<PAGE>
SECURITIES AND EXCHANGE COMMISSION
----------------------------------
WASHINGTON, D. C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1995
OR
( ) TRANSITION REPORT PURSUANT TO SECTION
13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD
FROM TO
COMMISSION FILE NUMBER 1-8009
UNR INDUSTRIES, INC.
--------------------
(DELAWARE)
----------
332 South Michigan Avenue
Chicago, Illinois 60604-4385
I.R.S. Employer Identification Number 36-3060977
TELEPHONE NUMBER (312) 341-1234
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 ___
<TABLE>
<CAPTION>
Outstanding as of
May 8, 1995
-----------------
<S> <C>
Common Stock $.01 par value......................... 51,865,378
Warrants to purchase Common Stock................... 419,761
</TABLE>
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
UNR INDUSTRIES, INC. AND SUBSIDIARIES
STATEMENTS OF INCOME
(In Thousands Except Per Share Data)
(unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31
1995 1994
-------- -------
<S> <C> <C>
Net Sales $101,213 $84,816
Cost of products sold 77,018 66,546
-------- -------
Gross Profit 24,195 18,270
Selling, general & administrative
expenses 11,231 10,389
-------- -------
Operating Income 12,964 7,881
Interest income (expense), net 409 (435)
-------- -------
Income from continuing operations
before income taxes 13,373 7,446
Income tax provision 5,500 3,000
-------- -------
Income from continuing operations 7,873 4,446
Discontinued operation-
Loss from operation -- (110)
-------- -------
NET INCOME $ 7,873 $ 4,336
-------- -------
-------- -------
Net Income Per Share:
Continuing operations $.15 $.09
Discontinued operation-
Loss from operation -- --
-------- -------
NET INCOME PER SHARE $.15 $.09
-------- -------
-------- -------
Weighted average number of shares
outstanding 51,196 48,403
</TABLE>
1
<PAGE>
UNR INDUSTRIES, INC. AND SUBSIDIARIES
BALANCE SHEETS
(In Thousands)
(unaudited)
<TABLE>
<CAPTION>
MARCH 31 DECEMBER 31
ASSETS 1995 1994
------ --------- -----------
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 83,914 $ 68,991
Accounts, notes and other receivables, less allowance for doubtful
accounts of $4,300 in 1995 and $4,000 in 1994 53,842 51,311
Inventories:
Work-in-process and finished goods 47,731 43,773
Raw materials and supplies 34,285 26,243
Deferred income taxes 16,000 16,000
Prepaid expenses 2,757 2,757
--------- --------
TOTAL CURRENT ASSETS 238,529 209,075
--------- --------
PLANT AND EQUIPMENT, at cost 164,119 162,789
Less: Accumulated depreciation (100,503) (98,450)
--------- --------
TOTAL PLANT AND EQUIPMENT 63,616 64,339
--------- --------
OTHER ASSETS
Deferred income taxes 4,130 8,610
Net assets of discontinued operations -- 11,244
Other 8,591 6,179
--------- --------
TOTAL ASSETS $ 314,866 $299,447
--------- --------
--------- --------
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES
Accounts payable 18,431 14,063
Accrued expenses 34,731 31,602
Dividends payable 80,211 --
Current portion of long-term liabilities 3,482 3,470
Accrued income taxes 1,767 907
--------- --------
TOTAL CURRENT LIABILITIES 138,622 50,042
--------- --------
LONG-TERM LIABILITIES 21,689 23,278
--------- --------
WARRANTS 2,738 5,531
--------- --------
STOCKHOLDERS' EQUITY
Common stock 524 516
Capital surplus 65,802 130,497
Retained earnings 97,908 102,023
Treasury stock (2,751) (2,751)
Notes receivable from officers (9,100) (9,100)
Unearned portion of restricted stock (566) (589)
--------- --------
TOTAL STOCKHOLDERS' EQUITY 151,817 220,596
--------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 314,866 $299,447
--------- --------
--------- --------
</TABLE>
2
<PAGE>
UNR INDUSTRIES, INC. AND SUBSIDIARIES
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31
(In Thousands)
(unaudited)
<TABLE>
<CAPTION>
1995 1994
-------- -------
<S> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES
Net Income $ 7,873 $ 4,336
Adjustments for noncash items included in net income-
Depreciation and amortization 2,430 2,431
Deferred income taxes 4,480 2,800
Provision for deferred employee compensation -- 63
Operating requirements-
Accounts receivable (increase) (2,531) (930)
Income tax refund receivable decrease -- 48,065
Inventories (increase) (12,000) (6,265)
Prepaid expenses (increase) decrease -- (11)
Accounts payable & accrued expenses increase 4,577 3,963
-------- -------
Net cash provided by operating activities $ 4,829 $54,452
-------- -------
CASH FLOW FROM INVESTING ACTIVITIES
Purchase of plant and equipment $ (1,422) $(1,706)
Increase (decrease) in other assets (2,698) 72
Discontinued operations 15,024 1,151
-------- -------
Net cash provided by (used for) investing activities $ 10,904 $ (483)
-------- -------
CASH FLOW FROM FINANCING ACTIVITIES
Decrease in debt and lease obligations $ (1,577) $(1,058)
Payment of short-term borrowings -- (5,100)
Issuance of common stock 767 434
-------- -------
Net cash (used for) financing activities $ (810) $(5,724)
-------- -------
Net increase in cash and cash equivalents $ 14,923 $48,245
Cash & cash equivalents, beginning of period 68,991 1,226
-------- -------
Cash & cash equivalents, end of period $ 83,914 $49,471
-------- -------
-------- -------
Cash paid during the period for interest $ 642 $ 603
-------- -------
-------- -------
Cash paid during the period for income taxes $ 7 $ 193
-------- -------
-------- -------
</TABLE>
3
<PAGE>
UNR INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
(1) Principles of Consolidation:
The financial statements include the consolidated accounts of UNR
Industries, Inc. and its subsidiaries (the "Company"). All significant
intercompany transactions have been eliminated in consolidation.
(2) Income Taxes:
On December 21, 1992, the Internal Revenue Service issued final
regulations under Section 468B "Special Rules for Designated Settlement
Funds." The Section 468B regulations deal with the tax treatment of the
Company's 1989 transfer of 29.4 million shares of UNR stock to the UNR
Asbestos-Disease Claims Trust. Based on these regulations, the Company and
Trust elected to treat the Trust as a Qualified Settlement Fund on January 1,
1993, which entitled the Company to a tax deduction equivalent to the value
of the stock held by the Trust on that date. This deduction substantially
reduced the Company's 1993 income tax liability and generated tax loss
carry-backs and carry-forwards. The Company received a Federal income tax
refund of approximately $48.1 million in the first quarter and a state income
tax refund of approximately $4.5 million in the second quarter of 1994 as a
result of these carry-backs.
At December 31, 1994, the Company had available $52.0 million of net
operating loss carry-forwards to offset future taxable income through 2008.
The Company also has general business tax credits of $3.0 million which are
available to reduce future Federal income taxes through 2002. A portion of
these credits begin to expire starting in 1997. Alternative minimum tax
credits of approximately $5.5 million are available to reduce future Federal
taxable income over an indefinite period.
(3) Net Income Per Share:
Net income per share is based on the weighted average number of common
shares outstanding during each period. Dilution, which would result if all
outstanding warrants and options were exercised, is not significant to the
net income per share computation.
(4) Treasury Stock:
In 1990, the Company announced that its Board of Directors had
authorized the acquisition, through both negotiated transactions involving
large blocks and open market purchases, of up to 1.5 million shares of its
common stock to be held as treasury shares and be available to meet
requirements of its Key Executives' Stock Option Plan and other corporate
purposes. As of March 31, 1995, 1,133,565 shares have been purchased.
(5) Dividends Declared:
On April 17, 1995, the Company paid a regular cash dividend of $.25 per
share and an extraordinary dividend of $1.30 per share to stockholders of
record as of the close of business on April 3, 1995. On April 1, 1994, the
Company paid a regular cash dividend of $.20 per share to stockholders of
record as of the close of business on March 18, 1994.
4
<PAGE>
(6) Inventories:
The interim determination of inventories under the LIFO method is based
on management's estimates of the expected year-end inventory levels and costs
and as such, interim financial results are subject to final year-end
inventory amounts. Inventories as presented on the Balance Sheets are net of
a reserve for LIFO valuation of $9.2 million at March 31, 1995, and $8.7
million at December 31, 1994.
(7) Discontinued Operation:
On January 31, 1995, the Company entered into a definitive agreement to
sell its industrial storage rack business to The Renco Group, Inc., a private
holding company. This sale was consummated on March 31, 1995. Net assets of
this operation for the prior year are classified as "Net assets of
discontinued operations" in the accompanying balance sheets.
(8) Basis of Reporting for Interim Financial Statements:
The unaudited financial statements included herein have been prepared by
the Company pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally
accepted accounting principles have been omitted pursuant to such rules and
regulations, although the Company believes that the disclosures are adequate
to make the information presented not misleading. It is suggested that these
financial statements be read in conjunction with the financial statements and
notes thereto included in the Company's Annual Report and Form 10-K for the
year ended December 31, 1994.
The financial statements presented herewith reflect all adjustments
(consisting of normal and recurring accruals) which, in the opinion of
management, are necessary for fair statement of the results of operations for
the three month periods ended March 31, 1995, and 1994. Results of
operations for interim periods are not necessarily indicative of results to
be expected for an entire year.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The Company's 1994 Annual Report and Form 10-K contains management's
discussion and analysis of financial condition and results of operations for
the year ended December 31, 1994. The following discussion and analysis
describes changes in the Company's financial condition from December 31,
1994, and the Company's financial position at that date. Trends are
discussed to the extent known and considered relevant. The analysis of
results of operations compares the three months ended March 31, 1995, with
the corresponding period of 1994.
RESULTS OF OPERATIONS
First quarter of 1995 versus first quarter of 1994:
Net sales increased 19.3% to $101.2 million from $84.8 million in the
prior year. Operating income was $13.0 million for the first quarter of 1995
versus $7.9 million for the same period last year or an increase of 64.5%.
Net income was $7.9 million or $.15 per share versus $4.3 million or $.09 per
share last year, or an increase of 81.6%.
5
<PAGE>
The following table shows net sales and operating income by industry
segment (In Thousands):
<TABLE>
<CAPTION>
FOR THE THREE MONTHS
ENDED MARCH 31
1995 1994
-------- -------
<S> <C> <C>
NET SALES:
Industrial $ 47,003 $43,874
Commercial 54,210 40,942
-------- -------
Total $101,213 $84,816
-------- -------
-------- -------
OPERATING INCOME:
Industrial $ 5,598 $ 4,241
Commercial 8,812 5,002
Corporate Expense (1,446) (1,362)
-------- -------
-------- -------
Total $ 12,964 $ 7,881
-------- -------
-------- -------
</TABLE>
The Industrial segment (principal products of this segment are steel
tubing and computerized warehouse equipment) reported net sales of $47.0
million for the first quarter of 1995 versus $43.9 million reported in the
same period last year, or an increase of 7.1%. The increase in sales is due
entirely to the steel tube division.
Operating income of the Industrial segment increased 32.0% to $5.6
million for the first quarter of 1995 versus $4.2 million for the same period
last year. This increase is due to strong results from our steel tube
division.
The Commercial segment (principal products of this segment are shopping
carts, steel towers and shelters for the communication industry and stainless
steel and composite sinks) reported net sales of $54.2 million for the first
quarter of 1995 versus $40.9 million reported in the same period last year or
an increase of 32.4%. The increase in sales is due primarily to strong
performances of the tower division.
Operating income for the Commercial segment was $8.8 million for the
first quarter of 1995 versus $5.0 million for the same period last year or an
increase of 76.2%. As with sales, this increase is due to strong results of
the tower division.
Selling, general and administrative expenses were $11.2 million or 11.1%
of sales for 1995 versus $10.4 million or 12.2% of sales in 1994. This
percentage reduction reflects cost cutting measures taken throughout the
Company and the resulting ability to produce greater sales with less costs.
Net interest in both periods includes the interest earned on short-term
investments reduced by interest paid on secured debt. Net interest income
for the first quarter of 1995 versus net interest expense for the same period
last year is due to substantially greater levels of cash available during the
current quarter versus the same period last year.
6
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
The following is a comparison of the working capital at March 31, 1995,
and December 31, 1994:
<TABLE>
<CAPTION>
March 31, 1995 December 31, 1994
-------------- -----------------
<S> <C> <C>
Working Capital (in millions) $99.9 $159.0
Working Capital Ratio 1.7 to 1 4.2 to 1
</TABLE>
The Company's financial condition continues to be strong at the end of
the first quarter of 1995, with working capital of $99.9 million at March 31,
1995, as compared to $159.0 million at December 31, 1994. The decline in
working capital is due to the declaration of the $.25 regular and $1.30
extraordinary dividend totalling approximately $80.2 million. Our working
capital ratio at March 31, 1995, after the dividend declaration, was 1.7 to 1
versus 4.2 to 1 at year-end, is still considered a strong measure of
liquidity. The Company expects that it will meet its ongoing working capital
and capital expenditure requirements from operating cash flows and borrowings
under a $35.0 million short-term credit facility. In addition, the Company's
strong unleveraged balance sheet allows it access to funds, if needed, from
capital markets.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) EXHIBITS
2. Plan of Reorganization incorporated herein by reference from
Exhibit A of the 1989 first quarter Form 10-Q.
4. Warrant Agreement (including form of warrant) issued pursuant to
the provisions of Article III of the Company's Consolidated Plan
of Reorganization incorporated herein by reference from Exhibit A
of the 1989 Form 10-K.
10. None
11. The computation can be determined from the report.
15. None
18. None
19. None
22. None
23. None
24. None
27. Financial data schedule.
(B) Reports on Form 8-K
None
7
<PAGE>
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.
UNR INDUSTRIES, INC.
Dated: May 8, 1995 /s/ Henry Grey
- ------------------- -----------------------------------------------
Henry Grey
Senior Vice President-Finance, Treasurer & Chief
Financial Officer
Dated: May 8, 1995 /s/ John A. Saladino
- ------------------- -----------------------------------------------
John A. Saladino
Controller & Assistant Secretary
8
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<CASH> 83,914
<SECURITIES> 0
<RECEIVABLES> 53,842
<ALLOWANCES> 4,323
<INVENTORY> 82,016
<CURRENT-ASSETS> 238,529
<PP&E> 63,616
<DEPRECIATION> 100,503
<TOTAL-ASSETS> 314,866
<CURRENT-LIABILITIES> 138,622
<BONDS> 21,689
<COMMON> 524
0
0
<OTHER-SE> 151,293
<TOTAL-LIABILITY-AND-EQUITY> 314,866
<SALES> 101,213
<TOTAL-REVENUES> 101,213
<CGS> 77,018
<TOTAL-COSTS> 11,231
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 13,373
<INCOME-TAX> 5,500
<INCOME-CONTINUING> 7,873
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7,873
<EPS-PRIMARY> .15
<EPS-DILUTED> .15
</TABLE>
