FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
( X ) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended July 31, 1994
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OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to ____________
Commission file number 1-7567
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URS CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 94-1381538
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(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification No.)
100 California Street, Suite 500
San Francisco, California 94111-4529
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 415-774-2700
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Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 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
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Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding at August 26, 1994
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Common stock, $.01 par value 7,005,047
Exhibit Index on Page 9
Page 1 of 9 <PAGE>
URS CORPORATION AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION:
In the opinion of management, the information furnished reflects all
adjustments, consisting only of normal recurring adjustments, which are
necessary for a fair statement of the interim financial information. Net
earnings per share computations are based upon the weighted average number
of common shares outstanding during the period plus shares issuable under
warrants and stock options that have a dilutive affect.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been omitted. These condensed financial
statements should be read in conjunction with the financial statements and
notes thereto included in the Company's Annual Report on Form 10-K for the
fiscal year ended October 31, 1993. The results of operations for the
three and nine month periods ended July 31, 1994 are not necessarily
indicative of the operating results for the full year.
Item 1. Financial Statements (unaudited)
Consolidated Balance Sheets
July 31, 1994 and October 31, 1993. . . . . 3
Consolidated Statements of Operations
Three months and nine months ended
July 31, 1994 and 1993. . . . . . . . . . 4
Consolidated Statements of Cash Flows
Nine months ended July 31, 1994 and 1993 . 5
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations . . . . . . . . . . . . . . . . . . . 6
PART II. OTHER INFORMATION:
Item 6. Exhibits and Reports on Form 8-K. . . . . . . . . . . 8
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PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
URS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
July 31, October 31,
ASSETS 1994 1993
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(unaudited)
Current assets:
Cash $ 9,387 $ 6,628
Accounts receivable, less allowance for
doubtful accounts of $686 and $665 31,174 27,157
Costs and accrued earnings in excess of
billings on contracts in process, less
allowances for losses of $438 and $416 10,567 11,783
Prepaid expenses and other 1,082 955
Total current assets ------ ------
52,210 46,523
Property and equipment at cost, net 4,688 4,596
Goodwill, net 4,905 5,260
Other assets 649 1,695
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$62,452 $58,074
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 8,373 $ 8,078
Accrued salaries and wages 6,855 3,574
Accrued expenses 4,902 7,187
Total current liabilities ------ ------
20,130 18,839
Long-term debt, including related parties 8,636 8,277
Deferred compensation and other 1,542 1,569
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Total liabilities 30,308 28,685
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Shareholders' equity:
Common shares, par value $.01; authorized
20,000 shares; issued 7,005 and 6,989 shares 70 70
Additional paid-in capital 29,935 28,365
Retained earnings since February 21, 1990,
date of quasi-reorganization 2,139 954
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Total shareholders' equity 32,144 29,389
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$62,452 $58,074
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URS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
Three months ended Nine Months Ended
July 31, July 31,
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1994 1993 1994 1993
---- ---- ---- ----
(unaudited) (unaudited)
Revenues $41,333 $35,627 $118,606 $105,169
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Expenses:
Direct operating 25,455 22,516 73,034 65,220
Indirect, general and
administrative 14,428 14,656 41,587 39,010
Interest expense, net 335 326 993 912
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40,218 37,498 115,614 105,142
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Income (loss) before taxes 1,115 (1,871) 2,992 27
Income tax expense, (benefit) 130 (190) 340 -
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Net income (loss) $ 985 $(1,681) $ 2,652 $ 27
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Primary and fully diluted
earnings (loss) per share $ .14 $ (.24) $ .37 $ -
====== ====== ======= =======
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URS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Nine Months Ended
July 31,
1994 1993
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(unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 2,652 $ 27
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Adjustments to reconcile net income
to net cash provided (used) by operating
activities:
Depreciation and amortization 1,771 2,140
Changes in current assets and liabilities:
Increase in accounts receivable and costs
and accrued earnings in excess of
billings on contracts in process (2,802) (413)
(Increase) decrease in prepaid expenses (126) 356
Increase (decrease) in accounts payable,
accrued salaries and wages and accrued
expenses 1,246 (983)
Other, net 45 325
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Total adjustments 134 1,425
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Net cash provided by operating activities 2,786 1,452
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CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (1,105) (1,542)
Other - (415)
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Net cash used by investing activities (1,105) (1,957)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sale of common shares 75 71
Repurchase of January notes - (1,340)
Other 1,003 -
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Net cash provided (used) by financing
activities 1,078 (1,269)
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Net increase (decrease) in cash 2,759 (1,774)
Cash at beginning of period 6,628 5,729
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Cash at end of period $ 9,387 $ 3,955
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Supplemental information:
Interest paid $ 1,035 $ 975
Taxes paid 249 518
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$ 1,284 $ 1,493
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URS CORPORATION AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The Company reports the results of its operations on a fiscal year
which ends on October 31. This Management Discussion and Analysis (MD&A)
should be read in conjunction with the MD&A and the footnotes to the
Consolidated Financial Statements included in the Annual Report on
Form 10-K for the fiscal year ended October 31, 1993 which was previously
filed with the Securities and Exchange Commission.
RESULTS OF OPERATIONS
Third quarter ended fiscal 1994 vs. fiscal 1993.
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The Company's revenues were $41,333,000 for the third quarter ended
July 31, 1994, an increase of $5,706,000, or 16% over the amount reported
for the same period last year. The growth in revenues is generally
attributable to an increase in demand for the Company's services, on both
infrastructure and environmental projects. The revenues generated from the
Company's three largest environmental contracts (Navy CLEAN, EPA ARCS 9 &
10 and EPA ARCS 6, 7 & 8) were $10,262,000 for the quarter ended July 31,
1994, compared to $8,467,000 for the same period last year.
Direct operating expenses for the quarter ended July 31, 1994, which
consist of direct labor and other direct expenses including subcontractor
costs, increased $2,939,000, or 13% over the amount reported for the same
period last year. The increase is due to increases in subcontractor costs
and direct labor costs.
Indirect, general and administrative expenses were $14,428,000 for the
third quarter ended July 31, 1994, a decrease of $228,000, or 2% below the
amount reported for the same period last year.
The Company earned $1,115,000 before income taxes for the third
quarter ended July 31, 1994, compared to a loss of $1,871,000 for the same
period last year. For Federal income tax purposes, the Company has
available net operating loss carryforwards which off-set otherwise taxable
income. For state income tax purposes, net operating loss carryforwards
are not necessarily available to off-set income subject to tax.
Accordingly, the Company's effective income tax rate for the quarter ended
July 31, 1994 was approximately 12%.
The Company reported net income of $985,000, or $.14 per share, for
the third quarter ended July 31, 1994, compared with a net loss of
$1,681,000, or $.24 per share, after incurring one-time charges totaling
$2,650,000 in last year's third quarter.
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Nine months ended fiscal 1994 vs. fiscal 1993.
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The Company's revenues were $118,606,000 for the nine months ended
July 31, 1994, an increase of $13,437,000, or 13% over the amount reported
for the same period last year. The growth in revenues is attributable to
all areas of the Company's business including infrastructure projects
involving transportation systems, institutional and commercial facilities
and environmental projects. The revenues generated from the Company's
three largest environmental contracts (Navy CLEAN, EPA ARCS 9 & 10 and EPA
ARCS 6, 7 & 8) were $28,192,000 for the nine months ended July 31, 1994,
compared to $28,191,000 for the same period last year.
Direct operating expenses for the nine months ended July 31, 1994,
which consist of direct labor and other direct expenses including
subcontractor costs, increased $7,814,000, or 12% over the amount reported
in the same period last year. The increase in direct operating expenses is
attributable to the overall increase in the Company's business. Indirect,
general and administrative expenses were $41,587,000 for the nine months
ended July 31, 1994, an increase of $2,577,000, or 7% over the amount
reported for the same period last year. The increase in indirect, general
and administrative expenses is primarily due to an increase in business
activity.
The Company earned $2,992,000 before income taxes for the nine months
ended July 31, 1994 compared to $27,000 for the same period last year. For
Federal income tax purposes, the Company has available net operating loss
carryforwards to off-set income. For state income tax purposes, such
amounts are not necessarily available to off-set income subject to tax.
Accordingly, the Company's effective income tax rate for the nine months
ended July 31, 1994 is approximately 11%.
The Company reported net income of $2,652,000, or $.37 per share, for
the nine months ended July 31, 1994, compared with $27,000, or $.00 per
share for the same period last year, which included one-time charges
totaling $2,650,000.
The Company's backlog at July 31, 1994 was $166,000,000, as compared
to $142,000,000 at October 31, 1993.
LIQUIDITY AND CAPITAL RESOURCES
At July 31, 1994, the Company had working capital of $32,080,000, an
increase of $4,396,000 from October 31, 1993. The Company also has
$9,800,000 in available borrowing capacity under its bank line of credit.
It did not borrow on this line in the nine months ended July 31, 1994.
The Company believes that its existing financial resources, together
with its planned cash flow from operations and its unused bank line of
credit, will provide sufficient capital to fund its operations and its
capital expenditure needs for the foreseeable future.
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PART II
OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit 27 - Financial Data Schedule.
(b) No reports on Form 8-K were filed during the
quarter ended July 31, 1994.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
Dated September 14, 1994
URS CORPORATION
s/Kent P. Ainsworth
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Kent P. Ainsworth
Vice President and
Chief Financial Officer
(Principal Accounting Officer)
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EXHIBIT INDEX
Exhibit Page
No. Description No.
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27 Financial Data Schedule 10
-9- <PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
CONSOLIDATED BALANCE SHEETS AND CONSOLIDATED STATEMENTS OF OPERATIONS
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> QTR-3
<FISCAL-YEAR-END> OCT-31-1994
<PERIOD-END> JUL-31-1994
<CASH> 9,387
<SECURITIES> 0
<RECEIVABLES> 31,174
<ALLOWANCES> 686
<INVENTORY> 0
<CURRENT-ASSETS> 52,210
<PP&E> 4,688
<DEPRECIATION> 0
<TOTAL-ASSETS> 62,452
<CURRENT-LIABILITIES> 20,130
<BONDS> 8,636
<COMMON> 70
0
0
<OTHER-SE> 32,074
<TOTAL-LIABILITY-AND-EQUITY> 62,452
<SALES> 0
<TOTAL-REVENUES> 118,606
<CGS> 0
<TOTAL-COSTS> 73,034
<OTHER-EXPENSES> 41,587
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 993
<INCOME-PRETAX> 2,992
<INCOME-TAX> 340
<INCOME-CONTINUING> 2,652
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> .14
<EPS-DILUTED> .14
</TABLE>
