<PAGE> 1
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 September 30, 1995
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________________ to ______________
Commission File No. 0-4643
ROY F. WESTON, INC.
(Exact name of registrant as specified in its charter)
PENNSYLVANIA 23-1501990
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1 WESTON WAY, WEST CHESTER, PENNSYLVANIA 19380-1499
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code...............(610)-701-3000
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
-------- --------
As of September 30, 1995, the registrant had outstanding 7,404,787 shares
of Series A common stock and 2,111,784 shares of common stock.
<PAGE> 2
<TABLE>
<CAPTION>
Index Page
----- ----
<S> <C>
Part I - Financial Information
Item 1. Financial Statements:
Consolidated Balance Sheets -
September 30, 1995 and December 31, 1994 1-2
Consolidated Statements of Income -
Three Months Ended September 30, 1995 and 1994 3
Consolidated Statements of Income (Loss) -
Nine Months Ended September 30, 1995 and 1994 4
Consolidated Statements of Cash Flows -
Nine Months Ended September 30, 1995 and 1994 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 7-8
Part II - Other Information 9
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
</TABLE>
<PAGE> 3
ROY F. WESTON, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
September 30, December 31,
1995 1994
---- ----
(Unaudited)
(Thousands of Dollars)
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents........................... $ 15,316 $ 5,745
Marketable securities............................... 3,793 12,992
Accounts receivable, trade, net of allowance
for doubtful accounts of $2,106 in 1995
and $1,699 in 1994................................. 80,058 68,947
Unbilled costs and estimated earnings on
contracts in process............................... 19,971 20,586
Prepaid and refundable income taxes................. 393 1,581
Deferred income taxes............................... 2,837 1,395
Other............................................... 3,107 3,626
--------- ---------
Total current assets.......................... 125,475 114,872
--------- ---------
PROPERTY AND EQUIPMENT
Land................................................ 215 215
Buildings and improvements.......................... 11,282 10,832
Furniture and equipment............................. 57,780 54,617
Leasehold improvements.............................. 7,470 7,579
Construction in progress............................ 1,623 253
--------- ---------
Total property and equipment.................. 78,370 73,496
Less accumulated depreciation and amortization...... 57,060 52,494
--------- ---------
Property and equipment, net................... 21,310 21,002
--------- ---------
OTHER ASSETS
Goodwill, net of accumulated amortization of
$1,166 in 1995 and $1,055 in 1994.................. 4,788 4,899
Deferred income taxes............................... 1,537 1,827
Other............................................... 17,148 14,130
--------- ---------
Total other assets............................ 23,473 20,856
--------- ---------
$ 170,258 $ 156,730
========= =========
</TABLE>
See notes to consolidated financial statements.
-1-
<PAGE> 4
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
September 30, December 31,
1995 1994
---- ----
(Unaudited)
(Thousands of Dollars)
<S> <C> <C>
CURRENT LIABILITIES
Current maturities of long-term debt.............. $ 2,305 $ 2,431
Accounts payable and accrued expenses............. 11,470 11,502
Billings on contracts in process in excess of
costs and estimated earnings..................... 19,184 8,960
Employee compensation, benefits and
payroll taxes.................................... 12,695 9,841
Income taxes payable.............................. 332 120
Other ............................................ 10,189 7,666
---------- ---------
Total current liabilities................... 56,175 40,520
---------- ---------
LONG TERM DEBT.................................... 25,169 29,843
---------- ---------
OTHER LIABILITIES................................. 5,658 5,475
---------- ---------
CONTINGENCIES.....................................
STOCKHOLDERS' EQUITY
Common stock, $.10 par value, 10,500,000 shares
authorized; 3,193,059 shares issued in 1995;
3,211,213 shares issued in 1994.................. 319 321
Series A common stock, $.10 par value,
20,500,000 shares authorized; 7,878,892
shares issued in 1995; 7,668,325 shares
issued in 1994................................... 788 767
Additional paid-in capital........................ 54,044 52,684
Retained earnings................................. 31,697 29,415
---------- ---------
86,848 83,187
Less treasury stock at cost, 1,081,275 common
shares in 1995 and 1994; 474,105 and 214,705
Series A common shares in 1995 and 1994.......... 3,592 2,295
----------- ---------
Total stockholders' equity.................. 83,256 80,892
---------- ---------
$ 170,258 $ 156,730
========== =========
</TABLE>
See notes to consolidated financial statements.
-2-
<PAGE> 5
ROY F. WESTON, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended September 30,
--------------------------------
1995 1994
---- ----
(Thousands of Dollars)
<S> <C> <C>
Gross revenues..................................... $ 79,737 $ 75,531
Direct project costs............................... 27,119 24,445
---------- ----------
Net revenues................................. 52,618 51,086
---------- ----------
Expenses:
Direct salaries and other operating costs.... 44,136 43,569
General and administrative expenses.......... 7,130 7,285
---------- ----------
51,266 50,854
---------- ----------
Income from operations....................... 1,352 232
---------- ----------
Other income (expense):
Investment income............................ 361 382
Interest expense............................. (546) (621)
Other........................................ 2 22
---------- ----------
(183) (217)
---------- ----------
Income before income taxes................... 1,169 15
Provision for income taxes......................... 421 6
---------- ----------
Net income .................................. $ 748 $ 9
========== ==========
Net income per share......................... $ .08 $ -
========== ==========
Weighted average shares outstanding 9,565,903 9,561,204
========== ==========
</TABLE>
See notes to consolidated financial statements.
-3-
<PAGE> 6
ROY F. WESTON, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Ended September 30,
-------------------------------
1995 1994
---- ----
(Thousands of Dollars)
<S> <C> <C>
Gross revenues..................................... $ 231,741 $ 217,582
Direct project costs............................... 73,768 66,411
---------- ----------
Net revenues................................. 157,973 151,171
---------- ----------
Expenses:
Direct salaries and other operating costs.... 132,461 129,468
General and administrative expenses.......... 21,702 21,523
---------- ----------
154,163 150,991
---------- ----------
Income from operations....................... 3,810 180
---------- ----------
Other income (expense):
Investment income............................ 1,096 945
Interest expense............................. (1,756) (1,916)
Other........................................ 416 89
---------- ----------
(244) (882)
---------- ----------
Income (loss) before income taxes............ 3,566 (702)
Provision (benefit) for income taxes............... 1,284 (268)
---------- ----------
Net income (loss)............................ $ 2,282 $ (434)
========== ==========
Net income (loss) per share.................. $ .24 $ (.05)
========== ==========
Weighted average shares outstanding 9,524,196 9,502,449
========== ==========
</TABLE>
See notes to consolidated financial statements.
-4-
<PAGE> 7
ROY F. WESTON, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Ended September 30,
-------------------------------
1995 1994
---- ----
(Thousands of Dollars)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)................................ $ 2,282 $ (434)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation and amortization............. 7,207 7,661
Provision for losses on accounts
receivable............................... 450 540
Other..................................... 1,342 650
Change in assets and liabilities:
Accounts receivable, trade................ (11,561) (5,715)
Unbilled costs and estimated earnings on
contracts in process..................... 615 1,297
Other current assets...................... 519 (442)
Accounts payable and accrued expenses..... (32) 667
Billings on contracts in excess of costs
and estimated earnings................... 10,224 (2,650)
Employee compensation, benefits and
payroll taxes............................ 2,854 4,244
Income taxes.............................. 1,400 571
Deferred income taxes..................... (1,458) (766)
Other current liabilities................. 1,079 (2,156)
Other assets and liabilities.............. (377) (437)
--------- ---------
Net cash provided by operating activities..... 14,544 3,030
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of investments................ 17,370 27,455
Payments for purchase of investments............. (8,102) (34,718)
Purchase of property and equipment, net.......... (6,241) (2,907)
Investments in other assets...................... (2,601) (221)
--------- ---------
Net cash provided by (used for) investing
activities................................... 426 (10,391)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments under long-term debt.......... (4,855) (3,029)
Proceeds from issuance of Series A common stock.. 753 838
Purchase of Series A common treasury stock....... (1,297) (539)
--------- ---------
Net cash used for financing activities....... (5,399) (2,730)
--------- ---------
Net increase (decrease) in cash and cash
equivalents................................. 9,571 (10,091)
Cash and cash equivalents:
Beginning of period.......................... 5,745 14,441
--------- ---------
End of period................................ $ 15,316 $ 4,350
========= =========
</TABLE>
See notes to consolidated financial statements.
-5-
<PAGE> 8
ROY F. WESTON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
The unaudited consolidated financial statements reflect all adjustments which
are, in the opinion of management, necessary for a fair presentation of the
financial position, results of operations and cash flows for the interim
periods. All such adjustments are of a normal recurring nature. Results for
the three months and nine months ended September 30, 1995 are not necessarily
indicative of results for the full year 1995.
NOTE 2 - CONSOLIDATED STATEMENTS OF CASH FLOW
Net cash payments for income taxes were $1,361,000 in the first nine months of
1995. During the first nine months of 1994 there were net cash refunds for
income taxes of $73,000. Cash payments for interest were $1,308,000 and
$1,398,000 in the nine months ended September 30, 1995 and 1994, respectively.
Capital lease obligations of $55,000 and $81,000 were incurred in the nine
months ended September 30, 1995 and 1994, respectively.
-6-
<PAGE> 9
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Material Changes in Financial Condition
Cash and cash equivalents increased $9,571,000 in the first nine months of 1995
to $15,316,000 from $5,745,000 at December 31, 1994. Marketable securities
decreased $9,199,000 in the first nine months of 1995 to $3,793,000 from
$12,992,000 at December 31, 1994.
Operating activities provided cash of $14,544,000 for the nine months ended
September 30, 1995. Net cash investments in property and equipment and other
assets were $8,842,000 in the first nine months of 1995, including a $2,000,000
investment for a minority interest in a bioremediation and infrastructure
engineering company, compared to $3,128,000 in the comparable 1994 period. The
Company used cash of $5,399,000 in financing activities in the first nine
months of 1995, including the purchase of its 7% Convertible Subordinated
Debentures in the principal amount of $3,000,000. In addition, the Company
purchased 259,400 shares of its Series A common stock for $1,297,000.
Material Changes in Results of Operations
Net income for the three months ended September 30, 1995 was $748,000 or $.08
per share, compared to $9,000 or $.00 per share, for the three months ended
September 30, 1994. Net income for the nine months ended September 30, 1995
was $2,282,000, or $.24 per share, compared to a net loss of $434,000, or $.05
per share, for the nine months ended September 30, 1994.
Gross revenues increased 6% to $79,737,000 for the three months ended September
30, 1995, and 7% to $231,741,000 for the nine months ended September 30, 1995,
compared to the 1994 periods. Net revenues increased 3% to $52,618,000 for the
three months ended September 30, 1995, and 5% to $157,973,000 for the nine
months ended September 30, 1995, compared to the 1994 periods. Net revenues in
the three months and nine months ended September 30, 1995 include $1,200,000
and $1,800,000, respectively, representing completion of a remediation contract
negotiation. For both the three months and nine months ended September 30,
1995, increases in net revenues for consulting services and remediation
projects were partially offset by lower analytical laboratory services
revenues.
Income from operations for the three months ended September 30, 1995 was
$1,352,000 compared to $232,000 for the three months ended September 30, 1994.
Income from operations for the nine months ended September 30, 1995 was
$3,810,000 compared to $180,000 for the nine months ended September 30, 1994.
The improvements in the three months and nine months ended September 30, 1995
were principally due to the greater 1995 net revenues. Improved results from
remediation projects were partially offset by declines in margins for
analytical laboratory services and lower revenues for consulting services in
the western United States. General and administrative expenses as a percentage
of net revenues declined to 13.5% and 13.7% in the three months and nine months
ended September 30, 1995, respectively, from 14.2% in both the three months and
nine months ended September 30, 1994, respectively, due to greater net revenues
and expense reductions.
-7-
<PAGE> 10
Investment income increased $151,000 or 16% for the nine months ended September
30, 1995 due principally to higher interest rates on short- term investments.
Interest expense declined $75,000 or 12%, and $160,000 or $8%, in the three
months and nine months ended September 30, 1995, respectively, due principally
to lower borrowings. Other income for the nine months ended September 30,
1995, includes a $376,000 gain realized on purchase of the Company's 7%
Convertible Subordinated Debentures. Other income for the nine months ended
September 30, 1994 included a $51,000 gain from debenture purchase.
-8-
<PAGE> 11
PART II OTHER INFORMATION
Item 1. Legal Proceedings
Not Applicable.
Item 2. Changes in Securities
Not Applicable.
Item 3. Defaults Upon Senior Securities
Not Applicable.
Item 4. Submission of Matters to a Vote of Security Holders
Not Applicable.
Item 5. Other Information
Not Applicable.
Item 6. Exhibits and Reports on Form 8-K
(a) The exhibits are numbered in accordance with the Exhibit
Table of Item 601 of Regulation S-K.
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<S> <C>
11 Statements of Computation
of Net Income (Loss) Per Share
27 Financial Data Schedule
</TABLE>
(b) No reports on Form 8-K have been filed during the quarter
ended September 30, 1995.
-9-
<PAGE> 12
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.
ROY F. WESTON, INC.
(Registrant)
Date: November 10, 1995 By:/s/ M. Christine Murphy
------------------------
M. Christine Murphy
Executive Vice President
Quality Assurance/Finance
(Duly Authorized Officer)
(Principal Financial Officer)
Date: November 10, 1995 By:/s/ William G. Mecaughey
-------------------------
William G. Mecaughey
Vice President and
Corporate Controller
(Chief Accounting Officer)
<PAGE> 13
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
11 Statements of Computation of
Net Income (Loss) Per Share
27 Financial Data Schedule
</TABLE>
<PAGE> 1
Exhibit 11
ROY F. WESTON, INC. AND SUBSIDIARIES
STATEMENTS OF COMPUTATION OF NET INCOME PER SHARE
<TABLE>
<CAPTION>
Three Months Ended September 30,
--------------------------------
1995 1994
---- ----
(Thousands of Dollars)
<S> <C> <C>
PRIMARY
-------
Net income ........................................ $ 748 $ 9
=========== ===========
Weighted average shares outstanding................ 9,565,903 9,561,204
=========== ===========
Net income per share............................... $ .08 $ -
=========== ===========
FULLY DILUTED
-------------
Net income ......................................... $ 748 $ 9
ADD:
Interest on 7% Convertible Subordinated
Debentures, net of applicable income
taxes....................................... 247 268
----------- -----------
Net income for fully diluted net income
per share......................................... $ 995 $ 277
=========== ===========
Weighted average number of shares used in
calculating primary net income per share.......... 9,565,903 9,561,204
ADD:
Shares issuable upon conversion of 7%
Convertible Subordinated Debentures......... 1,033,128 1,175,106
Stock options................................ 693 -
----------- -----------
Weighted average number of shares used in
calculating fully diluted net income per
share............................................ 10,599,724 10,736,310
=========== ===========
Fully diluted net income per share................. $ .09 $ .03
=========== ===========
</TABLE>
<PAGE> 2
Exhibit 11
ROY F. WESTON, INC. AND SUBSIDIARIES
STATEMENTS OF COMPUTATION OF NET INCOME (LOSS) PER SHARE
<TABLE>
<CAPTION>
Nine Months Ended September 30,
-------------------------------
1995 1994
---- ----
(Thousands of Dollars)
<S> <C> <C>
PRIMARY
-------
Net income (loss).................................. $ 2,282 $ (434)
=========== ===========
Weighted average shares outstanding................ 9,524,196 9,502,449
=========== ===========
Net income (loss) per share........................ $ .24 $ (.05)
=========== ===========
FULLY DILUTED
-------------
Net income (loss).................................. $ 2,282 $ (434)
ADD:
Interest on 7% Convertible Subordinated
Debentures, net of applicable income
taxes....................................... 772 811
----------- -----------
Net income for fully diluted net income per
share............................................. $ 3,054 $ 377
=========== ===========
Weighted average number of shares used in
calculating primary net income (loss) per share... 9,524,196 9,502,449
ADD:
Shares issuable upon conversion of 7%
Convertible Subordinated Debentures......... 1,094,496 1,184,641
Stock options................................ 231 -
----------- -----------
Weighted average number of shares used in
calculating fully diluted net income per
share............................................ 10,618,923 10,687,090
=========== ===========
Fully diluted net income per share................. $ .29 $ .04
=========== ===========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET OF SEPTEMBER 30, 1995 AND THE CONSOLIDATED STATEMENT
OF INCOME FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 15,316
<SECURITIES> 3,793
<RECEIVABLES> 100,029<F1>
<ALLOWANCES> 2,106
<INVENTORY> 0
<CURRENT-ASSETS> 125,475
<PP&E> 78,370
<DEPRECIATION> 57,060
<TOTAL-ASSETS> 170,258
<CURRENT-LIABILITIES> 56,175
<BONDS> 25,169
<COMMON> 1,107
0
0
<OTHER-SE> 82,149
<TOTAL-LIABILITY-AND-EQUITY> 170,258
<SALES> 0
<TOTAL-REVENUES> 231,741
<CGS> 0
<TOTAL-COSTS> 227,931
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 450
<INTEREST-EXPENSE> 1,756
<INCOME-PRETAX> 3,566
<INCOME-TAX> 1,284
<INCOME-CONTINUING> 2,282
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,282
<EPS-PRIMARY> .24
<EPS-DILUTED> 0
<FN>
<F1>INCLUDES 19,971 OF UNBILLED COSTS AND ESTIMATED EARNINGS THEREON.
</FN>
</TABLE>
