SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly period ended March 31, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 1-804
SEQUA CORPORATION
Exact name of registrant as specified in its charter)
Delaware 13-188-5030
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Indentification No.)
200 Park Avenue, New York, New York 10166
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(212) 986-5500
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 latest practicable
date.
Class Outstanding at May 10, 1994
Class A Common Stock, no par value 6,323,829
Class B Common Stock, no par value 3,330,778
<PAGE>
<TABLE>
PART I - FINANCIAL INFORMATION
SEQUA CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(Amounts in thousands, except per share data)
(Unaudited)
<CAPTION>
For the Three Months
Ended March 31,
1994 1993
<S> <C> <C>
SALES AND REVENUES $350,982 $427,221
COSTS AND EXPENSES
Cost of sales and revenues 280,011 342,954
Selling, general and adminstrative 53,965 67,804
333,976 410,758
OPERATING INCOME 17,006 16,463
OTHER INCOME (EXPENSE)
Interest expense (15,377) (17,056)
Interest income 720 526
Other, net (5,307) (3,428)
LOSS BEFORE INCOME TAXES (2,958) (3,495)
Income tax benefit 1,500 -
LOSS BEFORE EXTRAORDINARY LOSS
ON EARLY RETIREMENT OF DEBT (1,458) (3,495)
Extraordinary loss on early retirement of
debt (1,083) -
NET LOSS (2,541) (3,495)
Preferred dividend requirements (791) (791)
NET LOSS APPLICABLE TO COMMON STOCK $ (3,332) $ (4,286)
LOSS PER SHARE
Loss before extraordinary loss $ (.23) $ (.44)
Extraordinary loss (.11) -
Net loss $ (.34) $ (.44)
DIVIDENDS DECLARED PER SHARE
Class A Common $ - $ .150
Class B Common - .125
Preferred - 1.250
<FN>
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE>
<TABLE>
SEQUA CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
<CAPTION>
SUMMARY BUSINESS SEGMENT DATA (in millions)
Sales and Operating
Revenues Income (Loss)
1994 1993 1994 1993
<S> <C> <C> <C> <C>
Aerospace $230.2 $259.3 $ 8.0 $ 2.7
Machinery & Metal Coatings 45.4 51.4 3.5 4.8
Specialty Chemicals 57.2 52.1 9.6 9.3
Professional Services and
Other Products 18.2 64.4 2.2 5.2
Corporate - - (6.3) (5.5)
TOTAL $351.0 $427.2 $17.0 $16.5
</TABLE>
Sales and Revenues
Overall sales declined 18% to $351.0 million from the year
earlier level. The 1993 period included $39.7 million of sales
from the ARC Professional Services Group (PSG), which was sold in
December 1993 and $8.5 million of sales from two Northern Can
Systems (NCS) can plants, which were sold in mid-1993.
Sales of the Aerospace segment declined 11%, with all units
down from the 1993 first quarter level. Sales were down 7% at Gas
Turbine primarily as a result of a substantially unfavorable
comparison at the Orangeburg plant, where the 1993 quarter was the
last period not to have been affected by the temporary suspension
of Federal Aviation Administration (FAA) authorized repairs that
began in April 1993. Improvements at units primarily serving the
repair market (other than Orangeburg) were offset by declines at
units primarily serving the original equipment manufacturers, the
engine overhaul market, and the defense industry. At the ARC
propulsion unit, first quarter sales declined 14% as cuts in
domestic defense spending were reflected in reduced requirements
for three major programs: MLRS, Tomahawk, and Stinger. These
declines were partially offset by increased sales of automotive air
bag components. Kollsman's sales were off sharply, with declines
in each of its major market segments -- avionics, military systems
and medical instruments.
Sales of the Machinery and Metal Coatings segment declined
12% in the first quarter, as an increase at the Precoat Metals
operation was more than offset by sharp declines at both the Can
Machinery and auxiliary press equipment units. At the metal
coatings operation, the sales increase was driven by the overall
improvement in the building products market. Sales to the
container market were down due to lower demand and competitive
pricing pressures. Can Machinery sales were down sharply, a
reflection of a global slowdown in customer installation of new
lines. At the overseas auxiliary press equipment manufacturer, the
decline in sales largely reflects year-to-year timing differences
in customer delivery requirements. At the end of March, this
unit's backlog for deliveries in the current year was comparable to
the 1993 level.
<PAGE>
Sales and Revenue (con't)
Sales of the Specialty Chemicals segment increased 10%, with
both units registering advances. At the overseas unit, a strong
increase in detergent chemical volume was tempered by lower selling
prices. At the domestic unit, sales gains were registered in every
major product area except paper chemicals where sales declined
primarily due to industry wide weakness in the paper market. The
sales patterns at both units are expected to continue.
Sales in the Other Products segment, (formerly known as the
Professional Services and Other Products segment) declined 72%, due
entirely to the sale of the ARC PSG unit and the sale of two NCS
can plants in 1993. Excluding the sales of units sold during 1993,
the segment recorded a 13% increase for the 1994 quarter. Sales at
the automotive products unit advanced 15% from the first quarter of
1993, with improvements in OEM sales of lighters, electronic
sensors and power outlets, partially offset by declines in
aftermarket sales. At NCS, sales of lids increased 9% in 1994.
Due to an overstock position of one customer, and the loss of one
major account, sales for the second quarter are currently expected
to be soft. At Centor, a real estate company, revenue increased 3%
primarily due to the transfer of another property to the unit's
asset base.
Operating Income
Operating income advanced 3% from the year-earlier level,
reaching $17.0 million. The 1993 period included operating income
of approximately $3.2 million from ARC PSG and two NCS can plants,
all of which were sold in 1993.
Aerospace profits rose sharply from a depressed 1993 base due
to a turnaround at Gas Turbine. The Gas Turbine units returned to
profitability in the first quarter of 1994 for the first time since
the fourth quarter of 1992. The 1993 quarter was adversely
affected by two unusual provisions, -- one covering a $5.0 million
remedial payment to the FAA arising out of their investigation of
the Orangeburg plant and another covering termination costs for
manpower reductions at the Orangeburg facility.
The 1994 quarter benefitted from improvements at those units
(other than Orangeburg) which primarily serve the airline repair
market. Although units serving the engine overhaul, original
equipment and defense markets generated lower sales, restructuring
actions taken in the second half of 1993 enabled these units to
maintain operating results on a par with the first quarter of 1993.
At ARC propulsion, operating income declined 17% due to lower
sales and increased bid and proposal costs. At Kollsman, operating
income declined 13% as an improved sales mix and lower
administrative costs cushioned the effects of a sharp sales
decline.
<PAGE>
Operating Income (con't)
Operating income in the Machinery and Metal Coatings segment
declined 26%. At the metal coatings unit, profits increased
primarily due to the sales increase and the related improvement in
capacity utilization. Profits of the can machinery unit declined
19%, primarily due to lower sales and increased under absorption of
overhead costs resulting from the lower level of manufacturing
activity required to support a weak backlog position. Lower costs
resulting from manpower and expense reductions helped to temper the
decline. At the auxiliary press equipment unit, the 40% sales
decline resulted in a significantly larger 1994 first quarter loss.
Current booking trends for 1994 equipment sales suggest improvement
in the second half.
Operating income in the Specialty Chemicals segment was 3%
ahead of the preceding year. At the overseas unit, profits
improved modestly as the benefits of higher sales were tempered by
lower selling prices and increased research and development costs.
At the domestic unit, the effects of sales gains were largely
offset by an unfavorable sales mix shift and by higher research,
marketing and selling costs. Management currently anticipates an
improvement in this unit's results for the full year.
Operating income in the Other Products segment declined 58%
from the year earlier levels as a result of the sale of the
ARC PSG unit and the two NCS can plants in 1993. Excluding profits
of these units in the 1993 period, operating income would have
increased modestly. At the automotive products unit, an
unfavorable sales mix shift and start-up costs related to the move
to a new facility largely offset the benefits of higher sales. The
increase in operating income at NCS which resulted from increased
lid sales was partially offset by a decline at Centor primarily due
to higher operating costs and reduced revenues at the unit's
Clayton Missouri office building complex.
Restructuring Charges
During 1993, the Company recorded $26.6 million in
restructuring costs largely related to Gas Turbine's plan to reduce
its investment in units engaged in activities other than the repair
of components for flight engines. In April 1994, the Company sold
two Gas Turbine units engaged in engine overhaul and in early May
signed an agreement to sell a small unit primarily engaged in OEM
sales. Proceeds from these divestitures will total approximately
$55 million. Losses on these disposals were in line with amounts
previously recorded by the Company.
<PAGE>
<PAGE>
Interest Expense
The decrease in interest expense of approximately $1.7
million was primarily due to a decrease in average borrowings
related to the Company's cash generation program.
Other, Net
In the first quarter of 1994, Other, net includes a $3.2
million charge to adjust the carrying value of options sold on
interest rate swaps, $0.6 million of discount expenses related to
the sale of accounts receivable, a $0.9 million equity loss in the
Company's unconsolidated airbag business and amortization of
capitalized debt cost in the amount of $0.6 million. In the first
quarter of 1993, Other, net includes $0.7 million of discount
expenses related to the sale of accounts receivable, a $1.6 million
equity loss in the Company's unconsolidated airbag business and
amortization of capitalized debt costs in the amount of $0.8
million.
Income Tax Provision
The effective tax rates for the first quarters of 1994 and
1993 were 51% and 0%, respectively. These effective tax rates were
based upon estimated annual pre-tax accounting earnings in 1994 and
estimated annual pre-tax accounting losses in 1993 as adjusted for
goodwill amortization, a provision for state income and franchise
taxes, and the favorable tax treatment of earnings of the Company's
foreign sales corporation.
Liquidity
In March 1994, Sequa Capital, a discontinued operation,
received $25.0 million in proceeds from the nonrecourse
securitization of its leveraged lease cash flow stream. Proceeds
from this financing arrangement were primarily used to reduce debt
of continuing operations. In April 1994, the Company completed the
sale of Chromalloy Gas Turbine Corporation's East Granby division
and GTC Limited, a subsidiary of Chromalloy Gas Turbine
Corporation, for aggregate cash proceeds of approximately $54.0
million. These proceeds were used to fund operations and to
execute an in-substance defeasance of the remaining $33.5 million
principal balance of the Company's 10 1/2% senior subordinated
notes due 1998 which were called in April 1994. The in-substance
defeasance transaction and subsequent redemption resulted in an
extraordinary loss of $1.1 million, net of tax benefits of $0.6
million, which was accrued at March 31, 1994.
<PAGE>
<PAGE>
Liquidity (con't)
The dividend restrictions under the terms of the 10 1/2%
senior subordinated notes have been eliminated by the full
redemption of the related indebtedness; however, the Company's
earnings were not sufficient to maintain a consolidated interest
coverage ratio of 2.0 to 1.0 which, pursuant to the terms of the
Company's senior notes due 2001 and the senior subordinated notes
due 2003, precludes the Company from paying dividends among other
restricted activities.
Management anticipates that cash flow from operations,
proceeds from the divestiture of the remaining discontinued
operations and other assets, the $95.6 million of credit available
at May 10, 1994 under the revolving credit agreement, plus cash and
cash equivalents on hand at March 31, 1994 will be more than
sufficient to fund the Company's operations for the foreseeable
future.
Backlog
The businesses of Sequa for which backlogs are significant
are the Kollsman division, the Turbine Airfoils, Caval Tool and
Castings units of Gas Turbine, of the Aerospace segment, and the
Can Machinery and MEG operations of the Machinery and Metal
Coatings segment. The aggregate dollar amount of backlog in these
segments at March 31, 1994 was $353.3 million ($369.7 million at
December 31, 1993). There is no seasonal variation in the
Company's backlog.
Environmental Liabilities
With respect to all known environmental liabilities, it is
currently estimated that the Company will spend in the range of $6
million to $12 million in 1994 and between $5 million to $7 million
during each of the following several years. Actual remedial
expenditures for the first three months of 1994 were approximately
$2.5 million.
In accordance with the provisions of Statement of Accounting
Standards No. 5, the Company has accrued liabilities in the
financial statements to provide for estimated remediation costs
that management has determined to be probable and reasonably
estimable.
<PAGE>
<PAGE>
<TABLE>
SEQUA CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Amounts in thousands)
ASSETS
<CAPTION>
(Unaudited)
March 31, December 31,
1994 1993
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 32,009 $ 24,780
Receivables (less allowances of
$11,280 and $10,892) 214,971 227,688
Unbilled receivables (less allowances
of $13,162 and $13,165) 52,166 55,451
Inventories 320,891 290,323
Other current assets 53,955 63,350
Total current assets 673,992 661,592
INVESTMENTS
Net assets of discontinued operations 160,512 188,964
Non-current receivables and other
investments 21,314 17,179
181,826 206,143
PROPERTY, PLANT AND EQUIPMENT, NET 552,509 562,623
OTHER ASSETS
Excess of cost over net assets of
companies acquired 332,419 348,696
Deferred charges and other 23,711 24,467
356,130 373,163
TOTAL ASSETS $1,764,457 $1,803,521
<FN>
The accompanying notes are an integral part of the financial
statements.
</TABLE>
<PAGE>
<TABLE>
SEQUA CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Amounts in thousands, except share data)
LIABILITIES AND SHAREHOLDERS' EQUITY
<CAPTION>
(Unaudited)
March 31, December 31,
1994 1993
<S> <C> <C>
CURRENT LIABILITIES
Current maturities of long-term debt $ 40,175 $ 23,998
Accounts payable 126,296 114,529
Taxes on income 14,585 16,357
Accrued expenses 225,512 221,654
Total current liabilities 406,568 376,538
LONG-TERM DEBT, NET OF
CURRENT MATURITIES 590,249 624,092
DEFERRED TAXES AND OTHER LONG-TERM
LIABILITIES
Deferred taxes on income 24,542 27,039
Other long-term liabilities 168,112 200,068
192,654 227,107
SHAREHOLDERS' EQUITY
Preferred stock--$1 par value,
1,825,000 shares authorized, 797,000
shares of $5 cumulative convertible
stock issued in 1994 and 1993
(involuntary liquidation value--$26,359
at March 31, 1994) 797 797
Class A common stock--no par value,
25,000,000 shares authorized, 7,188,000
shares issued in 1994 and 7,054,000
shares issued in 1993 stated at 7,188 7,054
Class B common stock--no par value,
5,000,000 shares authorized, 3,727,000
shares issued in 1994 and 3,861,000
shares in 1993 stated at 3,727 3,861
Capital in excess of par value 295,841 295,841
Cumulative translation adjustment (14,237) (16,771)
Retained earnings 380,285 383,617
673,601 674,399
Less: Cost of treasury stock (98,615) (98,615)
Total shareholders' equity 574,986 575,784
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $1,764,457 $1,803,521
<FN>
The accompanying notes are an integral part of the financial
statements.
</TABLE>
<PAGE>
<TABLE>
SEQUA CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
Year Ended December 31, 1993 and period ended March 31, 1994
(Amounts in thousands, except per share data)
<CAPTION>
Class A Class B Capital in Cum.
Preferred Common Common Excess of Trans. Retained Treasury
Stock Stock Stock Par Value Adj. Earnings Stock
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1992 $ 797 $7,042 $3,873 $295,806 $(10,583) $453,486 $ (98,755)
Net loss - - - - - (63,982) -
Revaluation and amortization
of restricted stock grant - - - 35 - - 140
Exchange of common stock 12 (12)
Foreign currency translation
adjustment - - - - (6,696) - -
Sale of foreign subsidiary - - - - 508 - -
Cash dividends:
Class A - $.30 per share - - - - - (1,854) -
Class B - $.25 per share - - - - - (870) -
Preferred - $2.50 per share
Preferred dividends in - - - - - (1,581) -
arrears* - $2.50 per share - - - - - (1,582) -
Balance at December 31, 1993 $ 797 $7,054 $3,861 $295,841 $(16,771) $383,617 $ (98,615)
Net loss - - - - - (2,541) -
Exchange of common stock - 134 (134) - - - -
Foreign currency translation
adjustment - - - - 2,534 - -
Preferred dividends in
arrears* - $1.25 per share - - - - - (791) -
Balance at March 31, 1994 $ 797 $7,188 $3,727 $295,841 $(14,237) $380,285 $ (98,615)
<FN>
* Aggregate preferred dividends in arrears were $2,373 ($3.75 per share) as of March 31, 1993.
</TABLE>
<PAGE>
<TABLE>
SEQUA CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(Amounts in thousands)
(Unaudited)
<CAPTION>
For the Three Months
Ended March 31,
1994 1993
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Loss before income taxes $ (2,958) $ (3,495)
Adjustments to reconcile income to net cash
provided by operating activities:
Depreciation and amortization 25,251 27,731
Provision for losses on receivables 802 1,312
Equity in losses of unconsolidated subsidiaries 719 1,530
Other items not requiring cash 65 248
Changes in operating assets and liabilities:
Receivables 16,347 6,817
Inventories (29,460) 1,377
Other current assets 9,496 327
Accounts payable and accrued expenses 12,745 14,971
Other long-term liabilities (240) (1,739)
Net cash provided by continuing operations
before income taxes 32,767 49,079
Net cash provided by (used for) discontinued
operations before income taxes 26,508 (13,157)
Income taxes paid, net (2,140) (4,681)
Net cash provided by operating activities 57,135 31,241
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of minority interest in subsidiary (16,701) -
Purchase of property, plant and equipment (11,570) (23,870)
Sale of property, plant and equipment 1,626 479
Other investing activities (5,094) 132
Net cash used for investing activities (31,739) (23,259)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of debt - 3,688
Payments of debt (18,110) (4,613)
Dividends paid - (2,134)
Repurchase of accounts receivable sold - (4,000)
Net cash used for financing activities (18,110) (7,059)
Effect of exchange rate changes on cash
and cash equivalents (57) (15)
Net increase in cash and cash equivalents 7,229 908
Cash and cash equivalents at beginning of period 24,780 14,807
Cash and cash equivalents at end of period $ 32,009 $ 15,715
<FN>
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE>
SEQUA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
The consolidated financial statements of Sequa Corporation
(the "Company") include the accounts of all majority-owned
subsidiaries including those of Sequa Receivables Corp. ("SRC"), a
special purpose corporation formed for the sale of eligible
receivables. Under the terms of the receivables purchase
agreement, SRC's assets will be available to satisfy its
obligations to its creditors, which have security interests in
certain of SRC's assets, prior to any distribution to the Company.
The consolidated financial statements included herein have
been prepared by the Company, without audit, pursuant to the rules
and regulations of the Securities and Exchange Commission. In the
opinion of management, the accompanying unaudited consolidated
financial statements contain all adjustments necessary to fairly
present the Company's results for the interim periods presented.
With the exception of accruals for the $5.0 million remedial
payment made to the Federal Aviation Administration in April 1993
and termination costs for manpower reductions resulting from the
suspension of FAA-authorized repairs at the Orangeburg plant, such
adjustments to the March 31, 1993 Consolidated Statement of Income
consisted only of normal recurring items. The March 31, 1994
Consolidated Statement of Income includes an accrual for a $1.1
million after-tax extraordinary loss related to the April 1994 in-
substance defeasance and subsequent redemption of the Company's
10 1/2% senior subordinated notes and a $3.2 million charge to adjust
the carrying value of options sold on interest rate swaps. All
other adjustments in the March 31, 1994 interim period consisted of
normal recurring items. Certain information and footnote
disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles, have been
condensed or omitted pursuant to such rules and regulations,
although the Company believes that the disclosures are adequate to
make the information presented not misleading. It is suggested
that these condensed consolidated financial statements be read in
conjunction with the financial statements and notes thereto
included in the Company's latest Annual Report on Form 10-K. The
results of operations for the three months ended March 31, 1994 are
not necessarily indicative of the results to be expected for the
full year.
<PAGE>
<PAGE>
<TABLE>
NOTE 2 - INVENTORIES
The inventory amounts at March 31, 1994 and December 31, 1993 were as
follows:
(Amounts in thousands)
<CAPTION>
(Unaudited)
March 31, 1994 December 31, 1993
<S> <C> <C>
Finished Goods $ 93,027 $ 73,460
Work in process 115,303 100,341
Raw materials 109,916 111,866
Long-term contract costs 8,452 9,097
Progress payments (5,807) (4,441)
$320,891 $290,323
</TABLE>
<TABLE>
NOTE 3 - DISCONTINUED OPERATIONS
Net assets of discontinued operations approximate net realizable value
and have been classified as non-current. The net assets of discontinued
operations comprise Sequa Capital's remaining investment portfolio and the
men's apparel unit and are summarized as follows:
(Amounts in thousands)
<CAPTION>
(Unaudited)
March 31, December 31,
1994 1993
<S> <C> <C>
Funds designated for use by Sequa
Capital $ 750 $ 571
Receivables, net 9,464 6,380
Inventories 10,554 10,354
Sequa Capital investment portfolio, net 166,570 176,363
Property, plant, and equipment 3,492 3,519
Other assets 10,734 11,818
Total assets 201,564 209,005
Accounts payable 3,262 2,756
Accrued expenses 11,899 15,776
Debt 24,657 -
Other long-term liabilities 1,234 1,509
Total liabilities 41,052 20,041
Net assets of discontinued operations $160,512 $188,964
<FN>
In March 1994, Sequa Capital received $25.0 million in proceeds from the
securitization of its leveraged lease rental stream. The loan is non-
recourse to both Sequa Capital and Sequa Corporation and payment of principal
and interest is limited to the cash flow generated by the leveraged lease
portfolio.
</TABLE>
NOTE 4 - LOSS PER SHARE
Primary losses per common share in 1994 and 1993 were computed by
dividing net losses, after deducting dividend requirements on
cumulative convertible preferred stock, by the weighted average
number of shares of common stock outstanding during the periods.
These computations were based on 9,655,000 shares for both of the
three month periods in 1994 and 1993.
Fully diluted loss per common share calculations for the assumed
conversion of the cumulative convertible preferred stock were
anti-dilutive in the first quarters of 1994 and 1993.
<TABLE>
NOTE 5 - SUPPLEMENTAL CASH FLOW INFORMATION
<CAPTION>
(Amounts in thousands)
Three Months Ended
March 31,
1994 1993
<S> <C> <C>
Net cash provided by (used for)
discontinued operations:
Provision for losses on leasing assets $ 274 $ 616
Depreciation and amortization 92 134
Changes in working capital (6,143) (2,898)
Increase (decrease) in debt 24,657 (35,932)
Decrease (increase) in funds designated
for use by Sequa Capital (179) 572
Principal repayments on leasing assets 2,455 742
Sale of leasing assets 9,636 24,963
Other changes in net assets (4,284) (1,354)
$ 26,508 $(13,157)
</TABLE>
Other supplemental Cash Flow information:
Interest paid during the three months ended March 31, 1994 and
1993 was $2.2 million and $5.7 million, respectively.
<PAGE>
<PAGE>
PART II - OTHER INFORMATION
Item 1 - LEGAL PROCEEDINGS
Sequa is involved in a number of claims, lawsuits and
proceedings (environmental and otherwise) which arose in the
ordinary course of business. Other litigation is pending against
Sequa involving allegations that are not routine and include, in
certain cases, compensatory and punitive damage claims. Included
in this other class of litigation is an arbitration proceeding that
was formally commenced in 1992 to resolve a dispute between the
Egyptian Air Force and Chromalloy Gas Turbine. In the damage
portion of the arbitration hearing in October 1993, Chromalloy Gas
Turbine claimed $29.6 million in damages (which includes $17.5
million of net assets in the Company's Consolidated Balance Sheet)
and the Egyptian Air Force counterclaimed for $46.5 million in
damages.
The ultimate legal and financial liability of the Company in
respect to all claims, lawsuits and proceedings referred to above
cannot be estimated with any certainty. However, in the opinion of
management, based on its examination of such matters, its
experience to date and discussions with counsel, the ultimate
outcome of these contingencies, net of liabilities already accrued
in the Company's Consolidated Balance Sheet, is not expected to
have a material adverse effect on the results of operations or
financial position of the Company.
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
(A) Exhibits
11 - Schedule showing calculations of Primary and Fully
Diluted Loss Per Share for the 3-month periods
ended March 31, 1994 and 1993.
(B) Reports on Form 8-K
The Registrant filed a Current Report on Form 8-K, dated
January 14, 1994, in connection with the Registrant's
sale of ARC Professional Services to Computer Sciences
Corporation.
<PAGE>
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.
SEQUA CORPORATION
BY:/S/ WILLIAM P. KSIAZEK
William P. Ksiazek
Vice President and Controller
May 16, 1994
<TABLE>
EXHIBIT 11
SEQUA CORPORATION
CALCULATION OF PRIMARY AND FULLY DILUTED LOSS PER SHARE
<CAPTION>
For the Three Months
Ended March 31,
1994 1993
<S> <C> <C>
Primary
Loss
Loss before extraordinary loss $(1,458) $(3,495)
Preferred stock dividend requirements (791) (791)
Loss applicable to common shareholders
before extraordinary loss (2,249) (4,286)
Extraordinary loss on early retirement of debt (1,083) -
Net loss applicable to common shareholders $(3,332) $(4,286)
Shares
Common and common equivalent shares 9,655 9,655
Primary loss per common share
Loss before extraordinary loss $ (.23) $ (.44)
Extraordinary loss on early retirement of debt (.11) -
Net loss $ (.34) $ (.44)
*Fully Diluted
Loss
Loss before extraordinary loss $(1,458) $(3,495)
Extraordinary loss on early retirement of debt (1,083) -
Net loss $(2,541) $(3,495)
Shares
Common and common equivalent shares 10,493 10,493
Fully diluted loss per common share
Net loss from continuing operations
before extraordinary loss $ (.14) $ (.33)
Extraordinary loss on early retirement of debt (.10) -
Net loss $ (.24) $ (.33)
Shares
Weighted average common shares outstanding 9,655 9,655
Preferred stock assumed to be converted 838 838
Common and common equivalent shares 10,493 10,493
<FN>
(*)The 1994 and 1993 fully diluted loss per share calculations are anti-dilutive;
therefore, fully diluted losses per share have not been presented in the
Consolidated Statement of Income.
</TABLE>
