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FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________________
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____ to _____
Commission file number 1-5259
____________________
PITT-DES MOINES, INC.
(Exact name of registrant as specified in its charter)
Commonwealth of Pennsylvania 25-0729430
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3400 Grand Avenue, Pittsburgh, PA 15225
(Address of Principal Executive Offices) (Zip Code)
(412) 331-3000
(Registrant's Telephone Number, including Area Code)
____________________
Indicate by check whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
----- ----
On October 31, 1996, 2,324,101 shares of Common Stock were outstanding.
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<PAGE>
TABLE OF CONTENTS
Page
Part I - Financial Information
Item 1. Financial statements 3
Item 2. Management's discussion and analysis of
financial condition and results of operations 11
Part II - Other Information
Item 1. Legal proceedings 14
Item 6. Exhibits and reports on Form 8-K 14
Signatures 15
Exhibit Index 16
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<PAGE>
Part I. Financial Information
Item 1. Financial Statements
PITT-DES MOINES, INC.
Consolidated Statements of Income
(Unaudited)
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
---------------------- ---------------------
(in thousands, except per share amounts) 1996 1995 1996 1995
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Earned revenue $120,795 $ 123,186 $ 358,410 $355,896
Cost of earned revenue (104,109) (106,035) (311,115) (310,652)
--------- --------- --------- ---------
Gross profit from operations 16,686 17,151 47,295 45,244
Selling, general and administrative expenses (11,686) (9,878) (31,438) (29,179)
--------- --------- --------- ---------
Income from operations 5,000 7,273 15,857 16,065
Other income/(expense):
Interest income 365 138 808 483
Interest expense (315) (470) (906) (1,501)
Gain on sale of assets 298 16 580 48
Miscellaneous, net (211) (100) (386) (209)
--------- --------- --------- ---------
137 (416) 96 (1,179)
--------- --------- --------- ---------
Income before income taxes 5,137 6,857 15,953 14,886
Income taxes (2,034) (2,699) (6,250) (5,822)
--------- --------- --------- ---------
Net income $ 3,103 $ 4,158 $ 9,703 $ 9,064
========= ========= ========= =========
Per common share:
Net income per common share $ 1.32 $ 1.78 $ 4.13 $ 3.89
========= ========= ========= =========
Dividends paid $ .275 $ .25 $ 1.025 $ .75
========= ========= ========= =========
Shares used to calculate income per share
(in 000's) 2,352 2,330 2,352 2,329
========= ========= ========= =========
CONSOLIDATED RETAINED EARNINGS
Balance at the beginning of year $ 89,677 $ 79,202
Net income 9,703 9,064
Dividends paid (2,382) (1,742)
Other 38 0
--------- ---------
Balance at end of period $ 97,036 $ 86,524
========= =========
</TABLE>
See Notes to Consolidated Financial Statements.
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<PAGE>
Item 1. Financial Statements (Continued)
PITT-DES MOINES, INC.
Consolidated Statements of Financial Condition
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
------------- ------------
(in thousands) (Unaudited)
<S> <C> <C>
Assets
Current Assets
Cash and cash equivalents $ 4,743 $ 9,508
Accounts receivable including retentions
(less allowances: 1996-$1,126; 1995-$868) 92,788 77,517
Inventories 17,644 16,418
Costs and estimated profits in excess of billings 32,173 38,166
Deferred income taxes 4,872 4,872
Prepaid expenses 1,249 914
-------- --------
Total Current Assets 153,469 147,395
Other Assets 7,190 8,080
Net Assets of Discontinued Operations 3,980 3,916
Property, Plant and Equipment
Land 6,706 6,784
Buildings 31,163 31,025
Machinery and equipment 64,602 62,287
-------- --------
102,471 100,096
Allowances for depreciation (62,478) (58,351)
-------- --------
Net Property, Plant and Equipment 39,993 41,745
-------- --------
$204,632 $201,136
======== ========
</TABLE>
See Notes to Consolidated Financial Statements.
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<PAGE>
Item 1. Financial Statements (Continued)
PITT-DES MOINES, INC.
Consolidated Statements of Financial Condition
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
------------- ------------
(in thousands) (Unaudited)
<S> <C> <C>
Liabilities
Current Liabilities
Accounts payable $ 33,874 $ 41,611
Accrued compensation, related taxes and benefits 11,737 11,739
Other accrued expenses 1,874 2,379
Billings in excess of costs and estimated profits 7,542 6,436
Income taxes 1,143 1,345
Casualty and liability insurance 10,056 8,817
-------- -------
Total Current Liabilities 66,226 72,327
Revolving Credit Facility 15,000 13,000
Deferred Income Taxes 5,601 5,601
Minority Interest 1,419 1,267
Contingencies and Commitments
Stockholders' Equity
Preferred stock - par value $.01 per share;
authorized 3,000,000 shares; issued - none
Common stock - no par value; authorized
15,000,000 shares; issued 2,982,156 shares 33,549 33,549
Retained earnings 97,036 89,677
-------- --------
130,585 123,226
Treasury stock at cost
(1996-658,523 shares; 1995-662,523 shares) (14,199) (14,285)
-------- --------
Total Stockholders' Equity 116,386 108,941
-------- --------
$204,632 $201,136
======== ========
</TABLE>
See Notes to Consolidated Financial Statements.
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<PAGE>
Item 1. Financial Statements (Continued)
PITT-DES MOINES, INC.
Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Nine months ended
September 30,
--------------------
(in thousands) 1996 1995
--------- ---------
<S> <C> <C>
Cash Flow From Operating Activities
Net income $ 9,703 $ 9,064
Adjustments to reconcile net income to net
cash utilized by operating activities:
Depreciation 4,463 4,393
Discontinued operations (64) (543)
Gain on sale of assets (580) (48)
Minority interest, net of dividends paid 152 90
Other non-cash credits, net (180) (360)
Change in certain assets and liabilities
(using) or providing cash:
Accounts receivable (14,190) 8,474
Inventories (1,226) 3,255
Prepaid expenses (335) (638)
Costs, estimated profits and billings, net 7,099 (15,241)
Accounts payable (7,737) (15,745)
Accrued liabilities 732 1,787
Income taxes (202) 512
--------- ---------
Net cash utilized by operating activities (2,365) (5,000)
Cash Flows from Investing Activities
Capital expenditures (2,853) (3,870)
Proceeds from sales of assets 722 146
Change in investments and other assets (11) 108
-------- --------
Net cash utilized by investing activities (2,142) (3,616)
Cash Flows from Financing Activities
Proceeds from debt obligations 8,000 4,000
Payments of debt obligations (6,000) (3,000)
Dividends paid (2,382) (1,742)
Other 124 0
-------- --------
Net cash utilized by financing activities (258) (742)
-------- --------
Decrease in cash and cash equivalents (4,765) (9,358)
Cash and cash equivalents at beginning of year 9,508 11,668
-------- --------
Cash and cash equivalents at end of period $ 4,743 $ 2,310
======== ========
</TABLE>
See Notes to Consolidated Financial Statements.
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<PAGE>
Item 1. Financial Statements (Continued)
PITT-DES MOINES, INC.
Notes to Consolidated Financial Statements
(Unaudited)
Note A. Basis of Presentation
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the nine months ended September 30, 1996
are not necessarily indicative of the results that may be expected for the year
ending December 31, 1996. The December 31, 1995 Consolidated Statement of
Financial Condition was derived from audited financial statements. For further
information, refer to the consolidated financial statements and footnotes
thereto included in the Company's Annual Report on Form 10-K for the year ended
December 31, 1995.
Note B. Costs and Estimated Profits on Uncompleted Contracts
Costs and estimated profits on uncompleted contracts are summarized as follows:
<TABLE>
<CAPTION>
September 30, December 31,
(in thousands) 1996 1995
------------ ----------
<S> <C> <C>
Costs incurred on uncompleted contracts $ 716,935 $ 542,631
Estimated profits 98,266 69,861
--------- ---------
815,201 612,492
Less: Billings to date (790,570) (580,762)
--------- ---------
$ 24,631 $ 31,730
========= =========
</TABLE>
Costs, estimated profits and billings on uncompleted contracts are included in
the accompanying Consolidated Statements of Financial Condition under the
following captions:
<TABLE>
<CAPTION>
September 30, December 31,
(in thousands) 1996 1995
------------ ----------
<S> <C> <C>
Costs and estimated profits in excess of billings $32,173 $38,166
Billings in excess of costs and estimated profits (7,542) (6,436)
------- -------
$24,631 $31,730
======= =======
</TABLE>
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<PAGE>
Item 1. Financial Statements (Continued)
Note B. Costs and Estimated Profits on Uncompleted Contracts (Continued)
Included in costs and estimated profits in excess of billings on uncompleted
contracts at September 30, 1996 was approximately $6.0 million relating to an
unapproved change order arising from a dispute over design and specification
changes on a project currently under construction.
On May 14, 1996 the Company brought suit in the United States District Court for
the Northern District of Illinois to obtain reimbursement for this additional
work. Negotiations to obtain reimbursement for this additional work continue
and management believes that amounts recognized will be realized. However, the
estimate of recovery could change as the negotiations continue or as the conduct
of the litigation progresses. Counterclaims in the amount of $3.5 million, in
the nature of backcharges, have been asserted against the Company in this case.
(See Note C. Contingencies, below.) As additional information becomes available,
the Company may revise the estimate of potential recovery, which could result in
a material adjustment to the results of operations in future periods.
Note C. Contingencies
There are various claims and legal proceedings against the Company arising from
the normal course of business. 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 three
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.
-8-
<PAGE>
Item 1. Financial Statements (Continued)
Note C. Contingencies (Continued)
As previously reported, 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 was in the process of erecting the
steel structure of the building. Two men were killed and five seriously injured
when a portion of the erected steel collapsed. Various personal injury claims
have been asserted against the Company, and others, as a result of the accident
(the "Personal Injury Cases"). The Company has policies of insurance with third
parties with coverages in excess of the amounts presently demanded in the
Personal Injury Cases. Those policies contain various deductible clauses
totaling $1.5 million, and the Company and its insurance carriers are assessing
the damages claimed and related policy coverages. Also, as previously reported,
a charge of $2.0 million was recorded in the fourth quarter of 1993 relating to
this accident. There may be uninsured costs relating to this accident for which
the Company would be liable.
An investigation of the November 3, 1993 accident was conducted by the Federal
Occupational Safety and Health Administration (OSHA) and the Justice Department
as required by OSHA law. OSHA has cited the Company for safety violations and
has assessed $147,000 in civil penalties. In an order dated April 28, 1995, an
administrative law judge dismissed OSHA's case assessing civil penalties.
OSHA's appeal of this decision is pending before the Occupational Safety and
Health Review Commission.
As a result of the OSHA/Justice Department investigation, on August 23, 1996,
the Company was served with an indictment issued by a grand jury for the United
States District Court for the Northern District of Illinois. The indictment
alleges that the Company is guilty of two misdemeanors for violations of the
Occupational Safety and Health Act (and regulations promulgated thereunder)
concerning the erection of structural steel members around the time of the
November 3, 1993 accident and that such violations caused the deaths of the two
men killed in the accident. The Department of Justice has reported that the
maximum criminal fines and penalties which can be assessed, if the Company is
convicted of both misdemeanors, is $1,000,000.
On September 17, 1996 the Company entered a plea of not guilty to the alleged
misdemeanors and demanded a jury trial at which it intends to vigorously defend
itself against the allegations. The Company believes that it has significant
and meritorious defenses to the alleged misdemeanors.
If the Company is convicted of the alleged misdemeanors, management believes
that the resulting fines, penalties and costs of defense, which would be
uninsured, would not be material to the Company's financial condition, although
they could be material to the Company's reported results of operations for the
period in which such payments are incurred. As a result of the Justice
Department's actions, additional claims may be asserted in the
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<PAGE>
Item 1. Financial Statements (Continued)
Note C. Contingencies (Continued)
Personal Injury Cases, or other claims, actions or proceedings may be instituted
against the Company. While the Company has no reason to believe that any such
claim, action or proceeding will be instituted against it, the Company cannot
predict the likelihood of such a claim, action or proceeding being instituted
against it, and cannot assess the availability of any insurance coverage or the
possibility or materiality of an adverse result in the event of any such claim,
action or proceeding in advance of a claim, action or proceeding being
instituted.
On May 14, 1996 the Company filed an action in the United States District Court
for the Northern District of Illinois (Eastern Division) captioned PITT-DES
MOINES, INC. V. METROPOLITAN PIER & EXPOSITION AUTHORITY ET AL. seeking
reimbursement for additional work and making other claims in connection with an
unapproved change order arising from a dispute over design and specification
changes to a project under construction (see discussion in Note B above). On
June 4, 1996 certain of the defendants in said action made counterclaims against
the Company in amounts approximating $3.5 million. The Company's total claim is
substantially in excess of the counterclaims. Although counsel is unable to
predict with certainty the ultimate outcome, management and counsel believe the
Company has significant and meritorious defenses to any such claims and intend
to pursue them vigorously.
On June 20, 1996 the Company was served with a subpoena to appear and produce
documents before the Grand Jury of the United States District Court for the
Western District of Wisconsin in connection with the United States Department of
Justice Antitrust Division's investigation of bid rigging and other criminal
violations in the steel bridge fabrication industry. The Company has been
informed that it is not the target of the investigation at present but that it
and other companies in the steel bridge fabrication industry are the subjects of
the investigation.
The Company has no reason to believe that it will become a target of the
investigation or that a criminal action will be instituted against it in these
matters. If the Company became a target or a criminal investigation were
instituted, the Company believes that it would have significant and meritorious
defenses to any such charges and would vigorously defend against them.
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.
This quarterly report on Form 10-Q contains certain forward-looking statements
as to the outcome of various claims and legal proceedings. Actual results may
differ with respect to such claims and proceedings as a result of factors over
which the Company does not have any control, including, but not limited to, new
developments, changes in the laws or regulations and the positions taken by the
opposing parties, the courts or the finders of fact.
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<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED WITH THREE MONTHS ENDED SEPTEMBER
30, 1995.
The Company reported net income of $3.1 million, or $1.32 per share, on earned
revenue of $120.8 million for the quarter ended September 30, 1996. These
results compare with net income of $4.2 million, or $1.78 per share, on earned
revenue of $123.2 million for the quarter ended September 30, 1995. Although
results were down for the current quarter when compared with the prior year
quarter, gross profits overall remained relatively unchanged. The most
significant impact on current income from operations was primarily the result of
the increase in selling, general and administrative expenses associated with the
relocation of the Engineered Construction Division (ECD) headquarters to
Houston, Texas.
ECD, for the current quarter, reported earned revenue of $49.6 million and
income from operations of $2.3 million. These results were down $2.1 million
and $589,000 respectively from the prior year quarter, which, in terms of earned
revenue, was one of the more successful quarters in recent history. As a
percentage, gross profit improved from the prior year period but as volume
declined and costs related with the relocation were incurred, current results
were effected accordingly. New awards were $39.5 million and $60.4 million for
the third quarter of 1996 and 1995, respectively.
For the current quarter, Steel Construction reported earned revenue of $26.7
million and income from operations of $1.3 million. During the same period in
1995 earned revenue of $30.0 million and income from operations of $3.0 million
were realized. The decline in earned revenue for the current quarter is
primarily due to the decrease in bridge fabrication activity. New awards were
$29.8 million and $35.2 million for the quarters ended September 30, 1996 and
1995, respectively. On September 30, 1996, a contract with the local union of
the United Steelworkers of America in Eau Claire, Wisconsin expired and the
employees began a work stoppage. On November 9, 1996, a new contract was
ratified, and on November 11, 1996, the employees returned to work. Although at
the time of this filing the full effect of this temporary work stoppage has not
been determined, management does not expect it to have a material effect on the
1996 financial results of the Steel Construction business segment.
Also within the Steel Construction business segment, as indicated in "Costs and
Estimated Profits on Uncompleted Contracts" in Notes to Consolidated Financial
Statements, included in costs and estimated profits in excess of billings on
uncompleted contracts at September 30, 1996 was approximately $6.0 million
relating to an unapproved change order arising from a dispute over design and
specification changes on a project currently under construction. The resolution
of this matter could affect future operating results of the Company for the
period in which it is resolved.
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<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations (Cont'd)
Steel Service Centers earned revenue improved $3.0 million from $41.6 million to
$44.6 million for the three months ended September 30, 1996. Income from
operations increased 8 percent to $4.0 million from $3.7 million for the quarter
ended September 30, 1995. This segment is on pace to outperform 1995 results in
earned revenue and income from operations. However, historical trends indicate
fourth quarter results are somewhat lower than the third quarter.
Other income of $137,000 for the current quarter, compares with other expense of
$416,000 for the same quarter in 1995. This improvement can be attributed in
part to a gain realized on the sale of idle property recognized during the third
quarter of 1996.
NINE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED WITH NINE MONTHS ENDED SEPTEMBER
30, 1995.
For the nine months ended September 30, 1996 earned revenue improved $2.5
million and income from operations remained relatively unchanged at $15.9
million when compared with the nine months ended September 30, 1995. For the
current period, gross profit from operations improved $2.1 million which was
primarily offset by the current increase in selling, general and administrative
expenses resulting from the relocation costs as previously discussed.
ECD, for the nine months ended September 30, 1996, reported income from
operations of $5.8 million on earned revenue of $143.8 million. These results
compare with income from operations of $7.5 million on earned revenue of $147.5
million for the same period in 1995. Current results were lower, when compared
with successful 1995 results, and may continue into the fourth quarter as
business activity typically tapers off during that period.
Steel Construction reported a modest increase in earned revenue to the current
level of $93.7 million from $93.2 million for the nine months ended September
30, 1996. A significant increase in income from operations from $6.0 million to
$7.5 million was realized for the nine months ended September 30, 1996 due to
the improvement in building construction activity. This segment has experienced
a decline in bridge fabrication activity during 1996, particularly when compared
with unusually high levels reported during 1995. Management anticipates this
trend to continue into the fourth quarter.
During the nine months ended September 30, 1996, Steel Service Centers reported
an improvement in earned revenue of $7.0 million to $122.3 million from $115.3
million for the same period in 1995. Additionally, income from operations
increased to the current level of $9.9 million from $9.2 million recognized
during the nine months ended September 30, 1995. This segment continues to
benefit from strategic capital expansion programs which enables Steel Service
Centers to focus on customer service and efficiency of operations.
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<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations (Cont'd)
Other income of $96,000 for the period ended September 30, 1996, compares with
other expense of $1.2 million for the same period during 1995. A decrease in
interest expense, as a result of lower levels of net borrowings during 1996,
accounted for the majority of this improvement. Additionally, gains on the sale
of a foreign investment and an idle property had a significant impact on other
income.
LIQUIDITY AND CAPITAL RESOURCES
During the nine months ended September 30, 1996, the Company's primary sources
of liquidity were cash and cash equivalents, proceeds from debt obligations and
cash from operating activities which were invested in working capital. On
September 30, 1996, cash and cash equivalents were $4.7 million, compared with
$9.5 million on December 31, 1995. Working capital increased $12.1 million from
$75.1 million at December 31, 1995 to $87.2 million currently.
The net cash utilized by operating activities decreased by $2.6 million for the
period ended September 30, 1996 when compared with the same period in 1995. The
decrease in cash utilized was primarily the result of the change in components
that affect working capital. The change in costs, estimated profits and
billings (net) are affected from period to period by the mix, stage of
completion and commercial terms of contracts. The change in accounts receivable
accounted for the largest use of cash which was impacted by the timing of
contract related billings and receipts.
Capital expenditures of $2.9 million and $3.9 million for the nine months ended
September 30, 1996 and 1995, respectively, accounted for substantially all of
the investing activities. In 1995 and 1996, capital expenditures were primarily
for plant machinery and equipment. Total capital expenditures for the year
ended December 31, 1996 should approximate $5.5 million. In addition, management
intends to continue to pursue acquisition opportunities beneficial to the
Company.
Net cash utilized by financing activities for the period ended September 30,
1996, was the result of net borrowings of $2.0 million and payments of cash
dividends of $2.4 million. During the same period in 1995, net borrowings were
$1.0 million and payments of cash dividends equaled $1.7 million. On November
7, 1996, the Board of Directors declared a quarterly cash dividend of $.275 per
share of common stock payable December 27, 1996 to shareholders of record on
December 13, 1996. For the nine months ended September 30, 1996 and 1995, the
Company paid cash dividends per common share of $1.025 and $.75, respectively.
Payment of future dividends will be evaluated based upon 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 the unused portion of a $40.0 million unsecured revolving credit
facility which matures December 31, 1998. This facility contains an annual
option to renew for an additional one-year period, subject to lender approval.
On September 30, 1996, $15.0 million of borrowings and $12.5 million of stand-by
letters of credit were outstanding under this agreement.
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<PAGE>
Part II - Other Information
Item 1. Legal Proceedings
Refer to Part I Item 1, Notes B and C of the Notes to Consolidated
Financial Statements for information, which information is incorporated
herein by reference .
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
10.1 Pitt-Des Moines, Inc. Directors Stock Plan (filed herewith)
11.1 Computation of earnings per share for the three months ended
September 30, 1996 and 1995 (filed herewith)
11.2 Computation of earnings per share for the nine months ended
September 30, 1996 and 1995 (filed herewith)
27 Financial Data Schedule (filed herewith)
(b) Reports on Form 8-K
A Form 8-K dated August 23, 1996 was filed under Item 5 Other Events that
acknowledged receipt of an indictment handed down by the United States
Department of Justice regarding the accident on November 3, 1993, at the
U.S. Postal Service building site in Chicago, Illinois.
A Form 8-K dated September 17, 1996 was filed under Item 5 Other Events
which reported that the Company entered a plea of not guilty to the two
count misdemeanor indictment served on August 23, 1996.
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<PAGE>
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Pitt-Des Moines, Inc.
-------------------------------
(Registrant)
Principal Executive Officer:
Date: November 13, 1996 By: /s/ Wm. W. McKee
--------------------------
Wm. W. McKee
(President and
Chief Executive Officer)
Principal Financial Officer:
Date: November 13, 1996 By: /s/ R. A. Byers
--------------------------
R. A. Byers
(Vice President
Finance and Treasurer)
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<PAGE>
EXHIBIT INDEX
Exhibit
Number
- -------
10.1 Pitt-Des Moines, Inc. Directors Stock Plan (filed herewith)
11.1 Computation of earnings per share for the three months ended
September 30, 1996 and 1995 (filed herewith)
11.2 Computation of earnings per share for the nine months ended
September 30, 1996 and 1995 (filed herewith)
27 Financial Data Schedule (filed herewith)
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<PAGE>
Exhibit 10.1
Pitt-Des Moines, Inc.
DIRECTORS STOCK PLAN
Article I
General Provisions
Section 1.1. Establishment and Purpose. There is hereby established the
Pitt-Des Moines, Inc. Directors Stock Plan (the "Plan") pursuant to which each
director of Pitt-Des Moines, Inc. (the "Company") who is not an employee of the
Company or any of its subsidiaries (a "Non-Employee Director") shall: (a) be
required to receive shares of the Company's common stock, no par value ("Stock")
for a portion of the annual retainer fees to be paid to each Non-Employee
Director (the "Annual Retainer Fees") unless the Non-Employee Director is
eligible to elect, and elects pursuant to Section 2.3 of the Plan, not to
receive Stock; and (b) be eligible to receive shares of Stock in addition to
shares required to be received as a portion of the Annual Retainer Fees through
an election made pursuant to Section 2.2 of the Plan to receive Stock in lieu of
a greater portion of the Annual Retainer Fees than required under Section 2.1 of
the Plan. The purpose of the Plan is to assist the Company in attracting,
retaining and motivating highly qualified Non-Employee Directors and to promote
identification of, and align Non-Employee Directors' interests more closely
with, the interests of the stockholders of the Company.
Section 1.2. Definitions. The following terms when used herein shall have
the meanings set forth below:
"Annual Retainer Fees" shall mean the amount of Compensation determined by
the Board to be payable to each Non-Employee Director for an entire Plan Year.
"Board" shall mean the Board of Directors of the Company.
"Committee" shall mean the committee of the Board appointed by the Board to
administer the Plan. Unless otherwise determined by the Board, the Committee
shall be the Compensation Committee of the Board.
"Company" shall mean Pitt-Des Moines, Inc. and any successor entity.
"Compensation" shall mean remuneration paid to a Non-Employee Director for
service on the Board excluding fees payable by reason of meeting attendance, for
service on Committees of the Board or for other matters or services.
"Election" or "Elections" shall mean either or both an Election In and an
Election Out.
"Election In" shall mean an Election, duly filed in accordance with Section
2.6 of the Plan, whereby a Non-Employee Director elects to receive additional
Stock pursuant to Section 2.2 of the Plan.
-1-
<PAGE>
"Election In Date" shall mean March 31, in any Plan Year commencing on or
after January 1, 1997 and shall mean September 30, 1996 for the Plan Year
commencing on said date.
"Election Out" shall mean an Election, duly filed in accordance with
Section 2.6 of the Plan, whereby a Non-Employee Director elects to receive cash
in lieu of Stock pursuant to Section 2.3 of the Plan.
"Election Out Date" shall mean February 28, in any Plan Year commencing on
or after January 1, 1997, and shall mean September 30, 1996 for the Plan Year
commencing on said date.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
"Fair Market Value" shall mean, as of any date, the average of the closing
prices for the Stock as reported by the American Stock Exchange (or such other
exchange or market applicable to the Stock or the Company which is designated by
the Board) for the three dates most immediately preceding the date in question
upon which sales were effected and so reported.
"Non-Employee Director" shall mean any director of the Company who is not
an employee of the Company or any of its subsidiaries.
"Payment Dates" shall mean those dates for Payment of Compensation provided
in Section 2.5 of the Plan, or such other dates as the Committee, or the Board,
shall determine.
"Plan Year" shall mean the twelve-month period beginning January 1 and
ending December 31 in any year commencing on or after January 1, 1997 and shall
mean for the year 1996, that period commencing September 30, 1996 and ending
December 31, 1996.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Stock" shall mean the Company's common stock, no par value.
"Stock Portfolio" shall mean all Stock of which a Non-Employee Director has
sole voting and dispositive power as such terms are used in Rule 13d-3 (or any
successor rule) promulgated under the Exchange Act.
"Stockholding Valuation Date" shall mean January 31, in any Plan Year
commencing on or after January 1, 1997 and shall mean August 1, 1996 for the
Plan Year commencing on September 30, 1996.
Section 1.3. Administration. The Plan shall be administered by the
Committee. The Committee shall serve at the pleasure of the Board of Directors.
A majority of the Committee shall constitute a quorum, and the acts of a
majority of the members of the Committee present at any meeting at which a
quorum is present, or acts approved in writing by a majority of the members of
the Committee, shall be deemed the acts of the Committee. The Committee is
authorized to interpret and construe the Plan, to make all determinations and
take all other actions necessary or advisable for the administration of the
Plan, and to delegate to employees of the Company or any subsidiary the
authority to perform administrative functions under the Plan.
-2-
<PAGE>
Section 1.4. Eligibility. An individual who is a Non-Employee Director
shall be eligible to participate in, and subject to the requirements of, the
Plan commencing with the first Plan Year commencing after the date said
individual becomes a Non-Employee Director.
Section 1.5. Common Stock Subject to the Plan. The initial number of
shares of Stock that may be issued pursuant to the Plan is 25,000. The
Committee may authorize the issuance of Stock in excess of said initial 25,000
shares, up to a maximum of 100,000 Shares, in the event that the Committee
determines that the issuance of additional shares is required in order to
maintain the existence of the Plan, subject to the receipt of any necessary
approvals. In no event shall more than 100,000 shares of Stock be issued under
the Plan.
Section 1.6. Plan Duration. Subject to earlier termination pursuant to
Plan Sections 1.5 and 3.1, the Plan shall terminate with payment of any
Compensation due at the expiry of the Plan Year ending December 31, 2007.
Article II
Distributions and Elections
Section 2.1. Required Receipt of Stock from Compensation. Any Non-
Employee Director who is not eligible to elect to receive Compensation in cash
in lieu of Stock pursuant to Section 2.3 of the Plan, and any Non-Employee
Director who is eligible to elect to receive cash in lieu of Stock but who does
not so elect, shall receive Stock under the Plan in lieu of a portion of the
Annual Retainer Fees otherwise payable to such Non-Employee Director in any Plan
Year as follows:
a. For the Plan Year commencing September 30, 1996, each such Non-
Employee Director shall receive, on October 1, 1996, as a portion of
the Compensation payable pursuant to Plan Section 2.5 on said date,
that number of whole shares of Stock with a Fair Market Value as
nearly as possible equal to but less than Five Thousand Dollars and
One Cent ($5,000.01); and
b. For Plan Years commencing on or after January 1, 1997, each such Non-
Employee Director shall receive, on the day after the Company's Annual
Meeting of Shareholders, as a portion of the Compensation payable
pursuant to Plan Section 2.5 on said date, that number of whole shares
of Stock with a Fair Market Value as nearly as possible equal to but
less than Five Thousand Dollars and One Cent ($5,000.01).
Section 2.2. Right to Receive Additional Stock from Compensation. Any Non-
Employee Director may elect to receive Stock under this Plan in lieu of any
portion of the Compensation otherwise payable to such Non-Employee Director not
received in Stock pursuant to Section 2.1 of the Plan, by filing a written
election with the Company pursuant to Section 2.4 of the Plan. In the absence of
such an election the balance of all Compensation payable other than pursuant to
Section 2.1 of the Plan shall be paid in cash.
-3-
<PAGE>
Section 2.3. Election Not to Receive Stock from Compensation. Any Non-
Employee Director who, on the applicable Stockholding Valuation Date, holds a
Stock Portfolio with a Fair Market Value on that date in excess of three times
the Annual Retainer Fees then payable to said Non-Employee Director for the Plan
Year in which such date falls, shall have the right to elect not to receive any
Stock under the Plan for the Plan Year in which such date falls ("Election
Out"), by filing a written notice of election with the Secretary of the Company
on or before the Election Out Date which falls during that same Plan Year.
In the absence of an Election Out, Compensation shall be paid partly in Stock
pursuant to Section 2.1 of the Plan and partly in cash pursuant to Section 2.5
of the Plan.
Section 2.4. Elections to Receive Additional Stock from Compensation. Any
Non-Employee Director may, on or before the applicable Election In Date during
any Plan Year, file written notice of election with the Secretary of the Company
electing to receive Stock in lieu of Compensation under the Plan in addition to
that received pursuant to Section 2.1 of the Plan ("Election In"). Such
Election In shall denominate the dollar value of that portion of Compensation to
be paid in Stock during the Plan Year for which the Election In is made, and
Non-Employee Directors who so file an Election In shall receive, on the
applicable Payment Dates, that number of whole shares of Stock with a Fair
Market Value as nearly as possible equal to but less than the lesser of: (a)
that portion of Annual Retainer Fees payable but unpaid on said date(s); and (b)
the amount denominated in the Election In.
Section 2.5 Payments and Payment Dates.
a. Payments of Compensation under the Plan shall be made on the following
dates ("Payment Dates") during each Plan Year that Annual Retainer Fees
are payable:
January 1 (on account of Compensation payable for the preceding
quarter);
April 1 (on account of Compensation payable for the preceding
quarter);
October 1 (on account of Compensation payable for the preceding
quarter); and
That date which falls on the day after the regular Annual Meeting of
Shareholders of the Company (on account of Compensation payable
during the second quarter).
b. Payments of Compensation shall be made in cash unless otherwise provided
pursuant to the provisions of the Plan and Elections made thereunder. To the
extent that the Fair Market Value of Stock to be received on any Payment Date is
less than the amount of Compensation payable to a Non-Employee Director on said
date, the Company shall, subject to Section 3.5 of the Plan, forthwith remit
cash to said Non-Employee Director for the balance of Compensation due on said
date.
c. No partial shares of Stock shall be issued by reason of the provisions of
the Plan or any Elections thereunder.
-4-
<PAGE>
Section 2.6. Terms and Conditions of Elections.
a. Any election not to receive Stock from Compensation ("Election Out") or
Election to receive additional stock from Compensation ("Election In",
together "Elections") shall be subject to the following terms and
conditions:
(i) All Elections shall be in a writing mailed to or filed with the
Secretary of the Company;
(ii) All Elections shall be irrevocable and unchangeable except as
provided in 2.6(a)(iii); and
(iii) An Election shall remain in effect for all future Plan Years
unless terminated or changed pursuant to an Election made on or
prior to date such Election would be due for the next Plan Year.
b. Any Election In shall designate the dollar amount of Compensation in
excess of that portion of the Annual Retainer Fees to be received in
Stock pursuant to Section 2.1 of the Plan that a Non-Employee Director is
electing to receive in Stock pursuant to Section 2.4 of the Plan.
Section 2.7. Distributions on Death. In the event of the death of a Non-
Employee Director, whether before or after cessation of services as a Non-
Employee Director, any Compensation to which said Director was entitled shall be
distributed in cash and participation in the Plan shall cease as of the date of
such Director's death.
Article III
Miscellaneous Provisions
------------------------
Section 3.1. Amendment and Discontinuance. The Board of Directors may alter,
amend, suspend or discontinue the Plan, provided that no such action shall
deprive any person, without such person's consent, of any rights theretofore
granted pursuant hereto. The Board may, in its discretion, submit any proposed
amendment to the Plan to the stockholders of the Company for approval.
Section 3.2. Compliance with Governmental Regulations. Notwithstanding any
provision of the Plan or the terms of any agreement entered into pursuant to the
Plan, the Company shall not be required to issue any shares hereunder prior to
registration of the shares subject to the Plan under the Securities Act or the
Exchange Act, if such registration shall be necessary, or before compliance by
the Company or any participant with any other provisions of either of those acts
or of regulations or rulings of the Securities and Exchange Commission
thereunder, or before compliance with other federal and state laws and
regulations and rulings thereunder, including the rules of the American Stock
Exchange or other exchange or market applicable to the Company and to the Plan.
The Company shall use its best efforts to effect such registrations and to
comply with such laws, regulations and rulings forthwith upon advice by its
counsel that any such registration or compliance is necessary.
-5-
<PAGE>
Section 3.3. Compliance with Section 16. With respect to persons subject to
Section 16 of the Exchange Act, transactions under the Plan are intended to
comply with all applicable conditions of Rule 16b-3, effective August 15, 1996
(or its successor rule). To the extent that any provision of the Plan or any
action by the Board of Directors or the Committee fails to so comply, it shall
be deemed null and void to the extent permitted by law and to the extent deemed
advisable by the Committee.
Section 3.4. Non-Alienation of Benefits. No right or interest of a Non-
Employee Director under the Plan may be sold, assigned, transferred, pledged,
encumbered or otherwise disposed of except as expressly provided in the Plan and
no interest or benefit of any Non-Employee Director under the Plan shall be
subject to the claims of creditors of the Non-Employee Director.
Section 3.5. Withholding Taxes. To the extent required by applicable law or
regulation, each Non-Employee Director must arrange with the Company for the
payment of any federal, state or local income or other tax applicable to the
receipt of Stock under the Plan before the Company shall be required to deliver
to the Non-Employee Director a certificate for Stock free and clear of all
restrictions under the Plan.
Section 3.6. Funding. No obligation of the Company under the Plan shall be
secured by any specific assets of the Company, nor shall any assets of the
Company be designated as attributable or allocated to the satisfaction of any
such obligation. To the extent that any person acquires a right to receive
payments from the Company under the Plan, such right shall be no greater than
the right of any unsecured creditor of the Company.
Section 3.7. Governing Law. The Plan shall be governed by and construed and
interpreted in accordance with the internal laws of the Commonwealth of
Pennsylvania.
Section 3.8. Effective Date of Plan. The Plan is effective as of September
30, 1996.
-6-
<PAGE>
Exhibit 11.1
PITT-DES MOINES, INC.
Computation of Earnings Per Share
(Unaudited)
<TABLE>
<CAPTION>
Three months ended
September 30,
----------------------------
1996 1995
--------- ---------
<S> <C> <C>
Primary
Average shares outstanding 2,323,633 2,321,903
---------- ----------
Dilutive stock options based on treasury stock
method using average market price 28,286 7,832
---------- ----------
2,351,919 2,329,735
========== ==========
Net income $3,103,422 $4,158,097
========== ==========
Per common share:
Net income per common share $ 1.32 $ 1.78
========== ==========
Fully Diluted
Average shares outstanding 2,323,633 2,321,903
Dilutive stock options based on treasury stock method
using greater of period-end or average market price 28,286 12,844
---------- ----------
2,351,919 2,334,747
========== ==========
Net income $3,103,422 $4,158,097
========== ==========
Per common share:
Net income per common share $ 1.32 $ 1.78
========== ==========
</TABLE>
<PAGE>
Exhibit 11.2
PITT-DES MOINES, INC.
Computation of Earnings Per Share
(Unaudited)
<TABLE>
<CAPTION>
Nine months ended
September 30,
----------------------------
1996 1995
--------- ---------
<S> <C> <C>
Primary
Average shares outstanding 2,323,120 2,321,903
Dilutive stock options based on treasury stock
method using average market price 28,794 6,612
---------- ----------
$9,351,914 2,328,515
========== ==========
Net income $9,703,264 $9,064,021
========== ==========
Per common share:
Net income per common share $ 4.13 $ 3.89
========== ==========
Fully Diluted
Average shares outstanding 2,323,120 2,321,903
Dilutive stock options based on treasury stock method
using greater of period-end or average market price 30,625 8,905
---------- ----------
2,353,745 2,330,808
========== ==========
Net income $9,703,264 $9,064,021
========== ==========
Per common share:
Net income per common share $ 4.13 $ 3.89
========== ==========
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1996 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 4,743
<SECURITIES> 0
<RECEIVABLES> 93,914
<ALLOWANCES> 1,126
<INVENTORY> 17,644
<CURRENT-ASSETS> 153,469
<PP&E> 102,471
<DEPRECIATION> 62,478
<TOTAL-ASSETS> 204,632
<CURRENT-LIABILITIES> 66,226
<BONDS> 15,000
0
0
<COMMON> 33,549
<OTHER-SE> 82,837
<TOTAL-LIABILITY-AND-EQUITY> 204,632
<SALES> 358,410
<TOTAL-REVENUES> 358,410
<CGS> 311,115
<TOTAL-COSTS> 311,115
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 906
<INCOME-PRETAX> 15,953
<INCOME-TAX> 6,250
<INCOME-CONTINUING> 9,703
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,703
<EPS-PRIMARY> 4.13
<EPS-DILUTED> 4.13
</TABLE>
