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Previous: THAXTON GROUP INC, 10QSB, 1998-05-15 |
Next: LEGG MASON UNIT INVESTMENT TRUST SERIES 6, 497J, 1998-05-15 |
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, 1998
[ ] 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>
March 31, December 31,
1998 1997
--------------- -------------
(Unaudited)
<S> <C> <C>
CURRENT ASSETS
Cash $ - $ 438,445
Temporary Investments 141,119 142,533
Accounts Receivable
Trade 7,633,632 7,662,445
Costs and Estimated Earnings in Excess of
Billings on Uncompleted Contracts 1,785,766 1,834,063
Prepaid Expenses 74,115 82,309
Deferred Tax Asset 334,225 350,000
------------ ------------
TOTAL CURRENT ASSETS 9,968,857 10,509,795
------------ -----------
LAND, BUILDINGS AND EQUIPMENT 1,107,445 1,105,556
Less Accumulated Depreciation (578,015) (542,015)
------------ ------------
NET LAND, BUILDINGS AND EQUIPMENT 529,430 563,541
------------ ------------
OTHER ASSETS
Receivables From Affiliates and Employees 125,870 118,040
Deferred Tax Asset 1,426,540 1,426,540
------------ ------------
TOTAL OTHER ASSETS 1,552,410 1,544,580
------------ ------------
TOTAL ASSETS $12,050,697 $12,617,916
=========== ===========
</TABLE>
(Continued)
F-1
<PAGE>
GIBBS CONSTRUCTION, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(Continued)
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
------------- --------------
(Unaudited)
<S> <C> <C>
CURRENT LIABILITIES
Cash Overdraft $ 327,191 $ -
Notes Payable 150,000 150,000
Current Installments of Long-Term Debt 215,538 380,769
Accounts Payable 7,118,440 7,482,475
Accrued Expenses 651,856 685,722
Billings in Excess of Costs and Estimated Earnings on
Uncompleted Contracts 1,032,727 1,372,152
Payable to Stockholders 420,745 422,245
------------ ------------
TOTAL CURRENT LIABILITIES 9,916,497 10,493,363
LONG-TERM DEBT - Excluding Current Installments 189,209 210,232
------------ ------------
TOTAL LIABILITIES 10,105,706 10,703,595
----------- -----------
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) (3,002,281) (3,032,951)
------------ ------------
TOTAL STOCKHOLDERS' EQUITY 1,944,991 1,914,321
------------ ------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $12,050,697 $12,617,916
=========== ===========
</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,
---------------------------------------
1998 1997
---------------- ------------
<S> <C> <C>
CONSTRUCTION REVENUES $11,463,976 $8,693,918
COST OF CONSTRUCTION 11,026,551 (8,481,834)
----------- ----------
GROSS PROFIT 437,425 212,084
GENERAL AND ADMINISTRATIVE EXPENSES 372,392 327,415
------------ ----------
INCOME (LOSS) BEFORE OTHER
INCOME (EXPENSE) 65,033 (115,331)
OTHER INCOME (EXPENSE)
(Loss) on Temporary Investments Transactions - (540)
Interest Income 2,503 64
Interest Expense, net of capitalized interest (21,091) (25,455)
Other - 6,268
--------------- -----------
INCOME (LOSS) BEFORE INCOME TAXES 46,445 (134,994)
INCOME TAX (EXPENSE) BENEFIT (15,775) 45,900
------------- ----------
NET INCOME (LOSS) $ 30,670 $ (89,094)
============ =========
INCOME (LOSS) PER SHARE $ 0.01 $ (0.02)
============== ============
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, 1996 4,000,000 $40,000 $4,907,272 $(3,617,851) $1,329,421
1997 Net Income - - - 584,900 584,900
------------ ---------- -------------- ------------ -----------
BALANCE, DECEMBER 31, 1997 4,000,000 40,000 4,907,272 (3,032,951) 1,914,321
1997 Net Income (Unaudited) - - - 30,670 30,670
----------- ---------- -------------- ------------ -----------
BALANCE, MARCH 31, 1998 4,000,000 $40,000 $4,907,272 $(3,002,281) $1,944,991
========= ======= ========== =========== ==========
</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,
-------------------------
1998 1997
-------------- ------------
<S> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES
Net Income (Loss) $ 30,670 $ (89,094)
Adjustments to Reconcile Net Income (Loss) to Net Cash
From Operating Activities
Depreciation 36,000 35,999
Loss on Temporary Investments Transactions - 540
Deferred Taxes 15,775 (45,900)
Changes in Current Assets and Liabilities
Decrease in Accounts Receivable 28,813 3,577,300
(Increase) Decrease in Billings Related to Cost
and Earnings on Uncompleted Contracts (291,128) 24,605
Decrease in Prepaid Expenses 8,194 -
(Decrease) in Accounts Payable (364,035) (3,650,868)
(Decrease) in Accrued Expenses (33,866) (31,252)
Proceeds from Sale of Temporary Investments 1,414 -
--------- -----------
NET CASH FLOW (USED) BY
OPERATING ACTIVITIES (568,163) (178,670)
-------- ----------
CASH FLOW FROM INVESTING ACTIVITIES
Purchase of Equipment (1,889) (8,792)
Decrease in Other Assets (7,830) 81,524
--------- -----------
NET CASH FLOW (USED) PROVIDED
IN INVESTING ACTIVITIES (9,719) 72,732
--------- -----------
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from Note Borrowings - 70,000
Repayments of Note Borrowings (186,254) (114,814)
Changes in Stockholder Receivables (1,500) -
--------- -----------
NET CASH FLOW PROVIDED (USED) BY
FINANCING ACTIVITIES $ (187,754) $ (44,814)
---------- -----------
</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,
-------------------------
1998 1997
----------- ---------
<S> <C> <C>
NET (DECREASE) IN CASH $(765,636) $ (150,752)
CASH AT THE BEGINNING OF THE PERIOD 438,445 124,565
--------- ----------
CASH AT THE END OF THE PERIOD $(327,191) $ (26,187)
========= ==========
SUPPLEMENTAL DISCLOSURES OF CASH
FLOW INFORMATION
Cash Paid During the Year For:
Interest Expense $ 21,090 $ 29,945
========= ==========
</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, 1998 AND 1997
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, 1997. 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, 1998, are not necessarily indicative of the
results that may be expected for the year ending December 31, 1998.
<PAGE>
Item 2. Management's Discussion and Analysis of Operations.
Income from continuing operations was $30,670 for the three month period
ended March 31, 1998, compared to a loss of $89,094 for the same period in 1997.
This change is attributable to increased revenues in the 1998 period, increased
gross margins in the 1998 period when gross margins were approximately 3.8%
compared to approximately 2.4% in the 1997 period and lower general and
administrative costs as a percentage of revenue in the 1998 period, 3.2% in the
1998 period compared to 3.8% in same period in 1997. The increase in gross
margins in the 1998 period reflects the fact that in the earlier year the
Company had several contracts with one client where the margins were low or
nonexistent. In the first quarter of 1998 the Company lost money on a contract
due to subcontractor's nonperformance, but this contract did not result in
losses as severe as those in 1997.
The Company's revenues increased in the first quarter of 1998 by
approximately 32% when compared to the first quarter of 1997, to $11,463,976 in
1998 compared to $8,693,918 in 1997. The increase in revenues is attributable to
the Company expanding into construction for clients other than national retail
chains. During the first quarter of 1998 the Company constructed nursing homes,
schools and small hotels in addition to its traditional business of construction
for large retail chains.
General and administrative expenses in the three month period ended March
31, 1998, declined as a percentage of revenue when compared to the same 1997
period although general and administrative costs increased to $372,392 from
$327,415 in the earlier period. The increase in amount reflects higher salaries
in the later period as well as higher insurance costs and promotional expense.
Liquidity and capital resources
Although the Company's working capital position improved since the first
quarter of 1997, the Company's working capital position has essentially remained
unchanged since second quarter of 1997. The Company is seeking to increase its
operating capital, particularly cash, to increase its opportunity to expand its
business
<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.
May 15, 1998 /s/ Danny R. Gibbs
------------------
Danny R. Gibbs, President and
Principal Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> (327,191)
<SECURITIES> 141,119
<RECEIVABLES> 7,633,632
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 9,968,857
<PP&E> 529,430
<DEPRECIATION> 36,000
<TOTAL-ASSETS> 12,050,697
<CURRENT-LIABILITIES> 9,916,497
<BONDS> 0
0
0
<COMMON> 40,000
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 12,050,697
<SALES> 11,463,976
<TOTAL-REVENUES> 11,463,976
<CGS> 11,026,551
<TOTAL-COSTS> 11,398,943
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 21,091
<INCOME-PRETAX> 46,445
<INCOME-TAX> 15,775
<INCOME-CONTINUING> 30,670
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 30,670
<EPS-PRIMARY> 0.01
<EPS-DILUTED> 0
</TABLE>
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