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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, 2002
BUTLER MANUFACTURING COMPANY
Incorporated in the State of Delaware
1540 Genessee Street
Post Office Box 419917
Kansas City, Missouri 64102
Phone: (816) 968-3000
I.R.S. Employer Identification Number: 44-0188420
Shares of common stock outstanding at
June 30, 2002: 6,310,002
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 30 days.
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 Months Ended June 30, 2002 and 2001. 3
Consolidated Statements of Comprehensive Income (Loss)
for the Three and Six Months Ended June 30, 2002 and 2001. 4
Consolidated Balance Sheets as of June 30, 2002 and
December 31, 2001. 5
Consolidated Statements of Cash Flows for the Six Months
Ended June 30, 2002 and 2001. 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 12
ITEM 4. Submission of Matters to a Vote Of Security Holders 13
PART II. OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K 13
Signatures 14
Exhibits Index 15
2
BUTLER MANUFACTURING COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
For the three and six months ended June 30, 2002 and 2001
(unaudited)
($000's omitted except for per share data)
Three months ended June 30 Six months ended June 30
2002 2001 2002 2001
----------- ----------- ----------- -----------
Net sales $ 213,421 $ 213,672 $ 396,273 $ 408,531
Cost of sales 184,210 180,014 344,943 350,108
----------- ----------- ----------- -----------
Gross profit 29,211 33,658 51,330 58,423
Selling, general and administrative expenses 27,909 27,131 55,746 55,318
----------- ----------- ----------- -----------
Operating income (loss) 1,302 6,527 (4,416) 3,105
Other income, net 686 220 616 706
----------- ----------- ----------- -----------
Income (loss) before interest and taxes 1,988 6,747 (3,800) 3,811
Interest expense 1,975 1,594 3,933 3,073
----------- ----------- ----------- -----------
Pretax income (loss) 13 5,153 (7,733) 738
Income tax expense (benefit) (281) 1,728 (2,659) 116
----------- ----------- ----------- -----------
Net income (loss) $ 294 $ 3,425 $ (5,074) $ 622
=========== =========== =========== ===========
Basic earnings (loss) per common share $ 0.05 $ 0.55 $ (0.81) $ 0.10
=========== =========== =========== ===========
Diluted earnings (loss) per common share $ 0.05 $ 0.54 $ (0.81) $ 0.10
=========== =========== =========== ===========
Basic weighted average number of shares 6,315,046 6,282,620 6,302,643 6,278,123
Diluted weighted average number of shares 6,324,684 6,290,487 6,302,643 6,282,057
See Accompanying Notes to Consolidated Financial Statements
3
BUTLER MANUFACTURING COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
For the three and six months ended June 30, 2002 and 2001
(unaudited)
($000's omitted)
Three months ended June 30 Six months ended June 30
2002 2001 2002 2001
------- ------- ------- -------
Net income (loss) $ 294 $ 3,425 $(5,074) $ 622
Other comprehensive income (loss):
Foreign currency translation and
hedging activity (62) 206 182 (501)
------- ------- ------- -------
Comprehensive income (loss) $ 232 $ 3,631 $(4,892) $ 121
======= ======= ======= =======
See Accompanying Notes to Consolidated Financial Statements.
4
BUTLER MANUFACTURING COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
June 30, 2002 and December 31, 2001
($000's omitted)
2002 2001
--------- ---------
(unaudited) (audited)
ASSETS
Current assets:
Cash and cash equivalents $ 44,431 $ 52,569
Receivables, net 116,583 109,522
Inventories:
Raw materials 27,268 20,132
Work in process 9,842 13,692
Finished goods 30,802 32,100
LIFO reserve (8,926) (8,489)
--------- ---------
Total inventory 58,986 57,435
Real estate developments in progress 18,459 23,966
Net current deferred tax assets 16,635 16,636
Other current assets 8,468 14,939
--------- ---------
Total current assets 263,562 275,067
Investments and other assets 52,777 48,741
Assets held for sale 3,684 3,684
Property, plant and equipment, at cost 297,669 302,360
Less accumulated depreciation (159,334) (159,090)
--------- ---------
Net property, plant and equipment 138,335 143,270
--------- ---------
$ 458,358 $ 470,762
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable $ 2,413 $ 2,100
Current maturities of long-term debt 5,567 5,617
Accounts payable 76,179 70,362
Dividends payable 1,136 1,131
Accrued liabilities 91,386 98,237
Taxes on income 3,960 8,659
--------- ---------
Total current liabilities 180,641 186,106
Net noncurrent deferred tax liabilities 3,683 3,683
Other noncurrent liabilities 18,041 18,254
Long-term debt, less current maturities 97,916 98,244
Shareholders' equity:
Common stock, no par value, authorized 20,000,000
shares, issued 9,088,200 shares, at stated value,
outstanding 6,310,002 in 2002 and 6,282,783 in 2001 12,623 12,623
Foreign currency translation, hedging activity, and minimum
pension liability, net of tax (6,609) (6,791)
Retained earnings 216,341 223,594
--------- ---------
222,355 229,426
Less cost of common stock in treasury, 2,778,198 shares
in 2002 and 2,805,417 shares in 2001 64,278 64,951
--------- ---------
Total shareholders' equity 158,077 164,475
--------- ---------
$ 458,358 $ 470,762
========= =========
See Accompanying Notes to Consolidated Financial Statements.
5
BUTLER MANUFACTURING COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the six months ended June 30, 2002 and 2001
(unaudited)
($000's omitted)
2002 2001
-------- --------
Cash flows from operating activities:
Net earnings (loss) $ (5,074) $ 622
Adjustments to reconcile net earnings (loss) provided by
operating activities:
Depreciation and amortization 9,000 8,282
Equity earnings (loss) of joint ventures 55 (19)
Change in asset and liabilities:
Receivables (7,061) 72
Inventories (1,551) 4,286
Real estate developments in progress 5,507 10,132
Other current assets and liabilities 846 (17,512)
Other noncurrent operating assets and liabilities (441) 285
-------- --------
Net cash provided by operating activities 1,281 6,148
Cash flows from investing activities:
Capital expenditures (3,068) (18,656)
Capital expenditures - software (4,770) (1,148)
-------- --------
Net cash used by investing activities (7,838) (19,804)
Cash flows from financing activities:
Payment of dividends (2,264) (2,131)
Proceeds from issuance of long-term debt -- 50,523
Repayment of long-term debt (328) (547)
Net change in short-term debt 263 (33,095)
Issuance of treasury stock 698 639
Purchase of treasury stock (25) (19)
-------- --------
Net cash provided (used) by financing activities (1,656) 15,370
Effect of exchange rate changes 75 (299)
-------- --------
Net increase (decrease) in cash and cash equivalents (8,138) 1,415
Cash and cash equivalents at beginning of year 52,569 16,855
-------- --------
Cash and cash equivalents at June 30 $ 44,431 $ 18,270
======== ========
See Accompanying Notes to Consolidated Financial Statements.
6
BUTLER MANUFACTURING COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited consolidated 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 2001 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 - GOODWILL
In June 2001, the Financial Accounting Standards Board (FASB) issued Statements
of Financial Accounting Standards No. 141, "Business Combinations" (SFAS No.
141), and No. 142, "Goodwill and Other Intangible Assets" (SFAS No. 142),
effective for fiscal years beginning after December 15, 2001. These Statements
eliminated the pooling-of-interests method of accounting for business
combinations and the systematic amortization of goodwill. SFAS No. 141 applies
to all business combinations with a closing date after June 30, 2001, of which
the Company had no such activity. At the beginning of fiscal 2002, the Company
adopted SFAS No. 142. Under the new standard, purchased goodwill is no longer
amortized over its useful life, but will be subject to annual impairment tests.
Therefore, the Company did not incur any goodwill amortization expense during
the first or second quarter of 2002. Goodwill amortization expense recorded in
the first and second quarters of 2001 was less than $.1 million, respectively,
or an after tax effect of less than $.01 per share. As of January 1, 2002 the
Company tested its Architectural Products business segment using an estimate of
fair value rather than an undiscounted cash flow approach performed under prior
accounting standards. It was determined that its fair value exceeded its
carrying value and no impairment was recognized. The Company has elected to
perform an annual test for goodwill impairment in the third quarter.
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 metal
buildings business. The European metal buildings business was sold on July 25,
2002. 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.
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 2001
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.
7
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) 2002 2001 2002 2001
- --------------------------------------------------------------------------------
North American Building Systems $ 97,725 $ 110,703 $ 176,212 $ 201,776
International Building Systems 31,980 19,327 53,572 35,131
Architectural Products 56,102 57,728 107,683 115,999
Construction Services 27,387 33,155 65,137 51,388
Real Estate 6,075 -- 6,075 15,953
Other (5,848) (7,241) (12,406 (11,716)
------------------------ --------------------
$ 213,421 $ 213,672 $ 396,273 $ 408,531
======================== ====================
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) 2002 2001 2002 2001
- --------------------------------------------------------------------------------
North American Building Systems $ (1,589) $ 3,891 $ (5,841) $ (754)
International Building Systems 1,957 245 1,928 (404)
Architectural Products 3,022 3,864 3,931 7,445
Construction Services 311 337 1,088 732
Real Estate 927 1,064 1,482 2,555
Other (4,615) (4,248) (10,321) (8,836)
---------------------- --------------------
$ 13 $ 5,153 $ (7,733) $ 738
====================== ====================
TOTAL ASSETS June 30, December 31,
(Thousands of dollars) 2002 2001
- ---------------------------------------------------------------------------
North American Building Systems $ 143,847 $ 138,690
International Building Systems 69,559 67,064
Architectural Products 110,600 112,785
Construction Services 22,558 22,465
Real Estate 33,416 28,406
Other 78,378 101,352
--------- ---------
$ 458,358 $ 470,762
========= =========
Total assets represent 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 segments were reported as a single segment. Because of reorganization
and management changes, two segments were formed.
NOTE 4 - RESTRUCTURING AND ASSET IMPAIRMENT CHARGES
In December 2001, the Company's board of directors approved the disposition of
its European metal buildings business. As a result, the Company recorded a $3.8
million pretax charge in connection with this decision. In addition, the Company
recorded a $4.3 million pretax charge for the impairment of certain assets.
During 2001,
8
$1.7 million of the restructuring reserve was utilized, and in the second
quarter of 2002, $.6 million was utilized for severance and employee separation
costs and other costs related to the disposition of the business. At June 30,
2002, $1.5 million remains in the restructuring reserve.
NOTE 5 - INDEBTEDNESS
In June 2001, the Company entered into a $50 million bank credit facility and
issued $50 million of senior unsecured notes pursuant to a note agreement,
allowing domestic bank borrowings to be reduced to zero.
Interest on advances under the new credit facility are based on either (a) the
higher of the federal funds rate plus .50% or the prime rate, which is payable
quarterly, or (b) LIBOR, which is payable at the end of periods ranging from one
to six months. The credit agreement provides for a commitment fee on unused
advances ranging from .20% to .30%. Commitments under the 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 effective 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 final installment due on December 30,
2016. 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 June 30, 2001 and a fixed charge coverage ratio, as defined, of
1.5 to 1.0.
NOTE 6 - EARNINGS PER SHARE
Basic and diluted earnings per common share were comparable for the three and
six month periods ending June 30, 2002 and 2001. Under the treasury stock method
the diluted weighted average number of shares outstanding vary from the basic
weighted average number of shares outstanding due to dilutive stock options
which are "in the money" at the end of the second quarter 2002.
9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
Net sales were $213 million for the second quarter 2002, comparable with a year
ago. The International Building Systems segment's sales increased$12.7 million
or 65% during the second quarter compared with the prior year, due to continuing
strong sales demand in China. Their positive result helped dampen the sales
decreases within the North American Building Systems, Architectural Products and
Construction Services segments.
The continued decline in the domestic nonresidential construction market
followed the general decline in the U.S. economy. Sales in the North American
Building Systems segment decreased 14% in the second quarter to $98 million
compared with $111 million a year ago, while the Construction Services segment's
sales decreased 17% to $27 million, both due to a decline in the nonresidential
construction market. The Architectural Products segment's sales decreased 3% to
$56 million in the second quarter due primarily to a decline in the office and
retail construction markets. The Real Estate segment, whose revenue stream is
more erratic than the manufacturing operations due to the project nature of this
business, recorded the sale of a development project held in inventory during
the second quarter.
The Company's sales for the first six months of the year decreased 3% to $396
million. International Building Systems segment sales were $54 million, an
increase of 52% compared with a year ago, due to increased demand in China.
Construction Services segment sales increased 27% to $65 million due to a strong
backlog at beginning of the year. The remaining segments reported sales
decreases which more than offset sales increases in the International Building
Systems and Construction Services segments mentioned above. North American
Building Systems segment's sales for the six months ending June 30, 2002 were
$176 million, a decrease of 17% compared with a year ago., while the
Architectural Products segment sales were $108 million, a decrease of 7%.
Gross profit was $29 million in the second quarter, a decline of 13% compared to
a year ago, and $51 million for the six months ending June 30, 2002, a decline
of 12%. The significant decline in the nonresidential construction market has
heightened price competition in the Company's domestic markets depressing gross
profit margins.
Sales, general and administrative expenses of $28 million and $56 million for
the three and six month periods ending June 30, 2002, were comparable to a year
ago. The positive impact of several cost cutting measures was offset by
increased health care and pension costs compared with a year ago. A portion of
the North American Building Systems segment manufacturing capacity, which was
temporarily idled last year, remains off-line until signs of a market rebound is
underway. Interest expense was $2.0 million and $3.9 million for the three and
six month periods ending June 30, 2002, higher than amounts in the corresponding
periods in 2001 due primarily to greater capitalized interest on the Company's
headquarters project in 2001, and a higher average interest rate in 2002.
The Company reported pretax earnings for the second quarter at breakeven levels
compared with earnings of $5.2 million a year ago, and year-to-date pretax
losses of $7.7 million compared with $.7 million pretax earnings for the same
period a year ago primarily due to the decline in the U.S. economy generally and
in nonresidential construction specifically. An income tax benefit was recorded
for the second quarter of 2002 due to the domestic loss and a lower effective
tax rate in China. Net earnings for the second quarter 2002 were $.05 per share.
The Company reported a net loss for the six month period ending June 30, 2002 of
$.81 per share.
During July, the Company completed the previously announced sale of assets of
its European metal buildings business to the Lindab AB Group headquartered in
Sweden.
LIQUIDITY AND CAPITAL RESOURCES
Since December 2001, cash and cash equivalents decreased $8 million to $44
million. During the period, cash was primarily used for investments,
specifically for general factory capital expenditures, and for the development
of a scalable enterprise system (ERP) in the North American metal buildings
business. Cash flow from operations increased slightly as noncash depreciation
and amortization expenses and a reduction in real estate developments in
progress offset seasonal increases in receivables in China and the Architectural
Products segment. Inventory increased at the end of June due to the North
American metal buildings business hedge buy of steel inventory in anticipation
of July steel price increases. Taxes payable declined due to lower earnings.
Cash from financing activities was used for payment of dividends.
10
During 2001, the Company entered into a $50 million bank credit facility to fund
future working capital requirements, and signed a $50 million private placement
agreement. For the six months ended June 30, 2002, there were no domestic
short-term borrowings. At June 30, 2002, approximately $20 million of the
domestic credit line was utilized to provide standby letters of credit to
backstop various short and long term liabilities of the Company. This compares
with $9 million at June 30, 2001. The Company's foreign operations maintain
separate lines of credit with local banks of approximately $6 million, with $2.4
million utilized at current exchange rates at June 30, 2002. Management believes
the Company's operating cash flow, cash balances, along with the bank credit
lines, are sufficient to meet future foreseen liquidity requirements.
Cash paid for interest was $1.2 million through the second quarter 2002, while
cash paid for taxes was $.8 million through June 2002. A $4.2 million tax refund
related to the disposition of the European operation was received during the
first quarter 2002. Cash paid for interest and taxes was $3.0 million and $1.8
million, respectively, for the same period a year ago.
Treasury stock purchases for 2002 and 2001 were minimal, and dividends were $2
million. On June 18, 2002 the Company's Board of Directors declared a regular
quarterly dividend of $.18 per share of the Company's common stock payable on
July 16, 20002 to shareholders of record on July 1, 2002.
OUTLOOK.
F.W. Dodge reported nonresidential construction orders through May, 2002
declined 11% compared with a year ago. The nonresidential construction economy
continues to trend downward nearing the lows set in early 1990's. Against this
backdrop, the Company is balancing near-term operating environment with careful
management of expenses and selective investment in growth strategies.
It is difficult to predict market conditions for the balance of the year,
although some seasonal pick-up in the third quarter is anticipated as this is
typically the strongest quarter of the year. However, pricing conditions are
expected to remain very competitive, and that, combined with higher steel costs
will keep the pressure on gross margins and operating profitability. Total
backlog at June 30, 2002 was $332 million, 3% lower than the prior year. Higher
margin product backlog was approximately 14% lower, while construction backlog
was 15% lower compared to the same period a year ago.
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 years 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. Steel prices in
2002 have risen sharply and are expected to increase early into the third
quarter 2002, partly due to recent tariffs imposed by the U.S. Government on
certain imported steel products. Recent investments and increased operating
efficiencies in Company operations have helped to dampen the impact of the
increase, nevertheless, in April, 2002, the Company's U.S. metal buildings
business announced a price increase on most of its products to partially
mitigate the impact of rising steel prices.
The Company's wood frame building business enters into forward purchase
arrangements for commercial grade lumber for periods of less than one year's
duration. Lumber costs are generally more volatile than steel costs. To offset
increases in lumber costs, the Company adjusts product prices accordingly.
Aluminum hedge contracts of less than one year's 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 charged to cost of sales when the underlying inventory is
sold. At June 30, 2002 the fair value of open aluminum contracts recorded in its
cumulative other comprehensive income was less than $.1 million. Mark to market
gains on the Company's Canadian currency exchange contracts were recorded in
earnings and were less than $.1 million at June 30, 2002. At June 30, 2002 a 10%
change in both aluminum and Canadian currency contracts was immaterial.
11
Interest Rates: The majority of the Company's long-term debt carries a fixed
interest rate, which limits the Company's exposure to increases in market rates.
However, interest rate changes impacts the fair market value of such debt. As of
June 30, 2002, holding other variables constant, including levels of
indebtedness, a one percentage point increase in interest rates would result in
approximately a $5 million change in the fair value of the Company's fixed rate
debt.
Foreign Currency Fluctuation: The majority of the Company's business is
transacted in U.S. dollars, 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. At June 30, 2002 the Company's net asset investment
in foreign operations was $28 million. The Company does hedge its short-term
foreign currency transaction exposures related to metal building sales in
Canada. Forward exchange contracts are purchased to cover a portion of the
exposure.
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, 2002, 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, 2001 regarding this matter. See
discussion about market risk under Item 2. Management Discussion and Analysis on
page 12 above.
12
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The Company held its Annual Meeting of Shareholders on April 16, 2002. Three
Class A Directors were elected at the Annual Meeting. In the election of
directors there were 5,350,316 votes cast for Gary M. Christensen and 523,396
withheld; 5,344,185 votes cast for C.L. William Haw and 529,527 withheld; and
5,358,098 votes cast for John J. Holland and 515,614 withheld.
Two other proposals were voted on and passed at the Annual Meeting; the Stock
Incentive Plan of 2002 to provide additional incentives to senior management
and other key employees of the Company, and the 2002 Stock Option Plan for
Outside Directors to promote long-term success of the Company and enhance the
Company's ability to attract qualified persons to serve as directors while
enhancing the long-term mutuality of interest between the Outside Directors of
the Company and the stockholders of the Company. Votes cast for the Stock
Incentive Plan were 4,131,085, votes against were 745,014, those abstaining were
141,142 and those delivered with no vote totaled 856,481. Votes cast for the
Outside Director Stock option were 3,917,497, votes against were 924,958, those
abstaining were 174,776, and those delivered with no vote totaled 856,481.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
(19) July 17, 2002 Letter to Shareholders.
(99.1) Certification of Periodic Report-CEO
(99.2) Certification of Periodic Report-CFO
(b) Reports on Form 8-K
On May 16, 2002 the Company filed form 8-K for change in the
registrants certified accountants. The Board of Directors of the
Company approved the dismissal of Arthur Andersen LLP and the
appointment of KPMG LLP as independent auditors for the Company
effective May 16, 2002.
13
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, 2002 /s/ Larry C. Miller
- --------------------- ------------------------------
Date Larry C. Miller
Vice President - Finance,
and Chief Financial Officer
August 14, 2002 /s/ John W. Huey
- --------------------- ------------------------------
Date John W. Huey
Vice President, General Counsel
and Secretary
14
EXHIBIT INDEX
Exhibit
Number Description
- ------ -----------
19 July 17, 2002 Letter to Shareholders
99.1 Certification of Periodic Report-CEO
99.2 Certification of Periodic Report-CFO
15