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 December 31, 1993
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 1-6903
TRINITY INDUSTRIES, INC.
(Exact name of Registrant as specified in its charter)
Incorporated Under the Laws 75-0225040
of the State of Delaware (I.R.S. Employer
Identification No.)
2525 Stemmons Freeway
Dallas, Texas 75207-2401
(Address of Principal (Zip Code)
Executive Offices)
Registrant's Telephone Number,
Including Area Code (214) 631-4420
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
and (2) has been subject to such filing requirements for the past
90 days.
Yes X No
39,635,147
(Number of shares of common stock outstanding as of December 31,
1993)
Part I
Item 1 - Financial Statements
Trinity Industries, Inc.
Consolidated Balance Sheet
(unaudited)
(in millions except per share data)
December 31 March 31
Assets 1993 1993
Cash and cash equivalents . . . . . . . . . $ 5.4 $ 7.5
Receivables . . . . . . . . . . . . . . . . 205.1 203.2
Inventories:
Finished goods. . . . . . . . . . . . . . 25.1 15.5
Work in process . . . . . . . . . . . . . 101.2 90.9
Raw material and supplies . . . . . . . . 129.1 104.8
Total inventories 255.4 211.2
Property, plant and equipment, at cost:
Excluding Leasing Subsidiary. . . . . . . 570.2 509.8
Leasing Subsidiary. . . . . . . . . . . . 485.3 476.9
Less accumulated depreciation:
Excluding Leasing Subsidiary. . . . . . . (253.9) (223.5)
Leasing Subsidiary. . . . . . . . . . . . (139.6) (132.2)
Other assets. . . . . . . . . . . . . . . . 39.2 36.2
$1,167.1 $1,089.1
Liabilities and Stockholders' Equity
Short-term debt . . . . . . . . . . . . . . $ 92.0 $ 15.0
Accounts payable and accrued liabilities. . 125.7 140.1
Billings in excess of cost and related
earnings. . . . . . . . . . . . . . . . . 13.0 32.0
Long-term debt:
Excluding Leasing Subsidiary. . . . . . . 42.8 49.2
Leasing Subsidiary. . . . . . . . . . . . 240.6 244.0
Deferred income taxes . . . . . . . . . . . 75.7 85.9
Other liabilities . . . . . . . . . . . . . 18.2 15.6
Stockholders' equity:
Common stock - par value $1 per share;
authorized at December 31, 1993 -
100.0 shares and March 31, 1993 -
40.0 shares; shares issued and out-
standing at December 31, 1993 -
39.6 and March 31, 1993 - 26.1 . . . . . 39.6 26.1
Capital in excess of par value. . . . . . 210.6 214.5
Retained earnings . . . . . . . . . . . . 308.9 266.7
559.1 507.3
$1,167.1 $1,089.1
<PAGE>
Trinity Industries, Inc.
Consolidated Income Statement
(unaudited)
(in millions except per share data)
Nine Months Ended
December 31
1993 1992
Revenues. . . . . . . . . . . . . . . . . . . . . . $1,332.2 $1,151.1
Operating costs:
Cost of revenues. . . . . . . . . . . . . . . . . 1,147.1 1,001.3
Selling, engineering and administrative expenses. 69.6 69.7
Interest expense of Leasing Subsidiary. . . . . . 18.0 21.1
Retirement plans expense. . . . . . . . . . . . . 6.8 8.1
1,241.5 1,100.2
Operating profit. . . . . . . . . . . . . . . . . . 90.7 50.9
Other (income) expenses:
Interest income . . . . . . . . . . . . . . . . . (1.4) (1.0)
Interest expense - excluding Leasing Subsidiary . 3.7 3.5
Other, net. . . . . . . . . . . . . . . . . . . . (1.1) (0.2)
1.2 2.3
Income before income taxes and cumulative effect
of change in accounting for income taxes . . . . . 89.5 48.6
Provision for income taxes:
Current . . . . . . . . . . . . . . . . . . . . . 29.1 13.5
Deferred. . . . . . . . . . . . . . . . . . . . . 5.2 4.8
Effect of statutory rate increase . . . . . . . . 2.1 -
36.4 18.3
Income before cumulative effect of accounting
change for income taxes. . . . . . . . . . . . . . 53.1 30.3
Cumulative effect as of April 1, 1993 of change
in method of accounting for income taxes . . . . . 7.9 -
Net income. . . . . . . . . . . . . . . . . . . . . $ 61.0 $ 30.3
Income per common and common equivalent share
before cumulative effect of accounting change
for income taxes . . . . . . . . . . . . . . . . . $ 1.32 $ 0.87
Cumulative effect of accounting change for income
taxes. . . . . . . . . . . . . . . . . . . . . . . 0.20 -
Net income per common and common equivalent share . $ 1.52 $ 0.87
Weighted average number of common and common
equivalent shares outstanding. . . . . . . . . . . 40.2 34.9
Earnings per share for the nine months ended December 31, 1992 is restated
for the three-for-two stock split distributed on August 31, 1993.
<PAGE>
Trinity Industries, Inc.
Consolidated Income Statement
(unaudited)
(in millions except per share data)
Three Months Ended
December 31
1993 1992
Revenues. . . . . . . . . . . . . . . . . . . . . . $466.4 $392.6
Operating costs:
Cost of revenues. . . . . . . . . . . . . . . . . 403.3 337.8
Selling, engineering and administrative expenses. 24.7 25.3
Interest expense of Leasing Subsidiary. . . . . . 5.9 7.0
Retirement plans expense. . . . . . . . . . . . . 2.4 2.1
436.3 372.2
Operating profit. . . . . . . . . . . . . . . . . . 30.1 20.4
Other (income) expenses:
Interest income . . . . . . . . . . . . . . . . . (0.7) (0.2)
Interest expense - excluding Leasing Subsidiary . 1.4 1.1
Other, net. . . . . . . . . . . . . . . . . . . . (0.5) (0.2)
0.2 0.7
Income before income taxes . . . . . . . . . . . . 29.9 19.7
Provision for income taxes:
Current . . . . . . . . . . . . . . . . . . . . . 10.2 5.8
Deferred. . . . . . . . . . . . . . . . . . . . . 1.2 1.6
11.4 7.4
Net income. . . . . . . . . . . . . . . . . . . . . $ 18.5 $ 12.3
Net income per common and common equivalent share . $ 0.46 $ 0.35
Weighted average number of common and common
equivalent shares outstanding. . . . . . . . . . . 40.2 34.9
Earnings per share for the three months ended December 31, 1992 is restated
for the three-for-two stock split distributed on August 31, 1993.
<PAGE>
Trinity Industries, Inc.
Consolidated Statement of Cash Flows
(unaudited)
(in millions)
Nine Months Ended
December 31
1993 1992
Cash flows from operating activities:
Net income. . . . . . . . . . . . . . . . . . . . . . . $ 61.0 $ 30.3
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation:
Excluding Leasing Subsidiary . . . . . . . . . . . . 29.5 27.5
Leasing Subsidiary . . . . . . . . . . . . . . . . . 14.2 16.5
Deferred provision for income taxes . . . . . . . . . 5.2 4.8
(Gain) loss on sale of property, plant and equipment. (0.1) 0.1
Cumulative effect of change in accounting for
income taxes. . . . . . . . . . . . . . . . . . . . (7.9) -
Effect of statutory tax rate increase. . . . . . . . 2.1 -
Other. . . . . . . . . . . . . . . . . . . . . . . . (0.5) 0.5
Changes in assets and liabilities:
Decrease in receivables . . . . . . . . . . . . . . 0.2 12.6
(Increase) decrease in inventories. . . . . . . . . (40.6) 15.4
Increase in other assets . . . . . . . . . . . . . (7.4) (7.0)
Increase (decrease) in accounts payable
and accrued liabilities. . . . . . . . . . . . . . (26.1) 7.0
Decrease in billings in excess of cost and
related earnings . . . . . . . . . . . . . . . . . (19.0) (1.2)
Increase (decrease) in other liabilities. . . . . . 2.5 (1.3)
Total adjustments . . . . . . . . . . . . . . . . (47.9) 74.9
Net cash provided by operating activities. . . . . . 13.1 105.2
Cash flows from investing activities:
Proceeds from sale of property, plant and equipment. . 14.6 2.5
Capital expenditures:
Excluding Leasing Subsidiary. . . . . . . . . . . . . (29.9) (28.0)
Leasing Subsidiary. . . . . . . . . . . . . . . . . . (27.0) (55.7)
Payment for purchase of acquisitions, net of
cash acquired . . . . . . . . . . . . . . . . . . . . (31.5) (14.9)
Cash of acquired subsidiary. . . . . . . . . . . . . . 0.1 0.7
Net cash required by investing activities. . . . . . (73.7) (95.4)
Cash flows from financing activities:
Issuance of common stock . . . . . . . . . . . . . . . 8.5 3.2
Net borrowings under short-term debt . . . . . . . . . 77.0 (20.0)
Proceeds from issuance of long-term debt . . . . . . . 20.0 60.0
Payments to retire long-term debt. . . . . . . . . . . (29.8) (27.8)
Dividends paid . . . . . . . . . . . . . . . . . . . . (17.2) (13.2)
Net cash provided by financing activities. . . . . . 58.5 2.2
Net increase (decrease) in cash and cash equivalents. . (2.1) 12.0
Cash and cash equivalents at beginning of year. . . . . 7.5 6.1
Cash and cash equivalents at end of period. . . . . . . $ 5.4 $ 18.1
Supplemental schedule of non-cash investing and
financing activities:
Common stock issued for acquisition . . . . . . . . . $ 0.9 $ 3.1
Trinity Industries, Inc.
Consolidated Statement of Stockholders' Equity
(unaudited)
(in millions except share and per share data)
Common Capital
Stock in Total
$1.00 Excess Stock-
Common Par of Par Retained holders'
Shares Value Value Earnings Equity
Balance at March 31, 1992 as
as previously reported. . 21,117,470 $21.1 $116.4 $208.1 $345.6
Adjustment for pooling of
interests. . . . . . . . . 1,621,448 1.6 (0.6) 29.6 30.6
Adjustment for cumulative
effect on prior years of
the change in method of
accounting for inventory
for pooled company . . . . - - - 2.8 2.8
Balance at March 31, 1992
as restated. . . . . . . . 22,738,918 22.7 115.8 240.5 379.0
Other . . . . . . . . . . . 380,945 0.4 5.8 - 6.2
Net income. . . . . . . . . - - - 30.3 30.3
Cash dividends
($0.58 per share). . . . . - - - (13.5) (13.5)
Balance December 31, 1992. . 23,119,863 $23.1 $121.6 $257.3 $402.0
Balance March 31, 1993 . . . 26,076,549 $26.1 $214.5 $266.7 $507.3
Three-for-two stock split . 13,158,164 13.2 (13.2) - -
Other . . . . . . . . . . . 400,434 0.3 9.3 - 9.6
Net income. . . . . . . . . - - - 61.0 61.0
Cash dividends
($0.4733 per share). . . . - - - (18.8) (18.8)
Balance December 31, 1993. . 39,635,147 $39.6 $210.6 $308.9 $559.1
The number of authorized shares of common stock was increased from 40,000,000
to 100,000,000 at the Annual Meeting of Stockholders held July 21, 1993.
Combined dividends per share for the nine months ended December 31, 1992 were
calculated by dividing the sum of the cash dividends declared by Trinity and
the cash dividends declared by Syro, Inc. (formerly Syro Steel Company), the
pooled company, by the total number of common shares outstanding. Individ-
ually, for the nine months ended December 31, 1992, Trinity's dividend was
$0.60 per share and Syro's dividend was $0.12 per share.
Dividends per share for the current fiscal year were $0.1333 in the first
quarter and $0.17 per share in the second quarter and third quarter.
The foregoing consolidated financial statements are unaudited and have been
prepared from the books and records of the Registrant. In the opinion of
the Registrant, all adjustments, consisting only of normal and recurring
adjustments necessary to a fair presentation of the financial position of
the Registrant as of December 31, 1993 and March 31, 1993, the results of
operations for the nine and three month periods ended December 31, 1993 and
1992 and cash flows for the nine month periods ended December 31, 1993 and
1992, in conformity with generally accepted accounting principles, have
been made.
Trinity Industries, Inc.
Notes to Consolidated Financial Statements
December 31, 1993
Income Taxes
Effective April 1, 1993, Trinity adopted Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes." This Statement requires
a change from the deferred to the liability method of computing income
taxes. As permitted by Statement No. 109, Trinity has elected not to
restate the financial statements of any prior period. The effect of the
change on pretax income for the period ended December 31, 1993 is not
material. The cumulative effect of applying the change in accounting
method is a decrease in Trinity's deferred tax liability and a nonrecurring
credit of $7.9 million or $0.20 earnings per share.
The components of the deferred taxes at April 1, 1993 were as follows: (in
millions)
Deferred tax liabilities:
Excess of tax depreciation over financial
statement depreciation. . . . . . . . . . . . $ 94.1
Total deferred tax liabilities . . . . . . 94.1
Deferred tax assets:
Profits on long-term contracts recorded on
the percentage of completion method . . . . . 0.8
Pensions and other benefits. . . . . . . . . . 16.8
Accounts receivable and inventory valuation. . 0.4
Other. . . . . . . . . . . . . . . . . . . . . 2.8
Total deferred tax assets. . . . . . . . . 20.8
Net deferred tax liabilities . . . . . . . $ 73.3
<PAGE>
Item 2 - Management's Discussion and Analysis of Consolidated Financial
Condition and Statement of Operations
FINANCIAL CONDITION
The increase in 'Inventories' at December 31, 1993 compared to March 31,
1993 is due primarily to the increased level of business in the Railcars
and Construction Products segments.
The increase in 'Property, plant and equipment, at cost: Excluding Leasing
Subsidiary' is due principally to certain acquisitions in the Railcars,
Marine Products, and Construction Products segments.
The increase in 'Short-term debt' is due principally to the acquisitions
stated above and to support increased levels of business.
Statement of Operations
Nine Months Ended December 31, 1993 vs.
Nine Months Ended December 31, 1992
'Revenues' increased in the current nine month period compared to the same
period of a year ago due primarily to increased business in the Railcars
and Construction Products segments. The increase was offset somewhat by
decreased revenues recorded by the Marine Products segment.
Driven by the replacement market for railcars, demand continues for both
freight and tank cars and railcar related products. Railcar segment orders
on hand increased significantly during the current quarter. The increase
in Construction Products' 'Revenues' is due to the acquisition of certain
Texas concrete operations in fiscal 1993 and 1994 coupled with increased
demand for the Registrant's highway related products. Although demand in
the Marine Products segment remains strong, current period comparable
'Revenues' are lower due to the completion of a significant contract in the
prior year.
The increase in 'Operating profit' in the current period is principally due
to the improved results from the Railcars, Construction Products and
Leasing segments. 'Operating profit' for the Containers segment declined
somewhat as market conditions for large pressure vessels have become
competitive. Marine Products segment 'Operating profit' declined modestly
due to the facts stated above, but it's 'Operating profit as a percent of
revenues' was slightly higher in the current period compared to the same
period of a year ago as market conditions improve for military and
commercial vessels.
Three Months Ended December 31, 1993 vs.
Three Months Ended December 31, 1992
Both 'Revenues' and 'Operating profit' in the current quarter were greater
than the same quarter of a year ago due primarily to increased business in
the Railcars and Construction Products segments. As stated above, railcar
orders during the current quarter increased significantly and
infrastructure requirements are fueling expanded production in the
Construction Products segment.
Part II
Item 6 - Exhibits and Reports on Form 8-K.
No Form 8-K was filed during the quarter.
Pursuant to the requirements of Section 13 or 15(d) 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.
Trinity Industries, Inc.
By: F. Dean Phelps
F. Dean Phelps
Vice President
February 9, 1994<PAGE>
