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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [Fee Required]
For the fiscal year ended December 31, 1993
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [No Fee Required]
For the transition period from to
COMMISSION FILE NUMBER 1-5259
PITT-DES MOINES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
PENNSYLVANIA 25-0729430
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
3400 GRAND AVENUE, PITTSBURGH, PENNSYLVANIA 15225
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
412-331-3000
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
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TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED
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Common Stock, no par value American Stock Exchange
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SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: NONE
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, and (2) has been subject
to such filing requirements for the past 90 days. Yes x No
----- -----
Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will not
be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part
III of this Form 10-K [x]
The aggregate market value of the registrant's voting stock held by
non-affiliates was at least $37,436,000 on February 28, 1994, based
upon the average between the highest and lowest sales prices of the
registrant's Common Stock as reported in the consolidated transactions
reporting system.
Common Stock outstanding as of February 28, 1994--2,323,978 shares.
Documents Incorporated By Reference:
Certain portions of the documents of the Registrant listed below
have been incorporated by reference into the indicated parts of this
Annual Report on Form 10-K:
Notice of Annual Meeting of Stockholders and Proxy Statement anticipated
to be dated April 8, 1994............................Part III, Items 10-13
Part IV, Item 14
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PART I
ITEM 1. BUSINESS
Pitt-Des Moines, Inc. and its subsidiaries (PDM or the Company) began
conducting business in 1892 and was incorporated in Pennsylvania on February 14,
1916. The Company's principal executive offices are located at 3400 Grand
Avenue, Pittsburgh, Pennsylvania 15225, telephone number (412) 331-3000.
The Company is comprised of four business segments: Engineered Construction
Division, Steel Construction Division, Steel Service Centers and CVI
Incorporated. Each segment is a profit center except the Steel Construction
Division business segment which is divided into four profit centers as noted
below.
A summary of the Company's products and services by business segment is set
forth below. Additional business segment information is included in Part II of
this Form 10-K.
ENGINEERED CONSTRUCTION DIVISION
Beginning in 1994, the Engineered Construction Division organized into three
profit centers: Water, Industrial, and International and Technology. These
market groups provide:
a) The capability to design, fabricate and erect many types of facilities and
structures; services offered include research and design, material
selection, preparation of detailed drawings, shop fabrication, field
erection and subcontract management.
b) The capability to design, fabricate and erect elevated and flat bottom
water storage tanks for water service and fire protection requirements and
treatment tanks for the purification, filtration and softening of water.
The principal purchasers of the Company's water storage tanks and
wastewater treatment facilities are government agencies and private
industry.
c) The capability to design, fabricate and erect oil and chemical storage
tanks used for storing crude oil, petroleum, gasoline and other petroleum
derivatives and chemicals. The Company has developed and patented certain
systems, parts and sealing devices which help to reduce the hazards of fire
and explosion from the stored products, as well as to decrease air
pollution and vapor loss. Additionally, the Company fabricates and erects
various vessels used in the processing of a variety of oil and chemical
products. The oil and chemical tanks, sealing devices and process vessels
are produced principally for the petroleum, petrochemical, chemical and
food processing industries as well as government agencies.
d) The capability to fabricate and erect miscellaneous plate work which
includes penstocks and breechings, stacks and stack liners, scrubbers,
absorbers, flow conductors and heat exchangers for utilities and private
industry.
e) The capability to design, fabricate and erect high speed wind tunnels,
altitude test chambers, hydrospace test facilities and high vacuum and
thermal test facilities for use in connection with energy, aerospace and
defense research.
f) The capability to design and build supercritical fluid extraction
facilities for the food processing industry.
g) The capability to design and build anaerobic digesters for the wastewater
treatment industry.
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ITEM 1. BUSINESS (CONT'D)
STEEL CONSTRUCTION DIVISION
a) The capability to fabricate and erect structural steel for commercial,
institutional and public sector buildings for government agencies, private
developers and general contractors.
b) The capability to fabricate structural steel for new bridges and fabricate
and erect structural steel for bridge rehabilitation for government
agencies and general contractors.
STEEL SERVICE CENTERS
The operation of six steel service centers and three culvert facilities
located in the west and midwest regions of the United States. The Company
processes and distributes a general line of carbon steel products including
plates, sheets, structural shapes, bars, tubes, pipe and other miscellaneous
metal products. The Company also manufactures and markets corrugated metal
culvert pipe and accessories. The Steel Service Centers' primary markets
include steel fabricators, original equipment manufacturers and the mining,
logging, agricultural and road construction industries.
CVI INCORPORATED
a) The capability to design, fabricate and construct low temperature and
cryogenic systems and storage vessels for various liquefied gases such as
anhydrous ammonia, propane, natural gas and elements of air used primarily
in the chemical, petrochemical, natural gas and aerospace industries.
b) The capability to design and manufacture cryogenic pumps, cryogenic valves,
vacuum seal-off valves, cryopumps, nuclear spares, vacuum insulated pipe
and other specialty cryogenic components.
On July 11, 1993, the Company's Des Moines Steel Construction plant, along
with the headquarters office building for the Engineered Construction Division,
both located in Des Moines, Iowa, were severely damaged by the devastating flood
in the Midwest. The Company has completed the flood related cleanup of both
facilities and is continuing to evaluate the future costs of the flood. All
work which was in process at the Des Moines Steel Construction plant was
completed or transferred to other locations while the Company evaluates
alternatives for the facility. The headquarters personnel for the Engineered
Construction Division continue to operate from temporary quarters at that
Division's plant in Clive, Iowa.
On November 3, 1993, an accident occurred at the construction site of a new
United States Post Office in Chicago where the Company's Steel Construction
business segment is in the process of fabricating and erecting the steel
structure of the building. Two men were killed and five seriously injured when
a portion of the erected steel collapsed. An investigation of the cause of the
accident is being conducted by the Federal Occupational Safety and Health
Administration.
Several large companies compete nationally in some product lines with the
Company and there are several local and regional companies that compete in
certain product lines in specific geographic areas. The majority of the
Company's business is secured through open competitive
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ITEM 1. BUSINESS (CONT'D)
bidding or through direct negotiations with industry or government agencies.
Competition is based primarily on performance including the ability to provide
design, engineering and on-site field construction services in a cost-effective,
timely manner. The Steel Service Centers' volume of business is based on the
price, delivery and credit terms, and first stage preprocessing operations
offered to its customers as well as its reputation.
Earned revenue was $354 million in 1993, compared with $383 million in 1992
and $392 million in 1991. For further financial information refer to pages 14
through 29.
The principal raw materials essential to the Company's business are steel,
alloys and other metal plates and structural sections. The Company procures
these raw materials from various domestic and foreign sources including, the
mills of USX Corporation, Bethlehem Steel Corporation, Northwestern Steel and
Wire Company, Nucor Steel, British Steel and Mitsubishi International
Corporation.
The Company has a license and technical assistance agreement with Roediger, a
German corporation, which gives the Company exclusive rights in North America
and other selected countries worldwide to use the Roediger technology, a process
which utilizes anaerobic digestion in the treatment of wastewater. Revenues to
date from this technology have not been material to the Company.
Some components of the other products made and erection techniques used by the
Company are covered by patents owned or licensed by the Company. None of these
are deemed to be material to the Company from an overall financial viewpoint.
The Company had a backlog of uncompleted contracts of $190 million on December
31, 1993 compared to $142 million on December 31, 1992. Approximately 5 percent
of the backlog on December 31, 1993 is not expected to be completed during 1994.
Factors such as the type and scope of operations in progress at any given
time, including weather conditions at field sites, create fluctuations in the
employment level at PDM. On December 31, 1993, the Company employed 1,987
persons, of which 674 were salaried personnel and 1,313 were hourly personnel.
International sales during 1993 were minimal as the Company continues to
concentrate on a few selected foreign projects and to negotiate additional
cooperation agreements which allow for the supply of experience and technology
without incurring overseas, on-site risk.
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ITEM 2. PROPERTIES
Operations of the Company are conducted at both owned and leased properties.
In addition, certain owned properties of the Company are leased to third party
tenants. The following table indicates each of the Company's facilities in the
United States by: segment, location, year operations began, approximate floor
space and acreage owned or leased on December 31, 1993:
<TABLE>
<CAPTION>
YEAR FLOOR
OPERATIONS SPACE LAND
LOCATION BEGAN SQ. FT. ACREAGE
<S> <C> <C> <C>
ENGINEERED CONSTRUCTION DIVISION
Clive, Iowa 1955 158,000 34
Franklin, Tennessee 1977 28,220 6
Fresno, California 1963 52,140 25
Provo, Utah 1959 154,950 15
Warren, Pennsylvania 1959 125,960 13
Pittsburgh, Pennsylvania 1908 98,776 20
STEEL CONSTRUCTION DIVISION
Wausau, Wisconsin 1991 164,580 36
Chicago, Illinois 1987 520,000 24
Stockton, California 1987 136,000 30
STEEL SERVICE CENTERS
Stockton, California 1967 175,010 16
Cedar Rapids, Iowa 1976 27,200 9
Fresno, California 1963 62,640 10
Santa Clara, California 1947 56,690 6
Spanish Fork, Utah 1977 18,780 7
Sparks, Nevada 1974 29,240 6
Tualatin, Oregon 1973 27,100 16
Arlington, Washington (4) 1993 19,480 11
CVI INCORPORATED
Hilliard, Ohio 1971 152,000 20
Costa Mesa, California (1) 1981 22,000 2
IDLE HOLDINGS, INCLUDING PLANT AND PROPERTY (2)
Baltimore, Maryland 1960 -- 41
Des Moines, Iowa 1900 338,250 25
Lubbock, Texas (3) 1979 30,400 2
Pittsburgh, Pennsylvania 1908 110,516 10
Sacramento, California 1966 -- 28
</TABLE>
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(1) Company leased facility from outside third party.
(2) Company pursues the sale or development of all idle facilities and
regularly evaluates similar opportunities for facilities not fully
utilized.
(3) Company is leasing facility to a third party with a purchase option which
expires on December 31, 1995.
(4) Company leases land from outside third party. Lease will expire January
31, 2003.
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<PAGE>
ITEM 2. PROPERTIES (CONT'D)
The Company also has a 50 percent ownership in a joint venture, PDM Saudi
Arabia, Ltd., which operates a heavy steel fabrication and machining facility in
Saudi Arabia.
All significant properties are utilized by the Company's business segments.
The Company's production capacity is adequate for its present needs. The
Company believes that its properties have been adequately maintained, are
generally in good condition and are suitable for the Company's business as now
conducted.
ITEM 3. LEGAL PROCEEDINGS
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 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 protection of the environment. The Company accrues for environmental
costs where such obligations are either known or considered probable and can be
reasonably estimated.
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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 Company's consolidated financial statements in the Annual
Report.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
EXECUTIVE OFFICERS OF THE REGISTRANT
Information regarding executive officers of the Registrant is presented in
Part III following and incorporated herein by reference.
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PART II
ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The Company's common stock is traded on the American Stock Exchange under the
symbol "PDM". The following is the range of high and low sales prices and
dividends paid per share for fiscal 1993 and 1992 by quarters.
<TABLE>
<CAPTION>
Price Range
----------------- DIVIDENDS
HIGH LOW PER SHARE
1993 ------- ------- ------------
<S> <C> <C> <C>
First Quarter $ 37-1/2 $ 32-1/2 $.22-1/2
Second Quarter 33 24 .22-1/2
Third Quarter 30-7/8 26 .22-1/2
Fourth Quarter 28-3/4 24-1/2 .22-1/2
--------
$ .90
1992 ========
First Quarter $ 41-1/2 $ 36 .22-1/2
Second Quarter 37-3/4 34-1/2 .22-1/2
Third Quarter 38 34-1/4 .22-1/2
Fourth Quarter 37-1/4 31-1/2 .22-1/2
--------
$ .90
========
</TABLE>
On February 28, 1994, there were 2,323,978 shares outstanding and approximately
462 stockholders of record of the Company's Common Stock.
ITEM 6. SELECTED FINANCIAL DATA
The following table summarizes information with respect to the operations of
the Company.
<TABLE>
<CAPTION>
(Dollars in thousands, except per share amounts) 1993 1992 1991 1990 1989
- ------------------------------------------------ -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
OPERATING PERFORMANCE
Earned Revenue $354,347 $382,895 $392,473 $368,164 $361,484
Income (loss) from operations (2,018) 6,274 11,661 13,613 5,577
Net income 1,038 4,900 7,853 8,427 5,003
Net income per common share .45 2.02 3.19 3.42 2.01
FINANCIAL POSITION
Total assets $177,803 $166,074 $176,001 $167,915 $156,603
Long-term debt - - 2,135 9,926 13,070
Redeemable preferred stock - - - - 1,050
Stockholders' equity 88,473 89,678 91,512 85,627 79,373
OTHER INFORMATION
For the year:
Cash provided (utilized) by operations $ (3,609) $ 21,594 $ 13,955 $ 23,388 $ 5,775
Depreciation expense 4,777 4,933 4,806 4,220 4,449
Capital expenditures 4,100 4,672 4,503 5,863 7,575
Dividends per common share .90 .90 .82-1/2 .90 .70
At year end:
Book value per common share $ 38.07 $ 38.63 $ 37.36 $ 34.97 $ 32.44
Employees 1,987 2,066 2,285 2,297 2,059
Note: Refer to the Contingencies and Commitments notes to the consolidated financial statements which are included in Part II
of this Form 10-K.
</TABLE>
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
The Company realized net income of $1.0 million in 1993 compared with $4.9
million in 1992 and $7.9 million in 1991. The related earnings per share were
$.45 in 1993 compared with $2.02 in 1992 and $3.19 in 1991. Earned revenue
decreased 7.5 percent in 1993 compared with 1992 and also decreased 2.4 percent
in 1992 compared with 1991. The Company normally lags the general economy and as
a result the Company's overall financial performance in 1993 was still affected
by the recession.
ENGINEERED CONSTRUCTION DIVISION
Throughout 1993 and 1992, the Engineered Construction Division faced poor
economic conditions including lower housing starts, municipal funding restraints
and lack of capital spending. This resulted in declines in both earned revenue
and profitability realized by the Engineered Construction Division in 1993
compared with 1992 and 1991.
This Division downsized its field, plant and office personnel to address these
market conditions.
Earned revenue for this Division was $128.4 million in 1993 compared with
$187.9 million and $199.6 million in 1992 and 1991, respectively. After
profitability of $12.8 million in 1991 and $6.0 million in 1992, income from
operations decreased $7.7 million, for a loss of $1.7 million in 1993. New
awards were $160.3 million in 1993 compared with $138.8 million in 1992 and
$205.4 million in 1991.
In 1993, capital expenditures of $882,000 were primarily for purchase of plant
and construction equipment. Capital expenditures of $1.6 million and $2.0
million in 1992 and 1991, respectively, were for the purchase of construction
equipment and computer aided design (CAD) engineering equipment.
STEEL CONSTRUCTION DIVISION
Steel Construction Division's earned revenue contributed approximately 27
percent to consolidated earned revenue in 1993. In 1993, earned revenue for
this segment was $95.8 million compared with $81.6 million and $93.7 million in
1992 and 1991, respectively. Income from operations in 1993 was approximately
level with 1992 although a charge of $2.0 million was recorded in 1993 in order
to provide for insurance deductibles relating to the Post Office project in
Chicago. PDM may be responsible for future uninsured costs relating to this
accident. The Company believes these uninsured costs would not have a material
adverse effect on the financial position of the Company. In 1992, income from
operations, adversely impacted by the recession, was $395,000 compared with $1.5
million in 1991.
In 1993, the increase in earned revenue compared with 1992 was primarily due
to the substantial completion of the United States Post Office project in
Chicago.
In 1992, the decrease in earned revenue and income from operations as compared
with 1991 was due to a continued downturn in the commercial high-rise building
market. Bridge market activity was also restrained during 1993 and 1992 due to
the federal government withholding release of funds from the Federal Highway
Trust Fund and the lack of state matching funds.
New awards were $121.3 million in 1993 compared with $98.9 million in 1992 and
$81.9 million in 1991. In 1993, the Company was awarded a $68 million contract
for the McCormick Place Exhibition Center located in Chicago. This award
continues to demonstrate PDM's success in
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competing in the public sector building market. Although this award is
positive, the market conditions experienced by this business segment during 1992
and 1993 are expected to continue into 1994.
Capital expenditures were $1.5 million in 1993 compared with $1.8 million and
$1.1 million in 1992 and 1991, respectively. During the last three years, a
significant portion of capital expenditures were for purchases of plant and
construction equipment. In 1992 and 1991, the Chicago facility was renovated to
expand its structural and bridge fabrication capabilities.
STEEL SERVICE CENTERS
PDM's Steel Service Centers represented in 1993 approximately 28 percent of
the Company's consolidated earned revenue. Earned revenue was $99.5 million in
1993 compared with $85.5 million in 1992 and $77.1 million in 1991.
During 1993 and 1992, earned revenue increased 16 percent and 11 percent,
respectively, as the Steel Service Centers increased actual tons shipped and
market share. The increase in earned revenue was primarily due to increased
marketing efforts. Income from operations in 1993 was approximately level with
the prior year. Operating profits increased 33 percent to $5.0 million in 1992
compared with $3.8 million in 1991, primarily the result of increased volume.
This business segment expects to continue its excellent performance in 1994
despite the competitive market environment.
Capital expenditures were $1.6 million in 1993 compared with $1.1 million and
$1.3 million in 1992 and 1991, respectively. In 1993, Steel Service Centers
purchased various first-stage processing machinery and also upgraded its
delivery fleet. In 1992 and 1991, capital expenditures were primarily used to
finance expansion projects at the various plant facilities.
CVI INCORPORATED
CVI Incorporated has averaged less than 10 percent of the Company's
consolidated earned revenue over the last three years. Earned revenue in 1993
was $30.6 million compared with $27.9 million and $22.1 million in 1992 and
1991, respectively. Income from operations, adversely impacted by the
cancellation of Superconducting Super Collider (SSC), was $671,000 in 1993
compared with $1.6 million in 1992 and $326,000 in 1991.
In 1992, earned revenue increased 26 percent over 1991 due to a higher volume
of systems projects. The increase in earned revenue was the result of increased
demand for helium refrigeration systems generated by superconducting
applications and programs. This increase, along with higher margins on CVI's
standard products, significantly improved income from operations in 1992.
New awards for CVI were $20.7 million in 1993 compared with $32.0 million in
1992 and $30.2 million in 1991. New awards decreased in 1993 due to the
uncertainty of funding for superconducting applications.
Capital expenditures averaged $142,000 over the last three years.
OTHER
Corporate unallocated expenses, consisting primarily of salaries, benefits,
outside professional services, taxes and insurance were $6.5 million in 1993
compared with $6.7 million in 1992 and 1991.
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In 1993, the Company's interest income was $540,000 compared with $688,000 in
1992 and $1.7 million in 1991. Interest income decreased significantly in 1992
compared with 1991 due to a lower level of interest earning funds and a
reduction in average interest rates.
Interest expense has steadily decreased over the last three years to $248,000
in 1993 from $579,000 in 1992 and $1.2 million in 1991. The reduction in
interest expense is due to a decrease in the Company's total debt obligations of
$9.3 million over the last three years. The Company had no debt obligations on
December 31, 1993. The Company's total debt obligations were $875,000 on
December 31, 1992 compared with $9.3 million on December 31, 1991. Interest
expense in 1993 includes $200,000 relating to possible additional tax
assessments.
The gain on the sale of assets was $3.6 million in 1993 compared with $930,000
in 1992 and $765,000 in 1991. In 1993, the Company realized gains on the sale
of idle properties compared with gains on the sale of foreign marketable
securities in 1992 and 1991.
Net miscellaneous income was $10,000 in 1993, $290,000 in 1992 and $62,000 in
1991. The increase in 1992 was primarily due to an increase in dividend income
associated with a joint venture company.
The effective income tax rate was 45 percent in 1993, compared with 36 percent
in 1992 and 40 percent in 1991. In 1993, the effective tax rate was adversely
impacted as a result of foreign taxes of $81,000 with no corresponding tax
credit while 1992 was favorably impacted by the realization of investment tax
credit of $142,000.
The Revenue Reconciliation Act of 1993 did not have a material effect on the
consolidated financial position or results of operations.
During the first quarter of 1993, the Company adopted Statements of Financial
Accounting Standards No. 106, "Employees' Accounting for Postretirement Benefits
Other Than Pensions" (SFAS No. 106) and No. 109, "Accounting for Income Taxes"
(SFAS No. 109). The adoption of these accounting changes did not have a
material impact on the Company's financial position or results of operations.
In 1994, the Company will adopt the Statement of Financial Accounting
Standards No. 112, "Employers' Accounting for Postemployment Benefits" (SFAS No.
112). The Company has completed a preliminary assessment of the impact of this
accounting change and does not expect it to have a material impact on the
Company's financial position or results of operations.
In recognition of the current interest and inflation rate environment as of
December 31, 1993, the company adjusted the discount rate and the rate of salary
increase assumptions used in the determination of its benefit obligations from
8.9 percent to 7.5 percent and 6.5 percent to 6.0 percent, respectively. It is
estimated that these changes will increase benefit expense for 1994 as compared
to 1993 approximately $600,000.
The Company's operations, including idle facilities and other property, are
subject to federal, state and local laws and regulations regarding 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 has been notified it is a potentially responsible party (PRP) at
several waste disposal sites 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.
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<PAGE>
The Company believes, based upon the information presently available to it,
that such costs will not have a material adverse 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 in 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 waste or pollutants at sites other
than those currently identified, could result in additional costs.
LIQUIDITY AND CAPITAL RESOURCES
During 1993, the Company's primary sources of liquidity included cash provided
by investing activities and cash on hand. These sources financed working
capital, capital expenditures, and the payments of debt obligations and
dividends. On December 31, 1993, cash and cash equivalents were $15.9 million
compared with $19.9 million and $17.2 million on December 31, 1992 and 1991,
respectively.
In 1993, the Company decreased cash and cash equivalents by $4.0 million.
This decrease resulted from $3.6 million utilized by operations, $3.1 million
utilized for financing activities offset by $2.7 million provided by investing
activities. Working capital remained relatively unchanged.
Capital expenditures during 1993 were $4.1 million compared with $4.7 million
and $4.5 million during 1992 and 1991, respectively. In 1993, capital
expenditures were primarily for plant and construction equipment in addition to
the purchase of Cascade Culvert Corp.'s assets. Capital expenditures in 1994,
which are expected to be financed by operations, should approximate $5.0
million. In addition, the Company intends to continue to pursue acquisition
opportunities closely aligned with its existing core businesses.
During 1993, the Company's total debt of $875,000 was paid.
The Company paid total cash dividends of $.90 per common share in 1993. On
January 20, 1994, the Board of Directors declared a $.22-1/2 cash dividend per
common share for the first quarter of 1994. The payment of future dividends
will be evaluated based on business conditions.
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. On December 31, 1993,
$14.9 million of this facility was committed to support stand-by letters of
credit. The Company expects that it will have to borrow under the credit
facility for working capital requirements in 1994.
The Company is currently incurring costs related to the Midwest flood. At
December 31, 1993, actual flood related costs were $5.7 million and future costs
are estimated to be $4.3 million. The total cost of $10.0 million has been
reimbursed under the Company's insurance policy.
As described in the Notes to Consolidated Financial Statements under the
caption Commitments, the Company has an outstanding commitment to purchase
124,800 shares of its Common Stock from certain members of the Jackson family,
principal stockholders, upon the stockholder's death. The outstanding
commitment for these shares was $3.3 million based on the closing stock price of
the Common Stock on December 31, 1993.
Inflation and changing prices did not significantly impact the Company during
the last three years.
-12-
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA
REPORT OF INDEPENDENT AUDITORS
STOCKHOLDERS AND BOARD OF DIRECTORS
PITT-DES MOINES, INC.
We have audited the accompanying consolidated statements of financial
condition of Pitt-Des Moines, Inc. and subsidiaries as of December 31, 1993 and
1992, and the related consolidated statements of income, stockholders' equity,
and cash flows for each of the three years in the period ended December 31,
1993. Our audits also included the financial statement schedules listed in the
Index at Item 14(a). These financial statements and schedules are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements and schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
Pitt-Des Moines, Inc. and subsidiaries as of December 31, 1993 and 1992, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended December 31, 1993, in conformity with generally
accepted accounting principles. Also, in our opinion, the related financial
statement schedules, when considered in relation to the basic financial
statements taken as a whole, present fairly in all material respects the
information set forth therein.
As discussed in the notes to the consolidated financial statements, Washington
Public Power Supply System (WPPSS) brought a complaint against the Company in
1984 seeking unspecified damages for contract work completed in a prior year.
The ultimate outcome of this matter is still uncertain and cannot be presently
determined. Accordingly, no provision for any liability that may result has
been made in the financial statements.
/s/ ERNST & YOUNG
------------------
ERNST & YOUNG
Pittsburgh, Pennsylvania
March 3, 1994
-13-
<PAGE>
PITT-DES MOINES, INC.
CONSOLIDATED STATEMENTS OF INCOME
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
<TABLE>
<CAPTION>
1993 1992 1991
------------- ------------- -------------
<S> <C> <C> <C>
Earned revenue $354,347,328 $382,894,564 $392,473,057
Cost of earned revenue 318,624,570 338,229,852 343,720,309
------------ ------------ ------------
GROSS PROFIT FROM OPERATIONS 35,722,758 44,664,712 48,752,748
Selling, general and administrative expenses 37,740,679 38,390,977 37,092,147
------------ ------------ ------------
INCOME (LOSS) FROM OPERATIONS (2,017,921) 6,273,735 11,660,601
Other income (expense):
Interest income 540,008 688,204 1,725,874
Interest expense (248,347) (579,328) (1,202,684)
Gain on sale of assets 3,595,414 930,017 764,749
Miscellaneous, net 9,908 289,656 61,629
------------ ------------ ------------
3,896,983 1,328,549 1,349,568
------------ ------------ ------------
INCOME BEFORE INCOME TAXES 1,879,062 7,602,284 13,010,169
Income tax expense 841,121 2,702,271 5,156,992
------------ ------------ ------------
NET INCOME $ 1,037,941 $ 4,900,013 $ 7,853,177
============ ============ ============
Net income per common share $.45 $2.02 $3.19
============ ============ ============
Average common shares outstanding 2,323,645 2,414,670 2,449,018
============ ============ ============
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
</TABLE>
-14-
<PAGE>
PITT-DES MOINES, INC.
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1993 AND 1992
<TABLE>
<CAPTION>
ASSETS 1993 1992
------------ ------------
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 15,946,321 $ 19,944,225
Accounts receivable 60,782,038 55,056,020
Inventories 18,119,248 14,779,435
Costs and estimated profits in excess of billings 28,618,657 26,580,223
Deferred income taxes 7,938,680 5,222,747
Prepaid expenses 1,595,318 298,611
------------ ------------
TOTAL CURRENT ASSETS 133,000,262 121,881,261
INVESTMENTS AND OTHER ASSETS 6,619,911 4,670,923
PROPERTY, PLANT AND EQUIPMENT
Land 7,350,952 8,429,148
Buildings 30,455,806 32,796,911
Machinery and equipment 59,936,962 58,928,791
------------ ------------
97,743,720 100,154,850
Allowances for depreciation (59,560,936) (60,632,634)
----------- ------------
NET PROPERTY, PLANT AND EQUIPMENT 38,182,784 39,522,216
------------ ------------
$177,802,957 $166,074,400
============ ============
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
</TABLE>
-15-
<PAGE>
PITT-DES MOINES, INC.
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1993 AND 1992
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY 1993 1992
------------- -------------
<S> <C> <C>
CURRENT LIABILITIES
Accounts payable $ 41,325,840 $ 38,354,217
Accrued compensation, related taxes and benefits 9,082,627 7,097,577
Other accrued expenses 3,963,152 3,391,173
Accrued expenses related to flood 4,272,049 -
Billings in excess of costs and estimated profits 10,319,772 9,892,479
Income taxes 1,149,057 456,006
Casualty and liability insurance 12,608,799 11,520,669
Current portion of long-term obligations - 875,000
------------ ------------
TOTAL CURRENT LIABILITIES 82,721,296 71,587,121
DEFERRED INCOME TAXES 5,700,661 3,938,274
MINORITY INTEREST 908,080 870,930
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 33,549,255 33,549,255
Retained earnings 69,055,440 70,314,270
------------ ------------
102,604,695 103,863,525
Treasury stock at cost (1993--658,178 shares;
1992--660,678 shares) (14,131,775) (14,185,450)
------------ ------------
TOTAL STOCKHOLDERS' EQUITY 88,472,920 89,678,075
------------ ------------
$177,802,957 $166,074,400
============ ============
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
</TABLE>
-16-
<PAGE>
PITT-DES MOINES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
<TABLE>
<CAPTION>
1993 1992 1991
------------ ------------ ------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 1,037,941 $ 4,900,013 $ 7,853,177
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 4,776,905 4,933,283 4,806,439
Gain on sale of assets (3,595,414) (930,017) (764,749)
Deferred income taxes (credits) (953,545) (829,232) (911,355)
Minority interest in earnings, net of dividends paid 37,150 46,649 56,060
Other non-cash credits, net (216,249) (882,725) (305,679)
Change in operating assets and liabilities
providing (using) cash:
Accounts receivable (5,387,190) 14,109,751 (2,717,576)
Inventories (2,803,704) (3,377,988) 2,466,477
Prepaid expenses (1,296,707) 1,823,201 (250,604)
Costs, estimated profits and billings, net (1,611,141) 359,113 (1,054,599)
Accounts payable 2,674,338 2,717,015 3,150,476
Accrued liabilities 3,035,118 807,507 1,641,069
Income taxes 693,051 (2,082,137) (13,954)
----------- ------------ ------------
Net cash provided (utilized) by operating activities (3,609,447) 21,594,433 13,955,182
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (4,100,486) (4,672,367) (4,503,303)
Proceeds from sale of assets 4,978,949 1,021,103 841,236
Insurance proceeds from flood damage 10,000,000 - -
Costs incurred to date related to flood damage (5,727,951) - -
Acquisitions, net of cash acquired (1,298,174) - (7,571,460)
Decrease (increase) in short-term investments - 4,017,345 (4,017,345)
Change in investments and other assets (1,122,699) (82,925) (7,713)
----------- ------------ ------------
Net cash provided (utilized) by investing activities 2,729,639 283,156 (15,258,585)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from debt obligations - 9,000,000 -
Payments of debt obligations (875,000) (17,395,000) (7,960,109)
Purchase of treasury stock - (4,615,000) -
Dividends paid (2,091,581) (2,176,563) (2,020,572)
Other (151,515) 57,609 52,313
----------- ------------ ------------
Net cash utilized by financing activities (3,118,096) (15,128,954) (9,928,368)
----------- ------------ ------------
Increase (decrease) in cash and cash equivalents (3,997,904) 6,748,635 (11,231,771)
Cash and cash equivalents at beginning of year 19,944,225 13,195,590 24,427,361
----------- ------------ ------------
CASH AND CASH EQUIVALENTS AT END OF YEAR $15,946,321 $ 19,944,225 $ 13,195,590
=========== ============ ============
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
</TABLE>
-17-
<PAGE>
PITT-DES MOINES, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
<TABLE>
<CAPTION>
TREASURY STOCK
------------------------
RETAINED NUMBER OF
COMMON STOCK EARNINGS COST SHARES
------------ ----------- ------------ ---------
<S> <C> <C> <C> <C>
Balance on December 31, 1990 $33,549,255 $61,704,186 $ (9,626,343) (533,778)
Net income 7,853,177
Cash dividends ($.82-1/2 per share) (2,020,572)
Other 37,889 14,424 800
----------- ----------- ------------ --------
Balance on December 31, 1991 33,549,255 67,574,680 (9,611,919) (532,978)
Net income 4,900,013
Cash dividends ($.90 per share) (2,176,563)
Purchase of treasury stock (4,615,000) (130,000)
Other 16,140 41,469 2,300
----------- ----------- ------------ --------
Balance on December 31, 1992 33,549,255 70,314,270 (14,185,450) (660,678)
Net income 1,037,941
Cash dividends ($.90 per share) (2,091,581)
Other (205,190) 53,675 2,500
----------- ----------- ------------ --------
Balance on December 31, 1993 $33,549,255 $69,055,440 $(14,131,775) (658,178)
=========== =========== ============ ========
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
PITT-DES MOINES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation -- The consolidated financial statements include the
accounts of the Company and its subsidiaries. Intercompany accounts and
transactions are eliminated in consolidation. Certain amounts in the 1991 and
1992 consolidated financial statements and notes to consolidated financial
statements have been reclassified to conform with the 1993 presentation.
Classifications of Current Assets and Liabilities -- The Company includes in
current assets and current liabilities amounts realizable and payable under
contracts which extend beyond one year. Other assets and liabilities are
classified as current or non-current on the basis of expected realization or
payment within or beyond one year, respectively.
Cash and Cash Equivalents -- Cash and cash equivalents are defined as cash and
short-term investments with maturities of three months or less at the time of
acquisition.
Inventories -- Inventories of raw materials and fabricated parts are principally
valued at the lower of last-in, first-out (LIFO) cost or market, except for
certain inventories which are valued at the lower of first-in, first-out (FIFO)
cost or market.
Contract material inventories included in accumulated contract costs are
valued using the specific identification method.
-18-
<PAGE>
Property, Plant and Equipment -- Land, buildings, machinery and equipment are
carried at cost. Buildings, machinery and equipment, including capitalized
leases, are depreciated by accelerated methods.
Revenue Recognition -- The Company follows the percentage of completion method
of reporting income from contracts. This method takes into account the cost,
estimated profit and earned revenue to date on contracts not yet completed.
Revenue recognized is the portion of the total contract price that the man-hours
expended to date bears to the estimated final total man-hours, based on current
estimates of man-hours to complete. Revenue recognition is not related to
progress billings to customers.
Revenues recognized for CVI are measured by the percentage of costs incurred
to date to estimated final costs for each contract. This method is used because
management considers expended costs to be the best available measure of progress
for these contracts.
As long-term contracts extend over one or more years, revisions in estimates
of costs and estimated profits during the course of work are reflected in the
accounting period in which the facts which require the revision become known.
At the time a loss on a contract becomes known, the entire amount of the
estimated ultimate loss is recognized in the financial statements. Revenue from
change orders and claims is recognized when the settlement is probable and the
amount can be reasonably estimated. Contract costs include all direct material,
labor, subcontract costs and those indirect costs related to contract
performance. Costs and estimated profits in excess of billings are classified
as a current asset. Amounts billed in excess of costs and estimated profits are
classified as a current liability.
Income Taxes -- In 1993, the Company adopted Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes" (SFAS No. 109). SFAS No. 109
requires recognition of deferred tax assets and liabilities for the expected
future tax consequences of events that have been recognized in the Company's
financial statements or tax returns.
Net Income per Share of Common Stock -- Earnings per share is based on the
weighted average number of shares outstanding during the year and include the
dilutive effect of the assumed exercise of outstanding stock options, as
computed under the treasury stock method.
ACQUISITIONS
Hartwig Mfg. Corp. -- On July 31, 1991, the Company acquired Hartwig Mfg. Corp.
(HMC), a steel bridge fabricator. The total cost of this acquisition, financed
from the Company's internal cash resources, was $7.7 million. In addition, a
total of $1.1 million will be paid in connection with non-compete agreements,
expiring in July 1997, with two former shareholders of HMC.
Cascade Culvert Corp. -- On November 30, 1993, Oregon Culvert Co., Inc., a
majority-owned subsidiary, acquired the assets and assumed certain liabilities
of Cascade Culvert Corp., a corrugated metal culvert pipe manufacturer. The
total cost of this acquisition was $1.3 million.
These acquisitions were accounted for as purchases and, accordingly, the
acquired assets and liabilities were recorded at their estimated fair value at
the date of their respective acquisitions. Operating results have been included
since acquisition dates but pro forma information has not been presented because
it is immaterial.
-19-
<PAGE>
ACCOUNTS RECEIVABLE
On December 31, 1993 and 1992, accounts receivable included approximately
$15.2 million and $15.1 million, respectively, which have been billed under
retainage provisions in contracts and will become due upon completion of the
contracts. Accounts receivable on December 31, 1993 included approximately $1.1
million which is expected to be collected after December 31, 1994. The
allowance for doubtful accounts was approximately $1.0 million on December 31,
1993 and 1992.
The majority of accounts receivable are from customers in various locations
and industries throughout the United States. The Company maintains adequate
reserves for potential credit losses and such losses have been minimal and
within management's estimates.
INVENTORIES
Inventories aggregating approximately $14.5 million and $11.2 million on
December 31, 1993 and 1992, respectively, are valued at the lower of LIFO cost
or market. If these amounts had been valued on the FIFO method, which
approximates replacement cost, these amounts would have been approximately $13.0
million and $12.5 million higher than reported on December 31, 1993 and 1992,
respectively.
Inventories carried on a FIFO basis were $3.6 million on December 31, 1993 and
1992.
COSTS AND ESTIMATED PROFITS ON UNCOMPLETED CONTRACTS
Costs and estimated profits on uncompleted contracts are summarized as
follows for December 31:
<TABLE>
<CAPTION>
1993 1992
------------- ------------
<S> <C> <C>
Costs incurred on uncompleted contracts $ 413,203,152 $ 457,030,316
Estimated profits 45,266,904 50,842,395
------------- -------------
458,470,056 507,872,711
Billings to date (440,171,171) (491,184,967)
------------- -------------
$ 18,298,885 $ 16,687,744
============= =============
</TABLE>
Costs, estimated profits and billings on uncompleted contracts are included in
the accompanying Consolidated Statements of Financial Condition under the
following captions for December 31:
<TABLE>
<CAPTION>
1993 1992
------------- ------------
<S> <C> <C>
Costs and estimated profits in excess of billings $ 28,618,657 $26,580,223
Billings in excess of costs and estimated profits (10,319,772) (9,892,479)
------------ -----------
$ 18,298,885 $16,687,744
============ ===========
</TABLE>
-20-
<PAGE>
INVESTMENTS AND OTHER ASSETS
Investments and other assets include prepaid pension costs, notes receivable
and foreign marketable equity securities. On December 31, 1993 and 1992, the
Company held 11,000 shares of a foreign marketable equity security at a cost of
$1,162 with a market value of $52,500 as of December 31, 1993. In 1992, the
Company sold 133,100 shares and realized a gain of approximately $970,000.
PENSIONS
The Company has a number of noncontributory defined benefit pension plans
covering most employees. Plans covering salaried employees provide monthly
benefits at retirement age based on the participant's monthly salary and years
of employment. Plans covering hourly employees generally provide benefits of
stated amounts for each year of service although certain of such plans provide
benefits based on the participant's hourly wage rate and years of service. The
plans permit the Company, at any time, to amend or terminate the plans subject
to union approval, if applicable.
The Company's policy is to fund the legal minimum required contributions.
Plan assets on December 31, 1993 consisted primarily of listed stocks, bonds,
investments in pooled funds and group annuity contracts of insurance carriers.
The Company also makes contributions to certain multi-employer defined benefit
pension plans for field union employees. These contributions are determined in
accordance with the provisions of negotiated labor contracts and generally are
based on the number of man-hours worked. Company contributions and cost
recognized for these plans were approximately $521,000, $598,000 and $852,000
for the years ended December 31, 1993, 1992 and 1991, respectively. The
estimated accumulated plan benefits and plan assets for these plans are not
available.
The Company sponsors defined contribution plans which cover nearly all
salaried employees, certain hourly groups in accordance with their union labor
contracts and nearly all non-union field employees. Based upon the plan, the
Company contributions represent either a stated matching percentage of the
participant's basic contribution or a stated rate per hour worked. Company
contributions and cost recognized for these plans were $1.2 million, $1.8
million and $1.6 million for the years ended December 31, 1993, 1992 and 1991,
respectively.
-21-
<PAGE>
Net periodic pension expense (income) for the Company's defined benefit pension
plans include the following components for the years ended December 31:
<TABLE>
<CAPTION>
1993 1992 1991
----------- ----------- ------------
<S> <C> <C> <C>
Service cost-benefits earned during the period $ 1,353,337 $ 1,214,820 $ 1,100,146
Interest cost on projected benefit obligation 3,839,576 3,622,154 3,343,365
Actual return on plan assets (5,894,270) (3,059,245) (10,001,191)
Net amortization, deferral and other 793,922 (2,503,619) 5,311,020
----------- ----------- ------------
Net periodic pension expense (income) $ 92,565 $ (725,890) $ (246,660)
=========== =========== ============
</TABLE>
As a result of restructuring activities and the flood in the Midwest,
curtailment losses of $382,000 are reflected in the net amortization and
deferral component of net periodic pension expense for the year ended December
31, 1993. The following assumptions were used in the determination of net
periodic cost for the years ended December 31:
<TABLE>
<CAPTION>
1993 1992 1991
----- ----- -----
<S> <C> <C> <C>
Discount rate 8.9% 8.9% 8.9%
Rates of increase in compensation levels 6.5% 6.5% 6.5%
Expected long-term rates of return on assets 9.0% 9.0% 9.0%
</TABLE>
In recognition of the current interest and inflation rate environment as of
December 31, 1993, the Company adjusted the discount rate used in the
determination of its benefit obligation to 7.5 percent and the rate of salary
increases to 6.0 percent. The following table sets forth the status of the
Company's defined benefit pension plans:
<TABLE>
<CAPTION>
DECEMBER 31, 1993 DECEMBER 31, 1992
------------------ ------------------
PLANS WHOSE PLANS WHOSE PLANS WHOSE PLANS WHOSE
ASSETS EXCEED ACCUMULATED ASSETS EXCEED ACCUMULATED
ACCUMULATED BENEFITS ACCUMULATED BENEFITS
BENEFITS EXCEED ASSETS BENEFITS EXCEED ASSETS
<S> <C> <C> <C> <C>
Actuarial present value of benefit obligations:
Vested benefit obligation $ 36,239,672 $ 8,729,959 $ 31,470,687 $ 5,191,187
============ ============ ============ ===========
Accumulated benefit obligation $ 37,130,744 $ 9,379,968 $ 32,308,162 $ 5,566,339
============ ============ ============ ===========
Plan assets at fair value $ 51,697,963 $ 6,943,830 $ 50,036,794 $ 5,196,386
Projected benefit obligation (44,543,929) (10,375,100) (38,007,491) (6,179,402)
------------ ------------ ------------ -----------
Plan assets in excess of (less than)
projected benefit obligation 7,154,034 (3,431,270) 12,029,303 (983,016)
Unrecognized net loss (gain) 2,628,690 1,101,955 (2,468,177) (1,084,042)
Unrecognized net (asset) obligation (4,967,955) 107,331 (5,750,497) 266,295
Unrecognized prior service cost 434,241 956,689 639,695 1,029,434
Adjustment to recognize minimum
liability - (1,271,350) - (81,954)
------------ ------------ ------------ -----------
Pension asset (liability) recognized in
Consolidated Statements of Financial Condition $ 5,249,010 $ (2,536,645) $ 4,450,324 $ (853,283)
============ ============ ============ ===========
</TABLE>
-22-
<PAGE>
Effective January 1, 1993, the Company adopted the provisions of Statement of
Financial Accounting Standards No. 106, "Employer's Accounting for
Postretirement Benefits Other Than Pensions" (SFAS No. 106). The Company has
elected to recognize this change in accounting on a prospective recognition
basis utilizing a twenty-year amortization as permitted by SFAS No. 106. The
adoption of SFAS No. 106 did not have a material impact on the Company's
financial position or results of operations.
In 1994, the Company will adopt the Statement of Financial Accounting
Standards No. 112, "Employers' Accounting for Postemployment Benefits" (SFAS No.
112). The Company has completed a preliminary assessment of the impact of this
accounting change and does not expect it to have a material impact on the
Company's financial position or results of operations.
ACCRUED LIABILITIES
On July 11, 1993, the Company's Des Moines Steel Construction plant, along
with the headquarters office building for the Engineered Construction Division,
both located in Des Moines, Iowa, were severely damaged by the devastating flood
in the Midwest. The Company has completed the flood related cleanup of both
facilities and is continuing to evaluate the future costs of the flood. All
work which was in process at the Des Moines Steel Construction plant was
completed or transferred to other locations while the Company evaluates
alternatives for the facility. The headquarters personnel for the Engineered
Construction Division continue to operate from temporary quarters at that
Division's plant in Clive, Iowa.
Actual flood related costs incurred through December 31, 1993 were $5.7
million with estimated future costs of approximately $4.3 million. The total
cost of $10.0 million has been reimbursed under the Company's insurance policy
as of December 31, 1993.
On November 3, 1993, an accident occurred at the construction site of a new
United States Post Office in Chicago where the Company's Steel Construction
business segment is in the process of fabricating and erecting the steel
structure of the building. Two men were killed and five seriously injured when
a portion of the erected steel collapsed. An investigation of the cause of the
accident is being conducted by the Federal Occupational Safety and Health
Administration. The Company and its insurance carriers are assessing the
damages and related policy coverages. Insurance coverages contain various
deductible amounts for which the Company recorded a charge of $2.0 million in
the fourth quarter of 1993 relating to the accident. PDM may be responsible for
future uninsured costs relating to this accident.
EMPLOYEE STOCK OWNERSHIP PLAN
In 1990, the Company established a noncontributory Employee Stock Ownership
Plan (ESOP) which provides salaried employees, who have at least one year of
continuous service, an opportunity to own Company Common Stock and to accumulate
additional retirement benefits. The Company's contributions, whether in cash or
in stock, are determined annually by the Board of Directors in an amount not to
exceed the maximum allowable as an income tax deduction. Company contributions
are 100 percent vested after five years of continuous service. The ESOP
contribution is allocated to the participant's account based upon the actual
salary paid to the participant during that year. The Company's contributions,
recorded as compensation expense, were approximately $543,000, $557,000 and
$520,000 for the years ended December 31, 1993, 1992 and 1991, respectively.
-23-
<PAGE>
LONG-TERM OBLIGATIONS
The Company has an unsecured revolving credit agreement with several banks from
which it may borrow up to $30 million. This agreement matures on December 31,
1995, at which time all borrowings must be repaid in full. This agreement
contains an annual option to renew for an additional one-year period, subject to
lender approval. The agreement provides for various interest rate options at
the Company's election. A commitment fee of one-fourth of one percent per annum
is charged on any unused amount of this revolving credit commitment. This
agreement contains restrictive financial covenants that require minimum levels
of net worth and maintenance of specific financial ratios. On December 31,
1993, $14.9 million of stand-by letters of credit were outstanding under this
agreement.
In December 1993, the Company made a final payment on CVI's revolving credit
and term loan.
The Company made cash payments of interest totaling $385,000 for the year
ended December 31, 1993 and $562,000 and $1.1 million for the years ended
December 31, 1992 and 1991, respectively.
INCOME TAXES
During the first quarter of 1993, the Company adopted Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes" (SFAS No. 109). The
adoption of this accounting change did not have a material impact on the
Company's financial position or results of operations. Income tax expense
consisted of the following for the years ended December 31:
<TABLE>
<CAPTION>
1993 1992 1991
----------- ----------- -----------
<S> <C> <C> <C>
Current:
Federal $1,558,663 $2,947,596 $5,013,288
State 141,166 560,598 1,000,000
Foreign 94,837 23,309 55,059
---------- ---------- ----------
Total current 1,794,666 3,531,503 6,068,347
Deferred:
Federal (736,852) (640,770) (709,205)
State (216,693) (188,462) (202,150)
---------- ---------- ----------
Total deferred (953,545) (829,232) (911,355)
---------- ---------- ----------
Total income tax expense $ 841,121 $2,702,271 $5,156,992
========== ========== ==========
</TABLE>
-24-
<PAGE>
A reconciliation of reported income taxes (credits) to that based on the
statutory federal income tax rate follows for the years ended December 31:
<TABLE>
<CAPTION>
1993 1992 1991
-------- ----------- ----------
<S> <C> <C> <C>
Statutory federal income tax expense $638,881 $2,584,777 $4,423,457
Increase (decrease) in taxes resulting from:
Foreign taxes, net of tax credit 81,212 - -
Investment tax credit - (142,000) -
State taxes less federal benefit 93,170 369,994 660,000
Other, net 27,858 (110,500) 73,535
-------- ---------- ----------
Income tax expense $841,121 $2,702,271 $5,156,992
======== ========== ==========
</TABLE>
Deferred taxes reflected the tax effects of differences between the amounts
recorded as assets and liabilities for financial reporting purposes and the
amounts recorded for income tax purposes. The tax effects of significant
temporary differences giving rise to deferred tax assets and liabilities are as
follows for December 31:
<TABLE>
<CAPTION>
1993 1992
---------- ----------
<S> <C> <C>
Deferred tax assets:
Casualty and liability insurance $4,503,964 $2,114,934
Contract related amounts 553,450 598,328
Inventory 569,402 876,229
Employee benefits 1,486,094 1,228,659
Accounts receivable allowance 390,320 404,597
Accrued expenses related to flood 435,450 -
---------- ----------
Total deferred tax assets $7,938,680 $5,222,747
========== ==========
Deferred tax liabilities:
Accelerated depreciation $3,432,995 $2,051,009
Pensions 2,070,754 1,841,384
Other 196,912 45,881
---------- ----------
Total deferred tax liabilities $5,700,661 $3,938,274
========== ==========
</TABLE>
Income taxes paid for the years ended December 31, 1993, 1992 and 1991 were
approximately $1.1 million, $5.6 million and $6.2 million, respectively.
-25-
<PAGE>
STOCK PLAN
The Stock Option Plan of 1990 (Plan) provides for grants of incentive stock
options to officers and key employees. The Plan is administered by a committee
consisting of at least three directors of the Company, none of whom are eligible
to participate in the Plan. A total of 200,000 shares of the Company's Common
Stock may be issued pursuant to the Plan. Grant prices are determined by the
committee and are established at the fair market value of the Company's Common
Stock at the date of grant. Options vest over a four-year period in equal
annual amounts, or over such other period as the committee shall determine, and
may be accelerated in the event of certain other circumstances such as death or
disability of the optionee. These options generally expire within ten years
after the date of grant.
The following table summarizes option activity for the two years ended
December 31, 1993:
<TABLE>
<CAPTION>
<S> <C> <C>
OPTION PRICE RANGE
SHARES PER SHARE
------- ------------------
OUTSTANDING ON DECEMBER 31, 1991 69,500 $ 30.75
Granted 11,000 $37.00-$37.25
Exercised (2,000) $ 30.75
Surrendered (2,000) $ 30.75
------- -------------
OUTSTANDING ON DECEMBER 31, 1992 76,500 $30.75-$37.25
------- -------------
Exercised (2,500) $ 30.75
Surrendered (8,500) $ 30.75
------- -------------
OUTSTANDING ON DECEMBER 31, 1993 65,500 $30.75-$37.25
======= =============
Exercisable:
December 31, 1992 32,750 $ 30.75
December 31, 1993 43,625 $30.75-$37.25
======= =============
Available for future grant:
December 31, 1992 121,500
December 31, 1993 130,000
=======
</TABLE>
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
-26-
<PAGE>
breach of 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.
COMMITMENTS
The Company entered into agreements with certain 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. The outstanding commitment for 124,800 shares was $3.3
million based on the closing stock price of the Company's Common Stock on
December 31, 1993. Pursuant to a similar agreement, the Company purchased
130,000 shares in 1992 of its Common Stock for $4.6 million. These shares were
included in the Company's treasury stock as of December 31, 1992.
-27-
<PAGE>
BUSINESS SEGMENT INFORMATION
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
1993 1992 1991
------------ ------------ ------------
<S> <C> <C> <C>
EARNED REVENUE
Engineered Construction Division $128,444,623 $187,926,709 $199,603,594
Steel Construction Division 95,755,727 81,610,826 93,725,148
Steel Service Centers 99,506,546 85,505,278 77,067,577
CVI Incorporated 30,640,432 27,851,751 22,076,738
------------ ------------ ------------
$354,347,328 $382,894,564 $392,473,057
============ ============ ============
INCOME (LOSS) FROM OPERATIONS
Engineered Construction Division $ (1,716,243) $ 5,964,269 $ 12,794,837
Steel Construction Division 430,963 394,589 1,457,359
Steel Service Centers 5,068,260 5,032,076 3,796,124
CVI Incorporated 671,285 1,593,069 326,307
Corporate and other (6,472,186) (6,710,268) (6,714,026)
------------ ------------ ------------
$ (2,017,921) $ 6,273,735 $ 11,660,601
============ ============ ============
IDENTIFIABLE ASSETS
Engineered Construction Division $ 49,564,994 $ 49,092,935 $ 62,075,886
Steel Construction Division 48,941,685 44,828,049 46,629,224
Steel Service Centers 33,221,009 25,648,817 20,431,156
CVI Incorporated 12,170,808 15,780,805 18,533,505
Corporate and other 33,904,461 30,723,794 28,330,965
------------ ------------ ------------
$177,802,957 $166,074,400 $176,000,736
============ ============ ============
CAPITAL EXPENDITURES
Engineered Construction Division $ 881,772 $ 1,576,912 $ 1,981,188
Steel Construction Division 1,493,362 1,783,155 1,093,962
Steel Service Centers 1,561,748 1,120,754 1,289,249
CVI Incorporated 158,920 181,246 86,213
Corporate and other 4,684 10,300 52,691
------------ ------------ ------------
$ 4,100,486 $ 4,672,367 $ 4,503,303
============ ============ ============
DEPRECIATION
Engineered Construction Division $ 1,543,513 $ 1,722,082 $ 1,793,379
Steel Construction Division 1,674,637 1,628,400 1,343,641
Steel Service Centers 883,991 911,584 931,313
CVI Incorporated 631,520 619,159 628,505
Corporate and other 43,244 52,058 109,601
------------ ------------ ------------
$ 4,776,905 $ 4,933,283 $ 4,806,439
============ ============ ============
</TABLE>
In 1993, Steel Construction Division's earned revenue included $39.5 million
related to the United States Post Office project. For the two years ended
December 31, 1992, neither any single customer nor customers outside the United
States accounted for 10 percent or more of total earned revenue.
-28-
<PAGE>
TWO YEAR QUARTERLY RESULTS OF OPERATION
The following is a summary of the quarterly results of operations:
<TABLE>
<CAPTION>
QUARTERS ENDED
--------------------------------------------------
(Dollars in thousands, except per share amounts) MARCH 31, JUNE 30, SEPTEMBER 30, DECEMBER 31,
--------- -------- ------------- ------------
<S> <C> <C> <C> <C>
1993
Earned revenue $81,909 $ 90,374 $92,320 $89,744
Gross profit from operations 8,082 7,379 10,716 9,546
Income (loss) before income taxes (1,419) (1,857) 4,773 382
Net income (loss) (879) (1,087) 2,846 158
Net income (loss) per common share (.38) (.47) 1.22 .07
1992
Earned revenue $95,718 $102,418 $99,617 $85,142
Gross profit from operations 9,941 12,627 11,769 10,328
Income before income taxes 1,689 2,830 2,148 935
Net income 1,041 1,723 1,303 833
Net income per common share .42 .70 .53 .36
</TABLE>
A separate computation of earnings per share is made for each quarter presented.
The dilutive effect on earnings per share resulting from the assumed exercise of
stock options is included in each quarter in which dilution occurs. The
earnings per share computation for the year is a separate annual calculation.
Accordingly, the sum of the quarterly earnings per share amounts will not
necessarily equal the earnings per share for the year.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not applicable
-29-
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Regarding the directors of the Registrant, reference is made to the
information set forth under the caption "Election of Directors" in the Company's
definitive Proxy Statement anticipated to be dated April 8, 1994 (Proxy
Statement) which information is incorporated by reference herein.
The principal executive officers of the Company and their recent business
experience are as follows:
W. R. JACKSON, AGE 85
Director since 1940;
Chairman Emeritus since 1988; formerly Chairman of the Board since 1971.
Mr. Jackson has been with the Company since 1936.
P. O. ELBERT, AGE 63 (2)
Director since 1988;
Chairman of the Board of the Company since 1990; formerly President of the
Company since 1988 and President, PDM Structural Group since 1987. Mr. Elbert
joined the Company in 1987. Prior to 1987, Mr. Elbert was Vice Chairman of
Chicago Steel Corporation since 1986; formerly a partner of Elbert and McKee
Company since 1984; formerly President and Chief Executive Officer of Flint
Steel Corporation since 1979; and formerly Group Vice President of Inryco,
Inc., a subsidiary of Inland Steel Company since 1969.
W. W. MCKEE, AGE 55 (3)
Director since 1988;
President and Chief Executive Officer of the Company since 1990; formerly
President, PDM Plate Group since May 1987 and formerly Executive Vice
President, PDM Structural Group since April 1987. Mr. McKee joined the
Company in 1987. Prior to 1987, Mr. McKee was Secretary of Chicago Steel
Corporation since 1986; formerly a partner of Elbert and McKee Company since
1984; formerly a consultant with McKee and Associates since 1983; formerly
President of Hogan Manufacturing since 1980; and formerly President of Herrick
Corporation since 1973.
R. A. BYERS, AGE 46 (3)
Treasurer since 1988 and Vice President, Finance and Administration since
1987; formerly Vice President, Finance since 1984; formerly Controller since
1982; formerly Assistant Controller since 1981; formerly Manager of Financial
Reporting since 1979; and formerly with Ernst & Young for ten years.
T. R. LLOYD, AGE 45 (3)
Secretary and General Counsel since 1990; formerly Senior Attorney of Buchanan
Ingersoll Professional Corporation, since 1989; formerly Vice President,
Secretary and General Counsel for Arch Mineral Corporation since 1984; and
formerly Director and Secretary of U.S. Steel Mining Co., Inc. since 1979.
__________________________
(1) Except where otherwise indicated, all references are to positions held with
Pitt-Des Moines, Inc. Each executive officer of the Company is elected
annually by the Board of Directors until his successor is elected and
qualified, and each has served continually as an officer since first
elected.
-30-
<PAGE>
(2) The Company has a severance agreement with Mr. Elbert.
(3) The Company has agreements with each of Messrs. McKee, Byers and Lloyd
covering, among other things, their positions as executive officers of the
Company after a change of control.
ITEM 11. EXECUTIVE COMPENSATION
Reference is made to the information set forth under the captions "Board of
Directors and Committees of the Board," "Executive Compensation and Other
Information," "Compensation Committee Interlocks and Insider Participation"
appearing in the Company's Proxy Statement, which information is incorporated
herein by reference; provided, however, that the information set forth under the
captions "Compensation Committee Report on Executive Compensation" and
"Performance Graph" in the Proxy Statement shall not be deemed to be soliciting
material or to be "filed" with the Commission or subject to Regulation 14A or
14C (other than as provided in Item 402 of Regulation S-K) or to the liabilities
of Section 18 of the Securities Exchange Act of 1934, as amended.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Reference is made to the information contained under the captions
"Stockholdings of Management" and "Principal Holders of Common Stock" in
the Company's Proxy Statement which information is incorporated herein by
reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Reference is made to the information contained under the caption "Compensation
Committee Interlocks and Insider Participation" in the Company's Proxy Statement
which information is incorporated herein by reference.
-31-
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) Documents filed as part of this Report:
1. The following consolidated financial statements of Pitt-Des Moines, Inc.
and subsidiaries are included in Item 8:
<TABLE>
<CAPTION>
PAGE NUMBER
IN THIS REPORT
--------------
<S> <C>
Report of Independent Auditors 13
Consolidated Statements of Income -- Years Ended
December 31, 1993, 1992 and 1991 14
Consolidated Balance Sheets as of
December 31, 1993 and 1992 15-16
Consolidated Statements of Cash Flows -- Years Ended
December 31, 1993, 1992 and 1991 17
Consolidated Statements of Stockholders' Equity --
Years Ended December 31, 1993, 1992 and 1991 18
Notes to Consolidated Financial Statements 18-29
2. The following consolidated financial statement schedules of Pitt-Des
Moines, Inc. and subsidiaries are included in Item 14(d):
I. Marketable Securities -- Other Investments at 37
December 31, 1993
VII. Guarantees of Securities of Other Issuers at 38
December 31, 1993
VIII. Valuation and Qualifying Accounts for years ended
December 31, 1993, 1992 and 1991 39
X. Supplementary Income Statement for years ended
December 31, 1993, 1992 and 1991 40
</TABLE>
All other schedules are omitted because they are not applicable or the
required information is shown in the consolidated financial statements or
notes thereto.
3. Exhibits:
3.1 Articles of Incorporation, as amended to date (filed as Exhibit 3.1 to
the Company's quarterly report on Form 10-Q for the quarter ended
September 30, 1989 and incorporated herein by reference)
3.2 Bylaws, as amended to date (filed as Exhibit 3.2 to the Company's
quarterly report on Form 10-Q for the quarter ended September 30, 1989
and incorporated herein by reference)
-32-
<PAGE>
4.1 Amended and Restated Credit Agreement dated as of June 30, 1992 by and
among Pitt-Des Moines, Inc. and Pittsburgh National Bank, Wells Fargo
Bank, N.A. and American National Bank (filed as Exhibit 4.1 to the
Company's annual report on Form 10-K for the year ended December 31,
1992 and incorporated herein by reference)
4.2 First Amendment dated November 23, 1992 to Credit Agreement filed as
Exhibit 4.1 hereto (filed as Exhibit 4.2 to the Company's annual report
on Form 10-K for the year ended December 31, 1992 and incorporated
herein by reference)
4.3 Second Amendment dated June 10, 1993 to Credit Agreement filed as
Exhibit 4.1 hereto (filed as Exhibit 4.1 to the Company's quarterly
report on Form 10-Q for the quarter ended June 30, 1992 and
incorporated herein by reference)
4.4 Third Amendment dated December 16, 1993 to Credit Agreement filed as
Exhibit 4.1 (filed herewith)
10.1* Agreement executed by and between the Company and W. W. McKee (filed as
Exhibit 10.1 to the Company's annual report on Form 10-K for the year
ended December 31, 1990 and incorporated herein by reference)
10.2* Agreement executed by and between the Company and R. A. Byers (filed as
Exhibit 10.1 to the Company's quarterly report on Form 10-Q for the
quarter ended June 30, 1991 and incorporated herein by reference)
10.3* Agreement executed by and between the Company and T. R. Lloyd (filed as
Exhibit 10.2 to the Company's quarterly report on Form 10-Q for the
quarter ended June 30, 1991 and incorporated herein by reference)
10.4* Severance Pay Agreement executed by and between the Company and P. O.
Elbert (filed as Exhibit 10.3 to the Company's quarterly report on Form
10-Q for the quarter ended June 30, 1991 and incorporated herein by
reference)
10.5* Management Incentive Plan (filed as Exhibit 10.5 to the Company's annual
report on Form 10-K for the year ended December 31, 1992 and
incorporated herein by reference)
10.6* Pitt-Des Moines, Inc. Savings and Investment Plan and Trust as Amended
and Restated September 1, 1990 (filed as Exhibit 10.6 to the Company's
annual report on Form 10-K for the year ended December 31, 1992 and
incorporated herein by reference)
10.7* Retirement Plan for PDM Outside Directors (filed as Exhibit 10.7 to the
Company's annual report on Form 10-K for the year ended December 31,
1992 and incorporated herein by reference)
10.8* Stock Option Plan of 1990 (filed as Exhibit 4.01 to the Company's
Registration Statement No. 33-34787 on Form S-8 filed May 7, 1990 and
incorporated herein by reference)
10.9* Employee Stock Ownership Plan (filed as Exhibit 10.8 to the Company's
annual report on Form 10-K for the year ended December 31, 1990 and
incorporated herein by reference)
-33-
<PAGE>
10.10* Retirement Plan for Salaried Employees of Pitt-Des Moines, Inc. as
amended effective January 1, 1984 (filed as Exhibit 10.10 to the
Company's annual report on Form 10-K for the year ended December 31,
1992 and incorporated herein by reference)
10.11 Stock Purchase Agreements dated April 19, 1990 between the Company and
each of W. R. Jackson, and S. M. Jackson (filed as Exhibits 10.01 and
10.03, respectively, to current report on Form 8-K filed on April 30,
1990 and incorporated herein by reference)
10.12* Investment Letter and Registration Rights Agreement dated September 21,
1993 by and between Pitt-Des Moines, Inc. and William W. McKee, Jr.
(filed as Exhibit 10.1 to the Company's quarterly report on Form 10-Q
for the quarter ended September 30, 1993 and incorporated herein by
reference)
10.13* Investment Letter and Registration Rights Agreement dated September 21,
1993 by and between Pitt-Des Moines, Inc. and Phillip O. Elbert
(filed as Exhibit 10.2 to the Company's quarterly report on Form 10-Q
for the quarter ended September 30, 1993 and incorporated herein by
reference)
11 Computation of Per Share Earnings (filed herewith)
21 Subsidiaries of Pitt-Des Moines, Inc. (filed herewith)
23 Consent of Independent Auditors, Ernst & Young (filed
herewith)
(b) Reports on Form 8-K:
There were no reports on Form 8-K filed during the quarter ended December
31, 1993.
- -----------------------------
* Denotes management contract or compensatory plan or arrangement.
-34-
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
March 30, 1994 By: /s/ W. W. McKee
------------------
W. W. McKee
President
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
SIGNATURES TITLE Date
----
PRINCIPAL EXECUTIVE OFFICER:
/s/ W. W. McKee President, Chief March 30, 1994
- ------------------- Executive Officer and
W. W. McKee Director
PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER:
/s/ R. A. Byers Chief Financial Officer March 30, 1994
- ------------------- and Chief Accounting
R. A. Byers Officer
OTHER DIRECTORS:
/s/ J. C. Bates Director March 30, 1994
- -------------------
J. C. Bates
/s/ R. W. Dean Director March 30, 1994
- -------------------
R. W. Dean
/s/ P. O. Elbert Director March 30, 1994
- -------------------
P. O. Elbert
-35-
<PAGE>
SIGNATURES (CONT'D)
SIGNATURES TITLE Date
----
/s/ W. R. Jackson Director March 30, 1994
- -------------------------
W. R. Jackson
/s/ W. R. Jackson, Jr. Director March 30, 1994
- -------------------------
W. R. Jackson, Jr.
/s/ W. E. Lewellen Director March 30, 1994
- -------------------------
W. E. Lewellen
/s/ J. H. Long Director March 30, 1994
- -------------------------
J. H. Long
/s/ A. J. Paddock Director March 30, 1994
- -------------------------
A. J. Paddock
/s/ P. J. Townsend Director March 30, 1994
- -------------------------
P. J. Townsend
-36-
<PAGE>
SCHEDULE I - MARKETABLE SECURITIES - OTHER INVESTMENTS
PITT-DES MOINES, INC.
DECEMBER 31, 1993
<TABLE>
<CAPTION>
NUMBER OF AMOUNT AT WHICH
SHARES OR EACH PORTFOLIO
UNITS OF EQUITY SECURITY
PRINCIPAL MARKET VALUE ISSUE AND EACH
AMOUNT OF OF EACH ISSUE OTHER SECURITY
BONDS AND COST OF AT BALANCE ISSUE CARRIED IN
NAME OF ISSUER AND TITLE OF EACH ISSUE NOTES EACH ISSUE SHEET DATE THE BALANCE SHEET
- -------------------------------------- ---------- ----------- ------------- -----------------
<S> <C> <C> <C> <C>
I. INCLUDED IN CASH AND CASH EQUIVALENTS:
a) Commercial Paper
1) Ford Credit $ 5,025,000 $ 5,025,000 $ 5,025,000 $ 5,025,000
2) Other 2,600,000 2,600,000 2,600,000 2,600,000
b) Other 2,503,115 2,503,115 2,503,115 2,503,115
----------- ----------- ----------- -----------
$10,128,115 $10,128,115 $10,128,115 $10,128,115
=========== =========== =========== ===========
II. INCLUDED IN INVESTMENT AND OTHER ASSETS:
a) Toyo Kanetsu Common Stock 11,000 $ 1,162 $ 51,334 $ 1,162
</TABLE>
-37-
<PAGE>
SCHEDULE VII - GUARANTEES OF SECURITIES OF OTHER ISSUERS
PITT-DES MOINES, INC.
DECEMBER 31, 1993
<TABLE>
<CAPTION>
NATURE OF
ANY DEFAULT
BY ISSUER OF
SECURITIES
GUARANTEED IN
PRINCIPAL,
INTEREST,
NAME OF ISSUER OF AMOUNT OWNED AMOUNT IN SINKING FUND
SECURITIES TITLE OF ISSUE BY PERSONS OR TREASURY OF OR REDEMPTION
GUARANTEED BY PERSON OF EACH CLASS OF TOTAL PERSONS FOR WHICH ISSUE OF NATURE PROVISIONS,
FOR WHICH STATEMENT SECURITIES AMOUNT STATEMENT IS SECURITIES OF OR PAYMENT
IS FILED (1) GUARANTTED GUARANTEED FILED GUARANTEED GUARANTEE OF DIVIDENDS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PDM Saudi Arabia Ltd. Letter of Credit $1,865,122 None None Full Value None
Facility of Credits
</TABLE>
- --------------
(1) PDM Saudi Arabia Ltd. is a 50 percent owned affiliate of Pitt-Des Moines,
Inc.
-38-
<PAGE>
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS
PITT-DES MOINES, INC.
<TABLE>
<CAPTION>
ADDITIONS DEDUCTIONS(1)
---------- -------------
BALANCE AT CHARGED TO
BEGINNING OF COSTS AND CREDITED BALANCE AT END
DESCRIPTION PERIOD EXPENSES TO ASSET OF PERIOD
- ----------------------------------- ------------ ---------- -------- --------------
<S> <C> <C> <C> <C>
Deducted from accounts receivable
as allowance for doubtful accounts:
Year ended December 31, 1993 $1,011,000 $911,000 $947,000 $975,000
Year ended December 31, 1992 $1,013,000 $157,000 $159,000 $1,011,000
Year ended December 31, 1991 $982,000 $237,000 $206,000 $1,013,000
</TABLE>
- ---------------------
(1) Write-off of accounts deemed to be uncollectible
-39-
<PAGE>
SCHEDULE X -- SUPPLEMENTARY INCOME STATEMENT INFORMATION
PITT-DES MOINES, INC.
<TABLE>
<CAPTION>
CHARGED TO COSTS AND EXPENSES
ITEM YEAR ENDED DECEMBER 31,
- ---- -----------------------------------
1993 1992 1991
---------- ----------- ----------
<S> <C> <C> <C>
Maintenance and repairs $5,208,000 $6,200,000 $6,918,000
</TABLE>
__________________
Amounts for depreciation and amortization of intangible assets, preoperating
costs and similar deferrals, royalties, taxes (other than payroll and income
taxes) and advertising costs are not presented as such amounts are less than 1
percent of total earned revenue for each of the years ended December 31, 1993,
1992 and 1991.
-40-
<PAGE>
EXHIBIT INDEX
3.1 Articles of Incorporation, as amended to date (filed as Exhibit 3.1 to
the Company's quarterly report on Form 10-Q for the quarter ended
September 30, 1989 and incorporated herein by reference)
3.2 Bylaws, as amended to date (filed as Exhibit 3.2 to the Company's
quarterly report on Form 10-Q for the quarter ended September 30, 1989
and incorporated herein by reference)
4.1 Amended and Restated Credit Agreement dated as of June 30, 1992 by and
among Pitt-Des Moines, Inc. and Pittsburgh National Bank, Wells Fargo
Bank, N.A. and American National Bank (filed as Exhibit 4.1 to the
Company's annual report on Form 10-K for the year ended December 31, 1992
and incorporated herein by reference)
4.2 First Amendment dated November 23, 1992 to Credit Agreement filed as
Exhibit 4.1 hereto (filed as Exhibit 4.2 to the Company's annual report
on Form 10-K for the year ended December 31, 1992 and incorporated herein
by reference)
4.3 Second Amendment dated June 10, 1993 to Credit Agreement filed as Exhibit
4.1 hereto (filed as Exhibit 4.1 to the Company's quarterly report on
Form 10-Q for the quarter ended June 30, 1992 and incorporated herein by
reference)
4.4 Third Amendment dated December 16, 1993 to Credit Agreement filed as
Exhibit 4.1 (filed herewith)
10.1 Agreement executed by and between the Company and W. W. McKee (filed as
Exhibit 10.1 to the Company's annual report on Form 10-K for the year
ended December 31, 1990 and incorporated herein by reference)
10.2 Agreement executed by and between the Company and R. A. Byers (filed as
Exhibit 10.1 to the Company's quarterly report on Form 10-Q for the
quarter ended June 30, 1991 and incorporated herein by reference)
10.3 Agreement executed by and between the Company and T. R. Lloyd (filed as
Exhibit 10.2 to the Company's quarterly report on Form 10-Q for the
quarter ended June 30, 1991 and incorporated herein by reference)
10.4 Severance Pay Agreement executed by and between the Company and P. O.
Elbert (filed as Exhibit 10.3 to the Company's quarterly report on Form
10-Q for the quarter ended June 30, 1991 and incorporated herein by
reference)
10.5 Management Incentive Plan (filed as Exhibit 10.5 to the Company's annual
report on Form 10-K for the year ended December 31, 1992 and incorporated
herein by reference)
10.6 Pitt-Des Moines, Inc. Savings and Investment Plan and Trust as Amended
and Restated September 1, 1990 (filed as Exhibit 10.6 to the Company's
annual report on Form 10-K for the year ended December 31, 1992 and
incorporated herein by reference)
10.7 Retirement Plan for PDM Outside Directors (filed as Exhibit 10.7 to the
Company's annual report on Form 10-K for the year ended December 31, 1992
and incorporated herein by reference)
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<PAGE>
10.8 Stock Option Plan of 1990 (filed as Exhibit 4.01 to the Company's
Registration Statement No. 33-34787 on Form S-8 filed May 7, 1990 and
incorporated herein by reference)
10.9 Employee Stock Ownership Plan (filed as Exhibit 10.8 to the Company's
annual report on Form 10-K for the year ended December 31, 1990 and
incorporated herein by reference)
10.10 Retirement Plan for Salaried Employees of Pitt-Des Moines, Inc. as
amended effective January 1, 1984 (filed as Exhibit 10.10 to the
Company's annual report on Form 10-K for the year ended December 31, 1992
and incorporated herein by reference)
10.11 Stock Purchase Agreements dated April 19, 1990 between the Company and
each of W. R. Jackson, and S. M. Jackson (filed as Exhibits 10.01 and
10.03, respectively, to current report on Form 8-K filed on April 30,
1990 and incorporated herein by reference)
10.12 Investment Letter and Registration Rights Agreement dated September 21,
1993 by and between Pitt-Des Moines, Inc. and William W. McKee, Jr.
(filed as Exhibit 10.1 to the Company's quarterly report on Form 10-Q for
the quarter ended September 30, 1993 and incorporated herein by
reference)
10.13 Investment Letter and Registration Rights Agreement dated September 21,
1993 by and between Pitt-Des Moines, Inc. and Phillip O. Elbert (filed as
Exhibit 10.2 to the Company's quarterly report on Form 10-Q for the
quarter ended September 30, 1993 and incorporated herein by reference)
11 Computation of Per Share Earnings (filed herewith)
21 Subsidiaries of Pitt-Des Moines, Inc. (filed herewith)
23 Consent of Independent Auditors, Ernst & Young (filed
herewith)
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EXHIBIT 4.4
THIRD AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
THIS THIRD AMENDMENT ("Third Amendment") made as of December 16, 1993, by
and among PITT-DES MOINES, INC., a Pennsylvania corporation, as borrower (the
"Borrower"), PNC BANK, NATIONAL ASSOCIATION (formerly Pittsburgh National Bank),
WELLS FARGO BANK, N.A. and AMERICAN NATIONAL BANK, as lenders (individually
"PNC", "Wells" and "American" and a "Bank" and collectively the "Banks"), PNC
BANK, NATIONAL ASSOCIATION (formerly Pittsburgh National Bank) as agent for the
Banks (in such capacity the "Agent"), and PNC BANK, NATIONAL ASSOCIATION
(formerly Pittsburgh National Bank), as the issuer of Letters of Credit (in such
capacity the "Issuing Bank"), amends certain provisions of that certain amended
and restated Credit Agreement dated as of June 30, 1992 as previously amended by
the First Amendment to Amended and Restated Credit Agreement dated as of
November 10, 1992 and the Second Amendment to Amended and Restated Credit
Agreement dated as of June 10, 1993 (said Credit Agreement as amended herein the
"Original Credit Agreement").
WITNESSETH:
WHEREAS, the Borrower, the Banks, the Issuing Bank and the Agent wish to
amend the Original Credit Agreement as provided herein.
NOW, THEREFORE, in consideration of the mutual promises and the mutual
covenants made herein and in the Original Credit Agreement and other valuable
consideration and with the intent to be legally bound hereby, the parties hereto
agree as follows:
ARTICLE I
AMENDMENTS TO ORIGINAL CREDIT AGREEMENT
Section 1.01 AMENDMENT TO SUBSECTION 5.3C OF ORIGINAL CREDIT AGREEMENT.
Subsection 5.3c of the Original Credit Agreement is hereby amended to delete the
reference to "$85,000,000" and substitute in place thereof a reference to
"$80,000,000".
Section 1.02 SUPPLEMENT TO SCHEDULE 3.18 TO THE ORIGINAL CREDIT
AGREEMENT. Schedule 3.18 to the Original Credit Agreement is hereby
supplemented by the Addendum to Schedule 3.18 attached to this Third Amendment.
Section 1.03 NO OTHER AMENDMENTS. The amendments to the Original Credit
Agreement set forth in Sections 1.01 and 1.02 do not either implicitly or
explicitly alter, waive or amend, except as expressly provided in this Third
Amendment, the provisions of the Original Credit Agreement. The amendments set
forth in Sections 1.01 and 1.02 hereof do not waive, now or in the future,
compliance with any other covenant, term or condition to be performed or
complied with nor do they impair any rights or remedies of the Banks, the
Issuing Bank or the Agent under the Original Credit Agreement with respect to
any such violation.
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<PAGE>
ARTICLE II
BORROWER'S SUPPLEMENTAL REPRESENTATIONS
As an inducement to the Banks, the Issuing Bank and the Agent to
enter into this Third Amendment hereunder, the Borrower represents and warrants
that:
Section 2.01. INCORPORATION BY REFERENCE. Borrower hereby
incorporates herein by reference and repeats herein for the benefit of the
Banks, the Issuing Bank and the Agent the representations and warranties made by
it in Sections 3.1 through 3.20, both inclusive, of the Original Credit
Agreement and for purposes hereof such representations and warranties, shall be
deemed to extend to and cover this Third Amendment.
ARTICLE III
MISCELLANEOUS
Section 3.01 RATIFICATION OF TERMS. This Third Amendment shall be
construed in connection with and as part of the Original Credit Agreement.
Except as expressly amended by this Third Amendment, the Original Credit
Agreement and each and every representation, warranty, covenant, term and
condition contained therein is specifically ratified and confirmed.
Section 3.02 COUNTERPARTS. This Third Amendment may be executed in
any number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which together shall constitute one and the same instrument.
Delivery of an executed counterpart of a signature page to this Third Amendment
by telecopier shall be effective as of delivery of a manually executed
counterpart of this Third Amendment.
Section 3.03 CAPITALIZED TERMS. Except for proper nouns and as
otherwise defined herein, capitalized terms used herein shall have the meanings
ascribed to them in the Original Credit Agreement, as amended hereby.
Section 3.04 CONDITIONS PRECEDENT. This Third Amendment shall become
effective (the "Amendment Effective Date") on the date on which Borrower shall
provide to the Banks, the Issuing Bank and the Agent the following:
(A) A duly executed counterpart original of this Third Amendment;
(B) A certificate of the chief financial officer of the Borrower
certifying that, as of the date of this Third Amendment, no Event of Default
shall have occurred and be continuing and no event, condition, act or omission
has occurred and is continuing which, with the passage of time, the giving of
notice or both, would constitute a Event of Default, or would result from the
execution of this Third Amendment;
(C) A certified copy of the corporate action of the Borrower
authorizing the execution and delivery of the performance under this Third
Amendment;
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(D) Such other instruments, documents and opinions of counsel as
the Agent shall reasonably require, all of which shall be satisfactory in form
and content to the Agent and its special counsel, Tucker Arensberg, P.C.
Section 3.05 EFFECTIVE DATE. From and after the Amendment Effective
Date, all references in the Original Credit Agreement to the Original Credit
Agreement shall be deemed to be references to the Original Credit Agreement as
amended hereby.
Section 3.06 ENTIRE AGREEMENT. This Third Amendment contains the
entire agreement between the parties relating to the subject matter hereof;
there are merged herein all prior representations, promises and conditions,
whether oral or written, in connection with the subject matter hereof, and any
representation, promise or condition not incorporated herein shall not be
binding upon the parties.
Section 3.07 SEVERABILITY. Whenever possible each provision of this
Third Amendment shall be interpreted in such manner as to be effective and valid
under applicable law but if any provision of this Third Amendment or any part of
such provision shall be prohibited by or invalid under applicable law, such
provision of part thereof shall be ineffective to the extent of such prohibition
or invalidity without invalidating the remainder of such provision or the
remaining provisions of this Third Amendment.
Section 3.08 GOVERNING LAW. THIS THIRD AMENDMENT AND THE RIGHTS AND
OBLIGATIONS HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAWS OF THE COMMONWEALTH OF PENNSYLVANIA WITHOUT REGARD TO THE PROVISIONS
THEREOF REGARDING CONFLICTS OF LAW.
Section 3.09 HEADINGS. The headings of this Third Amendment are for
purposes of reference only and shall not limit or otherwise affect the meaning
thereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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<PAGE>
IN WITNESS WHEREOF, the parties hereto, with the intent to be legally
bound hereby have caused this Third Amendment to be duly executed by their
proper and duly authorized officers as of the day and year first above written.
ATTEST: (SEAL) PITT-DES MOINES, INC.
By /s/ Thomas R. Lloyd By /s/ Richard A. Byers
-------------------- ----------------------
Name: Thomas R. Lloyd Name: Richard A. Byers
Title: Secretary Title: Vice President Finance
and Administration
PNC BANK, NATIONAL ASSOCIATION
(formerly Pittsburgh National
Bank) as a Bank, as the Issuing Bank
and as the Agent
By /s/ Stephanie A. Rogan
-----------------------
Name: Stephanie A. Rogan
Title: Commercial Banking Officer
WELLS FARGO BANK, N.A.
By /s/ Stephen M. Smith
-----------------------
Name: Stephen M. Smith
Title: Assistant Vice President
AMERICAN NATIONAL BANK
By /s/ Douglas P. Sutton
------------------------
Name: Douglas P. Sutton
Title: Vice President
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ADDENDUM TO SCHEDULE 3.18
ENVIRONMENTAL MATTERS
PITT-DES MOINES, INC.
DECEMBER 16, 1993
In the last sentence of Schedule 3.18 to the original Credit Agreement,
Borrower stated:
"Borrower has no other reason to believe that a Release of Hazardous
Substances presently exists at, upon, under or within the Premises and has
no reason to believe that operations at the Premises are not in present
compliance with all Environmental Laws applicable to Hazardous substances".
On September 30, 1993, Borrower conveyed two parcels of land on Neville
Island, Allegheny County, Pennsylvania, to Miles Bryan, Trustee. Said parcels
were a portion of the Premises as defined in the Original Credit Agreement.
Such conveyance was made after Phase I and Phase II environmental studies were
made of the two parcels and said studies disclosed elevated levels of arsenic
and lead on a portion of said parcels.
The document for said conveyance includes, of record, the following
Language:
"Said property being acquired with respect to all environmental conditions
thereon "AS IS", including an area thereof in the East Yard near the former
Pipe Thread Shop where one round of testing indicated the soil contains
higher than anticipated levels of arsenic and lead".
The aforementioned Phase I and Phase II environmental studies did, however,
cause Borrower to have reason to now believe that a Release of Hazardous
Substances may have existed at, upon, under or within that portion of the
premises described above. Except as provided in the Original Credit Agreement
and the attachments thereto, Borrower has no reason to believe that operations
at the Premises were not, and are not, in compliance with all Environmental Laws
applicable to Hazardous Substances.
Borrower has no reason to believe that the above-described portions of the
Premise conveyed on September 30, 1993, are not in present compliance with all
Environmental Laws applicable to Hazardous Substances.
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EXHIBIT 11
STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS
PITT-DES MOINES, INC.
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
1993 1992 1991
---------- ---------- ----------
<S> <C> <C> <C>
PRIMARY
Average shares outstanding 2,323,645 2,414,670 2,449,018
Dilutive stock options based on
treasury stock method using
average market price 2,002 10,841 15,652
---------- ---------- ----------
2,325,647 2,425,511 2,464,670
========== ========== ==========
Net income $1,037,941 $4,900,013 $7,853,177
========== ========== ==========
Net income per share $.45 $2.02 $3.19
========== ========== ==========
FULLY DILUTED
Average shares outstanding 2,323,645 2,414,670 2,449,018
Dilutive stock options based on
treasury stock method using
greater of year-end or average
market price 2,002 11,444 17,836
---------- ---------- ----------
2,325,647 2,426,114 2,466,854
========== ========== ==========
Net income $1,037,941 $4,900,013 $7,853,177
========== ========== ==========
Net income per share $.45 $2.02 $3.18
========== ========== ==========
</TABLE>
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EXHIBIT 21
SUBSIDIARIES OF THE COMPANY
PITT-DES MOINES, INC.
DECEMBER 31, 1993
<TABLE>
<CAPTION>
%
SUBSIDIARIES OWNED INCORPORATED OPERATIONS
<S> <C> <C> <C>
Canadian Des Moines Industries Ltd. 100 Canada Inactive
Hammond Latino Americana, S.A. 100 Panama Inactive
Hydrostorage, Inc. 100 Tennessee Inactive
Oregon Culvert Co., Inc. 81 Oregon Culvert Mfg.
d/b/a Washington Culvert Co.
PDM Australia Pty. Ltd. 100 Australia Inactive
PDM International Ltd. 100 Delaware Inactive
PDM Latin America Ltd. 100 Georgia Inactive
Construcciones Pitt-Des Moines Venezuela, C.A. 100 Venezuela Steel Fab.
PDM Saudi Arabia Ltd. (1) 50 Saudi Arabia Steel Fab.
PDM Services A.G. 100 Liechtenstein Inactive
PDM Strocal, Inc. 100 Pennsylvania Steel Fab.
PDM Virgin Islands, Ltd. 100 Virgin Islands Inactive
P.T. Perkasa Daya Megah (PDM Indonesia) (2) 100 Indonesia Inactive
PDM Bonaire, N.V. 100 Bonaire Inactive
Pittsburgh-Des Moines Sdn. Bhd.(PDM Malaysia) 100 Malaysia Inactive
PDM Bridge Corporation 100 Delaware Inactive
CVI Incorporated 100 Ohio Cryogenic &
High Vacuum
Component &
System Mfg.
Hartwig Mfg. Corp. 100 Wisconsin Steel Bridge
Fabrication
</TABLE>
NOTES OF EXPLANATION
(1) Unconsolidated affiliate.
(2) Managed by PDM Services A.G.
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EXHIBIT 23
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
(Form S-8 No. 33-34787) pertaining to the Stock Option Plan of 1990 of Pitt-Des
Moines, Inc. of our report dated March 3, 1994, with respect to the consolidated
financial statements and schedules of Pitt-Des Moines, Inc. included in the
Annual Report (Form 10-K) for the year ended December 31, 1993.
/s/ ERNST & YOUNG
-----------------
ERNST & YOUNG
Pittsburgh, Pennsylvania
March 29, 1994
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