<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 quarter period ended June 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)
<TABLE>
<S> <C>
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
</TABLE>
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 June 30, 1995, the registrant had outstanding 7,505,449 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 -
June 30, 1995 and December 31, 1994 1-2
Consolidated Statements of Income -
Three Months Ended June 30, 1995 and 1994 3
Consolidated Statements of Income -
Six Months Ended June 30, 1995 and 1994 4
Consolidated Statements of Cash Flows -
Six Months Ended June 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>
June 30, December 31,
1995 1994
---- ----
(Unaudited)
(Thousands of Dollars)
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents........................... $ 9,583 $ 5,745
Marketable securities............................... 7,394 12,992
Accounts receivable, trade, net of allowance
for doubtful accounts of $2,024 in 1995
and $1,699 in 1994................................. 77,238 68,947
Unbilled costs and estimated earnings on
contracts in process............................... 18,164 20,586
Prepaid and refundable income taxes................. - 1,581
Deferred income taxes............................... 2,888 1,395
Other............................................... 3,405 3,626
--------- ---------
Total current assets.......................... 118,672 114,872
--------- ---------
PROPERTY AND EQUIPMENT
Land................................................ 215 215
Buildings and improvements.......................... 11,207 10,832
Furniture and equipment............................. 56,239 54,617
Leasehold improvements.............................. 7,433 7,579
Construction in progress............................ 1,777 253
--------- ---------
Total property and equipment.................. 76,871 73,496
Less accumulated depreciation and amortization...... 55,408 52,494
--------- ---------
Property and equipment, net................... 21,463 21,002
--------- ---------
OTHER ASSETS
Goodwill, net of accumulated amortization of
$1,129 in 1995 and $1,055 in 1994.................. 4,825 4,899
Deferred income taxes............................... 1,774 1,827
Other............................................... 16,548 14,130
--------- ---------
Total other assets............................ 23,147 20,856
--------- ---------
$ 163,282 $ 156,730
========= =========
</TABLE>
See notes to consolidated financial statements.
-1-
<PAGE> 4
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
June 30, December 31,
1995 1994
---- ----
(Unaudited)
(Thousands of Dollars)
<S> <C> <C>
CURRENT LIABILITIES
Current maturities of long-term debt.............. $ 2,429 $ 2,431
Accounts payable and accrued expenses............. 10,873 11,502
Billings on contracts in process in excess of
costs and estimated earnings..................... 14,800 8,960
Employee compensation, benefits and
payroll taxes.................................... 10,593 9,841
Income taxes payable.............................. 1,253 120
Other ............................................ 9,226 7,666
---------- ---------
Total current liabilities................... 49,174 40,520
---------- ---------
LONG TERM DEBT.................................... 25,734 29,843
---------- ---------
OTHER LIABILITIES................................. 5,550 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; 7,876,054
shares issued in 1995; 7,668,325 shares
issued in 1994................................... 788 767
Additional paid-in capital........................ 53,829 52,684
Retained earnings................................. 30,949 29,415
---------- ---------
85,885 83,187
Less treasury stock at cost, 1,081,275 common
shares in 1995 and 1994; 370,605 and 214,705
Series A common shares in 1995 and 1994.......... 3,061 2,295
---------- ---------
Total stockholders' equity.................. 82,824 80,892
---------- ---------
$ 163,282 $ 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 June 30,
---------------------------
1995 1994
---- ----
(Thousands of Dollars)
<S> <C> <C>
Gross revenues..................................... $ 76,403 $ 69,860
Direct project costs............................... 23,772 19,803
---------- ----------
Net revenues................................. 52,631 50,057
---------- ----------
Expenses:
Direct salaries and other operating costs.... 44,219 43,519
General and administrative expenses.......... 7,074 7,188
---------- ----------
51,293 50,707
---------- ----------
Income (loss) from operations................ 1,338 (650)
---------- ----------
Other income (expense):
Investment income............................ 363 383
Interest expense............................. (605) (630)
Other........................................ 407 13
---------- ----------
165 (234)
---------- ----------
Income (loss) before income taxes............ 1,503 (884)
Provision (benefit) for income taxes............... 541 (338)
---------- ----------
Net income (loss)........................... $ 962 $ (546)
========== ==========
Net income (loss) per share................. $ .10 $ (.06)
========== ==========
Weighted average shares outstanding 9,453,730 9,483,372
========== ==========
</TABLE>
See notes to consolidated financial statements.
-3-
<PAGE> 6
ROY F. WESTON, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended June 30,
-------------------------
1995 1994
---- ----
(Thousands of Dollars)
<S> <C> <C>
Gross revenues..................................... $ 152,004 $ 142,051
Direct project costs............................... 46,649 41,966
---------- ----------
Net revenues................................. 105,355 100,085
---------- ----------
Expenses:
Direct salaries and other operating costs.... 88,325 85,899
General and administrative expenses.......... 14,572 14,238
---------- ----------
102,897 100,137
---------- ----------
Income (loss) from operations................ 2,458 (52)
---------- ----------
Other income (expense):
Investment income............................ 735 563
Interest expense............................. (1,210) (1,295)
Other........................................ 414 67
---------- ----------
(61) (665)
---------- ----------
Income (loss) before income taxes............ 2,397 (717)
Provision (benefit) for income taxes............... 863 (274)
---------- ----------
Net income (loss)............................ $ 1,534 $ (443)
========== ===========
Net income (loss) per share.................. $ .16 $ (.05)
========== ===========
Weighted average shares outstanding 9,502,614 9,484,084
========== ==========
</TABLE>
See notes to consolidated financial statements.
-4-
<PAGE> 7
ROY F. WESTON, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended June 30,
-------------------------
1995 1994
---- ----
(Thousands of Dollars)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)................................ $ 1,534 $ (443)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation and amortization............. 4,778 5,189
Provision for losses on accounts
receivable............................... 360 360
Other..................................... 927 816
Change in assets and liabilities:
Accounts receivable, trade................ (8,651) (3,287)
Unbilled costs and estimated earnings on
contracts in process..................... 2,422 2,233
Other current assets...................... 221 (802)
Accounts payable and accrued expenses..... (629) (721)
Billings on contracts in excess of costs
and estimated earnings................... 5,840 (1,455)
Employee compensation, benefits and
payroll taxes............................ 752 918
Income taxes.............................. 2,714 1,493
Deferred income taxes..................... (1,645) (1,708)
Other current liabilities................. 536 (166)
Other assets and liabilities.............. (97) 384
--------- ---------
Net cash provided by operating activities..... 9,062 2,811
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of investments................ 12,770 24,655
Payments for purchase of investments............. (7,041) (20,233)
Purchase of property and equipment, net.......... (4,374) (1,850)
Investments in other assets...................... (2,392) (113)
--------- ---------
Net cash provided by (used for) investing
activities................................... (1,037) 2,459
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments under long-term debt.......... (4,166) (2,425)
Proceeds from issuance of Series A common stock.. 745 838
Purchase of Series A common treasury stock....... (766) -
--------- ---------
Net cash used for financing activities....... (4,187) (1,587)
--------- ---------
Net increase in cash and cash
equivalents................................. 3,838 3,683
Cash and cash equivalents:
Beginning of period.......................... 5,745 14,441
--------- ---------
End of period................................ $ 9,583 $ 18,124
========= =========
</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 six months ended June 30, 1995 are not necessarily
indicative of results for the full year 1995.
NOTE 2 - CONSOLIDATED STATEMENTS OF CASH FLOW
During the first six months of 1995 and 1994 there were net cash refunds for
income taxes of $184,000 and $59,000, respectively. Cash payments for interest
were $1,185,000 and $1,245,000 in the six months ended June 30, 1995 and 1994,
respectively.
Capital lease obligations of $55,000 and $81,000 were incurred in the six
months ended June 30, 1995 and 1994, respectively.
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<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 $3,838,000 in the first six months of 1995
to $9,583,000 from $5,745,000 at December 31, 1994. Marketable securities
decreased $5,598,000 in the first six months of 1995 to $7,394,000 from
$12,992,000 at December 31, 1994.
Operating activities provided cash of $9,062,000 for the six months ended June
30, 1995. Net cash investments in property and equipment and other assets were
$6,766,000 in the first six months of 1995, including a $2,000,000 investment
for a minority interest in a bioremediation and infrastructure engineering
company, compared to $1,963,000 in the comparable 1994 period. The Company
used cash of $4,187,000 in financing activities in the first six 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 155,900
shares of its Series A common stock for $766,000.
Material Changes in Results of Operations
Net income for the three months ended June 30, 1995 was $962,000 or $.10 per
share, compared to a net loss of $546,000 or $.06 per share, for the three
months ended June 30, 1994. Net income for the six months ended June 30, 1995
was $1,534,000 or $.16 per share, compared to net loss of $443,000 or $.05 per
share, for the six months ended June 30, 1994.
Gross revenues increased 9% to $76,403,000 for the three months ended June 30,
1995, and 7% to $152,004,000 for the six months ended June 30, 1995, compared
to the 1994 periods. Net revenues increased 5% to $52,631,000 for the three
months ended June 30, 1995, and 5% to $105,355,000 for the six months ended
June 30, 1995, compared to the 1994 periods. Net revenues in the six months
ended June 30, 1995 include $600,000 representing a refined estimate of
contract realization on a remediation project. For both the three months and
six months ended June 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 June 30, 1995 was $1,338,000
compared to a loss from operations of $650,000 for the three months ended June
30, 1994. Income from operations for the six months ended June 30, 1995 was
$2,458,000 compared to a loss from operations of $52,000 for the six months
ended June 30, 1994. The improvements in the three months and six months ended
June 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 13.4% and 13.8% in the three months and
six months ended June 30, 1995, respectively, from 14.4% and 14.2% in the three
months and six months ended June 30, 1994, respectively, due to greater net
revenues and expense reductions.
-7-
<PAGE> 10
Investment income increased $172,000 or 31% for the six months ended June 30,
1995 due to higher interest rates. Interest expense declined $25,000 or 4%,
and $85,000 or $7%, in the three months and six months ended June 30, 1995,
respectively, due to lower borrowings. Other income for the three months and
six months ended June 30, 1995, includes a $376,000 gain realized on purchase
of the Company's 7% Convertible Subordinated Debentures. Other income for the
six months ended June 30, 1994 included a $51,000 gain from debenture purchase.
-8-
<PAGE> 11
<TABLE>
<CAPTION>
PART II OTHER INFORMATION
<S> <C>
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
On May 8, 1995, the Company held its Annual Meeting of Shareholders.
The shareholders approved an amendment increasing by 450,000 the
number of shares of Series A common stock reserved for issuance
under the Company's Employee Stock Purchase Plan. There were
2,498,074 affirmative votes, 19,449 negative votes, 3,895
abstentions and 150,230 broker non-votes.
Item 5. Other Information
Not Applicable.
Item 6. Exhibits and Reports on Form 8-K
(a) The exhibit filed as part of this report below:
Exhibit No. Description
----------- -----------
11 Statements of Computation
of Net Income (Loss) Per Share
27 Financial Data Schedule
(b) No reports on Form 8-K have been filed during the quarter
ended June 30, 1995.
</TABLE>
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<PAGE> 12
Exhibit 11
ROY F. WESTON, INC. AND SUBSIDIARIES
STATEMENTS OF COMPUTATION OF NET INCOME (LOSS) PER SHARE
<TABLE>
<CAPTION>
Three Months Ended June 30,
---------------------------
1995 1994
---- ----
(Thousands of Dollars)
<S> <C> <C>
PRIMARY
- -------
Net income (loss).................................. $ 962 $ (546)
=========== ===========
Weighted average shares outstanding................ 9,453,730 9,483,372
=========== ===========
Net income (loss) per share........................ $ .10 $ (.06)
=========== ===========
FULLY DILUTED
- -------------
Net income (loss).................................. $ 962 $ (546)
ADD:
Interest on 7% Convertible Subordinated
Debentures, net of applicable income
taxes....................................... 244 268
----------- -----------
Net income (loss) for fully diluted net income (loss)
per share......................................... $ 1,206 $ (278)
============ ============
Weighted average number of shares used in
calculating primary net income (loss) per share... 9,453,730 9,483,372
ADD:
Shares issuable upon conversion of 7%
Convertible Subordinated Debentures......... 1,076,814 1,175,106
Stock options................................ - -
----------- -----------
Weighted average number of shares used in
calculating fully diluted net income (loss) per
share............................................ 10,530,544 10,658,478
=========== ===========
Fully diluted net income (loss) per share.......... $ .11 $ (.03)
=========== ===========
</TABLE>
<PAGE> 13
Exhibit 11
ROY F. WESTON, INC. AND SUBSIDIARIES
STATEMENTS OF COMPUTATION OF NET INCOME (LOSS) PER SHARE
<TABLE>
<CAPTION>
Six Months Ended June 30,
-------------------------
1995 1994
---- ----
(Thousands of Dollars)
<S> <C> <C>
PRIMARY
- -------
Net income (loss).................................. $ 1,534 $ (443)
=========== ============
Weighted average shares outstanding................ 9,502,614 9,483,084
=========== ===========
Net income (loss) per share........................ $ .16 $ (.05)
=========== ============
FULLY DILUTED
- -------------
Net income (loss).................................. $1,534 $ (443)
ADD:
Interest on 7% Convertible Subordinated
Debentures, net of applicable income
taxes....................................... 489 543
----------- -----------
Net income for fully diluted net income per
share....................................... $ 2,023 $ 100
=========== ===========
Weighted average number of shares used in
calculating primary net income (loss) per share... 9,502,614 9,484,084
ADD:
Shares issuable upon conversion of 7%
Convertible Subordinated Debentures......... 1,125,689 1,189,487
Stock options................................ - -
----------- -----------
Weighted average number of shares used in
calculating fully diluted net income per
share............................................ 10,628,303 10,673,571
=========== ===========
Fully diluted net income per share................. $ .19 $ .01
=========== ===========
</TABLE>
<PAGE> 14
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.
<TABLE>
<CAPTION>
ROY F. WESTON, INC.
(Registrant)
<S> <C>
Date: August 10, 1995 By:/s/ M. Christine Murphy
------------------------
M. Christine Murphy
Executive Vice President
Quality Assurance/Finance
(Duly Authorized Officer)
(Principal Financial Officer)
Date: August 10, 1995 By:/s/ William G. Mecaughey
-------------------------
William G. Mecaughey
Vice President and
Corporate Controller
(Chief Accounting Officer)
</TABLE>
<PAGE> 15
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
11 Statements of Computation of
Net Income (Loss) Per Share
27 Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AT JUNE 30, 1995 AND THE CONSOLIDATED STATEMENT
OF INCOME FOR THE SIX MONTHS ENDED JUNE 30, 1995 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
<CASH> 9,583
<SECURITIES> 7,394
<RECEIVABLES> 95,402<F1>
<ALLOWANCES> 2,024
<INVENTORY> 0
<CURRENT-ASSETS> 118,672
<PP&E> 76,871
<DEPRECIATION> 55,408
<TOTAL-ASSETS> 163,282
<CURRENT-LIABILITIES> 49,174
<BONDS> 25,734
<COMMON> 1,107
0
0
<OTHER-SE> 81,717
<TOTAL-LIABILITY-AND-EQUITY> 163,282
<SALES> 0
<TOTAL-REVENUES> 152,004
<CGS> 0
<TOTAL-COSTS> 149,546
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 360
<INTEREST-EXPENSE> 1,210
<INCOME-PRETAX> 2,397
<INCOME-TAX> 863
<INCOME-CONTINUING> 1,534
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,534
<EPS-PRIMARY> .16
<EPS-DILUTED> 0
<FN>
<F1>Includes 18,164 of unbilled costs and estimated earnings thereon.
</FN>
</TABLE>
