HUNT VALLEY, Md., March 16 /PRNewswire-FirstCall/ -- United Industrial
Corporation (NYSE: UIC) (the "Company") today reported its financial results
for the fourth quarter and the year ended December 31, 2004. Net sales and
income from continuing operations include the results of the Company's Defense
and Energy segments. The Defense segment, which operates through AAI
Corporation and its subsidiaries ("AAI"), a wholly-owned subsidiary of the
Company, has four product lines consisting of Unmanned Aerial Vehicles
("UAV"), Engineering and Logistics Services ("Services"), Test and Training
Systems, and Advanced Programs. The Energy segment is conducted through
Detroit Stoker Company, a wholly-owned subsidiary of the Company. Results
from the Company's remaining Transportation operations are reported as
discontinued operations.
Financial Results for the Fourth Quarter of 2004
Net sales from continuing operations for the three months ended
December 31, 2004 increased 14.4% to $95.2 million compared to $83.2 million
for the three months ended December 31, 2003. Income from continuing
operations for the fourth quarter of 2004 decreased $3.2 million to $3.3
million, or $0.26 per diluted share, compared to $6.5 million, or $0.47 per
diluted share, for the fourth quarter of 2003.
In connection with previously announced strategic initiatives to enhance
shareholder value for the long run, the Company incurred, during the fourth
quarter of 2004, pre-tax charges of $3.8 million for several special items as
well as higher selling and administrative, and interest expenses. The special
items included restructuring charges of $2.9 million related to operations in
both the Defense and Energy segments and an asset impairment charge of
$0.9 million in the Defense segment. In the fourth quarter of 2003, the
Company's results included a charge of approximately $0.4 million to close and
relocate its corporate headquarters from New York City to Hunt Valley,
Maryland.
In addition, during the fourth quarter of 2004, the Defense segment
reported $0.7 million less in award fee revenue and pre-tax income than during
the fourth quarter of 2003 due to the timing of the recognition of a certain
award fee. During the fourth quarter of 2004, other selling and
administrative expenses also increased $5.5 million primarily due to the
timing of these costs, and interest expense increased $1.3 million as a
result of the Company's issuance of 3.75% Convertible Senior Notes in
September 2004.
Excluding the restructuring and asset impairment charges in the fourth
quarter of 2004 and the New York office closure costs in the fourth quarter of
2003, income from continuing operations would have been $5.7 million, or $0.45
per diluted share, in 2004 and $6.7 million, or $0.49 per diluted share, in
2003.
Income from discontinued operations in the fourth quarter of 2004 was
$1.6 million, or $0.13 per diluted share, compared to a loss in the fourth
quarter of 2003 of ($1.9 million), or ($0.14) per diluted share.
Net income in the fourth quarter of 2004 increased to $4.9 million, or
$0.39 per diluted share, compared to $4.5 million, or $0.33 per diluted share,
for the fourth quarter of 2003.
Fourth Quarter 2004 Results By Operating Segment - Continuing Operations
Net sales for the Defense segment in the fourth quarter of 2004 increased
16.1% to $88.6 million compared to $76.3 million for the fourth quarter of
2003. Pre-tax income from the Defense segment decreased $2.2 million to
$8.0 million compared to $10.2 million for the fourth quarter of 2003.
The Defense segment's pre-tax results in the fourth quarter of 2004
included $0.9 million of restructuring charges for the Company's fluid test
systems product area, as more fully discussed under "Initiatives to Enhance
Shareholder Value" below, and a $0.9 million impairment charge related to
certain assets of Services' commercial firefighting training facility.
Excluding the restructuring and asset impairment charges in the fourth
quarter of 2004, pre-tax earnings in the Defense segment would have been
$9.8 million compared to $10.2 million in the fourth quarter of 2003.
The Defense segment's results in the fourth quarter of 2004 also included
$0.8 million of award fee revenue and pre-tax income related to the Company's
C-17 Maintenance Training Systems program compared to $1.5 million during the
fourth quarter of 2003. In 2004, the Company began accruing award fees for
this program because historical performance provided a reasonable basis to
estimate revenue and income, which resulted in the income being recognized
throughout the year. In 2003, the award fee revenue and pre-tax income was
recorded upon notification of the award.
Selling and administrative expenses in the Defense segment increased
$5.5 million during the fourth quarter of 2004 compared to the same period in
2003. This increase was primarily due to the timing of such costs in 2004, and
included $1.4 million higher research and development expenses due to projects
initiated in the second half of 2004, $1.8 million higher bid and
proposal/marketing costs due to several large program opportunities in the UAV
and Services product lines in the fourth quarter of 2004, $1.0 million higher
legal and consulting fees primarily incurred for general corporate matters,
$0.3 million of professional fees for compliance with Section 404 of the
Sarbanes-Oxley Act of 2002, and other net increases of approximately
$1.0 million.
Net sales for the Energy segment in the fourth quarter of 2004 were
$6.6 million, a decrease of $0.3 million, or 4.3%, from the fourth quarter of
2003. The Energy segment's pre-tax loss from operations in the fourth quarter
of 2004 was ($2.1 million) compared to pre-tax income of $0.9 million for the
fourth quarter of 2003. This decrease in the Energy segment's results for the
fourth quarter of 2004 included a $2.0 million pre-tax pension plan
curtailment charge, as more fully discussed in "Initiatives to Enhance
Shareholder Value" below, a pre-tax charge of $0.5 million related to
maintaining a ten-year estimate of its asbestos liability, and lower product
margins due to product mix and competitive pricing pressures.
Operating Highlights
"We were extremely pleased with the strong performance of our core Defense
segment and our results for the full year," said Frederick M. Strader, the
Company's President and Chief Executive Officer. "Our Shadow 200 Tactical
Unmanned Aerial Vehicle ("TUAV") program for the U.S. Army continued to lead
the Company's performance through the end of 2004. In 2005, we expect to
continue the solid performance of our TUAV program with the U.S. Army. Also,
we are continuing to focus our efforts on the profitability and growth of our
core Defense segment, including evaluating select acquisitions, and
implementing our restructuring plans to reduce operating costs and streamline
operations at Detroit Stoker and in the fluid test systems product area.
Although the fourth quarter of 2004 was unfavorably impacted by $3.8 million
of special charges, we expect the related actions to yield future benefits,"
Strader concluded.
During the fourth quarter of 2004, the Company's UAV product line received
its third consecutive full-rate production contract for $71.9 million from the
U.S. Army for eight Shadow 200 TUAV systems, including ground control
stations, maintenance equipment and spare components, to be delivered over the
next twenty months. The Company's UAV business was also awarded $23.4 million
of additional contracts in the fourth quarter of 2004 for ongoing logistical
support of TUAV systems deployed in Operation Iraqi Freedom. Including these
awards, funded backlog for the UAV product line at December 31, 2004 was
approximately $233.9 million.
In the fourth quarter, the Services product line expanded its offerings
with a $1.5 million award to begin transition activities under a new contract
with a potential value, subject to further funding, of $160.0 million over the
next five years to provide logistical support for joint service biological
detection systems at more than 50 U.S. facilities throughout the U.S., Middle
East, Europe and Asia. The Services product line also received a $5.2 million
contract award in the fourth quarter for the T-45 Ground Based Training
System. The funded backlog for the Services product line at December 31, 2004
was $58.8 million.
Test and Training Systems had a funded backlog of $25.0 million at
December 31, 2004, primarily related to its Joint Service Electronic Combat
Systems Tester program. Contract deliveries are expected to extend through
the fourth quarter of 2005. In the fourth quarter of 2004, Test and Training
Systems also received a $2.9 million contract from the U.S. Navy for Advanced
Boresight Equipment ("ABE") to be used across several aircraft platforms.
Contract options can be exercised through 2009, with a potential value of
approximately $25.0 million.
In Advanced Programs during the fourth quarter, AAI was awarded a contract
from Applied GEO Technologies, Inc., a company chartered by the Mississippi
Band of Choctaw Indians, to support the design and development of
aviation-related ground support equipment for the U.S. Army. AAI's initial
contract is worth $0.4 million, but is expected to grow to approximately $14.0
million, subject to further funding.
Financial Results for the Year Ended December 31, 2004
Net sales from continuing operations for the year ended December 31, 2004
increased 23.8% to $385.1 million compared to $310.9 million for the year
ended December 31, 2003. Income from continuing operations in 2004 increased
72.8% to $26.1 million, or $1.94 per diluted share, compared to $15.1 million,
or $1.10 per diluted share, for 2003. The calculation of diluted earnings per
share in 2004 included 894,000 potential dilutive shares for the required
assumed conversion of the Company's 3.75% Convertible Senior Notes issued on
September 15, 2004.
Net sales for the Defense segment increased $72.6 million primarily due to
an increase in production of TUAV systems as well as support for delivered and
deployed TUAV systems. Higher sales volume of $14.2 million for the C-17
Maintenance Training System program also contributed to the increase in net
sales in 2004 for the Defense segment. Sales in the Energy segment increased
$1.5 million.
Income from continuing operations before income taxes increased $16.4
million primarily due to the higher sales volume generated by the Defense
segment and improved performance in the TUAV production program. These
favorable items were partially offset by the $3.8 million of restructuring and
asset impairment charges incurred in the fourth quarter of 2004, as discussed
above. Also, in 2004 the Defense segment recorded a charge of approximately
$0.8 million related to the discovery and correction of the cumulative effect
of overstated revenues and related unbilled accounts receivable that occurred
in prior periods. In 2003, pre-tax income from continuing operations included
$0.9 million of New York office relocation costs.
Excluding the restructuring, asset impairment, and revenue adjustment
charges in 2004 and the New York office relocation costs in 2003, income from
continuing operations would have been $29.0 million, or $2.15 per diluted
share, in 2004 compared to $15.7 million, or $1.14 per diluted share, in 2003.
In addition, excluding the restructuring charge in the Energy segment
discussed above, selling and administrative expenses increased $4.7 million
primarily due to increased research and development, bid and proposal, legal
and consulting and other expenses associated with the general volume increase
in the Defense segment.
Income from the Company's discontinued operations for the year ended
December 31, 2004 was $0.7 million, or $0.05 per diluted share, compared to a
loss of ($20.9 million), or ($1.53) per diluted share, for the year ended
December 31, 2003.
Net income for the year ended December 31, 2004 increased to
$26.8 million, or $1.99 per diluted share, compared to a net loss of
($5.8 million), or ($0.43) per diluted share, for the year ended December 31,
2003.
Financial Results for Discontinued Operations
Income from the Company's discontinued operations for the fourth quarter
of 2004 was $1.6 million, or $0.13 per diluted share, compared to a loss of
($1.9 million), or ($0.14) per diluted share, in the fourth quarter of 2003.
During 2004, Electric Transit, Inc. ("ETI"), an entity owned 35% by AAI, was
able to favorably resolve certain operational challenges associated with its
last remaining program. Consequently, AAI recorded 100%, or $1.5 million, net
of tax, of ETI's results due to the recording of 100% of ETI's losses in
recent prior years. Partially offsetting this income was $0.8 million of net
expenses to wind down discontinued operations. These net expenses included
$2.9 million of general and administrative expenses and other charges,
including $1.5 million of professional fees primarily related to a certain
litigation matter involving a recovery claim initiated by the Company,
partially offset by $2.1 million related to the favorable resolution of
certain matters previously reserved.
Income from the Company's discontinued operations for the year ended
December 31, 2004 was $0.7 million, or $0.05 per diluted share, compared to a
loss of ($20.9 million), or ($1.53) per diluted share, for the year ended
December 31, 2003. The loss in the prior year was primarily related to the
completion of ETI's last remaining production contract.
Bookings and Funded Backlog
The Company received $152.5 million of new awards during the fourth
quarter of 2004, an increase of $34.5 million, or 29.2%, compared to the
corresponding fourth quarter of 2003, including $71.9 million for AAI's third
consecutive full-rate production contract from the U.S. Army for Shadow TUAV
systems. For the year ended December 31, 2004, the Company was awarded
$449.8 million of new contracts, which was $117.1 million, or 35.2%, more than
in 2003. Funded backlog for the Company's continuing operations was $387.9
million at December 31, 2004, an increase of $64.7 million, or 20.0%, from
December 31, 2003.
Initiatives to Enhance Shareholder Value
In accordance with its initiatives to enhance shareholder value, the
Company is continuing to focus its efforts on the profitability and growth of
its core Defense product lines, including evaluating select acquisitions to
grow its Defense segment, seeking to maximize operating efficiencies, and
exploring the sale of non-core assets.
In October 2003, Imperial Capital LLC was engaged to assist the Company in
exploring strategic alternatives for Detroit Stoker, including a potential
sale. This process is ongoing and no assurances can be given regarding whether
Detroit Stoker will be sold or the timing or proceeds from any such sale.
On April 15, 2004, the Company entered into an agreement to sell
undeveloped property adjacent to its headquarters for $8.1 million, or
$7.6 million net of selling expenses and closing costs. This transaction
closed in January 2005. The Company will recognize a pre-tax gain on this
sale in the first quarter of 2005 of approximately $7.2 million ($4.7 million
after tax). The net proceeds from this sale will be reinvested in a new
facility that we purchased in the first quarter of 2005 in South Carolina to
support growth in the Services product line. The Company expects to treat
these transactions as a like-kind exchange pursuant to Internal Revenue Code
provisions and defer the taxable gain on the sale.
Additionally, during the fourth quarter of 2004, the Company's management
finalized plans to restructure certain operations. Detroit Stoker finalized a
plan to streamline its operations, and accordingly most of the manufacturing
operations performed at Detroit Stoker's facilities will be outsourced to
lower-cost producers. As a result of the related reduction in Detroit
Stoker's workforce, Detroit Stoker recognized a curtailment charge, related
primarily to one of its pension benefit plans, of approximately $2.0 million
in the fourth quarter of 2004, which was included in selling and
administrative expenses. Other costs associated with Detroit Stoker's
restructuring plan that are estimated to be approximately $0.7 million will be
paid and charged to operations in 2005 as the liabilities are incurred.
The Company also established a plan to reorganize the operations of the
fluid test systems product area in the Defense segment in order to realize
operating efficiencies. In the fourth quarter of 2004, the Company incurred
approximately $0.9 million of related charges and expects to incur
approximately $2.4 million of additional charges in 2005 to complete this
restructuring.
Stock Buy-Back Program
On March 10, 2005, United Industrial's Board of Directors authorized a new
stock purchase plan for up to $25.0 million. As of December 31, 2004, the
Company had $3.5 million available for purchases under the previous plan,
which was unused and expired on March 15, 2005. Since inception of the
initial stock purchase plan authorized in November 2003, the Company has
purchased a total of 917,700 shares for $16.5 million, or an average of $18.00
per share. In addition, the Company purchased 850,400 shares of its common
stock for approximately $24.4 million, or $28.64 per share, using a portion of
the net proceeds from the issuance of the 3.75% Convertible Senior Notes in
September 2004.
Conference Call Webcast
The Company will hold a conference call Thursday, March 17, 2005, at 8:30
a.m. (ET), to discuss its financial results for the fourth quarter and full
year of 2004. A live webcast of the call will be accessible for all
interested parties on the Company's website, http://www.unitedindustrial.com,
in the Investor Relations section, or on http://www.streetevents.com.
Following the call, the webcast will be archived for a period of two weeks and
available at http://www.unitedindustrial.com or at
http://www.streetevents.com.
United Industrial Corporation is a company focused on the design,
production and support of defense systems. Its products include unmanned
aerial vehicles, engineering and logistics services, and test and training
systems. The Company also manufactures combustion equipment for biomass and
refuse fuels.
Use of Non-GAAP Measures
In addition to disclosing financial results that are determined in
accordance with accounting principles generally accepted in the United States
of America ("GAAP"), management believes that providing Income from Continuing
Operations Before Special Items, a non-GAAP measure, is meaningful to
investors because it provides insight with respect to ongoing operating
results of the Company. Special items include significant charges or credits
that are important to understanding the Company's ongoing operations. The
Company also discloses EBITDA (earnings before interest, taxes, depreciation,
and amortization), which is likewise a non-GAAP measure. In addition, the
Company discloses Free Cash Flow, a non-GAAP measure, which equals net cash
provided by operating activities less net cash used in acquiring property and
equipment, net of retirements. The Company believes Free Cash Flow is used by
some investors, analysts, lenders and other parties to measure the Company's
performance over time. Management believes that providing this additional
information is useful to understanding the Company's ability to meet capital
expenditures and working capital requirements and to better assess and
understand operating performance. Because the Company's methods for
calculating such non-GAAP measures may differ from other companies' methods,
such non-GAAP measures presented may not be comparable to similarly titled
measures reported by other companies. Such measures are not recognized in
accordance with GAAP, and the Company does not intend for this information to
be considered in isolation or as a substitute for GAAP measures.
Reconciliations from non-GAAP reported measures described in this press
release to GAAP reported results are provided in the financial tables attached
to this document.
Forward-Looking Information
Except for the historical information contained herein, information set
forth in this news release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. Words such
as "expects," "anticipates," "intends," "plans," "believes," "estimates," and
variations of such words and similar expressions that indicate future events
and trends are intended to identify such forward-looking statements which
include, but are not limited to, projections of revenues, earnings, segment
performance, cash flows and contract awards. These forward-looking statements
are subject to risks and uncertainties, which could cause the Company's actual
results or performance to differ materially from those expressed or implied in
such statements. The Company makes no commitment to update any
forward-looking statement or to disclose any facts, events, or circumstances
after the date hereof that may affect the accuracy of any forward-looking
statement. For additional information about the Company and its various risk
factors, please see the Company's most recent Annual Report on Form 10-K as
filed with the Securities and Exchange Commission.
United Industrial Corporation & Subsidiaries
Consolidated Earnings Per Share
(Unaudited)
Three Months Ended Year Ended
December 31, December 31,
2004 2003 2004 2003
Basic earnings (loss) per share:
Income from continuing
operations before
special items $0.47 $0.50 $2.27 $1.18
Special items:
Restructuring charges (0.15) -- (0.15) --
Impairment of
long-lived assets (0.05) -- (0.04) --
Revenue adjustment -- -- (0.04) --
New York office
closure costs -- (0.02) -- (0.04)
Income from continuing
operations 0.27 0.48 2.04 1.14
Income (loss) from
discontinued operations 0.13 (0.14) 0.06 (1.58)
Net income (loss) $0.40 $0.34 $2.10 $(0.44)
Weighted average number
of basic shares
outstanding 12,216,000 13,402,000 12,772,000 13,219,000
Diluted earnings (loss) per share:
Income from continuing
operations before
special items $0.45 $0.49 $2.15 $1.14
Special items:
Restructuring charges (0.15) -- (0.13) --
Impairment of
long-lived assets (0.04) -- (0.04) --
Revenue adjustment -- -- (0.04) --
New York office
closure costs -- (0.02) -- (0.04)
Income from continuing
operations 0.26 0.47 1.94 1.10
Income (loss) from
discontinued operations 0.13 (0.14) 0.05 (1.53)
Net income (loss) $0.39 $0.33 $1.99 $(0.43)
Weighted average number
of diluted shares
outstanding 12,768,000 13,690,000 14,076,000 13,662,000
United Industrial Corporation & Subsidiaries
Consolidated Statements of Operations
(Dollars in Thousands)
(Unaudited)
Three Months Ended Year Ended
December 31, December 31,
2004 2003 2004 2003
Net sales $95,157 $83,195 $385,084 $310,947
Cost of sales 69,509 61,512 289,138 239,618
Gross profit 25,648 21,683 95,946 71,329
Selling and administrative expenses 18,568 11,117 53,414 46,688
Impairment of long-lived assets 861 -- 861 --
Asbestos litigation expense 542 50 542 717
Other operating expenses, net 22 416 295 667
Total operating income 5,655 10,100 40,834 23,257
Non-operating income and (expense):
Interest income 550 379 831 463
Interest expense (1,496) (52) (1,776) (92)
Other (expense) income, net (222) (300) 13 (111)
(1,168) 27 (932) 260
Income from continuing operations
before income taxes 4,487 10,127 39,902 23,517
Provision for income taxes 1,174 3,654 13,800 8,411
Income from continuing operations 3,313 6,473 26,102 15,106
Income (loss) from discontinued
operations, net of income taxes 1,637 (1,936) 698 (20,947)
Net income (loss) 4,950 4,537 26,800 (5,841)
Add (deduct) special items, net of tax:
Restructuring charges 1,858 -- 1,858 --
Impairment of long-lived assets 560 -- 560 --
Revenue adjustment -- -- 507 --
New York office closure costs -- 266 -- 586
(Income) loss from discontinued
operations (1,637) 1,936 (698) 20,947
Net income before special items
and discontinued operations $ 5,731 $ 6,739 $29,027 $15,692
United Industrial Corporation & Subsidiaries
Results By Operating Segment
(Dollars in Thousands)
(Unaudited)
Three Months Ended Year Ended
December 31, December 31,
2004 2003 2004 2003
Net sales:
Defense $88,551 $76,293 $355,061 $282,425
Energy 6,606 6,902 30,023 28,522
$95,157 $83,195 $385,084 $310,947
Pretax income (loss) from
continuing operations:
Defense $8,010 $10,166 $41,202 $23,182
Energy (2,106) 894 542 2,695
Other (1,417) (933) (1,842) (2,360)
$4,487 $10,127 $39,902 $23,517
Bookings:
Defense $146,289 $111,631 $417,376 $304,615
Energy 6,166 6,343 32,439 28,103
$152,455 $117,974 $449,815 $332,718
December 31, December 31,
2004 2003
Funded backlog:
Defense $380,622 $318,307
Energy 7,296 4,880
$387,918 $323,187
United Industrial Corporation & Subsidiaries
Non-GAAP Results By Operating Segment
(Dollars in Thousands)
(Unaudited)
Three Months Ended Year Ended
December 31, December 31,
2004 2003 2004 2003
Non-GAAP income from
continuing operations
before tax - excluding
special items:
Defense $9,771 $10,166 $43,743 $23,182
Energy (147) 894 2,501 2,695
Other (1,417) (524) (1,842) (1,459)
8,207 10,536 44,402 24,418
Add (deduct) special items:
Defense:
Restructuring charges (900) -- (900) --
Impairment of
long-lived assets (861) -- (861) --
Revenue adjustment -- -- (780) --
Energy:
Restructuring charges (1,959) -- (1,959) --
Other:
New York office
closure costs -- (409) -- (901)
GAAP income from continuing
operations before tax $4,487 $10,127 $39,902 $23,517
EBITDA (continuing operations):
Defense $9,652 $11,172 $46,251 $26,573
Energy (2,026) 992 861 3,084
Other (496) (855) (419) (1,096)
7,130 11,309 46,693 28,561
Add (deduct):
Depreciation and
amortization (1,697) (1,509) (5,846) (5,415)
Interest (expense)
income, net (946) 327 (945) 371
Provision for income taxes (1,174) (3,654) (13,800) (8,411)
Income from continuing
operations $3,313 $6,473 $26,102 $15,106
United Industrial Corporation & Subsidiaries
Non-GAAP Results By Operating Segment (Continued)
(Dollars in Thousands)
(Unaudited)
Three Months Ended Year Ended
December 31, December 31,
2004 2003 2004 2003
Free cash flow:
Cash provided by
operating activities
of continuing operations $20,346 $13,494 $25,263 $40,835
Purchases of property and
equipment (6,764) (2,000) (9,628) (6,213)
Cash used in discontinued
operations (702) 5,152 (4,753) (7,946)
Free cash flow $12,880 $16,646 $10,882 $26,676
United Industrial Corporation & Subsidiaries
Consolidated Balance Sheets
(Dollars in Thousands)
(Unaudited)
December 31, December 31,
2004 2003
ASSETS
Current assets:
Cash and cash equivalents $ 80,679 $ 24,138
Securities pledged to creditors 124,626 --
Deposits and restricted cash 33,845 --
Trade receivables, net 46,658 33,377
Inventories 34,639 16,968
Prepaid expenses and other current
assets 12,465 9,417
Assets of discontinued operations 13,545 5,089
Total current assets 346,457 88,989
Deferred income taxes 13,930 10,886
Other assets 11,953 7,710
Insurance receivable - asbestos
litigation 20,343 20,317
Property and equipment, net 27,645 22,216
Total assets $420,328 $150,118
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 958 $ --
Payable under securities
loan agreement 124,619 --
Accounts payable 21,664 10,117
Accrued employee compensation
and taxes 13,706 11,920
Other current liabilities 14,942 9,787
Liabilities of discontinued operations 18,566 15,561
Total current liabilities 194,455 47,385
Long-term debt 122,000 --
Postretirement benefit obligation,
other than pension 20,813 21,970
Minimum pension liability 17,513 6,755
Reserve for asbestos litigation 31,852 31,595
Other liabilities 2,129 1,466
Commitments and contingencies
Total liabilities 388,762 109,171
Shareholders' Equity:
Preferred stock, par value $1.00
per share; 1,000,000 shares
authorized; none issued
and outstanding -- --
Common stock, par value $1.00 per
share; 30,000,000 shares authorized;
12,291,951 and 13,267,218 shares
outstanding at December 31, 2004
and 2003, respectively (net of
shares held in treasury) 14,374 14,374
Additional capital 84,296 88,125
Retained earnings (deficit) 3,499 (22,095)
Treasury stock, at cost,
2,082,197 and 1,106,930 shares at
December 31, 2004 and 2003,
respectively (40,019) (11,345)
Accumulated other comprehensive loss,
net of tax (30,584) (28,112)
Total Shareholders' Equity 31,566 40,947
Total liabilities and
shareholders' equity $420,328 $150,118
United Industrial Corporation & Subsidiaries
Consolidated Cash Flows
(Unaudited)
Year Ended December 31,
(Dollars in thousands) 2004 2003 2002
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $26,800 $(5,841) $(39,077)
Adjustments to reconcile net income
(loss) to net cash provided by (used in)
operating activities:
(Income) loss from discontinued
operations, net of taxes (698) 20,947 42,941
Depreciation and amortization 5,846 5,415 8,763
Provision for asbestos litigation -- -- 11,509
Pension expense 4,602 6,119 1,321
Curtailment charge for postretirement
benefits 1,959 -- --
Impairment of long-lived assets 861 -- --
Deferred income taxes 1,132 (1,525) (4,933)
Income tax refund -- 16,822 --
Other, net 116 (57) (99)
Changes in operating assets and
liabilities:
(Increase) decrease in trade
receivables (13,268) 4,311 87
(Increase) decrease in inventories (17,671) 3,983 (4,763)
(Increase) decrease in prepaid
expenses and other current assets (1,743) (1,309) 404
Increase (decrease) in accounts
payable, accruals, and other
current liabilities 17,763 (5,186) 6,223
Other long-term assets and
liabilities, net (436) (2,844) 490
Net cash provided by operating activities
from continuing operations 25,263 40,835 22,866
Net cash used in discontinued operations (4,753) (7,946) (37,806)
Net cash provided by (used in)
operating activities 20,510 32,889 (14,940)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (9,628) (6,213) (5,219)
Purchase of available-for-sale
securities (124,619) -- --
Increase in amount due from investee of
discontinued operations -- (2,122) (3,648)
Advances repaid by investee of
discontinued operations -- 2,122 1,917
Dividend received from and advances
repaid by investee -- -- 1,360
Cash advance received on pending
property sale 150 -- --
Proceeds from sale of assets of
discontinued operations -- -- 20,756
Net cash (used in) provided by
investing activities (134,097) (6,213) 15,166
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of long-term
debt, net 115,624 -- --
Collateral received in securities
lending transaction 124,619 -- --
Proceeds from exercise of stock options 4,580 5,178 1,825
Repayment of long-term debt (915) -- --
Purchases of treasury shares (34,842) (6,036) --
Dividends paid (5,093) (5,315) (3,912)
Increase in deposits and restricted cash (33,845) -- --
Net cash provided by (used in)
financing activities 170,128 (6,173) (2,087)
Increase (decrease) in cash and cash
equivalents 56,541 20,503 (1,861)
Cash and cash equivalents at beginning
of year 24,138 3,635 5,496
Cash and cash equivalents at end of year $80,679 $24,138 $3,635
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