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, 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
40,208,736
(Number of shares of common stock outstanding as of December 31, 1994)
Part I
Item 1 - Financial Statements
Trinity Industries, Inc.
Consolidated Balance Sheet
(unaudited)
(in millions except per share data)
December 31 March 31
Assets 1994 1994
Cash and cash equivalents . . . . . . . . . $ 2.4 $ 8.7
Receivables . . . . . . . . . . . . . . . . 274.0 264.9
Inventories:
Finished goods. . . . . . . . . . . . . . 26.4 28.2
Work in process . . . . . . . . . . . . . 121.3 119.0
Raw material and supplies . . . . . . . . 200.4 181.6
Total inventories 348.1 328.8
Property, plant and equipment, at cost:
Excluding Leasing Subsidiary. . . . . . . 678.5 590.8
Leasing Subsidiary. . . . . . . . . . . . 456.7 479.2
Less accumulated depreciation:
Excluding Leasing Subsidiary. . . . . . . (295.8) (263.0)
Leasing Subsidiary. . . . . . . . . . . . (135.3) (139.9)
Other assets. . . . . . . . . . . . . . . . 42.1 37.3
$1,370.7 $1,306.8
Liabilities and Stockholders' Equity
Short-term debt . . . . . . . . . . . . . . $ 199.0 $ 192.0
Accounts payable and accrued liabilities. . 206.0 161.6
Billings in excess of cost and related
earnings. . . . . . . . . . . . . . . . . 8.2 12.6
Long-term debt:
Excluding Leasing Subsidiary. . . . . . . 38.5 41.9
Leasing Subsidiary. . . . . . . . . . . . 207.3 236.0
Deferred income taxes . . . . . . . . . . . 69.4 73.9
Other liabilities . . . . . . . . . . . . . 19.4 18.3
747.8 736.3
Stockholders' equity:
Common stock - par value $1 per share;
authorized 100.0 shares; shares issued
and outstanding at December 31, 1994 -
40.2 and March 31, 1994 - 39.7 . . . . . 40.2 39.7
Capital in excess of par value. . . . . . 222.3 213.4
Retained earnings . . . . . . . . . . . . 360.4 317.4
622.9 570.5
$1,370.7 $1,306.8
<PAGE>
Trinity Industries, Inc.
Consolidated Income Statement
(unaudited)
(in millions except per share data)
Nine Months
Ended December 31
1994 1993
Revenues. . . . . . . . . . . . . . . . . . . . . . $1,676.7 $1,332.2
Operating costs:
Cost of revenues. . . . . . . . . . . . . . . . . 1,462.7 1,147.1
Selling, engineering and administrative expenses. 77.5 69.6
Interest expense of Leasing Subsidiary. . . . . . 16.1 18.0
Retirement plans expense. . . . . . . . . . . . . 8.5 6.8
1,564.8 1,241.5
Operating profit. . . . . . . . . . . . . . . . . . 111.9 90.7
Other (income) expenses:
Interest income . . . . . . . . . . . . . . . . . (0.5) (1.4)
Interest expense - excluding Leasing Subsidiary . 8.2 3.7
Other, net. . . . . . . . . . . . . . . . . . . . (0.7) (1.1)
7.0 1.2
Income before income taxes and cumulative effect
of change in accounting for income taxes . . . . . 104.9 89.5
Provision (benefit) for income taxes:
Current . . . . . . . . . . . . . . . . . . . . . 44.6 29.1
Deferred. . . . . . . . . . . . . . . . . . . . . (3.1) 5.2
Effect of statutory rate increase . . . . . . . . - 2.1
41.5 36.4
Income before cumulative effect of change in
accounting for income taxes. . . . . . . . . . . . 63.4 53.1
Cumulative effect as of April 1, 1993 of change
in accounting for income taxes . . . . . . . . . . - 7.9
Net income. . . . . . . . . . . . . . . . . . . . . $ 63.4 $ 61.0
Income per common and common equivalent share
before cumulative effect of change in accounting
for income taxes . . . . . . . . . . . . . . . . . $ 1.57 $ 1.32
Cumulative effect of change in accounting for
income taxes . . . . . . . . . . . . . . . . . . . - 0.20
Net income per common and common equivalent share . $ 1.57 $ 1.52
Weighted average number of common and common
equivalent shares outstanding. . . . . . . . . . . 40.5 40.2
<PAGE>
Trinity Industries, Inc.
Consolidated Income Statement
(unaudited)
(in millions except per share data)
Three Months
Ended December 30
1994 1993
Revenues. . . . . . . . . . . . . . . . . . . . . . $576.9 $466.4
Operating costs:
Cost of revenues. . . . . . . . . . . . . . . . . 501.7 403.3
Selling, engineering and administrative expenses. 26.7 24.7
Interest expense of Leasing Subsidiary. . . . . . 4.9 5.9
Retirement plans expense. . . . . . . . . . . . . 3.0 2.4
536.3 436.3
Operating profit. . . . . . . . . . . . . . . . . . 40.6 30.1
Other (income) expenses:
Interest income . . . . . . . . . . . . . . . . . (0.2) (0.7)
Interest expense - excluding Leasing Subsidiary . 3.2 1.4
Other, net. . . . . . . . . . . . . . . . . . . . - (0.5)
3.0 0.2
Income before income taxes. . . . . . . . . . . . . 37.6 29.9
Provision (benefit) for income taxes:
Current . . . . . . . . . . . . . . . . . . . . . 18.0 10.2
Deferred. . . . . . . . . . . . . . . . . . . . . (3.1) 1.2
14.9 11.4
Net income. . . . . . . . . . . . . . . . . . . . . $ 22.7 $ 18.5
Net income per common and common equivalent share . $ 0.56 $ 0.46
Weighted average number of common and common
equivalent shares outstanding. . . . . . . . . . . 40.6 40.2
<PAGE>
Trinity Industries, Inc.
Consolidated Statement of Cash Flows
(unaudited)
(in millions)
Nine Months
Ended December 31
1994 1993
Cash flows from operating activities:
Net income . . . . . . . . . . . . . . . . . . . . $ 63.4 $ 61.0
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation:
Excluding Leasing Subsidiary. . . . . . . . . . 37.6 29.5
Leasing Subsidiary. . . . . . . . . . . . . . . 12.2 14.2
Deferred provision (benefit) for income taxes. . (3.1) 5.2
Gain on sale of property, plant and equipment. . (0.2) (0.1)
Cumulative effect of change in accounting for
income taxes. . . . . . . . . . . . . . . . . . - (7.9)
Effect of statutory tax rate increase. . . . . . - 2.1
Other. . . . . . . . . . . . . . . . . . . . . . (4.4) (0.5)
Changes in assets and liabilities:
Decrease in receivables . . . . . . . . . . . . - 0.2
Increase in inventories . . . . . . . . . . . . (11.4) (40.6)
Increase in other assets . . . . . . . . . . . (3.3) (7.4)
Increase (decrease) in accounts payable
and accrued liabilities. . . . . . . . . . . . 41.5 (26.1)
Decrease in billings in excess of cost and
related earnings . . . . . . . . . . . . . . . (4.4) (19.0)
Increase in other liabilities . . . . . . . . . 1.2 2.5
Total adjustments . . . . . . . . . . . . . . 65.7 (47.9)
Net cash provided by operating activities . . . . 129.1 13.1
Cash flows from investing activities:
Proceeds from sale of property, plant
and equipment . . . . . . . . . . . . . . . . . . 26.8 14.6
Capital expenditures:
Excluding Leasing Subsidiary. . . . . . . . . . . (45.3) (29.9)
Leasing Subsidiary. . . . . . . . . . . . . . . . (15.1) (27.0)
Payment for purchase of acquisitions,
net of cash acquired. . . . . . . . . . . . . . . (57.5) (31.5)
Cash of acquired subsidiary. . . . . . . . . . . . 2.4 0.1
Net cash required by investing activities. . . . (88.7) (73.7)
Cash flows from financing activities:
Issuance of common stock . . . . . . . . . . . . . 0.7 8.5
Net borrowings under short-term debt . . . . . . . 7.0 77.0
Proceeds from issuance of long-term debt . . . . . - 20.0
Payments to retire long-term debt. . . . . . . . . (34.1) (29.8)
Dividends paid . . . . . . . . . . . . . . . . . . (20.3) (17.2)
Net cash provided (required) by
financing activities. . . . . . . . . . . . . . (46.7) 58.5
Net decrease in cash and cash equivalents . . . . . (6.3) (2.1)
Cash and cash equivalents at beginning of year. . . 8.7 7.5
Cash and cash equivalents at end of period. . . . . $ 2.4 $ 5.4
<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
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 at December 31, 1993. . . 39,635,147 $39.6 $210.6 $308.9 $559.1
Balance at March 31, 1994 . . . . 39,711,698 $39.7 $213.4 $317.4 $570.5
Other. . . . . . . . . . . . . . 497,038 0.5 8.9 - 9.4
Net income . . . . . . . . . . . - - - 63.4 63.4
Cash dividends
($0.51 per share) . . . . . . - - - (20.4) (20.4)
Balance at December 31, 1994. . . 40,208,736 $40.2 $222.3 $360.4 $622.9
</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 December 31, 1994 and March 31, 1994, the results of
operations for the nine and three month periods ended December 31, 1994 and
1993 and cash flows for the nine month periods ended December 31, 1994 and
1993, in conformity with generally accepted accounting principles, have
been made.
<PAGE>
Trinity Industries, Inc.
Notes to Consolidated Financial Statements
December 31, 1994
Income Taxes
Effective April 1, 1993, Trinity adopted Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes." This Statement required
a change from the deferred to the liability method of computing income
taxes. As permitted by Statement No. 109, Trinity 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 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 December 31, 1994 compared to March 31, 1994 is due
principally to certain acquisitions in the Construction Products, Marine
Products, and Metal Components segments.
Statement of Operations
Nine Months Ended December 31, 1994 vs.
Nine Months Ended December 31, 1993
'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
segment. Marine Products, Construction Products and Containers segments
'Revenues' recorded moderate increases in the current period. Leasing
segment 'Revenues' increased due to the sales of selected car types
previously for lease. 'Revenues' for the Metal Components segment were
approximately the same for both periods.
Strong replacement demand and fundamental economic expansion of railroad
traffic are stimulating the production of railcars and related products.
This demand is expected to continue as railcars on order at the end of the
current period are up 60% from railcars on order a year ago. A similar
replacement market for marine products and construction products is
anticipated as the economy grows stronger. 'Revenues' in the Containers
segment increased due primarily to higher demand for LPG containers caused
by improvement in the residential housing industry.
The increase in 'Operating profit' in the current period is principally due
to improved results from the Railcars segment. Leasing segment 'Operating
profit' is higher due to sale of selected car types previously for lease.
Three Months Ended December 31, 1994 vs.
Three Months Ended December 31, 1993
'Revenues' are higher for the current quarter compared to the same quarter
from a year ago due to increased business in the Railcars, Construction
Products and Leasing segments. 'Operating profit' is greater in the
current quarter due primarily to improved results in the Railcars and
Leasing segments.
<PAGE>
Part II
Item 6 - Exhibits and Reports on Form 8-K.
(a) Exhibits
Exhibit
Number Description
27 Financial Data Schedule
(b) 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: /S/ F. Dean Phelps
F. Dean Phelps
Vice President
February 10, 1995
<PAGE>
Index to Exhibit
NO. DESCRIPTION PAGE
27 Financial Data Schedule *
Notice: Exhibit 27, Financial Data Schedule, is filed pursuant to the
requirements of Regulation S-T as it relates to electronic filings through
the EDGAR System. While this exhibit has been included in the electronic
filing of this Form 10-Q to the Securities and Exchange Commission, it is
not included in the printed reproduction. The Financial Data Schedule sets
forth specific financial information easily obtained from the financial
statements, schedules and other disclosure requirements from the
Registrant's filed report form. The purpose of the Financial Data Schedule
is the identification of specific information in a manner that permits the
data to be readily identified and extracted by the electronic system.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-1995
<PERIOD-END> DEC-31-1994
<CASH> 2400000
<SECURITIES> 0
<RECEIVABLES> 274000000
<ALLOWANCES> 0
<INVENTORY> 348100000
<CURRENT-ASSETS> 0
<PP&E> 1135200000
<DEPRECIATION> 431100000
<TOTAL-ASSETS> 1370700000
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 40200000
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 1370700000
<SALES> 0
<TOTAL-REVENUES> 1676700000
<CGS> 0
<TOTAL-COSTS> 1564800000
<OTHER-EXPENSES> 7000000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 104900000
<INCOME-TAX> 41500000
<INCOME-CONTINUING> 63400000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 63400000
<EPS-PRIMARY> 1.57
<EPS-DILUTED> 0
</TABLE>
