SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)..........
Report pursuant to Item 5 made at registrant's option
with respect to event announced August 16, 1995
STONE & WEBSTER, INCORPORATED
(Exact name of registrant as specifed in its charter)
Delaware 1-1228 13-5416910
(State or other jurisdiction (Commission File (IRS Employer
of incorporation) Number) Number)
250 West 34th Street, New York, NY 10119
Address of principal executive offices) ( Zip Code)
Registrant's telephone number, including area code: (212) 290-7500
2.
Form 8-K Stone & Webster, Incorporated
Item 5. Other Events
The text of registrant's Press Release dated August 16, 1995
relating to the completion of a strategic asset review and an increase in
a share repurchase authorization appears below.
FOR IMMEDIATE RELEASE
STONE & WEBSTER COMPLETES STRATEGIC ASSET REVIEW;
BOARD INCREASES SHARE REPURCHASE AUTHORIZATION
New York, N.Y., August 16, 1995--Stone & Webster, Incorporated (NYSE: SW) today
released the following letter from Kent F. Hansen, non-executive Chairman of the
Board of Directors, and Edward J. Walsh, acting President and Chief Executive
Officer, which is being mailed to the company's shareholders:
Dear Fellow Shareholders:
On behalf of the Board of Directors and senior management of Stone & Webster,
Incorporated, we are writing to update you on several important developments at
your company.
First, as you may have heard, on August 15, 1995, Stone & Webster announced that
Bruce C. Coles resigned his positions as Chairman, President and CEO, effective
immediately, to accept a senior position at another company. While we are
genuinely sorry that he is leaving, we accept his desire to pursue a new
challenge after his successful efforts to restructure and reorganize Stone &
Webster.
Clearly, the turnaround is now well underway--as evident in the significant
improvement in the company's financial results for the first two quarters of the
current fiscal year. The many initiatives now in place will enhance the long-
term value of your investment in Stone & Webster, Incorporated.
As you well know, our primary objectives are to build and deliver value for
Stone & Webster's shareholders by ensuring that the company is well positioned
for profitable growth and remains a global leader in the increasingly
competitive engineering and construction industry. To this end, Stone &
Webster's Board and management recently completed a thorough review of our
asset investments and capital structure. We were assisted in this process,
which has been ongoing since January 1994, by Goldman, Sachs & Co., the
company's financial advisor.
Based on this review, we have determined that our current capital structure is
in line with the company's projected capital requirements for the next five
years. Moreover, the Stone & Webster Board has reaffirmed that the best way to
build shareholder value over the long term is to continue to reinvest available
capital in the company's core engineering, construction and consulting business,
invest in new development projects and, from time to time, repurchase shares of
the company's stock.
Accordingly, your Board has authorized an increase in the company's share
repurchase program--from 1.0 million to 2.5 million shares. Since originally
announcing our repurchase program in July 1994, the company has repurchased
almost 700,000 shares. Currently, 14.3 million shares are outstanding.
After careful analysis of our strategic plan, which includes an orderly
3.
Form 8-K Stone & Webster, Incorporated
disposition of non-core and underperforming assets, we believe there will be
resources available to fund both the company's anticipated growth as well as
this additional initiative to enhance shareholder value.
Like all large engineering and construction companies, Stone & Webster must
maintain a strong balance sheet and strong finances to win major projects and
then stand behind them until they are completed--a process that often takes
years. Strengthening that ability is vital to the success of our long-term
strategy and the turnaround now underway. For this reason, the Board determined
that any extraordinary payout, including a special one-time distribution, would
not be in the best interest of the company and its long-term shareholders.
Let us, briefly, outline the highlights of the significant progress we have
already achieved as a result of our strategic initiatives:
- Reorganizing and refocusing the core engineering, construction and
consulting business. This is where the future of Stone & Webster lies,
and we are concentrating our resources and energies squarely upon
strengthening the core business.
In this regard, we have specifically targeted growing our power, process,
governmental and industrial business sectors and expanding our
international business. We will also develop and invest in at least two
new projects a year through the Stone & Webster Development Corporation.
Additionally, our objective is to achieve annual revenue growth of at
least 10 percent.
- Bringing Stone & Webster's cost structure in line with expected revenues.
We have instituted an intensive cost reduction program which has yielded
more than $55 million in annual cost savings.
- Achieving the orderly disposition of non-core and underperforming assets.
To date, we have: sold all investment securities in Stone & Webster's
portfolio; commenced active marketing of real estate holdings, including
the Sabal Office Park in Tampa, Florida and a 450,000 square foot
engineering office facility in Cherry Hill, New Jersey; and announced our
intention to sell the oil and gas business.
These initiatives to restructure the core business and reduce costs have already
begun to have a direct and positive impact on the financial performance of your
company. As you know, last month we announced strong gains in revenues and
operating income for the second quarter and first six months of 1995,
particularly in our engineering, construction and consulting segment.
Going forward, we will continue to concentrate on building shareholder value and
achieving our long-term objectives. We will reinvest available capital in our
core capabilities and make every effort to respond to the interests of our
shareholders.
Stone & Webster is a company with a proud 106-year history, during which it has
undertaken some of the world's greatest engineering and construction projects.
Our future offers even more promising potential and so our efforts to revitalize
the company encourage and excite us. We look forward to achieving continued
growth and profitability for our shareholders for many years to come.
Sincerely,
Kent F. Hansen Edward J. Walsh
Chairman of the Board Acting President and CEO
* * * * *
Contact: Jeremiah P. Cronin
(212) 290-7484
4.
Form 8-K Stone & Webster, Incorporated
SIGNATURES
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.
STONE & WEBSTER, INCORPORATED
BY: JEREMIAH P. CRONIN
Jeremiah P. Cronin
Executive Vice President
Date: August 18, 1995