================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K/A AMENDMENT NO. 1 [x] AMENDMENT TO ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1994 or [_] AMENDMENT TO 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: 1-4252 UNITED INDUSTRIAL CORPORATION - -------------------------------------------------------------------------------- (Exact Name of Registrant as Specified in its Charter) DELAWARE 95-2081809 - ------------------------------------------------------------------------------- (State or Other Jurisdiction of (I.R.S. Employer Identification No.) Incorporation or Organization) 18 EAST 48TH STREET NEW YORK, NEW YORK 10017 (212) 752-8787 - -------------------------------------------------------------------------------- (Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant's Principal Executive Offices) Securities registered pursuant to Section 12(b) of the Act: Name of Each Exchange Title of Each Class on Which Registered ------------------- ------------------- COMMON STOCK, $1.00 PAR VALUE NEW YORK STOCK EXCHANGE Securities registered pursuant to Section 12(g) of the Act: NONE - -------------------------------------------------------------------------------- (Title of Class) 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 (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 by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statement incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K [x]. Aggregate market value of the voting stock (which consists solely of shares of Common Stock) held by non-affiliates of the registrant as of March 1, 1995 computed by reference to the closing sale price of the registrant's Common Stock on the New York Stock Exchange on such date: $52,364,460. On March 1, 1995, the registrant had outstanding 12,167,493 shares of Common Stock, par value $1.00 per share, which is the registrant's only class of common stock. ================================================================================ INTRODUCTORY NOTE This Amendment on Form 10-K/A amends and restates in its entirety Item 14 of the Annual Report on Form 10-K of United Industrial Corporation (the "Company") for the fiscal year ended December 31, 1994 to add an inadvertently omitted sentence to the Auditor's Report in Item 14(a) and to correct a typographical error in the Condensed Statements of Operations of Schedule I - Condensed Financial Information of the Registrant. ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K (a) (1) Financial Statements: See Financial Statements Index included in Item 8 of this Report. (2) Financial Statement Schedules: FINANCIAL STATEMENT SCHEDULES INDEX Page No. -------- Independent Auditors Report F-3 Schedule I Condensed Financial Information of Registrant F-4 Schedule II Valuation and Qualifying Accounts F-9 (3) Exhibits: (3)(a)- Restated Certificate of Incorporation of United (1). (3)(b)- By-Laws of United (incorporated by reference to United's Annual Report on Form 10-K for the year ended December 31, 1989). (3)(c)- Amendment to By-Laws of United as of September 19, 1994. (10)(a)- United Industrial Corporation 1994 Stock Option Plan (1). (10)(b)- Purchase Agreement, dated January 18, 1994, between United and Symtron Systems, Inc.(1). (10)(c)- Note Purchase Agreement (the "Note Agreement") dated as of July 15, 1992 among AAI Corporation ("AAI") and Principal Mutual Life Insurance Company, The Travelers Insurance Company and The Travelers Indemnity Company of Rhode Island (the "Purchasers")(2). (10)(d)- Guaranty Agreement (the "Note Guaranty") dated as of July 15, 1992 by United in favor of the Purchasers (2). (10)(e)- Amendment No. 1 dated July 15, 1993 to the Note Agreement(3). (10)(f)- Amendment No. 1 dated July 15, 1993 to the Note Guaranty(3). (10)(g)- Amendment No. 2 to Note Agreement dated as of December 20, 1993 among AAI and the Purchasers. (10)(h)- Amendment No. 3 to Note Agreement dated as of October 13, 1994 among AAI and the Purchasers(4). (10)(i)- Amendment No. 2 to the Note Guaranty(4). (10)(j)- Credit Agreement dated as of October 13, 1994 among AAI Corporation, the Lenders parties thereto and First Fidelity Bank, National Association as Agent (the "Agent") and Issuing Bank(4). (10)(k)- Pledge and Security Agreement dated as of October 13, 1994 by AAI in favor of the Agent(4). (10)(l)- Pledge and Security Agreement dated as of October 13, 1994 by the Company in favor of the Agent(4). (10)(m)- Security Agreement dated as of October 13, 1994 between AAI and the Agent(4). (10)(n)- Security Agreement dated as of October 13, 1994 between each subsidiary of AAI, certain subsidiaries of the Company and the Agent(4). (10)(o)- Guaranty dated as of October 13, 1994 by the Company and certain of its subsidiaries and by each subsidiary of AAI in favor of the Agent(4). (10)(p)- Employment Agreement, dated September 20, 1993, between AAI and Richard R. Erkeneff(1). (10)(q)- Employment Agreement, dated March 16, 1995, between United and P. David Bocksch. (11) - Computation of Earnings Per Share. (13) - United's 1994 Annual Report to Shareholders. (21) - Subsidiaries of United. (23) - Consent of Independent Auditors (27) - Financial Data Schedule ----------------------- (1) Incorporated by reference to United's Annual Report on Form 10-K for the year ended December 31, 1993. (2) Incorporated by reference to United's Quarterly Report on Form 10-Q for the quarter ended September 30, 1992. (3) Incorporated by reference to United's Quarterly Report on Form 10-Q for the quarter ended September 30, 1993. (4) Incorporated by reference to United's Quarterly Report on Form 10-Q for the quarter ended September 30, 1994. (b) - Reports on Form 8-K - United did not file any reports on Form 8-K during the quarter ended December 31, 1994. Annual Report on Form 10-K Item 14(a) (1) and (2), (c) and (d) List of Financial Statements and Financial Statement Schedules Certain Exhibits Financial Statement Schedules Year ended December 31, 1994 United Industrial Corporation New York, New York Form 10-K Item 14(a)(1) and (2) United Industrial Corporation and Subsidiaries List of Financial Statements and Financial Statement Schedules The following consolidated financial statements of United Industrial Corporation and subsidiaries, included in the annual report of the registrant to its shareholders for the year ended December 31, 1994, are incorporated by reference in Item 8: Consolidated Balance Sheets--December 31, 1994 and 1993 Consolidated Statements of Operations-- Years Ended December 31, 1994, 1993 and 1992 Consolidated Statements of Cash Flows-- Years Ended December 31, 1994, 1993 and 1992 Notes to Financial Statements The following consolidated financial statement schedules of United Industrial Corporation and subsidiaries are included in Item 14(d): Schedule I Condensed Financial Information of Registrant Schedule II Valuation and Qualifying Accounts All other schedules for which provision is made in the applicable accounting regulation of the Securities and Exchange Commission are not required under the related instructions or are inapplicable and, therefore, have been omitted. F-2 Report of Independent Auditors Board of Directors and Shareholders United Industrial Corporation We have audited the accompanying consolidated balance sheets of United Industrial Corporation and subsidiaries as of December 31, 1994 and 1993, and the related consolidated statements of operations and cash flows for each of the three years in the period ended December 31, 1994. Our audits also included the financial statement schedules listed in the Index at Item 14(a). These financial statements and schedules are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements and schedules based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of United Industrial Corporation and subsidiaries at December 31, 1994 and 1993 and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 1994 in conformity with generally accepted accounting principles. Also, in our opinion, the related financial statement schedules, when considered in relation to the basic financial statements taken as a whole, present fairly in all material respects the information set forth therein. As discussed in Notes 11 and 13 to the consolidated financial statements, effective January 1, 1993 the Company changed its method of accounting for postretirement benefits other than pensions and income taxes. ERNST & YOUNG LLP New York, New York February 28, 1995 F-3 SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT UNITED INDUSTRIAL CORPORATION CONDENSED BALANCE SHEETS (DOLLARS IN THOUSANDS) DECEMBER 31 1994 1993 ------ ------ ASSETS Current assets: Cash and cash equivalents $ 5,635 $ 1,941 Recoverable income taxes -- 3,618 Prepaid expenses and other current assets 208 940 Deferred income taxes 3,169 5,303 --------- --------- Total current assets $ 9,012 $ 11,802 Equipment 325 256 Less allowances for depreciation (240) (231) --------- --------- 85 25 Other assets (principally investments in and amounts due from wholly-owned subsidiaries) 165,370 125,834 --------- --------- $ 174,467 $ 137,661 ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities, including notes payable of $3,000 $ 6,899 $ 7,515 Income taxes 3,333 -- --------- --------- Total current liabilities 10,232 7,515 Deferred income taxes 9,228 8,280 Other liabilities (principally amount due to wholly-owned subsidiaries) 66,586 36,512 Shareholders' equity: Common Stock 14,374 14,374 Other shareholders' equity 74,047 70,980 --------- --------- 88,421 85,354 --------- --------- $ 174,467 $ 137,661 ========= ========= See notes to condensed financial statements of registrant. F-4 SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT UNITED INDUSTRIAL CORPORATION CONDENSED STATEMENTS OF OPERATIONS (DOLLARS IN THOUSANDS) YEAR ENDED DECEMBER 31 1994 1993 1992 -------- -------- -------- Management fees from wholly-owned subsidiaries $ 2,064 $ 2,571 $ 2,485 Other revenue (expense)- net 150 41 (21) -------- -------- -------- 2,214 2,612 2,464 Expenses: Administrative expenses 3,247 4,590 1,571 Interest income (1,292) (364) (926) Interest expense 4,708 2,110 2,460 -------- -------- -------- 6,663 6,336 3,105 ======== ======== ======== Loss before income taxes and equity in net income of subsidiaries (4,449) (3,724) (641) Income tax (benefit) (1,639) (933) (195) -------- -------- -------- Loss before equity in net income of subsidiaries (2,810) (2,791) (446) Equity in net income (loss) of subsidiaries 8,022 (8,232) 6,839 -------- -------- -------- Net income (loss) $ 5,212 $(11,023) $ 6,393 ======== ======== ======== Dividends paid by subsidiaries to Parent $ -- $ 1,500 $ -- ======== ======== ======== See notes to condensed financial statements of registrant. F-5 SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT UNITED INDUSTRIAL CORPORATION CONDENSED STATEMENTS OF CASH FLOWS (DOLLARS IN THOUSANDS) YEAR ENDED DECEMBER 31 1994 1993 1992 ------ ------ ------ Operating activities: Net income (loss) $ 5,212 $(11,023) $ 6,393 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 9 33 34 Deferred income taxes (441) (680) -- Undistributed (earnings) loss of subsidiaries (8,022) 9,732 (6,839) Changes in operating assets and liabilities: Income taxes 6,951 (3,618) -- Prepaid expenses and other current assets 732 (939) 662 Current liabilities (616) (2,912) 1,613 Accounts with wholly-owned subsidiaries 3,037 21,874 6,542 -------- -------- -------- Net cash provided by operating activities 6,862 12,467 8,405 -------- -------- -------- Investing activities: Purchase of property and equipment (69) -- -- (Increase) decrease in intercompany receivables due to transfer of deferred taxes from wholly-owned subsidiaries (3,523) 24,109 5,328 Increase (decrease) in deferred taxes resulting from transfer from wholly-owned subsidiaries 3,523 (24,109) (5,328) Other, net (53) -- -- -------- -------- -------- Net cash used in investing activities (122) -- -- -------- -------- -------- F-6 SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT UNITED INDUSTRIAL CORPORATION CONDENSED STATEMENTS OF CASH FLOWS (continued) (DOLLARS IN THOUSANDS) YEAR ENDED DECEMBER 31 1994 1993 1992 ------ ------ ------ Financing activities: Proceeds from borrowings $ 12,000 $ 9,000 $ 23,000 Payments on borrowings (12,000) (16,000) (24,000) Dividends paid (2,571) (4,290) (7,845) Purchase of treasury shares (475) -- -- Proceeds from exercise of stock options -- -- 57 -------- -------- -------- Net cash used in financing activities (3,046) (11,290) (8,788) -------- -------- -------- Increase (decrease) in cash and cash equivalents 3,694 1,177 (383) Cash and cash equivalents at beginning of year 1,941 764 1,147 -------- -------- -------- Cash and cash equivalents at end of year $ 5,635 $ 1,941 $ 764 ======== ======== ======== See notes to condensed financial statements of registrant. F-7 A. ACCOUNTING POLICIES BASIS OF PRESENTATION In the parent-company-only financial statements, the Company's investment in subsidiaries is stated at cost plus equity in undistributed earnings of subsidiaries since date of acquisition. The Company's share of net income of its unconsolidated subsidiaries is reflected using the equity method. Parent-company-only financial statements should be read in conjunction with the Company's consolidated financial statements. Certain amounts in the prior years have been reclassified to conform to the current year's classification. B. EQUITY IN NET INCOME (LOSS) OF SUBSIDIARIES In 1993, included in the equity in net loss of subsidiaries is a restructuring charge of $22,500,000 ($14,370,000, net of tax benefit) regarding the Company's defense industry subsidiary. A major portion of the charge resulted from the termination of the operations of AAI/MICROFLITE, a manufacturer of flight simulators and training devices, due to a lack of new orders. Also, in 1993 the Company changed its method of accounting for postretirement benefits other than pensions and income taxes. The implementation of these accounting changes resulted in a cumulative effect charge against income of $12,890,000, net of tax benefit and a cumulative effect of $13,884,000 which reduced the 1993 net loss, respectively. Consequently, the net cumulative effect of these accounting changes resulted in a $994,000 reduction of the net loss in 1993. F-8 Schedule II--Valuation and Qualifying Accounts United Industrial Corporation and Subsidiaries December 31, 1994 COL. A Col. B Col. C Col. D Col. E (1) (2) Charged to Balance at Charged to Other Balance at Beginning of Costs and Accounts Deductions End of Description Period expenses Describe (Describe) Period ----------- ------ -------- -------- ---------- ------ Year ended December 31, 1994: Deducted from asset account: Allowance for doubtful accounts $ 418,000 $ 50,000 (B) $ 368,000 ========== =============== ========== Product warranty liability $ 800,000 $ 275,000 (B) $ 525,000 ========== =============== ========== Year ended December 31, 1993: Deducted from asset account: Allowance for doubtful accounts $ 476,000 $ 41,000 $ 99,000 (A) $ 418,000 ========== =========== =============== ========== Product warranty liability $ 950,000 $ 150,000 (B) $ 800,000 ========== =============== ========== Year ended December 31, 1992: Deducted from asset account: Allowance for doubtful accounts $ 560,000 $ 13,000 $ 141,000 (C) $ 238,000 (B) $ 476,000 ========== =========== =============== =============== ========== Product warranty liability $ 850,000 $ 100,000 $ 950,000 ========== =========== ========== <FN> (A) -- Uncollectible accounts written off, net of recoveries. (B) -- Reduction of valuation account. (C) -- Applicable to acquired business. F-9 SIGNATURE Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Amendment to its Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized. UNITED INDUSTRIAL CORPORATION By: /s/ James H. Perry ------------------------------- James H. Perry Treasurer and Chief Financial Officer Date: December 26, 1995 NYFS11...:\95\78495\0001\1196\FRMN155S.53A