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FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1994
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 I-5259
____________________
PITT-DES MOINES, INC.
(Exact name of registrant as specified in its charter)
Commonwealth of Pennsylvania 25-0729430
(State of other jurisdiction of (I.R.S. Employer
incorporation of organization) Identification No.)
3400 Grand Avenue, Pittsburgh, PA 15225
(Address of Principal Executive Offices) (Zip Code)
(412) 331-3000
(Registrant's Telephone Number, including Area Code)
____________________
Indicate by check 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
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On March 31, 1994, 2,323,978 shares of Common Stock were outstanding.
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TABLE OF CONTENTS
Page
Part I - Financial Information
Item 1. Financial statements 3
Item 2. Management's discussion and analysis of
financial condition and results of operations 9
Part II - Other Information
Item 1. Legal proceedings 11
Item 6. Exhibits and reports on Form 8-K 11
Signatures 12
Exhibit Index 13
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<PAGE>
Part I. Financial Information
Item 1. Financial Statements
PITT-DES MOINES, INC.
Consolidated Statements of Income
(Unaudited)
<TABLE>
<CAPTION>
For the three months ended
March 31,
--------------------------
(in thousands, except per share amounts) 1994 1993
-------- --------
<S> <C> <C>
Earned revenue $ 98,483 $ 81,909
Cost of earned revenue (88,803) (73,827)
-------- --------
Gross profit from operations 9,680 8,082
Selling, general and administrative expenses (9,135) (9,681)
-------- --------
Income (loss) from operations 545 (1,599)
Other income/(expense):
Interest income 136 167
Interest expense (81) (14)
Loss on sale of assets (4) (7)
Miscellaneous, net 8 34
-------- --------
59 180
-------- --------
Income (loss) before income taxes 604 (1,419)
Income taxes (credits) 234 (540)
-------- --------
Net income (loss) $ 370 $ (879)
======== ========
Per Share
Net income (loss) $ .16 $ (.38)
Dividend paid $ .225 $ .225
Average common shares outstanding (in 000's) 2,324 2,323
CONSOLIDATED RETAINED EARNINGS
Balance at the beginning of year $ 69,056 $ 70,314
Net income (loss) 370 (879)
Dividends paid (523) (523)
Other 0 24
------- -------
Balance at end of period $ 68,903 $ 68,936
======== ========
</TABLE>
See Notes to Consolidated Financial Statements.
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<PAGE>
Item 1. Financial Statements (Continued)
PITT-DES MOINES, INC.
Consolidated Statements of Financial Condition
<TABLE>
<CAPTION>
March 31, December 31,
1994 1993
--------- ------------
<S> <C> <C>
(in thousands)
Assets
Current Assets
Cash and cash equivalents $ 1,766 $ 15,946
Accounts receivable including retentions
(less allowances: 1994-$1,056; 1993-$976) 66,921 60,782
Inventories 19,924 18,119
Costs and estimated profits in excess
of billings 23,673 28,619
Deferred income taxes 7,939 7,939
Prepaid expenses 2,637 1,595
-------- --------
Total Current Assets 122,860 133,000
Investments and Other Assets 6,744 6,620
Property, Plant and Equipment
Land 7,351 7,351
Buildings 30,479 30,456
Machinery and equipment 60,621 59,937
-------- --------
98,451 97,744
Allowances for depreciation (60,815) (59,561)
-------- --------
Net Property, Plant and Equipment 37,636 38,183
-------- --------
$167,240 $177,803
======== ========
</TABLE>
See Notes to Consolidated Financial Statements.
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<PAGE>
Item 1. Financial Statements (Continued)
PITT-DES MOINES, INC.
Consolidated Statements of Financial Condition
<TABLE>
<CAPTION>
March 31, December 31,
1994 1993
(in thousands) --------- ------------
<S> <C> <C>
Liabilities
Current Liabilities
Accounts payable $ 27,590 $ 41,326
Accrued compensation, related taxes and benefits 9,894 9,082
Other accrued expenses 4,082 3,963
Accrued expenses related to flood 3,718 4,272
Billings in excess of costs and estimated
profits 11,740 10,320
Income taxes 1,500 1,149
Casualty and liability insurance 13,848 12,609
-------- --------
Total Current Liabilities 72,372 82,721
Deferred Income Taxes 5,701 5,701
Minority Interest 847 908
Contingencies and Commitments
Stockholders' Equity
Preferred stock - par value $.01 per share;
authorized 3,000,000 shares; issued - none
Common stock - no par value; authorized
15,000,000 shares; issued 2,982,156 shares 33,549 33,549
Retained earnings 68,903 69,056
-------- --------
102,452 102,605
Treasury stock at cost
(1994 - 658,178 shares; 1993 - 658,178 shares) (14,132) (14,132)
-------- --------
Total Stockholders' Equity 88,320 88,473
-------- --------
$167,240 $177,803
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</TABLE>
See Notes to Consolidated Financial Statements.
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<PAGE>
Item 1. Financial Statements (Continued)
PITT-DES MOINES, INC.
Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
For the three months ended
March 31,
----------------------------
1994 1993
------------ --------------
<S> <C> <C>
Cash Flow From Operating Activities
Net income (loss) $ 370 $ (879)
Adjustments to reconcile net income to net cash
utilized by operating activities:
Depreciation 1,262 1,205
Loss on sale of assets 4 7
Minority interest, net of dividends paid (61) (71)
Other non-cash credits, net (120) (448)
Change in certain assets and liabilities
(using) or providing cash:
Accounts receivable (6,139) (2,448)
Inventories (1,805) (319)
Prepaid expenses (1,042) (1,385)
Costs, estimated profits and billings, net 6,366 1,001
Accounts payable (13,736) (10,275)
Accrued liabilities 1,616 2,003
Income taxes 351 (250)
-------- --------
Net cash utilized by operating activities (12,934) (11,859)
Cash Flows from Investing Activities
Capital expenditures (737) (769)
Proceeds from sales of assets 18 22
Change in investments and other assets (4) 21
-------- --------
Net cash utilized by investing activities (723) (726)
Cash Flows from Financing Activities
Proceeds from debt obligations 6,000 0
Payments of debt obligations (6,000) (219)
Dividends paid (523) (523)
Other 0 77
-------- --------
Net cash utilized by financing activities (523) (665)
-------- --------
Decrease in cash and cash equivalents (14,180) (13,250)
Cash and cash equivalents at beginning of year 15,946 19,944
-------- --------
Cash and cash equivalents at end of period $ 1,766 $ 6,694
======== ========
</TABLE>
See Notes to Consolidated Financial Statements.
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<PAGE>
Item 1. Financial Statements (Continued)
PITT-DES MOINES, INC.
Notes to Consolidated Financial Statements
(Unaudited)
Note A. Basis of Presentation
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three months ended March 31, 1994 are
not necessarily indicative of the results that may be expected for the year
ending December 31, 1994. The December 31, 1993 Consolidated Statement of
Financial Condition was derived from audited financial statements. For further
information, refer to the consolidated financial statements and footnotes
thereto included in the Company's Annual Report on Form 10-K for the year ended
December 31, 1993.
Note B. Costs and Estimated Profits on Uncompleted Contracts
Costs and estimated profits on uncompleted contracts are summarized as
follows:
<TABLE>
<CAPTION>
March 31, December 31,
(in thousands) 1994 1993
---------- -------------
<S> <C> <C>
Costs incurred on uncompleted contracts $ 455,160 $ 413,203
Estimated profits 50,218 45,267
--------- ---------
505,378 458,470
Less: Billings to date (493,445) (440,171)
--------- ---------
$ 11,933 $ 18,299
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</TABLE>
Costs, estimated profits and billings on uncompleted contracts are included
in the accompanying Consolidated Statements of Financial Condition under the
following captions:
<TABLE>
<CAPTION>
March 31, December 31,
(in thousands) 1994 1993
---------- -------------
<S> <C> <C>
Costs and estimated profits in excess of billings $ 23,673 $ 28,619
Billings in excess of costs and estimated profits (11,740) (10,320)
-------- --------
$ 11,933 $ 18,299
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</TABLE>
Note C. Contingencies
There are various claims and legal proceedings against the Company arising
from the normal course of business. As previously reported, in May 1984,
Washington Public Power Supply System ("WPPSS") filed a complaint against the
Company and its surety in the United States District Court for the Eastern
District of Washington. Various claims in connection with retrofit work
performed by the company at Nuclear Unit #2, Hanford, Washington, were alleged.
Four alternative damages theories were presented, ranging in amounts from $53
million to $86 million.
In January 1986, the District Court granted partial summary judgment and
dismissed some of WPPSS' claims. After a trial in June 1986, and a jury verdict
favorable to the company, the Court entered final judgment dismissing all the
claims of WPPSS against the Company. WPPSS filed a notice of appeal to the
United States Court of Appeals for the Ninth Circuit. In May 1989, the Court of
Appeals affirmed the judgment of the District Court that the company was not
liable for breach of
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<PAGE>
Item 1. Financial Statements (Continued)
Note C. Contingencies (Continued)
warranties in connection with its construction of the retrofit of the
containment vessel at Nuclear Unit #2, Hanford, Washington. However, the Court
of Appeals remanded the case to the District Court for a determination of
whether WPPSS had released its claims against the Company for breach of contract
with respect to the Company's retrofit contract.
After several preliminary rulings in 1990 in favor of the Company, the
District Court entered an order dismissing WPPSS' complaint with prejudice on
May 1, 1991.
In an order filed January 26, 1993, the United States Court of Appeals
affirmed the judgment of the District Court in part, but reversed and again
remanded the case to the District Court for determination of whether WPPSS had
released its claims against the Company for breach of contract with respect to
the retrofit contract, including its original claims for consequential damages.
The District Court has scheduled a jury trial to commence in June of 1994.
In an order filed October 21, 1993, the District Court ruled that the June 1994
trial will be bifurcated; the trial will determine whether WPPSS reserved its
breach of contract claims, without any determination of the amount of WPPSS'
damages, or the extent of the Company's liability, if any.
Although counsel is unable to predict with certainty the ultimate outcome,
management and counsel believe the Company has significant and meritorious
defenses to any claims, and intend to pursue them vigorously.
The Company's operations, including idle facilities and other property, are
subject to and affected by federal, state and local laws and regulations
regarding the protection of the environment. The Company accrues for
environmental costs where such obligations are either known or considered
probable and can be reasonably estimated.
The Company is participating as a potentially responsible party (PRP) at
several different sites pursuant to proceedings under the Comprehensive
Environmental Response, Compensation and Liability Act (CERCLA). Other parties
have also been identified as PRP's at the sites. Investigative and/or remedial
activities are ongoing. The Company believes, based upon information presently
available to it, that such future costs will not have a material effect on the
Company's financial position, results of operations or liquidity. However, the
imposition of more stringent requirements under environmental laws or
regulations, new developments or changes regarding site cleanup costs or the
allocation of such costs among PRP's or a determination that the Company is
potentially responsible for the release of hazardous substances at sites other
than those currently identified, could result in additional costs.
Management believes it is improbable that the ultimate outcome of any matter
currently pending against the Company will materially affect the financial
position of the Company; accordingly, no provision for such liability has been
recorded in the accompanying financial statements.
Note D. Commitments
The Company entered into agreements with members of the Jackson family,
principal stockholders, to purchase shares of the Company's Common Stock upon
the stockholder's death. The price for such purchases will be the closing
price of the Common Stock on the American Stock Exchange on the date of such
stockholder's death. A portion of this outstanding commitment for 44,800 shares
is now fixed at $1.4 million as of January 10, 1994. The remaining outstanding
commitment for 80,000 shares was $2.5 million based on the closing sale price of
the Company's Common Stock on March 31, 1994.
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<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
RESULTS OF OPERATIONS
Three months ended March 31, 1994 compared with three months ended March 31,
1993.
The Company reported net income of $370,000 or $.16 per share on earned revenue
of $98.5 million for the quarter ended March 31, 1994. These results compare
with a net loss of $879,000 or $.38 per share on earned revenue of $81.9 million
for the quarter ended March 31, 1993.
During the first quarter of 1994 increases in earned revenue and significant
improvements in operating profitability were realized by the Company's
Engineered Construction Division and Steel Service Centers business segments
compared with the same period in 1993.
The Steel Construction Division reported slight improvements in earned revenue
and profitability while CVI, as expected, experienced decreases in both earned
revenue and profitability for the three months ended March 31, 1994 when
compared with the three months ended March 31, 1993.
New awards of $94.8 million were reported for the period ended March 31, 1994 as
compared to $138.3 million which included a $68 million award for the McCormick
Place Exhibition Center for the quarter ended March 31, 1993. The Company's
backlog was $186.1 million on March 31, 1994 compared to $189.8 million for the
year ended December 31, 1993.
LIQUIDITY AND CAPITAL RESOURCES
During the first quarter of 1994, the Company's primary source of liquidity was
cash and cash equivalents and borrowings under the revolving credit commitment,
which sources financed working capital requirements, capital expenditures and
dividends. On March 31, 1994, cash and cash equivalents were $1.8 million
compared with $15.9 million on December 31, 1993.
For the three months ended March 31, 1994, cash and cash equivalents decreased
$14.2 million primarily due to a decrease in accounts payable of $13.7 million.
Working capital remained relatively unchanged at $50.5 million at March 31, 1994
when compared with $50.3 million at December 31, 1993. Capital expenditures
were $737,000 compared with $769,000 for the three months ended March 31, 1994
and 1993, respectively. In 1994, capital expenditures were primarily for
computer equipment and construction equipment while expenditures in 1993 were
primarily for plant and construction equipment. Total capital expenditures for
the year ending December 31, 1994, which are expected to be internally financed,
should approximate $5.0 million. In addition, the Company intends to continue
to pursue acquisition opportunities closely aligned with the existing core
businesses.
The Company paid total cash dividends of $523,000 or $.225 per common share in
the first quarter of 1994. Payment of future dividends will be evaluated based
upon business conditions.
Under cash flows from financing activities, the Company borrowed $6.0 million
from the revolving credit commitment, to cover short-term requirements during
the quarter ended March 31, 1994. The Company reduced these obligations, by the
same amount, utilizing cash and cash equivalents during the period ended March
31, 1994.
The Company has on hand and access to sufficient sources of funds to meet its
anticipated operating, expansion and capital needs. These sources include cash
on hand and a $30 million unsecured revolving credit facility which matures on
December 31, 1995. This facility contains an annual option to renew for an
additional one-year period, subject to lender approval.
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<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations (Continued)
As described in the Notes to Consolidated Financial Statements under the caption
Commitments, the Company has an outstanding commitment to purchase certain
shares of its Common Stock from members of the Jackson family, principal
stockholders, upon the stockholder's death. As of January 10, 1994, a portion
of this outstanding commitment for 44,800 shares is now fixed at $1.4 million.
The remaining outstanding commitment for 80,000 shares was $2.5 million based on
the closing sale price of the Company's Common Stock on March 31, 1994.
As described under the caption Contingencies, the WPPSS jury trial is scheduled
to commence in June of 1994.
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<PAGE>
Part II - Other Information
Item 1. Legal Proceedings
Refer to Part I Item 1, "Note C - Contingencies" of the Notes to
Consolidated Financial Statements for information, which information is
incorporated herein by reference.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 11.1 - Computation of earnings per share for the three months
ended March 31, 1994 and 1993.
(b) Reports on Form 8-K.
There have been no reports on Form 8-K filed by the Company during the
quarter ended March 31, 1994.
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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.
Pitt-Des Moines, Inc.
-----------------------
(Registrant)
Principal Executive Officer:
Date: May 13, 1994 By: /s/ W. W. McKee
----------------
W. W. McKee
(President and
Chief Executive Officer)
Principal Financial Officer:
Date: May 13, 1994 By: /s/ R. A. Byers
---------------
R. A. Byers
(Vice President
Finance and Treasurer)
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EXHIBIT INDEX
Exhibit
Number Page
- - ------- ----
11.1 Computation of earnings per share for the three
months ended March 31, 1994 and 1993 14
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Exhibit 11.1
PITT-DES MOINES, INC.
Computation of Earnings Per Share
(Unaudited)
<TABLE>
<CAPTION>
For the three months ended
March 31,
------------------------------------------------
1994 1993
---------------------- -----------------------
<S> <C> <C> <C> <C>
PER SHARE AMOUNTS
Net income (loss) reported $ .16 $ (.38)
======= =======
PRIMARY EARNINGS PER SHARE
Average shares outstanding 2,323,978 2,322,645
Dilutive options 3,683 8,006
---------- ---------
2,327,661 2,330,651
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Net income (loss) per share $ .16 $ (.38)
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FULLY DILUTED EARNINGS PER SHARE
Average shares outstanding 2,323,978 2,322,645
Dilutive options 3,683 8,006
--------- ---------
2,327,661 2,330,651
========= =========
Net income (loss) per share $ .16 $ (.38)
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</TABLE>
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