<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 or 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended September 30, 1995 Commission File No. 1-6736
STARRETT CORPORATION
(Formerly Starrett Housing Corporation)
(Exact Name of Registrant as specified in its charter)
NEW YORK 13-5411123
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
909 THIRD AVENUE, NEW YORK, NEW YORK 10022
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212)751-3100
NONE
(Former name, former address and former fiscal year, if changed since last
report)
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 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the close of the period covered by this report.
6,566,402 shares of common stock.
<PAGE> 2
STARRETT CORPORATION AND SUBSIDIARIES
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Consolidated Financial Statements:
Statement of Consolidated Financial Position - September 30, 1995. . . . . . . . 3
Condensed Statement of Consolidated Financial Position -
December 31, 1994 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Statements of Common Stockholders' Equity - September 30, 1995
and December 31, 1994 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Statements of Consolidated Operations - For the Nine Months
ended September 30, 1995 and 1994 . . . . . . . . . . . . . . . . . . . . . . . 6
Statements of Consolidated Operations - For the Three Months
ended September 30, 1995 and 1994 . . . . . . . . . . . . . . . . . . . . . . . 7
Statements of Consolidated Cash Flows - For the Nine Months
ended September 30, 1995 and 1994 . . . . . . . . . . . . . . . . . . . . . . . 8
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . 9
Management's Discussion of Financial Condition and
Results of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Exhibit A - Computation of Primary Earnings per Share - For the
Nine Months ended September 30, 1995 and 1994 . . . . . . . . 12
Exhibit B - Computation of Primary Earnings per Share - For the
Three Months ended September 30, 1995 and 1994. . . . . . . . 13
</TABLE>
2
<PAGE> 3
STARRETT CORPORATION AND SUBSIDIARIES
STATEMENT OF CONSOLIDATED FINANCIAL POSITION
SEPTEMBER 30, 1995
(In Thousands)
(Unaudited)
<TABLE>
<S> <C>
ASSETS:
Cash and cash equivalents of $585 . . . . . . . . . . . . . . . . . . . . . . . . . $ 6,891
Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27,775
Inventory of real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66,700
Investments in real estate joint ventures . . . . . . . . . . . . . . . . . . . . . 7,434
Property and Equipment-Net . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,497
Land Held for Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,809
Other Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,232
--------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $126,338
========
LIABILITIES AND EQUITY:
Liabilities:
Payable Within One Year:
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 15,375
Current portion of long-term obligations . . . . . . . . . . . . . . . . . . . . . 21,104
Accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,267
--------
Total Liabilities Payable Within One Year . . . . . . . . . . . . . . . . 46,746
Deferred Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,341
Deferred Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,346
Long-Term Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,062
--------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76,495
--------
Common Stockholders' Equity
Common stock-par value, $1.00; authorized, 18,000 shares . . . . . . . . . . . . . 6,566
Capital in excess of par value . . . . . . . . . . . . . . . . . . . . . . . . . . 23,933
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,748
Pension Liability Adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . (814)
Shares held in treasury-at cost . . . . . . . . . . . . . . . . . . . . . . . . . (1,590)
--------
Common Stockholders' Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49,843
--------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $126,338
========
</TABLE>
See Notes to Consolidated Financial Statements
3
<PAGE> 4
STARRETT CORPORATION AND SUBSIDIARIES
CONDENSED STATEMENT OF CONSOLIDATED FINANCIAL POSITION
(In Thousands)
(Unaudited)
<TABLE>
<CAPTION>
December 31,
1994
------------
<S> <C>
ASSETS
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . $ 17,474
U.S. Treasury/Certificates of Deposit . . . . . . . . . . . . . . . . . . . . . 304
Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,918
Inventory of Real Estate . . . . . . . . . . . . . . . . . . . . . . . . . . . 52,332
Investments in Real Estate Joint Ventures . . . . . . . . . . . . . . . . . . . 6,701
Other Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,538
--------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $116,267
========
LIABILITIES AND EQUITY
Accounts Payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 10,874
Other Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,359
Deferred Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,851
Long-Term Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36,066
Common Stockholders' Equity . . . . . . . . . . . . . . . . . . . . . . . . . . 47,117
--------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $116,267
========
</TABLE>
See Notes to Consolidated Financial Statements
4
<PAGE> 5
STARRETT CORPORATION AND SUBSIDIARIES
STATEMENTS OF COMMON STOCKHOLDERS' EQUITY
(In Thousands Except Share Data)
(Unaudited)
<TABLE>
<CAPTION>
September 30, December 31,
1995 1994
------------- ------------
<S> <C> <C>
Common Stock - Par Value, $1.00; Authorized,
18,000,000 shares; Issued, 6,566,402 shares . . . . . . . . . . $ 6,566 $ 6,566
Capital in Excess of Par Value . . . . . . . . . . . . . . . . . 23,933 23,933
Retained Earnings . . . . . . . . . . . . . . . . . . . . . . . . 21,748 19,022
Pension Liability Adjustment . . . . . . . . . . . . . . . . . . (814) (814)
Less: Shares Held in Treasury - at cost; 1995, 305,442
and 1994, 305,427 shares . . . . . . . . . . . . . . . (1,590) (1,590)
------- -------
TOTAL COMMON STOCKHOLDERS' EQUITY . . . . . . . . . . . . . . . . $49,843 $47,117
======= =======
</TABLE>
See Notes to Consolidated Financial Statements
5
<PAGE> 6
STARRETT CORPORATION AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED OPERATIONS
For The Nine Months Ended September 30, 1995 and 1994
(In Thousands Except Per Share Data)
(Unaudited)
<TABLE>
<CAPTION>
1995 1994
------- -------
<S> <C> <C>
Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . $86,487 $88,305
Construction Costs . . . . . . . . . . . . . . . . . . . . . . . 44,001 48,507
------- -------
Income from Construction Contracts and
Related Revenues . . . . . . . . . . . . . . . . . . . . . . . . 42,486 39,798
Expenses:
General and Administrative . . . . . . . . . . . . . . . . . . . 19,671 18,512
Security Service Labor & Other Costs . . . . . . . . . . . . . . 8,086 7,539
Selling . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,963 3,649
Mortgage and Closing Costs . . . . . . . . . . . . . . . . . . . 3,730 3,917
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . 329 494
------- -------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . 35,779 34,111
------- -------
Income before Income Taxes . . . . . . . . . . . . . . . . . . . 6,707 5,687
Income Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 2,808 2,473
------- -------
Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,899 $ 3,214
======== ========
Earnings per Common Share:
Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . . $ .62 $ .51
======== ========
Weighted average number of shares . . . . . . . . . . . . . . . . 6,261 6,261
======== ========
Cash Dividends per Share . . . . . . . . . . . . . . . . . . . . $ .1875 $ .0625
======== ========
</TABLE>
See Notes to Consolidated Financial Statements
6
<PAGE> 7
STARRETT CORPORATION AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED OPERATIONS
For The Three Months Ended September 30, 1995 and 1994
(In Thousands Except Per Share Data)
(Unaudited)
<TABLE>
<CAPTION>
1995 1994
-------- --------
<S> <C> <C>
Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . $32,805 $32,868
Construction Costs . . . . . . . . . . . . . . . . . . . . . . . 17,054 18,486
-------- --------
Income from Construction Contracts and
Related Revenues . . . . . . . . . . . . . . . . . . . . . . . . 15,751 14,382
-------- --------
Expenses:
General and Administrative . . . . . . . . . . . . . . . . . . . 6,650 6,214
Security Service Labor and Other Costs . . . . . . . . . . . . . 3,160 2,850
Selling . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,469 1,298
Mortgage and Closing Costs . . . . . . . . . . . . . . . . . . . 1,344 1,372
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111 167
-------- --------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,734 11,901
-------- --------
Income before Income Taxes . . . . . . . . . . . . . . . . . . . 3,017 2,481
Income Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 1,221 993
-------- --------
Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,796 $ 1,488
======== ========
Earnings per Common Share:
Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . . $ .28 $ .23
======== ========
Weighted average number of shares . . . . . . . . . . . . . . . . 6,261 6,261
======== ========
Cash Dividends per Share . . . . . . . . . . . . . . . . . . . . $ .0625 $ .0625
======== ========
</TABLE>
See Notes to Consolidated Financial Statements
7
<PAGE> 8
STARRETT CORPORATION AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED CASH FLOWS
For The Nine Months Ended September 30, 1995 and 1994
(In Thousands)
(Unaudited)
<TABLE>
<CAPTION>
1995 1994
-------- --------
<S> <C> <C>
OPERATING ACTIVITIES:
Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,899 $ 3,214
Adjustments to Reconcile Income to Net Cash
Used In Operating Activities:
Depreciation and amortization . . . . . . . . . . . . . . . . . 2,136 1,703
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . 776 107
Equity in (earnings) in Joint Ventures . . . . . . . . . . . . (1,774) (1,736)
Changes in Operating Assets and Liabilities:
Receivables . . . . . . . . . . . . . . . . . . . . . . . . . (1,857) (3,308)
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . (14,180) (1,181)
Account payable . . . . . . . . . . . . . . . . . . . . . . . 4,501 1,960
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . (5,915) (2,121)
Accrued liabilities . . . . . . . . . . . . . . . . . . . . . (1,392) (1,113)
Deferred revenues . . . . . . . . . . . . . . . . . . . . . . (505) (420)
Net Cash Used In Operating Activities . . . . . . . . . . . . . . (14,311) (2,895)
-------- -------
INVESTING ACTIVITIES:
Investment in Real Estate Joint Ventures . . . . . . . . . . . . (1,354) (5,889)
Proceeds from Real Estate Joint Ventures . . . . . . . . . . . . 2,395 3,399
Investments In And Advances To Partnerships . . . . . . . . . . . 582 72
U.S. Treasury/Certificates of Deposit . . . . . . . . . . . . . . 304 6,993
Purchase of Property and Equipment . . . . . . . . . . . . . . . (991) (695)
-------- -------
Net Cash Provided by Investing Activities . . . . . . . . . . . . 936 3,880
-------- -------
FINANCING ACTIVITIES:
Repayment of Long Term Obligations . . . . . . . . . . . . . . . (10,189) (10,042)
Proceeds from Long Term Obligations . . . . . . . . . . . . . . . 13,763 8,790
Payment of Cash Dividends to Common
Stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . (782)
-------- -------
Net Cash Provided by (Used In) Financing Activities . . . . . . . 2,792 (1,252)
-------- -------
Decrease in Cash and Cash Equivalents . . . . . . . . . . . . . . (10,583) (267)
Cash and Cash Equivalents Beginning of Period . . . . . . . . . . 17,474 12,171
-------- -------
Cash and Cash Equivalents End of Period . . . . . . . . . . . . . $ 6,891 $11,904
======== =======
</TABLE>
See Notes to Consolidated Financial Statements
8
<PAGE> 9
STARRETT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The accompanying consolidated financial statements of Starrett
Corporation and its subsidiaries have been prepared in accordance with generally
accepted accounting principles for interim financial information and with the
instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do
not include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of the
management, all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. The consolidated financial
statements as of and for the nine months ended September 30, 1995 and 1994 are
unaudited and are subject to year-end audit and adjustments. The results of
operations for the interim periods are not necessarily indicative of the results
of operations for the fiscal year. For comparability purposes, certain 1994
amounts have been reclassified to conform with the 1995 classifications. For
further information, refer to the consolidated financial statements and
footnotes included thereto in the Company's Annual Report on Form 10-K for the
year ended December 31, 1994.
9
<PAGE> 10
MANAGEMENT'S DISCUSSION OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS COMPARISON OF NINE AND THREE MONTHS
ENDED SEPTEMBER 30, 1995 AND 1994
During the nine and three months ended September 30, 1995, the Company
had income from operations of $6,707,000 and $3,017,000 as compared with
$5,687,000 and $2,481,000 in 1994, and net income of $3,899,000 or $.62 a share
and $1,796,000 or $.28 a share as compared to $3,214,000 or $.51 a share and
$1,488,000 or $.23 a share for the same period in 1994.
The slight decrease in revenues was attributable to a decrease in the
number of houses delivered in the Company's single-family homes subsidiary
Levitt Corp. This decrease was caused by the timing of project phases under
development in Levitt's Puerto Rico region. Levitt's domestic region partially
offset the decrease with a significant improvement in the gross profit for the
region.
Levitt's backlog of homes contracted for sale increased from $98,852,000
at September 30, 1994 to $107,619,000 at September 30, 1995. Included in
Levitt's sales backlog is its 50% interests in joint ventures.
During the nine months ended September 30, 1995, Levitt showed a net
increase of approximately $13,139,000 in various development projects,
increasing its inventory and joint venture investments in its single-family home
division.
The Company's management division, Grenadier Realty Corp., and its
construction management division, HRH Construction Corporation, continued to
show profits.
The Company expects that the increased level of profits will continue
for the balance of the year.
Cash Flow and Liquidity
While the Company presently has various banking relationships, it does
not have any formal lines of credit other than its Levitt subsidiary. The
Company has begun a program to secure a formal line of credit with its banking
institutions and anticipates this process to be completed by the end of the
year.
10
<PAGE> 11
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.
STARRETT CORPORATION
(Registrant)
s/ Paul Milstein
---------------------------------------
Paul Milstein - Chairman
s/ Lewis A. Weinfeld
---------------------------------------
Lewis A. Weinfeld - Executive Vice
President and Chief Financial Officer
(Principal Accounting Officer)
DATE: November 13, 1995
11
<PAGE> 12
EXHIBIT INDEX
-------------
Exhibit No. Description
----------- -----------
Exhibit 11.A Computation of Primary Earnings per Share
Exhibit 11.B Computation of Primary Earnings per Share
Exhibit 27 Financial Data Schedule
<PAGE> 1
EXHIBIT A
STARRETT CORPORATION AND SUBSIDIARIES
EXHIBIT SETTING FORTH THE COMPUTATION OF PRIMARY
EARNINGS PER SHARE INFORMATION
(In Thousands Except Per Share Amounts)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
---------------------
1995 1994
---- ----
<S> <C> <C>
Weighted average number of shares outstanding
during the period . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,261 6,261
====== ======
Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3,899 $3,214
====== ======
Primary earnings per share:
Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ .62 $ .51
====== ======
</TABLE>
12
<PAGE> 1
EXHIBIT B
STARRETT CORPORATION AND SUBSIDIARIES
EXHIBIT SETTING FORTH THE COMPUTATION OF PRIMARY
EARNINGS PER SHARE INFORMATION
(In Thousands Except Per Share Amounts)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
SEPTEMBER 30,
----------------------
1995 1994
------ ------
<S> <C> <C>
Weighted average number of shares outstanding
during the period . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,261 6,261
====== ======
Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,796 $1,488
====== ======
Primary earnings per share:
Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ .28 $ .23
====== ======
</TABLE>
13
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 6,891,000
<SECURITIES> 0
<RECEIVABLES> 28,251,000
<ALLOWANCES> 476,000
<INVENTORY> 66,700,000
<CURRENT-ASSETS> 93,663,000
<PP&E> 11,479,000
<DEPRECIATION> 7,982,000
<TOTAL-ASSETS> 126,338,000
<CURRENT-LIABILITIES> 46,746,000
<BONDS> 0
<COMMON> 6,566,000
0
0
<OTHER-SE> 43,277,000
<TOTAL-LIABILITY-AND-EQUITY> 126,338,000
<SALES> 86,487,000
<TOTAL-REVENUES> 86,487,000
<CGS> 44,001,000
<TOTAL-COSTS> 44,001,000
<OTHER-EXPENSES> 35,450,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 329,000
<INCOME-PRETAX> 6,707,000
<INCOME-TAX> 2,808,000
<INCOME-CONTINUING> 3,899,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,899,000
<EPS-PRIMARY> .62
<EPS-DILUTED> .62
</TABLE>
