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: June 30, 1998
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.)
11 Stanwix Street, Pittsburgh, Pennsylvania 15222
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (412) 995-5500
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 July 31, 1998:
Title of Class Shares Outstanding
Common Stock, $1.00 par value 14,718,509
DRAVO CORPORATION AND SUBSIDIARIES
INDEX
PART I - FINANCIAL INFORMATION
Page No.
Consolidated Balance Sheets at June 30, 1998
and December 31, 1997 3, 4
Consolidated Statements of Earnings for the
Quarters ended June 30, 1998 and 1997 5
Consolidated Statements of Earnings for the
Six months ended June 30, 1998 and 1997 6
Consolidated Statements of Cash Flows for the
Six months ended June 30, 1998 and 1997 7, 8
Notes to Consolidated Financial Statements 9 - 14
Management's Discussion and Analysis of Financial
Condition and Results of Operations 15 - 17
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 18
SIGNATURES 19
-2-
DRAVO CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
($ in 000's)
<TABLE>
<CAPTION>
June 30, December 31,
1998 1997
(unaudited)
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 3,583 $ 1,477
Accounts receivable, net 19,325 24,995
Notes receivable, net 576 769
Inventories 17,034 17,434
Other current assets 824 980
Total current assets 41,342 45,655
Advances to and equity in joint ventures 2,355 2,450
Notes receivable 5,537 6,873
Other assets 26,883 27,627
Deferred income taxes 29,976 29,976
Property, plant and equipment 269,812 263,926
Less: accumulated depreciation and
amortization 126,349 121,277
Net property, plant and equipment 143,463 142,649
Total assets $249,556 $255,230
</TABLE>
See accompanying notes to consolidated financial statements.
-3-
DRAVO CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
($ in 000's)
<TABLE>
<CAPTION>
June 30, December 31,
1998 1997
(unaudited)
LIABILITIES AND SHAREHOLDERS' EQUITY
<S> <C> <C>
Current liabilities:
Current portion of long-term notes $ 9,767 $ 9,736
Accounts payable - trade 14,786 17,546
Accrued insurance 1,842 1,482
Net liabilities of discontinued operations 2,623 3,613
Redeemable preference stock 5,000 5,000
Other current liabilities 7,180 4,368
Total current liabilities 41,198 41,745
Long-term notes 64,549 74,396
Net liabilities of discontinued operations 5,178 5,401
Other liabilities 8,786 9,022
Redeemable preference stock:
Par value $1, issued 200,000 shares:
Series D, $12.35 cumulative, convertible,
exchangeable (entitled in liquidation to
$20.0 million) 15,000 15,000
Shareholders' equity:
Preference stock, par value $1, authorized
1,878,870: Series B, $2.475 cumulative,
convertible; issued 16,000 shares and 18,386
shares(entitled in liquidation to $880,000 and 16 18
$1.0 million); Series D, reported above
Common stock, par value $1, authorized
35,000,000 shares; issued 15,110,922
and 15,103,249 15,111 15,103
Other capital 66,809 66,819
Retained earnings 37,783 32,662
Treasury stock at cost:
Common shares 392,413 and 397,413 (4,874) (4,936)
Total shareholders' equity 114,845 109,666
Total liabilities and shareholders' equity $249,556 $255,230
</TABLE>
See accompanying notes to consolidated financial statements.
-4-
DRAVO CORPORATION AND SUBSIDIARIES
Consolidated Statements of Earnings
(unaudited, $ in 000's, except per share data)
<TABLE>
<CAPTION>
Quarters ended June 30,
1998 1997
<S> <C> <C>
Revenue $ 41,883 $ 42,435
Cost of revenue 30,986 30,908
Gross profit 10,897 11,527
Selling, general and administrative expenses 5,150 5,497
Earnings from operations 5,747 6,030
Other income (expense):
Equity in earnings of joint ventures 32 174
Other income -- (9)
Interest income 130 50
Interest expense (1,725) (1,607)
Net other expense (1,563) (1,392)
Earnings before taxes 4,184 4,638
Provision for income taxes 774 326
Net earnings 3,410 4,312
Preference dividends 628 629
Net earnings available
for common shares $ 2,782 $ 3,683
Earnings per share:
Basic $ 0.19 $ 0.25
Diluted $ 0.19 $ 0.25
Weighted average shares outstanding:
Basic 14,717 14,776
Diluted 14,760 14,818
</TABLE>
See accompanying notes to consolidated financial statements.
-5-
DRAVO CORPORATION AND SUBSIDIARIES
Consolidated Statements of Earnings
(unaudited, $ in 000's, except per share data)
Six Months ended June 30,
1998 1997
<TABLE>
<CAPTION>
<S> <C> <C>
Revenue $ 84,257 $ 80,059
Cost of revenue 63,352 60,759
Gross profit 20,905 19,300
Selling, general and administrative expenses 9,957 10,781
Earnings from operations 10,948 8,519
Other income (expense):
Equity in earnings of joint ventures 227 373
Other income 12 (9)
Interest income 228 82
Interest expense (3,592) (3,169)
Net other expense (3,125) (2,723)
Earnings before taxes 7,823 5,796
Provision for income taxes 1,447 410
Net earnings 6,376 5,386
Preference dividends 1,255 1,259
Net earnings available
for common shares $ 5,121 $ 4,127
Earnings per share:
Basic $ 0.35 $ 0.28
Diluted $ 0.35 $ 0.28
Weighted average shares outstanding:
Basic 14,712 14,773
Diluted 14,758 14,851
</TABLE>
See accompanying notes to consolidated financial statements.
-6-
DRAVO CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(unaudited, $ in 000's)
<TABLE>
<CAPTION>
Six Months ended June 30,
1998 1997
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 6,376 $ 5,386
Adjustments to reconcile net earnings
to net cash provided by continuing
operations activities:
Depreciation and amortization 5,652 5,007
Gain on sale of assets (12) 9
Equity in joint ventures 95 (470)
Changes in assets and liabilities:
Decrease in accounts receivable 5,670 1,937
Decrease (increase) in notes receivable 1,529 (1,039)
Decrease (increase) in inventories 400 (450)
Decrease in other current assets 214 62
Decrease in accounts payable
and accrued expenses (666) (1,069)
Increase in taxes payable 1,079 77
Decrease in other assets 744 42
Increase (decrease) in other liabilities (236) 432
Net cash provided by continuing
operations activities 20,845 9,924
Net cash used by discontinued
operations activities (1,213) (1,821)
Net cash provided by operating activities 19,632 8,103
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from the sale of assets 12 --
Additions to property, plant and equipment (6,466) (18,854)
Net cash used by investing activities $(6,454) $(18,854)
</TABLE>
See accompanying notes to consolidated financial statements.
-7-
DRAVO CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(unaudited, $ in 000's)
<TABLE>
<CAPTION>
Six Months ended June 30,
1998 1997
<S> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowing (repayment) under revolving
credit agreements $ (2,000) $ 15,390
Principal payments under long-term notes (7,816) (6,133)
Proceeds from issuance of long-term notes -- 1,663
Dividends on preference stock (1,256) (1,259)
Net cash provided (used) by financing activities (11,072) 9,661
Net increase (decrease) in cash
and cash equivalents 2,106 (1,090)
Cash and cash equivalents at beginning of
period 1,477 1,600
Cash and cash equivalents at end of period $ 3,583 $ 510
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest (net of amount capitalized) $ 3,722 $ 3,183
Income taxes 256 336
</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. 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>
June 30, December 31,
1998 1997
<S> <C> <C>
Materials and supplies $ 13,796 $ 14,615
Finished goods 3,238 2,819
Total inventories $ 17,034 $ 17,434
</TABLE>
Finished goods are valued at average production cost or market,
whichever is lower, and include raw materials, direct labor, and
operating overhead. Materials and supplies are valued at average
cost.
-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 cleanup of soil and groundwater
contamination at four sub-sites in Hastings, NE. 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).
Regarding the first sub-site, the company participated in an EPA-initiated
allocation proceeding for a municipal landfill sub-site to
allocate shares of liability for past response costs and costs of a
proposed cap of the landfill. As part of this proceeding, the
allocator conducted a mediation session that resulted in a settlement
among the EPA and the PRPs. Pursuant to the settlement, the company
agreed to pay 14.33 percent of the EPA's past costs and the estimated
costs of the cap and its maintenance. A Consent Decree incorporating
the settlement and requiring the private parties to pay for,
construct and maintain the cap has been approved by the United States
Justice Department and lodged with the Federal District Court. In
exchange, the company received contribution protection against third-party
claims as well as a covenant from the EPA not to sue for matters covered by
the settlement.
The company has also been notified by the EPA that the EPA considers
it a PRP at another municipal landfill in Hastings. At least three
other parties (including the City of Hastings) are considered by the
EPA to be PRPs at this second sub-site. At this sub-site, the
company has concluded that the City of Hastings is primarily
responsible for proper closure of the landfill and the remediation
of any release of hazardous substances. The EPA has conducted the
remedial investigation for this sub-site. The company, along with
some of the other PRPs, including the City of Hastings, is
considering a proposal from the EPA to conduct the feasibility study.
In 1997, the company and the other PRPs at this sub-site received a
demand from the EPA that they pay the EPA's response costs at this
sub-site through September 30, 1994. The company and some of the
other PRPs, including the City of Hastings, intend to examine these
costs to determine whether or not they are valid.
-10-
DRAVO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(3) Contingent Liabilities (continued)
With respect to the third sub-site, the company and two other PRPs
have been served with administrative orders directing them to
undertake soil remediation and interim groundwater remediation at
that sub-site. The company is currently complying with these orders
while reserving its right to seek reimbursement from the United
States for costs it incurs, as a result of these orders, which are
inconsistent with statutory and regulatory requirements.
In 1997, the company and the other PRPs at this sub-site received a
demand from the EPA that they pay the EPA's response costs at this
sub-site through September 30, 1994. The company and some of the
other PRPs intend to examine these costs to determine whether or not
they are valid. A total of five parties have been named by the EPA
as PRPs at this sub-site, but two of them have been granted de
minimis status. The company believes other parties should also be
named as PRPs.
The fourth sub-site is a former naval ammunition depot that was
subsequently converted to an industrial park. The company and its
predecessor owned and operated a manufacturing facility in this
industrial park. To date, the company's investigation indicates that
it did not cause the release of hazardous substances at this sub-site
during the time it owned and operated the facility. The United States
is conducting the remediation of this sub-site.
In addition to sub-site cleanup, the EPA is seeking remediation of
area-wide contamination associated with all of the sub-sites in and
around Hastings. The company, along with other Hastings PRPs, has
recommended that the EPA adopt institutional controls as the area-wide
remedy in Hastings. The EPA has completed an area-wide remedial
investigation and has asked the PRPs to agree to perform a
feasibility study to determine whether institutional controls or
another remedial alternative should be undertaken. The company,
along with seven other PRPs, is considering this proposal. An
acceptable area-wide remediation plan could result in interim
remedies at the sub-sites becoming final remedies. In 1997, the
company and the other area-wide PRPs received a demand from the EPA
that they pay the EPA's area-wide response costs through September
30, 1994. The company and some of the other area-wide PRPs are
examining these costs to determine whether or not they are valid.
-11-
DRAVO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(3) Contingent Liabilities (continued)
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 sub-site.
On motion of the defendant insurance carriers, the suit was
transferred to the District Court for the Western District of
Pennsylvania on October 31, 1996. The company has settled the claim
against its predecessor's insurer regarding the third sub-site, 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 handling the company's claim. A
tentative trial date has been set for early 1999. 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 second and fourth sub-sites.
Estimated future cleanup costs at the third sub-site, including
capital outlays and maintenance costs for soil and groundwater
remediation of approximately $6.2 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 and a pro rata share of the EPA's
past response costs. The company's estimated share of the costs is
based on its assessment of the total cleanup costs, its potential
exposure, and the viability of other named PRPs. These estimates
are, by their nature, uncertain and dependent upon numerous factors,
any of which could cause actual results to differ materially from
projected amounts.
During World War II, the company conducted military shipbuilding
activities for the U.S. Navy on a tract of property in Wilmington,
Delaware. More limited commercial activities were conducted on a
much smaller parcel of property during the period 1927 - 1967. By
letter dated May 22, 1998, the Delaware Department of Natural
Resources and Environmental Control (DNREC) asserted the company's
liability under Delaware's Hazardous Substance Control Act with
respect to possible contamination of its former shipyard in
Wilmington. The company and the U.S. Army Corps of Engineers (on
behalf of the U. S. Navy) have been invited to participate in cost
recovery negotiations with the DNREC.
-12-
DRAVO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(3) Contingent Liabilities (continued)
A portion of the Wilmington site is currently being developed for
commercial use under Delaware's "brown fields" legislation. The
company understands from the DNREC that, for at least a portion of the
site, existing and planned development will achieve a substantial part
of the State's remediation goals, because on-site structures, such as
parking lots, roads and buildings will prevent migration of
contaminants.
The company is currently investigating the DNREC's claims, the use and
ownership of the Wilmington site, both before and after the company's
operations, and the company's historical relationship with the Navy.
A detailed title search of the affected properties has begun. To date,
the company has identified several other former property owners that
were not originally known to the DNREC. At this time no accrual has
been made because the amount of the liability, if any, and any share
of the liability for which the company may be responsible, is unknown.
The company does not consider it reasonable to expect that the
resolution of this matter will have a material adverse affect on its
financial position.
Other claims and assertions made against the company will be resolved,
in the opinion of management, without material additional charges to
earnings.
On April 3, 1998, the company filed suit in the New Jersey Federal
District Court against IMO Delaval (Delaval), successor to the entity
that supplied a steam turbine generator to a waste-to-energy facility
designed and built by one of the company's discontinued operations.
Several years ago the company settled a dispute with the facility's
owner over failure to meet contractual performance obligations. The
company now believes a contributing factor to its failure to meet the
performance obligations was caused by equipment supplied by Delaval
that did not meet contract specifications. The defect remained
undetected until a scheduled maintenance outage called for the
generator to be disassembled. The company intends to vigorously pursue
its claim against Delaval.
-13-
DRAVO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(4) Discontinued Operations
Discontinued operations' assets and liabilities at June 30, 1998 and
December 31, 1997 relate to non-cancelable leases, insurance,
environmental, legal and other matters associated with exiting the
engineering and construction business and are presented below:
($ in 000's) June 30, December 31,
1998 1997
<TABLE>
<CAPTION>
<S> <C> <C>
Current assets:
Accounts and retainers receivable $ -- $ 209
Total assets $ -- $ 209
Current liabilities:
Accounts and retainers payable $ -- $ 135
Accrued loss on leases -- 1,026
Insurance 350 405
Environmental 1,633 1,684
Other 640 572
Total current liabilities 2,623 3,822
Insurance 2,851 2,706
Environmental 1,214 1,286
Other 1,113 1,409
Total liabilities $ 7,801 $ 9,223
Net liabilities and accrued loss
on leases of discontinued operations $ (7,801) $ (9,014)
</TABLE>
(5) Comprehensive Income
In June 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 130, "Reporting Comprehensive
Income" (SFAS 130). SFAS 130 requires the reporting of changes in
equity during the period from nonowner sources, such as minimum pension
liability adjustments. There were no items of comprehensive income in
equity at June 30, 1998 or December 31, 1997.
-14-
DRAVO CORPORATION AND SUBSIDIARIES
Management's Discussion and Analysis of Financial
Condition and Results of Operations
Revenue during the quarter was down 1.3 percent from the same quarter
last year. Wet weather and associated interruptions in lime unloading
at power plant locations late in the quarter affected Ohio Valley
sales. The slightly lower revenue and resultant lower production
levels suppressed gross profit and margins compared to last year's
second quarter results, which were especially strong due to pent up
demand caused by unprecedented flooding in northern Kentucky during
last year's first quarter. Improved selling, general and
administrative expenses, largely due to lower pension expense,
partially offset the reduced gross profit. Earnings from joint
ventures were also down due to lower demand from the single customer
at a phosphate contract mining facility. The company's net earnings
for reporting purposes reflects an effective tax rate of 19 percent
this year versus 7 percent last year. This change in tax rate is the
result of the reassessment of the recoverability of the deferred tax
asset during last year's fourth quarter as required by Statement of
Financial Accounting Standard No. 109. The effective tax rate is used
for financial reporting purposes only and will not affect actual taxes
paid, which will remain low due to net operating loss utilization.
Steady and predictable demand during both the first and second quarters
of 1998 led to higher revenue, gross profit and gross profit margins
compared to last year when flooding, mentioned above, negatively
impacted the company's first six months' results. Earnings before
taxes increased 35 percent on higher revenue, lower overhead costs and
improved operating efficiencies.
Net cash flow from operating activities was $19.6 million at June 30,
1998 versus $8.1 million during the first six months of 1997. Better
earnings and substantial reductions in both accounts and notes
receivable principally contributed to the increase. Cash flow from
operating activities was used to reduce debt $9.8 million from year-end
levels and to finance $6.5 million of capital expenditures.
On August 12, 1998, the company and a consortium of six banks completed
a financing package that restructured the company's $53.0 million
revolving credit/letter of credit facility and $15.3 million term loan.
The new agreement consists of a $60.0 million five-year revolving
credit/letter of credit facility and a $40.0 million five-year term
loan. The term loan is payable in equal quarterly installments in the
final two years. Interest on the total financing package equals the
Eurodollar rate plus 100 basis points through December 31, 1998
compared to current pricing of the Eurodollar rate plus 200 basis
points. Commencing January 1, 1999, interest equals
-15-
DRAVO CORPORATION AND SUBSIDIARIES
Management's Discussion and Analysis of Financial
Condition and Results of Operations (continued)
the Eurodollar rate plus a margin determined by the company's ratio
of total debt to earnings before interest, taxes, depreciation and
amortization. The margin ranges between 75 and 125 basis points.
The company expects to use part of the additional funds provided by
the new package to finance the Longview plant's expansion and
modernization project.
The "Year 2000 Issue," or "Y2K," refers to errors that may occur
because many existing computer programs use only the last two
digits to refer to a year and may not function properly in the year
2000. Over the past 18 months, the company has replaced its
general ledger, payroll, accounts payable, and accounts receivable
financial systems with fully compliant Y2K hardware and software.
An evaluation is being performed to assess whether other financial
systems identified as non-Y2K compliant will be replaced or whether
existing software will be modified to accept the year 2000 date.
These systems include, billing, spare parts inventory,
requisitioning and purchasing. Currently, the company is running
diagnostic checks on all its computers to identify hardware and
non-financial software that must be upgraded or replaced to be
compliant. Also, process control technologies, used to operate
various equipment at the company's operating sites, are being
evaluated. Major customers and suppliers are being contacted and
asked to complete questionnaires to determine their awareness of
the Y2K issue and how they are addressing it.
The company plans to be Y2K compliant by the end of the third
quarter of 1999. Future expenditures to become compliant are
currently estimated to approximate $1.0 million.
The Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, Accounting for Derivative
Instruments and Hedging Activities (FAS 133) in June 1998. FAS 133
standardizes the accounting for derivative instruments, including
certain derivative instruments embedded in other contracts. Under
the standard, entities are required to carry all derivative
instruments on its balance sheet at fair value and changes (ie.
gains or losses) in fair value may be required, given certain
conditions, to be recognized in earnings in the period of change.
Adoption of FAS 133 is required by January 1, 2000. The company
does not currently have any conventional financial derivative
instruments and does not believe it has any other derivative
instruments as defined by FAS 133; however, a thorough review of
FAS 133 and the company's contracts is ongoing.
-16-
DRAVO CORPORATION AND SUBSIDIARIES
Management's Discussion and Analysis of Financial
Condition and Results of Operations (continued)
Certain statements contained in this report, including environmental
cleanup costs and the company's estimated completion date and cost to
become Year 2000 compliant, are forward looking statements within the
meaning of the Securities Exchange Act of 1934. In addition, the
company or persons acting on its behalf may from time to time publish
or communicate other items which could also be construed to be forward
looking statements. Statements of this sort are or will be based on
the company's estimates, assumptions and projections, and are subject
to risks and uncertainties that could cause actual results to differ
materially from those included in the forward looking statements.
-17-
DRAVO CORPORATION AND SUBSIDIARIES
PART II - Other Information
Item 6. Exhibits and Reports on Form 8-K
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 June
30, 1998.
-18-
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: August 13, 1998 /s/EARL J. BELLISARIO
Earl J. Bellisario
Senior Vice President,
Chief Financial Officer
and Secretary
Date: August 13, 1998 /s/LARRY J. WALKER
Larry J. Walker
Vice President and Controller
(Principal Accounting Officer)
-19-
Exhibit 11. Statement Re Computation of Per Share Earnings
(In 000's, except per share data)
<TABLE>
<CAPTION>
Quarters ended June 30,
1998 1997
<S> <C> <C>
Basic earnings per share:
Net earnings $ 3,410 $ 4,312
Deduct dividends on preference stock 628 629
Net earnings applicable to common stock $ 2,782 $ 3,683
Shares:
Weighted average number of common
shares outstanding 14,717 14,776
Basic earnings per share $ 0.19 $ 0.25
Diluted earnings per share:
Net earnings applicable to common stock $ 2,782 $ 3,683
Shares:
Weighted average number of common
shares outstanding 14,717 14,776
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) 43 42
Weighted average number of shares
outstanding, as adjusted 14,760 14,818
Diluted earnings per share $ 0.19 $ 0.25
</TABLE>
-20-
Exhibit 11. Statement Re Computation of Per Share Earnings (continued)
(In 000's, except per share data)
Six Months ended June 30,
1998 1997
<TABLE>
<CAPTION>
<S> <C> <C>
Basic earnings per share:
Net earnings $ 6,376 $ 5,386
Deduct dividends on preference stock 1,255 1,259
Net earnings applicable to common stock $ 5,121 $ 4,127
Shares:
Weighted average number of common
shares outstanding 14,712 14,773
Basic earnings per share $ 0.35 $ 0.28
Diluted earnings per share:
Net earnings applicable to common stock $ 5,121 $ 4,127
Shares:
Weighted average number of common
shares outstanding 14,712 14,773
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) 46 78
Weighted average number of shares
outstanding, as adjusted 14,758 14,851
Diluted earnings per share $ 0.35 $ 0.28
</TABLE>
-21-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM DRAVO
CORPORATION'S JUNE 30, 1998 FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 3583
<SECURITIES> 0
<RECEIVABLES> 20826
<ALLOWANCES> 925
<INVENTORY> 17034
<CURRENT-ASSETS> 41342
<PP&E> 269812
<DEPRECIATION> 126349
<TOTAL-ASSETS> 249556
<CURRENT-LIABILITIES> 41198
<BONDS> 0
<COMMON> 15111
15000
16
<OTHER-SE> 99718
<TOTAL-LIABILITY-AND-EQUITY> 249556
<SALES> 84257
<TOTAL-REVENUES> 84257
<CGS> 63352
<TOTAL-COSTS> 63352
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3592
<INCOME-PRETAX> 7823
<INCOME-TAX> 1447
<INCOME-CONTINUING> 6376
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6376
<EPS-PRIMARY> .35
<EPS-DILUTED> .35
</TABLE>
