WTD INDUSTRIES, INC.
United States Securities and Exchange Commission, Washington, D.C.
20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the fiscal year ended Commission file number
April 30, 1995 0-16158
WTD INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Oregon 93-0832150
(State of Incorporation) (I.R.S. Employer Identification No.)
10260 S.W. Greenburg Road, Suite 900 Registrant's telephone number,
Portland, Oregon 97223 including area code: (503) 246-3440
(Address of principal executive offices)
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, no par value (Title of Class)
__________________________________________________________________
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein, and
will not be contained, to the best of registrant's knowledge, in
definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K. ___X___
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding twelve 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 _______
State the aggregate market value of the voting stock held by
non-affiliates of the registrant, as of July 10, 1995: $18,016,145.
Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Section 12, 13 or
15(d) of the Securities Exchange Act of 1934 subsequent to the
distributions of securities under a plan confirmed by a court.
Yes ___X___ No _______
Indicate the number of shares outstanding of each of the
registrant's classes of Common Stock, as of July 10, 1995: Common
Stock, no par value: 11,077,074.
Documents Incorporated by Reference. Registrant has
incorporated into Part III of Form 10-K by reference portions of
its Proxy Statement for its 1995 Annual Meeting of Shareholders.
FORM 10-K TABLE OF CONTENTS
Item No. Page No.
Part I
1. Business 3
2. Properties 7
3. Legal Proceedings 7
4. Submission of Matters to a Vote of Security Holders 7
Part II
5. Market for the Registrant's Common Stock and
Related Stockholder Matters 8
6. Selected Financial Data 10
7. Management's Discussion and Analysis of Financial
Condition and Results of Operations 11
8. Financial Statements and Supplementary Data 16
9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure 16
Part III
10. Directors and Executive Officers of the Registrant 17
11. Executive Compensation 20
12. Security Ownership of Certain Beneficial Owners
and Management 24
13. Certain Relationships and Related Transactions 25
Part IV
14. Exhibits, Financial Statement Schedules, and Reports
on Form 8-K
(a)(1) Financial Statements 26
(a)(2) Financial Statement Schedules 26
(a)(3) Exhibit Index 26
(b) Reports on Form 8-K 29
PART I
Item 1. BUSINESS
WTD Industries, Inc. is a forest products company organized in
Oregon in 1983, whose subsidiaries manufacture softwood and
hardwood lumber and by-products. WTD Industries, Inc. and its
subsidiaries are hereinafter referred to as "WTD" or the "Company."
The Company markets its products primarily in the United States and
Canada through its subsidiary TreeSource, Inc.
The Company and its subsidiaries filed for protection under
Chapter 11 of the Federal Bankruptcy Code in late January 1991
following extreme adverse conditions in the forest products
industry in 1990. WTD emerged from bankruptcy on November 30,
1992 pursuant to the Company's court-approved Second Amended Joint
Plan of Reorganization ("Plan") under which it continues to
operate.
PRODUCTS AND MARKETS
Softwood Lumber
The Company manufactures a wide variety of softwood lumber
products, predominantly from Douglas fir, hemlock, and white fir.
The Company produces softwood studs in several species, generally
as 2x4 or 2x6 lumber in lengths of 8 to 10 feet. The Company also
makes dimension softwood lumber in a wide range of widths and
thicknesses in lengths from 6 to 26 feet. Softwood lumber
accounted for 84% of net sales in fiscal 1995, 83% in fiscal 1994,
and 78% in fiscal 1993.
The Company sells softwood lumber to a large number of
customers, primarily distribution centers, wholesalers and directly
to large retailers. Softwood lumber is used in a variety of
applications, including residential and commercial construction,
packaging, and industrial uses.
Other Products
The Company produces a small quantity of hardwood lumber in
sizes targeted principally for the furniture and cabinet
industries. Wood chips, a by-product of the manufacturing process,
are sold principally to pulp and paper manufacturers. Wood chips
and other by-products accounted for 12% of net sales in fiscal
1995, 11% in fiscal 1994, and 13% in fiscal 1993.
Distribution and Marketing
The Company markets, distributes, and arranges transportation
for its lumber products through its wholly owned subsidiary and
sales agent, TreeSource, Inc. Through TreeSource, the production
capabilities of individual mills are coordinated to meet a broad
range of customer needs. TreeSource sells primarily through
telephone contacts from its office in Portland, Oregon.
Shipments of wood products are generally made by rail or truck
directly from the mill. The Company also makes shipments by barge
from certain of its mills with access to port facilities to
destinations in Southern California and Hawaii. Exports do not
represent a material portion of the Company's net sales.
The Company does not attempt to accumulate a large backlog of
orders. WTD's general practice is to maintain an order file
representing about two to four weeks' production. The filling of
orders for certain items, however, may require a substantially
longer period of time. The dollar value of the Company's backlog
of orders at April 30, 1995 was $6.0 million compared to $7.2
million at April 30, 1994. Backlog on any particular date may not
be indicative of the Company's average backlog, or of net sales or
the backlog for any succeeding period.
One customer accounted for 12% of the Company's net sales
during fiscal 1995. The loss of any one customer would not, in
management's opinion, have a material adverse impact on the Company
and its subsidiaries taken as a whole.
Timber Supply
The Company generally purchases timber and logs in sufficient
quantities to match the current operating requirements of its
mills. Management attempts to maintain log inventories equal to an
average of three to four weeks' operating requirements, except
where seasonal or weather factors necessitate larger volumes. The
goals of the Company's procurement strategy are to limit the
speculative aspects of timber purchasing and to maintain the
Company's adaptability to changing lumber market conditions.
The Company relies mainly on open market log purchases to
supply its raw materials needs. It also purchases timber-cutting
contracts ("timber contracts"), primarily at public timber sales,
and has historically obtained logs to a minor extent from its own
fee timberlands. At April 30, 1995, the Company owned a small
amount of fee timberlands in the vicinity of various mills. The
following table shows the percentages of logs supplied by open
market purchases, timber contracts and fee timberlands, and total
log footage required:
Year Ended Open Timber Fee Log
April 30, Market Contracts Timber Requirements
1991 75% 19% 6% 408,000 MBF
1992 88% 8% 4% 338,000 MBF
1993 90% 6% 4% 306,000 MBF
1994 94% 5% 1% 305,100 MBF
1995 95% 5% -- 317,100 MBF
MBF - Thousand Board Feet
The availability and cost of timber and logs have been, and
should continue to be, influenced by a variety of factors,
including demand by competitors and exporters, the environmental
and harvest policies of federal and state agencies, and, in the
long term, the level of reforestation. For further discussion of
current industry conditions relating to timber supply, see the
section entitled "Management's Discussion and Analysis of Financial
Condition and Results of Operations."
Employees
The Company and its subsidiaries had approximately 1,100
employees at July 10, 1995. The Company believes that its
relations with employees are good. The Company provides its
employees with health insurance, paid holidays and vacation time,
and maintains an IRC 401(k) retirement savings plan.
Environmental Regulation
The Company is subject to federal, state and local waste
disposal and pollution control regulations, including air, water
and noise pollution, which have required, and are expected to
continue to require, additional operating and capital expenditures.
The Company believes that it is in substantial compliance with all
existing regulations and orders. During fiscal 1995, the Company
incurred expenditures of approximately $500,000 for waste disposal
and pollution control. Such expenditures are projected to be about
$900,000 for fiscal 1996 and $600,000 for fiscal 1997. Various
governmental agencies are considering regulations regarding log
yard management and disposal of log yard waste. The final
regulations in these areas may require material expenditures in the
future.
Industry Conditions
The United States lumber industry is highly sensitive to the
condition of the nation's economy and tends to experience poor
financial results during general economic downturns. In addition,
sales traditionally increase in the spring and summer months and
decline during the fall and winter months in response to seasonal
building construction cycles. However, in fiscal 1993 and 1994,
relatively strong lumber demand occurred in the winter months and
relatively weak demand occurred during the spring months.
Management believes this situation occurred because lumber buyers,
concerned about supply in light of public timber harvest
restrictions, made defensive purchases before the traditional
spring buying period. In addition, demand in the early part of
1994 was muted by severe winter conditions in the midwestern and
eastern portions of the U.S. In fiscal 1995, the Company
experienced a more typical winter slowdown in lumber demand.
Conditions remained weak in the spring due in large measure to high
interest rates, increased lumber imports from Canada and high raw
materials costs. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations" for further
discussion.
Competition
The wood products industry is highly competitive and includes
a large number of companies manufacturing relatively standardized
products. The principal means of competition in the lumber
industry are unit production costs, pricing, product quality, and
the ability to satisfy customer needs promptly. The Company feels
it competes effectively based on the foregoing factors. Some of
WTD's competitors are large, integrated companies with
substantially greater total resources than those of the Company.
Some of these competitors have a significant base of low-cost fee
timberlands and timber contracts. The Company could be at a
disadvantage to such competitors since it relies on the open log
market to supply the bulk of its raw materials requirements. See
the sections entitled "Timber Supply" and "Management's Discussion
and Analysis of Financial Condition and Results of Operations."
Item 2. PROPERTIES
<TABLE>
MANUFACTURING FACILITIES(1)
<CAPTION>
*** Thousand board feet ***
Fiscal Est. Annual
1995 Production
Production Capacity(2)
------- -------
<S> <C> <C>
Softwood Lumber
Burke Lumber Co., West Burke, Vermont 48,000 46,000
Central Point Lumber Co., Central Point, Oregon(3) 39,000 110,000
Glide Lumber Products Co., Glide, Oregon 102,000 125,000
Morton Forest Products Co., Morton, Washington 53,000 90,000
North Powder Lumber Co., North Powder, Oregon 50,000 90,000
Pacific Softwoods Co., Philomath, Oregon 57,000 80,000
Philomath Forest Products Co., Philomath, Oregon 141,000 245,000
Sedro-Woolley Lumber Co., Sedro-Woolley, Washington 46,000 140,000
Spanaway Lumber Co., Tacoma, Washington(3) 43,000 85,000
Trask River Lumber Co., Tillamook, Oregon(3) 49,000 120,000
Tumwater Lumber Co., Tumwater, Washington(3) 52,000 70,000
Hardwood Lumber
Pacific Hardwoods-South Bend Co.,
South Bend, Washington(3) 13,000 19,000
<FN>
(1) The machinery and equipment of all facilities are subject to the security
interests of certain lenders.
(2) Capacity is generally computed using a two shift-per-day, five day-per-week
operating schedule.
(3) These subsidiaries lease all or a substantial portion of the real property on
which the mill is located pursuant to ground leases.
</TABLE>
Item 3. LEGAL PROCEEDINGS
On or about January 30, 1991, WTD Industries, Inc. and each of
its subsidiaries (see Exhibit 21 for list) filed a voluntary
petition for reorganization under Chapter 11 of the Federal
Bankruptcy Code. The proceeding was filed in the United States
Bankruptcy Court for the Western District of Washington in Seattle
(the "Bankruptcy Court"). The jointly administered proceeding is
entitled: "In re Sedro-Woolley Lumber Co., WTD Industries, Inc.,
TreeSource, Inc., et al.", Case Numbers 91-00707 through 91-00721,
91-00736 through 91-00741, 91-00752 through 91-00756, 91-00773
through 91-00778, and 91-01140 through 91-01149. The Company's
Second Amended Joint Plan of Reorganization was confirmed by the
Bankruptcy Court on November 23, 1992, effective November 30, 1992.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART II
Item 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED
STOCKHOLDER MATTERS
Principal Market
Registrant's Common Stock is traded in the over-the-counter
market. Quotations are reported on the National Market System of
the National Association of Securities Dealers (NASD). The
Company's stock trades under the NASDAQ symbol WTDI. The number of
holders of record of WTD Industries, Inc. Common Stock at July 10,
1995 was 735. The Company estimates that the total number of its
direct and beneficial shareholders is approximately 5,000.
Stock Price and Dividend Information
From December 2, 1991 through March 17, 1994, WTD Common Stock
was reported in the Small Cap Issues section of NASDAQ. Since
March 18, 1994, the Common Stock of WTD has been included in the
NASDAQ National Market System.
The following tables show the stock price range or the price
quotes, as applicable, for the two years ended April 30, 1995:
Fiscal Year Ended Stock Price Range
April 30, 1995 Low High
----------------- -----------------
First Quarter $2.21875 $3.250
Second Quarter $1.953125 $2.750
Third Quarter $1.625 $2.50
Fourth Quarter $1.625 $2.125
Stock Quotes
Fiscal Year Ended Bid Ask
April 30, 1994 Low High Low High
------------------- ------ ------ ------ ------
First Quarter $1.625 $2.750 $1.750 $2.875
Second Quarter $1.625 $2.125 $1.750 $2.250
Third Quarter $1.625 $2.625 $1.875 $2.750
Fourth Quarter (1) $2.375 $3.875 $2.625 $4.125
Fiscal Year Ended Stock Price Range
April 30, 1994 Low High
------------------- ---------- ----------
Fourth Quarter (2) $2.875 $4.750
(1) Quotes reported for the period February 1, 1994 through
March 17, 1994.
(2) Prices reported for the period March 18, 1994 through
April 30, 1994.
The share prices shown are those published by the NASD and
represent prices between dealers. They do not include retail
markups, markdowns, or commissions and, in the case of bid and ask
quotes, may not represent actual transactions. Prior to the
Company's October 1986 public stock offering, there was no public
trading market for its Common Stock.
WTD does not pay any cash dividends on its Common Stock. The
Company's various debt instruments restrict the payment of
dividends. See Notes 4 and 6 to Consolidated Financial Statements.
<TABLE>
ITEM 6. SELECTED FINANCIAL DATA
WTD INDUSTRIES, INC. AND SUBSIDIARIES
FIVE-YEAR SELECTED FINANCIAL DATA
(In Thousands, Except Per-Share Amounts and Ratios)
<CAPTION>
YEAR ENDED APRIL 30,
-----------------------------------------------------------
1995 1994 1993 1992 1991
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
NET SALES $274,966 $278,115 $246,887 $213,896 $243,931
COST OF SALES 262,334 253,732 227,040 195,386 250,468
-------- -------- -------- -------- --------
GROSS PROFIT (LOSS) 12,632 24,383 19,847 18,510 (6,537)
GENERAL, SELLING AND
ADMINISTRATIVE EXPENSES 10,366 12,423 12,615 12,047 20,957
REORGANIZATION CHARGES (CREDITS) (532) (2,487) 563 3,272 58,000
-------- -------- -------- -------- --------
OPERATING INCOME (LOSS) 2,798 14,447 6,669 3,191 (85,494)
INTEREST EXPENSE (5,972) (6,541) (2,864) (235) (10,197)
OTHER INCOME 1,228 418 151 36 589
-------- -------- -------- -------- --------
INCOME (LOSS) BEFORE INCOME TAXES (1,946) 8,324 3,956 2,992 (95,102)
PROVISION FOR INCOME TAXES (BENEFIT) (5,646) 2,024 1,543 1,167 (9,950)
-------- -------- -------- -------- --------
INCOME (LOSS) BEFORE
EXTRAORDINARY ITEMS 3,700 6,300 2,413 1,825 (85,152)
EXTRAORDINARY ITEMS -- -- 21,345 1,167 --
-------- -------- -------- -------- --------
NET INCOME (LOSS) 3,700 6,300 23,758 2,992 (85,152)
PREFERRED DIVIDENDS 2,126 1,616 647 -- --
-------- -------- -------- -------- --------
NET INCOME (LOSS) APPLICABLE TO
COMMON SHAREHOLDERS $1,574 $4,684 $23,111 $2,992 ($85,152)
======== ======== ======== ======== ========
NET INCOME (LOSS) PER
COMMON SHARE, PRIMARY
- before extraordinary items $0.14 $0.41 $0.29 $0.73 ($34.17)
- extraordinary items -- -- $3.46 $0.47 --
- net income (loss) $0.14 $0.41 $3.75 $1.20 ($34.17)
Average shares outstanding (1) 11,492 11,433 6,166 2,492 2,492
NET INCOME (LOSS) PER
COMMON SHARE, FULLY DILUTED
- before extraordinary items $0.14 $0.41 $0.28 $0.73 ($34.17)
- extraordinary items -- -- $3.43 $0.47 --
- net income (loss) $0.14 $0.41 $3.71 $1.20 ($34.17)
Average shares outstanding (1) 11,510 11,519 6,231 2,492 2,492
CASH DIVIDENDS PER COMMON SHARE -- -- -- -- --
PERIOD END BALANCES
Working capital $33,740 $44,796 $39,255 $46,162 $35,069
Total assets 88,944 97,100 100,039 113,561 106,038
Long-term debt, excl. current maturities (2) 51,421 60,587 64,184 519 7,457
Liabilities subject to compromise (2) -- -- -- 134,351 126,935
Stockholders' equity (deficit) 20,076 18,512 13,684 (43,553) (46,545)
SELECTED FINANCIAL RATIOS
Net income (loss) to average:
Total assets 4.0 % 6.4 % 22.2 % 2.7 % (52.1)%
Stockholders' equity 19.2 % 39.1 % NM NM NM
Average stockholders' equity to average
total assets 20.7 % 16.3 % NM NM NM
<FN>
(1) Restated to reflect effect of four-for-ten reverse split as of November 30, 1992.
(2) During fiscal 1992, the Company reclassified certain debt obligations between fully secured debt and
liabilities subject to compromise.
NM - Not Meaningful
</TABLE>
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Overview
On a quarter-to-quarter basis, the Company's financial results
have and will vary widely, due to seasonal fluctuations and market
factors affecting the demand for logs, lumber and other wood
products. Therefore, past results for any given year or quarter
are not necessarily indicative of future results.
The industry is subject to fluctuations in sales and earnings
due to such factors as industry production in relation to product
demand and variations in interest rates and housing starts.
Currency fluctuations affect the forest products industry when
exchange rates spur log exports and drive up domestic log prices,
and when a relatively strong U.S. Dollar encourages imports of
lumber from competing countries.
The industry is also affected by weather conditions and
changing timber management policies. Fire danger and excessively
dry or wet conditions temporarily reduce logging activity and may
increase open market log prices. Timber management policies of
various governmental agencies change from time to time,
periodically causing actual or perceived shortages in some areas.
These policies change because of environmental concerns, public
agency budget issues and a variety of other reasons.
It is generally WTD's practice to curtail production at
facilities from time to time due to conditions which temporarily
impair log flow or when imbalances between log costs and product
prices cause the cost of operation to exceed the cost of shutdown.
Management believes that WTD's labor practices and compensation
systems, as well as a relatively low capital cost in relation to
production capacity, give it the flexibility to curtail operations
and resume production as conditions warrant. The Company may also
permanently close facilities that are determined to lack future
profit potential under expected operating conditions.
In fiscal 1995, demand for U.S. lumber experienced a
protracted decline. This appears to be primarily the result of two
factors. First, mortgage interest rates continued rising from
about 7% in January 1994 to a high of 9.2% in December 1994. This
rise had a negative impact on U.S. lumber demand during the second
half of the Company's 1995 fiscal year. Second, a widening gap in
the exchange rate between the U.S. Dollar and the Canadian Dollar,
combined with government-subsidized logs in Canada costing
substantially less than those in much of the U.S., encouraged
imports of lumber from Canada. The combination of reduced domestic
demand and increased imports caused an overall 10% reduction in the
Company's fiscal 1995 lumber prices when compared to those of the
prior year, and an 18% decline in prices in the second half of
fiscal 1995 when compared to the same period in 1994. Although a
resurgent paper market led to substantial chip price increases in
the second half of fiscal 1995, this also helped to maintain higher
log prices. Log pricing also remained high in relation to the
domestic lumber market because of strong export log demand due in
part to a strong Japanese Yen. As a result of these factors, the
percentage decline in lumber prices for the year ended April 30,
1995 was approximately double the percentage decline in the
Company's log costs. This caused a 48% decline in gross margins in
fiscal 1995.
The Company curtailed operations in response to these weak
market conditions. Reduced operations at selected mills and
temporary curtailments at others will continue until operating
conditions improve.
Raw Materials
Raw materials comprise the majority of the cost of products
sold by the Company. The Company depends principally on open
market log purchases for its raw materials needs. WTD's log
inventory policy is to maintain, where possible, a supply equal to
three to four weeks of production.
During the 1980's, public timber accounted for a significant
portion of the supply used by the forest products industry in the
Pacific Northwest. On June 22, 1990, the northern spotted owl was
listed by the U.S. Fish and Wildlife Service as a threatened
species in Oregon, Washington and Northern California. This
required the U.S. Forest Service (USFS) and Bureau of Land
Management (BLM) to develop plans to protect the owl's habitat,
primarily in old-growth timber, by limiting timber harvests on
public lands in the Pacific Northwest. This decision resulted from
many years of controversy and litigation surrounding the harvest of
"old-growth" timber in Oregon, Washington and Northern California.
Since that time, new controversies surrounding ecosystem
management, biological diversity, and species such as the marbled
murrelet and various strains of wild salmon, have caused the USFS
and BLM to further limit timber harvests.
The USFS and BLM have proposed new policies regarding logging
on public lands that would reduce public timber harvests to 20% to
30% of the 1980's harvest levels. Programs have also been proposed
in Congress to increase the harvest of diseased timber. However,
implementation of such plans have been delayed by industry and
preservationist litigation. This will extend the period before
implementation can occur, and may require significant changes to
the proposed rules.
During fiscal years 1993, 1994 and 1995, the Company operated
most of its mills on a one-shift basis, typically using logs
purchased on the open market from industrial and non-industrial
private land owners. The ability to maintain the present level of
operations at the Company's mills depend on a continuing supply of
logs from these private sources. The Company's ability to increase
production above present levels would be enhanced by an increased
availability of timber from public lands in the Northwest.
The sharp reduction in available timber in the Pacific
Northwest contributed to increased open market log costs since the
late 1980's. However, log costs have stabilized, although at much
higher levels, in the Company's last two fiscal years. The Company
has generally been able to obtain sufficient raw materials for its
mills from private sources at prices which ensure a gross margin.
However, management anticipates that uncertainty associated with
timber supply issues, combined with a continued lack of significant
public timber sale activity, may contribute to further log price
volatility. Log and lumber markets may continue to experience
rapid changes in values due to actual and perceived market
conditions throughout the Company's 1996 fiscal year, which may
sometimes result in inconsistent relationships between log and
lumber prices. These changes could result in large swings in the
gross margin on lumber produced. The long-term impact of this
issue cannot be predicted at this time.
Yearly Comparisons
The following table compares certain income and expense items
as a percentage of net sales, and the period-to-period percentage
change for each item:
<TABLE>
<CAPTION>
Percentage
Increase (Decrease)
Income and Expense Items as a -----------------
Percentage of Net Sales 1995 1994
-------------------------------------- vs vs
1995 1994 1993 1994 1993
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Net sales 100.0 % 100.0 % 100.0 % (1.1)% 12.6 %
Cost of sales 95.4 91.2 92.0 3.4 11.8
------ ------ ------
Gross profit 4.6 8.8 8.0 (48.2) 22.9
Selling, general and
administrative expense 3.8 4.5 5.1 (16.6) (1.5)
Reorganization charges (credits) (0.2) (0.9) 0.2 (78.6) NM
------ ------ ------
Operating income 1.0 5.2 2.7 (80.6) 116.6
Interest expense (2.2) (2.4) (1.2) (8.7) 128.4
Miscellaneous 0.4 0.2 0.1 193.8 176.8
------ ------ ------
Income (loss) before income taxes (0.7) 3.0 1.6 NM 110.4
Provision for income taxes (benefit) (2.1) 0.7 0.6 NM 31.2
------ ------ ------
Income before extraordinary items 1.3 2.3 1.0 (41.3) 161.1
Extraordinary items -- -- 8.6 NM NM
------ ------ ------
Net income 1.3 % 2.3 % 9.6 % (41.3) (73.5)
====== ====== ======
<FN>
NM - Not Meaningful
Note: Percentages may not add precisely due to rounding
</TABLE>
Effective November 30, 1992, the Company and each of its
subsidiaries reorganized under Chapter 11 of the Federal Bankruptcy
Code and made distributions under its Plan of Reorganization (the
"Plan").
Comparison of 1995 to 1994
Net sales for the year ended April 30, 1995 decreased by $3.1
million (1 percent) from the year ended April 30, 1994. This
decrease was mainly the result of a 10 percent decrease in lumber
prices, partially offset by a 5 percent increase in lumber
production, a 6 percent increase in chip production and a 7 percent
increase in chip prices.
Gross profit in fiscal 1995 was 4.6 percent of sales versus
8.8 percent of sales in fiscal 1994. Lumber prices received by the
Company during fiscal 1995 were, on average, 10 percent lower than
in fiscal 1994, while the Company's log costs were, on average,
only 3 percent lower than in the prior year.
Selling, general and administrative (SG&A) expenses in the
year ended April 30, 1995 decreased by $2.1 million (17 percent)
from those of a year earlier. This decrease was the result of
lower profit-sharing bonus payments resulting from a lower level of
pretax profits, as well as from ongoing efforts to reduce overhead
expenses. SG&A expenses were 3.8 percent of sales in fiscal 1995
versus 4.5 percent of sales in fiscal 1994.
Reorganization credits in fiscal 1995 primarily reflect the
reduction of certain valuation and holding cost reserves associated
with the Company's remaining non-core assets. Reorganization
credits in fiscal 1994 primarily reflect gains recognized on the
sale of idle assets. See Note 7 to Consolidated Financial
Statements.
Interest expense in the year ended April 30, 1995 was $0.6
million below that incurred in the year ended April 30, 1994. This
decrease was the result of both scheduled and voluntary reductions
of debt.
The Company's tax benefit in fiscal 1995 was 290 percent of
its pretax loss, pursuant to the provisions of SFAS Number 109.
See Note 5 to Consolidated Financial Statements.
Comparison of 1994 to 1993
Net sales for the year ended April 30, 1994 increased by $31.2
million (13 percent) from the year ended April 30, 1993. This
increase was mainly the result of a 23 percent increase in lumber
prices and a 2 percent increase in lumber production, partially
offset by a 10 percent decline in chip production. The chip
production decrease from the prior year resulted from improved raw
materials utilization and less whole log chipping activity.
Gross profit in fiscal 1994 was 8.8 percent of sales versus
8.0 percent of sales in fiscal 1993. Lumber prices received by the
Company during fiscal 1994 were, on average, 23 percent higher than
in fiscal 1993, while log costs were, on average, 28 percent higher
than in the prior year. The Company was able to offset some of the
increase in log prices by improving its raw materials utilization
by 2 percent.
Selling, general and administrative (SG&A) expenses in the
year ended April 30, 1994 decreased by $0.2 million (1.5 percent)
from those of a year earlier. This decrease was the result of
ongoing efforts to reduce overhead expenses. SG&A expenses were
4.5 percent of sales in fiscal 1994 versus 5.1 percent of sales in
fiscal 1993.
Reorganization credits in fiscal 1994 primarily reflect gains
recognized on the sale of idle assets. Reorganization charges in
fiscal 1993 primarily reflect professional fees related to the
Chapter 11 proceedings, net of interest income on restricted cash
and changes in reserve accounts. See Note 7 to Consolidated
Financial Statements.
Interest expense in the year ended April 30, 1994 was $3.7
million above that incurred in the year ended April 30, 1993. In
accordance with AICPA Statement of Position 90-7, the Company did
not accrue interest between January 30, 1991 and November 30, 1992
on unsecured and under-secured instruments. Interest expense in
fiscal 1993 would have been approximately $3.9 million higher if
interest had been accrued for the entire fiscal year under the
terms of the obligations issued pursuant to the Plan.
The Company's tax provision in fiscal 1994 was 24 percent of
pretax income, pursuant to the provisions of SFAS Number 109. In
accordance with APB 11, the Company in fiscal 1993 recorded a tax
provision at statutory rates and an offsetting extraordinary credit
due to net operating loss carryforward utilization. See Notes 5
and 7 to Consolidated Financial Statements.
In fiscal 1993 the Company recognized an extraordinary gain
(before tax effect) on debt restructure of $19.8 million as a
result of distributions under the Plan. See Note 7 to Consolidated
Financial Statements.
LIQUIDITY AND CAPITAL RESOURCES
At April 30, 1995, the Company had net working capital of
$33.7 million, or $11.1 million less than at April 30, 1994. The
working capital decrease was primarily the result of capital
spending, scheduled principal payments and voluntary prepayments of
certain debts, and dividends paid on the Company's Series A
preferred stock, offset by operating activity and the return of
deposits held to secure certain obligations.
Cash and cash equivalents decreased by $2.1 million during the
year ended April 30, 1995, to $6.0 million at year-end.
Approximately $14.3 million of cash was provided by operations.
About $9.0 million was used to repay various debt obligations. The
Company also paid $2.2 million in dividends to holders of its
Series A preferred stock.
During fiscal 1995, the Company spent $6.5 million for capital
improvements to its facilities. Capital spending for the year
ending April 30, 1996 is currently projected to be approximately
$3.5 million. The Company had no material commitments for capital
additions at April 30, 1995.
During fiscal 1995, the Company entered into bonding
agreements for its timber acquisition and workers' compensation
self-insurance (WCSI) activities. Such bonding allowed the return
of approximately $2.1 million in cash deposits made to secure its
timber and WCSI activities.
The Company does not have a credit facility for working
capital and therefore relies on cash provided by its operations to
fund its working capital needs. There is no assurance that such
cash will be sufficient to fund the Company's operations.
Substantially all of the Company's assets are pledged to secure
various debt obligations.
The Company's Credit and Security Agreement dated as of
November 30, 1992 contains certain covenants, including the
maintenance of prescribed levels of tangible net worth and adjusted
cumulative operating income (as defined). See Note 4 to
Consolidated Financial Statements. At April 30, 1995 the Company's
tangible net worth was $19.3 million compared to $10 million
required by the covenant. At that same date, the Company's
adjusted cumulative operating income was $24.1 million, compared to
$20.0 million required. The fiscal 1995 results and the
expectation of results for the first quarter of fiscal 1996 were
such that the Company negotiated an amendment to the tangible net
worth and adjusted cumulative operating income covenants as of May
1, 1995. The required level of tangible net worth increases to $15
million for the period from May 1, 1995 through October 31, 1995,
decreases to $13.5 million from November 1, 1995 through April 30,
1996, and increases to $15.0 million from May 1, 1996 through April
30, 1998. The covenant originally required maintenance at the $15
million level for the period May 1, 1995 through April 30, 1998.
The required level of adjusted cumulative operating income
increases to $22.5 million at January 1, 1996, to $27.5 million at
May 1, 1996 and to $35.0 million at May 1, 1997. The covenant
originally required maintenance at the $33 million level from
August 1, 1995 through April 30, 1996, $40 million during fiscal
1997, and $50 million for fiscal 1998. During the year ended April
30, 1995, the Company's adjusted cumulative operating income
increased by $3.2 million despite a pretax loss of $1.9 million.
Improved operating results will be necessary for the Company to
remain in compliance with its Credit and Security Agreement.
The Company has no floating rate debt, but the dividend rate
on its Series A preferred stock varies based on Bank of America's
prime rate in effect at the time the dividends are declared. Based
on the prime rate in effect at July 10, 1995, annual preferred
dividends would increase by about $0.2 million from the amount
incurred in the year ended April 30, 1995.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements and supplementary data required by
this item are listed in Item 14 of Part IV of this report which
begins at page 26.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The directors and executive officers of the Company are:
Name Age Position
H. Raymond Bingham 49 Director
Scott Christie 46 Director
Bruce L. Engel 54 Director and President
L. Robert Hoffman 42 Vice President
David J. Loftus 53 Treasurer
K. Stanley Martin 53 Director, Vice President-
Finance and Chief
Financial Officer
Robert J. Riecke 45 Director, Vice President-
Administration, General
Counsel and Secretary
John C. Stembridge 36 Vice President-Sales and
Marketing
James R. Wilson 45 Vice President-Timber
William H. Wright 60 Director
The composition of the Board of Directors of the Company is
determined by Article XII of the Company's Second Amended Joint
Plan of Reorganization (the "Plan"). The Plan provides that from
its Effective Date until the Company's 1995 annual meeting of
shareholders, the Board of Directors of the Company shall consist
of seven positions, including six that existed prior to the
Effective Date, and the seventh to be filled by certain creditors
of the Company. Mr. Howard E. Leppla was named as director by
these creditors. Mr. Leppla resigned his directorship, effective
July 6, 1995. At its annual meeting in calendar year 1995, the
Board seats held by Mr. Bingham and Mr. Christie will be filled by
election of the shareholders. The seat vacated by Mr. Leppla will
also be filled if a suitable candidate is identified for nomination
prior to the Annual Meeting of Shareholders in September 1995. At
its annual meeting during calendar year 1996, the remaining four
Board seats will be filled by election of the shareholders. In the
event the Company fails to make a certain number of scheduled
dividend payments or if a certain financial ratio covenant
violation has occurred and is continuing on its Series A preferred
stock, holders of such stock may, under the circumstances and in
the manner provided in the Company's Fourth Restated Articles of
Incorporation, elect a majority of the Board of Directors by
replacing incumbent Board members or increasing the size of the
Board.
H. Raymond Bingham has been a director of the Company since
1988. He is currently executive vice president-chief financial
officer of Cadence Design Systems, Inc., a manufacturer of
electronic design software. Mr. Bingham was formerly executive
vice president and chief financial officer of Red Lion Hotels and
Inns, a Vancouver, Washington based hotel chain, a position he held
until 1993. Mr. Bingham was also formerly managing director of
Agrico Overseas Investment Company where he was in charge of
development of industrial projects.
Scott Christie has been a director of the Company since 1988.
Mr. Christie is currently general partner of Christie Capital
Management. From 1987 until 1994, Mr. Christie was engaged as an
investment advisor for his own account and the account of other
individuals. From 1983 until 1987 Mr. Christie was senior vice
president of Kidder, Peabody & Co. Incorporated, an investment
banking firm. Mr. Christie headed Kidder, Peabody's underwriting
team for the Company's initial public offering and 1987 debenture
offering.
Bruce L. Engel, the Company's founder, has been president and
a director of the Company since its inception. Mr. Engel, a
graduate of the University of Chicago Law School, practiced
business and corporate law, including representation of clients in
the wood products industry, from 1964 to 1984. Mr. Engel became
engaged in sawmill operations in 1981 with the acquisition of a
mill in Glide, Oregon, now owned by a subsidiary of the Company.
Mr. Engel is involved in various other businesses. Mr. Engel is
president and a director of Encore Group, Inc. Mr. Engel is a
former executive officer of Kimber of Oregon, Inc., a company which
filed a petition under Chapter 7 of the U.S. Bankruptcy Code in
January 1991.
L. Robert Hoffman is vice president of the Company, a position
held since January 1988. Mr. Hoffman is responsible for financial
reporting and other accounting matters for the Company. From 1985
to 1988, Mr. Hoffman was an assistant vice president specializing
in acquisitions and business development for PacifiCorp's
international telecommunications subsidiaries. From 1984 to 1985,
he was manager of corporate planning for PacifiCorp and from 1983
to 1984 was director of financial services for Nerco, Inc., a
company engaged in mining and resource development operations. Mr.
Hoffman's earlier experience includes logging and manufacturing
management responsibilities for Simpson Timber Company.
David J. Loftus was appointed treasurer of the Company in
October 1993 and continues to serve as vice president-finance of
TreeSource, the Company's marketing subsidiary, a position he has
held since May 1986. As treasurer, Mr. Loftus is primarily
responsible for cash management matters and credit and banking
relationships. For the eight years prior to joining TreeSource,
Mr. Loftus served as the assistant treasurer for a publicly-traded
company with operations in the forest products industry.
K. Stanley Martin is vice president-finance of the Company, a
position held since September 1983, and has been chief financial
officer since April 1991. Mr. Martin has been a director of the
Company since January 1994. Mr. Martin is responsible for all
financial affairs of the Company. For the eleven years prior to
1983, Mr. Martin served as a financial officer for publicly-traded
companies having all or a substantial portion of their operations
in the forest products industry. Mr. Martin is a certified public
accountant.
Robert J. Riecke became vice president-administration of the
Company in May 1989, has been general counsel of the Company since
January 1987, assistant secretary from March 1983 until January
1994, and a director of the Company since March 1986. Mr. Riecke
was named corporate secretary in January 1994. Mr. Riecke has
primary responsibility for the Company's legal, risk management,
environmental compliance, investor relations, and human resources
functions. From 1976 through 1986, Mr. Riecke was in private law
practice. Since 1983, Mr. Riecke has devoted much of his
professional endeavors to legal matters relating to the Company and
its subsidiaries. Mr. Riecke is a graduate of the University of
Illinois School of Law.
John C. Stembridge was appointed vice president-sales and
marketing of the Company in February 1995. Mr. Stembridge joined
TreeSource, the Company's marketing subsidiary, in 1989 and
continues to serve as its vice president and general manager, a
position he has held since June 1991. Mr. Stembridge has primary
responsibility for managing all aspects of the Company's lumber
sales and transportation. For the nine years prior to joining
TreeSource, Mr. Stembridge was involved in domestic and export
lumber sales, primarily with North Pacific Lumber Co.
James R. Wilson was appointed vice president-timber of the
Company in October 1993. Mr. Wilson has primary responsibility for
the Company's timber supply program. Prior to his present
position, Mr. Wilson served at both mill and corporate levels of
WTD Industries commencing in February 1992. Prior to 1992, Mr.
Wilson served as general manager of Estacada Lumber Company, a
division of RSG Forest Products. From 1973 to 1984, Mr. Wilson was
involved in all phases of the wood products industry with Crown
Zellerbach Corporation.
William H. Wright has been a director of the Company since
April of 1992. Mr. Wright has held a variety of management
positions in the forest products industry since 1957. He is
currently president of Heartwood Consulting Service, which advises
forest products clients. From 1989 until 1994 he was president and
chief executive officer of Dee Forest Products Inc., a manufacturer
of hardboard and related products. From 1984 to 1989 Mr. Wright
was general manager of Stevenson Co-Ply Inc., a manufacturer of
veneer and plywood.
Reporting of Securities Transactions
Under the federal securities laws, officers and directors of
the Company and persons holding more than 10 percent of the
Company's Common Stock are required to report, within specified
monthly and annual due dates, their initial ownership in the
Company's Common Stock and all subsequent acquisitions,
dispositions or other transfers of beneficial interests therein, if
and to the extent reportable events occur which require reporting
by such due dates. The Company is required to describe in this
section whether, to its knowledge, any person required to file such
a report may have failed to do so in a timely manner.
Based solely on its review of the copies of such forms
received by it and written representations that no other reports
were required for those persons, the Company believes that, during
fiscal 1995, all Section 16(a) filing requirements applicable to
its executive officers, directors and owners of more than 10
percent of the Company's Common Stock were complied with.
Item 11. EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table shows the cash and non-cash compensation
paid by the Company for the last three fiscal years to the chief
executive officer and the four other most highly compensated
executive officers.
<TABLE>
<CAPTION>
Annual Compensation
Name and Principal Position Year Salary Bonus
- --------------- ---- ---- ----
<S> <C> <C> <C>
Bruce L. Engel 1995 $300,000 $48,200
President 1994 $300,000 $151,936
1993 $300,000 $100,553
K. Stanley Martin 1995 $120,000 $19,280
Vice President-Finance and 1994 $104,250 $51,659
Chief Financial Officer 1993 $89,958 $39,216
Robert J. Riecke 1995 $132,000 $21,209
Vice President- 1994 $132,000 $66,853
Administration, General 1993 $123,500 $48,484
Counsel and Secretary
John C. Stembridge 1995 $86,667 $15,539
Vice President-Sales and 1994 $80,000 $45,944
Marketing 1993 $76,667 $38,303
James R. Wilson 1995 $85,833 $12,853
Vice President-Timber 1994 $70,250 $41,245
1993 $54,000 $11,058
</TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
No executive officer named above received option grants during the fiscal
year ended April 30, 1995.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
The following table provides information on option exercises
for the last fiscal year by the named executive officers and the
value of such officers' unexercised options as of April 30, 1995:
<TABLE>
<CAPTION>
Value of Unexercised
Shares Number of Unexercised In-the-Money Options
Acquired Options at April 30,1995 at April 30, 1995
Name or Exercised Exercisable Unexercisable Exercisable Unexercisable
- -------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Bruce L. Engel -- 230,400 153,600 $45,653 $30,435
K. Stanley Marti -- 24,200 7,600 $13,010 $1,900
Robert J. Riecke -- 27,400 7,600 $15,550 $1,900
John C. Stembrid -- 6,000 4,000 -- --
James R. Wilson -- 6,000 4,000 -- --
</TABLE>
Benefits
The Company maintains an IRC Section 401(k) retirement savings
plan under which employees, including executive officers, are
permitted to make salary deferral contributions. Executive
officers are not entitled to employer matching contributions
pursuant to this plan. The Company pays the costs of
administration of the retirement savings plan.
Compensation of Directors
Each of the Company's outside directors is paid an annual
retainer of $15,000 for attending up to six Board meetings, plus
$750 for each additional meeting attended and $225 for each
telephone conference meeting attended or written consent minutes
executed. Directors who are also employees of the Company do not
receive additional compensation for their services as directors.
Pursuant to the Company's Stock Option Plan, directors who are not
employees of the Company each received initial option grants with
respect to 35,000 shares of the Company's Common Stock and are
entitled to receive option grants with respect to 10,000 shares in
subsequent fiscal years to a maximum aggregate of 80,000 shares.
Each director was granted options with respect to 10,000 shares in
fiscal 1995.
Executive Bonuses
Monthly discretionary bonuses are paid to the Company's
executive officers, as well as other management and administrative
employees, pursuant to the Company's profit sharing bonus plan.
The bonuses are based upon net pretax profits and are generally
allocated according to base salary level. Bonuses paid to
executive officers for services rendered to the Company during the
year ended April 30, 1995 are included in the amounts shown in the
"Summary Compensation Table."
Stock Option Plan
In July 1986 the Company adopted a Stock Option Plan ("Option
Plan"). The Option Plan was amended by the Company's Chapter 11
Plan of Reorganization to (a) increase to 1,245,900 the number of
shares available for grant, (b) provide for the grant of
nonqualified stock options, as well as incentive stock options, (c)
permit nonemployee agents, consultants, and independent contractors
to participate in the Option Plan and (d) provide automatic initial
and annual option grants in defined amounts to the Company's non-
employee directors. The purpose of the Option Plan is to motivate
special achievement by the Company's officers and key employees by
encouraging them to acquire an equity interest in the Company.
Compensation Committee Interlocks and Insider Participation
The Compensation Committee of the Board of Directors is
composed of Mr. Bingham, Mr. Christie, and Mr. Wright. The
Compensation Committee determines compensation for executive
officers, including executive officers who are directors. It also
administers the Company's Option Plan.
Board Compensation Committee Report on Executive Compensation
The Compensation Committee is composed of three independent
non-employee directors.
The Compensation Committee is responsible for recommending to
the full Board of Directors, for its approval, the base
compensation for all executive officers. Executive officers who
serve on the Company's Board of Directors do not participate in any
deliberations or decisions regarding their own compensation. The
Compensation Committee receives recommendations from the Chief
Executive Officer regarding appropriate levels of base compensation
for the other executive officers.
Awards to executive officers (and other employees) under the
Company's 1986 Amended and Restated Stock Option Plan are made by
the Compensation Committee acting as an Administrative Committee.
The Company's executive officer compensation policies are
designed to attract, motivate and retain senior management by
providing an opportunity for overall competitive compensation based
on an adequate base compensation amount and participation in a
profit based bonus system in effect for all salaried employees of
the Company.
The profit sharing component of the overall compensation
system is designed to reward all salaried employees, including
executive officers, in relation to the Company's monthly
performance and to encourage salaried employees at all levels of
the Company to work together for the common goal of maximizing
profits. Salaried employees at the WTD corporate level (including
all executive officers) receive 10% of monthly consolidated pre-tax
profits, allocated according to base salary level.
It is the Company's practice to participate in and use, as a
basis for comparison, an analysis of executive compensation in the
Northwest prepared by the compensation consulting group of Milliman
& Robertson, Inc. This analysis is useful in establishing base
salary levels and monitoring overall compensation levels as
compared to other publicly-traded companies of similar size.
Executive officers' compensation paid during fiscal 1995, with
respect to both base and total cash compensation, was below the
median levels published in the 1994/1995 Milliman & Robertson
compensation survey of all industries.
The Company also uses long term stock-based incentive
opportunities in the form of options to purchase the Company's
Common Stock. The Company's Amended and Restated 1986 Stock Option
Plan provides for the grant of stock options to employees of the
Company to purchase shares of the Company's Common Stock subject to
minimum exercise price limitations imposed by the Company's Plan of
Reorganization. Stock option awards are determined on a
discretionary basis by the Compensation Committee. No stock
options were awarded to executive officers during the 1995 fiscal
year.
Stock options remaining available for grant to employees
(including executive officers) have a minimum exercise price of the
greater of 85% of the fair market value per share of the Company's
stock at the time of grant or $3.00 per share.
The Committee believes that stock-based performance
compensation arrangements are beneficial in aligning management's
and shareholders' interests in the advancement of shareholder
value.
WTD provides the same group life and health insurance coverage
to executive officers as other employees and requires all
employees, including executive officers, to pay approximately 25%
of health insurance premiums by payroll deduction.
The Company allows its executive officers and all other
employees to contribute a percentage of their compensation to the
Company-sponsored 401(k) Retirement Savings Plan. Executive
officers and other salaried employees are not generally entitled to
matching contributions.
Neither the executive officers nor other employees are covered
by any other Company-sponsored retirement plans.
Chief Executive Officer Compensation
All of the policies described above apply to Mr. Engel's
compensation. No additional benefits or requirements specifically
apply to the chief executive officer.
Mr. Engel's 1995 base salary of $300,000 is below the median
for chief executive officers of comparably sized public companies,
as published by the Milliman & Robertson compensation survey. Mr.
Engel received a cash bonus of $48,200 during fiscal 1995 under the
profit sharing plan described above, reflecting profitable
operations during the first half of the fiscal year. Mr. Engel's
bonus and total compensation amounts were below the published
median levels.
Stock Performance Graph
The stock performance graph required by this item is included
under the caption Executive Compensation in the Company's Proxy
Statement for its 1995 Annual Meeting of Shareholders, and is
incorporated herein by reference.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The following table shows beneficial ownership of the
Company's Common Stock by each director, shareholders known to the
Company to beneficially own more than 5 percent of the Common
Stock, by the executive officers named in the Summary Compensation
Table, and all directors and officers as a group. Except as
otherwise specifically noted, each person noted below has sole
investment and voting power with respect to shares indicated.
<TABLE>
<CAPTION>
Amount and Nature
Name and Address of Beneficial Owner of Beneficial Ownership(3) Percent
- --------------------- -------------- ----
<S> <C> <C>
INVISTA Capital Management, Inc., a
subsidiary of Principal Mutual Life Insurance
Company
1500 Hub Tower
699 Walnut
Des Moines, Iowa 50309 828,111 (1) 7.5%
Howard E. Leppla
3224 Skycroft Drive
Minneaplois, MN 55418 649,259 (2) 5.8%
Amount and Nature
Name of Directors and Executive Officers of Beneficial Ownership(3)(4) Percent
- ---------------------- --------------- ----
H. Raymond Bingham 64,000 0.6%
Scott Christie 55,400 0.5%
Bruce L. Engel(4) 616,440 5.5%
K. Stanley Martin 27,200 0.3%
Robert J. Riecke 27,400 0.3%
John C. Stembridge 7,300 0.1%
James R. Wilson 6,100 0.1%
William H. Wright 55,000 0.5%
All directors and executive officers as a
group (10 persons) 890,240 7.7%
</TABLE>
(1) As determined by reference to the beneficial owner's most
recent 13 D or G filing.
(2) Mr. Leppla shares with his spouse Mary Leppla voting and
investment power as to 608,009 shares beneficially owned.
Includes 41,250 shares reserved for issuance to Mr. Leppla
under stock options exercisable within 60 days of July 10,
1995. Mr. Leppla was a director of the Company from November
30, 1992 until his resignation on July 6, 1995.
(3) Beneficial Ownership is calculated as of July 10, 1995.
(4) Includes shares reserved for issuance under options
exercisable within 60 days of July 10, 1995 as follows: Mr.
Bingham 55,000; Mr. Christie 55,000; Mr. Engel 230,400; Mr.
Martin 24,200; Mr. Riecke 27,400; Mr. Stembridge 6,000; Mr.
Wilson 6,000; and Mr. Wright 55,000.
(5) Mr. Engel shares with his spouse Teri E. Engel voting and
investment power as to 386,040 shares beneficially owned. See
Note 4 above for details of individual option rights. Certain
of Mr. Engel's shares are pledged to third parties in
connection with certain personal obligations.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None.
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
FORM 8-K
(a) (1) Financial Statements Page
The following consolidated financial statements
of the Registrant and its subsidiaries are contained in
this report:
Report of Independent Certified Public Accountants 31
Consolidated Statements of Income for the Years
Ended April 30, 1995, 1994 and 1993 32
Consolidated Balance Sheets at April 30, 1995 and 1994 33
Consolidated Statements of Cash Flows for the Years
Ended April 30, 1995, 1994 and 1993 35
Consolidated Statement of Changes in Stockholders'
Equity for the Years Ended April 30, 1995,
1994 and 1993 36
Notes to Consolidated Financial Statements 37
(a) (2) Financial Statement Schedules
The schedules called for under Regulation S-X are not
submitted because they are not applicable, are not required, or
because the required information is not material or is included in
the financial statements or notes thereto.
(a) (3) Exhibit Index Page
2.1 Final form of Registrant's Second Amended
Joint Plan of Reorganization dated October 5,
1992, filed with the United States Bankruptcy
Court for the Western District of Washington. (1)
3.1 Fourth Restated Articles of Incorporation of the
Registrant adopted November 27, 1992. (1)
3.2 Second Restated Bylaws of the Registrant effective
November 27, 1992. (9)
4.2 Credit and Security Agreement dated as of
November 30, 1992, between Registrant and
Principal Mutual Life Insurance Company, Aetna
Life Insurance Company, The Northwestern Mutual
Life Insurance Company, Chemical Bank,
Seattle-First National Bank, and Bank of America
Oregon. (2)
4.2.1 Amendment dated as of October 18, 1994 to Credit
and Security Agreement dated as of November 30, 1992,
between Registrant and Principal Mutual Life Insurance
Company, Aetna Life Insurance Company, The Northwestern
Mutual Life Insurance Company, Chemical Bank, Seattle-
First National Bank, and Bank of America Oregon. (10)
4.2.2 Amendment dated as of January 27, 1995 to Credit
and Security Agreement dated as of November 30, 1992,
between Registrant and Principal Mutual Life Insurance
Company, Aetna Life Insurance Company, The Northwestern
Mutual Life Insurance Company, Chemical Bank, Seattle-
First National Bank, and Bank of America Oregon. 52
4.2.3 Amendment dated as of May 1, 1995 to Credit and
Security Agreement dated as of November 30, 1992,
between Registrant and Principal Mutual Life Insurance
Company, Aetna Life Insurance Company, The Northwestern
Mutual Life Insurance Company, Chemical Bank, Seattle-
First National Bank, and Bank of America Oregon. 56
4.3 Indenture dated as of November 30, 1992, between
Registrant and State Street Bank and Trust Company,
as Trustee, with respect to 8% Senior Subordinated
Notes due 2005. (3)
10.1 Amended and Restated 1986 Stock Option Plan dated
December 30, 1992. (4)
10.1.2 Form of Stock Option Agreement for directors of
Registrant. (9)
10.1.3 Form of Stock Option Agreement for executive
officers of the Registrant. (9)
10.2 General Indemnity Agreement dated March 29,
1984, among the Registrant, Bruce L. Engel
("Engel"), Teri E. Engel and Employers
Insurance of Wausau ("Wausau") and other
related parties and an Agreement dated
June 25, 1986, among Wausau, the Registrant,
Engel and other related parties. (5)
10.2.1 Letter dated November 18, 1986, from Wausau to
the Registrant and General Agreement of Indemnity
dated January 19, 1987, among Wausau, the Reg-
istrant, Bruce L. Engel and Teri E. Engel. (6)
10.3 Form of Indemnification Agreement for directors,
officers and certain employees effective January
30, 1991. (9)
10.4 Description of Management Profit-Sharing Bonus
Plan. (5)
10.61 WTD Industries, Inc. Retirement Savings Plan
and Trust dated as of May 1, 1989. (7)
10.62 Amendment No. 1 to WTD Industries, Inc. Retirement
Savings Plan and Trust Effective May 1, 1989. (8)
10.63 Amendment No. 2 to WTD Industries, Inc. Retirement
Savings Plan and Trust adopted May 30, 1991. (8)
10.64 Amendment No. 3 to WTD Industries, Inc. Retirement
Savings Plan and Trust adopted June 26, 1992. (8)
10.65 Amendment No. 4 to WTD Industries, Inc. Retirement
Savings Plan and Trust adopted April 30, 1993. (9)
10.66 Amendment No. 5 to WTD Industries, Inc. Retirement
Savings Plan and Trust adopted December 28, 1994. (11)
12.2 Computation of Registrant's Net Income (Loss) to
Average Total Assets. 58
12.3 Computation of Registrant's Net Income (Loss) to
Average Stockholders' Equity (Deficit). 59
12.4 Computation of Registrant's Average Stockholders'
Equity (Deficit) to Average Total Assets. 60
21 Subsidiaries of the Registrant (list updated as
of July 10, 1995). 61
23 Consent of Independent Certified Public
Accountants. 62
(1) Incorporated by reference to the exhibit of like number
to the Registrant's report on Form 8-K dated November 23,
1992.
(2) Incorporated by reference to the exhibit of like number
to the Registrant's quarterly report on Form 10-Q for the
quarter ended October 31, 1992, dated December 14, 1992,
previously filed with the Commission.
(3) Incorporated by reference to the exhibit of like number
to the Registrant's quarterly report on Form 10-Q for the
quarter ended January 31, 1993, dated March 15, 1993,
previously filed with the Commission.
(4) Incorporated by reference to exhibit 6.0 to the
Registrant's Registration Statement on Form S-8 (No. 33-
62714) filed with the Commission on May 14, 1993.
(5) Incorporated by reference to the exhibit of like number
to the Registrant's Registration Statement on Form S-1
(No. 33-7389) filed with the Commission on July 21, 1986,
as amended by Amendment Nos. 1 through 3 thereto filed
with the Commission on September 3, 1986, October 14,
1986 and October 24, 1986, respectively.
(6) Incorporated by reference to the exhibit of like number
to the Registrant's Registration Statement on Form S-1
(No. 33-12644) filed with the Commission on March 16,
1987, as amended by Amendment Nos. 1 and 2 thereto filed
with the Commission on April 1, 1987 and April 24, 1987,
respectively.
(7) Incorporated by reference to the exhibit of like number
to the Registrant's annual report on Form 10-K for the
year ended April 30, 1989, previously filed with the
Commission.
(8) Incorporated by reference to the exhibit of like number
to the Registrant's annual report on Form 10-K for the
year ended April 30, 1992, previously filed with the
Commission.
(9) Incorporated by reference to the exhibit of like number
to the Registrant's annual report on Form 10-K for the
year ended April 30, 1993, previously filed with the
Commission.
(10) Incorporated by reference to the exhibit of like number
to the Registrant's quarterly report on Form 10-Q for the
quarter ended October 31, 1994, previously filed with the
Commission.
(11) Incorporated by reference to the exhibit of like number
to the Registrant's quarterly report on Form 10-Q for the
quarter ended January 31, 1995, previously filed with the
Commission.
Except for instruments already filed as exhibits to this Form
10-K, the Registrant agrees to furnish the Commission upon request
a copy of each instrument with respect to long-term debt of the
Registrant and its consolidated subsidiaries, the amount of which
does not exceed 10% of the total assets of the Registrant and its
subsidiaries on a consolidated basis.
Other exhibits listed in Item 601 of Regulation S-K are not
applicable.
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended
April 30, 1995.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
WTD Industries, Inc.
(Registrant)
By: s/ Bruce L. Engel
- -----------------------------------
Bruce L. Engel
President
July 14, 1995
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the registrant and in the capacities and on the dates
indicated.
s/ Bruce L. Engel s/ K. S. Martin
- ------------------------------ ------------------------------
Bruce L. Engel K. Stanley Martin
President Vice President-Finance
(Principal Executive Officer) (Principal Financial and
and Director Accounting Officer)
and Director
s/ H. Raymond Bingham s/ Scott Christie
- ------------------------------ -------------------------------
H. Raymond Bingham, Director Scott Christie, Director
s/ William H. Wright s/ Robert J. Riecke
- ------------------------------ --------------------------------
William H. Wright, Director Robert J. Riecke
Vice President-Administration
and Director
Each of the above signatures is affixed as of July 14, 1995.
[MOSS ADAMS LETTERHEAD]
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Shareholders
WTD Industries, Inc.
We have audited the accompanying consolidated balance sheets of
WTD Industries, Inc. and subsidiaries (the "Company") as of April
30, 1995 and 1994, and the related consolidated statements of
income, cash flows and changes in stockholders' equity, for each
of the years in the three-year period ended April 30, 1995.
These financial statements are the responsibility of the
Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial
position of WTD Industries, Inc. and subsidiaries as of April 30,
1995 and 1994, and the results of their operations and their cash
flows for each of the years in the three-year period ended April
30, 1995, in conformity with generally accepted accounting
principles.
/s/ Moss Adams
-----------------------------------
MOSS ADAMS
Beaverton, Oregon
June 13, 1995<PAGE>
<TABLE>
WTD INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands, Except Per-Share Amounts)
<CAPTION>
YEAR ENDED APRIL 30,
------------------------------------------------------------
1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
NET SALES $ 274,966 $ 278,115 $ 246,887
COST OF SALES 262,334 253,732 227,040
-------- -------- --------
GROSS PROFIT 12,632 24,383 19,847
GENERAL, SELLING AND
ADMINISTRATIVE EXPENSES 10,366 12,423 12,615
REORGANIZATION CHARGES (CREDITS) (532) (2,487) 563
-------- -------- --------
OPERATING INCOME 2,798 14,447 6,669
OTHER INCOME (EXPENSE)
Interest (5,972) (6,541) (2,864)
Miscellaneous 1,228 418 151
-------- -------- --------
(4,744) (6,123) (2,713)
-------- -------- --------
INCOME (LOSS) BEFORE INCOME TAXES (1,946) 8,324 3,956
PROVISION FOR INCOME TAXES (BENEFIT) (5,646) 2,024 1,543
-------- -------- --------
INCOME BEFORE
EXTRAORDINARY ITEMS 3,700 6,300 2,413
EXTRAORDINARY ITEMS -- -- 21,345
-------- -------- --------
NET INCOME 3,700 6,300 23,758
PREFERRED DIVIDENDS 2,126 1,616 647
-------- -------- --------
NET INCOME APPLICABLE TO
COMMON SHAREHOLDERS $ 1,574 $ 4,684 $ 23,111
======== ======== ========
NET INCOME PER
COMMON SHARE-PRIMARY
Income before
extraordinary items $0.14 $0.41 $0.29
Extraordinary items -- -- 3.46
-------- -------- --------
$0.14 $0.41 $3.75
======== ======== ========
NET INCOME PER
COMMON SHARE-FULLY DILUTED
Income before
extraordinary items $0.14 $0.41 $0.28
Extraordinary items -- -- 3.43
-------- -------- --------
$0.14 $0.41 $3.71
======== ======== ========
<FN>
The accompanying notes are an integral part of these consolidated financial statements
</TABLE>
<TABLE>
WTD INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
(In Thousands)
<CAPTION>
APRIL 30,
------------------------------------------------
1995 1994
------- -------
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 6,023 $ 8,101
Accounts receivable, net 11,404 8,634
Inventories 18,104 26,796
Prepaid expenses 4,024 3,145
Income tax refund receivable 503 --
Deferred tax asset 1,830 2,197
Timber, timberlands and
timber-related assets 9,299 11,743
------- -------
Total current assets 51,187 60,616
NOTES AND ACCOUNTS RECEIVABLE 89 121
TIMBER AND TIMBERLANDS 705 845
PROPERTY, PLANT AND EQUIPMENT, at cost
Land 2,733 2,602
Buildings and improvements 11,008 10,067
Machinery and equipment 65,511 60,148
------- -------
79,252 72,817
Less accumulated depreciation 47,727 42,001
------- -------
31,525 30,816
Construction in progress 600 1,361
------- -------
32,125 32,177
DEFERRED TAX ASSET 2,448 --
OTHER ASSETS 2,390 3,341
------- -------
$ 88,944 $ 97,100
======= =======
<FN>
The accompanying notes are an integral part of these consolidated financial statements
</TABLE>
<TABLE>
WTD INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
(In Thousands, Except Share Information)
<CAPTION>
APRIL 30,
------------------------------------------------
1995 1994
------- -------
<S> <C> <C>
CURRENT LIABILITIES
Accounts payable $ 6,023 $ 3,361
Accrued expenses 7,466 7,946
Income taxes payable -- 283
Timber contracts payable 1,660 2,292
Current maturities of long-term debt 2,298 1,938
------- -------
Total current liabilities 17,447 15,820
DEFERRED INCOME TAXES PAYABLE -- 2,181
LONG-TERM DEBT, less current maturities 51,421 60,587
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Preferred stock, no par value;
10,000,000 shares authorized:
Series A 20,688 20,654
Series B 333 333
Common Stock, no par value 28,641 28,617
Additional paid-in capital 15 15
Retained deficit (29,601) (31,107)
------- -------
20,076 18,512
------- -------
$ 88,944 $ 97,100
======= =======
<FN>
The accompanying notes are an integral part of these consolidated financial statements
</TABLE>
<TABLE>
WTD INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
<CAPTION>
YEAR ENDED APRIL 30,
------------------------------------------------------------
1995 1994 1993
------- ------- -------
<S> <C> <C> <C>
CASH PROVIDED BY (USED FOR)
OPERATING ACTIVITIES:
Net income $ 3,700 $ 6,300 $ 23,758
Adjustments to reconcile net income to
cash provided by (used for) operations:
Depreciation, depletion and amortization 7,058 8,146 13,124
Deferred income tax (4,262) (16) --
Reorganization charges (532) (2,487) 563
Gain on debt restructure, before
income tax provision -- -- (19,802)
Accounts receivable (2,770) 10,949 (4,795)
Inventories 8,692 (8,474) 2,974
Income taxes (786) 283 --
Prepaid expenses (879) (746) 208
Timber, timberlands and
timber-related assets - current 2,132 5,691 (7,975)
Accruals, payables & other operating
activities 1,974 (5,196) (6,449)
-------- -------- --------
Cash provided by operating activities 14,327 14,450 1,606
-------- -------- --------
CASH PROVIDED BY (USED FOR)
INVESTING ACTIVITIES:
Notes and accounts receivable 75 (1) 63
Net reductions of (additions to) timber
and timberlands 140 13 (155)
Acquisition of property, plant & equipment (6,467) (4,066) (5,319)
Cost of holding idle facilities (7) (125) (996)
Proceeds from sale of idle facilities -- 2,013 4,819
Other investing activities 227 281 207
-------- -------- --------
Cash used for investing activities (6,032) (1,885) (1,381)
-------- -------- --------
CASH PROVIDED BY (USED FOR)
FINANCING ACTIVITIES:
Principal payments on long-term debt (8,952) (4,190) (9,646)
Other assets 749 (853) (33)
Restricted cash -- -- 7,606
Dividends paid on preferred stock (2,194) (1,616) (776)
Issuance of Common Stock 24 71 10
-------- -------- --------
Cash used for financing activities (10,373) (6,588) (2,839)
-------- -------- --------
INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS (2,078) 5,977 (2,614)
CASH BALANCE AT BEGINNING OF YEAR 8,101 2,124 4,738
-------- -------- --------
CASH BALANCE AT END OF YEAR $ 6,023 $ 8,101 $ 2,124
======== ======== ========
CASH PAID (REFUNDED) DURING
THE YEAR FOR:
Interest $6,989 $7,229 $2,628
Income taxes ($613) $1,742 --
<FN>
The accompanying notes are an integral part of these consolidated financial statements
</TABLE>
<TABLE>
WTD INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
(In Thousands)
<CAPTION>
SERIES A SERIES B ADDI- STOCK-
PREFERRED STOCK PREFERRED STOCK COMMON STOCK TIONAL RETAINED HOLDERS'
------ ------ -------------- ------ ----- PAID-IN EARNINGS EQUITY
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT CAPITAL (DEFICIT) (DEFICIT)
----- ----- ----- ----- ----- ----- ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at April 30,1992 -- -- -- -- 6,229 $ 15,205 $ 15 $ (58,773) $ (43,553)
Four-for-ten reverse split -- -- -- -- (3,737) -- -- -- --
Shares issued pursuant
to reorganization plan 269 $ 20,581 197 $ 10,730 1,869 2,934 -- -- 34,245
Shares converted -- -- (91) (4,974) 3,176 4,974 -- -- --
Stock options exercised -- -- -- -- 11 10 -- -- 10
Dividends paid -- -- -- -- -- -- -- (776) (776)
Net income -- -- -- -- -- -- -- 23,758 23,758
----- ----- ----- ----- ----- ----- ------ ------ ------
Balance at April 30, 1993 269 20,581 106 5,756 7,548 23,123 15 (35,791) 13,684
Shares issued pursuant
to reorganization plan 1 73 -- -- -- -- -- -- 73
Shares converted -- -- (100) (5,423) 3,464 5,423 -- -- --
Stock options exercised -- -- -- -- 49 71 -- -- 71
Dividends paid -- -- -- -- -- -- -- (1,616) (1,616)
Net income -- -- -- -- -- -- -- 6,300 6,300
----- ----- ----- ----- ----- ----- ------ ------ ------
Balance at April 30, 1994 270 20,654 6 333 11,061 28,617 15 (31,107) 18,512
Shares issued pursuant
to reorganization plan -- 34 -- -- -- -- -- -- 34
Stock options exercised -- -- -- -- 16 24 -- -- 24
Dividends paid -- -- -- -- -- -- -- (2,194) (2,194)
Net income -- -- -- -- -- -- -- 3,700 3,700
----- ----- ----- ----- ----- ----- ------ ------ ------
Balance at April 30, 1995 270 $ 20,688 6 $ 333 11,077 $ 28,641 $ 15 $ (29,601) $ 20,076
===== ===== ===== ===== ===== ===== ====== ====== ======
<FN>
The accompanying notes are an integral part of these consolidated financial statements
</TABLE>
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of consolidation and operations - The consolidated
financial statements include the accounts of WTD Industries, Inc.
and its wholly owned subsidiaries (hereinafter "WTD" or "the
Company"). All significant intercompany accounts and transactions
have been eliminated.
The Company operates in one industry segment, the manufacture
and sale of softwood and hardwood lumber products, wood chips and
other by-products. Most lumber products are sold to wholesalers,
distributors or directly to large retailers. The Company's
products are used in many applications, including residential and
commercial construction, packaging and industrial uses.
Market conditions in the housing sector deteriorated during
the third and fourth quarters of fiscal 1995. Low lumber prices
combined with high log prices created losses for the Company during
the fourth quarter, a period in which operating results have been
historically strong. The Company curtailed production in response
to these weak market conditions. Reduced operations at selected
mills and temporary curtailments at others will continue until
operating conditions improve.
The fiscal 1995 results and the expectation of results for the
first quarter of fiscal 1996 were such that management initiated an
amendment to its primary debt agreement. This debt agreement was
amended as of May 1, 1995, with respect to certain affirmative
financial performance covenants. Improved operating conditions
will be necessary for the Company to remain in compliance with its
primary debt agreement. See Note 4 to Consolidated Financial
Statements.
The Company's sales are predominantly in the United States;
export sales are not material. During the year ended April 30,
1995, the Company had sales to one major customer of $33,346,000,
or 12.1% of net sales. During the year ended April 30, 1994, WTD
had no sales to any one customer in excess of 10 percent of net
sales. The loss of any one customer would not, in the opinion of
management, have a material adverse impact on the financial results
of the Company.
Temporary cash investments and trade receivables potentially
subject the Company to concentrations of credit risk. The Company
places its temporary cash investments with high credit-quality
financial institutions, and by policy limits the amount of credit
exposure to any one institution. The Company reviews a customer's
credit history before extending credit and continuously evaluates
its accounts receivable. Concentrations of credit risk on trade
receivables are limited due to the Company's large number of
customers and their widely varying locations. Generally, the
Company does not require collateral or other security to support
its trade receivables.
WTD has from time to time utilized futures contracts to
minimize the Company's exposure to adverse movements in the log and
lumber markets. This activity has not been significant in the past
and the Company had no material futures position at April 30, 1995.
Cash and cash equivalents - Financial instruments with a
maturity of three months or less are considered to be cash
equivalents.
Accounts receivable - Trade accounts receivable are shown net
of allowances for doubtful accounts and discounts of $199,000 and
$658,000 at April 30, 1995 and 1994, respectively.
Inventories - Inventories are valued at the lower of cost or
market. Cost is determined using the average cost and first-in,
first-out (FIFO) methods. A summary of inventory by principal
product classification follows (in thousands):
APRIL 30,
1995 1994
-------- --------
Logs $ 6,100 $ 11,777
Lumber 10,808 13,818
Supplies 1,196 1,201
-------- --------
$ 18,104 $ 26,796
======== ========
At April 30, 1995 and 1994, $375,000 and $3,094,000,
respectively, of log inventory was valued at market, which
approximated cost. At both April 30, 1995 and 1994, all lumber
inventory was valued at market, which represented reductions of
$2,729,000 and $2,511,000, respectively, from cost.
Property, plant and equipment - Property, plant and equipment
of the Company's facilities are stated at cost. For financial
reporting purposes, the Company uses the units-of-production method
for computing depreciation over the estimated useful lives of
assets, ranging from ten to thirty years for buildings and
improvements, and three to ten years for machinery and equipment.
When assets are retired or disposed of, cost and accumulated
depreciation are reversed from the related accounts and any gain or
loss is included as income.
Timber and timberlands - Timber and timberlands are stated at
the lower of aggregate cost or estimated disposal value, less the
amortized cost of timber harvested. The portion of the cost
attributable to standing timber is charged against income as timber
is cut, at rates determined periodically based on the relationship
between unamortized timber value and the estimated volume of
recoverable timber. The costs of roads and land improvements are
capitalized and amortized over their economic lives. The carrying
costs of timber, timberlands and related assets are expensed as
incurred. The Company classifies timber and timber-related assets
as current or long-term assets based upon expected harvest and
disposal plans.
Timber-cutting contracts - The Company purchases timber under
various types of contracts. Certain contracts, for which the total
purchase price is fixed, are recorded as assets along with the
related liability at the date acquired. The remaining contracts,
for which the total purchase price depends on the volume of timber
removed, are considered to be commitments (as discussed in Note 9)
and are not recorded until the timber is removed.
Income taxes - Income taxes are provided for transactions in
the year in which they are reflected in earnings, even though they
may be reported for tax purposes in a different year. The
resulting difference between taxes charged to operations and taxes
paid is reported as deferred income taxes. Tax credits are
recognized in the year utilized, using the flow-through method.
Effective May 1, 1993, the Company adopted Statement of Financial
Accounting Standard Number 109 "Accounting for Income Taxes". No
gain or loss was recorded as a result of implementing this
pronouncement. See Note 5 to Consolidated Financial Statements.
Accrued expenses - The following is a summary of the
components of accrued expenses (in thousands):
APRIL 30,
1995 1994
-------- --------
Payroll and related items $ 5,127 $ 5,442
Freight payable 867 868
Reserve for disputed and
unallowed prepetition claims 40 290
Other 1,432 1,346
-------- --------
$ 7,466 $ 7,946
======== ========
NOTE 2 - NET INCOME PER SHARE
This computation is based on net income less preferred
dividends for the period, divided by the weighted average number of
shares of Common Stock and equivalents assumed to be outstanding
during the period. Anti-dilutive common stock equivalents are
excluded from the calculations.
The calculations of net income per share for the years ended
April 30, 1995, 1994 and 1993 are summarized below (in thousands,
except per-share data):
<TABLE>
<CAPTION>
YEAR ENDED APRIL 30,
-------------------------------------------------------------
1995 1994 1993
---------- ---------- ----------
<S> <C> <C> <C>
INCOME BEFORE EXTRAORDINARY ITEMS $ 3,700 $ 6,300 $ 2,413
EXTRAORDINARY ITEMS -- -- 21,345
---------- ---------- ----------
NET INCOME 3,700 6,300 23,758
PREFERRED DIVIDENDS 2,126 1,616 647
---------- ---------- ----------
NET INCOME APPLICABLE TO
COMMON SHAREHOLDERS $ 1,574 $ 4,684 $ 23,111
========== ========== ==========
WEIGHTED AVERAGE NUMBER
WEIGHTED AVERAGE SHARES OUTSTANDING(1) 11,075 9,477 3,744
ADDITIONAL SHARES ASSUMED FROM:
Conversion of Series B
preferred stock 213 1,770 2,367
Exercise of stock options 204 186 55
---------- ---------- ----------
AVERAGE NUMBER OF SHARES AND
EQUIVALENTS OUTSTANDING
- PRIMARY BASIS 11,492 11,433 6,166
ADDITIONAL SHARES ASSUMED FROM
EXERCISE OF STOCK OPTIONS 18 86 65
---------- ---------- ----------
AVERAGE NUMBER OF SHARES AND
EQUIVALENTS OUTSTANDING
- ASSUMING FULL DILUTION 11,510 11,519 6,231
========== ========== ==========
NET INCOME PER COMMON SHARE
- PRIMARY BASIS
Before extraordinary items $0.14 $0.41 $0.29
Extraordinary items -- -- 3.46
---------- ---------- ----------
$0.14 $0.41 $3.75
========== ========== ==========
NET INCOME PER COMMON SHARE
- ASSUMING FULL DILUTION
Before extraordinary items $0.14 $0.41 $0.28
Extraordinary items -- -- 3.43
---------- ---------- ----------
$0.14 $0.41 $3.71
========== ========== ==========
<FN>
(1) 1993 shares adjusted for four-for-ten reverse common stock split on November 30, 1992.
</TABLE>
NOTE 3 - TIMBER, TIMBERLANDS AND TIMBER-RELATED ASSETS
The following summarizes the components of timber, timberlands
and timber-related assets (in thousands):
APRIL 30,
1995 1994
-------- --------
Timber held under contract $ 5,565 $ 6,730
Timber, timberlands
and timber deposits 3,353 4,936
Logging roads (at amortized cost) 381 77
-------- --------
$ 9,299 $ 11,743
======== ========
Timber and timberlands, long-term $ 705 $ 845
======== ========
Timber held under contract is comprised of various public and
private timber contracts representing approximately 23 million
board feet (MMBF) at April 30, 1995 and 19 MMBF at April 30, 1994.
Outstanding obligations relating to these contracts at April 30,
1995 and 1994, were $1,660,000 and $2,292,000, respectively.
NOTE 4 - LONG-TERM DEBT
Long-term debt consists of the following (in thousands):
APRIL 30,
1995 1994
-------- --------
Senior secured debt, bearing interest
at 10%; principal payable in quarterly
installments of $225 through December
15, 1997, then quarterly installments
of $400 through December 15, 1998,
then quarterly installments of $1,000
beginning March 15, 1999, and a final
payment in December 2004; secured by
substantially all assets of the Company
not otherwise encumbered. $ 50,523 $ 56,894
Secured notes, interest at rates from
8.8% to 11%; payable on various dates;
secured by various assets. 987 1,931
Priority notes, $228 payable in fiscal
1996, $29 payable in fiscal 1997, $18
payable in fiscal 1998, plus interest
at 8.3%; senior to all other unsecured
obligations. 275 468
Unsecured Senior Subordinated Notes,
net of discount of $428 ($624 at April
30, 1994); 8% coupon, effective interest
rate of 13.3%; semi-annual interest
payments each June 30 and December 31;
principal due in full June 30, 2005. 1,048 1,435
Other unsecured debt, net of discount
of $229 ($592 at April 30, 1994); pay-
able in equal annual installments of
$478; non-interest bearing; effective
interest rate of 12.3%. 886 1,797
-------- --------
53,719 62,525
Less current maturities (2,298) (1,938)
-------- --------
$ 51,421 $ 60,587
======== ========
The Company's primary debt agreement includes covenants for
maintaining specified levels of income, cash flow, working capital,
and collateral coverage. This agreement also imposes certain
restrictions and limitations on capital expenditures, investments,
dividend payments, new indebtedness, and transactions with
officers, directors, shareholders and affiliates. This debt
agreement was amended as of May 1, 1995, with respect to two
affirmative financial performance covenants. One covenant requires
the Company to maintain tangible net worth of $10 million at April
30, 1995, and the second covenant requires the Company to maintain
adjusted cumulative operating income (as defined) of $20 million.
At April 30, 1995, the Company's tangible net worth and adjusted
cumulative operating income were $19.3 million and $24.1 million,
respectively. These debt covenants contain escalation provisions
over the term of the agreement. The tangible net worth covenant
increased to $15 million at May 1, 1995, declines to $13.5 million
at November 1, 1995, and increases to $15 million at May 1, 1996.
The adjusted cumulative operating income covenant increases to
$22.5 million at January 1, 1996, and $27.5 million at May 1, 1996.
During the year ended April 30, 1995, the Company's adjusted
cumulative operating income increased by $3.2 million despite a
loss before tax benefit of $1.9 million. See Note 1 to
Consolidated Financial Statements.
In accordance with the Company's primary debt agreement,
mandatory additional prepayments are required if the Company's
cumulative operating income exceeds certain specified amounts. No
such prepayment will be required for the year ended April 30, 1995.
Future minimum repayments under the terms of all of the
Company's debt are as follows (in thousands):
1996 2,298
1997 1,126
1998 1,313
1999 2,447
2000 4,007
thereafter 42,528
--------
$ 53,719
========
NOTE 5 - PROVISION FOR INCOME TAXES
The income tax provision (benefit) is based on the estimated
effective annual tax rate for each fiscal year. The provision
(benefit) includes anticipated current income taxes payable or
refundable, the tax effect of anticipated differences between the
financial reporting and tax basis of assets and liabilities, and
the expected utilization of net operating loss (NOL) carryforwards.
Effective May 1, 1993, the Company adopted Statement of
Financial Accounting Standard (SFAS) Number 109, "Accounting for
Income Taxes." This statement mandates the asset and liability
approach to determining income tax provision or benefit. Deferred
income tax benefits and liabilities are recognized for the tax
consequences of temporary differences in the carrying value of
assets and liabilities for financial reporting and income tax
purposes. The cumulative effect of adopting SFAS Number 109 as of
May 1, 1993 was not material. The Company's prior year financial
statements have not been restated for the provisions of this
pronouncement. The federal and state income tax provision consists
of the following (in thousands):
Year Ended April 30,
1995 1994 1993
------- ------- -------
Income (loss) before income taxes $(1,946) $ 8,324 $ 3,956
======= ======= =======
Income tax provision (benefit):
Federal $(5,052) $ 1,984 $ 1,345
State (594) 40 198
------- ------- -------
$(5,646) $ 2,024 $ 1,543
======= ======= =======
Current $(1,384) $ 2,040 $ -
Deferred (4,262) (16) -
------- ------- -------
$(5,646) $ 2,024 $ -
======= ======= =======
The fiscal 1993 tax provision was calculated at statutory
rates and the estimated benefits of net operating loss (NOL)
carryforwards were recognized as extraordinary items. The tax
benefit of NOL carryforwards in fiscal 1993 includes $7.7 million
associated with an extraordinary gain on debt restructure.
The income tax provision in fiscal 1993 differs from the
amount computed by applying the federal statutory rate principally
as a result of state income taxes. The income tax provision in
fiscal 1994 differs from the amount computed by applying the
federal statutory rate principally as a result of recognizing the
tax benefits of NOL carryforwards. The tax provision in fiscal
1995 differs from the amount computed by applying the federal
statutory rate principally as a result of elections made under the
Internal Revenue Code regarding the calculation and use of NOL
carryforwards.
In the quarter ended January 31, 1995, the Company recorded
current and deferred income tax benefits of $5.4 million associated
with elections made by the Company under Internal Revenue Service
(IRS) Regulations regarding the calculation and use of NOL
carryforwards. These elections required the Company to reduce its
federal NOL by approximately $8.2 million and its state NOL by
approximately $5.9 million. These reductions relate to interest
expense recorded on debts which were converted to equity in the
reorganization and taxable income not recognized on the conversion
of debt to stock. However, the elections permit the remaining NOL
to offset taxable income without annual limitation.
Accordingly, the Company amended its tax returns for fiscal
year 1993 and filed its fiscal year 1994 tax returns to reflect
utilization of its remaining federal and state NOL without annual
limitation. This results in anticipated refunds of prior year and
current year taxes and deposits aggregating approximately $1.9
million, of which $1.45 million had been received as of April 30,
1995. The Company can expect audits of its tax returns by various
taxing authorities for the years ending after April 30, 1991. The
results of any such examinations could affect the amount of NOL
carryforwards available to offset future tax liabilities. The
Company's remaining NOL at April 30, 1995 is approximately $18.6
million for federal income tax and $15.9 million for state income
tax purposes. These carryforwards expire in 2006 and 2007.
SFAS Number 109 requires that all current deferred tax assets
and liabilities be grouped and reported as one amount and that all
noncurrent deferred tax assets and liabilities be grouped and
reported as one amount. Classification as current or noncurrent
is based upon the classification of the related asset or liability
for financial reporting. For deferred tax amounts that do not
relate to an asset or liability for financial reporting,
classification is to be based upon the expected utilization.
At April 30, 1995 and 1994, deferred tax assets and
liabilities were comprised of the following (in thousands):
Year Ended April 30,
1995 1994
-------- --------
Current deferred tax assets:
Non-deductible accruals $ 1,741 $ 1,953
Reserves for doubtful accounts
and discounts 89 244
-------- --------
Net current deferred tax assets $ 1,830 $ 2,197
======== ========
Non-current deferred tax assets:
Tax benefit of net operating
loss carryforward $ 7,107 $ 11,028
Valuation allowance against tax
benefit of net operating
loss carryforwards (2,946) (11,028)
-------- --------
4,161 --
Non-current deferred tax liabilities:
Differences in depreciation
and capitalization of assets for
financial reporting and tax purposes (1,713) (2,181)
-------- --------
Net long-term deferred tax
assets (liabilities) $ 2,448 $ (2,181)
======== ========
Total net deferred tax asset $ 4,278 $ 16
======== ========
Management has assessed the likelihood of utilizing the
recorded deferred tax asset related to its NOL carryforwards,
including its operating history, the cyclical nature of the
industry in which the Company operates, current economic conditions
and the potential outcome of any IRS audits. Based upon the above
factors, management believes that a valuation allowance of
approximately $2.9 million is necessary. Management periodically
reviews the above factors and may change the amount of valuation
allowance as facts and circumstances dictate.
NOTE 6 - STOCKHOLDERS' EQUITY
Stockholders' equity at April 30, 1995 consists of the
following:
Series A preferred stock, $100 per share liquidation
preference; 500,000 shares authorized; 270,079 shares issued and
outstanding, limited voting rights; cumulative dividends payable
quarterly in advance at the prime rate, with a minimum rate of 6%
and a maximum rate of 9%; convertible into Common Stock at $7.50
per share after April 30, 1999; redeemable at original issue price
plus any accrued dividends at the option of the Board of Directors,
in the form of cash or in exchange for senior unsecured debt with
12% coupon. The holders of the Series A preferred stock will be
granted voting control of the Company's Board of Directors in the
event the Company misses three consecutive quarterly dividend
payments, four quarterly dividend payments within twenty-four
months or a total of eight quarterly dividend payments.
Series B preferred stock, $100 per share liquidation
preference; 500,000 shares authorized; 6,111 shares issued and
outstanding; limited voting rights; convertible into 212,693 shares
of Common Stock; dividends payable only if paid on the Company's
Common Stock; redeemable at original issue price plus accrued
dividends at the option of the Board of Directors after all Series
A preferred stock has been redeemed.
Common Stock, no par value; 40,000,000 shares authorized;
11,077,074 shares issued and outstanding. Before giving effect to
any shares that might be issued pursuant to the management
incentive stock option plan or conversion of any Series A preferred
stock, the total number of common shares would increase to
11,289,767 shares if the remaining outstanding Series B preferred
stock is converted to Common Stock.
NOTE 7 - EXTRAORDINARY ITEMS AND REORGANIZATION CHARGES (CREDITS)
In fiscal 1993, the Company reorganized under Chapter 11 of
the Federal Bankruptcy Code and recognized a gain on its debt
restructure of $12,102,000 and a tax benefit related to the use of
net operating loss carryforwards of $9,243,000. These items,
aggregating $21,345,000, were recognized as extraordinary items.
In conjunction with the restructuring, management reduced the value
of assets associated with certain facilities to their estimated net
realizable value and established certain reserves for expenses
related to the cost of holding and disposing of such facilities.
In fiscal years 1993, 1994 and 1995, the reorganization charges and
credits related to the Company's sale of idle assets and settlement
of obligations at amounts which varied from their original
estimates.
NOTE 8 - STOCK OPTIONS, WARRANTS AND EMPLOYEE BENEFIT PLANS
Effective December 30, 1992, the Company's Stock Option Plan
("Option Plan") was amended and restated, and new options were
granted. Non-qualified stock options may be granted to directors,
independent contractors, consultants, and employees, and incentive
stock options may be granted to employees, to acquire up to
1,245,900 shares of Common Stock. Options may be granted for a
term not to exceed 10 years and are not transferable other than by
will or the laws of descent and distribution. The Option Plan
terminates on July 11, 1996, or such earlier time as the Board of
Directors may determine. The Option Plan provides for incremental
vesting based upon the optionee's period of service with the
Company and is administered by the Compensation Committee of the
Board of Directors.
Following is a summary of the activity with respect to the
Option Plan for the years ended April 30, 1993, 1994 and 1995:
<TABLE>
<CAPTION>
Non-Employee
Employee Stock Options Stock Options
Option Number of Option Number of
Price Shares Price Shares
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Shares under option at April 30, 1993 $.95625
to $3.00 646,200 $1.50 140,000
Options granted May 3, 1993 $3.00 119,600 $3.00 40,000
Options exercised $.95625
to $1.50 (60,800) --
Options cancelled $.95625
to $3.00 (54,600) --
---------- ----------
Shares under option at April 30, 1994 650,400 180,000
Options granted $3.00 40,000 $3.00 40,000
Options exercised $.95625 (16,000) --
Options cancelled $.95625
to $3.00 (38,000) --
---------- ----------
Shares under option at April 30, 1995 636,400 220,000
======= =======
Shares exercisable at April 30, 1995 386,240 206,250
======= =======
</TABLE>
Options for 312,700 shares remain available for grant. The
balance of the options will have an exercise price of the greater
of $3.00 per share or an amount per share determined by the Plan
Administrator, but not less than 85 percent of the fair market
value of the Company's Common Stock on the date of grant.
The Company maintains a weekly discretionary bonus program for
its mill workers based on the performance of each production shift
at individual mills. The bonus program for mill workers is
designed to reward productivity, safety and regular attendance.
The Company also has a monthly discretionary profit sharing bonus
program for management and administrative employees. Profit
sharing bonuses are based on net pre-tax profits and are generally
allocated according to base salary level. Amounts paid under all
bonus programs were approximately $6,800,000; $8,500,000; and
$7,400,000 in fiscal years 1995, 1994 and 1993, respectively.
The Company maintains a 401(k) Retirement Savings Plan. Under
the plan, eligible participants may contribute 2 percent to 20
percent of their compensation. The Company matches contributions
of employees participating in the Production/Safety/Attendance
Bonus program on a monthly basis in an amount as determined from
time to time by the Board of Directors. Salaried employees are not
generally entitled to matching contributions. During the years
ended April 30, 1995, 1994 and 1993 the Company incurred expenses
for matching contributions and plan administration of $377,000;
$391,000; and $402,000; respectively. Company contributions to
this plan are funded on a current basis.
NOTE 9 - COMMITMENTS AND CONTINGENCIES
(a) Timber commitments - At April 30, 1995, the Company had
contracts to purchase approximately 27.9 MMBF of timber from the
U.S. Forest Service and others for an estimated stumpage cost of
$8.9 million. Deposits were made on these contracts and additional
payments are required as timber is removed. Under current lumber
market conditions, the Company may sustain a loss in conversion of
certain of these contracts. Because of the volatility of product
prices, the long-term nature of these contracts and the options of
selling logs, or processing them into lumber, it is not possible to
estimate potential losses, if any, that might be incurred under
these contracts at April 30, 1995. The expiration dates of the
contracts are as follows:
Footage Stumpage
Year Ending April 30, MMBF Cost
-------- -----------
1996 7.1 $1,289,000
1997 15.2 5,060,000
1998 5.6 2,563,000
-------- ------------
27.9 $8,912,000
======== ============
(b) Leases - At April 30, 1995, the Company had future
minimum rental commitments for new or assumed operating leases as
follows: 1996 - $819,000; 1997 - $373,000; 1998 - $312,000; 1999 -
$176,000; 2000 - $125,000; thereafter - $70,000.
Total rental expense for all leases was $1,196,000, $1,131,000
and $1,199,000 for the years ended April 30, 1995, 1994 and 1993,
respectively. Actual rental expense includes short-term rentals
and leases shorter than one year, which are not included in the
commitments.
(c) Litigation - Certain claims arising from the Company's
reorganization have not been settled. A reserve of $40,000 was
included as a current liability at April 30, 1995 to reflect the
aggregate estimated liability of such claims.
The Company is involved in other litigation primarily arising
in the normal course of its business. In the opinion of
management, the Company's liability, if any, under such pending
litigation will not have a material impact upon the Company's
consolidated financial condition or results of operations.
(d) Environmental compliance - The Company is subject to
various federal, state and local regulations regarding waste
disposal and pollution control. The Company believes it is in
substantial compliance with all existing regulations and orders.
Various government agencies are considering new regulations,
including those related to log yard management and disposal of log
yard waste. Management believes that it will be able to comply
with any final regulations in this area without a material adverse
impact on its financial condition or results or operations.
NOTE 10 - NON-CASH INVESTING AND FINANCING ACTIVITIES
In connection with the Company's reorganization, certain of
the Company's liabilities were discharged in fiscal 1993 through
the issuance of various debt and equity securities with a market
value of $101.1 million. These transactions affected the financial
position of the Company but did not directly affect its cash flow
during the periods presented.
NOTE 11 - UNAUDITED QUARTERLY FINANCIAL INFORMATION
The following quarterly information for the years ended April
30, 1995 and 1994 is unaudited but includes all adjustments (which
consist of normal recurring adjustments) which management considers
necessary for a fair presentation of such information (in
thousands, except per-share amounts):
<TABLE>
<CAPTION>
************* YEAR ENDED APRIL 30, 1995 *********
************* QUARTER ****************
FIRST SECOND THIRD FOURTH TOTAL
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
Net sales $76,466 $79,157 $61,592 $57,751 $274,966
Gross Profit (loss) 5,539 6,328 1,251 (486) 12,632
Net income (loss) $1,040 $1,664 $3,997 ($3,001) $3,700
Net income (loss) per common share $0.05 $0.10 $0.30 ($0.31) $0.14
</TABLE>
<TABLE>
<CAPTION>
************* YEAR ENDED APRIL 30, 1994 *********
*************** QUARTER ***************
FIRST SECOND THIRD FOURTH TOTAL
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
Net sales $53,859 $65,885 $85,673 $72,698 $278,115
Gross Profit 1,297 6,873 11,203 5,010 24,383
Net income (loss) ($1,619) $2,494 $3,974 $1,451 $6,300
Net income (loss) per common share ($0.23) $0.18 $0.31 $0.09 $0.41
</TABLE>
NOTE 12 - VALUATION AND QUALIFYING RESERVES
The following table summarizes the activity associated with
the Company's reserves for doubtful accounts and allowances for
discounts for the years ended April 30, 1995, 1994 and 1993 (in
thousands):
Allowance for doubtful accounts -
deducted from accounts receivable
in the balance sheet Year Ended April 30,
1995 1994 1993
------ ------ ------
Balance at beginning of year $ 584 $ 504 $ 307
Charged (credited) to costs
and expenses (10) 458 268
Deductions (1) 459 378 71
------ ------ ------
Balance at end of year $ 115 $ 584 $ 504
====== ====== ======
Allowance for discounts -
deducted from accounts receivable
in the balance sheet Year Ended April 30,
1995 1994 1993
------ ------ ------
Balance at beginning of year $ 74 $ 135 $ 101
Charged to costs and expenses 2,482 2,520 2,135
Deductions (1) 2,472 2,581 2,101
------ ------ ------
Balance at end of year $ 84 $ 74 $ 135
====== ====== ======
(1) Uncollected receivables written off, net of recoveries, and
discounts taken by customers.
Exhibit 4.2.2
AMENDMENT
DATED AS OF JANUARY 27, 1995
TO
CREDIT AND SECURITY AGREEMENT
DATED AS OF NOVEMBER 30, 1992
Reference is hereby made to that certain Credit and Security
Agreement ("Credit Agreement") dated as of November 30, 1992 among
Principal Mutual Life Insurance Company, Aetna Life Insurance
Company, The Northwestern Mutual Life Insurance Company, Chemical
Bank, Seattle-First National Bank and Bank of America Oregon, and
WTD Industries, Inc. and its Affiliates and the Term Notes issued
by the Borrowers in connection with the Credit Agreement.
Capitalized terms used herein shall have the same meaning ascribed
thereto in the Credit Agreement.
The Term Note originally issued to Aetna Life Insurance
Company was split into two Notes which were sold to Franklin
Principal Maturity Trust ("Franklin") and Foothill Group, Inc. The
Term Notes originally issued to Chemical Bank, Seattle-First
National Bank, and Bank of America Oregon were sold to Oppenheimer
& Co., Inc. ("Oppenheimer").
Pursuant to that certain Offer to Purchase dated January 13,
1995, Borrowers purchased $708,391.93 original face amount
($653,537.53 current principal amount) of Franklin's Term Note and
$2,904,723.36 original face amount ($2,679,795.80 current principal
amount) of Oppenheimer's Term Notes. Borrowers thereupon issued to
Franklin and Oppenheimer substitute Term Notes reflecting the new
principal amount owed to each after the purchase. Pursuant to the
terms of the Offer to Purchase, $3,613,115.29 aggregate original
face amount ($3,333,333.33 aggregate current principal amount) of
Term Notes was cancelled. The purchase and cancellation has the
effect of reducing the proportionate share of future scheduled
principal and interest payments for Franklin and Oppenheimer and
increasing the proportionate shares of each Lender who did not
participate in the Offer to Purchase. Accordingly, certain exhibits
to the Credit Agreement require amendment as follows:
1. Credit Agreement Exhibits 2.04(a) and 2.05(b) are hereby
restated in the form, respectively, of Exhibit 2.04(a) (Restated
01/27/95) and Exhibit 2.05(b) (Restated 01/27/95) attached hereto
and incorporated herein.
2. In all other respects, the Credit Agreement shall remain
unchanged and in full force and effect.
EFFECTIVE DATE: January 27, 1995.
PRINCIPAL MUTUAL LIFE THE NORTHWESTERN MUTUAL LIFE
INSURANCE COMPANY INSURANCE COMPANY
By:___________________________ By:____________________________
Its:__________________________ Its:___________________________
By:___________________________ FOOTHILL GROUP, INC.
Its:__________________________
By:____________________________
Its:___________________________
OPPENHEIMER & CO., INC.
By:___________________________ WTD INDUSTRIES, INC.
Its:__________________________
By:____________________________
Its:___________________________
FRANKLIN PRINCIPAL MATURITY
TRUST
By:___________________________
Its:__________________________
<TABLE>
WTD INDUSTRIES, INC. EXHIBIT 2.04(a) (RESTATED 01/27/95)
ALLOCATION OF PRINCIPAL PAYMENTS to Credit and Security Agreement
FOR SECURED PROMISSORY NOTES Dated as of November 30, 1992
(RESTATED AS OF JAN 27, 1995)
<CAPTION>
100.000000% TOTAL 47.228439% PRINCIPAL 20.235984% NORTHWESTERN 6.838639% OPPENHEIMER
-------------------------- -------------------------- -------------------------- ------------------------
PAYMENT BALANCE PAYMENT BALANCE PAYMENT BALANCE PAYMENT BALANCE
------------ ------------ ----------- ------------- ----------- ------------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE DEC 31, 1994 54,087,212.32 23,970,264.80 10,270,546.98 6,150,670.04
PRINCIPAL PURCHASE
JAN 27, 1995 3,333,333.33 50,753,878.99 0.00 23,970,264.80 0.00 10,270,546.98 2,679,795.80 3,470,874.24
SCHEDULED PAYMENTS
MAR 15, 1995 225,000.00 50,528,878.99 106,263.99 23,864,000.81 45,530.96 10,225,016.02 15,386.94 3,455,487.30
JUN 15, 1995 225,000.00 50,303,878.99 106,263.99 23,757,736.82 45,530.96 10,179,485.06 15,386.94 3,440,100.36
SEP 15, 1995 225,000.00 50,078,878.99 106,263.99 23,651,472.83 45,530.96 10,133,954.10 15,386.94 3,424,713.42
DEC 15, 1995 225,000.00 49,853,878.99 106,263.99 23,545,208.84 45,530.96 10,088,423.14 15,386.94 3,409,326.48
MAR 15, 1996 225,000.00 49,628,878.99 106,263.99 23,438,944.85 45,530.96 10,042,892.18 15,386.94 3,393,939.54
JUN 15, 1996 225,000.00 49,403,878.99 106,263.99 23,332,680.86 45,530.96 9,997,361.22 15,386.94 3,378,552.60
SEP 15, 1996 225,000.00 49,178,878.99 106,263.99 23,226,416.87 45,530.96 9,951,830.26 15,386.94 3,363,165.66
DEC 15, 1996 225,000.00 48,953,878.99 106,263.99 23,120,152.88 45,530.96 9,906,299.30 15,386.94 3,347,778.72
MAR 15, 1997 225,000.00 48,728,878.99 106,263.99 23,013,888.89 45,530.96 9,860,768.34 15,386.94 3,332,391.78
JUN 15, 1997 225,000.00 48,503,878.99 106,263.99 22,907,624.90 45,530.96 9,815,237.38 15,386.94 3,317,004.84
SEP 15, 1997 225,000.00 48,278,878.99 106,263.99 22,801,360.91 45,530.96 9,769,706.42 15,386.94 3,301,617.90
DEC 15, 1997 225,000.00 48,053,878.99 106,263.99 22,695,096.92 45,530.96 9,724,175.46 15,386.94 3,286,230.96
MAR 15, 1998 400,000.00 47,653,878.99 188,913.75 22,506,183.17 80,943.94 9,643,231.52 27,354.56 3,258,876.40
JUN 15, 1998 400,000.00 47,253,878.99 188,913.75 22,317,269.42 80,943.94 9,562,287.58 27,354.56 3,231,521.84
SEP 15, 1998 400,000.00 46,853,878.99 188,913.75 22,128,355.67 80,943.94 9,481,343.64 27,354.56 3,204,167.28
DEC 15, 1998 400,000.00 46,453,878.99 188,913.75 21,939,441.92 80,943.94 9,400,399.70 27,354.56 3,176,812.72
MAR 15, 1999 1,000,000.00 45,453,878.99 472,284.39 21,467,157.53 202,359.84 9,198,039.86 68,386.39 3,108,426.33
JUN 15, 1999 1,000,000.00 44,453,878.99 472,284.39 20,994,873.14 202,359.84 8,995,680.02 68,386.39 3,040,039.94
SEP 15, 1999 1,000,000.00 43,453,878.99 472,284.39 20,522,588.75 202,359.84 8,793,320.18 68,386.39 2,971,653.55
DEC 15, 1999 1,000,000.00 42,453,878.99 472,284.39 20,050,304.36 202,359.84 8,590,960.34 68,386.39 2,903,267.16
MAR 15, 2000 1,000,000.00 41,453,878.99 472,284.39 19,578,019.97 202,359.84 8,388,600.50 68,386.39 2,834,880.77
JUN 15, 2000 1,000,000.00 40,453,878.99 472,284.39 19,105,735.58 202,359.84 8,186,240.66 68,386.39 2,766,494.38
SEP 15, 2000 1,000,000.00 39,453,878.99 472,284.39 18,633,451.19 202,359.84 7,983,880.82 68,386.39 2,698,107.99
DEC 15, 2000 1,000,000.00 38,453,878.99 472,284.39 18,161,166.80 202,359.84 7,781,520.98 68,386.39 2,629,721.60
MAR 15, 2001 1,000,000.00 37,453,878.99 472,284.39 17,688,882.41 202,359.84 7,579,161.14 68,386.39 2,561,335.21
JUN 15, 2001 1,000,000.00 36,453,878.99 472,284.39 17,216,598.02 202,359.84 7,376,801.30 68,386.39 2,492,948.82
SEP 15, 2001 1,000,000.00 35,453,878.99 472,284.39 16,744,313.63 202,359.84 7,174,441.46 68,386.39 2,424,562.43
DEC 15, 2001 1,000,000.00 34,453,878.99 472,284.39 16,272,029.24 202,359.84 6,972,081.62 68,386.39 2,356,176.04
MAR 15, 2002 1,000,000.00 33,453,878.99 472,284.39 15,799,744.85 202,359.84 6,769,721.78 68,386.39 2,287,789.65
JUN 15, 2002 1,000,000.00 32,453,878.99 472,284.39 15,327,460.46 202,359.84 6,567,361.94 68,386.39 2,219,403.26
SEP 15, 2002 1,000,000.00 31,453,878.99 472,284.39 14,855,176.07 202,359.84 6,365,002.10 68,386.39 2,151,016.87
DEC 15, 2002 1,000,000.00 30,453,878.99 472,284.39 14,382,891.68 202,359.84 6,162,642.26 68,386.39 2,082,630.48
MAR 15, 2003 1,000,000.00 29,453,878.99 472,284.39 13,910,607.29 202,359.84 5,960,282.42 68,386.39 2,014,244.09
JUN 15, 2003 1,000,000.00 28,453,878.99 472,284.39 13,438,322.90 202,359.84 5,757,922.58 68,386.39 1,945,857.70
SEP 15, 2003 1,000,000.00 27,453,878.99 472,284.39 12,966,038.51 202,359.84 5,555,562.74 68,386.39 1,877,471.31
DEC 15, 2003 1,000,000.00 26,453,878.99 472,284.39 12,493,754.12 202,359.84 5,353,202.90 68,386.39 1,809,084.92
MAR 15, 2004 1,000,000.00 25,453,878.99 472,284.39 12,021,469.73 202,359.84 5,150,843.06 68,386.39 1,740,698.53
JUN 15, 2004 1,000,000.00 24,453,878.99 472,284.39 11,549,185.34 202,359.84 4,948,483.22 68,386.39 1,672,312.14
SEP 15, 2004 1,000,000.00 23,453,878.99 472,284.39 11,076,900.95 202,359.84 4,746,123.38 68,386.39 1,603,925.75
DEC 15, 2004 BALANCE DUE BALANCE DUE BALANCE DUE BALANCE DUE
</TABLE>
<TABLE>
WTD INDUSTRIES, INC. EXHIBIT 2.04(a) (RESTATED 01/27/95)
ALLOCATION OF PRINCIPAL PAYMENTS to Credit and Security Agreement
FOR SECURED PROMISSORY NOTES Dated as of November 30, 1992
(RESTATED AS OF JAN 27, 1995)
<CAPTION>
18.729872% FOOTHILL 6.967066% FRANKLIN
---------------------- ----------------------
PAYMENT BALANCE PAYMENT BALANCE
--------- ----------- --------- -----------
<S> <C> <C> <C> <C>
BALANCE DEC 31, 1994 9,506,136.53 4,189,593.97
PRINCIPAL PURCHASE
JAN 27, 1995 0.00 9,506,136.53 653,537.53 3,536,056.44
SCHEDULED PAYMENTS
MAR 15, 1995 42,142.21 9,463,994.32 15,675.90 3,520,380.54
JUN 15, 1995 42,142.21 9,421,852.11 15,675.90 3,504,704.64
SEP 15, 1995 42,142.21 9,379,709.90 15,675.90 3,489,028.74
DEC 15, 1995 42,142.21 9,337,567.69 15,675.90 3,473,352.84
MAR 15, 1996 42,142.21 9,295,425.48 15,675.90 3,457,676.94
JUN 15, 1996 42,142.21 9,253,283.27 15,675.90 3,442,001.04
SEP 15, 1996 42,142.21 9,211,141.06 15,675.90 3,426,325.14
DEC 15, 1996 42,142.21 9,168,998.85 15,675.90 3,410,649.24
MAR 15, 1997 42,142.21 9,126,856.64 15,675.90 3,394,973.34
JUN 15, 1997 42,142.21 9,084,714.43 15,675.90 3,379,297.44
SEP 15, 1997 42,142.21 9,042,572.22 15,675.90 3,363,621.54
DEC 15, 1997 42,142.21 9,000,430.01 15,675.90 3,347,945.64
MAR 15, 1998 74,919.49 8,925,510.52 27,868.26 3,320,077.38
JUN 15, 1998 74,919.49 8,850,591.03 27,868.26 3,292,209.12
SEP 15, 1998 74,919.49 8,775,671.54 27,868.26 3,264,340.86
DEC 15, 1998 74,919.49 8,700,752.05 27,868.26 3,236,472.60
MAR 15, 1999 187,298.72 8,513,453.33 69,670.66 3,166,801.94
JUN 15, 1999 187,298.72 8,326,154.61 69,670.66 3,097,131.28
SEP 15, 1999 187,298.72 8,138,855.89 69,670.66 3,027,460.62
DEC 15, 1999 187,298.72 7,951,557.17 69,670.66 2,957,789.96
MAR 15, 2000 187,298.72 7,764,258.45 69,670.66 2,888,119.30
JUN 15, 2000 187,298.72 7,576,959.73 69,670.66 2,818,448.64
SEP 15, 2000 187,298.72 7,389,661.01 69,670.66 2,748,777.98
DEC 15, 2000 187,298.72 7,202,362.29 69,670.66 2,679,107.32
MAR 15, 2001 187,298.72 7,015,063.57 69,670.66 2,609,436.66
JUN 15, 2001 187,298.72 6,827,764.85 69,670.66 2,539,766.00
SEP 15, 2001 187,298.72 6,640,466.13 69,670.66 2,470,095.34
DEC 15, 2001 187,298.72 6,453,167.41 69,670.66 2,400,424.68
MAR 15, 2002 187,298.72 6,265,868.69 69,670.66 2,330,754.02
JUN 15, 2002 187,298.72 6,078,569.97 69,670.66 2,261,083.36
SEP 15, 2002 187,298.72 5,891,271.25 69,670.66 2,191,412.70
DEC 15, 2002 187,298.72 5,703,972.53 69,670.66 2,121,742.04
MAR 15, 2003 187,298.72 5,516,673.81 69,670.66 2,052,071.38
JUN 15, 2003 187,298.72 5,329,375.09 69,670.66 1,982,400.72
SEP 15, 2003 187,298.72 5,142,076.37 69,670.66 1,912,730.06
DEC 15, 2003 187,298.72 4,954,777.65 69,670.66 1,843,059.40
MAR 15, 2004 187,298.72 4,767,478.93 69,670.66 1,773,388.74
JUN 15, 2004 187,298.72 4,580,180.21 69,670.66 1,703,718.08
SEP 15, 2004 187,298.72 4,392,881.49 69,670.66 1,634,047.42
DEC 15, 2004 BALANCE DUE BALANCE DUE
</TABLE>
EXHIBIT 2.05(b) (RESTATED 01/27/95)
Lenders' Percentages
(Restated as of January 27, 1995)
Principal 47.228439 %
Northwestern 20.235984 %
Oppenheimer 6.838639 %
Foothill 18.729872 %
Franklin 6.967066 %
Exhibit 4.2.3
AMENDMENT
DATED AS OF MAY 1, 1995
TO
CREDIT AND SECURITY AGREEMENT
DATED AS OF NOVEMBER 30, 1992
Reference is hereby made to that certain Credit and Security
Agreement ("Credit Agreement") dated as of November 30, 1992 among
Principal Mutual Life Insurance Company, Aetna Life Insurance
Company, The Northwestern Mutual Life Insurance Company, Chemical
Bank, Seattle-First National Bank and Bank of America Oregon, and
WTD Industries, Inc. and its Affiliates and the Term Notes issued
by the Borrowers in connection with the Credit Agreement.
Capitalized terms used herein shall have the same meaning ascribed
thereto in the Credit Agreement.
The Term Note originally issued to Aetna Life Insurance
Company was split into two Notes which were sold to Franklin
Principal Maturity Trust ("Franklin") and Foothill Group, Inc. The
Term Notes originally issued to Chemical Bank, Seattle-First
National Bank, and Bank of America Oregon were sold to Oppenheimer
& Co., Inc. ("Oppenheimer").
The Credit Agreement is hereby modified as follows:
1. Credit Agreement Section 6.01D is hereby restated to read
as follows:
D. Tangible Net Worth. Maintain a positive Tangible
Net Worth of not less than the respective amount set forth below,
at all times during the periods set forth below:
Period Tangible Net Worth
Effective Date through 7/31/93 $ 6.5 Million
8/1/93 through 4/30/94 $ 8.0 Million
5/1/94 through 4/30/95 $10.0 Million
5/1/95 through 10/31/96 $15.0 Million
11/1/95 through 4/30/96 $13.5 Million
5/1/96 through 4/30/98 $15.0 Million
5/1/98 through 4/30/99 $20.0 Million
5/1/99 and beyond $25.0 Million
2. Credit Agreement Section 6.01G is hereby restated to read
as follows:
G. Minimum Cumulative Adjusted EBITDA. Maintain a
minimum EBITDA (calculated from and including the first day of the
first calendar month following the Effective Date) minus (a) actual
Capital Expenditures, minus (b) Timber and Timberlands Expenditures
Non-Current, of not less than the respective amount set forth
below, at all times during the periods set forth below:
Period Millions of Dollars
-------- -------------------
Effective Date through 4/30/93 0
5/1/93 through 7/31/93 2
8/1/93 through 1/31/94 5
2/1/94 through 7/31/94 10
8/1/94 through 12/31/95 20
1/1/96 through 4/30/96 22.5
5/1/96 through 4/30/97 27.5
5/1/97 through 4/30/98 35
5/1/98 through 4/30/99 50
5/1/99 through 4/30/00 65
5/1/00 through 4/30/01 80
5/1/01 and beyond 80
3. In all other respects, the Credit Agreement shall remain
unchanged and in full force and effect.
EFFECTIVE DATE: May 1, 1995.
PRINCIPAL MUTUAL LIFE THE NORTHWESTERN MUTUAL LIFE
INSURANCE COMPANY INSURANCE COMPANY
By:___________________________ By:____________________________
Its:__________________________ Its:___________________________
(Pro Rata Interest: 20.235984%)
By:___________________________
Its:__________________________ FOOTHILL GROUP, INC.
(Pro Rata Interest: 47.228439%)
By:____________________________
OPPENHEIMER & CO., INC. Its:___________________________
(Pro Rata Interest: 18.729872%)
By:___________________________
Its:__________________________ WTD INDUSTRIES, INC.
(Pro Rata Interest: 6.838639%)
By:____________________________
FRANKLIN PRINCIPAL MATURITY Its:___________________________
TRUST
By:___________________________
Its:__________________________
(Pro Rata Interest: 6.967066%)
<TABLE>
WTD INDUSTRIES, INC. AND SUBSIDIARIES Exhibit 12.2
COMPUTATION OF REGISTRANT'S NET INCOME (LOSS)
TO AVERAGE TOTAL ASSETS
(In Thousands, Except Ratios)
<CAPTION>
YEAR ENDED APRIL 30,
-------------------------------------------------------------
1995 1994 1993 1992 1991
------- -------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
NET INCOME (LOSS) $ 3,700 $ 6,300 $ 23,758 $ 2,992 $ (85,152)
======== ======== ======== ======== ========
AVERAGE TOTAL ASSETS
Beginning of period $ 97,100 $ 100,039 $ 113,561 $ 106,038 $ 220,930
End of period 88,944 97,100 100,039 113,561 106,038
Average $ 93,022 $ 98,570 $ 106,800 $ 109,800 $ 163,484
======== ======== ======== ======== ========
RATIO OF NET INCOME (LOSS) TO
AVERAGE TOTAL ASSETS 4.0 % 6.4 % 22.2 % 2.7 % (52.1)%
</TABLE>
<TABLE>
Exhibit 12.3
WTD INDUSTRIES, INC. AND SUBSIDIARIES
COMPUTATION OF REGISTRANT'S NET INCOME (LOSS)
TO AVERAGE STOCKHOLDERS' EQUITY (DEFICIT)
(In Thousands, Except Ratios)
<CAPTION>
YEAR ENDED APRIL 30,
-------------------------------------------------------------
1995 1994 1993 1992 1991
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
NET INCOME (LOSS) $ 3,700 $ 6,300 $ 23,758 $ 2,992 $ (85,152)
======== ======== ======== ======== ========
AVERAGE STOCKHOLDERS' EQUITY
(DEFICIT)
Beginning of period $ 18,512 $ 13,684 $ (43,553)$ (46,545)$ 38,607
End of period 20,076 18,512 13,684 (43,553) (46,545)
Average $ 19,294 $ 16,098 $ (14,935)$ (45,049)$ (3,969)
======== ======== ======== ======== ========
RATIO OF NET INCOME (LOSS) TO
AVERAGE STOCKHOLDERS'
EQUITY (DEFICIT) 19.2 % 39.1 % NM NM NM
<FN>
NM - Not meaningful
</TABLE>
<TABLE>
Exhibit 12.4
WTD INDUSTRIES, INC. AND SUBSIDIARIES
COMPUTATION OF REGISTRANT'S AVERAGE STOCKHOLDERS'
EQUITY (DEFICIT) TO AVERAGE TOTAL ASSETS
(In Thousands, Except Ratios)
<CAPTION>
YEAR ENDED APRIL 30,
-------------------------------------------------------------
1995 1994 1993 1992 1991
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
AVERAGE STOCKHOLDERS' EQUITY
(DEFICIT)
Beginning of period $ 18,512 $ 13,684 $ (43,553)$ (46,545)$ 38,607
End of period 20,076 18,512 13,684 (43,553) (46,545)
Average $ 19,294 $ 16,098 $ (14,935)$ (45,049)$ (3,969)
======= ======= ======= ======= =======
AVERAGE TOTAL ASSETS
Beginning of period $ 97,100 $ 100,039 $ 113,561 $ 106,038 $ 220,930
End of period 88,944 97,100 100,039 113,561 106,038
Average $ 93,022 $ 98,570 $ 106,800 $ 109,800 $ 163,484
======= ======= ======= ======= =======
RATIO OF AVERAGE STOCKHOLDERS'
EQUITY (DEFICIT) TO AVERAGE
TOTAL ASSETS 20.7 % 16.3 % NM NM NM
<FN>
NM - Not meaningful
</TABLE>
Exhibit 21
WTD Industries, Inc.
Subsidiaries of the Registrant
As of July 10, 1995
Grouped by State/Country of Incorporation
Oregon
Alturas Lumber Co.
Burke Lumber Co.
Central Point Lumber Co.
Cottage Grove Lumber Co.
Crater Lake Lumber Co.
Custer Lumber Co.
Eugene Wood Products Co.
Glide Lumber Products Co.
Goshen Veneer Co.
Halsey Veneer Co.
Judith Gap Lumber Co.
Junction City Lumber Co.
Midway Forest Products Co.
North American Enterprises Co.
North Powder Lumber Co.
Pacific Softwoods Co.
Philomath Forest Products Co.
Port Westward Pulp Co.
Riverside Lumber Co.
Silverton Forest Products Co.
Trask River Lumber Co.
TreeSource, Inc.
Union Forest Products Co.
Union Rail Enterprises, Inc.
Western Timber Co.
Whitehall Plywood, Inc.
Washington
Cle Elum Lake Veneer Co.
Graham Plywood Co.
Morton Forest Products Co.
Olympia Forest Products Co.
Orient Lumber Co.
Pacific Hardwoods-Aberdeen Co.
Pacific Hardwoods-South Bend Co.
Sedro-Woolley Lumber Co.
Spanaway Lumber Co.
Tumwater Lumber Co.
Valley Wood Products Co.
Montana
Columbia Falls Forest Products, Inc.
Guam
TreeSource International, Inc.
[MOSS ADAMS LETTERHEAD]
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the incorporation by reference in the Registration
Statement on Form S-8 and Form S-3 pertaining to the WTD
Industries, Inc. Amended and Restated 1986 Stock Option Plan with
respect to the financial statements of WTD Industries, Inc.,
which appear in the WTD Industries, Inc. Annual Report on Form
10-K for the year ended April 30, 1995, filed with the Securities
and Exchange Commission.
/s/ Moss Adams
-----------------------------------
MOSS ADAMS
Beaverton, Oregon
June 13, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM REGISTRANT'S
ANNUAL REPORT ON FORM 10-K AN DIS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000797543
<NAME> WTD INDUSTRIES, INC.
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> APR-30-1995
<PERIOD-END> APR-30-1995
<CASH> 6023
<SECURITIES> 0
<RECEIVABLES> 11404
<ALLOWANCES> 0
<INVENTORY> 18104
<CURRENT-ASSETS> 51187
<PP&E> 79852
<DEPRECIATION> 47727
<TOTAL-ASSETS> 88944
<CURRENT-LIABILITIES> 17447
<BONDS> 51421
<COMMON> 28641
0
21021
<OTHER-SE> (29586)
<TOTAL-LIABILITY-AND-EQUITY> 88944
<SALES> 274966
<TOTAL-REVENUES> 274966
<CGS> 262334
<TOTAL-COSTS> 262334
<OTHER-EXPENSES> 8606
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5972
<INCOME-PRETAX> (1946)
<INCOME-TAX> (5646)
<INCOME-CONTINUING> 3700
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3700
<EPS-PRIMARY> .14
<EPS-DILUTED> .14
</TABLE>
