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Previous: GELTEX PHARMACEUTICALS INC, 10-Q, 1997-05-14 |
Next: FIRST COMMONWEALTH INC, 10-Q, 1997-05-14 |
U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-Q
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 1997
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from __________________ to ______________
Commission file number 0-9352
Gibbs Construction, Inc.
- -------------------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Texas 75-2095676
- -------------------------------------------------------------------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization Identification No.)
1855 Wall Street, Garland, TX 75041
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(972) 278-3433
- -------------------------------------------------------------------------------
(Registrant's telephone number)
- ------------------------------------- ----------------------------------
(Former name, former address and former fiscal year, if changed
since last report)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes X No ____
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date: 4,000,000
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
GIBBS CONSTRUCTION, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
-----------------------------------
(Unaudited)
CURRENT ASSETS
<S> <C> <C>
Cash $ 2,447 $ 124,565
Temporary Investments 963 1,503
Accounts Receivable
Trade 5,018,982 8,596,282
Costs and Estimated Earnings in Excess of
Billings on Uncompleted Contracts 803,687 976,681
Prepaid Expenses 19,376 19,376
Deferred Tax Asset 510,000 510,000
----------- -------------
TOTAL CURRENT ASSETS 6,355,455 10,228,407
----------- ------------
LAND, BUILDINGS AND EQUIPMENT 1,093,172 1,084,380
Less Accumulated Depreciation (423,743) (387,744)
----------- ------------
NET LAND, BUILDINGS AND EQUIPMENT 669,429 696,636
----------- ------------
OTHER ASSETS
Other Assets 2,454 2,454
Receivables From Affiliates and Employees 151,265 232,789
Deferred Tax Asset 1,618,640 1,572,740
----------- ------------
TOTAL OTHER ASSETS 1,772,359 1,807,983
----------- ------------
TOTAL ASSETS $ 8,797,243 $12,733,026
=========== ===========
</TABLE>
(Continued)
F-1
<PAGE>
GIBBS CONSTRUCTION, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(Continued)
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
----------------------------------
(Unaudited)
CURRENT LIABILITIES
<S> <C> <C>
Cash Overdraft $ 28,634 $ -
Notes Payable 195,000 150,000
Current Installments of Long-Term Debt 378,243 374,443
Accounts Payable 4,397,072 8,047,940
Accrued Expenses 688,497 719,749
Billings in Excess of Costs and Estimated Earnings on
Uncompleted Contracts 993,775 1,142,164
Payable to Stockholders 406,055 406,055
------------ -------------
TOTAL CURRENT LIABILITIES 7,087,276 10,840,351
LONG-TERM DEBT - Excluding Current Installments 469,640 563,254
----------- -------------
TOTAL LIABILITIES 7,556,916 11,403,605
----------- ------------
STOCKHOLDERS' EQUITY
Common Stock of $.01 Par Value. Authorized 7,500,000
Shares; Issued and Outstanding 4,000,000
Shares, respectively 40,000 40,000
Paid-In-Capital 4,907,272 4,907,272
Retained (Deficit) (3,706,945) (3,617,851)
----------- ------------
TOTAL STOCKHOLDERS' EQUITY 1,240,327 1,329,421
----------- ------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 8,797,243 $12,733,026
=========== ===========
</TABLE>
The accompanying note is an integral part
of these consolidated financial statements
F-2
<PAGE>
GIBBS CONSTRUCTION, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
For the Three Months Ended
March 31,
------------------------------------
1997 1996
------------- ----------
<S> <C> <C>
CONSTRUCTION REVENUES $8,693,918 $6,804,744
COST OF CONSTRUCTION (8,481,834) (6,493,759)
---------- ----------
NET CONSTRUCTION REVENUES 212,084 310,985
----------- ----------
BRONCO BOWL REVENUES - 908,602
BRONCO BOWL OPERATING EXPENSES - 1,855,824
-------------- -----------
NET BRONCO BOWL EXPENSES - (947,222)
-------------- -----------
GROSS PROFIT (LOSS) 212,084 (636,237)
GENERAL AND ADMINISTRATIVE EXPENSES 327,415 557,481
----------- -----------
(LOSS) BEFORE OTHER INCOME (EXPENSE) (115,331) (1,193,718)
OTHER INCOME (EXPENSE)
(Loss) on Temporary Investments Transactions (540) -
Interest Income 64 -
Interest Expense, net of capitalized interest of $36,635
at March 31, 1996 (25,455) (33,533)
Other 6,268 -
------------ -------------
(LOSS) BEFORE INCOME TAXES (134,994) (1,227,251)
INCOME TAX BENEFIT 45,900 402,171
----------- ----------
NET (LOSS) $ (89,094) $(825,080)
=========== =========
(LOSS) PER SHARE $ (0.02) $ (0.21)
============= ============
WEIGHTED AVERAGE NUMBER OF SHARES 4,000,000 4,000,000
========= =========
</TABLE>
The accompanying note is an integral part
of these consolidated financial statements
(Continued)
F-3
<PAGE>
GIBBS CONSTRUCTION, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
Common Stock
---------------------
Retained
Number Paid-In Earnings
of Shares Amount Capital (Deficit) Total
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
BALANCE, DECEMBER 31, 1995 3,000,000 $30,000 $ - $ 2,724,319 $2,754,319
Sale of Common Shares -
January, 1996 1,000,000 10,000 3,712,500 - 3,722,500
Registration Costs, net of
applicable tax effect - - (358,948) - (358,948)
"S" Corporation Status Termination - - 1,553,720 (2,219,336) (665,616)
1996 Net Loss - - - (4,122,834) (4,122,834)
------------- ----------- -------------- ----------- ----------
BALANCE, DECEMBER 31, 1996 4,000,000 $40,000 $4,907,272 $(3,617,851) $1,329,421
1997 Net Loss (Unaudited) - - - (89,094) (89,094)
------------- ---------- -------------- ------------ -----------
BALANCE, MARCH 31, 1997 4,000,000 $40,000 $4,907,272 $(3,706,945) $1,240,327
============= ========== ========== =========== ==========
(Unaudited)
</TABLE>
The accompanying note is an integral part
of these consolidated financial statements
F-4
<PAGE>
GIBBS CONSTRUCTION, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
----------------------------------------
1997 1996
----------------------------------------
CASH FLOW FROM OPERATING ACTIVITIES
<S> <C> <C>
Net (Loss) $ (89,094) $ (825,080)
Adjustments to Reconcile Net Income to Net Cash
From Operating Activities
Depreciation 35,999 194,395
Loss on Temporary Investments Transactions 540 -
Deferred Taxes (45,900) (402,171)
Changes in Current Assets and Liabilities
(Increase) Decrease in Accounts Receivable 3,577,300 (101,181)
Decrease in Billings Related to Cost
and Earnings on Uncompleted Contracts 24,605 109,500
(Increase) in Inventories - (109,104)
(Increase) in Prepaid Expenses - (8,360)
(Decrease) in Accounts Payable (3,650,868) (694,285)
(Decrease) in Accrued Expenses (31,252) (8,176)
----------- ------------
NET CASH FLOW (USED) BY
OPERATING ACTIVITIES (178,670) (1,844,462)
---------- -----------
CASH FLOW FROM INVESTING ACTIVITIES
Purchase of Equipment (8,792) (105,134)
Bronco Bowl Renovations - (1,807,628)
Decrease in Other Assets 81,524 3,057
----------- ------------
NET CASH FLOW PROVIDED (USED)
IN INVESTING ACTIVITIES 72,732 (1,909,705)
----------- -----------
CASH FLOW FROM FINANCING ACTIVITIES
Deferred Registration Costs - (127,358)
Proceeds from Note Borrowings 70,000 -
Repayments of Note Borrowings (114,814) (25,743)
Repayments of Capital Lease Obligations - (33,614)
Sale of Common Stock - 3,722,500
------------- -----------
NET CASH FLOW PROVIDED (USED) BY
FINANCING ACTIVITIES (44,814) 3,535,785
----------- -----------
</TABLE>
The accompanying note is an integral part
of these consolidated financial statements
(Continued)
F-5
<PAGE>
GIBBS CONSTRUCTION, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Continued)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
--------------------------------------
1997 1996
--------------------------------------
<S> <C> <C>
NET (DECREASE) IN CASH $ (150,752) $(218,382)
CASH AT THE BEGINNING OF THE PERIOD 124,565 64,183
---------- ---------
CASH AT THE END OF THE PERIOD $ (26,187) $(154,199)
========== =========
SUPPLEMENTAL DISCLOSURES OF CASH
FLOW INFORMATION
Cash Paid During the Year For:
Interest Expense $ 29,945 $70,168
========== =======
SUPPLEMENTAL SCHEDULE OF NONCASH
INVESTING AND FINANCING ACTIVITIES:
Increase in Receivables From Affiliates and Employees $ - $ 1,115,262
Termination of "S" Corporation Status - (1,115,262)
Increase in Capital Lease Obligations - 634,625
Assets Purchased through Capital Lease - (634,625)
Reduction in Deferred Registration Costs - 326,151
Registration Costs Offset Against Paid-in-Capital - (326,151)
Transfer of Retained Earnings to Paid-in-Capital - 1,396,082
Increase in Paid-in-Capital - (1,396,082)
------------- -----------
$ $
============= ===========
</TABLE>
The accompanying note is an integral part
of these consolidated financial statements
F-6
<PAGE>
GIBBS CONSTRUCTION, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1997 AND 1996
NOTE 1: BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principals for
interim financial information and with the instructions to Form 10-Q and
Rule 10-01 of Regulations S-X. They do not include all information and notes
required by generally accepted accounting principals for complete financial
statements. However, except as disclosed, there has been no material change
in the information disclosed in the notes to consolidated financial
statements included in the Annual Report on Form 10-K of Gibbs Construction,
Inc. for the year ended December 31, 1996. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary
for a fair presentation have been included. Operating results for the three
month period ended March 31, 1997, are not necessarily indicative of the
results that may be expected for the year ending December 31, 1997.
F-7
<PAGE>
Item 2. Management's Discussion and Analysis of Operations.
Revenues increased in the first quarter of 1997 to $8,693,918 from
$6,804,897 in the first quarter of 1996, an increase of approximately 28%. Gross
profits for the 1997 quarter, however, were $212,084 compared to $310,985 in the
earlier period. Although the gross margins for the first quarter of 1997 were
lower than those from the first quarter of 1996, 2.4% compared to 4.6%, gross
margins improved from the fourth quarter of 1996 from 1.1%.
The first quarter's revenues are traditionally the Company's lowest revenues
for any fiscal quarter during the fiscal year reflecting less construction
during the winter months. The increase in revenues in the first quarter of 1997
compared to the first quarter of 1996 reflects a larger number of clients. The
lower margins reflects the low margins on jobs performed for one client, most of
which were completed early in the quarter. After completing the jobs for which
the Company contracted with this firm, the Company quit bidding on these jobs.
The effect of reduced gross margins was that the Company incurred a loss of
about $90,000 or $0.02 per share for the first quarter of 1997. The loss for the
first quarter of 1996, was, however, $825,000, or $0.21 per share, reflecting
primarily the losses associated with operation of the Bronco Bowl.
In the first quarter of 1997 selling, general and administrative costs
declined, to $327,145 from $557,481, compared to the same quarter a year
earlier. The earlier quarter reflected overhead expenses incurred during the
startup and operation of the Bronco Bowl. Selling, general and administrative
expenses, however, increased slightly, however, from $317,981 in the fourth
quarter of 1996. This small increase reflects the costs incurred in the
Company's first fiscal quarter for compliance activities associated with being a
publicly held Company.
Liquidity and Capital Resources
The Company's working capital ratio declined somewhat in the first quarter
of 1997, to 0.90, compared to 0.94 at December 31, 1996. Net cash flow from
operating activities decreased by approximately $179,000 during the first
quarter. Management of the Company remains confident that it possesses the
capital resources to finance the increased operations that commonly follow the
first quarter of the fiscal year and continuation of its recovery from the
Bronco Bowl.
PART II
None
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Gibbs Construction, Inc.
May 13, 1997 /s/ Danny R. Gibbs
------------------
Danny R. Gibbs, President and
Principal Financial Officer
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> (26,187)
<SECURITIES> 963
<RECEIVABLES> 5,822,669
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 6,355,455
<PP&E> 669,429
<DEPRECIATION> 35,999
<TOTAL-ASSETS> 8,797,243
<CURRENT-LIABILITIES> 7,087,276
<BONDS> 0
0
0
<COMMON> 40,000
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 8,797,243
<SALES> 8,693,918
<TOTAL-REVENUES> 8,693,918
<CGS> 8,481,834
<TOTAL-COSTS> 8,809,249
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 25,455
<INCOME-PRETAX> (134,994)
<INCOME-TAX> (45,900)
<INCOME-CONTINUING> (89,094)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (89,094)
<EPS-PRIMARY> (0.02)
<EPS-DILUTED> 0
</TABLE>
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