<PAGE>
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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 June 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 of other jurisdiction of (I.R.S. Employer
incorporation of organization) Identification No.)
3400 Grand Avenue, Pittsburgh, PA 15225
(Address of Principal Executive Offices) (Zip Code)
(412) 331-3000
(Registrant's Telephone Number, including Area Code)
____________________
Indicate by check whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
----- -----
On June 30, 1996, 2,323,633 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 4. Submission of matters to a vote of security holders 14
Item 6. Exhibits and reports on Form 8-K 14
Signatures 16
Exhibit Index 17
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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 Six months ended
June 30, June 30,
-------------------- --------------------
(in thousands, except per share amounts) 1996 1995 1996 1995
<S> <C> <C> <C> <C>
Earned revenue $121,649 $ 113,468 $ 237,615 $ 232,710
Cost of earned revenue (105,971) (98,670) (207,006) (204,617)
--------- -------- --------- ---------
Gross profit from operations 15,678 14,798 30,609 28,093
Selling, general and administrative expenses (10,133) (10,050) (19,752) (19,301)
--------- -------- --------- ---------
Income from operations 5,545 4,748 10,857 8,792
Other income/(expense):
Interest income 203 180 443 345
Interest expense (314) (511) (591) (1,031)
Gain on sale of assets 262 23 282 32
Miscellaneous, net (90) (110) (175) (109)
--------- -------- --------- ---------
61 (418) (41) (763)
--------- -------- --------- ---------
Income before income taxes 5,606 4,330 10,816 8,029
Income taxes (2,180) (1,703) (4,216) (3,123)
--------- -------- --------- ---------
Net income $ 3,426 $ 2,627 $ 6,600 $ 4,906
========= ======== ========= =========
Per common share:
Net income per common share $1.46 $1.13 $2.81 $2.11
========= ======== ========= =========
Dividends paid $.275 $.25 $.75 $.50
========= ======== ========= =========
Shares used to calculate income per share
(in 000's) 2,354 2,322 2,352 2,322
========= ======== ========= =========
CONSOLIDATED RETAINED EARNINGS
Balance at the beginning of year $ 89,677 $ 79,202
Net income 6,600 4,906
Dividends paid (1,743) (1,161)
Other 38 0
--------- --------
Balance at end of period $ 94,572 $ 82,947
========= =========
</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>
June 30, December 31,
1996 1995
----------- -----------
(in thousands) (Unaudited)
<S> <C> <C>
Assets
Current Assets
Cash and cash equivalents $ 3,797 $ 9,508
Accounts receivable including retentions
(less allowances: 1996-$1,220; 1995-$868) 92,383 77,517
Inventories 16,968 16,418
Costs and estimated profits in excess
of billings 33,766 38,166
Deferred income taxes 4,872 4,872
Prepaid expenses 1,702 914
-------- ---------
Total Current Assets 153,488 147,395
Other Assets 7,150 8,080
Net Assets of Discontinued Operations 3,916 3,916
Property, Plant and Equipment
Land 6,789 6,784
Buildings 31,089 31,025
Machinery and equipment 64,120 62,287
-------- --------
101,998 100,096
Allowances for depreciation (61,477) (58,351)
-------- --------
Net Property, Plant and Equipment 40,521 41,745
-------- --------
$205,075 $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>
June 30, December 31,
1996 1995
----------- -----------
(in thousands) (Unaudited)
<S> <C> <C>
Liabilities
Current Liabilities
Accounts payable $ 33,694 $ 41,611
Accrued compensation, related taxes and benefits 11,162 11,739
Other accrued expenses 1,942 2,379
Billings in excess of costs and estimated profits 7,383 6,436
Income taxes 2,090 1,345
Casualty and liability insurance 10,011 8,817
-------- --------
Total Current Liabilities 66,282 72,327
Revolving Credit Facility 18,000 13,000
Deferred Income Taxes 5,601 5,601
Minority Interest 1,270 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 94,572 89,677
-------- --------
128,121 123,226
Treasury stock at cost
(1996-658,523 shares; 1995-662,523 shares) (14,199) (14,285)
-------- --------
Total Stockholders' Equity 113,922 108,941
-------- --------
$205,075 $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>
Six months ended
June 30,
--------------------------
(in thousands) 1996 1995
--------- --------
<S> <C> <C>
Cash Flow From Operating Activities
Net income $ 6,600 $ 4,906
Adjustments to reconcile net income to net
cash utilized by operating activities:
Depreciation 2,977 2,945
Discontinued operations 0 (931)
Gain on sale of assets (282) (32)
Minority interest, net of dividends paid 3 (18)
Other non-cash credits, net (120) (240)
Change in certain assets and liabilities
(using) or providing cash:
Accounts receivable (13,795) 9,863
Inventories (550) (33)
Prepaid expenses (788) (1,765)
Costs, estimated profits and billings, net 5,347 (4,394)
Accounts payable (7,917) (13,173)
Accrued liabilities 180 758
Income taxes 745 (120)
-------- --------
Net cash utilized by operating activities (7,600) (2,234)
Cash Flows from Investing Activities
Capital expenditures (1,775) (2,882)
Proceeds from sales of assets 304 130
Change in investments and other assets (21) 70
-------- --------
Net cash utilized by investing activities (1,492) (2,682)
Cash Flows from Financing Activities
Proceeds from debt obligations 8,000 4,000
Payments of debt obligations (3,000) (3,000)
Dividends paid (1,743) (1,161)
Other 124 0
-------- --------
Net cash provided by financing activities 3,381 (161)
-------- --------
Decrease in cash and cash equivalents (5,711) (5,077)
Cash and cash equivalents at beginning of year 9,508 11,668
-------- --------
Cash and cash equivalents at end of period $ 3,797 $ 6,591
======== ========
</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 six months ended June 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>
June 30, December 31,
(in thousands) 1996 1995
--------- -----------
<S> <C> <C>
Costs incurred on uncompleted contracts $ 656,671 $ 542,631
Estimated profits 89,380 69,861
--------- ----------
746,051 612,492
Less: Billings to date (719,668) (580,762)
--------- ----------
$ 26,383 $ 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>
June 30, December 31,
(in thousands) 1996 1995
--------- -----------
<S> <C> <C>
Costs and estimated profits in excess of billings $33,766 $38,166
Billings in excess of costs and estimated profits (7,383) (6,436)
------- -------
$26,383 $31,730
======= =======
</TABLE>
-7-
<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 June 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)
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. An investigation is being 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.
The Justice Department continues to investigate whether to institute criminal
action against the Company as a result of the accident, and has convened a grand
jury proceeding in the United States District Court for the Northern District of
Illinois. The Company cannot predict whether or not a criminal action will be
instituted. If such action is commenced, and the Company is found in violation
of these laws, 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 it could be material to the Company's reported
results of operations for the period in which such payments are incurred. The
Company believes that it has significant and meritorious defenses to any such
charges and intends to vigorously defend them. Although the Company has
insurance coverages containing various deductible clauses totalling $1.5
million, the Company and its insurance carriers are assessing the damages and
related policy coverages.
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. The Company's total claim is
substantially in excess of the counterclaim. On June 4, 1996 certain of the
defendants in said action made counterclaims against the Company in amounts
approximating $3.5 million. 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 presently the target of the investigation but that it
and other companies in the steel bridge fabrication industry are the subjects of
the investigation.
-9-
<PAGE>
Item 1. Financial Statements (Continued)
Note C. Contingencies (Continued)
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 has significant and meritorious
defenses to any such charges and intends to vigorously defend 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 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.
-10-
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 1996 COMPARED WITH THREE MONTHS ENDED JUNE 30, 1995.
The Company reported net income of $3.4 million, or $1.46 per share, on earned
revenue of $121.6 million for the quarter ended June 30, 1996. These results
compare with net income of $2.6 million, or $1.13 per share, on earned revenue
of $113.5 million for the quarter ended June 30, 1995.
During the second quarter of 1996, earned revenue and income from operations
increased 7 percent and 17 percent, respectively when compared with the second
quarter of 1995. New awards of $135 million for the current quarter were
equivalent to the prior year quarter.
The Engineered Construction Division (ECD) reported a 6 percent increase in
earned revenue from $45.4 million at June 30, 1995 to $48.1 million for the
current quarter. Income from operations of $1.6 million, although profitable,
was down from $2.2 million for the prior year quarter. This was primarily the
result of contract margins slightly lower than margins realized during the
quarter ended June 30, 1995. New awards improved 37 percent for the current
quarter when compared with the same quarter in 1995 which resulted in a strong
backlog level entering the third quarter of 1996.
During the second quarter of 1996, Steel Construction realized improvements in
both earned revenue and profitability when compared with the second quarter of
1995. Earned revenue increased 18 percent to $33.5 million from $28.5 million
for the quarter ended June 30, 1995. Income from operations of $2.9 million for
the current quarter increased 42 percent when compared with the same quarter in
1995. New awards for the current quarter were down when compared with new awards
for the same quarter in 1995 which were substantially above average for this
segment. This resulted in a current backlog slightly below the second quarter of
1995. As indicated in "Costs and Estimated Profits on Uncompleted Contracts" in
the Notes to Consolidated Financial Statements, included in costs and estimated
profits in excess of billings on uncompleted contracts at June 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.
Steel Service Centers income from operations of $3.1 million on earned revenue
of $40.1 million for the quarter ended June 30, 1996 compares with income from
operations of $3.2 million on earned revenue of $39.6 million for the prior year
quarter.
Other income of $61,000, for the current quarter, compares with other expense of
$418,000 for the same quarter in 1995. This improvement was primarily the
result of a gain realized on the sale of a foreign investment during the second
quarter of 1996.
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<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations (Cont'd)
SIX MONTHS ENDED JUNE 30, 1996 COMPARED WITH SIX MONTHS ENDED JUNE 30, 1995.
For the six months ended June 30, 1996, the Company reported net income of $6.6
million, or $2.81 per share, on earned revenue of $237.6 million. These results
compare with net income of $4.9 million, or $2.11 per share, on earned revenue
of $232.7 million for the six months ended June 30, 1995.
During the period ended June 30, 1996 increases in earned revenue of $4.9
million, profitability of $2.1 million and new awards of $16.3 million were
realized when compared with results for the period ended June 30, 1995.
For the six months ended June 30, 1996, ECD reported income from operations of
$3.5 million on earned revenue of $94.2 million. These results compare with
income from operations of $4.6 million on earned revenue of $95.9 million for
the same period in 1995. As earned revenue remained relatively unchanged, the
decline in profitability was primarily the result of lower contract margins
realized in 1996 when compared with 1995. Additionally, new awards of $108.6
million represents a $21 million increase from the period ended June 30, 1995.
Steel Construction realized a $3.8 million increase in earned revenue from $63.2
million to $67 million for the periods ended June 30, 1995 and 1996,
respectively. Income from operations improved to the current level of $6.2
million from $3 million for the same period in 1995. Increases in earned
revenue and profitability were primarily the result of improvements in building
construction activity. New awards of $50.4 million for the six months ended
June 30, 1996 compare with $59 million for the similar prior year period. During
the second quarter of 1995 new awards were substantially above average for this
segment.
Steel Service Centers reported a 5 percent increase in earned revenue and a 7
percent increase in income from operations for the current period when compared
with the period ended June 30, 1995. Earned revenue of $73.7 million improved
to $77.7 million and profitability of $5.6 million increased to $6 million for
the six months ended June 30, 1995 and 1996, respectively.
Other expense of $41,000 for the year to date period ended June 30, 1996
compares with other expense of $763,000 for the same period in 1995. A decrease
in interest expense, as a result of lower levels of net borrowings during 1996,
accounted for the majority of this improvement.
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<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
During the six months ended June 30, 1996, the Company's primary sources of
liquidity were cash and cash equivalents and proceeds from the Company's
borrowing facility. On June 30, 1996, cash and cash equivalents were $3.8
million, a decrease of $5.7 million, compared with $9.5 million on December 31,
1995. Working capital increased $12.1 million to $87.2 million currently, from
$75.1 million at December 31, 1995.
The net cash utilized by operating activities increased by $5.4 million for the
period ended June 30, 1996 when compared with the same period in 1995. This was
primarily the result of the change in components that affect working capital.
Accounts receivable accounted for the largest change in working capital
components which was impacted by the timing of contract related billings and
receipts.
Capital expenditures of $1.8 million and $2.9 million for the six months ended
June 30, 1996 and 1995, respectively were the major components in investing
activities. In 1996 expenditures were primarily for computer equipment and plant
machinery and equipment. Expenditures during 1995 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 of $3.4 million for the period ended
June 30, 1996, was primarily the result of net borrowings of $5.0 million and
payments of cash dividends of $1.7 million. Net borrowings under the revolving
credit facility during the six months ended June 30, 1996, were used to finance
working capital growth. On August 1, 1996, the Board of Directors declared a
quarterly dividend of $.275 per share of common stock payable September 27, 1996
to shareholders of record on September 13, 1996. 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 June 30, 1996, $18.0 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, "Note C - Contingencies" of the Notes to
Consolidated Financial Statements for information, which information is
incorporated herein by reference.
Item 4. Submission of Matters to a Vote of Security Holders
On May 2, 1996, the Company held its annual stockholders meeting. The
two matters voted upon at the annual meeting were the election of three
directors and the ratification of the appointment of Ernst & Young LLP
as auditors for the year ending December 31, 1996.
Each of the Company's nominees for director was reelected at the annual
meeting. The total number of votes cast for the election of directors
was 1,947,082. Following is a separate tabulation with respect to each
director:
<TABLE>
<CAPTION>
Votes For Votes Withheld
--------- --------------
<S> <C> <C>
R. W. Dean 1,933,740 13,342
W. R. Jackson 1,932,587 14,495
W. E. Lewellen 1,933,240 13,842
</TABLE>
The total number of votes cast for the ratification of the appointment
of Ernst & Young LLP as auditors for the year ending December 31, 1996,
was 1,947,082 with 1,942,966 votes for, 210 votes against and 3,906
votes abstained.
There were no broker nonvotes with respect to the two matters voted
upon.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 4.1 - Seventh Amendment to Credit Agreement dated
June 30, 1996.
Exhibit 11.1 - Computation of earnings per share for the three months
ended June 30, 1996 and 1995.
Exhibit 11.2 - Computation of earnings per share for the six months
ended June 30, 1996 and 1995.
Exhibit 27 - Financial Data Schedule
-14-
<PAGE>
(b) Reports on Form 8-K.
A Form 8-K dated June 20, 1996 with respect to an investigation of the
Company by the United States Department of Justice's Anti-Trust
Division concerning potentially criminal bidding activities in the
steel bridge fabrication industry was filed under Item 5 Other Events.
There have been no other reports on Form 8-K filed by the Company
during the quarter ended June 30, 1996.
-15-
<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: August 13, 1996 By: /s/ Wm. W. McKee
-----------------------
Wm. W. McKee
(President and
Chief Executive Officer)
Principal Financial Officer:
Date: August 13, 1996 By: /s/ R. A. Byers
-----------------------
R. A. Byers
(Vice President
Finance and Treasurer)
-16-
<PAGE>
EXHIBIT INDEX
Exhibit
Number
- -------
4.1 Seventh Amendment to Credit Agreement dated June 30, 1996
11.1 Computation of earnings per share for the three months ended June 30,
1996 and 1995
11.2 Computation of earnings per share for the six months ended June 30,
1996 and 1995
27 Financial Data Schedule
<PAGE>
Exhibit 4.1
SEVENTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
THIS SEVENTH AMENDMENT ("Seventh Amendment") made as of June 30, 1996
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, the Second Amendment to Amended and Restated Credit Agreement
dated as of June 10, 1993, the Third amendment to Amended and Restated Credit
Agreement dated as of December 16, 1993, the Fourth Amendment to Amended and
Restated Credit Agreement dated as of June 24, 1994 and the Fifth Amendment to
Amended and Restated Credit Agreement dated as of December 8, 1994 and the Sixth
Amendment to Amended and Restated Credit Agreement dated as of May 31, 1995
(said Amended and Restated Credit Agreement as so amended herein referred to as
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 AMENDMENTS TO SUBSECTION 9.1 OF ORIGINAL CREDIT
AGREEMENT. (i) The following definition set forth in Subsection 9.1 of the
Original Credit Agreement is hereby amended and restated as follows:
"Maturity Date" means December 31, 1998 or such later date as is
ultimately determined in accordance with Subsection 1.1g hereof.
(ii) The following new definition is inserted into Section 9.1
of the Original Credit Agreement in alphabetical order:
"Seventh Amendment" shall mean that Seventh Amendment to
Amended and Restated Credit Agreement dated as of June 30, 1996 between
the Borrower, the Banks, the Agent and the Issuing Bank.
<PAGE>
Section 1.02 AMENDMENTS TO SCHEDULES TO THE ORIGINAL CREDIT NOTE.
Schedule 3.1b and Schedule 3.9 to the original Credit Agreement are deleted and
Schedule 3.1b and Schedule 3.9 to the original Credit Agreement are deleted and
Schedule 3.1b and Schedule 3.9 attached to this Seventh Amendment are
substituted in place thereof.
Section 1.03 NO OTHER AMENDMENTS. The amendments to the original
Credit Agreement set forth in Section 1.01 do not either implicitly or explicity
alter, waive or amend, except as expressly provided in this Seventh Amendment,
the provisions of the Original Credit Agreement. The amendments set forth in
Section 1.01 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.
ARTICLE II
BORROWER'S SUPPLEMENTAL REPRESENTATIONS
As an inducement to the Banks, the Issuing Bank and the Agent to enter
into this Seventh 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 Seventh Amendment.
ARTICLE III
MISCELLANEOUS
Section 3.01 RATIFICATION OF TERMS. This Seventh Amendment shall be
construed in connection with and as part of the Original Credit Agreement; and
the Original Credit Agreement is hereby amended and modified to include this
Seventh Amendment. Except as expressly amended by prior Amendments to the
Credit Agreement and this Seventh 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 Seventh 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 Seventh
Amendment by telecopier shall be effective as of delivery of a manually executed
counterpart of this Seventh 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.
<PAGE>
Section 3.04 CONDITIONS PRECEDENT. This Seventh 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 Seventh
Amendment;
(B) A certificate of the chief financial officer of the Borrower
certifying that, as of the date of this Seventh 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 Seventh amendment;
(C) A certified copy of the corporate action of the Borrower
authorizing the execution and delivery of the performance under this Seventh
Amendment;
(D) A good standing certificate for the Borrower issued by the
Secretary of State of the state of its incorporation and of the jurisdiction of
its principal place of business;
(E) A certificate of the secretary or assistant secretary of the
Borrower certifying the names of the persons authorized to sign this Seventh
Amendment and all other documents and certificates delivered hereunder together
with the true signatures of such persons;
(F) 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 Seventh 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
Seventh Amendment shall be interpreted in such manner as to be effective and
valid under applicable law but if any provision of this Seventh 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 Seventh Amendment.
Section 3.08 GOVERNING LAW. THIS SEVENTH 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 Seventh Amendment are
for purposes of reference only and shall not limit or otherwise affect the
meaning thereof.
<PAGE>
Section 3.10 REFERENCES. All notices, communications, agreements,
certificates, documents or other instruments executed and delivered after the
execution and delivery of this Seventh Amendment may refer to the Original
Credit Agreement without making specific reference to this Seventh Amendment,
but nevertheless all such references shall include this Seventh Amendment unless
the context requires otherwise.
Section 3.11 TAXES. The Borrower hereby agrees (i) to pay any and
all stamp and other taxes and fees payable or determined to be payable in
connection with the execution, delivery, filing and recording of this Seventh
Amendment and such other documents, and (ii) to save each of the Banks, the
Issuing Bank and the Agent harmless from and against any and all liabilities
with respect to or resulting from any delay in paying or omission to pay such
taxes and fees.
Section 3.12 COSTS AND EXPENSES. The Borrower hereby agrees to pay
all costs and expenses of the Banks, the Issuing Bank and the Agent (including,
without limitation, the reasonable fees and the disbursements of the Agent's
special counsel, Tucker Arensberg, P.C.) in connection with the preparation,
execution and delivery of this Seventh Amendment and the related documents.
Section 3.13 ACKNOWLEDGEMENT OF AMENDMENT OF THE NOTES. Each of the
parties hereto acknowledges and confirms that as of the Amendment Effective Date
each of the Revolving Credit Notes executed and delivered by the Borrower to the
various Banks in connection with the Fifth Amendment to Amended and Restated
Credit Agreement dated as of December 8, 1994 is, and will be, amended to extend
the stated maturity date of such Revolving Credit Notes to December 31, 1998.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
IN WITNESS WHEREOF, the parties hereto, with the intent to be legally
bound hereby have caused this Seventh 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.
/s/ Thomas R. Lloyd /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
/s/ Sean D. S. Sebastian
------------------------
Name: Sean D. S. Sebastian
Title: Assistant Vice President
WELLS FARGO BANK, N.A.
/s/ Stephen M. Smith
------------------------
Name: Stephen M. Smith
Title: Vice President
AMERICAN NATIONAL BANK
/s/ James R. Popp
------------------------
Name: James R. Popp
Title: Vice President
<PAGE>
Exhibit 11.1
PITT-DES MOINES, INC.
Computation of Earnings Per Share
(Unaudited)
<TABLE>
<CAPTION>
Three months ended
June 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 30,395 5,885
---------- ----------
2,354,028 2,327,788
========== ==========
Net income $3,425,512 $2,626,678
========== ==========
Per common share:
Net income per common share $ 1.46 $ 1.13
========== ==========
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 30,395 5,885
---------- ----------
2,354,028 2,327,788
========== ==========
Net income $3,425,512 $2,626,678
========== ==========
Per common share:
Net income per common share $ 1.46 $ 1.13
========== ==========
</TABLE>
<PAGE>
Exhibit 11.2
PITT-DES MOINES, INC.
Computation of Earnings Per Share
(Unaudited)
<TABLE>
<CAPTION>
Six months ended
June 30,
----------------------------
1996 1995
---------- ----------
<S> <C> <C>
Primary
Average shares outstanding 2,322,864 2,321,903
Dilutive stock options based on treasury stock
method using average market price 29,048 6,003
---------- ----------
2,351,912 2,327,906
========== ==========
Net income $6,599,842 $4,905,924
========== ==========
Per common share:
Net income per common share $ 2.81 $ 2.11
========== ==========
Fully Diluted
Average shares outstanding 2,322,864 2,321,903
Dilutive stock options based on treasury stock method
using greater of period-end or average market price 31,795 6,935
---------- ----------
2,354,659 2,328,838
========== ==========
Net income $6,599,842 $4,905,924
========== ==========
Per common share:
Net income per common share $ 2.80 $ 2.11
========== ==========
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 3,797
<SECURITIES> 0
<RECEIVABLES> 93,603
<ALLOWANCES> 1,220
<INVENTORY> 16,968
<CURRENT-ASSETS> 153,488
<PP&E> 101,998
<DEPRECIATION> 61,477
<TOTAL-ASSETS> 205,075
<CURRENT-LIABILITIES> 66,282
<BONDS> 18,000
0
0
<COMMON> 33,549
<OTHER-SE> 80,373
<TOTAL-LIABILITY-AND-EQUITY> 205,075
<SALES> 237,615
<TOTAL-REVENUES> 237,615
<CGS> 207,006
<TOTAL-COSTS> 207,006
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 591
<INCOME-PRETAX> 10,816
<INCOME-TAX> 4,216
<INCOME-CONTINUING> 6,600
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,600
<EPS-PRIMARY> 2.81
<EPS-DILUTED> 2.80
</TABLE>
