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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, 1998
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.)
10200 Grogan's Mill Road, Suite 300, The Woodlands, TX 77380
(Address of Principal Executive Offices) (Zip Code)
(281) 774-2200
(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, 1998, 7,226,290 shares of Common Stock were outstanding.
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TABLE OF CONTENTS
PAGE
Part I - Financial Information
Item 1. Financial statements 3
Item 2. Management's discussion and analysis of
financial condition and results of operations 12
Part II - Other Information
Item 1. Legal proceedings 16
Item 4. Submission of matters to a vote of security holders 16
Item 6. Exhibits and reports on Form 8-K 16
Signatures 17
Exhibit Index 18
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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 1998 1997 1998 1997
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Earned revenue $ 140,188 $ 119,235 $ 263,558 $ 228,816
Cost of earned revenue (118,983) (101,763) (223,278) (197,240)
--------- --------- --------- ---------
Gross profit from operations 21,205 17,472 40,280 31,576
Selling, general and administrative expenses (14,039) (11,430) (25,591) (22,122)
--------- --------- --------- ---------
Income from operations 7,166 6,042 14,689 9,454
Other income/(expense):
Interest income 203 159 342 353
Interest expense (479) (160) (743) (232)
Gain on sale of assets 9 16 27 53
Miscellaneous, net (95) (185) (692) (311)
--------- --------- --------- ---------
(362) (170) (1,066) (137)
--------- --------- --------- ---------
Income before income taxes 6,804 5,872 13,623 9,317
Income taxes (2,654) (2,302) (5,305) (3,646)
--------- --------- --------- ---------
Net income $ 4,150 $ 3,570 $ 8,318 $ 5,671
========= ========= ========= =========
Per common share:
Earnings per share $ 0.59 $ 0.51 $ 1.18 $ 0.81
Earnings per share assuming dilution $ 0.55 $ 0.50 $ 1.13 $ 0.80
Shares used to calculate: (in thousands)
Earnings per share 7,067 6,997 7,050 6,981
Earnings per share - assuming dilution 7,531 7,091 7,364 7,068
Cash dividend $ 0.15 $ 0.138 $ 0.30 $ 0.275
CONSOLIDATED RETAINED EARNINGS
Balance at the beginning of year $ 110,096 $ 99,344
Net income 8,318 5,671
Dividends paid (2,186) (1,920)
Other 207 125
--------- ---------
$ 116,435 $ 103,220
========= ==========
</TABLE>
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<PAGE>
Item 1. Financial Statements (Continued)
PITT-DES MOINES, INC.
Consolidated Statements of Financial Condition
June 30, December 31,
1998 1997
-------- --------
(in thousands) (Unaudited)
Assets
Current Assets
Cash and cash equivalents $ 14,852 $ 12,037
Accounts receivable including retentions
(less allowances: 1998-$547; 1997-$1,059) 96,320 78,216
Inventories 23,713 26,236
Costs and estimated profits in excess
of billings 45,364 46,493
Deferred income taxes 4,527 4,527
Prepaid expenses 1,468 1,086
-------- --------
Total Current Assets 186,244 168,595
Other Assets 8,767 7,793
Goodwill 6,116 6,172
Property, Plant and Equipment
Land 7,612 7,611
Buildings 43,815 41,630
Machinery and equipment 74,520 69,972
-------- --------
125,947 119,213
Allowances for depreciation (72,969) (70,349)
-------- --------
Net Property, Plant and Equipment 52,978 48,864
-------- --------
Total Assets $254,105 $231,424
======== ========
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,
1998 1997
-------- ------------
(in thousands) (Unaudited)
<S> <C> <C>
Liabilities
Current Liabilities
Accounts payable $ 29,622 $ 48,811
Accrued compensation, related taxes and benefits 13,785 12,492
Other accrued expenses 4,807 2,283
Billings in excess of costs and estimated profits 25,602 9,906
Income taxes 1,223 2,889
Casualty and liability insurance 7,121 6,041
-------- --------
Total Current Liabilities 82,160 82,422
Revolving Credit Facility 26,500 11,000
Deferred Income Taxes 5,802 5,802
Minority Interest 3,223 2,537
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 8,946,468 shares 33,549 33,549
Retained earnings 116,435 110,096
-------- --------
149,984 143,645
Treasury stock at cost
(1998-1,720,178 shares; 1997-1,933,094 shares) (13,564) (13,982)
-------- --------
Total Stockholders' Equity 136,420 129,663
-------- --------
Total Liabilities and Stockholders' Equity $254,105 $231,424
======== ========
</TABLE>
See Notes to Consolidated Financial Statements.
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Item 1. Financial Statements (Continued)
PITT-DES MOINES, INC.
Consolidated Statements of Cash Flows
(Unaudited)
Six months ended
June 30,
--------------------
(in thousands) 1998 1997
-------- -------
Cash Flow From Operating Activities
Net income $ 8,318 $ 5,671
Adjustments to reconcile net income to net
cash utilized by operating activities:
Depreciation 3,112 3,082
Gain on sale of assets (27) (53)
Minority interest, net of dividends paid 686 (46)
Other non-cash (credits) debits, net 1,250 (120)
Change in operating assets and liabilities
(using) providing cash:
Accounts receivable (18,104) (3,478)
Inventories 2,523 2,777
Prepaid expenses (382) (1,095)
Costs, estimated profits and billings, net 16,825 (6,997)
Accounts payable (19,189) (5,295)
Accrued liabilities 3,147 1,162
Income taxes (1,666) (52)
-------- -------
Net cash utilized by operating activities (3,507) (4,444)
Cash Flows from Investing Activities
Capital expenditures (7,281) (2,359)
Proceeds from sale of assets 82 137
Acquisitions, net of cash acquired - (8,342)
Change in investments and other assets (418) 1,018
-------- -------
Net cash utilized by investing activities (7,617) (9,546)
Cash Flows from Financing Activities
Proceeds from revolving credit facility 15,500 9,000
Dividends paid (2,186) (1,920)
Other 625 340
-------- -------
Net cash provided by financing activities 13,939 7,420
-------- -------
(Decrease) increase in cash and cash equivalents 2,815 (6,570)
Cash and cash equivalents at beginning of year 12,037 16,815
-------- -------
Cash and cash equivalents at end of period $ 14,852 $10,245
======== =======
See Notes to Consolidated Financial Statements.
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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, 1998 are not
necessarily indicative of the results that may be expected for the year ending
December 31, 1998. The December 31, 1997 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, 1997.
Comprehensive Income
Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive
Income" (SFAS No. 130), is effective January 1, 1998. This Statement
establishes standards for reporting and display of comprehensive income and its
components. Comprehensive income includes net income and all other changes in
stockholders' equity except those resulting from investments and distributions
to owners. The Company has had no significant reportable transactions under the
provisions of SFAS No. 130 for the periods reported.
Software Costs
Statement of Position 98-1, "Accounting for the Costs of Computer Software
Developed or Obtained for Internal Use" (SOP 98-1) requires the capitalization
of certain costs incurred in connection with developing or obtaining software
for internal use. Qualifying software costs are capitalized and amortized over
the estimated useful life of the software. Prior to the adoption of SOP 98-1,
software costs were expensed as incurred. Restatement of prior-year financial
statements was not permitted. The adoption of SOP 98-1 did not have a material
impact on the Corporation's financial position or results of operations.
Segment Disclosure
Statement of Financial Accounting Standards No. 131, "Disclosures about Segments
of an Enterprise and Related Information" (SFAS No. 131), establishes new
standards for reporting information about operating segments in interim and
annual financial statements. This statement is effective for 1998. Management
does not anticipate that the adoption of this statement will have a significant
effect on the Company's reported segments.
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Item 1. Financial Statements (Continued)
Note A. Basis of Presentation (Continued)
Derivative Instruments and Hedging Activities
Statement of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities" (SFAS No. 133) is effective in years
starting after June 15, 1999. SFAS No. 133 addresses the accounting for
derivative instruments, including certain derivative instruments embedded in
other contracts, and hedging activities. The Company does not currently utilize
derivatives or engage in hedging activities; therefore, management does not
anticipate that the adoption of this statement will have a material impact on
the Company's financial position or results of operations.
Note B. Earnings Per Share
The following table sets forth the computation of earnings per share and
earnings per share assuming dilution:
Three months Six months
ended June 30, ended June 30,
--------------- ----------------
1998 1997 1998 1997
------ ------ -------- ------
(in thousands, except per share amounts)
Numerator:
Net income $4,150 $3,570 $ 8,318 $5,671
====== ====== ======== ======
Denominator:
Weighted-average shares 7,067 6,997 7,050 6,981
Employee stock options 464 94 314 87
------ ------ -------- ------
Weighted-average shares-assuming dilution 7,531 7,091 7,364 7,068
====== ====== ======== ======
Earnings per share $ 0.59 $ 0.51 $ 1.18 $ 0.81
====== ====== ======== ======
Earnings per share-assuming dilution $ 0.55 $ 0.50 $ 1.13 $ 0.80
====== ====== ======== ======
Note C. Costs and Estimated Profits on Uncompleted Contracts
Costs and estimated profits on uncompleted contracts are summarized as follows:
June 30, December 31,
(in thousands) 1998 1997
--------- ---------
Costs incurred on uncompleted contracts $ 672,833 $ 679,157
Estimated profits 91,771 91,177
--------- ---------
764,604 770,334
Less: Billings to date (744,842) (733,747)
--------- ---------
$ 19,762 $ 36,587
========= =========
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<PAGE>
Item 1. Financial Statements (Continued)
Note C. Costs and Estimated Profits on Uncompleted Contracts (Continued)
Costs, estimated profits and billings on uncompleted contracts are included in
the accompanying Consolidated Statements of Financial Condition under the
following captions:
June 30, December 31,
(in thousands) 1998 1997
-------- ------------
Costs and estimated profits in excess of billings $ 45,364 $46,493
Billings in excess of costs and estimated profits (25,602) (9,906)
-------- -------
$ 19,762 $36,587
======== =======
Included in costs and estimated profits in excess of billings on uncompleted
contracts was approximately $6.5 million at June 30, 1998 and December 31, 1997,
relating to an unapproved change order arising from a dispute over design and
specification changes.
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 in excess of $15.0 million 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. On June 4,
1996, certain of the defendants in said action made counterclaims against the
Company in amounts approximating $3.5 million. While counsel believes that the
Company has a basis for the claim, neither management nor counsel is able to
predict with certainty the ultimate resolution of this matter. As additional
information becomes available, the Company may revise its estimate of potential
recovery, which could result in a material adjustment to the results of
operations in future periods.
Note D. Contingencies
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 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 had been asserted against the
Company, and others, as a result of the accident (the "Personal Injury Cases").
By December 31, 1996, the Company's insurance carriers settled all of the claims
against the Company in the Personal Injury Cases in which the Company was a
defendant without the Company incurring any additional cost.
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<PAGE>
Item 1. Financial Statements (Continued)
Note D. Contingencies (Continued)
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
appealed that dismissal and in an order dated March 24, 1997, the Occupational
Safety and Health Review Commission reversed the dismissal and entered an order
staying any further proceedings pending final disposition of the OSHA Criminal
Proceeding.
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 "OSHA Criminal
Proceeding"). On July 31, 1997, in the OSHA Criminal Proceeding, a jury returned
a verdict of guilty against the Company for two counts of misdemeanor violations
of OSHA regulations resulting in the deaths of two men killed in the accident. A
sentencing hearing was held on March 20, 1998 in the OSHA Criminal Proceeding
and the Company was fined $1,000,250 and the fine was paid on March 27, 1998.
The Company filed an appeal on March 20, 1998, with the United States Court of
Appeals for the Seventh Circuit seeking various forms of relief (Pitt-Des
Moines, Inc. v. United States of America No. 98-1767).
Management and counsel believe that the Company has significant and meritorious
points for sustaining the Company's appeal in the OSHA Criminal Proceeding.
As a result of the Justice Department's actions, other claims, actions, or
proceedings may be instituted against the Company. 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 June 20, 1996 the Company was served with a subpoena to appear and produce
documents before a 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.
While the investigation remains pending, the Company does not believe it will
become a target of the investigation or that a criminal action will be
instituted against it in these matters. If the Company becomes 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.
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<PAGE>
Item 1. Financial Statements (Continued)
Note D. Contingencies (Continued)
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. Additionally, amounts
reflected in results of operations and in the statements of financial condition
during the three years ended December 31, 1997 and during the six months ended
June 30, 1998, have also not been material. 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 that the ultimate outcome of any matter currently pending
against the Company will not materially affect the financial position of the
Company although they could be material to the reported results of operations
for the period in which they occur.
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.
Note E. Common Stock Split
On May 7, 1998, the Company declared a two for one stock split effective in the
form of a stock dividend payable June 26, 1998 to stockholders of record at the
close of business on June 12, 1998. Per share amounts, market prices, number of
shares and stock option amounts have been adjusted for the stock split for all
periods presented.
-11-
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 1998 COMPARED WITH THREE MONTHS ENDED JUNE 30, 1997.
The Company reported net income of $4.2 million, or $0.55 per share, on earned
revenue of $140.2 million for the quarter ended June 30, 1998. During the
quarter ended June 30, 1998, $1.8 million of compensation expense was recognized
under an incentive stock plan. Excluding the impact of the charge, net income
would have been $5.2 million, or $0.69 per share. These results compare with
net income of $3.6 million, or $.50 per share, on earned revenue of $119.2
million for the quarter ended June 30, 1997.
ENGINEERING AND CONSTRUCTION
The Engineering and Construction segment reported a 25 percent increase in
earned revenue from $69.8 million to $86.9 million for the second quarter of
1998. Income from operations increased $1.3 million from $4.4 million a year
ago to $5.7 million for the current quarter. Performance of contracts related
to Liquid and Cryogenic Storage, Water Storage, and Steel Bridges accounted for
the majority of the increases in both earned revenue and income from operations.
Selling, general and administrative (S,G&A) expense as a percentage of earned
revenue improved nearly one percentage point, decreasing to 7.4 percent from 8.3
percent for the period ended June 30, 1997. New awards rose $22.8 million, or
33 percent, to $91.6 million for the quarter ended June 30, 1998 compared with
$68.8 million for the comparable period of 1997. The growth in new awards
resulted in a strong backlog level of $268.1 million at June 30, 1998 versus
$196.5 million at June 30, 1997. 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 June 30, 1998, was approximately $6.5 million relating to an
unapproved change order arising from a dispute over design and specification
changes.
STEEL DISTRIBUTION
Steel Distribution reported earned revenue of $54.2 million, an 11 percent
increase from $48.9 million in earned revenue for the three months ended June
30, 1997. Income from operations decreased 4 percent to $4.5 million for the
current quarter from $4.7 million for the same period in 1997. S,G&A expense as
a percentage of earned revenue dropped to 6.5 percent from 7.1 percent for the
period ended June 30, 1997.
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<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations (Continued)
RESULTS OF OPERATIONS (Continued)
SIX MONTHS ENDED JUNE 30, 1998 COMPARED WITH SIX MONTHS ENDED JUNE 30, 1997.
The Company reported net income of $8.3 million, or $1.13 per share, on earned
revenue of $263.6 million for the six months ended June 30, 1998. During the
six months ended June 30, 1998, $1.8 million of compensation expense was
recognized under an incentive stock plan. Excluding the impact of the charge,
net income would have been $9.4 million, or $1.27 per share. These results
compare with net income of $5.7 million, or $.80 per share, on earned revenue of
$228.8 million for the six months ended June 30, 1997.
ENGINEERING AND CONSTRUCTION
The Engineering and Construction segment reported a 22 percent increase in
earned revenue from $134.2 million to $163.8 million for the first half of 1998.
Income from operations increased $5.2 million from $7.0 million a year ago to
$12.3 million for the first six months of 1998. Performance of contracts
related to Liquid and Cryogenic Storage, Water Storage, and Steel Bridges
accounted for the majority of the increases in both earned revenue and income
from operations. Selling, general and administrative (S,G&A) expense as a
percentage of earned revenue dropped to 7.5 percent from 8.1 percent for the
period ended June 30, 1998. New awards of $180.8 million, for the first half of
1998, increased $18.6 million from $162.2 million for the first six months of
1997.
STEEL DISTRIBUTION
Steel Distribution reported earned revenue of $101.5 million, a 12 percent
increase from $90.4 million in earned revenue for the six months ended June 30,
1997. Increased steel service center volumes coupled with incremental revenues
from General Steel Corporation, an acquisition completed during the first
quarter of 1997, contributed to the improvement in earned revenue. Income from
operations increased 1 percent to $8.0 million for the first six months of 1998.
S,G&A expense as a percentage of earned revenue improved to 6.9 percent from 7.5
percent for the comparable period of the prior year.
OTHER
As indicated in the "Contingencies" section of the Notes to Consolidated
Financial Statements, the Company's future results of operations could be
materially adversely affected by the Company's conviction on July 31, 1997 of
two misdemeanors for violations of the Occupational Safety Health Act (and
regulations promulgated thereunder)(see Note D "Contingencies" Notes to
Consolidated Financial Statements).
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<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations (Continued)
OTHER (Continued)
The Company initiated a review of its software systems in 1997 in view of the
fact that certain systems will not properly recognize dates after the year 1999,
which could cause those systems to produce invalid results. This is commonly
referred to as "the Year 2000 problem". The company has substantially completed
the assessment phase of all major systems and, in some cases, has made the
required changes. Based upon the results of the work done to date, which is
expensed as incurred, the Company believes that the remaining work will be
completed in a timely manner and that the overall cost of such work will not be
material. There can be no assurance that the estimated cost of addressing this
issue will not be negatively impacted by further analysis of the Company's
systems, as well as reliance on its customers and outside vendors systems. If
the Company and third parties upon which it relies are unable to address this
issue in a timely manner, it could result in a material financial risk to the
Company. In order to assure that this does not occur, the Company plans to
devote all resources required to resolve any significant year 2000 issues in a
timely manner.
LIQUIDITY AND CAPITAL RESOURCES
During the six months ended June 30, 1998, the Company's primary sources of
liquidity were proceeds from the revolving credit facility and cash flow
generated from operations which were used for investing activities and to fund
the growth in working capital. Working capital increased $17.9 million from
$86.2 million at December 31, 1997 to $104.1 million currently. On June 30,
1998, cash and cash equivalents were $14.9 million compared with $12.0 million
on December 31, 1997.
Net cash utilized by operating activities of $3.5 million decreased by $0.9
million when compared with the same period in 1997. The favorable change in
certain operating assets and liabilities, primarily costs, estimated profits and
billings (net), partially offset by changes in accounts receivable and accounts
payable, accounted for the decrease in net cash outflows. The changes in
operating assets and liabilities from period to period are affected by the mix,
stage of completion and commercial terms of contracts.
Net cash utilized by investing activities of $7.6 million for the six months
ended June 30, 1998 was primarily for capital expenditures. These expenditures
consisted primarily of plant machinery and equipment and construction of the new
structural steel fabricating facility in Eloy, Arizona, which began operating in
April 1998.
Cash utilized by investing activities of $9.5 million during the first half of
1997 related primarily to the acquisition of General Steel Corporation. The
Company intends to continue to evaluate and selectively pursue opportunities for
growth or expansion of its business through investment in or acquisition of
complementary businesses. The Company expects that any such acquisitions will
be financed from cash on hand or available funds under the Company's revolving
credit facility.
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<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations (Continued)
LIQUIDITY AND CAPITAL RESOURCES (Continued)
Cash provided by financing activities consisted primarily of proceeds from the
revolving credit facility. The Company paid cash dividends of $2.2 million, or
$0.30 per share, and $1.9 million, or $0.275 per share, during the six months
ended June 30, 1998, and 1997, respectively.
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, 1999. This facility contains an annual
option to renew for an additional one-year period, subject to lender approval.
On August 11, 1998, $26.5 million of borrowings and $7.8 million of stand-by
letters of credit were outstanding under this credit facility.
FORWARD-LOOKING STATEMENTS
Any of the comments in this quarterly report that refer to the Company's
estimated or future results, margins on existing or future projects, long-term
profitability and demand and growth trends for Pitt-Des Moines, Inc., are
forward-looking and reflect the Company's current analysis of existing trends
and information. Actual results may differ materially from current expectations
or projections based on a number of factors affecting the Company's businesses.
The Company's estimates of future performance depend on, among other things, the
likelihood of receiving certain new awards. While these estimates are based on
the good faith judgment of management, these estimates frequently change based
on new facts which become available. In addition, the timing of receipt of
revenue by the Company from engineering and construction projects can be
affected by a number of factors outside the control of the Company. The
Company's businesses are also subject to fluctuations in demand and to changing
global economic and political conditions which are beyond the control of the
Company and may cause actual results to differ from the forward-looking
statements contained in this quarterly report.
These forward-looking statements represent the Company's judgment only as of the
date of this quarterly report. As a result, the reader is cautioned not to rely
on these forward-looking statements. The Company disclaims any intent or
obligation to update these forward-looking statements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not applicable.
-15-
<PAGE>
Part II - Other Information
Item 1. Legal Proceedings
Refer to Part I Item 1, Notes C and D 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 7, 1998, the Company held its annual stockholders meeting. Only
holders of common stock of record at the close of business on March
16, 1998 were entitled to notice of and to vote at the Annual Meeting.
As of that date, the Company had outstanding 3,524,687 shares of
common stock. The three matters voted upon at the Annual Meeting were
the election of three directors, the ratification of the appointment
of Ernst & Young LLP as auditors for the year ending December 31,
1998, and approval of the Pitt-Des Moines, Inc. Long Term Incentive
Stock Plan of 1997.
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 3,080,682. Following is a separate tabulation with
respect to each director:
Votes For Votes Withheld
--------- --------------
W. R. Jackson, Jr. 2,829,546 251,136
A. J. Paddock 2,746,392 334,290
P. J. Townsend 2,829,805 250,877
The total number of votes cast for the ratification of the appointment
of Ernst & Young LLP as auditors for the year ending December 31, 1998,
was 3,080,682 with 3,036,611 votes for, 42,753 votes against and 1,318
votes abstained.
The total number of votes cast for the ratification of approval of the
Pitt-Des Moines, Inc. Long Term Incentive Stock Plan of 1997 was
2,790,831 with 1,969,783 votes for, 764,767 votes against and 56,281
votes abstained.
There were no broker non-votes with respect to the three matters voted
upon.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(10) - Material Contracts.
10.1 Long Term Incentive Stock Plan of 1997, effective
November 6, 1997 (filed herewith)
(27) - Financial Data Schedule.
(b) Reports on Form 8-K.
There have been no reports on Form 8-K filed by the Company
during the quarter ended June 30, 1998.
-16-
<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, 1998 By: /s/ Wm. W. McKee
-----------------------------
Wm. W. McKee
(President and
Chief Executive Officer)
Principal Financial Officer:
Date: August 13, 1998 By: /s/ R. A. Byers
-----------------------------
R. A. Byers
(Vice President
Finance and Treasurer)
-17-
<PAGE>
EXHIBIT INDEX
Exhibit
Number
- -------
10.1 Long Term Incentive Stock Plan of 1997, effective November 6, 1997
(filed herewith)
27 Financial Data Schedule.
-18-
<PAGE>
EXHIBIT 10.1
PITT-DES MOINES, INC.
LONG TERM INCENTIVE
STOCK PLAN OF 1997
------------------
Section 1. Purpose. This plan is to be known as the Pitt-Des Moines, Inc.
Long Term Incentive Stock Plan of 1997 (the "Plan"). The purpose of the Plan is
to promote the long-term growth and profitability of Pitt-Des Moines, Inc. (the
"Company") and its Subsidiaries by: (a) providing certain officers and key
employees of the Company and its Subsidiaries with incentives to maximize
stockholder value and otherwise contribute to the success of the Company; and
(b) enabling the Company to attract, retain and reward the best available
persons for positions of substantial responsibility. Grants of nonqualified
stock options and restricted stock may be made under the Plan.
Section 2. Administration. The Plan is to be administered by a committee
(hereinafter the "Committee") of not less than three directors of the Company
who will be appointed by, and serve at the pleasure of, the Board of Directors.
A majority of the Committee constitutes a quorum and the acts of a majority of
the members present at any meeting at which a quorum is present, or acts
approved in writing by a majority of the Committee, are deemed to be acts of the
Committee. Subject to the provisions of the Plan and to policies determined by
the Board of Directors, the Committee is authorized to interpret the Plan, adopt
rules and regulations and to take any action it deems proper in the
administration of the Plan.
Section 3. Shares Available for the Plan. Subject to adjustments as
provided in Section 10, an aggregate of 700,000 shares of the Company's common
stock ("Shares") may be issued pursuant to the Plan. Shares may be in whole or
in part authorized and unissued, or Shares which have been reacquired by the
Company and Shares held as treasury shares. If any grant under the Plan expires
or terminates unexercised, becomes unexercisable or is forfeited as to any
Shares, such unpurchased or forfeited Shares shall be available for further
grants under the Plan. There shall also be added to the Shares available for
grant under the Plan any Shares delivered to or withheld by the Company in
payment of the exercise price or for taxes, and any Shares acquired in the open
market specifically for use in the Plan.
Section 4. Participation. Participation in the Plan shall be limited to
those officers and key employees of the Company and its Subsidiaries as may be
selected by the Committee. Nothing in the Plan or in any grant thereunder shall
confer any right on a participant to continue in the employ of the Company.
<PAGE>
Section 5. Nonqualified Stock Options. The Committee may from time to
time grant to eligible participants Nonqualified Stock Options. The options
granted shall take such form as the Committee shall determine, subject to the
following terms and conditions.
(a) Price. The price per Share deliverable upon the exercise of each
option ("Exercise Price") shall be the Fair Market Value of a Share on
the relevant date as determined by the Committee.
(b) Payment.
(i) Options may be exercised, in whole or in part, upon payment of
the Exercise Price of the Shares to be acquired. Unless otherwise
determined by the Committee, payment shall be made: (A) in cash;
(B) by delivery of outstanding Shares with a Fair Market Value on
the date of exercise equal to the aggregate exercise price
payable with respect to the option(s) being exercised; (C) by
delivering to the Company a notice of exercise along with
irrevocable instructions to a broker, registered under the
Securities Exchange Act of 1934, as amended (the "Exchange Act")
and reasonably acceptable to the Company, to sell a sufficient
number of Shares to pay the Exercise Price of the Shares acquired
and to remit the proceeds directly to the Company; (D) by
authorizing the Company to withhold from issuance a number of
Shares issuable upon exercise of the options which, when
multiplied by the Fair Market Value of a Share on the date of
exercise, is equal to the aggregate exercise price payable with
respect to the options so exercised; or (E) by any combination of
the foregoing.
(ii) In the event an optionee elects to pay the exercise price
payable with respect to an option pursuant to clause (i)(B)
above: only a whole number of Share(s) may be tendered in
payment; and such grantee must present evidence acceptable to the
Company that he or she has owned such Shares so tendered, and
that such tendered Shares have not been subject to any
substantial risk of forfeiture for at least six months prior to
the date of exercise. Delivery may be made either by physical
delivery of the certificate(s) for all such Shares tendered,
accompanied by duly executed instruments of transfer in form
acceptable to the Company, or by direction to the grantee's
broker to transfer such shares to a brokerage account specified
by the Company. When payment of the exercise price is made by
delivery of Shares, the difference, if any, between the aggregate
exercise price payable with respect to the option(s) being
exercised and the Fair Market Value of the Share(s) tendered
(plus any applicable taxes) shall be paid in cash. No optionee
may tender Shares having
<PAGE>
a Fair Market Value exceeding the aggregate exercise price (plus
any applicable taxes) payable with respect to the option being
exercised.
(iii) In the event an optionee elects to pay the exercise price payable
pursuant to clause (i)(D) above: only a whole number of Share(s)
may be withheld; and optionee must present evidence acceptable to
the Company that he or she has owned a number of Shares at least
equal to the number of Shares to be withheld, and that such
Shares have not been subject to any substantial risk of
forfeiture for at least six months prior to the date of exercise.
When payment of the exercise price is made by withholding of
Shares, the difference, if any, between the aggregate exercise
price payable with respect to the option being exercised and the
Fair Market Value of the Share(s) withheld in payment (plus any
applicable taxes) shall be paid in cash. No optionee may
authorize the withholding of Shares having a Fair Market Value
exceeding the aggregate exercise price (plus any applicable
taxes) payable with respect to the option being exercised. Any
withheld Shares shall no longer be issuable under any option.
(iv) In the event of a Change in Control, in lieu of any payment
election pursuant to clause (i) above, an optionee shall have the
right, upon exercise, to surrender the right to receive that
number of Shares which are subject to the option being exercised,
in exchange for the Company's payment in cash of the difference
between the Fair Market Value of the Shares so surrendered on the
date the option is exercised and the Exercise Price, less any
withholding elected or required pursuant to Section 13 of the
Plan.
(c) Terms of Options. The term during which each option may be exercised
shall be determined by the Committee, but in no event shall an option
be exercisable in whole or in part more than ten years from the date
it is granted. All rights to purchase Shares pursuant to an option
shall, unless sooner terminated, expire at the date designed by the
Committee. The Committee shall determine the date on which each option
shall become exercisable and may provide that an option shall become
exercisable in installments.
Section 6. Exercise and Conditions of Options.
(a) During the lifetime of the optionee, options under the Plan may be
exercised only by the optionee, by his or her guardian or legal
representative or pursuant to a valid and enforceable qualified
domestic relations order. Options shall not be transferrable otherwise
than by will or by the laws of descent and distribution, except that
the Committee may permit transfer upon the optionee's death to
beneficiaries designated
<PAGE>
by the optionee in a form and manner authorized by the Company,
provided that the Company determines that such exercise and such
transfer are consonant with any requirements for exemption from
Section 16(b) of the Exchange Act, the Securities Act of 1933 as
amended (the "Securities Act") and any other applicable law.
(b) An option may be exercised within such period or periods or on such
specific date or dates as may be determined by the Committee and set
forth in the stock option agreement provided that:
(i) if the optionee ceases to be employed by the Company or any of
its Subsidiaries for any reason other than Deferred Retirement,
Normal Retirement, Early Retirement, death or disability, the
option may be exercised only within ninety (90) days after the
termination of the optionee's employment, unless such termination
is for Cause as defined in Section 15 hereof or constitutes a
breach by the employee of his or her obligation to remain in the
employ of the Company or a Subsidiary, in which case the option
shall terminate immediately upon such termination;
(ii) if the optionee dies or becomes disabled, the option may be
exercised within one (1) year from the date of death or
disability;
(iii) if the optionee takes Early Retirement, the option may be
exercised within one (1) year from the optionee's Early
Retirement Date; and
(iv) if the optionee takes Deferred Retirement or Normal Retirement,
the option may be exercised within three (3) years from the
optionee's Deferred Retirement Date or Normal Retirement Date, as
applicable.
(c) In the event there is a Change in Control of the Company, all of a
participant's options previously granted under the Plan shall vest and
become immediately exercisable effective upon the date of such Change
in Control.
(d) Options may be exercised only by written request to the Secretary of
the Company at the principal office of the Company, prior to the
expiration of the option, accompanied by payment as described in
Section 5(b) above. The certificate for the Shares purchased by such
exercise shall be issued and delivered to the person entitled thereto
at the principal office of the Company.
(e) In consideration for the granting of each option, the optionee shall
agree to remain in the employ of the Company or any of its
Subsidiaries, at the pleasure of the Company or such Subsidiaries, for
at least one year from the date of grant of such option at his
<PAGE>
or her salary rate in effect at the time of the grant of the option or
at such increased rate as may be fixed from time to time by the
Company or its Subsidiaries. At the discretion of the Committee, this
requirement may be waived in the case of any optionee who during the
said one-year period enters the active services of the military forces
of the United States or other United States government service
connected with national defense activities.
Section 7. Restricted Stock. The Committee may at any time and from time
to time grant Shares of restricted stock under the Plan to such participants and
in such amounts as it determines. Each grant of restricted stock shall specify
the applicable restrictions on such Shares, the duration of such restrictions
and the time or times at which such restrictions shall lapse with respect to all
or a specified number of Shares that are part of the grant, provided, however,
that in no event shall any grant of restricted stock vest more than ten years
from the date of its issuance. The participant will not be required to pay the
Company any consideration upon the initial issuance of any Shares of restricted
stock under the Plan. The Shares will be held by the Company on the
participant's behalf during any period of restriction thereon and will bear an
appropriate legend specifying the applicable restrictions. Except as otherwise
provided by the Committee, during such period of restriction the participant
shall have all of the rights of a holder of Shares, including but not limited to
the rights to receive dividends (or amounts equivalent to dividends) and to
vote. Any stock received as a dividend or distribution with respect to a
participant's restricted stock shall be subject to the same restrictions as then
in effect for the restricted stock.
Section 8. Vesting and Conditions of Grants and Company's Repurchases of
Restricted Stock.
(a) During the lifetime of the grantee of restricted stock under the Plan,
Shares so granted shall vest in accordance with the terms of any grant
pursuant to Section 7 and, prior to vesting, such Shares shall not be
transferable.
(b) If a participant holds restricted stock under the Plan which has not
vested on the date he or she ceases to be employed by the Company for
any reason, such restricted stock shall revert to the Company on the
date of such termination of employment.
(c) In the event there is a Change in Control of the Company, all of a
participant's restricted stock previously issued, but not then vested,
shall vest immediately, effective upon the date of such Change in
Control.
<PAGE>
(d) The Company may, in any agreement with a participant entered into
pursuant to this Plan, agree to purchase any shares of restricted
stock previously issued to such participant, effective with any Change
in Control.
Section 9. Authority of Committee. Subject to the provisions of the Plan,
the Committee shall have full and final authority to determine the persons to
whom options and restricted stock may be awarded and the number of shares to be
covered by each grant or option. The Committee may include such other terms and
conditions not inconsistent with the foregoing as the Committee shall determine
for any or all stock option agreements and agreements granting restricted stock,
including conditions based on the performance of the Company or a portion of the
Company, conditions based on the performance of the participant, or conditions
based on a combination thereof. The Committee's determinations under the Plan,
including without limitation determination of the persons to receive restricted
stock or options, the terms and provisions of such grants and options and the
agreements evidencing all of same, need not be uniform and may be made
selectively among persons who receive, or are eligible to receive, restricted
stock or options under the Plan, whether or not such persons are similarly
situated. The Committee, in its sole discretion, may permit an optionee
voluntarily to surrender for cancellation an option granted under the Plan, such
surrender to be conditioned upon the granting of such optionee of a new option
under the Plan for the same or a different number of shares as the option
surrendered, or may require such voluntary surrender as a condition precedent to
the grant of a new option to such optionee.
Section 10. Adjustment of Number and Price of Shares.
(a) In the event that a dividend is declared upon Shares and is payable in
Shares, the number of Shares covered by each outstanding option, the
number of Shares of previously issued restricted stock and the number
of Shares available for issuance pursuant to the Plan but not yet
covered by an option or issued as restricted stock shall be adjusted
by adding thereto the number of Shares which would have been
distributable thereon if such Shares had been outstanding on the date
fixed for determining the shareholders entitled to receive the stock
dividend.
(b) In the event that the outstanding Shares are changed into or exchanged
for a different number or kind of shares of stock or other securities
of the Company or of another company, whether through reorganization,
recapitalization, stock split-up, combination of shares, merger or
consolidation, there shall be substituted for the Shares covered by
each outstanding option, the shares issued as restricted stock and for
the Shares available for issuance pursuant to the Plan but not yet
covered by an option or issued as restricted stock, the number and
kind of shares of stock or other securities which would have been
substituted therefore if such Shares had been
<PAGE>
outstanding on the date fixed for determining the shareholders
entitled to receive such changed or substituted stock or other
securities.
(c) In the event there is any change, other than specified above in
Section 10(a) or (b), in the number and kind of outstanding Shares or
of any stock or other securities into which such Shares shall be
changed or for which it shall have been exchanged and such change
equitably requires adjustment in the number or kind of Shares covered
by outstanding options, the Shares issued as restricted stock or which
are available for issuance pursuant to the Plan, such adjustment shall
be made by the Committee and shall be effective and binding for all
purposes of the Plan and on each outstanding stock option agreement
and each agreement concerning restricted stock.
(d) In the case of any adjustment or substitution provided for in this
Section 10, the option price per Share in each stock option agreement
shall be equitably adjusted to reflect the greater or lesser number of
shares of stock or other securities into which the stock covered by
the option may have been changed or which may have been substituted
therefore.
(e) No adjustment or substitution provided for in this Section 10 shall
require the Company to issue or to sell a fractional share and the
total adjustment or substitution shall be limited accordingly.
Section 11. Amendment and Discontinuance. Subject to applicable law and
the rules, regulations and requirements of any exchange or market on which the
Shares are listed or traded, 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 previously granted pursuant hereto.
Section 12. Compliance with Governmental Regulations. Notwithstanding any
provision of the Plan or the terms of any agreement issued under 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, the
Exchange Act and any qualification or listing of the Shares with any exchange or
market on which the Shares are listed or traded, 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 all
other applicable Federal and State laws and regulations and rulings thereunder.
After the approval of this Plan by the stockholders of the Company pursuant to
Section 14, 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.
<PAGE>
Section 13. Withholding.
(a) Whenever Shares are to be issued or become vested under the Plan, the
Company shall have the right to require the participant to remit to
the Company an amount sufficient to satisfy any Federal, State and
local tax withholding requirements.
(b) In the event that any withholding is required pursuant to Section
13(a), or is to be made at the participant's election upon issuance or
vesting of Shares under the Plan, the Company may agree to withhold
such number of Shares to be issued or become vested with a Fair Market
Value equal to or less than the amount to be withheld and remit in
cash the Fair Market Value of Shares so withheld to satisfy any such
tax withholding requirements.
Section 14. Effective Date, Term of Plan. This Plan shall become
effective as of November 6, 1997, contingent upon the Plan being approved by
vote of the stockholders of the Company on or before October 31, 1998. In the
event that said approval is not obtained, this Plan, and any agreement entered
into pursuant thereto, shall become void and of no effect. This Plan shall
terminate in any event on November 1, 2007.
Section 15. Definitions. For purposes of this Plan and any stock options
or restricted stock granted hereunder, or any agreements relating thereto, the
following capitalized terms shall have the meanings ascribed below:
(a) Cause shall mean:
(i) any act or omission by the optionee which constitutes a felony
or misdemeanor, or involves dishonesty or serious disloyalty;
(ii) any act or omission which is an intentional violation of the
written policies of the Company;
(iii) any act or omission which constitutes failure by the optionee
to perform diligently and competently optionee's duties; or
(iv) any willful or grossly negligent act or omission which has a
material adverse effect on the Company's reputation, business
affairs or goodwill.
(b) Change in Control shall mean
<PAGE>
(i) the acquisition by any person, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) (a
"Person"), other than the Company, any of its Subsidiaries or
any employee benefit plan of the Company or its Subsidiaries,
of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 40% or more of either
the then outstanding shares of common stock or the combined
voting power of the Company's then outstanding voting
securities entitled to vote generally in the election of
directors ("Voting Securities");
(ii) Any change or changes in the composition of the Board for
reasons other than the death, disability, normal retirement or
unsolicited resignation of directors which change or changes
occur during any 24 month period and result in the individuals
who constituted the Board at the beginning of the applicable 24
month period ceasing to constitute a majority of the Board;
(iii) A merger or consolidation to which the Company is a party;
provided, however, that such a merger or consolidation shall
not be deemed to be a Change in Control if after giving effect
to such merger or consolidation, (A) the persons who were the
shareholders of the Company immediately prior to such
transaction are, immediately thereafter, the owners of more
than 50% of the combined voting power entitled to vote
generally in the election of directors of the merged or
consolidated company's then outstanding securities and (B) no
Person (other than any Person beneficially owning, immediately
prior to such merger or consolidation, 20% or more of the
Voting Securities of the Company and whose ownership interest
in the merged or consolidated company's securities was derived
solely by virtue of the exchange or conversion of such Voting
Securities) owns more than 20% of the combined voting power
entitled to vote generally in the election of directors of the
merged or consolidated company's then outstanding securities.
(iv) The sale of all or Substantially All of the assets of the
Company; or
(v) The liquidation or dissolution of the Company.
(c) Deferred Retirement and Deferred Retirement Date shall mean a
participant's election to take deferred retirement pursuant to the
provisions of the Retirement Plan for Salaried Employees of Pitt-Des
Moines, Inc. and the Deferred Retirement Date as defined in such plan.
<PAGE>
(d) Early Retirement and Early Retirement Date shall mean a participant's
election to take early retirement pursuant to the provisions of the
Retirement Plan for Salaried Employees of Pitt-Des Moines, Inc. and
the Early Retirement Date as defined in such plan.
(e) Fair Market Value of any Share shall mean the mean average of the high
and low sales prices per Share as reported on the stock exchange or
market on which such stock is traded or quoted on the trading day
immediately preceding the relevant date under the Plan and if not so
reported on said date, on the closest preceding day on which there
were sales so reported.
(f) Non Qualified Stock Option shall mean any option to purchase a share
of common stock of the Company granted pursuant to the Plan, which
options do not qualify for treatment as incentive stock options under
the Internal Revenue Code.
(g) Normal Retirement and Normal Retirement Date shall mean a
participant's election to take normal retirement pursuant to the
provisions of the Retirement Plan for Salaried such plan.
(h) Subsidiary or Subsidiaries shall mean any entity of which the Company,
directly or indirectly, owns or controls 50% or more of the combined
voting power.
(i) Substantially All shall mean more than 50% of the Fair Market Value of
the total assets of the Company as of the end of its most recent
fiscal quarter ending prior to the date such determination is made.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1998 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-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 14,852
<SECURITIES> 0
<RECEIVABLES> 96,867
<ALLOWANCES> 547
<INVENTORY> 23,713
<CURRENT-ASSETS> 186,244
<PP&E> 125,947
<DEPRECIATION> 72,969
<TOTAL-ASSETS> 254,105
<CURRENT-LIABILITIES> 82,160
<BONDS> 26,500
0
0
<COMMON> 33,549
<OTHER-SE> 102,871
<TOTAL-LIABILITY-AND-EQUITY> 254,105
<SALES> 263,558
<TOTAL-REVENUES> 263,558
<CGS> 223,278
<TOTAL-COSTS> 223,278
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 743
<INCOME-PRETAX> 13,623
<INCOME-TAX> 5,305
<INCOME-CONTINUING> 8,318
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8,318
<EPS-PRIMARY> 1.18<F1>
<EPS-DILUTED> 1.13<F1>
<FN>
<F1>A Two-for-one stock split occurred on June 26, 1998. Prior Financial Data
Schedules (excluding the schedules for the quarters ended March 31, 1998 and
1997) have not been restated for the recapitalization.
</FN>
</TABLE>
