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 September 30, 1996
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
42,982,257
(Number of shares of common stock outstanding as of September 30,
1996)
Part I
Item 1 - Financial Statements
Trinity Industries, Inc.
Consolidated Balance Sheet
(unaudited)
(in millions except per share data)
September 30 March 31
Assets 1996 1996
Cash and cash equivalents . . . . . . . . . $ 19.2 $ 15.4
Receivables . . . . . . . . . . . . . . . . 256.7 293.5
Inventories:
Finished goods. . . . . . . . . . . . . . 43.0 38.9
Work in process . . . . . . . . . . . . . 152.6 146.5
Raw material and supplies . . . . . . . . 208.7 218.3
Total inventories 404.3 403.7
Property, plant and equipment, at cost:
Excluding Leasing Subsidiary. . . . . . . 801.5 745.3
Leasing Subsidiary. . . . . . . . . . . . 400.2 353.7
Less accumulated depreciation:
Excluding Leasing Subsidiary. . . . . . . (362.7) (336.5)
Leasing Subsidiary. . . . . . . . . . . . (74.9) (70.2)
Other assets. . . . . . . . . . . . . . . . 100.3 50.9
$1,544.6 $1,455.8
Liabilities and Stockholders' Equity
Short-term debt . . . . . . . . . . . . . . $ 200.0 $ 216.0
Accounts payable and accrued liabilities. . 233.5 222.9
Billings in excess of cost and related
earnings. . . . . . . . . . . . . . . . . 24.3 19.2
Long-term debt:
Excluding Leasing Subsidiary. . . . . . . 35.8 37.6
Leasing Subsidiary. . . . . . . . . . . . 154.6 168.8
Deferred income taxes . . . . . . . . . . . 30.4 30.2
Other liabilities . . . . . . . . . . . . . 22.6 15.1
701.2 709.8
Stockholders' equity:
Common stock - par value $1 per share;
authorized 100.0 shares; shares issued
and outstanding at September 30, 1996 -
43.0 and March 31, 1996 - 41.6. . . . . 43.0 41.6
Capital in excess of par value. . . . . . 281.8 239.6
Retained earnings . . . . . . . . . . . . 518.6 464.8
843.4 746.0
$1,544.6 $1,455.8
Trinity Industries, Inc.
Consolidated Income Statement
(unaudited)
(in millions except per share data)
Six Months
Ended September 30
1996 1995
Revenues. . . . . . . . . . . . . . . . . . . . . . $1,305.5 $1,233.2
Operating costs:
Cost of revenues. . . . . . . . . . . . . . . . . 1,103.2 1,058.5
Selling, engineering and administrative expenses. 71.6 59.5
Interest expense of Leasing Subsidiary. . . . . . 7.7 9.2
Retirement plans expense. . . . . . . . . . . . . 8.7 6.8
1,191.2 1,134.0
Operating profit. . . . . . . . . . . . . . . . . . 114.3 99.2
Other (income) expenses:
Interest income . . . . . . . . . . . . . . . . . (0.5) (1.3)
Interest expense - excluding Leasing Subsidiary . 6.4 8.9
Other, net. . . . . . . . . . . . . . . . . . . . (2.1) 0.2
3.8 7.8
Income before income taxes . . . . . . . . . . . . 110.5 91.4
Provision (benefit) for income taxes:
Current . . . . . . . . . . . . . . . . . . . . . 43.9 45.0
Deferred. . . . . . . . . . . . . . . . . . . . . (1.6) (9.0)
42.3 36.0
Net income. . . . . . . . . . . . . . . . . . . . . $ 68.2 $ 55.4
Net income per common and common equivalent share . $ 1.62 $ 1.32
Weighted average number of common and common
equivalent shares outstanding. . . . . . . . . . . 42.2 41.9
<PAGE>
Trinity Industries, Inc.
Consolidated Income Statement
(unaudited)
(in millions except per share data)
Three Months
Ended September 30
1996 1995
Revenues. . . . . . . . . . . . . . . . . . . . . . $643.0 $628.5
Operating costs:
Cost of revenues. . . . . . . . . . . . . . . . . 541.5 541.2
Selling, engineering and administrative expenses. 36.2 29.5
Interest expense of Leasing Subsidiary. . . . . . 3.8 4.5
Retirement plans expense. . . . . . . . . . . . . 3.7 3.3
585.2 578.5
Operating profit. . . . . . . . . . . . . . . . . . 57.8 50.0
Other (income) expenses:
Interest income . . . . . . . . . . . . . . . . . (0.3) (1.1)
Interest expense - excluding Leasing Subsidiary . 3.0 4.9
Other, net. . . . . . . . . . . . . . . . . . . . (0.7) 0.2
2.0 4.0
Income before income taxes . . . . . . . . . . . . 55.8 46.0
Provision (benefit) for income taxes:
Current . . . . . . . . . . . . . . . . . . . . . 22.2 25.2
Deferred. . . . . . . . . . . . . . . . . . . . . (0.8) (7.1)
21.4 18.1
Net income. . . . . . . . . . . . . . . . . . . . . $ 34.4 $ 27.9
Net income per common and common equivalent share . $ 0.81 $ .66
Weighted average number of common and common
equivalent shares outstanding. . . . . . . . . . . 42.4 42.0
Trinity Industries, Inc.
Consolidated Statement of Cash Flows
(unaudited)
(in millions)
Six Months
Ended September 30
1996 1995
Cash flows from operating activities:
Net income . . . . . . . . . . . . . . . . . . . . $ 68.2 $ 55.4
Adjustments to reconcile net income to net cash
provided (required) by operating activities:
Depreciation:
Excluding Leasing Subsidiary. . . . . . . . . . 38.4 26.4
Leasing Subsidiary. . . . . . . . . . . . . . . 8.8 9.3
Deferred benefit for income taxes. . . . . . . . (1.6) (9.0)
Gain on sale of property, plant and equipment. . (1.8) (0.2)
Other. . . . . . . . . . . . . . . . . . . . . . 0.7 (4.6)
Changes in assets and liabilities:
Decrease in receivables. . . . . . . . . . . .. 43.0 4.3
(Increase) decrease in inventories. . . . . . . 1.9 (55.2)
Increase in other assets . . . . . . . . . . . (27.8) (1.6)
Increase (decrease) in accounts payable
and accrued liabilities. . . . . . . . . . . . 10.7 (60.9)
Increase in billings in excess of cost and
related earnings . . . . . . . . . . . . . . . 5.1 11.9
Increase (decrease)in other liabilities . . . . (6.6) 2.8
Total adjustments . . . . . . . . . . . . . . 70.8 (76.8)
Net cash provided (required) by operating
activities . . . . . . . . . . . . . . . . . . 139.0 (21.4)
Cash flows from investing activities:
Proceeds from sale of property, plant
and equipment . . . . . . . . . . . . . . . . . . 15.9 51.4
Capital expenditures:
Excluding Leasing Subsidiary. . . . . . . . . . . (35.9) (22.7)
Leasing Subsidiary. . . . . . . . . . . . . . . . (68.9) (32.0)
Payment for purchase of acquisitions,
net of cash acquired. . . . . . . . . . . . . . . - (11.8)
Cash of acquired subsidiary. . . . . . . . . . . . 2.3 1.2
Net cash required by investing activities. . . . (86.6) (13.9)
Cash flows from financing activities:
Issuance of common stock . . . . . . . . . . . . . 1.4 2.6
Net borrowings (repayments) under short-term debt. (16.0) 57.0
Proceeds from issuance of long-term debt . . . . . - 7.0
Payments to retire long-term debt. . . . . . . . . (19.9) (20.1)
Dividends paid . . . . . . . . . . . . . . . . . . (14.1) (13.8)
Net cash provided (required) by
financing activities. . . . . . . . . . . . . . (48.6) 32.7
Net increase (decrease) in cash and cash
equivalents. . . . . . . . . . . . . . . . . . . . 3.8 (2.6)
Cash and cash equivalents at beginning of year. . . 15.4 15.3
Cash and cash equivalents at end of period. . . . . $ 19.2 $ 12.7
<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, 1995 . . . . 40,220,694 $40.2 $221.7 $379.3 $641.2
Other. . . . . . . . . . . . . . 1,330,252 1.4 17.5 - 18.9
Net income . . . . . . . . . . . - - - 55.4 55.4
Cash dividends
($0.34 per share) . . . . . . - - - (14.2) (14.2)
Balance September 30, 1995 . . . 41,550,946 $41.6 $239.2 $420.5 $701.3
Balance at March 31, 1996 . . . . 41,596,037 $41.6 $239.6 $464.8 $746.0
Other. . . . . . . . . . . . . . 1,386,220 1.4 42.2 - 43.6
Net income . . . . . . . . . . . - - - 68.2 68.2
Cash dividends
($0.34 per share) . . . . . . - - - (14.4) (14.4)
Balance September 30, 1996 . . . 42,982,257 $43.0 $281.8 $518.6 $843.4
</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 September 30, 1996 and March 31, 1996, the results of
operations for the six and three month periods ended September 30, 1996 and
1995 and cash flows for the six month periods ended September 30, 1996 and
1995, in conformity with generally accepted accounting principles, have been
made.
<PAGE>
Trinity Industries, Inc.
Notes to Consolidated Financial Statements
September 30, 1996
Acquisitions
On September 3, 1996, the Registrant acquired, pursuant to a merger
agreement through a wholly-owned subsidiary of the Registrant, 100
percent of the outstanding common stock of Transcisco Industries,
Inc. in exchange for approximately, 1.3 million shares of common
stock of the Registrant. Transcisco is a diversified railcar
services company engaged in railcar maintenance and repair, specialty
railcar leasing and management services and Russian rail
transportation services through its 23.5 percent ownership of
SFAT, Russia's leading private rail transportation firm.
The acquisition was accounted for by the purchase method. The
operations of Transcisco have been included in the consolidated
financial statements of the Registrant from the effective date of the
acquisition. Contribution from this acquisition to revenues and
operating profit for the six month period ended September 30, 1996
was not material.
Subsequent Events
On October 1, 1996, the Registrant's ocean-going marine vessel
subsidiary, Halter Marine Group, Inc. ("Halter"), completed its
previously announced initial public offering of three million shares
of its common stock, representing approximately 17 percent of the
total outstanding shares of common stock of Halter. At the
conclusion of the offering, the Registrant retained 15 million
shares, or approximately 83 percent of the total outstanding common
stock of Halter. Halter used the net proceeds of approximately $29.6
million from the stock offering to repay income taxes payable to the
Registrant and a portion of the indebtedness incurred under Halter's
new bank credit facility.
Halter, based in Gulfport, MS, manufactures and markets a broad range
of small- to mid-size commercial, military and government vessels,
including offshore support vessels, offshore double-hull tank barges,
patrol boats, landing craft, oceanographic research vessels,
tugboats, towboats and luxury yachts.
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' and 'Other assets' at September 30, 1996 compared
to March 31, 1996 is primarily due to the acquisition of Transcisco
Industries, Inc. in the second quarter of the current year. 'Other
assets' includes the investment in SFAT recorded on the equity
method. The decrease in 'Receivables' at September 30, 1996 compared
to March 31, 1996 is primarily due to payments received from certain
customer accounts at the end of the quarter.
Statement of Operations
Six Months Ended September 30, 1996 vs.
Six Months Ended September 30, 1995
'Revenues' increased in the current six month period compared to the
same period of the prior year due primarily to increased business in
the Railcars, Marine Products, and Construction Products segments.
The Railcars segment continued to benefit from the existing
replacement cycle and associated market demand. The replacement
cycle for various types of vessels are also playing an important
role in creating more demand in the Marine Products segment.
Additionally, 'Revenues' of the Marine Products segment increased due
to the completed expansion of certain of its facilities and the
resulting increases in throughput. 'Revenues' of the Construction
Products segment for the current period were higher due to the
improved demand for highway safety products, coupled with continuing
demand for ready-mix concrete and aggregates. With the emphasis in
the repair and upgrading of the nation's highway system, demand for
construction products is expected to remain positive.
The increase in 'Operating profit' in the current period is
principally due to improved results from the Railcars, Marine
Products, Construction Products, and Containers segments.
Three Months Ended September 30, 1996 vs.
Three Months Ended September 30, 1995
'Revenues' and 'Operating profit' increased primarily due to the
improved results in the Marine Products segment. The results are due
to the reasons stated above.
Part II
Item 6 - Exhibits and Reports on Form 8-K.
(a) Exhibits
Exhibit
Number Description
27 Financial Data Schedule
(b) Form 8-K was filed on July 5, 1996 that reported approval
by the Registrant's Board of Directors of an initial
public offering of the common stock of a newly incorporated
wholly-owned subsidiary, Halter Marine Group, Inc.
Form 8-K was filed on August 20, 1996 that reported
additional information on the initial public offering
of Halter Marine Group, Inc. See Subsequent Events,
page 7.
Form 8-K was filed on September 10, 1996 that announced
the approval of Transcisco's stockholders of that company's
merger with and into Trinity Y, Inc., a wholly-owned
subsidiary of Trinity Industries, Inc. See Acquisitions,
page 7.
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
October 23, 1996
Index to Exhibit
No. Description Page
27 Financial Data Schedule *
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<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-END> SEP-30-1996
<CASH> 19,200,000
<SECURITIES> 0
<RECEIVABLES> 256,700,000
<ALLOWANCES> 0
<INVENTORY> 404,300,000
<CURRENT-ASSETS> 0
<PP&E> 1,201,700,000
<DEPRECIATION> (442,100,000)
<TOTAL-ASSETS> 1,544,600,000
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 43,000,000
0
0
<OTHER-SE> 800,400,000
<TOTAL-LIABILITY-AND-EQUITY> 1,544,600,000
<SALES> 0
<TOTAL-REVENUES> 1,305,500,000
<CGS> 0
<TOTAL-COSTS> 1,103,200,000
<OTHER-EXPENSES> 88,000,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,400,000
<INCOME-PRETAX> 110,500,000
<INCOME-TAX> 42,300,000
<INCOME-CONTINUING> 68,200,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 68,200,000
<EPS-PRIMARY> 1.62
<EPS-DILUTED> 0
</TABLE>
