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 June 30, 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 1-6903
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
39,879,028
(Number of shares of common stock outstanding as of June 30,
1994)
Part I
Item 1 - Financial Statements
Trinity Industries, Inc.
Consolidated Balance Sheet
(unaudited)
(in millions except per share data)
June 30 March 31
Assets 1994 1994
Cash and cash equivalents . . . . . . . . . $ 14.3 $ 8.7
Receivables . . . . . . . . . . . . . . . . 269.8 264.9
Inventories:
Finished goods. . . . . . . . . . . . . . 36.0 28.2
Work in process . . . . . . . . . . . . . 121.5 119.0
Raw material and supplies . . . . . . . . 172.3 181.6
Total inventories 329.8 328.8
Property, plant and equipment, at cost:
Excluding Leasing Subsidiary. . . . . . . 620.4 590.8
Leasing Subsidiary. . . . . . . . . . . . 480.4 479.2
Less accumulated depreciation:
Excluding Leasing Subsidiary. . . . . . . (274.1) (263.0)
Leasing Subsidiary. . . . . . . . . . . . (144.6) (139.9)
Other assets. . . . . . . . . . . . . . . . 40.1 37.3
$1,336.1 $1,306.8
Liabilities and Stockholders' Equity
Short-term debt . . . . . . . . . . . . . . $ 199.0 $ 192.0
Accounts payable and accrued liabilities. . 181.1 161.6
Billings in excess of cost and related
earnings. . . . . . . . . . . . . . . . . 7.1 12.6
Long-term debt:
Excluding Leasing Subsidiary. . . . . . . 40.9 41.9
Leasing Subsidiary. . . . . . . . . . . . 226.8 236.0
Deferred income taxes . . . . . . . . . . . 75.7 73.9
Other liabilities . . . . . . . . . . . . . 18.0 18.3
748.6 736.3
Stockholders' equity:
Common stock - par value $1 per share;
authorized 100.0 shares; shares issued
and outstanding at June 30, 1994 - 39.9
and March 31, 1994 - 39.7. . . . . . . . 39.9 39.7
Capital in excess of par value. . . . . . 218.5 213.4
Retained earnings . . . . . . . . . . . . 329.1 317.4
587.5 570.5
$1,336.1 $1,306.8
<PAGE>
Trinity Industries, Inc.
Consolidated Income Statement
(unaudited)
(in millions except per share data)
Three Months
Ended June 30
1994 1993
Revenues. . . . . . . . . . . . . . . . . . . . . . $544.3 $402.2
Operating costs:
Cost of revenues. . . . . . . . . . . . . . . . . 478.5 344.4
Selling, engineering and administrative expenses. 25.2 22.0
Interest expense of Leasing Subsidiary. . . . . . 5.6 6.0
Retirement plans expense. . . . . . . . . . . . . 2.6 2.2
511.9 374.6
Operating profit. . . . . . . . . . . . . . . . . . 32.4 27.6
Other (income) expenses:
Interest income . . . . . . . . . . . . . . . . . (0.2) (0.4)
Interest expense - excluding Leasing Subsidiary . 2.2 0.9
Other, net. . . . . . . . . . . . . . . . . . . . (0.2) -
1.8 0.5
Income before income taxes and cumulative effect
of change in accounting for income taxes . . . . . 30.6 27.1
Provision for income taxes:
Current . . . . . . . . . . . . . . . . . . . . . 11.5 10.3
Deferred. . . . . . . . . . . . . . . . . . . . . 0.6 -
12.1 10.3
Income before cumulative effect of change in
accounting for income taxes. . . . . . . . . . . . 18.5 16.8
Cumulative effect as of April 1, 1993 of change
in accounting for income taxes . . . . . . . . . . - 7.9
Net income. . . . . . . . . . . . . . . . . . . . . $ 18.5 $ 24.7
Income per common and common equivalent share
before cumulative effect of change in accounting
for income taxes . . . . . . . . . . . . . . . . . $ 0.46 $ 0.42
Cumulative effect of change in accounting for
income taxes . . . . . . . . . . . . . . . . . . . - 0.20
Net income per common and common equivalent share . $ 0.46 $ 0.62
Weighted average number of common and common
equivalent shares outstanding. . . . . . . . . . . 40.5 39.9
Earnings per share for the three months ended June 30, 1993 is adjusted for
the three-for-two stock split distributed on August 31, 1993.
<PAGE>
Trinity Industries, Inc.
Consolidated Statement of Cash Flows
(unaudited)
(in millions)
Three Months
Ended June 30
1994 1993
Cash flows from operating activities:
Net income . . . . . . . . . . . . . . . . . . . . $ 18.5 $ 24.7
Adjustments to reconcile net income to net cash
provided (required) by operating activities:
Depreciation:
Excluding Leasing Subsidiary. . . . . . . . . . 12.1 10.1
Leasing Subsidiary. . . . . . . . . . . . . . . 4.8 4.8
Deferred provision for income taxes. . . . . . . 0.6 -
Gain on sale of property, plant and equipment. . (0.1) (0.1)
Cumulative effect of change in accounting for
income taxes. . . . . . . . . . . . . . . . . . - (7.9)
Other. . . . . . . . . . . . . . . . . . . . . . 0.3 0.4
Changes in assets and liabilities:
Increase in receivables . . . . . . . . . . . . (3.7) (17.2)
(Increase) decrease in inventories. . . . . . . 0.8 (14.0)
Increase in other assets . . . . . . . . . . . (1.0) (0.8)
Increase (decrease) in accounts payable
and accrued liabilities. . . . . . . . . . . . 19.5 (1.1)
Decrease in billings in excess of cost and
related earnings . . . . . . . . . . . . . . . (5.5) (7.8)
Increase (decrease) in other liabilities. . . . (0.3) 0.3
Total adjustments . . . . . . . . . . . . . . 27.5 (33.3)
Net cash provided (required) by operating
activities. . . . . . . . . . . . . . . . . . . 46.0 (8.6)
Cash flows from investing activities:
Proceeds from sale of property, plant
and equipment . . . . . . . . . . . . . . . . . . 1.6 1.0
Capital expenditures:
Excluding Leasing Subsidiary. . . . . . . . . . . (17.2) (7.8)
Leasing Subsidiary. . . . . . . . . . . . . . . . (2.6) (9.8)
Payment for purchase of acquisitions,
net of cash acquired. . . . . . . . . . . . . . . (12.8) (16.3)
Cash of acquired subsidiary. . . . . . . . . . . . 1.2 -
Net cash required by investing activities. . . . (29.8) (32.9)
Cash flows from financing activities:
Issuance of common stock . . . . . . . . . . . . . 0.4 6.8
Net borrowings under short-term debt . . . . . . . 7.0 30.0
Proceeds from issuance of long-term debt . . . . . - 20.0
Payments to retire long-term debt. . . . . . . . . (11.3) (10.2)
Dividends paid . . . . . . . . . . . . . . . . . . (6.7) (5.2)
Net cash provided (required) by
financing activities. . . . . . . . . . . . . . (10.6) 41.4
Net increase (decrease) in cash and cash
equivalents. . . . . . . . . . . . . . . . . . . . 5.6 (0.1)
Cash and cash equivalents at beginning of year. . . 8.7 7.5
Cash and cash equivalents at end of period. . . . . $ 14.3 $ 7.4
<TABLE>
Trinity Industries, Inc.
Consolidated Statement of Stockholders' Equity
(unaudited)
(in millions except share and per share data)
<CAPTION>
Common Capital
Common Stock in Total
Shares $1.00 Excess Stock-
(100,000,000 Par of Par Retained holders'
Authorized) Value Value Earnings Equity
<S> <C> <C> <C> <C> <C>
Balance at March 31, 1993 . . . . 26,076,549 $26.1 $214.5 $266.7 $507.3
Other. . . . . . . . . . . . . . 225,170 0.2 6.6 - 6.8
Net income . . . . . . . . . . . - - - 24.7 24.7
Cash dividends
($0.13 per share) . . . . . . . - - - (5.2) (5.2)
Balance June 30, 1993 . . . . . . 26,301,719 $26.3 $221.1 $286.2 $533.6
Balance at March 31, 1994 . . . . 39,711,698 $39.7 $213.4 $317.4 $570.5
Other. . . . . . . . . . . . . . 167,330 0.2 5.1 - 5.3
Net income . . . . . . . . . . . - - - 18.5 18.5
Cash dividends
($0.17 per share) . . . . . . - - - (6.8) (6.8)
Balance June 30, 1994 . . . . . . 39,879,028 $39.9 $218.5 $329.1 $587.5
</TABLE>
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 June 30, 1994 and March 31, 1994, the results of
operations for the three month periods ended June 30, 1994 and 1993 and
cash flows for the three month periods ended June 30, 1994 and 1993, in
conformity with generally accepted accounting principles, have been made.
<PAGE>
Trinity Industries, Inc.
Notes to Consolidated Financial Statements
June 30, 1994
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 June 30, 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 deferred liabilities and assets at April 1, 1993 follow:
(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 for financial
purposes and related items. . . . . . . . . . (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 'Property, plant and equipment, at cost: Excluding Leasing
Subsidiary' at June 30, 1994 compared to March 31, 1994 is due principally
to certain acquisitions in the Construction Products and Marine Products
segments.
Statement of Operations
Three Months Ended June 30, 1994 vs.
Three Months Ended June 30, 1993
'Revenues' increased in the current three month period compared to the same
period of a year ago due primarily to increased business in the Railcars,
Marine Products, and Containers segments. The increase was offset slightly
by decreased 'Revenues' recorded by the Construction Products segment.
The replacement market for railcars and marine products continues to
contribute to the increase in demand for freight cars, tank cars, barges,
and marine vessels. At the end of the current quarter, record orders on
hand for the Railcars segment and significant inquiries and quotes
outstanding for the Marine Products segment indicate that this trend should
continue. 'Revenues' in the Containers segment increased due primarily to
higher demand for LPG containers due to the improvement in the residential
housing industry. Construction Products' 'Revenues' for the current
quarter declined slightly due principally to the completion of a
significant passenger loading bridge contract in the prior year, offset
somewhat by increased revenues from the acquisition of certain concrete
operations in fiscal 1994 and the early part of the current quarter.
Demand for construction products is expected to remain favorable as
attention is focused on the repair and upgrading of the nation's bridges
and highways.
The increase in 'Operating profit' in the current period is principally due
to the improved results from the Railcars segment. Construction Products
segment 'Operating profit' declined modestly due to the reason stated above
regarding a prior year passenger loading bridge contract.
Subsequent Events
At the Annual Meeting of Stockholders held July 20, 1994, stockholders
reelected eight incumbent directors for a one year term and approved the
Annual Incentive Bonus Plan for Selected Executives.
<PAGE>
Part II
Item 1 - Legal Proceedings.
On May 19, 1994, the jury in the case styled Morse-Diesel, Inc. v. Mosher
Steel Company and the Registrant, awarded judgment in favor of Morse-
Diesel, Inc. in the amount of $25,775,933 plus statutory interest from
September 1985.
The Registrant has been advised by legal counsel that there remain
substantial defenses and remedies, and the Registrant intends to pursue all
available avenues in the post trial and appellate review processes.
Item 6 - Exhibits and Reports on Form 8-K.
Form 8-K was filed on June 2, 1994 that reported the decision referred to
above in Item 1 - Legal Proceedings.
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
August 10, 1994
<PAGE>
