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 January 31, 1996
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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 .....
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 February 15, 1996
---------------------------- ---------------------------------
Common stock, $.01 par value 7,167,591
Exhibit Index on Page 10
Page 1 of 11 <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 have been calculated employing a methodology
consistent with that disclosed in the Company's Annual Report on
Form 10-K for the fiscal year ended October 31, 1995.
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, 1995. The results of operations
for the quarterly period ended January 31, 1996 are not
necessarily indicative of the operating results for the full
year.
Item 1. Financial Statements (unaudited)
Consolidated Balance Sheets
January 31, 1996 and October 31, 1995 . . . . . . 3
Consolidated Statements of Operations
Three months ended January 31, 1996 and 1995 . . 4
Consolidated Statements of Cash Flows
Three months ended January 31, 1996 and 1995 . . 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . 7
PART II. OTHER INFORMATION:
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . 9
Page 2 of 11 <PAGE>
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
URS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
January 31, October 31,
1996 1995
ASSETS ------ ------
(unaudited)
Current assets:
Cash $ 9,968 $ 8,836
Accounts receivable, less allowance for
doubtful accounts of $642 and $664 37,035 35,822
Costs and accrued earnings in excess of
billings on contracts in process, less
allowances for losses of $444 and $606 14,456 13,200
Prepaid expenses and other 2,827 1,849
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Total current assets 64,286 59,707
Property and equipment at cost, net 6,071 5,835
Goodwill, net 7,602 7,765
Other assets 759 768
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$78,718 $74,075
LIABILITIES AND SHAREHOLDERS' EQUITY ====== ======
Current liabilities:
Accounts payable $12,163 $ 7,724
Accrued salaries and wages 6,199 6,588
Accrued expenses 9,023 9,088
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Total current liabilities 27,385 23,400
Long-term debt, including related parties 9,986 9,999
Deferred compensation and other 1,055 1,198
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Total liabilities 38,426 34,597
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Shareholders' equity:
Common shares, par value $.01; authorized
20,000 shares; issued 7,168 and 7,167 shares 73 73
Treasury stock (287) (287)
Additional paid-in capital 32,244 31,791
Retained earnings since February 21, 1990,
date of quasi-reorganization 8,262 7,901
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Total shareholders' equity 40,292 39,478
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$78,718 $74,075
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Page 3 of 11 <PAGE>
URS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
Three months ended
January 31,
--------------------
1996 1995
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(unaudited)
Revenues $48,503 $40,307
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Expenses:
Direct operating 30,398 24,429
Indirect, general and
administrative 16,468 14,522
Interest expense, net 305 323
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47,171 39,274
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Income before taxes 1,332 1,033
Income tax expense 520 233
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Net income $ 812 $ 800
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Net income per share:
Primary $ .11 $ 0.11
====== ======
Fully diluted $ .11 $ 0.11
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Page 4 of 11 <PAGE>
URS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Three Months Ended
January 31,
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1996 1995
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(unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 812 $ 800
------ ------
Adjustments to reconcile net income to net
cash provided (used) by operating
activities:
Depreciation and amortization 767 661
Changes in current assets and liabilities
net of effect from business acquisition
Increase in accounts receivable and
costs and accrued earnings in excess
of billings on contracts in process (2,469) (988)
Increase in prepaid expenses (978) (830)
Increase (decrease) in accounts payable,
accrued salaries and wages and accrued
expenses 3,945 (842)
Other, net (135) (34)
------ ------
Total adjustments 1,130 (2,033)
------ ------
Net cash provided (used) by operating
activities 1,942 (1,233)
------ ------
CASH FLOWS FROM INVESTING ACTIVITIES:
Payment for business acquisition - (3,596)
Capital expenditures (816) (340)
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Net cash (used) by investing activities (816) (3,936)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Repurchase of common shares - (118)
Proceeds from exercise of stock options 6 92
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Net cash provided (used) by financing
activities 6 (26)
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Net increase (decrease) in cash 1,132 (5,195)
Cash at beginning of period 8,836 9,457
------ ------
Cash at end of period $ 9,968 $ 4,262
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Page 5 of 11 <PAGE>
Supplemental cash flow information:
Interest paid $ 361 $ 347
Taxes paid 427 72
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$ 788 $ 419
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Supplemental schedule of noncash investing and
financing activities:
The Company purchased all of the capital
stock of a complementary business for
$3,596,000. In conjunction with the
acquisition, liabilities were assumed as
follows:
Fair value of assets acquired $ - $ 4,952
Cash paid for the capital stock - (3,596)
------ ------
Liabilities assumed $ - $ 1,356
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Page 6 of 11 <PAGE>
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, 1995 which was previously filed with the
Securities and Exchange Commission.
Results of Operations
---------------------
The Company's revenues were $48,503,000 for the first
quarter ended January 31, 1996, an increase of $8,196,000 or 20%
over the amount reported for the same period last year. The
growth in revenue is generally attributable to an increase in
pass through costs and award fees. However, revenues generated
from the Company's three largest indefinite delivery contracts,
the Navy CLEAN, EPA ARCS 9 & 10, and EPA ARCS 6,7 & 8 contracts,
decreased in the first quarter of 1996 to $7,443,992 from
$10,790,397 in the first quarter of 1995. The decrease in
revenues from these contracts is due to fewer work assignments
currently being executed.
Direct operating expenses for the quarter ended January 31,
1996, which consist of direct labor and other direct expenses,
including subcontractor costs, increased $5,969,000, a 24%
increase over the amount reported for the same period last year.
This increase is due to increases in business volume and in
subcontractor and direct labor costs.
Indirect general and administrative expenses for the quarter
ended January 31, 1996 increased $1,946,000, or 13% over the
amount reported for the same period last year as a result of an
increase in business volume.
The Company reported net income of $812,000, or $.11 per
share for the first quarter ended January 31, 1996, compared to
$800,000, or $.11 per share for the same period last year. The
Company's effective income tax rate for the quarter ended
January 31, 1996 was 39% compared to 23% in 1995 when the Company
had available net operating loss carryforwards.
The Company's backlog at January 31, 1996 was $209,511,000,
as compared to $196,400,000 at October 31, 1995.
Liquidity and Capital Resources
-------------------------------
At January 31, 1996, the Company had working capital of
$36,901,000, an increase of $600,000 from October 31, 1995.
Page 7 of 11 <PAGE>
The Company also had $14,600,000 in available borrowing
capacity under its unsecured bank line of credit. It did not
borrow on this line during the first quarter ended January 31,
1996.
On January 10, 1996, the Company and Greiner Engineering,
Inc. ("Greiner") executed a merger agreement whereby the Company
will acquire all the outstanding stock of Greiner. Greiner is a
professional services firm operating in the engineering and
architectural design services industry and is headquartered in
Irving, Texas. The acquisition price will consist of $13.50 in
cash plus 0.298 shares of the Company's Common Stock for each of
the approximately 4,755,000 outstanding shares of Greiner common
stock, for an aggregate price of $64,193,000 and 1.4 million
shares of the Company's Common Stock. Completion of this
transaction is subject to approval by the Greiner stockholders
and other approvals. The transaction is expected to close by
April 1996. To finance the cash portion of the proposed Greiner
acquisition, and assist with providing for on-going activities,
the Company executed a secured credit agreement on January 10,
1996 with its bank which gives the Company $70,000,000 of
borrowing capacity in the form of a $20,000,000 revolving line of
credit and $50,000,000 in term loans and which replaces the
Company's unsecured line of credit.
The Company believes that its existing financial resources,
together with its planned cash flow from operations and its
secured line of credit, will provide sufficient capital to fund
the acquisition of Greiner and to fund its combined operations
and capital expenditure needs for the foreseeable future.
Page 8 of 11 <PAGE>
PART II
OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit 27 - Financial Data Schedule
(b)(1) Form 8-K filed with the Securities and
Exchange Commission on December 5, 1995,
reporting on Item 5 that on December 3, 1995,
the Company and Greiner executed a letter of
intent for the Company to acquire all the
outstanding stock of Greiner pursuant to a
merger of Greiner with a wholly-owned
subsidiary of the Company, and disclosing the
acquisition price.
(b)(2) Form 8-K filed with the Securities and
Exchange Commission on January 12, 1996,
reporting on Item 5 that on January 10, 1996,
the Company and Greiner executed an Agreement
and Plan of Merger, dated as of January 10,
1996, consistent with the terms of the letter
of intent disclosed in the Form 8-K filed on
December 5, 1995 and that the Company
executed a Credit Agreement, dated as of
January 10, 1996, to finance the acquisition
and to provide for the working capital needs
of the Company thereafter.
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 March 15, 1996
URS CORPORATION
/s/ Kent P. Ainsworth
--------------------------------
Kent P. Ainsworth
Vice President and
Chief Financial Officer
(Principal Accounting Officer)
Page 9 of 11 <PAGE>
EXHIBIT INDEX
Exhibit No. Description Page No.
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27 Financial Data Schedule 11
Page 10 of 11 <PAGE>
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<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-END> JAN-31-1996
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<SECURITIES> 0
<RECEIVABLES> 37,677
<ALLOWANCES> (642)
<INVENTORY> 0
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<PP&E> 13,416
<DEPRECIATION> (7,345)
<TOTAL-ASSETS> 78,718
<CURRENT-LIABILITIES> 27,385
<BONDS> 10,000
0
0
<COMMON> 73
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<SALES> 0
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<OTHER-EXPENSES> 16,327
<LOSS-PROVISION> 141
<INTEREST-EXPENSE> 305
<INCOME-PRETAX> 1,332
<INCOME-TAX> 520
<INCOME-CONTINUING> 812
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 812
<EPS-PRIMARY> 0.11
<EPS-DILUTED> 0.11
</TABLE>
