Butler Manufacturing Reports Fourth-Quarter and Year-End Results.Business Editors/Real Estate Writers KANSAS CITY Kansas City, two adjacent cities of the same name, one (1990 pop. 149,767), seat of Wyandotte co., NE Kansas (inc. 1859), the other (1990 pop. 435,146), Clay, Jackson, and Platte counties, NW Mo. (inc. 1850). , Mo.--(BUSINESS WIRE)--Feb. 15, 2004 Butler Manufacturing Company (NYSE NYSE See: New York Stock Exchange :BBR BBR Bureau of Business Research BBR Broadbandreports.com (website) BBR Bending Beam Rheometer BBR Burnt Beyond Repair BBR Black Body Radiation (quantum physics) BBR Baby Back Ribs BBR Back Bone Ring ) reported substantially improved results in sales and operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before in the fourth quarter ended December December: see month. 31, 2003. Butler's fourth quarter sales were $232 million compared with $193 million a year ago, an increase of approximately 20%. Stronger results in China and the North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. Building Systems businesses led the growth in sales. Pretax income pretax income Reported income before the deduction of income taxes. Pretax income is sometimes considered a better measure of a firm's performance than aftertax income because taxes in one period may be influenced by activities in earlier periods. was $2.2 million in the fourth quarter of 2003 compared with a pretax loss pretax loss A loss reported before tax benefits are considered. of $0.6 million in the fourth quarter of 2002. The fourth-quarter net loss was $19.1 million, or $3.01 per share, and includes a $24.7 million, or $3.89 per share, non-cash income tax valuation allowance expense within income tax expense, compared with net income of $1.5 million, or $0.24 per share in the prior year. The income tax valuation allowance expense is related to the establishment of a valuation allowance as a result of uncertainty as to the realization of deferred tax assets of the company, required under generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting . Butler has not extended its senior debt agreements and remains in default of certain covenants under those debt agreements. As a result, they expect their auditors AUDITORS, practice. Persons lawfully appointed to examine and digest accounts referred to them, take down the evidence in writing, which may be lawfully offered in relation to such accounts, and prepare materials on which a decree or judgment may be made; and to report the whole, together will include a going concern qualification in their audit opinion of the 2003 financial statements upon completion of the audit. The company continues to work with their lenders and announced on December 30, 2003 an agreement with their senior note holders deferring principal payments. In exchange, Butler agreed to satisfy certain milestones including the consummation CONSUMMATION. The completion of a thing; as the consummation of marriage; (q.v.) the consummation of a contract, and the like. 2. A contract is said to be consummated, when everything to be done in relation to it, has been accomplished. of a transaction that provides for repayment in full of the outstanding senior notes by April 30, 2004. The lenders have not waived any rights and are free to require payment of $90 million of debt recorded on the company's balance sheet as well as require funding of approximately $23 million of stand-by Stand´-by` n. 1. One who, or that which, stands by one in need; something upon which one relies for constant use or in an emergency. letters of credit. For 2003, annual sales were $796 million compared with $828 million a year ago, or 4% lower. The net loss was $32.1 million, including the $24.7 million non-cash income tax valuation allowance expense, compared with the net loss of $1.8 million in 2002. Commenting on the results, John Holland, chairman and chief executive officer, said, "In 2003, the domestic construction markets recorded the fourth consecutive annual decline, as F. W. Dodge reported a 3% decline in nonresidential Adj. 1. nonresidential - not residential; "the commercial or nonresidential areas of a town"; "community colleges are typically nonresidential" residential - used or designed for residence or limited to residences; "a residential hotel"; "a residential quarter"; "a construction orders, with the commercial segment off 6% and the manufacturing segment up 8%, a positive development, albeit increasing from a very low base. We have had an extremely challenging year but nonetheless have taken actions to reduce costs and invest in new products and markets during this very tough period. With the economy showing signs of improvement coupled with the aggressive cost reductions and new products and capabilities developed during 2003, we believe the company is on a path toward profitability in 2004. "We view the deferral deferral - Waiting for quiet on the Ethernet. agreement with our senior note holders as a positive step in the right direction of pursuing the previously announced strategic options initiative. We have made substantial progress in pursuing the strategic initiatives and our business is beginning to show signs of improvement as well, recording an operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. in the fourth quarter of 2003. While we cannot guarantee that we will conclude a transaction by the April 30, 2004 deadline it remains our highest priority to do so. "We ended 2003 with a backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. of $319 million, 21% higher compared with the backlog at the end of 2002. Each of our businesses posted higher backlogs except the Vistawall Architectural Products Group where the backlog was down a slight 1%. Our higher margin product backlog was up 17% and the construction backlog was 33% higher than at the end of 2002. "Sales in the North American Building Systems segment were $375 million in 2003, 5% lower when compared with the prior year. The pretax loss was approximately $19.8 million, compared with a pretax loss of $7.6 million in 2002. The 2003 loss includes a $4.8 million asset impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. expense related to the Lester wood building business. We believe that 2003 was the bottom of the cycle as this segment posted stronger sales in the fourth quarter 2003 compared with 2002 and a stronger backlog as we enter 2004. "Actions taken in the North American Building Systems segment in 2003 to lower costs and add new capabilities are expected to benefit 2004. Several major initiatives that added expense in 2003 will benefit 2004. Our new R-Steel(TM) panel system plant opened late last year and the product has been well received in the market. Our Mexican Mexican named after or originating in Mexico. Mexican axolotl see ambystomamexicanum. Mexican beaded lizard (Heloderma horridum pre-engineered metal building plant opened on schedule in December 2003. This lower cost facility will enhance our competitive position in Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. and domestically. Finally, the major enterprise resource planning See ERP. (application, business) Enterprise Resource Planning - (ERP) Any software system designed to support and automate the business processes of medium and large businesses. system implemented in May 2003, has begun to deliver benefits and will position our pre-engineered metal buildings business to operate more effectively as we master its capabilities to better serve customers. "The International Building Systems sales were $138 million compared with $108 million in 2002. The 2002 sales included $10 million from our European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. operation prior to its divestiture The breakup of AT&T. By federal court order, AT&T divested itself on January 1, 1984 of its 23 operating companies, which became known as the Regional Bell Operating Companies (RBOCs). in July of that year. The market in China remains robust and we have done an excellent job of expanding our brand and market position as the leading pre-engineered metal building supplier in China. In addition, we opened a manufacturing facility in China in the latter half of 2003 to support our Vistawall product line. The seamless introduction of the Vistawall product line will leverage our market leading position to add a new growth opportunity for Butler in China. Pretax income for this segment increased to $11.3 million compared with approximately $8 million in 2002, a 41% increase. The economy in China remains strong and Butler is well positioned to continue to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. this growth opportunity. "The Vistawall Architectural Products Group sales Group sales Block sale (of large amounts) of securities to institutional investors. group sales The distribution of a new security issue to institutional clients. were $217 million for all of 2003 compared with $220 million in 2002. The 1% decline in sales was much better than the overall 6% drop in commercial construction awards. Pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern earnings were $11.2 million compared with $8.9 million in 2002. This outstanding performance in 2003 was against challenging market conditions as we outperformed the domestic market and supported the start-up Start-up The earliest stage of a new business venture. in China and the United Arab Emirates United Arab Emirates, federation of sheikhdoms (2005 est. pop. 2,563,000), c.30,000 sq mi (77,700 sq km), SE Arabia, on the Persian Gulf and the Gulf of Oman. . Vistawall is poised for growth offering customers a single source array of architectural products to further consolidate the construction supply chain. "Butler Construction sales were approximately $81 million in 2003 compared with $111 million last year, a 28% decrease. The entire decline in sales occurred in the first half of 2003, reflecting the uncertain economy. The pretax loss was $3.4 million compared with pretax earnings of $2.0 million in 2002. The 2003 loss includes a $2.4 million asset impairment charge related to the planned closure of leased office space. We reduced expenses in this business but were unable to offset the decline in volume experienced in the first half of 2003. Construction backlog is up 33% and we expect a strong first half of 2004. As previously announced, we are in the process of combining the Construction business with our North American Buildings business, forming the Buildings Group. This combination improves the alignment, capabilities and talents of our associates in these two operations to better serve customers and enhance our ability to consolidate the construction supply chain. The Real Estate segment sales of completed projects were approximately $5 million for the year compared with about $16 million last year, with the drop in sales related to fewer opportunities in this business throughout 2003. With the lower sales volume and a smaller rent-flowing development portfolio, pretax earnings were $0.2 million compared with $3.3 million a year ago. "We believe the domestic nonresidential construction market is in the early stages of improvement after three difficult and challenging years. Our China business continues to provide significant growth potential and Vistawall is well positioned to continue its successful track record. The general US economy continues to show signs of a turnaround Turnaround A situation where a company that has had poor performance for an extended period of time experiences a positive reversal. Notes: A speculator may profit from a turnaround if he or she accurately anticipates the improvement of a poorly performing company. with the price of many commodities increasing significantly. Steel and aluminum costs are increasing, posing a challenge to improve operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: . However, we are taking aggressive action to manage our pricing to capture these higher costs. "We have introduced a great deal of change over the past couple of years, dramatically restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). costs and operations and have invested prudently in new products and capabilities that will expand future market opportunities for the company. We will endeavor to work through the challenges posed by our financial situation and are doing so as we pursue our strategic options. We remain totally committed to delivering value to our owners, associates and the customers whom we serve," Mr. Holland concluded. Butler Manufacturing Company is the world's leading producer of pre-engineered building systems, a leading supplier of architectural aluminum systems and components, and provides construction and real estate services for the nonresidential construction market. An analyst conference call to review the fourth-quarter and year-end results will be held Tuesday, February 17th at 9:00 AM EST EST electroshock therapy. EST abbr. electroshock therapy . A live audio webcast of the call will be available to the public on a listen-only basis. To listen to the webcast go to www.butlermfg.com and click on the webcast icon. An audiotape au·di·o·tape n. 1. A relatively narrow magnetic tape used to record sound for subsequent playback. 2. A tape recording of sound. tr.v. playback Playback could mean:
Statements in this press release concerning the company's business outlook or future economic performance; anticipated profitability, revenues, expenses or other financial items, together with other statements that are not historical facts, are "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " as that term is defined under the Federal Securities Laws. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those stated in such statements. Such risks and uncertainties include, but are not limited to, industry cyclicality, fluctuations in customer demand and order pattern, the seasonal nature of the business, changes in pricing or other actions by competitors, and general economic conditions, as well as other risks detailed in the company's 2002 Annual Report to Shareholders on page 16.
BUTLER MANUFACTURING COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
----------------------------------------------------------------------
Three months ended Twelve months ended
December 31, December 31,
2003 2002 2003 2002
----------------------------------------------------------------------
(Dollars in thousands
except per share amounts)
Net sales $ 231,836 $ 193,435 $ 796,167 $ 828,209
Cost of sales 201,901 164,028 695,337 715,203
---------- ---------- ---------- ----------
Gross profit 29,935 29,407 100,830 113,006
Selling, general and
administrative expenses 27,509 29,210 107,214 115,370
Asset impairment charge
(credit) 159 - 7,207 -
Restructuring charge
(credit) (840) - (840) (631)
---------- ---------- ---------- ----------
Operating income (loss) 3,107 197 (12,751) (1,733)
Other income (expense),
net 1,249 827 (322) 2,404
---------- ---------- ---------- ----------
Earnings (loss) before
interest and taxes 4,356 1,024 (13,073) 671
Interest expense 2,146 1,654 9,135 7,529
---------- ---------- ---------- ----------
Pretax earnings (loss) 2,210 (630) (22,208) (6,858)
Income tax benefit 3,364 2,176 14,801 5,022
Income tax expense
(deferred tax asset
valuation reserve) (24,701) - (24,701) -
---------- ---------- ---------- ----------
Net earnings (loss) $ (19,127)$ 1,546 $ (32,108)$ (1,836)
========== ========== ========== ==========
Basic earnings (loss) per
common share $ (3.01)$ 0.24 $ (5.06)$ (0.29)
========== ========== ========== ==========
Diluted earnings (loss)
per common share $ (3.01)$ 0.24 $ (5.06)$ (0.29)
========== ========== ========== ==========
Basic weighted average
number of shares 6,352,293 6,323,827 6,345,474 6,312,756
Diluted weighted average
number of shares 6,352,293 6,324,932 6,345,474 6,312,756
SELECTED SEGMENT INFORMATION
----------------------------------------------------------------------
Three months ended Twelve months ended
December 31, December 31,
Net Sales 2003 2002 2003 2002
----------------------------------------------------------------------
(Dollars in thousands)
North American Building
Systems $ 107,358 $ 98,221 $ 374,802 $ 393,969
International Building
Systems 53,603 26,856 138,381 107,842
Architectural Products 52,864 53,797 217,429 220,098
Construction Services 18,972 18,386 80,692 111,428
Real Estate 4,845 - 4,845 16,475
Other (5,806) (3,825) (19,982) (21,603)
---------- ---------- ---------- ----------
$ 231,836 $ 193,435 $ 796,167 $ 828,209
========== ========== ========== ==========
----------------------------------------------------------------------
Three months ended Twelve months ended
December 31, December 31,
Pretax Earnings (Loss) 2003 2002 2003 2002
----------------------------------------------------------------------
(Dollars in thousands)
North American Building
Systems $ 2,840 $ (1,504) $ (19,762) $ (7,562)
International Building
Systems 4,383 3,573 11,265 7,995
Architectural Products 2,628 1,055 11,210 8,891
Construction Services (2,988) (53) (3,422) 1,952
Real Estate 280 421 246 3,341
Other (4,933) (4,122) (21,745) (21,475)
---------- ---------- ---------- ----------
$ 2,210 $ (630) $ (22,208) $ (6,858)
========== ========== ========== ==========
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