1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13
or 15(d) of the
Securities Exchange Act of 1934
Commission File No. 001-12335
FOR THE QUARTER ENDED JUNE 30, 2001
BUTLER MANUFACTURING COMPANY
Incorporated in State of Delaware
BMA Tower - Penn Valley Park
Post Office Box 419917
Kansas City, Missouri 64141-0917
Phone: (816) 968-3000
I.R.S. Employer Identification Number: 44-0188420
Shares of common stock outstanding at
JUNE 30, 2001: 6,282,783
The name, address and fiscal year of the Registrant have not changed since
the last report.
The Registrant (1) has filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and
(2) has been subject to such filing requirements for the past 90 days.
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INDEX
PART I. - FINANCIAL INFORMATION Page Number
ITEM 1. Financial Statements
(1) Consolidated Financial Statements (unaudited):
Consolidated Statements of Operations for the Three and Six Month
Periods Ended June 30, 2001 and 2000. 3
Consolidated Statements of Comprehensive Income for the Six Month
Periods Ended June 30, 2001 and 2000. 4
Consolidated Balance Sheets as of June 30, 2001 and
December 31, 2000. 5
Consolidated Statements of Cash Flows for the Six Month
Periods Ended June 30, 2001 and 2000. 6
(2) Notes to Consolidated Financial Statements 7
ITEM 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 10
ITEM 3. Quantitative and Qualitative Disclosure About Market Risk. 11
PART II. - OTHER INFORMATION
ITEM 2. Changes in Securities and Use of Proceeds. 12
ITEM 4. Submission of Matters to a Vote of Security Holders 12
ITEM 6. Exhibits and Reports on Form 8-K 12
Signatures 13
Exhibits Index 14
Page 2
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BUTLER MANUFACTURING COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
For the three and six month periods ended June 30, 2001 and 2000
(unaudited)
($000's omitted except for per share data)
Three months ended Six months ended
June 30, June 30,
----------------------------- -----------------------------
2001 2000 2001 2000
----------- ----------- ----------- -----------
Net sales $ 213,672 $ 244,036 $ 408,531 $ 463,225
Cost of sales 180,014 201,879 350,108 386,354
----------- ----------- ----------- -----------
Gross profit 33,658 42,157 58,423 76,871
Selling, general and administrative expenses 27,131 30,482 55,318 59,979
Restructuring charge (credit) - (441) - (441)
----------- ----------- ----------- -----------
Operating income 6,527 12,116 3,105 17,333
Other income (expense) net 220 (132) 706 (371)
----------- ----------- ----------- -----------
Earnings before interest and taxes 6,747 11,984 3,811 16,962
Interest expense 1,594 1,405 3,073 2,672
----------- ----------- ----------- -----------
Pretax earnings 5,153 10,579 738 14,290
Income tax expense 1,728 3,936 116 5,432
----------- ----------- ----------- -----------
Net earnings $ 3,425 $ 6,643 $ 622 $ 8,858
=========== =========== =========== ===========
Basic earnings per common share $ 0.55 $ 1.01 $ 0.10 $ 1.33
=========== =========== =========== ===========
Diluted earnings per common share $ 0.54 $ 1.01 $ 0.10 $ 1.32
=========== =========== =========== ===========
Basic weighted average number of shares 6,282,620 6,598,922 6,278,123 6,676,980
Diluted weighted average number of shares 6,290,487 6,609,374 6,282,057 6,688,477
See Accompanying Notes to Consolidated Financial Statements.
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BUTLER MANUFACTURING COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the six month periods ended June 30, 2001 and 2000
(unaudited)
($000's omitted, except for per share data)
Six months ended
June 30,
2001 2000
------- -------
Net earnings $ 622 $ 8,858
Other comprehensive income:
Foreign currency translation and other comprehensive income (501) (118)
(loss) adjustments
------- -------
Comprehensive income $ 121 $ 8,740
======= =======
See Accompanying Notes to Consolidated Financial Statements.
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BUTLER MANUFACTURING COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
June 30, 2001 and December 31, 2000
(unaudited)
($000's omitted)
2001 2000
------------ ------------
ASSETS
Current assets:
Cash and cash equivalents $ 18,270 $ 16,855
Receivables, net 138,275 138,347
Inventories:
Raw materials 22,917 22,059
Work in process 11,019 10,685
Finished goods 33,409 38,686
Lifo reserve (10,127) (9,926)
------------ ------------
Total inventory 57,218 61,504
Real estate developments in progress 42,491 52,623
Deferred tax assets 10,587 10,586
Other current assets 6,475 11,855
------------ ------------
Total current assets 273,316 291,770
Investments and other assets 42,004 35,000
Assets held for sale 3,832 3,832
Property, plant and equipment, at cost 280,894 274,432
Less accumulated depreciation (154,948) (157,036)
------------ ------------
Net property, plant and equipment 125,946 117,396
------------ ------------
$ 445,098 $ 447,998
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable $ 2,037 $ 35,155
Current maturities of long-term debt 5,586 5,563
Accounts payable 73,475 86,232
Dividends payable 1,069 1,064
Accrued liabilities 72,620 77,434
Taxes on income 8,793 7,461
------------ ------------
Total current liabilities 163,580 212,909
Deferred tax liabilities 1,409 1,409
Other noncurrent liabilities 12,567 14,666
Long-term debt, less current maturities 103,274 53,298
Shareholders' equity:
Common stock, no par value, authorized 20,000,000
Shares, issued 9,088,200 shares, at stated value 12,623 12,623
Cumulative foreign currency translation and other (1,978) (1,477)
comprehensive income (loss) adjustments
Retained earnings 218,546 220,113
------------ ------------
229,191 231,259
Less cost of common stock in treasury, 2,805,417 shares
in 2001 and 2,832,338 shares in 2000 64,923 65,543
------------ ------------
Total shareholders' equity 164,268 165,716
------------ ------------
$ 445,098 $ 447,998
============ ============
See Accompanying Notes to Consolidated Financial Statements
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BUTLER MANUFACTURING COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the six month periods ended June 30, 2001 and 2000
(unaudited)
($000's omitted)
2001 2000
-------- --------
Cash flows from operating activities:
Net earnings $ 622 $ 8,858
Adjustments to reconcile net earnings to net cash provided (used)
in operating activities:
Depreciation and amortization 8,282 7,804
Restructuring charge - (441)
Equity earnings on joint ventures (19) (91)
Change in asset and liabilities
Receivables 72 (21,972)
Inventories 4,286 2,192
Real estate developments in progress 10,132 (14,332)
Other current assets 5,379 5,443
Current liabilities excluding short-term debt (16,239) 123
-------- --------
Net cash provided (used) in operating activities 12,515 (12,416)
Cash flows from investing activities:
Capital expenditures (18,656) (14,950)
Other, net (5,161) (988)
-------- --------
Net cash (used) by investing activities (23,817) (15,938)
Cash flows from financing activities:
Payment of dividends (2,131) (2,168)
Proceeds from issuance of long-term debt 50,523 58
Repayment of long-term debt (547) (249)
Net increase (decrease) in short-term debt (33,095) 6,155
Sale and issuance of treasury stock 639 547
Purchase of treasury stock (19) (11,566)
Other, net (2,152) 471
-------- --------
Net cash provided (used) by financing activities 13,218 (6,752)
Effect of exchange rate and comprehensive income changes on cash (501) (326)
-------- --------
Net increase (decrease) in cash and cash equivalents 1,415 (35,432)
Cash and cash equivalents at beginning of year 16,855 52,951
-------- --------
Cash and cash equivalents at June 30 $ 18,270 $ 17,519
======== ========
See Accompanying Notes to Consolidated Financial Statements.
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BUTLER MANUFACTURING COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited consolidated condensed financial statements have been
prepared in accordance with the accounting policies described in the
consolidated financial statements and related notes included in Butler
Manufacturing Company's 2000 Form 10-K. It is suggested that those consolidated
statements be read in conjunction with this report. The year-end financial
statements presented were derived from the company's audited financial
statements. In the opinion of management, the accompanying consolidated
financial statements reflect all adjustments necessary for a fair presentation
of the financial position of Butler Manufacturing Company and the results of its
operations.
NOTE 2 - NEW ACCOUNTING PRONOUNCEMENT
In July 2001, the Financial Accounting Standards Board (SFAS), issued Statement
No. 141, "Business Combinations, and SFAS No. 142, "Goodwill and Other
Intangible Assets." SFAS No. 141 requires all future acquisitions after June
30, 2001, to be accounted for under the purchase method of accounting. In
addition, if further clarifies the criteria for recognition of intangible
assets separately from goodwill. SFAS No. 142 provides guidance on the
accounting and reporting for goodwill and intangible assets. Goodwill will no
longer be amortized over its estimated useful life, but will be assessed
annually for impairment using a fair value based test.
The Company will adopt these new standards on January 1, 2002. At the end of
the second quarter the company had goodwill of $6.0 million. The Company is in
the process of evaluating the application of these pronouncements.
NOTE 3 - BUSINESS SEGMENTS
The Company groups its operations into five business segments: North American
Building Systems, International Building Systems, Architectural Products,
Construction Services, and Real Estate.
The North American Building Systems segment includes the North American metal
buildings and the wood buildings businesses. These business units supply steel
and wood frame pre-engineered building systems for a wide variety of commercial,
community, industrial, and agricultural applications.
The International Buildings Systems segment includes the Company's Asian and
European metal buildings businesses. These businesses supply pre-engineered
metal buildings for commercial, community, industrial, and agricultural
applications primarily for the Chinese and European markets.
The Architectural Products segment includes the operations of the Vistawall
Group. The group's businesses design, manufacture, and market architectural
aluminum systems for nonresidential construction, including curtain wall,
storefront systems, windows, doors, skylights, and roof accessories.
The Construction Services segment provides comprehensive design and construction
planning, execution, and management services for major purchasers of
construction. Projects are usually executed in conjunction with the dealer
representatives of other Butler divisions.
The Real Estate segment provides real estate build-to-suit-to-lease development
services in cooperation with Butler dealers.
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The accounting policies for the segments are the same as those described in the
summary of significant accounting policies as included in the company's 2000
form 10-K. Butler Manufacturing Company's reportable segments are strategic
business units that offer products and services for different markets. They are
managed separately because each business requires different technology and
expertise.
The Other classification represents unallocated corporate expenses and
unallocated assets, including corporate offices, deferred taxes, pension
accounts, interest expense, and intersegment eliminations.
Three Months Six Months
NET SALES Ended June 30, Ended June 30,
(Thousands of dollars) 2001 2000 2001 2000
----------------------------------------------------------------------------------------------
North American Building Systems $ 110,703 $ 127,624 $ 201,776 $ 249,642
International Building Systems 19,327 17,865 35,131 33,532
Architectural Products 57,728 55,744 115,999 109,694
Construction Services 33,155 44,306 51,388 76,534
Real Estate 0 7,152 15,953 7,366
Other (7,241) (8,655) (11,716) (13,543)
---------------------------------------------------------
$ 213,672 $ 244,036 $ 408,531 $ 463,225
---------------------------------------------------------
Net sales represent revenues from sales to affiliated and unaffiliated customers
before elimination of intersegment sales, which is included in Other.
Intersegment eliminations are primarily sales between North American Building
Systems and Architectural Products segments to the International Building
Systems and Construction Services segments.
Three Months Six Months
PRETAX EARNINGS (LOSSES) Ended June 30, Ended June 30,
(Thousands of dollars) 2001 2000 2001 2000
----------------------------------------------------------------------------------------------
North American Building Systems $ 3,891 $ 8,473 $ (754) $ 11,528
International Building Systems 245 470 (404) 347
Architectural Products 3,864 4,756 7,445 8,586
Construction Services 337 771 732 1,290
Real Estate 1,064 814 2,555 1,190
Other (4,248) (4,705) (8,836) (8,651)
---------------------------------------------------------
$ 5,153 $ 10,579 $ 738 $ 14,290
---------------------------------------------------------
TOTAL ASSETS June 30, December 31,
(Thousands of dollars) 2001 2000
----------------------------------------------------------------------------------------------
North American Building Systems $139,755 $156,002
International Building Systems 63,149 62,563
Architectural Products 117,109 108,688
Construction Services 36,817 31,231
Real Estate 44,640 55,331
Other 43,628 34,183
--------------------------------
$445,098 $447,998
--------------------------------
Assets represent both tangible and intangible assets used by each business
segment. Other represents cash and cash equivalents, assets held for sale,
corporate equipment, and miscellaneous other assets which are not related to a
specific business segment. In prior periods, the North American Building
Systems and International Building Systems were reported as a single segment.
Because of reorganization and management changes, two segments were formed.
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NOTE 4 - RESTRUCTURING AND ASSET IMPAIRMENT CHARGES
In December 1998, the company's board of directors approved a restructuring of
the South American and European metal buildings businesses. As a result, the
company recorded a $7.1 million pretax charge in connection with the
restructuring. In addition, the company recorded a $6.5 million pretax charge
for the impairment of certain assets. The actions leading to the restructuring
charge were the closing of manufacturing operations in Brazil and repositioning
of European operations. Estimates of realizable asset sales values were obtained
from outside appraisals and the company's experience in selling redundant
assets.
During the first quarter of 1999, the company recorded an additional $1.5
million restructuring charge for currency translation losses on its remaining
Brazilian net asset exposure.
At the end of the first quarter 2000, $.9 million of the restructuring accrual
remained. Final activities related to restructuring were completed in the second
quarter 2000, resulting in a $.4 million reversal of the remaining accrual.
NOTE 5 - CHANGE IN ACCOUNTING FOR PENSION COSTS
Effective January 2001, the company changed its method for the recognition of
deferred gains and losses considered in the calculation of the annual net
pension expense for its base retirement pension plan under SFAS 87, "Employers'
Accounting for Pensions. " The company has changed from the market value method
of asset valuation to the market-related value method. Under the previous
accounting method all gains and losses, subject to a ten-percent corridor, were
recognized and amortized in determining the net periodic pension costs. The new
method recognizes and amortizes 20 percent of the cumulative investment gains or
losses in determining net periodic pension costs. The new method is commonly
used by the manufacturing sector and is preferable because it more accurately
matches expense to accounting periods for which benefits are earned. The new
method also improves year-to-year comparability of net period costs for this
plan.
Adoption of this change reduced income from operations and net income for the
three months ending June 30 and March 31, 2001 by $.2 million and $.1 million,
respectively. The per share impact on each quarter was $.02. The effect on net
earnings if these changes were adopted in prior years is immaterial.
The company also changed effective April 1, 2001, the period used to amortize
prior service costs associated with retroactive amendments of benefits for its
hourly pension plans. Previously, the effect of these amendments was amortized
over the average future working lifetime of those expected to receive benefits.
The new period used for amortization of prior service costs attributed to the
amendments is the number of years in which the benefit is earned. The effect of
this change is to increase net periodic pension costs and decrease income from
continuing operations by $.2 million for the three months ending June 30, 2001.
NOTE 6 - INDEBTEDNESS
The company entered into a new $50 million bank credit facility and issued $50
million of senior unsecured notes pursuant to a note agreement at the end of
June, allowing domestic bank borrowings to be reduced to zero.
The new credit agreement was entered into with the Bank of America, N.A. as
administrative lender and certain other lenders. Interest on advances under the
new credit facility are based on either (a) the higher of the federal funds rate
plus .50% or the Administrative Lender's prime rate, which is payable quarterly,
or (b) LIBOR, which is payable at the end of periods ranging from one to six
months. The new credit agreement provides for a commitment fee on unused
advances ranging from .20% to .30%. Commitments under the new credit facility
expire on June 30, 2004, at which time any outstanding advances are payable. The
agreement contains certain operating covenants, including restrictions on liens,
investments, acquisitions, asset sales and mergers. The agreement also requires
the Company to maintain a capitalization ratio, as defined, of .5 to 1, a fixed
charge coverage ratio, as defined, of 1.7 to 1, and a leverage ratio, as defined
of 3.25 to 1 through June 30, 2002 and 3.0 to 1 thereafter.
The senior notes bear interest, payable semi-annually on June 30 and December
30, at the rate of 7.91% per annum. Principal of the Senior Notes is payable in
annual installments of $4.55 million on December 30th of each year, commencing
December 30, 2006, with the balance due on the December 30, 2016 maturity date.
The Note Agreement contains certain operating covenants, including restrictions
on liens, additional indebtedness and asset sales, and requires the Company to
maintain adjusted consolidated net worth, as defined, of $125 million plus the
cumulative sum of 50% of consolidated net income for each fiscal quarter after
March 31, 2001 and a fixed charge coverage ratio, as defined, of 1.5 to 1.0.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
Net sales for the second quarter were $214 million, down 12% for the same period
a year ago primarily due to lower sales in the North America Building Systems,
Construction Services, and Real Estate segments. The North American Building
Systems segment sales, which includes the pre-engineered steel and wood
buildings businesses, declined 13% in the second quarter compared to the prior
year. This segment continues to be effected by a weakening U.S. economy and
poorer weather through most of the second quarter, resulting in lower
non-residential building sales. Construction Services segment sales declined 25%
during the second quarter 2001 compared to the prior year as anticipated, due to
the decision to focus this business primarily on material-erect opportunities.
Real Estate segment sales decreased from a year ago, due to lower project sales.
Architectural Products segment sales increased 4% in the second quarter 2001
compared with the same period a year ago as demand for storefront and
curtain-wall products remained strong. The International Building Systems
segment, which includes the Chinese and European metal buildings businesses, was
reported separately for the first time in the second quarter 2001. These
businesses were previously reported with domestic pre-engineered steel and wood
buildings businesses. Their second quarter sales increased 8% compared with the
prior year primarily due to somewhat stronger pre-engineered metal buildings
sales in the Asian markets.
For the six months ended June 30, 2001 net sales were $409 million compared with
$463 million in 2000, a decrease of 12%. Declining sales in the North American
Building Systems and Construction Services segments make up most of the six
month decline in sales, offset somewhat by improved sales in the Architectural
Products, Real Estate and International Building Systems segment.
Pretax earnings for the quarter ended June 30, 2001 were $5.2 million compared
with $10.6 million, a year ago. For the six months ended June 30, 2001, pretax
earnings were $.7 million versus $14.3 million in 2000. The sluggish U.S.
economy, and slowing China and European markets, have resulted in competitive
pricing which has unfavorably effected pretax earnings in all business segments.
LIQUIDITY AND CAPITAL RESOURCES
Since December 2000, cash and equivalents increased $1.4 million. Capital
expenditures, the payment of dividends and short-term debt were the primary uses
of cash. Sources of cash were from operations, including a decrease in working
capital, and an increase in long-term debt relate to the new $50 million bank
credit facility. For the six months ended June 30, 2001, domestic short-term
borrowings averaged $40 million for 181 days compared to $11 million for 108
days in 2000.
The company entered into a new $50 million bank credit facility and signed a new
$50 million private placement agreement at the end of June allowing domestic
bank borrowings to be reduced to zero. The company's foreign operations maintain
separate lines of credit with local banks of approximately $7 million, with $2
million utilized at current exchange rates at June 30, 2001. Management believes
the company's operating cash flow, along with the bank credit lines, are
sufficient to meet future liquidity requirements.
Capital expenditures were $19 million for the first six months of 2001 compared
to $15 million for the same period in 2000. Total capital expenditures for 2001
are expected to be $54 million. It is estimated that approximately $26 million
will be used to construct the Company's new headquarters building. Other
expenditures include costs to complete the installation of process lines in the
new Vistawall extrusion plant in Tennessee and expansion of the Shanghai, China
office facility.
Cash paid for taxes and interest totaled $.4 million and $1.3 million in the
second quarter 2001, compared with $3.9 million and $1.1 million for the same
period a year ago. Cash paid for taxes and interest for the six month period
were $1.8 million and $3.0 million, compared with $4.8 million and $2.3 million
for the same period a year ago.
During the second quarter of 2001, treasury stock purchases were minimal
compared with the prior year, and dividends paid totaled $1 million. Total
backlog of $342 million increased 2% from comparable backlog of a year ago.
Higher margin product backlog was equal to a year ago and construction backlog
increased 10% for the same period.
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MARKET PRICE RISK
The company's principal exposure to market risk is from changes in commodity
prices, interest rates, and currency exchange rates. To limit exposure and to
manage volatility related to these risks, the company enters into select
commodity and currency hedging transactions, as well as forward purchasing
arrangements. The company does not use financial instruments for trading
purposes.
Commodity Price Exposure: The company's primary commodities are steel, aluminum,
and wood. Steel is the company's largest purchased commodity. The company enters
into forward steel purchase arrangements in its metal buildings business for
periods of less than one year duration to protect against potential price
increases. To the extent there are increases in the company's steel costs, they
are generally recaptured in the company's product sales prices.
Aluminum hedge contracts of less than one year duration are purchased to hedge
the engineered products backlog of the Vistawall group against potential losses
caused by increases in aluminum costs. This product line is sensitive to
material cost movements due to the longer lead times from project quoting to
manufacture. Gains or losses recorded on hedge contracts are offset against the
actual aluminum costs incurred. The change in fair value of aluminum contracts
and their associated risk are immaterial.
The company's wood frame building business enters into forward purchase
arrangements for commercial grade lumber for periods of less than one year
duration. Lumber costs are generally more volatile than steel costs. To offset
increases in lumber costs, the company adjusts product prices accordingly.
Interest Rates: The majority of the company's long-term debt carries a fixed
interest rate, therefore the company's interest expense is relatively stable and
not influenced by changes in market interest rates.
Foreign Currency Fluctuation: The majority of the company's business is
transacted in U.S. dollars, therefore limiting the company's exposure to foreign
currency fluctuations. Where the company has foreign-based operations, the local
currency has been adopted as the functional currency. As such, the company has
both transaction and translation foreign exchange exposure in those operations.
Due to relative cost and limited availability, the company does not hedge its
foreign net asset exposure. The company does hedge short-term foreign currency
transaction exposures related to sales activity in Canada. Forward Canadian
dollar sale contracts of less than one year duration are purchased to cover the
exposure. The change in fair value of such contracts are immaterial.
OTHER
The company announced that Donald H. Pratt, chairman of the board will retire at
the end of the year. John J. Holland, president and chief executive officer,
will succeed Mr. Pratt. Ronald E. Rutledge, currently executive vice president,
will become president and chief operating officer.
FORWARD LOOKING INFORMATION
This report contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995, which may include statements
concerning projection of revenues, income or loss, capital expenditures, capital
structure, or other financial items, statements regarding the plans and
objectives of management for future operations, statements of future economic
performance, statements of the assumptions underlying or relating to any of the
forgoing statements, and other statements which are other than statements of
historical fact. These statements appear in a number of places in this report
and include statements regarding the intent, belief, or current expectations of
the company and its management with respect to (i) the cost and timing of the
completion of new or expanded facilities, (ii) the company's competitive
position, (iii) the supply and price of materials used by the company, (iv) the
demand and price for the company's products and services, or (v) other trends
affecting the company's financial condition or results of operations, including
changes in manufacturing capacity utilization and corporate cash flow in both
domestic and international markets. Readers are cautioned that any such
forward-looking statements are not guarantees of future performance and involve
risks and uncertainties, and that actual results may differ materially as a
result of these various factors.
For additional comments, refer to the July 17, 2001 letter to shareholders,
which is attached as exhibit 19.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There are no material changes to the disclosure made in the Annual Report on
Form 10-K for the year ended December 31, 2000 regarding this matter. See
discussion about market risk under Item 2. Management Discussion and Analysis on
page 11 above.
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PART II. - OTHER INFORMATION
ITEM 2. CHANGES OF SECURITIES AND USE OF PROCEEDS
On June 27, 2001 the Company issued $50.0 million of its 7.87% Senior Notes due
December 30, 2016 pursuant to a note purchase agreement dated as of June 20,
2001. It requires the Company to maintain adjusted consolidated net worth, as
defined, of $125 million plus the cumulative sum of 50% of consolidated net
income for each fiscal quarter after March 31, 2001, and a consolidated income
available for fixed charges to fixed charge ratio, as defined, of 1.5 to 1.0. At
June 30, 2001, the Company's adjusted consolidated net worth as defined under
the Note Purchase Agreement was $275 million.
The Company's credit agreement, which was entered into as of June 20, 2001,
requires the Company to maintain a capitalization ratio, as defined, of .5 to 1,
a fixed charge coverage ratio, as defined, of 1.7 to 1 and a leverage ratio, as
defined of 3.25 to 1 through June 30, 2002 and 3.0 to 1 thereafter. The fixed
charge coverage ratio is based on the ratio of (a) EBITDAR (pre tax net income
(excluding extraordinary gains and losses) plus interest expense, depreciation
and amortization, rent expense in respect of synthetic lease obligations and
operating lease expense) to (b) fixed charges, consisting of interest and lease
expense and cash dividends.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The Company held its Annual Meeting of Shareholders on April 17, 2001. Three
Class C Directors were elected at the Annual Meeting. In the election of
directors, there were 5,178,601 votes cast "for" K. Dane Brooksher and 73,342
votes withheld, 5,178,413 votes cast "for" Susan F. Davis and 73,530 votes
withheld, and 5,176,135 votes cast "for" Robert J. Novello and 75,808 votes
withheld.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
4.1 Credit Agreement among the Company, certain lenders party
thereto and Bank of America, N.A.;, as Administrative Lender,
dated June 20, 2001.
4.2 Note Purchase Agreement dated as of June 20, 2001
relating to the Company's 7.87% Senior Notes due December 30,
2016
(b) Accountants Preferability Letter (re: Change in Accounting
Principle)
(b) July 17, 2000 Letter to Shareholders.
(b) Reports on Form 8-K
The Company has not filed any reports on Form 8-K during the
quarter ended June 30, 2001.
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SIGNATURES
Pursuant to the requirement 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.
BUTLER MANUFACTURING COMPANY
August 14, 2001 /s/ Larry C. Miller
------------------- ---------------------------------
Date Larry C. Miller
Vice President - Finance,
and Chief Financial Officer
August 14, 2001 /s/ John W. Huey
------------------- --------------------------
Date John W. Huey
Vice President, General Counsel
and Secretary
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EXHIBIT INDEX
Exhibit
Number Description
--------- -----------------------------------
4.1 Credit Agreement among the Company, certain lenders party
thereto and Bank of America, N.A.; as Administrative Lender,
dated June 20, 2001.
4.2 Note Purchase Agreement dated as of June 20, 2001 relating
to the Company's 7.91% Senior Notes due December 30, 2016
18 Accountants Preferability Letter
19 July 17, 2000 Letter to Shareholders
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