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Previous: QUADRATECH INC \NV\, 10KSB, 2000-05-15 |
Next: NAMIBIAN COPPER MINES INC, NT 10-Q, 2000-05-15 |
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, 2000
[ ] 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: 4,060,000
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
GIBBS CONSTRUCTION, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
----------- ------------
(Unaudited)
<S> <C> <C>
CURRENT ASSETS
Cash $ 540,723 $ 624,130
Temporary Investments 129 129
Note Receivable 139,300 139,300
Accounts Receivable
Trade - Net of Allowance for Doubtful
Accounts of $535,005 and $1,233,393
in 2000 and 1999, respectively 3,757,104 5,276,100
Costs and Estimated Earnings in Excess of
Billings on Uncompleted Contracts 242,385 310,085
Prepaid Expenses 70,482 104,866
------- --------
TOTAL CURRENT ASSETS 4,750,123 6,454,610
---------- ----------
LAND, BUILDINGS AND EQUIPMENT 979,582 1,489,686
Less Accumulated Depreciation (579,407) (782,717)
---------- ---------
NET LAND, BUILDINGS AND EQUIPMENT 400,175 706,969
--------- ----------
OTHER ASSETS
Receivables From Affiliates, Employees and Other 42,789 26,779
Real Estate Investments 282,589 282,589
-------- -----------
TOTAL OTHER ASSETS 325,378 309,368
-------- -----------
TOTAL ASSETS $5,475,676 $7,470,947
========== ==========
</TABLE>
(Continued)
F-1
<PAGE>
GIBBS CONSTRUCTION, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(Continued)
LIABILITIES AND STOCKHOLDERS' DEFICIT
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
------------- -------------
(Unaudited)
<S> <C> <C>
CURRENT LIABILITIES
Notes Payable $ 219,309 $ 219,309
Current Installments of Long-Term Debt 2,452,998 178,226
Current Installment of Capital Lease Obligation 29,054 15,472
Accounts Payable 7,127,362 8,442,710
Accrued Liabilities on Loss Jobs 1,417,647 2,163,809
Accrued Expenses 2,192,303 2,173,907
Billings in Excess of Costs and Estimated Earnings on
Uncompleted Contracts 726,002 331,303
Payable to Stockholders 78,539 79,325
-------------- ---------------
TOTAL CURRENT LIABILITIES 14,243,214 13,604,061
LONG-TERM DEBT - Excluding Current Installments - 326,976
CAPITAL LEASE OBLIGATION - Excluding Current
Installments - 13,582
------------------ --------------
TOTAL LIABILITIES 14,243,214 13,944,619
----------- ------------
STOCKHOLDERS' DEFICIT
Common Stock of $.01 Par Value. Authorized 15,000,000
Shares; Issued and Outstanding 4,060,000 Shares 40,600 40,600
Additional Paid-In-Capital 5,003,234 5,003,234
Retained Deficit (13,811,372) (11,517,506)
----------- ------------
TOTAL STOCKHOLDERS' DEFICIT (8,767,538) (6,473,672)
------------ -------------
TOTAL LIABILITIES AND
STOCKHOLDERS' DEFICIT $ 5,475,676 $ 7,470,947
============== =============
</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,
------------------------------------------
2000 1999
--------------- -------------
<S> <C> <C>
CONSTRUCTION REVENUES $ 2,656,029 $13,604,296
COST OF CONSTRUCTION (4,217,431) 12,874,000
---------- -----------
GROSS (LOSS) PROFIT (1,561,402) 730,296
GENERAL AND ADMINISTRATIVE EXPENSES 659,935 497,350
----------- ------------
(LOSS) INCOME BEFORE OTHER
INCOME (EXPENSE) (2,221,337) 232,946
OTHER INCOME (EXPENSE)
Loss on Sale of Account (32,007) -
Gain on Temporary Investments Transactions - 1,260
Interest Expense (46,932) (38,477)
Other 6,410 316
------------- --------------
(LOSS) INCOME BEFORE INCOME TAXES (2,293,866) 196,045
INCOME TAX (EXPENSE) - (66,650)
---------- -------------
NET (LOSS) INCOME $(2,293,866) $ 129,395
=========== ============
(LOSS) INCOME PER SHARE $ (.56) $ 0.03
WEIGHTED AVERAGE NUMBER OF SHARES 4,060,000 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 CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
--------------------------------------
2000 1999
-------------- -----------
<S> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES
Net (Loss) Income $(2,293,866) $ 129,395
Adjustments to Reconcile Net (Loss) Income to Net Cash
From Operating Activities
Depreciation 44,536 41,241
Loss on Sale of Assets 32,007 -
(Gain) on Temporary Investments Transactions - (1,260)
Change in Allowance for Doubtful 36,730 -
Deferred Taxes - 66,650
Changes in Current Assets and Liabilities
Accounts Receivable 1,466,256 (1,207,572)
Billings Related to Cost
and Earnings on Uncompleted Contracts 462,399 788,400
Prepaid Expenses 34,384 35,853
Accounts Payable (2,061,510) (202,338)
Accrued Expenses 18,396 (78,208)
Purchase of Temporary Investments - (1,480,883)
Proceeds from Sale of Temporary Investments - 1,443,630
------- -----------
NET CASH FLOW (USED) BY
OPERATING ACTIVITIES (2,260,668) (465,092)
----------- -----------
CASH FLOW FROM INVESTING ACTIVITIES
Proceeds from Sale of Assets 230,251 -
Purchase of Equipment - (21,929)
Change in Other Assets - 72,375
------- ------------
NET CASH FLOW PROVIDED
IN INVESTING ACTIVITIES 230,251 50,446
----------- ------------
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from Note Borrowings 3,957,479 -
Repayments of Note Borrowings (2,009,683) (45,433)
Changes in Stockholders' Receivables (786) (13,057)
---------- ------------
NET CASH FLOW PROVIDED (USED) BY
FINANCING ACTIVITIES $ 1,947,010 $ (58,490)
------------ -----------
</TABLE>
The accompanying note is an integral part
of these consolidated financial statements
(Continued)
F-4
<PAGE>
GIBBS CONSTRUCTION, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Continued)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
--------------------------------------
2000 1999
------------ ------------
<S> <C> <C>
NET (DECREASE) IN CASH $(83,407) $ (473,136)
CASH AT THE BEGINNING OF THE PERIOD 624,130 1,066,665
-------- ----------
CASH AT THE END OF THE PERIOD $ 540,723 $ 593,529
========= ===========
SUPPLEMENTAL DISCLOSURES OF CASH
FLOW INFORMATION
Cash Paid During the Year For:
Interest Expense $ 15,839 $ 38,477
========= ============
</TABLE>
The accompanying note is an integral part
of these consolidated financial statements
F-5
<PAGE>
GIBBS CONSTRUCTION, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2000
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, 1999. 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, 2000, are not necessarily indicative of
the results that may be expected for the year ending December 31, 2000.
NOTE 2: SUBSEQUENT EVENTS
On April 20, 2000, Gibbs Construction, Inc. filed a Petition pursuant to
Chapter 11 of the United States Bankruptcy Code, and Tony G. Gibbs resigned
as Vice President and Director of the Company.
Gibbs' Chapter 11 Bankruptcy contemplates a Plan of Reorganization that will
allow Gibbs to continue in business as a Public Company by consolidation
with a privately held company and re-negotiation of debt with its largest
creditor. Gibbs has entered into negotiations with a construction services
and asset management company that contemplates the combination of the
Company's resources and operations into Gibbs through stock issuance.
Tony Gibbs, brother of Company President, has resigned as an officer and
director to pursue other business interests. Mr. Gibbs owns 1,000,000 shares
of Gibbs' stock, which is pledged as collateral to secure the Company's debt
to its bonding surety.
NOTE 3: NOTE PAYABLE TO BONDING SURETY
In the fourth quarter 1999, the Company's bonding surety notified the
Company that it would no longer provide completion and payment bonds for the
Company's construction projects. Given these events, the Company began a
series of negotiations with its bonding surety in December 1999, which
resulted in a written agreement in January 2000, whereby the bonding surety
would provide funds to finish certain projects and required the Company to
terminate construction on other projects.
The amounts paid by the Company's bonding surety to subcontractors,
supplies, and other claimants are recorded as a note payable to the bonding
surety. As of April 6, 2000, the bonding surety had disbursed $3,957,479 on
those certain jobs. The surety applied $1,837,241 in billings on those jobs.
F-6
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Three Months Ended March 31, 2000 compared to Three Months Ended March 31,1999
On April 20, 2000, the Company filled for protection under Chapter 11 of the
United States Bankruptcy Act. During the first quarter of 1999, the Company's
increasing insolvency resulted in an increased inability to contract for work.
Accordingly, revenues decreased to $2,656,029 in the first quarter of 2000
compared to $13,604,296 in the first quarter of 1999. The Company incurred an
operating loss in the first quarter of 2000 of approximately $1,500,000
reflecting earlier contracts that the Company was completing at a loss.
The Company incurred increased general and administrative expenses in the first
quarter of 2000, $659,935, compared to $497,350 in the first quarter of 1999,
principally reflecting legal fees related to the Company's insolvency.
Liquidity and capital resources
With respect to the Company's filing of Chapter 11 under the United States
Bankruptcy Code, see Notes 2 and 3 to the accompanying financial statements.
<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits Index
Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8-K: April 20, 2000
<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 4, 2000 /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-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 540,723
<SECURITIES> 129
<RECEIVABLES> 3,757,104
<ALLOWANCES> 535,005
<INVENTORY> 0
<CURRENT-ASSETS> 5,475,676
<PP&E> 979,582
<DEPRECIATION> 579,407
<TOTAL-ASSETS> 5,475,676
<CURRENT-LIABILITIES> 14,243,214
<BONDS> 0
0
0
<COMMON> 40,600
<OTHER-SE> 5,003,234
<TOTAL-LIABILITY-AND-EQUITY> 5,475,676
<SALES> 2,656,029
<TOTAL-REVENUES> 2,656,029
<CGS> 4,217,431
<TOTAL-COSTS> 4,217,431
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 36,730
<INTEREST-EXPENSE> 46,932
<INCOME-PRETAX> (2,293,866)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2,293,866)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,293,866)
<EPS-BASIC> (0.56)
<EPS-DILUTED> 0
</TABLE>
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