UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[ x ] Quarterly report under Section 13 or 15 (d) of the Securities
Exchange Act of 1934
For the quarterly period ended March 31, 1995
--------------
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 1-10659
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ROBERTSON-CECO CORPORATION
- ------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 36-3479146
---------------------------------- --------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
222 Berkeley Street, Boston, Massachusetts 02116
- ----------------------------------------- --------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 617-424-5500
------------
Indicate by check mark whether 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 (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes X No
-------- --------
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding at April 30, 1995
- ---------------------------------------- -----------------------------
Common Stock, par value $0.01 per share 16,096,560
ROBERTSON-CECO CORPORATION
Form 10-Q
---------
For Quarter Ended March 31, 1995
--------------------------------
INDEX
=====
PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements:
Condensed Consolidated Balance Sheets --
March 31, 1995 and December 31, 1994. . . . . . . . . 3
Condensed Consolidated Statements of Operations
And Retained Earnings (Deficit) -- Three
Months Ended March 31, 1995 and 1994. . . . . . . . . 5
Condensed Consolidated Statements of Cash Flows --
Three Months Ended March 31, 1995 and 1994. . . . . . 7
Notes to Condensed Consolidated Financial
Statements. . . . . . . . . . . . . . . . . . . . . . 9
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . .16
PART II. OTHER INFORMATION:
Item 1. Legal Proceedings. . . . . . . . . . . . . . . . . . . .30
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . .30
Signatures. .. . . . . . . . . . . . . . . . . . . . . . . . . . .31
Exhibit Index. . . . . . . . . . . . . . . . . . . . . . . . . . .32
ITEM 1. FINANCIAL STATEMENTS
ROBERTSON-CECO CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
-------------------------------------
(In thousands, except share data)
(Unaudited)
March 31 December 31
1995 1994
----------- -----------
-- ASSETS --
CURRENT ASSETS:
Cash and cash equivalents . . . . . . . . $ 6,270 $ 7,890
Restricted cash . . . . . . . . . . . . . 7,985 2,478
Accounts and notes receivable, net. . . . 36,581 41,382
-------- --------
Inventories:
Work in process . . . . . . . . . . . . 7,377 6,211
Material and supplies . . . . . . . . . 11,856 11,614
-------- --------
Total inventories . . . . . . . . . . . 19,233 17,825
-------- --------
Net assets held for sale. . . . . . . . . - 4,664
Other current assets. . . . . . . . . . . 2,047 2,056
-------- --------
Total current assets. . . . . . . . . . 72,116 76,295
-------- --------
PROPERTY - at cost . . . . . . . . . . . . . 40,641 39,927
Less accumulated depreciation . . . . . . (17,889) (17,332)
-------- --------
Property, net . . . . . . . . . . . . . 22,752 22,595
-------- --------
ASSETS HELD FOR SALE . . . . . . . . . . . . 736 992
-------- --------
EXCESS OF COST OVER NET ASSETS OF
ACQUIRED BUSINESSES - NET. . . . . . . . 28,061 28,267
-------- --------
OTHER NON-CURRENT ASSETS . . . . . . . . . . 8,961 9,251
-------- --------
TOTAL ASSETS . . . . . . . . . . . . . . $132,626 $137,400
======== ========
See Notes to Condensed Consolidated Financial Statements.
ROBERTSON-CECO CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)
-------------------------------------------------
(In thousands, except share data)
(Unaudited)
March 31 December 31
1995 1994
----------- -----------
-- LIABILITIES --
CURRENT LIABILITIES:
Loans payable and current portion of
long-term debt. . . . . . . . . . . . . $ 589 $ 134
Accounts payable, principally trade . . . 21,873 25,168
Insurance liabilities . . . . . . . . . . 10,237 8,365
Other accrued liabilities . . . . . . . . 29,659 32,802
--------- ---------
Total current liabilities . . . . . . . . 62,358 66,469
LONG-TERM DEBT, less current portion . . . . 43,373 43,421
LONG-TERM INSURANCE LIABILITIES. . . . . . . 13,588 15,084
LONG-TERM PENSION LIABILITIES. . . . . . . . 16,788 16,265
RESERVES AND OTHER LIABILITIES . . . . . . . 27,991 31,854
--------- ---------
TOTAL LIABILITIES. . . . . . . . . . . . . . 164,098 173,093
--------- ---------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY (DEFICIENCY):
Common stock, par value $0.01 per share . 161 161
Capital surplus . . . . . . . . . . . . . 172,026 172,089
Warrants. . . . . . . . . . . . . . . . . 6,042 6,042
Retained earnings (deficit) . . . . . . . (194,752) (199,279)
Excess of additional pension liability
over unrecognized prior service cost. . (7,991) (7,991)
Deferred compensation . . . . . . . . . . (438) (508)
Foreign currency translation
adjustments . . . . . . . . . . . . . . (6,520) (6,207)
--------- ---------
Stockholders' equity (deficiency) . . . (31,472) (35,693)
--------- ---------
TOTAL LIABILITIES AND STOCK-
HOLDERS' EQUITY (DEFICIENCY). . . . $ 132,626 $ 137,400
========= =========
See Notes to Condensed Consolidated Financial Statements.
ROBERTSON-CECO CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS AND RETAINED EARNINGS (DEFICIT)
------------------------------------------
(In thousands, except per share data)
(Unaudited)
Three Months Ended
March 31
------------------------
1995 1994
----------- -----------
REVENUES:
Net product sales . . . . . . . . . . . . $ 64,254 $ 56,818
Construction and other services . . . . . 5,465 5,672
-------- --------
Total . . . . . . . . . . . . . . . . . 69,719 62,490
-------- --------
COSTS AND EXPENSES:
Product costs . . . . . . . . . . . . . . 53,886 51,101
Construction and other services . . . . . 5,399 5,562
-------- --------
Cost of sales . . . . . . . . . . . . . 59,285 56,663
Selling, general and administrative . . . 9,014 10,590
Restructuring expense . . . . . . . . . . - 900
-------- --------
Total . . . . . . . . . . . . . . . . . 68,299 68,153
-------- --------
OPERATING INCOME (LOSS). . . . . . . . . . . 1,420 (5,663)
-------- --------
OTHER INCOME (EXPENSE):
Interest expense. . . . . . . . . . . . . (1,116) (1,128)
Other income (expense) - net. . . . . . . 319 289
-------- --------
Total . . . . . . . . . . . . . . . . . (797) (839)
-------- --------
INCOME (LOSS) BEFORE PROVISION FOR TAXES
ON INCOME. . . . . . . . . . . . . . . . . 623 (6,502)
PROVISION FOR TAXES ON INCOME. . . . . . . . 51 60
-------- --------
INCOME (LOSS) - CONTINUING OPERATIONS. . . . 572 (6,562)
DISCONTINUED OPERATIONS:
Income from discontinued operations . . . 505 1,051
Gain on sale of business segment. . . . . 3,450 -
-------- --------
Income from discontinued operations. . . . . 3,955 1,051
-------- --------
NET INCOME (LOSS). . . . . . . . . . . . . . $ 4,527 $ (5,511)
======== ========
See Notes to Condensed Consolidated Financial Statements.
ROBERTSON-CECO CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS AND RETAINED EARNINGS (DEFICIT) (CONTINUED)
------------------------------------------------------
(In thousands, except per share data)
(Unaudited)
Three Months Ended
March 31
------------------------
1995 1994
----------- -----------
RETAINED EARNINGS(DEFICIT) AT BEGINNING
OF PERIOD . . . . . . . . . . . . . . . . $(199,279) $(177,519)
NET INCOME (LOSS). . . . . . . . . . . . . . 4,527 (5,511)
--------- ---------
RETAINED EARNINGS (DEFICIT)
AT END OF PERIOD. . . . . . . . . . . . . $(194,752) $(183,030)
========= =========
NET INCOME (LOSS) PER COMMON SHARE:
Continuing Operations . . . . . . . . . . $ .04 $ (.42)
Discontinued Operations . . . . . . . . . .24 .07
--------- ---------
NET INCOME (LOSS). . . . . . . . . . . . . . $ .28 $ (.35)
========= =========
SHARES USED IN INCOME (LOSS) PER
SHARE CALCULATION . . . . . . . . . . . . 16,123 15,773
========= =========
See Notes to Condensed Consolidated Financial Statements.
ROBERTSON-CECO CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
-----------------------------------------------
(In thousands)
(Unaudited)
Three Months Ended
March 31
------------------------
1995 1994
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss). . . . . . . . . . . . . . $ 4,527 $ (5,511)
Adjustments to reconcile net income (loss)
to net cash provided by (used for)
operating activities:
Depreciation and amortization . . . . . . 1,018 1,315
Amortization of discount on debentures
and debt issuance costs . . . . . . . . 309 308
Gain on sale of business segment. . . . . (3,450) -
Provisions for:
Bad debts and losses on erection
contracts . . . . . . . . . . . . . . 164 414
Rectification and other costs . . . . . 471 530
Restructuring expense . . . . . . . . . - 900
Changes in assets and liabilities,
net of divestitures:
(Increase) decrease in accounts and
notes receivable. . . . . . . . . . . 4,236 4,956
(Increase) decrease in inventories. . . (1,534) (1,261)
(Increase) decrease in restricted
cash. . . . . . . . . . . . . . . . . (5,507) 613
Increase (decrease) in accounts
payable, principally trade . . . . . (3,139) (10,027)
Increase (decrease) in other current
liabilities . . . . . . . . . . . . . (1,546) (3,528)
Net changes in other assets and
liabilities . . . . . . . . . . . . . (4,789) (1,020)
-------- --------
Net cash provided by (used for)
operating activities. . . . . . . . . . (9,240) (12,311)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures . . . . . . . . . . . . (1,161) (1,145)
Proceeds from sales of property, plant
and equipment. . . . . . . . . . . . . . . 500 591
Proceeds from sales of businesses. . . . . . 8,000 -
-------- --------
Net cash provided by (used for)
investing activities. . . . . . . . . . $ 7,339 $ (554)
-------- --------
See Notes to Condensed Consolidated Financial Statements.
ROBERTSON-CECO CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
-----------------------------------------------------------
(In thousands)
(Unaudited)
Three Months Ended
March 31
------------------------
1995 1994
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from (payments on) short-
term borrowings. . . . . . . . . . . . . . $ 446 $ 1,973
Payments on long-term debt borrowings . . . (108) (88)
-------- --------
Net cash provided by (used for)
financing activities. . . . . . . . . . 338 1,885
-------- --------
Effect of foreign exchange rate changes
on cash . . . . . . . . . . . . . . . . . (57) 74
-------- --------
Net increase (decrease) in cash and
cash equivalents. . . . . . . . . . . . (1,620) (10,906)
Cash and cash equivalents - beginning
of period . . . . . . . . . . . . . . . 7,890 15,666
-------- --------
Cash and cash equivalents - end of
period. . . . . . . . . . . . . . . . . $ 6,270 $ 4,760
======== ========
SUPPLEMENTAL CASH FLOW DATA:
Cash payments made for:
Interest. . . . . . . . . . . . . . . . $ 767 $ 2,422
======== ========
Income taxes. . . . . . . . . . . . . . $ - $ -
======== ========
See Notes to Condensed Consolidated Financial Statements.
ROBERTSON-CECO CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
- ----------------------------------------------------------------
1. BASIS OF PRESENTATION
---------------------
In the opinion of Robertson-Ceco Corporation (the "Company"),
the accompanying unaudited Condensed Consolidated Financial
Statements contain all adjustments necessary to present fairly
the financial position as of March 31, 1995, and the results
of operations and cash flows for the periods presented. All
adjustments recorded during the period consisted of normal
recurring adjustments. The Consolidated Statement of
Operations for the three months ended March 31, 1994 has been
reclassified to reflect the sale of the Concrete Construction
division as a discontinued operation (Note 2). Certain other
previously reported amounts have been reclassified to conform
to the 1995 presentation.
2. DISPOSITIONS
------------
On December 27, 1994, the Company sold the business and assets
of its remaining U.S. Building Products operation, the Cupples
Products Division (the "Cupples Division"), which manufactures
curtainwall systems. The operating results and cash flows for
the Cupples Division are included in the accompanying
Condensed Consolidated Financial Statements for the three
months ended March 31, 1994. During the three month period
ended March 31, 1994, the Cupples Division recorded revenues
of $2,500,000 and losses from continuing operations of
$2,200,000.
During the third quarter of 1994, the Company decided to sell
or dispose of its remaining European Building Products
operations (the "European Operations"). The Company is
continuing to pursue available alternatives for the sale or
disposition of its European Operations. For purposes of the
March 31, 1995 and December 31, 1994 Condensed Consolidated
Balance Sheets, the assets and liabilities of the European
Operations are netted and presented within other liabilities.
The operating results and cash flows of the European
Operations are included in the accompanying Condensed
Consolidated Financial Statements for the three months ended
March 31, 1994 and excluded for the three months ended March
31, 1995. The European operations recorded revenues of
$3,900,000 and losses from continuing operations of $700,000
during the three months ended March 31, 1994.
On March 3, 1995, the Company sold the business and assets of
its Concrete Construction business (the "Concrete Division")
to Ceco Concrete Construction Corp., ("Ceco Concrete"), a
newly formed company owned by an entity controlled by the
Company's Chief Executive Officer. The consideration
consisted of $11,500,000 of cash, adjusted to reflect an as of
sale date of October 1, 1994, a $3,000,000 interest bearing
promissory note payable in three equal annual installments,
with interest at 7% [which was transferred to an unrelated
third party in connection with the settlement of certain
litigation (see Note 5)], and the assumption of certain
liabilities by the purchaser. Upon the closing of the sale,
the Company received approximately $8,000,000 of cash, after
adjustments. The Concrete Division represented one of the
Company's business segments and accordingly, the results of
operations for all periods presented have been reclassified to
reflect the Concrete Division as a discontinued operation.
The Concrete Division recorded revenues and income of
$11,100,000 and $505,000, respectively, during the period from
January 1, 1995 through March 3, 1995. During the three
months ended March 31, 1994, the Concrete Division recorded
revenues and income of $13,500,000 and $1,100,000,
respectively. Income of the Concrete Division for the three
months ended March 31, 1994 includes a credit of $1,200,000
related to the settlement of certain backcharge and other
claims arising out of a project which was substantially
complete in 1989. For purposes of the December 31, 1994
Condensed Consolidated Balance Sheet, the assets and
liabilities of the Concrete Division have been netted and
classified as assets held for sale - current.
3. CREDIT AND LIQUIDITY
--------------------
The Company maintains a credit facility (the "Credit
Facility") with Foothill Capital Corporation which, under its
terms, has maximum availability of $45,000,000 and expires on
May 18, 1999.
Availability under the terms of the Credit Facility is based
on a percentage of eligible (as defined and subject to certain
restrictions) accounts receivable and inventory, plus a base
amount (which base amount is reduced by $166,667 per month and
is subject to reduction in the case of sales of certain
property, plant and equipment, including assets held for
sale), plus the amount provided by the Company as cash
collateral, if any, less the amount of $5,000,000 required to
be outstanding under the term loan (each together the
"Borrowing Base"). At March 31, 1995, the Borrowing Base was
estimated to be $30,000,000 which, together with $7,445,000 of
restricted cash collateral, was used to support the $5,000,000
term loan and approximately $31,500,000 of outstanding letters
of credit and related guarantees which were used to support
primarily the Company's workers' compensation and bonding
programs. The Company had approximately $900,000 of
availability under the Credit Facility at March 31, 1995.
Further availability could be obtained by providing additional
cash collateral to support additional letters of credit and
guarantees. At March 31, 1995, the Company had $7,985,000 of
restricted cash, of which approximately $540,000 was utilized
to support certain settlements and other claims related to the
sale and disposition of businesses. The remaining $7,445,000
of restricted cash was utilized to support letters of credit
and letter of credit guarantees, a portion of which were
related to the Concrete Division.
Pursuant to the terms of the agreement for the sale of the
Concrete Division, the purchaser entered into an indemnity
agreement with the Company's principal surety with respect to
performance bonds relating to the Concrete Division which were
outstanding at the date of the sale. In connection with such
agreement, the Company's surety agreed to reduce the Company's
letter of credit collateral requirements by approximately
$4,400,000. In addition, an insurance carrier for the Company
reduced the Company's letter of credit collateral requirements
during 1995, which together with the reduction in the
performance bond collateral requirements discussed above,
enabled the Company to reduce its total letter of credit
collateral requirements by approximately $5,800,000. As a
result of the collateral requirement reductions the Company
expects to gain access during the second quarter of 1995 to
approximately $5,800,000 of cash which was restricted at March
31, 1995.
In addition to the Credit Facility, borrowing arrangements are
in place at the Company's Asia/Pacific operations to assist in
supporting local working capital requirements and bonding
programs. The Asia/Pacific operations credit facility is
secured by a $1,000,000 letter of credit issued under the
Company's domestic Credit Facility during the first quarter of
1995. At March 31, 1995, the Company had in place at its
Asia/Pacific operations available lines of credit of $700,000,
of which $500,000 was outstanding. In addition to the line of
credit, the Company's Asia/Pacific operations had a guarantee
and performance bond facility in place which enabled them to
issue up to $1.8 million of performance bonds and guarantees.
At March 31, 1995, the Asia/Pacific operation had utilized
substantially all amounts available under that facility. The
Asia/Pacific operations are currently negotiating to replace
the current credit facility which expires on June 30, 1995.
In order for a new credit facility to be established, the
Company may be required to provide additional security for its
Asia/Pacific operations.
On a worldwide basis at March 31, 1995, excluding the European
Operations, the Company had outstanding performance and
financial bonds in the aggregate amount of $31,400,000, which
generally provide a guarantee as to the Company's performance
under contracts and other commitments. Certain of such bonds
are collateralized by letter of credit programs and certain of
such bonds are issued under foreign credit facilities.
At March 31, 1995, the Company's European Operations, which
are held for sale, had outstanding short-term bank borrowings
of $3,400,000, which are generally supported by the local
entities' assets. In addition, at March 31, 1995, the
European Operations had outstanding performance bonds and
other guarantees of $3,700,000 which are also supported by the
local entities' assets. At certain of the European
Operations, as well as other foreign locations, the Company
has issued guarantees which support the local entities
borrowings and performance guarantees.
4. OTHER CURRENT LIABILITIES
-------------------------
Other current liabilities consisted of the following:
March 31 December 31
1995 1994
----------- -----------
(Thousands)
Payroll and related benefits. . . . .$10,908 $11,778
Warranty and backcharge reserves. . . 3,481 3,367
Deferred revenues . . . . . . . . . . 1,044 1,778
Reserves for restructuring. . . . . . 1,876 2,460
Accrued interest . . . . . . . . . . 2,138 1,804
Other . . . . . . . . . . . . . . . . 10,212 11,615
------- -------
Total . . . . . . . . . . . . . . . .$29,659 $32,802
======= =======
5. COMMITMENTS AND CONTINGENCIES
-----------------------------
Several contracts related to the discontinued custom
curtainwall operations continue to be the subject of
litigation. In one of the actions, a lawsuit arising out of
the construction of new headquarters for Morgan Guaranty Trust
Company of New York ("Morgan") at 60 Wall Street, New York,
New York is pending in the Supreme Court of the State of New
York [Cupples Products Division of H.H. Robertson Company v.
Morgan Guaranty Trust Company of New York, et al (the "New
York Litigation")]. The Company's Cupples Division acted as
a subcontractor for the provision and erection of the custom
curtainwall for the building. Morgan and Tishman Construction
Company of New York ("Tishman") the general contractor for the
project, claimed that the Company and Federal Insurance
Company ("Federal"), as issuer of a performance bond in
connection with the Company's work, are liable for $29,900,000
in excess completion costs and delay damages due to the
Company's alleged failure to perform its obligations under its
subcontract. The Company had taken action to enforce a
$5,000,000 mechanic's lien against the building and sought to
recover more than $10,000,000 in costs and damages caused by
Tishman's breach of the subcontract with the Company.
On March 3, 1995, the Company and Federal entered into an
agreement (the "Federal Agreement") under which Federal agreed
to hold the Company harmless from claims pending in the New
York Litigation. Under the terms of the Federal Agreement,
Federal will assume control of the New York Litigation and
will also be the beneficiary of any affirmative claim which
the Company may receive. As consideration for Federal's
obligations, the Company assigned to Federal the $3,000,000
interest bearing promissory note received from the Company's
sale of its Concrete Division, and agreed to pay Federal
$1,000,000 per year, in equal quarterly installments, for
seven years without interest commencing March 24, 1995. As
security for the payment obligations to Federal, the Company
granted to Federal a security interest in all of the Company's
assets and the purchaser of the Concrete Division delivered a
financial guarantee insurance policy securing payment of the
promissory note.
The Federal Agreement also provides that (i) at least 30% of
the ownership of the common stock of the Company must be held
by Andrew G.C. Sage, II, who is the current Chairman of the
Company and at December 31, 1994 controlled approximately 34%
of the outstanding common stock through his control of Sage
RHH, and Michael E. Heisley, who is the current Chief
Executive Officer and Vice Chairman of the Company and at
December 31, 1994 controlled approximately 21% of the
outstanding common stock through his ownership of RBC Holdings
L.P. and (ii) that Mr. Sage, Mr. Heisley or both must continue
as chief executive officer and/or chairman of the Company.
The Federal Agreement provides that, in the event such common
stock ownership and executive officers are not maintained,
Federal will be entitled to immediate payment of all amounts
remaining unpaid to them.
The Company filed suit in state court in Iowa against the
owner, general contractor and a subcontractor seeking payment
of amounts owed to the Company and other damages in connection
with a pre-engineered metal building project in Anchorage,
Alaska. The general contractor subsequently filed suit in
state court in Alaska against a number of parties, including
the Company and its surety, alleging against the Company
breach of contract, breach of implied warranties,
misrepresentation and negligence in connection with the
fabrication of the building and seeking damages in excess of
$10.0 million. The Company believes that it is entitled to
payment under its contract and that it has meritorious
defenses against the claims of the general contractor.
There are various other proceedings pending against or
involving the Company which are ordinary or routine given the
nature of the Company's business. The Company has recorded a
liability related to litigation where it is both probable that
a loss will be incurred and the amount of the loss can be
reasonably estimated. While the outcome of the Company's legal
proceedings cannot at this time be predicted with certainty,
management does not expect that these matters will have a
material adverse effect on the consolidated financial
condition or results of operations of the Company.
The Company has been identified as a potentially responsible
party by various federal and state authorities for clean-up at
various waste disposal sites. While it is often difficult to
reasonably quantify future environmental related expenditures,
the Company has engaged various third parties to perform
feasibility studies and assist in estimating the cost of
investigation and remediation. The Company's policy is to
accrue environmental and clean-up related costs of a
non-capital nature when it is both probable that a liability
has been incurred and that the amount can be reasonably
estimated. Based upon currently available information,
including the reports of third parties, management does not
believe that the reasonably possible loss in excess of the
amounts accrued would be material to the consolidated
financial statements.
6. PRO FORMA FINANCIAL INFORMATION (UNAUDITED)
-------------------------------------------
The following unaudited pro forma financial information shows
the results of operations of the Company assuming that the
sale of the Cupples Division, sale or disposal of the European
Operations and sale of the Concrete Division (see Note 2) had
occurred at the beginning of the periods presented. These
results are not necessarily indicative of what results would
have been if such transactions had occurred at the beginning
of the periods presented and are not necessarily indicative of
the financial condition or results of operations for any
future date or period.
Three Months Ended
March 31
---------------------
1995 1994
--------- --------
(Pro forma)
(Thousands)
(Unaudited)
Revenue. . . . . . . . . . . . . . . $69,719 $56,101
======= =======
Net Income (Loss) from Continuing
Operations. . . . . . . . . . . . $ 572 $(3,736)
======= =======
Net Income (Loss) Per Common Share
from Continuing Operations. . . . $ .04 $ (.24)
======= =======
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
------------------------------------------------
RESULTS OF OPERATIONS
- ---------------------
During the past several years, Robertson-Ceco Corporation (the
"Company") has been adversely affected by the worldwide recession
in the construction industry and as a result has incurred
significant operating losses and has experienced severe liquidity
problems. To address these problems the Company has developed and
either implemented or is in the process of implementing a number of
operational and financial restructuring plans for the Company,
including reducing operating costs to meet current and expected
levels of demand, liquidating or divesting of operations which do
not meet the Company's strategic direction or where the amount of
cash required to restructure the business exceeds the expected
return within a reasonable period of time, and investing in
remaining businesses, where appropriate, to realize their
potential. In addition, there are currently a number of
restructuring programs which are ongoing and under consideration
including further reductions in work force levels and
rationalization of certain businesses and facilities.
The Company operates primarily in the construction and commercial
building sectors with a significant portion of the Company's
revenues concentrated in North America and, to a lesser extent, the
Asia/Pacific region. As a result, the Company considers its
businesses to be seasonal in nature and operating results during
the first quarter of each year are affected, in part, by the
severity of weather conditions.
On December 27, 1994, the Company sold the business and assets of
its remaining U.S. Building Products operation, the Cupples
Products Division (the "Cupples Division"). The operating results
and cash flows for the Cupples Division are included in the
accompanying Condensed Consolidated Financial Statements for the
three months ended March 31, 1994.
During the third quarter of 1994, the Company decided to sell or
dispose of its remaining European Building Products operations (the
"European Operations"). The Company is continuing to pursue
certain available alternatives for the sale or disposition of the
European Operations. For purposes of the March 31, 1995 and
December 31, 1994 Condensed Consolidated Balance Sheets, the assets
and liabilities of the European Operations are netted and presented
within other liabilities. The operating results and cash flows of
the European Operations are included in the accompanying Condensed
Consolidated Financial Statements for the three months ended March
31, 1994 and excluded for the three months ended March 31, 1995.
On March 3, 1995, the Company sold the business and assets of its
Concrete Construction business (the "Concrete Division") to Ceco
Concrete Construction Corp., ("Ceco Concrete"), a newly formed
company owned by an entity controlled by the Company's Chief
Executive Officer. The consideration consisted of $11.5 million of
cash, adjusted to reflect an as of sale date of October 1, 1994, a
$3.0 million interest bearing promissory note payable in three
equal annual installments, with interest at 7% [which was
transferred to an unrelated third party in connection with the
settlement of certain litigation (see "Litigation")], and the
assumption of certain liabilities by the purchaser. Upon the
closing of the sale, the Company received $8.0 million of cash,
after adjustments. The Concrete Division represented one of the
Company's business segments and accordingly, the results of
operations for all periods presented have been reclassified to
reflect the Concrete Division as a discontinued operation. The
Concrete Division recorded revenues and income of $11.1 million and
$.5 million, respectively, during the period from January 1, 1995
through March 3, 1995. During the three months ended March 31,
1994, the Concrete Division recorded revenues and income of $13.5
million and $1.1. million, respectively. Income of the Concrete
Division for the three months ended March 31, 1994 includes a
credit of $1.2 million related to the settlement of certain
backcharge and other claims arising out of a project which was
substantially complete in 1989. For purposes of the December 31,
1994 Condensed Consolidated Balance Sheet, the assets and
liabilities of the Concrete Division have been netted and
classified as assets held for sale - current.
As a result of the sales and dispositions noted above, the
Company's ongoing businesses currently include (excluding the
European Operations) the Metal Buildings Group, which has sales and
operations primarily throughout North America and, to a lesser
extent, the Far East, and its Building Products Group, which has
sales and operations primarily throughout the Asia/Pacific region
and, to a lesser extent, Canada (the above hereinafter referred to
as "Continuing Business"). See Note 2 of Notes to Condensed
Consolidated Financial Statements for additional financial
information with respect to businesses which have been sold or are
held for sale.
Overview of Results of Operations
- ---------------------------------
Revenues for the first quarter of 1995 of $69.7 million increased
$7.2 million or 11.6% from the first quarter of 1994. The increase
in revenues reflects higher revenues at the Company's Metal
Buildings Group and remaining Building Products Operations, offset
in part by the exclusion of the Cupples Division and the European
Operations from the 1995 operating results. The Company's gross
margin percentage was approximately 15.0% in the first quarter of
1995 compared to 9.3% in 1994. The improvement in the Company's
gross margin percentage is primarily due to the exclusion of the
Cupples Division from the 1995 operating results and higher margins
at the Company's Metal Building Group resulting from efficiencies
associated with higher revenues. Selling, general and
administrative expenses decreased by $1.6 million in the first
quarter of 1995 compared to the same quarter of 1994. The decrease
in selling, general and administrative expenses is primarily a
result of excluding the Cupples Division and European Operations
from the 1995 operating results.
During the first quarter of 1994, the Company recorded a
restructuring charge of $.9 million reflecting primarily severances
associated with workforce reductions at the Cupples Division.
Income from continuing operations was $.6 million during the first
quarter of 1995 compared to a loss of $6.6 million during the same
period of 1994.
Net income was $4.5 million for the first quarter of 1995 compared
with a net loss a $5.5 million for the first quarter of 1994. Net
income during the first quarter of 1995 includes income from the
discontinued Concrete Division of $.5 million and a $3.5 million
gain resulting from the sale of the Concrete Division. Net income
for the first quarter of 1994 includes income from the discontinued
Concrete Division of $1.1 million, including a $1.2 million credit
from the settlement of certain backcharge and other claims arising
out of a project which was substantially complete in 1989.
The financial information presented in the tables below includes
certain financial information concerning the Company's operations
as it is presented in the Condensed Consolidated Financial
Statements of the Company and provides certain unaudited pro forma
information relating to the Company's Continuing Businesses.
Adjustments for Businesses Sold/Held for Sale reflect the exclusion
of the operating results for the periods indicated of the Company's
businesses which have been sold or are currently in the process of
sale or disposal. Results of the Concrete Division are excluded,
as this business is accounted for as a discontinued operation. The
pro forma operating results are not necessarily indicative of what
the Company's actual results would have been had such transactions
occurred at the beginning of the periods presented and are not
necessarily indicative of the financial condition or results of
operations for any future period or date.
Quarter Ended
March 31
---------------------
1995 1994
--------- --------
(In Thousands)
(Unaudited)
Revenue:
Metal Buildings. . . . . . . . . . . . $60,927 $50,507
Building Products. . . . . . . . . . . 8,792 11,983
------- -------
As Reported. . . . . . . . . . . . . . 69,719 62,490
Businesses Sold/Held for Sale. . . . . - (6,389)
------- -------
Pro Forma Continuing Businesses. . . . $69,719 $56,101
======= =======
Quarter Ended
March 31
---------------------
1995 1994
--------- --------
(In Thousands)
(Unaudited)
Cost of Goods Sold:
Metal Buildings. . . . . . . . . . . . $51,422 $45,587
Building Products. . . . . . . . . . . 7,863 11,076
------- -------
As Reported. . . . . . . . . . . . . . 59,285 56,663
Businesses Sold/Held for Sale. . . . . - (6,352)
------- -------
Pro Forma Continuing Businesses. . . . $59,285 $50,311
======= =======
Quarter Ended
March 31
---------------------
1995 1994
--------- --------
(In Thousands)
(Unaudited)
Selling General and Administrative
Expense:
Metal Buildings. . . . . . . . . . . . $ 5,431 $ 4,767
Building Products. . . . . . . . . . . 1,575 3,337
Corporate. . . . . . . . . . . . . . . 2,008 2,486
------- -------
As Reported. . . . . . . . . . . . . . 9,014 10,590
Businesses Sold/Held for Sale. . . . . - (1,937)
------- -------
Pro Forma Continuing Businesses. . . . $ 9,014 $ 8,653
======= =======
Quarter Ended
March 31
---------------------
1995 1994
--------- --------
(In Thousands)
(Unaudited)
Restructuring Expense
Metal Buildings. . . . . . . . . . . . $ - $ -
Building Products. . . . . . . . . . . - 900
Corporate. . . . . . . . . . . . . . . - -
------- -------
As Reported. . . . . . . . . . . . . . - 900
Businesses Sold/Held for Sale. . . . . - (900)
------- -------
Pro Forma Continuing Businesses. . . . $ - $ -
======= =======
Quarter Ended
March 31
---------------------
1995 1994
--------- --------
(In Thousands)
(Unaudited)
Operating Income:
Metal Buildings. . . . . . . . . . . . $ 4,074 $ 153
Building Products. . . . . . . . . . . (646) (3,330)
Corporate. . . . . . . . . . . . . . . (2,008) (2,486)
------- -------
As Reported. . . . . . . . . . . . . . 1,420 (5,663)
Businesses Sold/Held for Sale. . . . . - 2,800
------- -------
Pro Forma Continuing Businesses. . . . $ 1,420 $(2,863)
======= =======
Quarter Ended
March 31
---------------------
1995 1994
--------- --------
(In Thousands)
(Unaudited)
Interest Expense:
As Reported. . . . . . . . . . . . . . $ 1,116 $ 1,128
Businesses Sold/Held for Sale. . . . . - (83)
------- -------
Pro Forma Continuing Businesses. . . . $ 1,116 $ 1,045
======= =======
Quarter Ended
March 31
---------------------
1995 1994
--------- --------
(In Thousands)
(Unaudited)
Income (Loss) from Continuing
Operations:
Metal Buildings. . . . . . . . . . . . $ 4,255 $ 315
Building Products. . . . . . . . . . . (606) (3,425)
Corporate (including domestic
interest expense) . . . . . . . . . (3,077) (3,452)
------- -------
As Reported. . . . . . . . . . . . . . 572 (6,562)
Businesses Sold/Held for Sale. . . . . - 2,826
------- -------
Pro Forma Continuing Businesses. . . . $ 572 $(3,736)
======= =======
The following sections highlight the Company's operating results on
a segment basis and provide information on non-operating income and
expenses.
Metal Buildings Group
- ---------------------
Metal Buildings Group revenues increased by $10.4 million or 20.6%
in the first quarter 1995 compared to the same period in 1994. The
increase reflects primarily improved market conditions in the U.S.
and favorable weather conditions in the first quarter of 1995
compared to the first quarter of 1994. Operating income at the
Metal Buildings Group was $4.1 million in the first quarter of 1995
compared to $.2 million in the first quarter of 1994. Operating
profits during the first quarter of 1995 were favorably affected by
higher revenues and weather conditions offset in part by higher
selling, general and administrative costs associated with higher
sales volumes and costs associated with the implementation of new
information systems and decentralization initiatives currently in
process.
Building Products Group
- -----------------------
Building Products Group revenues decreased by $3.2 million or 26.6%
in the first quarter of 1995 compared to the same period in 1994.
The revenue decline is a result of excluding the Cupples Division
and European Operations which recorded $6.4 million of revenue
during the first quarter of 1994, offset in part by higher revenues
at the Company's remaining Building Products operations.
For the quarter ended March 31, 1995, the Building Products Group
recorded an operating loss of $.6 million compared with an
operating loss of $3.3 million in the first quarter of 1994. The
1994 operating loss includes losses recorded by the Cupples
Division and European Operations of $2.8 million, including a $.9
million restructuring charge. Excluding the effect of the Cupples
Division and the European Operations, the operating loss for the
first quarter of 1994 was $.5 million.
Other Income (Expenses)
- -----------------------
Interest expense for the each of the quarters ended March 31, 1995
and 1994 was $1.1 million.
Other income (expense) - net for each of the quarters ended March
31, 1995 and 1994 totalled $.3 million.
Backlog of Orders
- -----------------
At March 31, 1995, the backlog of unfilled orders believed to be
firm for the Company's ongoing businesses was approximately $99.8
million. On a comparable basis, adjusted for the sale of the
Concrete Division, the Cupples Division and the European
Operations, which had a backlog at March 31, 1994 of approximately
$75.1 million, the order backlog was approximately $96.6 million at
March 31, 1994.
Litigation
- ----------
Several contracts related to the discontinued custom curtainwall
operations continue to be the subject of litigation. In one of the
actions, a lawsuit arising out of the construction of new
headquarters for Morgan Guaranty Trust Company of New York
("Morgan") at 60 Wall Street, New York, New York is pending in the
Supreme Court of the State of New York [Cupples Products Division
of H.H. Robertson Company v. Morgan Guaranty Trust Company of New
York, et al (the "New York Litigation")]. The Company's Cupples
Division acted as a subcontractor for the provision and erection of
the custom curtainwall for the building. Morgan and Tishman
Construction Company of New York ("Tishman") the general contractor
for the project, claimed that the Company and Federal Insurance
Company ("Federal"), as issuer of a performance bond in connection
with the Company's work, are liable for $29.9 million in excess
completion costs and delay damages due to the Company's alleged
failure to perform its obligations under its subcontract. The
Company had taken action to enforce a $5.0 million mechanic's lien
against the building and sought to recover more than $10.0 million
in costs and damages caused by Tishman's breach of the subcontract
with the Company.
On March 3, 1995, the Company and Federal entered into an agreement
(the "Federal Agreement") under which Federal agreed to hold the
Company harmless from claims pending in the New York Litigation.
Under the terms of the Federal Agreement, Federal will assume
control of the New York Litigation and will also be the beneficiary
of any affirmative claim which the Company may receive. As
consideration for Federal's obligations, the Company assigned to
Federal the $3.0 million interest bearing promissory note received
from the Company's sale of its Concrete Division, and agreed to pay
Federal $1.0 million per year, in equal quarterly installments, for
seven years without interest commencing March 24, 1995. As
security for the payment obligations to Federal, the Company
granted to Federal a security interest in all of the Company's
assets and the purchaser of the Concrete Division delivered a
financial guarantee insurance policy securing payment of the
promissory note.
The Federal Agreement also provides that (i) at least 30% of the
ownership of the common stock of the Company must be held by Andrew
G.C. Sage, II, who is the current Chairman of the Company and at
December 31, 1994 controlled approximately 34% of the outstanding
common stock through his control of Sage RHH, and Michael E.
Heisley, who is the current Chief Executive Officer and Vice
Chairman of the Company and at December 31, 1994 controlled
approximately 21% of the outstanding common stock through his
ownership of RBC Holdings L.P. and (ii) that Mr. Sage, Mr. Heisley
or both must continue as chief executive officer and/or chairman of
the Company. The Federal Agreement provides that, in the event
such common stock ownership and executive officers are not
maintained, Federal will be entitled to immediate payment of all
amounts remaining unpaid to them.
The Company filed suit in state court in Iowa against the owner,
general contractor and a subcontractor seeking payment of amounts
owed to the Company and other damages in connection with a pre-
engineered metal building project in Anchorage, Alaska. The
general contractor subsequently filed suit in state court in Alaska
against a number of parties, including the Company and its surety,
alleging against the Company breach of contract, breach of implied
warranties, misrepresentation and negligence in connection with the
fabrication of the building and seeking damages in excess of $10.0
million. The Company believes that it is entitled to payment under
its contract and that it has meritorious defenses against the
claims of the general contractor.
There are various other proceedings pending against or involving
the Company which are ordinary or routine given the nature of the
Company's business. The Company has recorded a liability related to
litigation where it is both probable that a loss has been incurred
and the amount of the loss can be reasonably estimated. While the
outcome of the above matters cannot at this time be predicted with
certainty, management does not expect that these matters will have
a material adverse effect on the consolidated financial condition
or results of operations of the Company.
Environmental Matters
- ---------------------
The Company has been identified as a potentially responsible party
by various federal and state authorities for clean-up at various
waste disposal sites. While it is often extremely difficult to
reasonably quantify future environmental related expenditures, the
Company has engaged various third parties to perform feasibility
studies and assist in estimating the cost of investigation and
remediation. The Company's policy is to accrue environmental and
clean-up related costs of a non-capital nature when it is both
probable that a liability has been incurred and that the amount can
be reasonably estimated. Based upon currently available
information, including the reports of third parties, management
does not believe that the reasonably possible loss in excess of the
amounts accrued would be material to the consolidated financial
statements.
Liquidity and Capital Resources
- -------------------------------
During the quarter ended March 31, 1995, the Company used
approximately $3.7 million of cash, excluding amounts which became
restricted, to fund its operating activities. Of this amount,
approximately $.6 million was used to fund restructuring
activities. The uses of operating cash during the first quarter of
1995 reflect primarily the funding of working capital requirements
and trailing liabilities associated with sold and discontinued
businesses.
During 1994, in view of the Company's liquidity situation, along
with the projected working capital and capital expenditure needs
for the Company's existing businesses, funding projections for
trailing liabilities and the existing and anticipated bonding
requirements required primarily by the Concrete Division, the
Company decided that it was necessary to sell the Concrete
Division. The sale was completed on March 3, 1995 and the Company
received approximately $8.0 million in cash after certain
adjustments. As a result of the sale of the Concrete Division, the
Company's borrowing base was reduced by approximately $3.9 million.
Security requirements for such reduction in the borrowing base, as
well as security requirements for additional letters of credit
issued during the first quarter of 1995, were fulfilled by the
Company in the form of restricted cash collateral. At March 31,
1995, the Company had $8.0 million of restricted cash.
Approximately $.6 million was utilized to support certain
settlements and other claims related to the sale and disposition of
businesses. The remaining $7.4 million of restricted cash was
utilized to support letters of credit and letter of credit
guarantees.
In addition, during the first quarter of 1995, the Company spent
approximately $1.2 million on capital expenditures, most of which
were directed toward upgrading and improving manufacturing
equipment and data processing systems at the Company's Metal
Building Group. Cash provided by financing activities during the
period consisted primarily of short-term borrowings of $.4 million
which was provided under foreign credit facilities to assist in
funding local working capital requirements and first quarter
operating losses. As a result, primarily of the above,
unrestricted cash and cash equivalents decreased by $1.6 million
during the period from December 31, 1994 to March 31, 1995. At
March 31, 1995, the Company had $6.3 million of unrestricted cash
and cash equivalents which consisted of $2.2 million of cash and
short-term investments located at foreign subsidiaries which is
available to fund local working capital requirements and $4.1
million of cash located in the U.S. which is available for general
business purposes.
The Company maintains a credit facility (the "Credit Facility")
with Foothill Capital Corporation which, under its terms, has
maximum availability of $45.0 million and expires on May 18, 1999.
Availability under the terms of the Credit Facility is based on a
percentage of eligible (as defined and subject to certain
restrictions) accounts receivable and inventory, plus a base amount
(which base amount is reduced by $.2 million per month and is
subject to reduction in the case of sales of certain property,
plant and equipment, including assets held for sale), plus the
amount provided by the Company as cash collateral, if any, less the
amount of $5.0 million required to be outstanding under the term
loan (each together the "Borrowing Base"). At March 31, 1995, the
Borrowing Base was estimated to be $30.0 million which together
with $7.4 million of restricted cash, was used to support the $5.0
million term loan and $31.5 million of outstanding letters of
credit and related guarantees which were used to support primarily
the Company's workers' compensation and bonding programs. The
Company had approximately $.9 million of availability under the
Credit Facility at March 31, 1995. Further availability could be
obtained by providing additional cash collateral to support
additional letters of credit and guarantees.
Pursuant to the terms of the agreement for the sale of the Concrete
Division, the purchaser entered into an indemnity agreement with
the Company's principal surety with respect to performance bonds
relating to the Concrete Division which were outstanding at the
date of the sale. In connection with such agreement, the Company's
surety agreed to reduce the Company's letter of credit collateral
requirements by approximately $4.4 million. In addition, an
insurance carrier for the Company reduced the Company's letter of
credit collateral requirements during 1995, which together with the
reduction in the performance bond collateral requirements discussed
above, enabled the Company to reduce its total letter of credit
collateral requirements by approximately $5.8 million. As a result
of the collateral requirement reductions, the Company expects to
gain access during the second quarter of 1995 to approximately $5.8
million of cash which was restricted at March 31, 1995.
In addition to the Credit Facility, borrowing arrangements are in
place at the Company's Asia/Pacific operations to assist in
supporting local working capital requirements and bonding programs.
The Asia/Pacific operations credit facility is secured by a $1.0
million letter of credit issued under the Company's domestic Credit
Facility during the first quarter of 1995. At March 31, 1995, the
Company had in place at its Asia/Pacific operations available lines
of credit of $.7 million, of which $.5 million was outstanding. In
addition to the line of credit, the Company's Asia/Pacific
operations had a guarantee and performance bond facility in place
which enabled them to issue up to $1.8 million of performance bonds
and guarantees. At March 31, 1995, the Asia/Pacific operations had
utilized substantially all amounts available under that facility.
The Asia/Pacific operations are currently negotiating to replace
the current credit facility which expires on June 30, 1995. In
order for a new credit facility to be established, the Company may
be required to provide additional security to its Asia/Pacific
operations.
On a worldwide basis at March 31, 1995, excluding the European
Operations, the Company had outstanding performance and financial
bonds of $31.4 million, which generally provide a guarantee as to
the Company's performance under contracts and other commitments;
certain of which are collateralized by letter of credit programs
and certain of which are issued under foreign credit facilities.
At March 31, 1995, the Company's European Operations had
outstanding short-term bank borrowing of $3.4 million which are
generally supported by the local entities' assets. In addition, at
March 31, 1995, the European Operations had outstanding performance
bonds and other guarantees of $3.7 million. At certain of the
European Operations, as well as other foreign locations, the
Company has issued guarantees which support the local entities
borrowings and performance guarantees.
Outlook
- -------
During the past several years, the Company has incurred significant
losses from continuing operations. The combination of these
operating losses, along with the funding required for restructuring
activities, trailing liabilities associated with sold and
discontinued businesses and substantial financing expenses have
placed a significant strain on the Company's liquidity and credit
resources. To respond to this situation, the Company has taken,
and is in the process of taking, a number of operational and
financial restructuring actions which are designed to improve the
Company's profitability and liquidity. During 1994, the Company
concluded that the appropriate near term strategy should be to:
(i) focus the business around its Metal Buildings Group and
Asia/Pacific Operations; (ii) exit those businesses which are
considered non-strategic and consume significant liquidity; and
(iii) preserve liquidity by aggressively managing trailing
liabilities and, whenever possible, structure the payment of such
obligations over a period of years. Actions which were taken
during 1994 and 1995 to increase profitability, cash flow and
liquidity include further reductions in headcount and costs
associated with the corporate office; termination of the accrual of
benefits under the Company's defined benefit pension plan for
active salaried employees in the United States; sale of the Cupples
Division, which incurred losses from continuing operations of $3.5
million for the nine months ended September 30, 1994; commencement
of actions for the sale or disposition of the European Operations
which incurred losses from continuing operations for the nine
months ended September 30, 1994 of $1.3 million; entering into the
Federal Agreement which provides a structured payout over time
concerning certain litigation; development of a program to
aggressively manage outstanding claims and to reduce collateral
requirements in connection with insurance programs; and other
actions to reduce the cost of active employee and retiree benefits.
Additionally, on January 13, 1995, the Company filed an Application
for Waiver of Minimum Funding Standard with the Internal Revenue
Service for certain of its U.S. defined benefit pension plans for
the plan years 1994 and 1995. If the request to waive these
contributions is accepted, the Company's pension funding
requirements for the calendar year ended December 31, 1995 of
approximately $6,400,000 will be deferred and such contributions
may be made ratably over a future period, depending on the
instructions of the Internal Revenue Service. In the event that
the request to waive these contributions is denied, the Company
will be required to immediately fund its past due contributions.
The Company anticipates that demands on its liquidity and credit
resources will continue to be significant during 1995 and the next
several years as a result of funding requirements for restructuring
programs, the Federal Agreement, nonrecurring cash obligations and
trailing liabilities associated with sold and discontinued
businesses. Additionally, beginning in November of 1995, the
Company will be required to pay its interest obligation on its 10%-
12% Senior Subordinated Notes in cash which will require a payment
of $1.4 million semiannually. The Company expects to meet these
requirements through a number of sources, including operating cash
generated by the Company's Metal Buildings Group, proceeds from the
sale of the Concrete Division, available cash which was $6.3
million at March 31, 1995, and availability under the Credit
Facility and foreign credit facilities. The Company's liquidity
projections are predicated on estimates as to the amount and timing
of the payment of the Company's trailing liabilities and
expectations regarding the operating performance of the Company's
Continuing Businesses. In the event the Company experiences
significant differences as to the amount and timing of the payment
of the Company's trailing liabilities and/or the actual operating
results of the Company's Continuing Businesses, the Company may be
required to seek additional capital through the expansion of
existing credit facilities or through new credit facilities, or
through a possible debt or equity offering, or a combination of the
above. There can be no assurance that such additional capital
would be available to the Company.
PART II
OTHER INFORMATION
-----------------
Item 1. Legal Proceedings
Information describing certain of the Company's legal
proceedings and environmental matters is included in Part
1, Item 1, in Note 5 to the "Notes to the Consolidated
Financial Statements," and in Part 1, Item 2, in
Management's Discussion and Analysis of Financial
Condition and Results of Operations under the captions
"Litigation" and Environmental Matters," and is hereby
incorporated by reference.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 11 - Computation of Earnings (Loss) per
Common Share, filed herewith.
SIGNATU RES
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.
ROBERTSON-CECO CORPORATION
--------------------------
(Registrant)
By: /s/ Thomas C. Baker
-----------------------------
Thomas C. Baker
Corporate Controller
May 12, 1995
- ------------
ROBERTSON-CECO CORPORATION
EXHIBIT INDEX
--------------------------
EXHIBIT 11 - Computation of Earnings (Loss) Per Common Share