TABLE>
<CAPTION>
(In 000's, except per share data)
Quarters ended September 30,
<S> <C> <C>
Primary 1995 1994
Earnings:
Net earnings $ 2,930 $ 3,867
Deduct dividends on preference stock 633 636
Net earnings applicable to common stock $ 2,297 $ 3,231
Shares:
Weighted average number of common
shares outstanding 14,700 14,863
Dilutive effect of outstanding
options and rights (as determined
by the application of the treasury
stock method at the average market
price for the period) 189 64
Weighted average number of shares
outstanding, as adjusted 14,889 14,927
Primary earnings per share $ 0.15 $ 0.22
Fully diluted
Earnings:
Net earnings $ 2,930 $ 3,867
Deduct dividends on preference stock (1) 633 636
Net earnings applicable to common stock $ 2,297 $ 3,231
Shares:
Weighted average number of common
shares outstanding 14,700 14,863
Dilutive effect of outstanding
options and rights (as determined
by the application of the treasury
stock method at the higher of the
closing or the average market price
for the period) 189 101
Weighted average number of shares
outstanding, as adjusted 14,889 14,964
Fully diluted earnings per share $ 0.15 $ 0.22
</TABLE>
-19-
Exhibit 11. Statement Re Computation of Per Share Earnings (continued)
<TABLE>
<CAPTION>
(In 000's, except per share data)
Quarters ended September 30,
Additional Fully Diluted Computation (2) 1995 1994
<S> <C> <C>
Earnings:
Net earnings $ 2,930 $ 3,867
Shares:
Weighted average number of common shares
outstanding 14,700 14,863
Dilutive effect of outstanding options and
rights (as determined by the application of
the treasury stock method at the higher of
the closing or average market price for
the period) 189 101
Shares issuable from assumed exercise of
convertible preference stock 1,682 1,695
Weighted average number of shares
outstanding, as adjusted 16,571 16,659
Fully diluted earnings per share $ 0.18 $ 0.23
</TABLE>
(1) The inclusion of preference stock in the fully dilutive computation
would have an anti-dilutive effect on earnings per share.
(2) This calculation is submitted in accordance with Securities Exchange
Act of 1934, Regulation S-K, paragraph 229.601 (b)(11) although it is
contrary to paragraph 40 of APB Opinion No. 15 because it produces an anti-
dilutive result.
-20-
Exhibit 11. Statement Re Computation of Per Share Earnings
<TABLE>
(In 000's, except per share data)
Nine Months ended September 30,
<CAPTION>
<S> <C> <C>
Primary 1995 1994
Earnings:
Earnings before cumulative effect of
accounting change $ 8,183 $ 5,745
Deduct dividends on preference stock 1,901 1,909
Earnings before cumulative effect of accounting
change applicable to common stock 6,282 3,836
Cumulative effect of accounting change -- (1,361)
Net earnings applicable to common stock $ 6,282 $ 2,475
Shares:
Weighted average number of common
shares outstanding 14,771 14,858
Dilutive effect of outstanding
options and rights (as determined
by the application of the treasury
stock method at the average market
price for the period) 125 74
Weighted average number of shares
outstanding, as adjusted 14,896 14,932
Primary earnings (loss) per share:
Operations $ 0.42 $ .26
Cumulative effect of accounting change -- (0.09)
Net earnings per share $ 0.42 $ .17
Fully diluted
Earnings:
Net earnings $ 8,183 $ 4,384
Deduct dividends on preference stock (1) 1,901 1,909
Net earnings applicable to common stock $ 6,282 $ 2,475
Shares:
Weighted average number of common
shares outstanding 14,771 14,858
Dilutive effect of outstanding
options and rights (as determined
by the application of the treasury
stock method at the higher of the
closing or the average market price
for the period) 125 101
Weighted average number of shares
outstanding, as adjusted 14,896 14,959
</TABLE>
-21-
Exhibit 11. Statement Re Computation of Per Share Earnings (continued)
<TABLE>
(In 000's, except per share data)
<CAPTION>
Nine Months ended September 30,
1995 1994
<S> <C> <C>
Fully diluted earnings (loss) per share:
Operations $ 0.42 $ 0.26
Cumulative effect of accounting change -- (0.09)
Net earnings per share $ 0.42 $ 0.17
Additional Fully Diluted Computation (2)
Earnings:
Net earnings $ 8,183 $ 4,384
Shares:
Weighted average number of common shares
outstanding 14,771 14,858
Dilutive effect of outstanding options and
rights (as determined by the application of
the treasury stock method at the higher of
the closing or average market price for
the period) 125 70
Shares issuable from assumed exercise of
convertible preference stock 1,686 1,698
Weighted average number of shares
outstanding, as adjusted 16,582 16,626
Fully diluted earnings per share $ 0.49 $ 0.26
</TABLE>
(1) The inclusion of preference stock in the fully dilutive computation
would have an anti-dilutive effect on earnings per share.
(2) This calculation is submitted in accordance with Securities Exchange
Act of 1934, Regulation S-K, paragraph 229.601 (b)(11) although it is
contrary to paragraph 40 of APB Opinion No. 15 because it produces an anti-
dilutive result.
-22-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM DRAVO
CORPORATION'S SEPTEMBER 30, 1995 FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 176
<SECURITIES> 0
<RECEIVABLES> 24697
<ALLOWANCES> 108
<INVENTORY> 13279
<CURRENT-ASSETS> 40189
<PP&E> 220616
<DEPRECIATION> 107236
<TOTAL-ASSETS> 210140
<CURRENT-LIABILITIES> 33643
<BONDS> 0
<COMMON> 15051
20000
25
<OTHER-SE> 65796
<TOTAL-LIABILITY-AND-EQUITY> 210140
<SALES> 107376
<TOTAL-REVENUES> 107379
<CGS> 79731
<TOTAL-COSTS> 79731
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3534
<INCOME-PRETAX> 8799
<INCOME-TAX> 616
<INCOME-CONTINUING> 8183
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8183
<EPS-PRIMARY> .42
<EPS-DILUTED> .42
</TABLE>
