|
|
|
|
|
|
|
|
|
|
|
|
|
|
Previous: THAXTON GROUP INC, RW, 1997-11-14 |
Next: NETTER DIGITAL ENTERTAINMENT INC, 10QSB, 1997-11-14 |
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 September 30, 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 Identification No.)
incorporation or organization)
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>
September 30, December 31,
1997 1996
------------- ------------
(Unaudited)
<S> <C> <C>
CURRENT ASSETS
Cash $ 1,553,165 $ 124,565
Temporary Investments 205,123 1,503
Accounts Receivable
Trade 5,216,556 8,596,282
Costs and Estimated Earnings in Excess of
Billings on Uncompleted Contracts 770,896 976,681
Prepaid Expenses 56,302 19,376
Deferred Tax Asset 250,000 510,000
--------- ----------
TOTAL CURRENT ASSETS 8,052,042 10,228,407
--------- ----------
LAND, BUILDINGS AND EQUIPMENT 1,100,523 1,084,380
Less Accumulated Depreciation (492,935) (387,744)
--------- ----------
NET LAND, BUILDINGS AND EQUIPMENT 607,588 696,636
--------- ----------
OTHER ASSETS
Other Assets 2,454 2,454
Receivables From Affiliates and Employees 185,254 232,789
Deferred Tax Asset 1,692,740 1,572,740
--------- ----------
TOTAL OTHER ASSETS 1,880,448 1,807,983
--------- ----------
TOTAL ASSETS
$10,540,078 $12,733,026
=========== ===========
</TABLE>
(Continued)
F-1
<PAGE>
GIBBS CONSTRUCTION, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(Continued)
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
September 30, December 31,
1997 1996
------------- -------------
(Unaudited)
CURRENT LIABILITIES
<S> <C> <C>
Notes Payable $ 150,000 $ 150,000
Current Installments of Long-Term Debt 344,050 374,443
Accounts Payable 5,115,457 8,047,940
Accrued Expenses 236,240 347,749
Billings in Excess of Costs and Estimated Earnings
on Uncompleted Contracts 1,972,414 1,142,164
------------- -------------
TOTAL CURRENT LIABILITIES 7,818,161 10,062,296
OTHER LONG-TERM LIABILITIES 774,705 778,055
LONG-TERM DEBT - Excluding Current Installments 341,633 563,254
------------- -------------
TOTAL LIABILITIES 8,934,499 11,403,605
------------- -------------
STOCKHOLDERS' EQUITY
Common Stock of $.01 Par Value. Authorized 7,500,000
Shares; Issued and Outstanding 4,000,000 Shares 40,000 40,000
Paid-In-Capital 4,907,272 4,907,272
Retained (Deficit) (3,341,693) (3,617,851)
------------- -------------
TOTAL STOCKHOLDERS' EQUITY 1,605,579 1,329,421
------------- -------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $10,540,078 $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 AND OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended Sept. 30, Nine Months Ended Sept. 30,
------------------------------ ------------------------------
1997 1996 1997 1996
----------- -------------- ----------- ------------
<S> <C> <C> <C> <C>
CONSTRUCTION REVENUES $12,422,143 $16,078,943 $30,489,929 $31,906,010
COST OF CONSTRUCTION 11,588,762 14,484,985 28,983,134 29,586,836
----------- -------------- ----------- ------------
GROSS PROFIT 833,381 1,593,958 1,506,795 2,319,174
GENERAL AND ADMINISTRATIVE
EXPENSES 340,721 341,046 1,017,977 1,256,435
----------- -------------- ----------- ------------
INCOME BEFORE OTHER
INCOME (EXPENSE) 492,660 1,252,912 488,818 1,062,739
OTHER INCOME (EXPENSE)
Gain on Disposal of Equipment - (1,557) 9,140 (1,557)
(Loss) on Temporary Investments Transactions - - (540) -
Interest Income 440 - 5,067 5,000
Interest Expense (27,114) (49,718) (86,261) (77,345)
Other (7,222) - (66) -
----------- -------------- ----------- ------------
INCOME BEFORE INCOME TAXES 458,764 1,201,637 416,158 988,837
INCOME TAX EXPENSE 154,500 413,948 140,000 344,000
----------- -------------- ----------- ------------
INCOME FROM CONTINUING
OPERATIONS 304,264 787,689 276,158 644,837
----------- -------------- ----------- ------------
DISCONTINUED OPERATIONS
(Loss) From Operations Of
Discontinued Subsidiary - (61,587) - (1,236,167)
(Loss) On Disposal of Subsidiary - - - (3,483,103)
NET INCOME (LOSS) $ 304,264 $ 726,102 $ 276,158 $(4,074,433)
=========== ============== =========== ============
INCOME (LOSS) PER SHARE
Continued Operations $ .08 $ .20 $ .07 $ .16
Discontinued Operations - (.02) - (1.18)
----------- -------------- ----------- ------------
$ .08 $ .18 $ .07 $ (1.02)
=========== ============== =========== ============
WEIGHTED AVERAGE NUMBER
OF SHARES 4,000,000 4,000,000 4,000,000 4,000,000
=========== ============== =========== ============
</TABLE>
The accompanying note is an integral part
of these consolidated financial statements
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 Income (Unaudited) - - - 276,158 276,158
--------- ------- ------------- ----------- ----------
BALANCE, SEPTEMBER 30, 1997
(Unaudited) 4,000,000 $40,000 $4,907,272 $(3,341,693) $1,605,579
========= ======= ============= =========== ==========
</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>
Nine Months Ended
September 30,
---------------------
1997 1996
---------- ------------
<S> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES
Net Income (Loss) $ 276,158 $(4,074,433)
Adjustments to Reconcile Net Income (Loss)
to Net Cash From Operating Activities
Loss on Sale of Discontinued Operations - 3,483,103
Depreciation 110,320 479,447
(Gain) Loss on Disposal of Equipment (9,140) 1,557
Loss on Temporary
Investments Transactions 540 -
Deferred Taxes 140,000 (292,000)
Changes in Current Assets and Liabilities
Decrease (Increase) in Accounts Receivable 3,379,726 (4,478,559)
Decrease in Billings Related to
Cost and Earnings on Uncompleted Contracts 1,036,035 110,438
(Increase) in Inventories - (8,259)
(Increase) in Prepaid Expenses (36,926) (72,910)
(Decrease) Increase in Accounts Payable (2,932,483) 1,853,549
(Decrease) Increase in Accrued Expenses (111,509) (82,050)
Purchase of Temporary Investments (204,160) -
---------- ------------
NET CASH FLOW PROVIDED (USED)
BY OPERATING ACTIVITIES 1,648,561 (3,080,117)
---------- ------------
CASH FLOW FROM INVESTING ACTIVITIES
Purchase of Equipment (43,068) (169,604)
Bronco Bowl Renovations - (1,983,864)
Proceeds from Sale of Equipment 30,936 3,500
Proceeds from Sale of Discontinued Subsidiary - 712,456
Decrease (Increase) in Other Assets 47,535 (83,279)
---------- ------------
NET CASH FLOW PROVIDED (USED)
IN INVESTING ACTIVITIES 35,403 (1,520,791)
---------- ------------
</TABLE>
The accompanying note is an integral part
of these consolidated financial statements
F-5
<PAGE>
GIBBS CONSTRUCTION, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Continued)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
-----------------
1997 1996
-------- ----------
CASH FLOW FROM FINANCING ACTIVITIES
<S> <C> <C>
Deferred Registration Costs $ - $ (127,358)
Proceeds from Notes Borrowings 167,277 1,368,234
Repayments of Notes Borrowings (419,291) (168,996)
Repayments of Capital Lease Obligations - (3,341)
Changes in Stockholder Payables (3,350)
Sale of Common Stock - 3,722,500
-------- ----------
NET CASH FLOW (USED) PROVIDED BY
FINANCING ACTIVITIES (255,364) 4,791,039
-------- ----------
NET INCREASE IN CASH 1,428,600 190,131
CASH AT THE BEGINNING OF THE PERIOD 124,565 64,183
-------- ----------
CASH AT THE END OF THE PERIOD $1,553,165 $ 254,314
======== ==========
SUPPLEMENTAL DISCLOSURES OF CASH
FLOW INFORMATION
Cash Paid During the Year For:
Interest Expense $ 86,261 $ 199,212
======== ==========
SUPPLEMENTAL SCHEDULE OF NONCASH
INVESTING AND FINANCING
ACTIVITIES:
Termination of "S" Corporation Status
Increase in Payable to Stockholders
and Affiliates $ - $ 993,319
Transfer of Retained Earnings to
Paid-in-Capital - 1,518,025
Reduction in Retained Earnings - (2,511,344)
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)
-------- ----------
$ - $ -
======== ==========
</TABLE>
The accompanying note is an integral part
of these consolidated financial statements
F-6
<PAGE>
GIBBS CONSTRUCTION, INC. AND SUBSIDIARY
CONSOLIDATED FINANCIAL STATEMENTS
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. and Subsidiary 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 nine month period ended September 30, 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.
Income from continuing operations was $276,158 for the nine month period ended
September 30, 1997, compared to $644,837 for the same period in 1996. The
decline is principally attributable to a decline in gross margins in the 1997
period when gross margins were approximately 4.9% compared to approximately 7.3%
in the 1996 period. This decline in gross margins in the 1997 period is
principally attributable to several contracts performed by the Company in the
first half of the year in which the Company's margins were negligible. The
Company no longer contracts with this former client.
The decline in income from continuing operations in the 1997 period is also
attributable to a decrease in revenues of approximately 4.4% for the nine months
ended September 30, 1997,when compared to the earlier year, $30,489,929 and
$31,906,010, respectively. This decline is attributable to the timing of the
start of several contracts that have been awarded to the Company but that had
not commenced by the end of the quarter.
The decline in gross margins was partially offset by reduced Selling, general
and administrative expenses in the nine month period ended September 30, 1997,
when compared to the same 1996 period. The Company incurred higher Selling,
general and administrative expenses associated with discontinued operations as
well as high initial professional fees in the 1996 period.
Liquidity and capital resources
The registrant's working capital position has continued to improve in the second
quarter of 1997. The result of the improved working capital position of the
Company and its liquidity reflect the improvement of operations to better
support the Company's liquidity needs.
<PAGE>
PART II - OTHER INFORMATION
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.
November 11, 1997 /s/ Danny R. Gibbs
------------------------------
Danny R. Gibbs, President and
Principal Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 1,553
<SECURITIES> 205
<RECEIVABLES> 5,217
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 8,052
<PP&E> 11,001
<DEPRECIATION> (493)
<TOTAL-ASSETS> 10,540
<CURRENT-LIABILITIES> 7,818
<BONDS> 0
0
0
<COMMON> 40
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 10,540
<SALES> 30,490
<TOTAL-REVENUES> 30,490
<CGS> 28,983
<TOTAL-COSTS> 1,018
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 86
<INCOME-PRETAX> 416
<INCOME-TAX> 140
<INCOME-CONTINUING> 276
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 276
<EPS-PRIMARY> 0.07
<EPS-DILUTED> 0.07
</TABLE>
|
|