<PAGE>
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, 1995
----------------------------
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 1, 1995
----- --------------------------
Class A Common Stock, no par value 6,535,881
Class B Common Stock, no par value 3,330,778<PAGE>
<PAGE>
<TABLE>
SEQUA CORPORATION
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,
--------------------
1995 1994
---- ----
<S> <C> <C>
SALES $327,534 $350,982
-------- --------
COSTS AND EXPENSES
Cost of sales 261,511 280,011
Selling, general and adminstrative 54,916 53,965
-------- --------
316,427 333,976
-------- --------
OPERATING INCOME 11,107 17,006
Other income (expense)
Interest expense (13,346) (15,377)
Interest income 872 720
Other, net 992 (5,307)
-------- --------
Loss before income taxes (375) (2,958)
Income tax (provision) benefit (1,500) 1,500
-------- --------
LOSS BEFORE EXTRAORDINARY LOSS
on early retirement of debt (1,875) (1,458)
Extraordinary loss on early retirement of
debt, net of applicable income taxes - (1,083)
-------- --------
NET LOSS (1,875) (2,541)
Preferred dividend requirements (791) (791)
-------- --------
NET LOSS APPLICABLE TO COMMON STOCK $ (2,666) $ (3,332)
======== ========
LOSS PER SHARE
Loss before extraordinary loss $ (.27) $ (.23)
Extraordinary loss - (.11)
-------- -------
Net loss $ (.27) $ (.34)
======== ========
DIVIDENDS DECLARED PER SHARE
Preferred $ 1.25 $ -
<FN>
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
SEQUA CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
------------------------------------------------
SUMMARY BUSINESS SEGMENT DATA (in millions)
- -------------------------------------------
<CAPTION>
Operating
Sales Income (Loss)
------------- -------------
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
Aerospace $195.0 $230.2 $(0.2) $ 8.0
Machinery & Metal Coatings 52.6 45.4 6.5 3.5
Specialty Chemicals 59.8 57.2 9.0 9.6
Other Products 20.1 18.2 2.6 2.2
Corporate - - (6.8) (6.3)
----- ----- ----- -----
TOTAL $327.5 $351.0 $11.1 $17.0
====== ====== ===== =====
</TABLE>
Sales
- -----
Overall sales declined 7% in the first quarter of 1995
compared with the same quarter of 1994. After eliminating sales
of Gas Turbine units that were disposed of in 1994, sales
declined 1%, as gains at the Kollsman, Precoat Metals and MEG
operations virtually offset declines at Gas Turbine, ARC
propulsion and Sequa Can Machinery.
Sales of the Aerospace segment declined 15%, as reductions
at the Gas Turbine and ARC propulsion units were only partially
offset by higher sales at Kollsman. Gas Turbine sales were down
23% (12% after eliminating sales of units disposed of in 1994),
with declines in all major market areas and a continuation of
severe competitive pricing pressures. Sales at the Orangeburg
facility were down 6% from the 1994 quarter, as a 46% increase in
repair sales was more than offset by a sharp sustained decline in
OEM sales. For the fourth consecutive quarter, the input of
parts for repair increased from the preceding quarter at the
Orangeburg facility. At the ARC propulsion unit, sales were down
10%, primarily as a result of lower revenues on the MLRS rocket
motor program, partially offset by higher sales of propellant and
initiators for automotive airbag inflators. At the Kollsman
unit, sales were sharply higher as a result of increases in the
night targeting system (NTS) for the Cobra helicopter and higher
sales of cabin telecommunication products for the avionics
market. The overall advance was tempered by declines in sales of
electro-optical devices for military vehicles and medical
instrumentation products.
Sales of the Machinery and Metal Coatings segment rose 16%,
as increases at Precoat Metals and MEG were partially offset by a
decline at Sequa Can Machinery. At the Precoat Metals operation,
sales increased 18% with improvements registered in metal for
building products, can end stock and truck trailer panels. Sales
<PAGE>
Sales (con't)
- -----
of MEG rose sharply from a low 1994 base, and the advance
primarily reflects the timing of deliveries and a 12% favorable
swing in foreign exchange rates. The outlook for this unit in
1995 continues to depend largely on the successful introduction
of new equipment models, which are being shown in May at a large
trade show in Germany. Sales of Sequa Can Machinery were lower
than in the 1994 first quarter, due entirely to customer delivery
requirements. Based on current backlog for 1995 delivery, sales
for the full year are expected to substantially exceed 1994
levels.
Sales of the Specialty Chemicals segment increased 4%, with
both units contributing to the advance. At the overseas unit,
sales measured in local currency declined 4%, as a drop in TAED
product sales was partially offset by increased sales of other
chemicals. However, the weakening of the U.S. dollar against the
British pound more than offset the impact of reduced local
currency sales. At the domestic unit, sales were up, as price
increases and a favorable sales mix shift more than offset a
small decline in volume. Sales of specialty polymers and paper
specialties advanced while sales to the graphics, textile and
export markets registered small declines.
Sales of the Other Products segment increased 10% in the
first quarter, as advances in the automotive products and can lid
units were partially offset by a decline at Centor, the real
estate company. At the automotive products unit, all major
product lines recorded increases, with sales of power outlets
registering the largest advance. At the NCS unit, domestic sales
registered a solid advance, which was tempered by lower export
sales due primarily to the problems in the Mexican economy. At
Centor, revenues declined 11% primarily as a result of a lower
occupancy rate and lower parking revenues at the unit's major
office building.
Operating Income
- ----------------
Operating income declined 35% in the first quarter of 1995
compared with the same period of 1994 as the result of a loss at
Gas Turbine.
The Aerospace segment posted a $0.2 million loss for the
first quarter of 1995, whereas this segment had an operating
profit of $8.0 million in the first quarter of 1994. The
unfavorable swing was due entirely to Gas Turbine, which had
been profitable in the 1994 quarter and registered a loss in the
1995 quarter. The operating income of ARC propulsion recorded a
small advance, and Kollsman profits were up 12%. The Gas Turbine
unit continues to be affected by lower sales and competitive
<PAGE>
Operating Income (con't)
- ----------------
pressures. In April 1995, Gas Turbine finalized and implemented
a further cost reduction program which will result in a $7.2
million pre-tax charge in the second quarter of 1995. The charge
reflects the severance and related costs of a 275-person
reduction primarily in the indirect workforce and the closing of
four small factories, whose workloads will be absorbed by other
units. It is anticipated that this cost reduction action will
generate a net savings in 1995, which will become evident in the
second half of the year. At the ARC propulsion unit, the
unfavorable effects of reduced military sales were more than
offset by increased profits on airbag inflator products, lower
bid and proposal costs and reduced administrative expenses. At
Kollsman, operating income increased 12% as the benefits of
higher sales were partially offset by increased selling and
administrative costs.
Operating income of the Machinery and Metal Coatings
segment rebounded 83% from the 1994 first quarter, with all three
units contributing to the advance. At the Precoat Metals unit,
the further profit gain derived from increased sales was tempered
by start-up costs, including the cost to qualify products at the
new facility in Jackson, Mississippi. Sequa Can Machinery's
profits were up sharply from a low 1994 base, primarily due to a
significant improvement in operating efficiencies, cost
reductions implemented in 1994 and improved spare parts sales.
Profits for the full year are expected to exceed the 1994 level
for this operation. MEG narrowed its loss as a result of sharply
higher sales in the first quarter of 1995. Results for the year
at MEG are largely dependent on order input in the second and
third quarters.
Operating income in the Specialty Chemicals segment
declined 6% from a strong 1994 first quarter. At the overseas
unit, lower local currency results were offset by a favorable
shift in foreign exchange rates, and reported results were on a
par with the 1994 first quarter. Reduced earnings in local
currency resulted from both lower sales and an inability to pass
on to customers the full effect of significant increases in raw
material costs. At the domestic unit, in general, the lag
between rapidly escalating raw materials prices and the increase
of selling prices caused operating income to decline in the first
quarter.
Operating income of the Other Products segment registered a
solid advance, as the automotive products and the real estate
operations recorded gains and the can lid operation registered a
slight decline. The automotive products unit primarily
benefitted from the increased sales volume. At the can lid
operation, an unfavorable sales mix shift led to a small decline
in operating income. The profitability of the real estate unit
improved, as lower operating expenses more than offset a decline
in revenues.
<PAGE>
<PAGE>
Interest Expense
- ----------------
The decrease in interest expense of approximately $2.0
million was due to a decrease in average borrowings.
Other, Net
- ----------
In the first quarter of 1995, Other, net includes a $2.0
million gain on the sale of an investment and amortization of
capitalized debt costs in the amount of $0.5 million. The
Company's unconsolidated airbag business broke even during the
first quarter of 1995.
In the first quarter of 1994, Other, net includes a $3.2
million mark-to-market loss on interest-rate derivatives, $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 costs in the amount of $0.6 million.
Income Tax Provision
- --------------------
The effective tax rates for the first quarters of 1995 and
1994 were (400%) and 51%, respectively. These effective tax
rates were based upon estimated annual pre-tax foreign earnings
and estimated annual pre-tax domestic losses adjusted for
goodwill amortization. The effective rates also reflect the
effect of a provision for state income and franchise taxes, and
the favorable tax treatment of earnings of the Company's foreign
sales corporation. Separate domestic and foreign estimated
annual effective tax rates were determined and applied separately
to actual domestic losses and actual foreign earnings.
Liquidity
- ---------
Management anticipates that cash flow from operations,
proceeds from the divestiture of assets, the $95.8 million of
credit available at May 8, 1995 under the revolving credit
agreement, the $35.0 million of available financing under the
Receivables Purchase Agreement, plus cash and cash equivalents on
hand at March 31, 1995 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 and the ARC Propulsion operations
of the Aerospace segment, and the Can Machinery, MEG and Precoat
Metals operations of the Machinery and Metal Coatings segment.
The aggregate dollar amount of backlog in these segments at March
31, 1995 was $484.0 million ($448.3 million at December 31,
1994). There is no seasonal variation in the Company's backlog.
<PAGE>
Environmental Liabilities
- -------------------------
The Company's environmental department, under senior
management direction, manages all activities related to the
Company's involvement in environmental clean-up. This department
establishes the projected range of expenditures for individual
sites with respect to which the Company may be considered a
potentially responsible party under applicable federal or state
law. These projected expenditures, which are reviewed
periodically, include: remedial investigation and feasibility
studies; outside legal, consulting and remediation project
management fees; the projected cost of remediation activities;
site closure and post-remediation monitoring costs. The
assessments take into account currently available facts, existing
technology, presently enacted laws, past expenditures, and other
potentially responsible parties and their probable level of
involvement. Outside technical, scientific and legal consulting
services are used to support management's assessments of costs at
significant individual sites. It is the Company's policy to
accrue environmental remediation costs for identified sites when
it is probable that a liability has been incurred and the amount
of loss can be reasonably estimated. The potential exposure for
such costs is estimated to range from $26 million to $52 million.
At March 31, 1995, the Company's balance sheet includes accruals
for remediation costs of $47.7 million. These accruals are at
undiscounted amounts and are primarily included in accrued
expenses and other long-term liabilities. While the possibility
of recovery of some of the costs from insurance companies exists,
the Company does not recognize these recoveries in its financial
statements until they are realized. Actual costs to be incurred
at identified sites in future periods may vary from the
estimates, given inherent uncertainties in evaluating
environmental exposures.
With respect to all known environmental liabilities, it is
currently estimated that the Company will spend in the range of
$8 million to $12 million during each of the following several
years. Actual remedial expenditures for the first three months
of 1995 were approximately $2.9 million.
<PAGE>
<PAGE>
<TABLE>
SEQUA CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Amounts in thousands)
ASSETS
------
<CAPTION>
(Unaudited)
March 31, December 31,
1995 1994
---------- ----------
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 27,005 $ 18,655
Trade receivables (less allowances
of $12,516 and $12,448) 241,910 252,588
Unbilled receivables (less
allowances of $2,546 and $2,723) 35,033 35,688
Inventories 269,345 266,370
Other current assets 34,188 31,030
---------- ----------
Total current assets 607,481 604,331
---------- ----------
INVESTMENTS
Net assets of discontinued operations 152,115 154,395
Other investments 19,083 19,085
---------- ----------
171,198 173,480
---------- ----------
PROPERTY, PLANT AND EQUIPMENT, NET 514,571 524,150
---------- ----------
OTHER ASSETS
Excess of cost over net assets of
companies acquired 322,745 325,530
Deferred charges and other 19,792 20,757
---------- ----------
342,537 346,287
---------- ----------
TOTAL ASSETS $1,635,787 $1,648,248
========== ==========
<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,
1995 1994
---------- ----------
<S> <C> <C>
CURRENT LIABILITIES
Current maturities of long-term debt $ 3,347 $ 15,231
Accounts payable 112,909 118,429
Taxes on income 22,854 21,128
Accrued expenses 179,095 166,558
---------- ----------
Total current liabilities 318,205 321,346
---------- ----------
LONG-TERM DEBT, NET OF
CURRENT MATURITIES 578,334 586,574
---------- ----------
DEFERRED TAXES AND OTHER LONG-TERM
LIABILITIES
Deferred taxes on income 9,485 9,494
Other long-term liabilities 156,657 164,343
---------- ----------
166,142 173,837
---------- ----------
SHAREHOLDERS' EQUITY
Preferred stock--$1 par value,
1,825,000 shares authorized,
797,000 shares of $5 cumulative
convertible stock issued in
1995 and 1994 (involuntary
liquidation value--$26,359
at March 31, 1995) 797 797
Class A common stock--no par value,
25,000,000 shares authorized,
7,188,000 shares issued in 1995
and 1994 stated at 7,188 7,188
Class B common stock--no par value,
5,000,000 shares authorized,
3,727,000 shares issued in 1995
and 1994 stated at 3,727 3,727
Capital in excess of par value 287,204 287,204
Cumulative translation adjustment 7,318 (1,899)
Retained earnings 352,010 354,676
---------- ----------
658,244 651,693
Less: Cost of treasury stock 85,138 85,202
---------- ----------
Total shareholders' equity 573,106 566,491
---------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $1,635,787 $1,648,248
========== ==========
<FN>
The accompanying notes are an integral part of the financial
statements.
/TABLE
<PAGE>
<PAGE>
<TABLE>
SEQUA CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
YEAR ENDED DECEMBER 31, 1994 AND PERIOD ENDED MARCH 31, 1995
(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, 1993 $ 797 $7,054 $3,861 $295,841 $(16,771) $383,617 $ (98,615)
Net loss - - - - - (25,778) -
Issuance and amortization
of restricted stock grant - - - (1,313) - - 1,366
Treasury stock contributed
to pension plan - - - (7,324) - - 12,047
Exchange of common stock - 134 (134) - - - -
Foreign currency translation
adjustment - - - - 12,897 - -
Sale of foreign subsidiary - - - - 1,975 - -
Cash dividends:
Preferred - $5.00 per share - - - - - (3,163) -
------ ------ ------ -------- -------- -------- ---------
Balance at December 31, 1994 $ 797 $7,188 $3,727 $287,204 $ (1,899) $354,676 $ (85,202)
====== ====== ====== ======== ======== ======== =========
Net loss - - - - - (1,875) -
Amortization of restricted
stock grant - - - - - - 64
Foreign currency translation
adjustment - - - - 9,891 - -
Sale of foreign subsidiary - - - - (674) - -
Cash dividends:
Preferred - $1.25 per share - - - - - (791) -
------ ------ ------ -------- -------- -------- ---------
Balance at March 31, 1995 $ 797 $7,188 $3,727 $287,204 $ 7,318 $352,010 $ (85,138)
====== ====== ====== ======== ======== ======== =========
/TABLE
<PAGE>
<PAGE>
<TABLE>
SEQUA CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(Amounts in thousands)
(Unaudited)
<CAPTION>
For the Three Months
Ended March 31,
--------------------
1995 1994
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Loss before income taxes $ (375) $ (2,958)
Adjustments to reconcile loss to net cash
provided by operating activities:
Depreciation and amortization 23,813 25,251
Provision for losses on receivables 538 802
Other items not requiring (providing) cash (1,714) 784
Changes in operating assets and liabilities,
net of business sold:
Receivables 8,201 16,347
Inventories (12,382) (29,460)
Other current assets (3,422) 9,496
Accounts payable and accrued expenses 5,761 12,745
Other long-term liabilities (4,342) (240)
-------- --------
Net cash provided by continuing operations
before income taxes 16,078 32,767
Net cash provided by discontinued
operations before income taxes 873 26,508
Income taxes refunded (paid), net 265 (2,140)
-------- --------
Net cash provided by operating activities 17,216 57,135
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of minority interest in subsidiary - (16,701)
Purchase of property, plant and equipment (13,332) (11,570)
Business sold 5,162 -
Sale of investment 2,582 -
Sale of property, plant and equipment 1,406 1,626
Other investing activities 131 (5,094)
-------- --------
Net cash used for investing activities (4,051) (31,739)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of debt 595 -
Payments of debt (4,341) (18,110)
Dividends paid (791) -
-------- --------
Net cash used for financing activities (4,537) (18,110)
-------- --------
Effect of exchange rate changes on cash
and cash equivalents (278) (57)
-------- --------
Net increase in cash and cash equivalents 8,350 7,229
Cash and cash equivalents at beginning of period 18,655 24,780
-------- --------
Cash and cash equivalents at end of period $ 27,005 $ 32,009
======== ========
<FN>
The accompanying notes are an integral part of the financial statements.
/TABLE
<PAGE>
<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. 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 mark-to-
market the carrying value of interest-rate derivatives. All
other adjustments in the March 31, 1994 interim period consisted
of normal recurring items. All adjustments to the March 31, 1995
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, 1995
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, 1995 and December 31, 1994 were as
follows:
<CAPTION>
(Amounts in thousands)
(Unaudited)
March 31, 1995 December 31, 1994
-------------- -----------------
<S> <C> <C>
Finished Goods $ 77,301 $ 68,965
Work in process 79,614 64,312
Raw materials 114,316 130,596
Long-term contract costs 9,204 7,728
Progress payments (11,090) (5,231)
-------- --------
$269,345 $266,370
======== ========
</TABLE>
<TABLE>
NOTE 3 - DISCONTINUED OPERATIONS
Net assets of discontinued operations approximate net realizable value
and have been classified as non-current. A summary of the net assets of
discontinued operations is as follows:
<CAPTION>
(Amounts in thousands)
(Unaudited)
March 31, December 31,
1995 1994
-------- --------
<S> <C> <C>
Receivables, net $ 9,400 $ 6,774
Inventories 8,037 9,788
Investment in leveraged leases and other
investments 162,217 163,857
Property, plant, and equipment 3,115 3,515
Other assets 10,505 10,861
-------- --------
Total assets 193,274 194,795
-------- --------
Accounts payable 3,579 2,550
Accrued expenses 9,715 12,023
Debt 26,911 24,657
Other long-term liabilities 954 1,170
-------- --------
Total liabilities 41,159 40,400
-------- --------
Net assets of discontinued operations $152,115 $154,395
======== ========
</TABLE>
Debt of discontinued operations represents the principal amount
of the $25.0 million in proceeds received from the non-recourse
securitization of Sequa Capital's leveraged lease portfolio in
1994. The leveraged lease cash flow stream will service the
payment of interest and principal until the loan is paid off. To
the extent that the leveraged lease cash flow stream during the
next several years is less than the amount necessary to service
the debt, the principal amount of the loan will increase.
Subsequent to the payment of the secured indebtedness, the
remaining investment in leveraged leases will be liquidated over
time as rentals are received and residual values are realized.
Disposal activities are ongoing for other discontinued assets.
<PAGE>
<PAGE>
NOTE 4 - LOSS PER SHARE
Primary losses per common share in 1995 and 1994 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 9,867,000 and 9,655,000 shares
for the three month periods in 1995 and 1994, respectively.
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 1995 and 1994.
NOTE 5 - SUPPLEMENTAL CASH FLOW INFORMATION
<TABLE>
<CAPTION>
(Amounts in thousands)
Three Months Ended
------------------
March 31,
---------
1995 1994
---- ----
<S> <C> <C>
Net cash provided by discontinued
operations:
Changes in working capital $ (1,842) $ (6,143)
Increase in debt 2,254 24,657
Principal repayments on leasing assets 1,565 2,455
Sale of leasing assets 475 9,636
Other changes in net assets (1,579) (4,097)
-------- --------
$ 873 $ 26,508
======== ========
</TABLE>
Other supplemental Cash Flow information:
Interest paid during the three months ended March 31, 1995 and
1994 was $0.1 million and $2.2 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 1994, the
arbitral tribunal issued an award of $16.3 million plus interest
in favor of Chromalloy Gas Turbine. At March 31, 1995, the
Company's Consolidated Balance Sheet includes net assets of
approximately $17.5 million related to this issue. Chromalloy
has filed a petition in the US District Court for the District of
Columbia to confirm and enforce the award, and the Egyptian Air
Force has filed a challenge to this award in the Court of Appeal
of Cairo.
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 Company's
Consolidated financial position, although the resolution in any
reporting period of one or more matters could have a significant
impact on the Company's results of operations for that period.
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, 1995 and 1994.
(B) Reports on Form 8-K
No report on Form 8-K was filed during the three-month
period ended March 31, 1995.
<PAGE>
<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 12, 1995
<PAGE>
<TABLE>
EXHIBIT 11
SEQUA CORPORATION
CALCULATION OF PRIMARY AND FULLY DILUTED LOSS PER SHARE
-------------------------------------------------------
<CAPTION>
For the Three Months
Ended March 31,
------------------
1995 1994
---- ----
<S> <C> <C>
PRIMARY
Loss
Loss before extraordinary loss $(1,875) $(1,458)
Preferred stock dividend requirements (791) (791)
------- -------
Loss applicable to common shareholders
before extraordinary loss (2,666) (2,249)
Extraordinary loss on early retirement of debt - (1,083)
------- -------
Net loss applicable to common shareholders $(2,666) $(3,332)
======= =======
Shares
Common and common equivalent shares 9,867 9,655
======= =======
Primary loss per common share
Loss before extraordinary loss $ (.27) $ (.23)
Extraordinary loss on early retirement of debt - (.11)
------- -------
Net loss $ (.27) $ (.34)
======= =======
*FULLY DILUTED
Loss
Loss before extraordinary loss $(1,875) $(1,458)
Extraordinary loss on early retirement of debt - (1,083)
------- -------
Net loss $(1,875) $(2,541)
======= =======
Shares
Common and common equivalent shares 10,705 10,493
======= =======
Fully diluted loss per common share
Net loss from continuing operations
before extraordinary loss $ (.18) $ (.14)
Extraordinary loss on early retirement of debt - (.10)
------- -------
Net loss $ (.18) $ (.24)
======= =======
SHARES
Weighted average common shares outstanding 9,867 9,655
Preferred stock assumed to be converted 838 838
------- -------
Common and common equivalent shares 10,705 10,493
======= =======
<FN>
(*)The 1995 and 1994 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>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<CASH> 27,005
<SECURITIES> 0
<RECEIVABLES> 292,005
<ALLOWANCES> 15,062
<INVENTORY> 269,345
<CURRENT-ASSETS> 607,481
<PP&E> 1,065,105
<DEPRECIATION> 550,534
<TOTAL-ASSETS> 1,635,787
<CURRENT-LIABILITIES> 318,205
<BONDS> 578,334
<COMMON> 10,915
0
797
<OTHER-SE> 561,394
<TOTAL-LIABILITY-AND-EQUITY> 1,635,787
<SALES> 327,534
<TOTAL-REVENUES> 327,534
<CGS> 261,511
<TOTAL-COSTS> 316,427
<OTHER-EXPENSES> (1,864)
<LOSS-PROVISION> 538
<INTEREST-EXPENSE> 13,346
<INCOME-PRETAX> (375)
<INCOME-TAX> 1,500
<INCOME-CONTINUING> (1,875)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,875)
<EPS-PRIMARY> (0.27)
<EPS-DILUTED> (0.18)
</TABLE>
