<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 June 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.
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STARRETT CORPORATION AND SUBSIDIARIES
TABLE OF CONTENTS
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PAGE
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Consolidated Financial Statements:
Statement of Consolidated Financial Position - June 30, 1995 .............. 3
Condensed Statement of Consolidated Financial Position -
December 31, 1994 ........................................................ 4
Statements of Common Stockholders' Equity - June 30, 1995
and December 31, 1994 .................................................... 5
Statements of Consolidated Operations - For the Six Months
ended June 30, 1995 and 1994 ............................................. 6
Statements of Consolidated Operations - For the Three Months
ended June 30, 1995 and 1994 ............................................. 7
Consolidated Statements of Cash Flows - For the Six Months
ended June 30, 1995 and 1994 ............................................. 8
Notes to Consolidated Financial Statements ................................ 9
Management's Discussion of Financial Condition and
Results of Operations .................................................... 10
Signatures ................................................................ 12
Exhibit A - Computation of Primary Earnings per Share - For the
Six Months ended June 30, 1995 and 1994 ....................... 13
Exhibit B - Computation of Primary Earnings per Share - For the
Three Months ended June 30, 1995 and 1994 ..................... 14
</TABLE>
2
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STARRETT CORPORATION AND SUBSIDIARIES
STATEMENT OF CONSOLIDATED FINANCIAL POSITION
JUNE 30, 1995
(In Thousands)
(Unaudited)
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<S> <C>
ASSETS:
Cash and cash equivalents ..................................... $ 9,261
U.S. Treasury/Certificates of Deposit ......................... 304
Receivables ................................................... 24,942
Inventory of real estate ...................................... 63,506
Investments in real estate joint ventures ..................... 8,214
Property and Equipment-Net .................................... 3,433
Land Held for Investment ...................................... 1,882
Other Assets .................................................. 10,367
-----------
Total ................................................ $ 121,909
===========
LIABILITIES AND STOCKHOLDERS' EQUITY:
Liabilities:
Payable Within One Year:
Accounts payable ............................................. $ 17,646
Current portion of long-term obligations ..................... 18,712
Accrued liabilities .......................................... 9,346
-----------
Total Liabilities Payable Within One Year ............ 45,704
Deferred Income taxes ......................................... 4,934
Deferred Revenues ............................................. 892
Long-Term Obligations ......................................... 21,942
-----------
Total ................................................ 73,472
-----------
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 ............................................ 20,342
Pension liability adjustment ................................. (814)
Shares held in treasury-at cost .............................. (1,590)
-----------
Common Stockholders' Equity ................................... 48,437
-----------
Total ................................................ $ 121,909
===========
</TABLE>
See Notes to Consolidated Financial Statements
3
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STARRETT CORPORATION AND SUBSIDIARIES
CONDENSED STATEMENT OF CONSOLIDATED FINANCIAL POSITION
(In Thousands)
(Unaudited)
<TABLE>
<CAPTION>
December 31,
1994
------------
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ASSETS
Cash ......................................................... $ 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 STOCKHOLDERS' 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
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STARRETT CORPORATION AND SUBSIDIARIES
STATEMENTS OF COMMON STOCKHOLDERS' EQUITY
(In Thousands Except Share Data)
(Unaudited)
<TABLE>
<CAPTION>
June 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 ................................ 20,342 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 ................ $ 48,437 $ 47,117
========= =========
</TABLE>
See Notes to Consolidated Financial Statements
5
<PAGE> 6
STARRETT CORPORATION AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED OPERATIONS
For The Six Months Ended June 30, 1995 and 1994
(In Thousands Except Per Share Data)
(Unaudited)
<TABLE>
<CAPTION>
1995 1994
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<S> <C> <C>
Revenues ........................................... $53,682 $55,437
Construction Costs ................................. 26,947 30,021
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Income from Construction Contracts and
Related Revenues .................................. 26,735 25,416
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Expenses:
General and Administrative ........................ 13,021 12,298
Security Service Labor and Other Cost ............. 4,926 4,689
Selling ........................................... 2,494 2,351
Mortgage and Closing Costs ........................ 2,386 2,545
Interest .......................................... 218 327
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Total ......................................... 23,045 22,210
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Income before Income Taxes ......................... 3,690 3,206
Income Taxes ....................................... 1,587 1,480
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Net Income ......................................... $ 2,103 $ 1,726
======= =======
Earnings per Common Share:
Net Income ......................................... $ .34 $ .28
======= =======
Weighted average number of shares .................. 6,261 6,261
======= =======
Cash Dividends per Share ........................... $ .125 None
======= =======
</TABLE>
See Notes to Consolidated Financial Statements
6
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STARRETT CORPORATION AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED OPERATIONS
For The Three Months Ended June 30, 1995 and 1994
(In Thousands Except Per Share Data)
(Unaudited)
<TABLE>
<CAPTION>
1995 1994
-------- --------
<S> <C> <C>
Revenues ......................................... $ 23,401 $ 28,042
Construction Costs ............................... 10,045 14,606
-------- --------
Income from Construction Contracts and
Related Revenues ................................ 13,356 13,436
-------- --------
Expenses:
General and Administrative ...................... 6,626 6,241
Security Service Labor and Other Cost ........... 2,447 2,503
Selling ......................................... 1,042 1,254
Mortgage and Closing Costs ...................... 1,176 1,370
Interest ........................................ 110 162
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Total ....................................... 11,401 11,530
-------- --------
Income before Income Taxes ....................... 1,955 1,906
Income Taxes ..................................... 841 875
-------- --------
Net Income ....................................... $ 1,114 $ 1,031
======== ========
Earnings per Common Share:
Net Income ....................................... $ .18 $ .17
======== ========
Weighted average number of shares ................ 6,261 6,261
======== ========
Cash Dividends per Share ......................... $ .0625 None
======== ========
</TABLE>
See Notes to Consolidated Financial Statements
7
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STARRETT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For The Six Months Ended June 30, 1995 and 1994
(In Thousands)
(Unaudited)
<TABLE>
<CAPTION>
1995 1994
---------- ----------
<S> <C> <C>
OPERATING ACTIVITIES:
Net Income ......................................... $ 2,103 $ 1,726
Adjustments to Reconcile Income to Net Cash (Used In)
Provided by Operating Activities:
Depreciation and amortization .................... 1,330 1,047
Deferred income taxes (benefit)................... 369 (14)
Equity in Earnings in Joint Venturers ............ (847) (1,645)
Changes in Operating Assets and Liabilities:
Receivables ..................................... 976 439
Inventories ..................................... (11,059) 1,615
Account payable ................................. 6,772 1,704
Other assets .................................... (3,140) (1,036)
Accrued liabilities ............................. (1,922) (1,590)
Deferred revenues ............................... (959) (411)
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Net Cash (Used In) Provided by Operating Activities. (6,377) 1,835
---------- ----------
INVESTING ACTIVITIES:
Investment in Real Estate Joint Ventures ........... (1,217) (5,554)
Proceeds From Real Estate Joint Ventures ........... 551 3,355
Investments in and Advances to Partnerships ........ 233 78
U.S. Treasury/Certificates of Deposit .............. 7,506
Purchase of Property and Equipment ................. (682) (438)
---------- ----------
Net Cash (Used In) Provided by Investing
Activities ........................................ (1,115) 4,947
---------- ----------
FINANCING ACTIVITIES:
Repayment of Long Term Obligations ................. (7,180) (7,630)
Proceeds from Long Term Obligations ................ 7,242 1,740
Payment of Cash Dividends to Common
Stockholders ...................................... (783)
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Net Cash Used In Financing Activities .............. (721) (5,890)
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(Decrease) Increase in Cash and Cash Equivalents ... (8,213) 892
Cash and Cash Equivalents Beginning of Period ...... 17,474 12,171
---------- ----------
Cash and Cash Equivalents End of Period ............ $ 9,261 $ 13,063
========== ==========
</TABLE>
See Notes to Consolidated Financial Statements
8
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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 six months ended June 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
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MANAGEMENT'S DISCUSSION OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
COMPARISON OF SIX AND THREE MONTHS ENDED JUNE 30, 1995 AND 1994
During the six and three months ended June 30, 1995, the Company had
income from operations of $3,690,000 and $1,955,000 as compared with $3,206,000
and $1,906,000 in 1994, and net income of $2,103,000 or $.34 a share and
$1,114,000 or $.18 a share as compared to $1,726,000 or $.28 a share and
$1,031,000 or $.17 a share for the same period in 1994.
The decrease in revenues was primarily 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
$96,676,000 at June 30, 1994 to $116,897,000 at June 30, 1995. Included in
Levitt's sales backlog is its 50% interests in joint ventures.
During the six months ended June 30, 1995, Levitt showed a net increase
of approximately $11,725,000 in various development projects, increasing its
inventory and joint venture investments in its single-family home division.
Selling, mortgage and closing costs decreased as a result of the
decrease in the delivery of homes in Levitt Corp.
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
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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: August 14, 1995
11
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EXHIBIT INDEX
Exhibit No. Description Page No.
EX-11.A The computation of primary earnings, (6 months).
EX-11.B The computation of primary earnings, (3 months).
EX-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>
SIX MONTHS ENDED
JUNE 30,
------------------
1995 1994
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<S> <C> <C>
Weighted average number of shares outstanding during
the period ............................................. 6,261 6,261
======= ======
Net Income .............................................. $ 2,103 $1,726
======= ======
Primary earnings per share:
Net Income ......................................... $ .34 $ .28
======= ======
</TABLE>
12
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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
JUNE 30,
------------------
1995 1994
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<S> <C> <C>
Weighted average number of shares outstanding during
the period ............................................. 6,261 6,261
======= ======
Net Income .............................................. $ 1,114 $1,031
======= ======
Primary earnings per share:
Net Income ......................................... $ .18 $ .17
======= ======
</TABLE>
13
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-1-1995
<PERIOD-END> JUN-30-1995
<CASH> 9,261,000
<SECURITIES> 304,000
<RECEIVABLES> 25,418,000
<ALLOWANCES> 476,000
<INVENTORY> 63,506,000
<CURRENT-ASSETS> 90,877,000
<PP&E> 11,173,000
<DEPRECIATION> 7,740,000
<TOTAL-ASSETS> 121,909,000
<CURRENT-LIABILITIES> 45,704,000
<BONDS> 0
<COMMON> 6,566,000
0
0
<OTHER-SE> 41,871,000
<TOTAL-LIABILITY-AND-EQUITY> 121,909,000
<SALES> 53,682,000
<TOTAL-REVENUES> 53,682,000
<CGS> 26,947,000
<TOTAL-COSTS> 26,947,000
<OTHER-EXPENSES> 22,827,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 218,000
<INCOME-PRETAX> 3,690,000
<INCOME-TAX> 1,587,000
<INCOME-CONTINUING> 2,103,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,103,000
<EPS-PRIMARY> .34
<EPS-DILUTED> .34
</TABLE>
