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 June 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 1-10659
-------
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.)
5000 Executive Parkway, San Ramon, California 94583
- ----------------------------------------------- ------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 510-358-0330
------------
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 July 31, 1996
- ----------------------------------- -------------------------------
Common Stock, par value $0.01 per 16,173,618
share
ROBERTSON-CECO CORPORATION
Form 10-Q
---------
For Quarter Ended June 30, 1996
-------------------------------
INDEX
=====
PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements:
Condensed Consolidated Balance Sheets --
June 30, 1996 and December 31, 1995 . . . . . . . . 3
Condensed Consolidated Statements of Operations
and Retained Earnings (Deficit) -- Three and Six
Months Ended June 30, 1996 and 1995 . . . . . . . . 5
Condensed Consolidated Statements of Cash Flows --
Six Months Ended June 1996 and 1995 . . . . . . . . 7
Notes to Condensed Consolidated Financial
Statements . . . . . . . . . . . . . . . . . . . . 9
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . 13
PART II. OTHER INFORMATION:
Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . 17
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . 17
Signatures. . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Exhibit Index . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ITEM 1. FINANCIAL STATEMENTS
ROBERTSON-CECO CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
-------------------------------------
(In thousands, except share data)
(Unaudited)
June 30 December 31
1996 1995
----------- -----------
-- ASSETS --
CURRENT ASSETS:
Cash and cash equivalents . . . . . . . $ 7,930 $ 9,668
Restricted cash . . . . . . . . . . . . - 209
Accounts and notes receivable, net . . . 27,797 25,261
-------- --------
Inventories:
Work in process . . . . . . . . . . . 6,130 4,880
Material and supplies . . . . . . . . 6,370 8,608
-------- --------
Total inventories . . . . . . . . . . 12,500 13,488
-------- --------
Businesses held for sale, net . . . . . 4,000 4,000
Other current assets . . . . . . . . . . 1,913 1,871
-------- --------
Total current assets . . . . . . . . . 54,140 54,497
-------- --------
PROPERTY - at cost . . . . . . . . . . . . 41,658 39,632
Less accumulated depreciation . . . . . (19,014) (17,389)
-------- --------
Property, net . . . . . . . . . . . . 22,644 22,243
-------- --------
EXCESS OF COST OVER NET ASSETS OF
ACQUIRED BUSINESSES - NET . . . . . . . 27,025 27,439
-------- --------
OTHER NON-CURRENT ASSETS . . . . . . . . . 4,822 4,300
-------- --------
TOTAL ASSETS . . . . . . . . . . . . . $108,631 $108,479
======== ========
See Notes to Condensed Consolidated Financial Statements.
ROBERTSON-CECO CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)
-------------------------------------------------
(In thousands, except share data)
(Unaudited)
June 30 December 31
1996 1995
----------- -----------
-- LIABILITIES --
CURRENT LIABILITIES:
Accounts payable, principally trade . . $ 14,549 $ 18,085
Insurance liabilities . . . . . . . . . 8,859 8,243
Other accrued liabilities . . . . . . . 24,142 28,081
--------- ---------
Total current liabilities . . . . . . . 47,550 54,409
LONG-TERM DEBT, less current portion . . . 39,197 40,530
LONG-TERM INSURANCE LIABILITIES . . . . . . 7,215 10,744
LONG-TERM PENSION LIABILITIES . . . . . . . 10,303 6,907
RESERVES AND OTHER LIABILITIES . . . . . . 24,472 25,883
--------- ---------
TOTAL LIABILITIES . . . . . . . . . . . . . 128,737 138,473
--------- ---------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY (DEFICIENCY):
Common stock, par value $0.01 per share 162 162
Capital surplus . . . . . . . . . . . . 172,309 172,350
Warrants . . . . . . . . . . . . . . . . 6,042 6,042
Retained earnings (deficit) . . . . . . (193,013) (202,820)
Excess of additional pension liability
over unrecognized prior service cost . (5,001) (5,001)
Deferred compensation . . . . . . . . . (283) (398)
Foreign currency translation
adjustments . . . . . . . . . . . . . (322) (329)
--------- ---------
Stockholders' equity (deficiency) . . (20,106) (29,994)
--------- ---------
TOTAL LIABILITIES AND STOCK-
HOLDERS' EQUITY (DEFICIENCY) . . . $ 108,631 $ 108,479
========= =========
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 Six Months Ended
June 30 June 30
------------------ ------------------
1996 1995 1996 1995
-------- -------- -------- --------
NET REVENUES . . . . . . . . . $ 63,876 $ 66,418 $120,848 $127,345
-------- -------- -------- --------
COSTS AND EXPENSES:
Cost of sales . . . . . . . 49,899 54,463 95,980 105,885
Selling, general and
administrative . . . . . . 6,412 8,712 13,203 16,151
-------- -------- -------- --------
Total . . . . . . . . . . 56,311 63,175 109,183 122,036
-------- -------- -------- --------
OPERATING INCOME . . . . . . . 7,565 3,243 11,665 5,309
-------- -------- -------- --------
OTHER INCOME (EXPENSE):
Interest expense . . . . . . (981) (1,088) (2,023) (2,181)
Other income (expense)-net . 136 105 365 310
-------- -------- -------- --------
Total . . . . . . . . . . (845) (983) (1,658) (1,871)
-------- -------- -------- --------
INCOME BEFORE PROVISION FOR
TAXES ON INCOME . . . . . . . 6,720 2,260 10,007 3,438
PROVISION FOR TAXES ON INCOME 175 - 200 -
-------- -------- -------- --------
INCOME - CONTINUING OPERATIONS 6,545 2,260 9,807 3,438
DISCONTINUED OPERATIONS:
Income (loss) from
discontinued operations . . - (841) - (942)
Gain on sale of business
segment . . . . . . . . . . - - - 3,450
-------- -------- -------- --------
Income (loss) from discontinued
operations . . . . . . . . . . - (841) - 2,508
-------- -------- -------- --------
NET INCOME . . . . . . . . . . $ 6,545 $ 1,419 $ 9,807 $ 5,946
======== ======== ======== ========
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 Six Months Ended
June 30 June 30
-------------------- ---------------------
1996 1995 1996 1995
--------- --------- ---------- ----------
RETAINED EARNINGS (DEFICIT)
AT BEGINNING OF PERIOD . . . $(199,558) $(194,752) $(202,820) $(199,279)
NET INCOME . . . . . . . . 6,545 1,419 9,807 5,946
--------- --------- --------- ---------
RETAINED EARNINGS (DEFICIT)
AT END OF PERIOD . . . . . $(193,013) $(193,333) $(193,013) $(193,333)
========= ========= ========= =========
NET INCOME PER COMMON SHARE:
Continuing Operations . . $ .41 $ .14 $ .61 $ .22
Discontinued Operations - (.05) - .15
--------- --------- --------- ---------
NET INCOME . . . . . . . . . $ .41 $ .09 $ .61 $ .37
========= ========= ========= =========
SHARES USED IN INCOME
PER SHARE CALCULATION . . . 16,117 15,945 16,120 15,940
========= ========= ========= =========
See Notes to Condensed Consolidated Financial Statements.
ROBERTSON-CECO CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
-----------------------------------------------
(In thousands)
(Unaudited)
Six Months Ended
June 30
-----------------------
1996 1995
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income . . . . . . . . . . . . . . . . $ 9,807 $ 5,946
Adjustments to reconcile net income
to net cash provided by (used for)
operating activities:
Depreciation and amortization . . . . . 2,214 2,001
Amortization of discount on debentures
and debt issuance costs . . . . . . . 638 618
Gain on sale of business segment . . . . - (3,450)
Provisions for:
Bad debts and losses on erection
contracts . . . . . . . . . . . . . 303 378
Rectification and other costs . . . . 629 728
Changes in assets and liabilities, net
of divestitures:
(Increase) decrease in accounts and
notes receivable . . . . . . . . . . (2,838) (2,748)
(Increase) decrease in inventories . . 988 (1,407)
(Increase) decrease in restricted cash 209 2,047
Increase (decrease) in accounts
payable, principally trade . . . . (3,534) (2,126)
Increase (decrease) in other current
liabilities . . . . . . . . . . . . (3,952) 5,167
Net changes in other assets and
liabilities . . . . . . . . . . . . (2,806) (9,234)
-------- --------
Net cash provided by (used for) operating
activities . . . . . . . . . . . . . . 1,658 (2,080)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures . . . . . . . . . . . (2,092) (2,748)
Proceeds from sales of property, plant
and equipment . . . . . . . . . . . . . . - 183
Proceeds from sales of businesses . . . . . - 8,000
Proceeds from assets held for sale . . . . 50 251
-------- --------
Net cash provided by (used for)
investing activities . . . . . . . . . $ (2,042) $ 5,686
-------- --------
See Notes to Condensed Consolidated Financial Statements.
ROBERTSON-CECO CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
-----------------------------------------------------------
(In thousands)
(Unaudited)
Six Months Ended
June 30
------------------------
1996 1995
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from (payments on) short-
term borrowings . . . . . . . . . . . . . $ - $ 511
Proceeds from long-term borrowings . . . . - 130
Payments on long-term borrowings . . . . . - (75)
Payments of capitalized interest on 12%
Notes . . . . . . . . . . . . . . . . (1,354) -
-------- --------
Net cash provided by (used for)
financing activities . . . . . . . . . (1,354) 566
-------- --------
Effect of foreign exchange rate changes
on cash . . . . . . . . . . . . . . . . - (42)
-------- --------
Net increase (decrease) in cash and
cash equivalents . . . . . . . . . . . (1,738) 4,130
Cash and cash equivalents - beginning
of period . . . . . . . . . . . . . . 9,668 7,890
-------- --------
Cash and cash equivalents - end of
period . . . . . . . . . . . . . . . . $ 7,930 $ 12,020
======== ========
SUPPLEMENTAL CASH FLOW DATA:
Cash payments made for:
Interest . . . . . . . . . . . . . . . $ 2,424 $ 1,387
======== ========
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
June 30, 1996 and the results of operations and cash flows for the periods
presented. All adjustments recorded during the period consisted of normal
recurring adjustments. The Condensed Consolidated Statement of Operations
for the three and six months ended June 30, 1995 has been reclassified to
reflect the sale of the Concrete Construction Group and the Building
Products Group as discontinued operations (Note 2). Certain other
previously reported amounts have been reclassified to conform to the 1996
presentation.
2. DISPOSITIONS
------------
On March 3, 1995, the Company sold its Concrete Construction business (the
"Concrete Construction Group") to Ceco Concrete Construction Corp., a newly
formed company owned by an entity controlled by the Company's Chief
Executive Officer. During the fourth quarter of 1995, the Company decided
to divest of its remaining Building Products operations which are located
in Australia, Northeast Asia and Southeast Asia (the "Asia/Pacific Building
Products Operations") and in Canada (the "Canadian Building Products
Operations"). In connection with the decision to divest the Asia/Pacific
and Canadian Building Products Operations, the Company recorded a charge of
$19,455,000 in the fourth quarter of 1995.
The decision to divest the Asia/Pacific and the Canadian Building Products
Operations represents the Company's complete exit from the Building
Products business. For accounting purposes, the Concrete Construction
Group and the Building Products Group were each considered a separate
business segment. Accordingly, the Company's Consolidated Statements of
Operations have been reclassified to reflect these businesses as
discontinued operations. For purposes of the December 31, 1995 and June
30, 1996 Consolidated Balance Sheets, the assets and liabilities of the
Asia/Pacific and Canadian Building Products Operations are netted and
classified as assets held for sale - current.
The following table summarizes the revenues and income/(losses) of the
Company's businesses which have been accounted for as discontinued
operations.
Three Six
Months Ended Months Ended
June 30, 1995 June 30, 1995
------------- -------------
(Thousands)
Revenues
Building Products Group . . $ 8,485 $ 17,277
Concrete Construction
Group . . . . . . . . . . - 11,088
-------- --------
Total . . . . . . . . . . $ 8,485 $ 28,365
======== ========
Discontinued operations
Income (loss) from
discontinued operations
Building Products Group . $ (841) $ (1,447)
Concrete Construction
Group . . . . . . . . . - 505
-------- --------
Total . . . . . . . . . . $ (841) $ (942)
======== ========
Gain (loss) on sale/disposal
of business segment
Building Products Group . . $ - $ -
Concrete Construction
Group . . . . . . . . . . - 3,450
-------- --------
Total . . . . . . . . . . $ - $ 3,450
======== ========
3. OTHER CURRENT LIABILITIES
-------------------------
Other current liabilities consisted of the following:
June 30 December 31
1996 1995
---------- -----------
(Thousands)
Payroll, pension and related
benefits . . . . . . . . . . . . $ 4,943 $10,378
Warranty and backcharge
reserves . . . . . . . . . . . . 3,429 3,854
Deferred revenues . . . . . . . . 2,118 1,450
Reserves for restructuring . . . . 919 753
Accrued interest . . . . . . . . 3,126 2,821
Other . . . . . . . . . . . . . . 9,607 8,825
------- -------
Total . . . . . . . . . . . . . . $24,142 $28,081
======= =======
4. COMMITMENTS AND CONTINGENCIES
-----------------------------
There are various 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 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 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 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.
In connection with the settlement of a construction contract dispute, on
March 3, 1995 the Company entered into an agreement which provides that (i)
at least 30% of the ownership of the common stock of the Company must be
held jointly by the current Chairman of the Company, who currently controls
approximately 34% of the outstanding common stock and the current Chief
Executive Officer and Vice Chairman of the Company, who currently controls
approximately 27% of the outstanding common stock and (ii) either or both
must continue as chief executive officer and/or chairman of the Company.
In the event such common stock ownership and executive officers are not
maintained, the Company will be required to make immediate payment of the
remaining unpaid settlement amount which was $5,500,000 at June 30, 1996,
rather than the scheduled $250,000 quarterly payments.
At June 30, 1996, the Company had outstanding performance and financial
bonds of $19,100,000, which generally provide a guarantee as to the
Company's performance under contracts and other commitments and are
collateralized in part by letters of credit which were issued under the
Company's credit facility. The outstanding bond amounts above include
approximately $15,700,000 of performance bonding related to businesses
which were previously sold or are pending disposition (see Note 2).
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
------------------------------------------------
RESULTS OF OPERATIONS
- ---------------------
Revenues for the second quarter of 1996 were $63.9 million, a decrease of $2.5
million or 3.8% compared to the second quarter of 1995. On a year-to-date
basis, revenues were $120.8 million in 1996, compared to $127.3 million in 1995,
a decrease of $6.5 million or 5.1%. The decrease in quarterly and year-to-date
revenues is primarily the result of severe weather conditions in early 1996, and
a lower backlog of orders at the beginning of 1996. The Company's gross margin
percentage was approximately 21.9% in the second quarter of 1996 compared to
18.0% during the same period in 1995. The year-to-date gross margin percentage
was 20.6% and 16.9% during the six months ended June 30, 1996 and 1995,
respectively. The increase in the Company's gross margin is primarily a result
of lower material costs, reduced costs associated with various employee benefit
plans and insurance programs and certain other cost reduction initiatives which
have been implemented by the Company.
Selling, general and administrative expenses decreased by $2.3 million in the
second quarter of 1996 compared to the same quarter of 1995. During the six
months ended June 30, 1996, selling general and adminstrative expenses decreased
by $2.9 million compared to the same period a year ago. The reduction in
selling, general and administrative expenses reflects savings which have been
realized by the Company resulting from the Company's continuing efforts to
reduce general and administrative costs and from modifications made during 1995
to certain defined benefit pension plans and retiree medical programs. The
increase in gross profit and reductions in selling, general and administrative
expenses resulted in operating income of $7.6 million and $11.7 million during
the three and six months ended June 30, 1996, respectively, compared to
operating income of $3.2 million and $5.3 million during the three and six
months ended June 30, 1995, respectively.
Interest expense for the three and six months ended June 30, 1996 was $1.0
million and $2.0 million, respectively, compared to $1.1 million and 2.2 million
for the three and six months ended June 30, 1995, respectively.
Income from continuing operations was $6.5 million during the second quarter of
1996 compared to $2.3 million during the same period of 1995. On a year-to-date
basis, income from continuing operations was $9.8 million in 1996, compared to
$3.4 million during the six month period ended June 30, 1995.
Net income during the three and six months ended June 30, 1996 was $6.5 million
and $9.8 million, respectively, compared with $1.4 million and $5.9 million
during the three months ended June 30, 1995, respectively. Net income during
the quarter ended June 30, 1995 includes losses from discontinued operations of
$.8 million. Net income during the six months ended June 30, 1995 includes
losses from discontinued operations of $.9 million and a gain on sale of
business segment of $3.5 million (see Note 2 of Notes to Condensed Consolidated
Financial Statements).
Backlog of Orders
- -----------------
At June 30, 1996, the backlog of unfilled orders believed to be firm for the
Company's ongoing Metal Building Group was approximately $84.7 million compared
to a corresponding Metal Building Group backlog of $81.5 million at June 30,
1995 and $63.1 million at December 31, 1995.
Litigation
- ----------
There are various 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 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.
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 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 six months ended June 30, 1996, the Company generated approximately
$1.7 million of cash from its operating activities. Uses of operating cash flow
were comprised primarily of requirements for trailing liabilities associated
with sold and discontinued businesses and seasonal working capital requirements
at the Company's Metals Buildings Group. During the first six months of 1996,
the Company's policy was to aggressively close and settle outstanding worker's
compensation and general liability claims and in connection therewith the
Company spent approximately $3.5 million during the period.
During the first quarter of 1996 the Company spent $1.9 million in connection
with a drawn letter of credit which was associated with the Company's former
U.K. subsidiary (the "U.K. Letter of Credit") and contributed $1.2 million to
the Company's defined pension plans. In order to reduce the anticipated amount
of funding requirements during the next several years and plan administrative
expenses, effective June 30, 1996, the Company merged its three remaining
defined benefit plans into a single defined benefit plan. Also during the first
six months of 1996, the Company aggressively followed an early payment policy on
certain raw material purchases in order to take advantage of early payment
discounts. The funding of the above was accomplished primarily through the use
of cash generated from the Company's Metal Buildings business.
The Company spent approximately $2.1 million on capital expenditures, during the
first six months of 1996, most of which were directed toward upgrading and
improving manufacturing equipment. Additionally, in May of 1996, the Company
made its semi-annual interest payment on its 12% Senior Subordinated Notes,
which amounted to approximately $1.4 million.
As a result, primarily of the above, unrestricted cash and cash equivalents
decreased by $1.7 million during the period from December 31, 1995 to June 30,
1996. At June 30, 1996, the Company had $7.9 million of unrestricted cash and
cash equivalents.
The Company maintains an asset based credit facility (the "Credit Facility")
with Foothill Capital Corporation ("Foothill") which incorporates both the
Company's U.S. and Canadian operations, and which, under its terms, has maximum
availability of $45.0 million and expires on May 18, 1999. Availability under
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 a term loan (each together the "Borrowing Base"). At June 30, 1996, the
Borrowing Base was estimated to be $24.7 million, which included $.7 million
collateral related to the Canadian Building Products Operation which is pending
sale/disposition, and was used to support the $5.0 million Term Loan Note and
$16.1 million of outstanding letters of credit which are primarily used to
support insurance programs, bonding programs, certain foreign credit facilities
and other financial guarantees. The Company had unused availability under the
Credit Facility of $3.7 million at June 30, 1996.
During 1995, the management of the Company and the Board of Directors determined
that the best strategy for the Company was to operate solely as a Metal
Buildings business. This decision was based in part on the operating success
which the Company has achieved with its existing Metal Building businesses,
along with the long-term view of the value of the Metal Building business and
the cash and liquidity demands which would be required to fund the ongoing
operations of the non-Metal Buildings businesses. The Company anticipates that
demands on its liquidity and credit resources will continue to be significant
during 1996 and the next several years primarily as a result of funding
requirements associated with the trailing liabilities of sold or discontinued
businesses and financing costs. The Company expects to meet these requirements
through a number of sources, including operating cash generated by the Company's
Metal Buildings Group, available cash which was $7.9 million at June 30, 1996,
and availability under credit facilities. During the first six months of 1996,
the Company reduced its letters of credit by $9.4 million, including the
reduction from the U.K. Letter of Credit, which was drawn in the first quarter
with the remainder reflecting primarily reductions in the collateral required to
support insurance programs and bonding programs.
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 operations. 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 operations, the Company may be required to seek
additional capital through new credit facilities, modification of existing
credit facilities, or through a possible debt or equity offering, or a
combination of the above. There can be no assurance, however, 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 4 to the
"Notes to Condensed 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 4. Submission of Matters to a Vote of Security Stockholders
The Company's Annual Meeting (the "Annual Meeting") of Stockholders was
held on May 29, 1995. The matters voted on are fully described in the
Company's Proxy Statement dated April 1, 1996. At the Annual Meeting
the matter of the Second Restated Certificate of Incorporation of the
Company (the "Charter") to eliminate the classification of the
directors was voted upon. The amendment to the Charter was as follows:
12,719,947 votes for, 3,221,598 votes against or withheld, and 211,340
abstentions and broker nonvotes. Each of the directors was elected as
follows: Andrew G.C. Sage (15,550,718 votes for and 637,703 votes
against or withheld); Michael E. Heisley (15,550,642 votes for and
637,779 votes against or withheld); Frank A. Benevento (15,550,664
votes for and 637,757 votes against or withheld); Stanley G. Berman
(15,550,640 votes for and 637,781 votes against or withheld); Mary
Heidi Hall-Jones (15,550,753 votes for and 637,668 votes against or
withheld); Kevin E. Lewis (15,550,909 votes for and 637,512 votes
against or withheld); Stanley H. Meadows (15,550,497 votes for and
637,924 votes against or withheld); Leonids Rudins 15,550,475 votes for
and 637,946 votes against or withheld); Gregg C. Sage (15,550,664
votes for and 637,757 votes against or withheld); E.A. Roskovensky
(15,550,666 votes for and 637,755 votes against or withheld).
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 11 - Computation of Earnings (Loss) per Common Share,
filed herewith.
(b) Exhibit 27 - Financial Data Schedule.
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.
ROBERTSON-CECO CORPORATION
--------------------------
(Registrant)
By: /s/ Thomas C. Baker
-----------------------------
Thomas C. Baker
Corporate Controller
August 13, 1996
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ROBERTSON-CECO CORPORATION
EXHIBIT INDEX
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EXHIBIT 11 - Computation of Earnings (Loss) Per Common Share
EXHIBIT 27 - Financial Data Schedule