<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED JUNE 30, 1995
-----------------------------------
COMMISSION FILE NUMBER 1-994
----------------------------
PRATT & LAMBERT UNITED, INC.
NEW YORK 16-0594810
-------- ----------
75 TONAWANDA STREET, BUFFALO, NY 14207
716-873-6000
*INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS
REQUIRED TO BE FILED BY SECTIONS 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934 DURING THE PRECEDING 12 MONTHS AND (2) HAS BEEN SUBJECT TO SUCH FILING
REQUIREMENTS FOR THE PAST 90 DAYS.
YES X NO
----- -----
NUMBER OF COMMON SHARES, PAR VALUE $.01 PER SHARE OUTSTANDING ON:
JUNE 30, 1995 10,639,276 SHARES
<PAGE> 2
<TABLE>
PRATT & LAMBERT UNITED, INC. AND SUBSIDIARY COMPANIES
-----------------------------------------------------
INDEX
-----
<CAPTION>
PART I. FINANCIAL INFORMATION Page No.
------------------------------ --------
<S> <C>
Consolidated Condensed Balance Sheet - June 30, 1995 and 1994 and
December 31, 1994 2
Consolidated Income Statement - Six Months Ended
June 30, 1995 and 1994 3
Statement of Consolidated Cash Flows - Six Months Ended
June 30, 1995 and 1994 4
Notes to Consolidated Condensed Financial Statements 5
Management's Discussion and Analysis of Financial Condition and
Results of Operations 6-7
Exhibit A - Earnings Per Share Computation 8
Incorporation of Certain Information by Reference 9
Pro Forma Condensed Consolidated Financial Information:
(i) Pro Forma Condensed Consolidated Statements of Operations for
the Three Month and Six Month Period Ended June 30, 1994
(Unaudited) 10-11
(ii) Notes to the Pro Forma Condensed Consolidated Statements of
Operations for the Three Month and Six Month Period Ended
June 30, 1994 (Unaudited) 12
PART II. OTHER INFORMATION 13-14
</TABLE>
<PAGE> 3
<TABLE>
PART I. FINANCIAL INFORMATION
PRATT & LAMBERT UNITED, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATED CONDENSED BALANCE SHEET
(UNAUDITED)
<CAPTION>
JUNE 30 DECEMBER 31
------- -----------
1995 1994 1994
---- ---- ----
(Thousands of Dollars)
<S> <C> <C> <C>
ASSETS
Current Assets:
Cash and Cash Equivalents $ 3,300 $ 2,493 $ 3,370
Receivables 93,438 48,743 66,644
Less - Allowance for Losses 3,880 3,209 3,470
-------- -------- --------
Receivables - Net 89,558 45,534 63,174
Inventories:
Manufactured Products 39,674 24,365 35,877
Raw Materials 25,169 15,796 24,958
Sundries 1,392 1,330 1,491
-------- -------- --------
Total Inventories 66,235 41,491 62,326
Prepaid Expenses 6,827 6,033 9,459
-------- -------- --------
Total Current Assets 165,920 95,551 138,329
-------- -------- --------
Property, Plant and Equipment - At Cost 110,226 82,612 104,379
Less - Accumulated Depreciation 60,934 45,898 58,021
-------- -------- --------
Property, Plant and Equipment - Net 49,292 36,714 46,358
Goodwill - Net of Amortization 94,190 241 95,395
Other Assets 13,935 6,979 11,461
-------- -------- --------
Total Assets $323,337 $139,485 $291,543
======== ======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Dividends Payable $ 1,596 $ 838 $ 1,590
Short-Term Debt 28,900 16,000 16,600
Current Maturities of Long-Term Debt 840 822 851
Accounts Payable 52,681 24,336 36,483
United States and Canadian Income Taxes 2,140 1,052 502
Other Current Liabilities 14,985 9,811 17,173
-------- -------- --------
Total Current Liabilities 101,142 52,859 73,199
-------- -------- --------
Other Liabilities (Current Maturities Included in
Current Liabilities):
Long-Term Debt 71,124 21,329 71,103
Deferred Income Taxes 6,322 4,704 6,845
-------- -------- --------
Total Other Liabilities 77,446 26,033 77,948
-------- -------- --------
Shareholders' Equity:
Common Stock at Par Value 135 8,401 134
Additional Paid-In Capital 98,814 9,109 98,261
Retained Earnings 73,643 69,827 69,205
Cumulative Translation Adjustments (1,807) (912) (1,372)
-------- -------- --------
Total 170,785 86,425 166,228
Less - Treasury Stock - At Cost 26,036 25,832 25,832
-------- -------- --------
Total Shareholders' Equity 144,749 60,593 140,396
-------- -------- -------
Total Liabilities and Shareholders' Equity $323,337 $139,485 $291,543
======== ======== ========
<FN>
See accompanying Notes to Consolidated Condensed Financial Statements
</TABLE>
-2-
<PAGE> 4
<TABLE>
PRATT & LAMBERT UNITED, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATED INCOME STATEMENT
(Unaudited)
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
------------------ ----------------
JUNE 30 JUNE 30
------- -------
1995* 1994 1995* 1994
----- ---- ----- ----
(000's omitted except share amounts)
<S> <C> <C> <C> <C>
Net sales $137,732 $ 68,664 $247,626 $126,034
Cost of sales 101,341 45,512 182,953 85,429
------- ------- ------- -------
Gross profit 36,391 23,152 64,673 40,605
Selling, administrative and general
expenses 23,678 18,342 47,975 35,126
-------- ------- ------- -------
Income from operations 12,713 4,810 16,698 5,479
Interest expense 1,978 522 3,661 904
Interest income 57 6 123 24
Other income - net 106 108 409 261
-------- -------- -------- --------
Income before taxes on income 10,898 4,402 13,569 4,860
Taxes on income 4,772 1,721 5,942 1,900
-------- -------- -------- --------
Net income $ 6,126 $ 2,681 $ 7,627 $ 2,960
======== ======= ======= ========
Per common share earnings $.57 $.47 $.71 $.52
Per common share earnings -
assuming full dilution $.56 $.47 $.70 $.52
Average common shares outstanding 10,632,882 5,587,800 10,624,054 5,586,789
<FN>
*Note: Only the 1995 results include the sales and earnings of United
Coatings, which merged with the company on August 4, 1994.
</TABLE>
<TABLE>
The following pro forma information was prepared under the assumption that the
merger with United Coatings was effective on January 1, 1994.
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
------------------ ----------------
JUNE 30 JUNE 30
------- -------
1995 1994 1995 1994
---- ---- ---- ----
(000's omitted except share amounts)
<S> <C> <C> <C> <C>
Net sales $137,732 $137,994 $247,626 $236,783
Net income 6,126 7,644 7,627 9,382
Per common share earnings $.57 $.71 $.71 $.88
Per common share earnings
assuming full dilution $.56 $.71 $.70 $.88
Average common shares outstanding 10,632,882 10,587,789 10,624,054 10,586,778
<FN>
See accompanying Notes to Consolidated Condensed Financial Statements
</TABLE>
-3-
<PAGE> 5
<TABLE>
PRATT & LAMBERT UNITED, INC. AND SUBSIDIARY COMPANIES
STATEMENT OF CONSOLIDATED CASH FLOWS
(UNAUDITED)
<CAPTION>
SIX MONTHS ENDED
----------------
JUNE 30
-------
1995 1994
---- ----
<S> <C> <C>
Cash Flows from Operating Activities:
Net Income $ 7,627 $ 2,960
Adjustments to Reconcile Net Income to Net Cash
Used for Operating Activities:
Depreciation 3,594 2,463
Amortization of Goodwill and Other Intangibles 1,312 10
Deferred Income Taxes (523) 160
Provision for Losses on Accounts Receivable 405 (455)
Gain on Disposition of Property (153) (12)
Changes in Operating Assets and Liabilities:
(Increase) Decrease in Current Assets:
Receivables (26,635) (5,413)
Inventories (3,833) (3,208)
Prepaid Expenses 2,638 (225)
Increase (Decrease) in Current Liabilities:
Accounts Payable 15,980 5,321
United States and Canadian Income Taxes 1,502 (131)
Other Current Liabilities (2,642) (3,397)
(Increase) Decrease in Other Assets (2,577) (389)
--------- -------
Net Cash Used for Operating Activities (3,305) (2,316)
--------- -------
Cash Flows from Investing Activities:
Additions to Property, Plant and Equipment (6,338) (3,988)
Proceeds from Disposition of Property 647 223
--------- -------
Net Cash Used for Investing Activities (5,691) (3,765)
--------- -------
Cash Flows from Financing Activities:
Dividends Paid (3,183) (1,676)
Borrowings of Short-Term Debt 12,300 8,300
Payments on Long-Term Debt, Including Capitalized
Leases (551) (526)
Proceeds from Exercise of Stock Options 554 37
Purchase of Treasury Stock from Related Parties (204) 0
--------- -------
Net Cash Provided by Financing Activities 8,916 6,135
--------- -------
Effect of Exchange Rate Changes on Cash 10 (4)
--------- -------
Net Increase (Decrease) in Cash (70) 50
Cash, Beginning of Period 3,370 2,443
--------- -------
Cash, End of Period $ 3,300 $ 2,493
========= =======
<FN>
See accompanying Notes to Consolidated Condensed Financial Statements
</TABLE>
-4-
<PAGE> 6
PRATT & LAMBERT UNITED, INC. AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1. In the opinion of management, the accompanying unaudited consolidated
condensed financial statements contain all adjustments (consisting of
only normal recurring accruals) necessary to present fairly the financial
position as of June 30, 1995, June 30, 1994 and December 31, 1994 and the
results of operations and cash flows for the six-month periods ended June
30, 1995 and 1994.
2. Results of operations for the six-month periods ended June 30, 1995 and
1994 are not necessarily indicative of the results to be expected for the
full year due to the seasonal nature of the paint industry.
-5-
<PAGE> 7
PRATT & LAMBERT UNITED, INC. AND SUBSIDIARY COMPANIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
-------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS
-----------------------------------
<TABLE>
Summary of significant income statement changes:
<CAPTION>
Increase (Decrease) in Comparing
Three Months Ended Six Months Ended
June 30, 1995 and 1994 June 30, 1995 and 1994
---------------------- ----------------------
(Thousands of Dollars)
<S> <C> <C> <C> <C>
Net Sales $69,068 100.6% $121,592 96.5%
Cost of Sales 55,829 122.7 97,524 114.2
Selling, Administrative and General Expenses 5,336 29.1 12,849 36.6
Interest Expense 1,456 N/A 2,757 N/A
Taxes on Income 3,051 177.3 4,042 212.7
Net Income 3,445 128.5 4,667 157.7
</TABLE>
RESULTS OF OPERATIONS:
---------------------
On August 4, 1994, the company merged with United Coatings, Inc., a leading
producer of paint for the private label market. Under the terms of the merger
agreement, the company purchased all of United's outstanding stock for
5,000,000 shares of the company's common stock, approximately $17,000,000 in
cash and the assumption of United's debt. As the merger has been recorded
under the purchase method of accounting, United's operations since August 4,
1994, have been included in the company's 1994 financial statements. Goodwill
recorded in the accompanying financial statements is lower than that used in
previous pro forma statements due to the change in the company's stock price
that occurred between the announcement and merger dates.
Consolidated net sales of $137,732,000 in the second quarter of 1995 compares
to $68,664,000 in the second quarter of last year while consolidated sales of
$247,626,000 in the first half of 1995 compares with $126,034,000 in the same
period last year. While sales of Pratt & Lambert branded products were higher
during the 1995 periods as a result of a new line of contractor paints
introduced late last year, sales of paint products in the aggregate increased
primarily as the result of the merger with United Coatings. Sales of specialty
chemicals approximated last year's levels as a result of softening demand for
the company's industrial coatings and construction adhesives. The increase in
cost of sales, selling, administrative and general expenses and interest
expense were primarily the result of the merger.
Assuming that the merger with United Coatings had occurred prior to January 1,
1994, consolidated sales of $137,732,000 in the 1995 second quarter
approximate the pro forma sales of $137,994,000 of a year ago. For the six
months, sales rose 5% to $247,626,000, when compared with pro forma sales of
$236,783,000 in the first half of 1994. During the 1995 periods, raw material
costs increased at a rate faster than the company could implement
-6-
<PAGE> 8
selling price adjustments and higher interest rates negatively impacted the
company's earnings. As a result, net income in the second quarter of 1995 of
$6,126,000, or $.57 per share, compares with the pro forma net income of
$7,644,000, or $.71 per share, in last year's quarter. Net income of
$7,627,000, or $.71 per share, in the latest six month period compares with pro
forma net income of $9,382,000, or $.88 per share, a year ago.
LIQUIDITY AND CAPITAL RESOURCES:
-------------------------------
During the first half of 1995 the company borrowed under its lines of credit in
order to finance the seasonally higher levels of inventories and accounts
receivable required for its paint business. Historically, the company has
increased its borrowings during the first half of each year and anticipates
that such borrowings will be repaid by year end. To effect the merger with
United Coatings and to refinance United's then existing debt, in 1994 the
company borrowed $50,000,000 under a new revolving credit and term loan
agreement.
The company continues to maintain a favorable financial position with a current
ratio of 1.6 to 1 at June 30, 1995. In addition to internal sources, the
company has $43,000,000 in lines of credit to meet its short-term financing
requirements. At June 30, 1995, the company had available $14,100,000 in
unused credit under the above agreements. In addition, the company has
revolving credit and term loan agreements which provide for borrowings of up to
$70,000,000, all of which was outstanding at June 30, 1995.
At June 30, 1995, the company had an authorization from the Board of Directors
to purchase up to 250,200 shares of the company's common stock. Although the
company did not use the authorization to purchase any of its common stock
during 1994, 1993 or 1992, the company has made such purchases in prior years.
Generally, the company utilizes its bank arrangements to effect such
transactions and, based upon historical cash flow, management does not envision
that the authorized stock repurchase program will interfere with the funding of
future operational needs.
As is common in the chemical industry, the company has been notified that it is
a potentially responsible party with respect to hazardous waste at several
sites. The company has accrued for the estimated cost of its participation in
the clean-up and, based upon current information, management believes that
there will not be a material future charge to earnings due to these sites.
Environmental regulations have limited in the past and will likely further
limit in the future the volatile organic content of the company's products.
Based upon the technologies that the company has developed, management believes
that in the aggregate the movement to environmentally compliant products will
have a beneficial impact on the company's future operations.
There were no material commitments for capital expenditures at June 30, 1995.
It is anticipated that the majority of 1995 capital expenditure requirements
will be financed from internal sources. Management believes that the company
is well positioned financially, with ample cash flow to meet general operating
needs.
-7-
<PAGE> 9
PART I - EXHIBIT A
PRATT & LAMBERT UNITED, INC. AND SUBSIDIARY COMPANIES
EARNINGS PER SHARE COMPUTATION
<TABLE>
<CAPTION>
LINE THREE MONTHS ENDED SIX MONTHS ENDED
NO. JUNE 30 JUNE 30
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
1. Net income $6,126,000 $2,681,000 $7,627,000 $2,960,000
========== ========== ========== ==========
EARNINGS PER COMMON SHARE AND COMMON
EQUIVALENT SHARES - ASSUMING NO DILUTION:
Shares:
Average number of common shares outstanding 10,632,882 5,587,800 10,624,054 5,586,789
Incremental shares - Dilutive stock options (A) 208,573 104,759 177,562 127,713
---------- ---------- ---------- ----------
2. Total 10,841,455 5,692,559 10,801,616 5,714,502
========== ========== ========== ==========
3. Decremental shares - Anti-dilutive stock options (A) 0 10,678 0 6,686
========== ========== ========== ==========
4. Earnings per common share and common equivalent
share - Assuming no dilution (1/2) $.57 $.47 $.71 $.52
========== ========== ========== ==========
5. Earnings per common share and common equivalent
share - Assuming no dilution adjusted for anti-dilutive
effect of common stock options 1 / (2-3) $.57 $.47 $.71 $.52
========== ========== ========== ==========
EARNINGS PER COMMON SHARE AND COMMON EQUIVALENT SHARES - ASSUMING
FULL DILUTION:
Shares:
Average number of common shares outstanding 10,632,882 5,587,800 10,624,054 5,586,789
Incremental shares - Dilutive stock options (A) 242,803 104,759 244,970 128,067
---------- ---------- ---------- -----------
6. Total 10,875,685 5,692,559 10,869,024 5,714,856
========== ========== ========== ==========
7. Decremental shares - Anti-dilutive stock options (A) 0 10,678 0 6,686
========== ========== ========== ==========
8. Earnings per common share and common equivalent
share - Assuming full dilution adjusted for dilutive
effect of stock options (1/6) $.56 $.47 $.70 $.52
========== =========== ========== ==========
9. Earnings per common share and common equivalent
share - Assuming full dilution adjusted for anti-
dilutive effect of stock options 1 / (6-7) $.56 $.47 $.70 $.52
========== =========== ========== ==========
<FN>
(A) Detailed computations omitted because of insignificant number of shares
and effect on total earnings per share.
</TABLE>
-8-
<PAGE> 10
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
-------------------------------------------------
The following documents are hereby incorporated into this 10-Q in lieu of
filing Form 8-K:
(1) Pratt & Lambert United's annual report on Form 10-K for the fiscal year
ended December 31, 1994.
(2) Pratt & Lambert's quarterly report on Form 10-Q ended March 31, 1994.
(3) Pratt & Lambert's quarterly report on Form 10-Q ended June 30, 1994.
(4) Pratt & Lambert United's quarterly report on Form 10-Q ended March 31,
1995.
(5) United Coatings, Inc. audited financial statements on Form S-4 for the
fiscal year ended December 31, 1993.
(6) Pro Forma Condensed Consolidated Financial Information on Form S-4 for the
three months ended March 31, 1994 (unaudited).
-9-
<PAGE> 11
PRO FORMA CONDENSED CONSOLIDATED
--------------------------------
STATEMENTS OF OPERATIONS
------------------------
FOR THE THREE MONTH AND SIX MONTH PERIOD ENDED JUNE 30, 1994
(Unaudited)
The following unaudited pro forma condensed consolidated statements of
operations gives effect to the acquisition of United Coatings by Pratt &
Lambert assuming that the acquisition was consummated as of December 31, 1993
and assumes that the acquisition was accounted for as a purchase. The
unaudited pro forma condensed consolidated statements of operations
consolidates the historical statements of operations of Pratt & Lambert and of
United Coatings for the three month and six month periods ended June 30, 1994.
The pro forma data reflects the acquisition of United Coatings Common Stock in
exchange for 5,000,000 shares of Pratt & Lambert Common Stock and approximately
$17,000,000 of cash which was financed through a new revolving credit/term loan
agreement. The following unaudited pro forma condensed consolidated statements
of operations include pro forma adjustments to the unaudited consolidated
statement of operations for the three month and six month periods ended June
30, 1994 contained in this filing, of a recurring nature which give effect to
the consummation on or prior to the closing as if it had occurred as of
December 31, 1993. The pro forma adjustments are described in the accompanying
notes to the pro forma condensed consolidated statement of operations and
should be read in conjunction with such pro forma condensed consolidated
statement of operations. Such pro forma statements should also be read in
conjunction with Pratt & Lambert United's consolidated financial statements and
notes set forth in this filing. The following pro forma condensed consolidated
statements of operations do not purport to be indicative of the actual results
that would have occurred had the transaction been consummated December 31, 1993
or of the future results of operations which will be obtained as a result of
the consummation of the transaction.
-10-
<PAGE> 12
<TABLE>
Pro Forma Condensed Consolidated Statements of Operations
For the Six Month Period Ended June 30, 1994 - Unaudited
(In thousands of dollars except per share amounts)
<CAPTION>
Pratt & United Pro Forma
Lambert Coatings Adjustments Pro Forma
------- -------- ----------- ---------
<S> <C> <C> <C> <C>
Net Sales $126,034 $110,749 $236,783
Cost of Sales 85,429 84,340 (500) (1) 169,269
--------- --------- ---------- ---------
Gross Profit 40,605 26,409 500 67,514
Selling, Administrative
and General Expenses 35,126 13,238 (356) (2) 48,008
--------- --------- ---------- ---------
Income from Operations 5,479 13,171 856 19,506
Interest Expense-Net 880 415 925 (4) 2,220
Other Income (Expense) 261 (4,398) 4,400 (6) 263
Amortization 0 0 1,323 (3) 1,323
--------- ---------- ---------- -----------
Income Before Taxes 4,860 8,358 3,008 16,226
Provision for Income Taxes 1,900 200 4,744 (5) 6,844
---------- ---------- ---------- -----------
Net Income $ 2,960 $ 8,158 $ (1,736) $ 9,382
========== ========= ========= ==========
Earnings per common share and
common equivalent share $ .52 $ .88
Earnings per common share-assuming
full dilution $ .52 $ .88
<FN>
See notes to the pro forma condensed consolidated statements of operations
</TABLE>
<TABLE>
Pro Forma Condensed Consolidated Statements of Operations
For the Three Month Period Ended June 30, 1994 - Unaudited
(In thousands of dollars except per share amounts)
<CAPTION>
Pratt & United Pro Forma
Lambert Coatings Adjustments Pro Forma
------- -------- ----------- ---------
<S> <C> <C> <C> <C>
Net Sales $ 68,664 $ 69,330 $ 137,994
Cost of Sales 45,512 51,822 97,334
-------- -------- --------
Gross Profit 23,152 17,508 40,660
Selling, Administrative
and General Expenses 18,342 7,770 (261) (2) 25,851
-------- --------- ---------- --------
Income from Operations 4,810 9,738 261 14,809
Interest Expense-Net 516 352 435 (4) 1,303
Other Income (Expense) 108 2 110
Amortization 0 0 662 (3) 662
--------- ---------- ---------- ----------
Income Before Taxes 4,402 9,388 (836) 12,954
Provision for Income Taxes 1,721 100 3,489 (5) 5,310
--------- ---------- ---------- ----------
Net Income $ 2,681 $ 9,288 $ (4,325) $ 7,644
========== ========= ========= ==========
Earnings per common share and
common equivalent share $ .47 $ .71
Earnings per common share-assuming
full dilution $ .47 $ .71
<FN>
See notes to the pro forma condensed consolidated statements of operations
</TABLE>
-11-
<PAGE> 13
PRATT & LAMBERT UNITED, INC. AND SUBSIDIARIES
NOTES TO THE PRO FORMA CONDENSED CONSOLIDATED
---------------------------------------------
STATEMENTS OF OPERATIONS
------------------------
The following adjustments have been made to reflect the pro forma recurring
effect of the transaction directly attributable to the agreement as if the
transaction were consummated on December 31, 1993:
1. To reflect negotiated volume discounts with vendors of its principal
raw materials.
2. To reflect the reduction of United Coatings' legal, accounting and
investment banking fees which would not have been incurred during 1994
had the transaction been consummated on December 31, 1993.
3. To reflect amortization expense for the following as required by
purchase accounting:
<TABLE>
<CAPTION>
THREE MONTH SIX MONTH
PERIOD ENDED PERIOD ENDED
JUNE 30, 1994 JUNE 30, 1994
------------- -------------
<S> <C> <C>
Amortization of goodwill over an estimated life of 40 years $605,000 $1,210,000
Amortization of write up of property over estimated lives of
3 to 8 years 57,000 113,000
-------- ----------
$662,000 $1,323,000
======== ==========
</TABLE>
4. To reflect increased interest expense because of additional long-term
debt levels necessary to consummate the transaction. Interest expense
is calculated using the interest rate (approximately 5.9%) for the
three month period ended June 30, 1994. Interest expense for the six
month period ended June 30, 1994 includes the interest rate
(approximately 4.7%) used for the three month period ended March 31,
1994. Each 1/8% change in the rate will effect net income by
approximately $60,000 or approximately a half a cent per share.
5. To reflect the income taxes associated with the change of United
Coatings' status from an S to a C corporation as well as the estimated
income tax effects of the recurring transactions described above, as
contemplated in the Merger Agreement.
6. With respect to the six month period ended June 30, 1994 pro forma
statement of operations, to reflect the reversal of the United
Coatings senior executive deferred compensation agreement expense
which would not have been incurred during 1994 had the transaction
been consummated on December 31, 1993.
-12-
<PAGE> 14
PART II. OTHER INFORMATION
-----------------------------
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The annual meeting of shareholders of the Company was held on May 4, 1995, in
Buffalo, New York. Two proposals were submitted as described in the Company's
proxy statement dated March 31, 1995, and were voted upon and approved by
shareholders at the meeting. The table below briefly describes the proposals
and results of the shareholder votes.
<TABLE>
<CAPTION>
Votes in
Favor Withheld
----- --------
<S> <C> <C>
Election of the Board of Directors:
A. M. Boas 9,633,645 45,776
J. J. Castiglia 9,646,206 33,215
M. L. Claster 9,634,201 45,220
A. L. Gorman 9,645,901 33,520
J. L. Kenner 9,634,765 44,656
J. F. Knapp 9,646,358 33,063
J. Knapp 9,646,426 32,995
S. H. Knox, III 9,645,959 33,462
W. J. Larson 9,646,568 32,853
R. A. Marks 9,633,602 45,819
D. R. Newcomb 9,645,498 33,923
R. D. Stevens, Jr. 9,646,364 33,057
R. O. Swados 9,643,963 35,458
</TABLE>
<TABLE>
<CAPTION>
Votes in Votes Votes
Favor Opposed Abstained
----- ------- ---------
<S> <C> <C> <C>
Appointment of Deloitte & Touche LLP as
Independent Auditors: 9,652,020 11,502 15,899
</TABLE>
ITEM 5. OTHER INFORMATION
Please refer to the incorporation of certain information by reference and the
pro forma financial information in Part I on pages 10 through 12 relating to
the acquisition of United Coatings, Inc. by Pratt & Lambert, Inc.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27 Financial Data Schedule
(b) Reports on Form 8-K.
There were no reports on Form 8-K filed for the three
months ended June 30, 1995.
-13-
<PAGE> 15
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PRATT & LAMBERT UNITED, INC.
----------------------------------
(Registrant)
Date August 9, 1995 "J. J. CASTIGLIA"
-------------------- ----------------------------------
J. J. Castiglia
President
Date August 9, 1995 "J. R. BOLDT"
-------------------- ----------------------------------
J. R. Boldt
Vice President - Finance
-14-
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1995
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0
0
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