<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 March 31, 1996
( ) 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 April 26, 1996, the registrant had outstanding 7,396,727 shares
of Series A common stock and 2,111,634 shares of common stock.
<PAGE> 2
Index Page
----- ----
Part I - Financial Information
Item 1. Financial Statements:
Consolidated Balance Sheets -
March 31, 1996 and December 31, 1995 1-2
Consolidated Statements of Income -
Three Months Ended March 31, 1996 and 1995 3
Consolidated Statements of Cash Flows -
Three Months Ended March 31, 1996 and 1995 4
Notes to Consolidated Financial Statements 5
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 6
Part II - Other Information 7
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
<PAGE> 3
ROY F. WESTON, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
---- ----
(Unaudited)
(Thousands of Dollars)
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents........................... $ 17,011 $ 12,980
Marketable securities............................... 9,219 2,813
Accounts receivable, trade, net of allowance
for doubtful accounts of $1,873 in 1996
and $1,800 in 1995................................. 67,502 78,374
Unbilled costs and estimated earnings on
contracts in process............................... 18,498 17,935
Prepaid and refundable income taxes................. 1,144 1,369
Deferred income taxes............................... 2,734 3,145
Other............................................... 3,187 2,602
--------- ---------
Total current assets....................... 119,295 119,218
--------- ---------
PROPERTY AND EQUIPMENT
Land................................................ 215 215
Buildings and improvements.......................... 11,336 11,308
Furniture and equipment............................. 58,962 58,348
Leasehold improvements.............................. 9,605 7,580
Construction in progress............................ 109 1,842
--------- ---------
Total property and equipment............... 80,227 79,293
Less accumulated depreciation and amortization...... 60,013 58,777
--------- ---------
Property and equipment, net................ 20,214 20,516
--------- ---------
OTHER ASSETS
Goodwill, net of accumulated amortization of
$1,241 in 1996 and $1,203 in 1995.................. 4,713 4,751
Deferred income taxes............................... 1,408 1,491
Other............................................... 16,278 17,430
--------- ---------
Total other assets......................... 22,399 23,672
--------- ---------
$ 161,908 $ 163,406
========= =========
</TABLE>
See notes to consolidated financial statements.
-1-
<PAGE> 4
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
---- ----
(Unaudited)
(Thousands of Dollars)
CURRENT LIABILITIES
<S> <C> <C>
Current maturities of long-term debt.............. $ 2,233 $ 2,261
Accounts payable and accrued expenses............. 11,589 12,444
Billings on contracts in process in excess of
costs and estimated earnings..................... 12,960 15,346
Employee compensation, benefits and
payroll taxes.................................... 14,356 11,348
Income taxes payable.............................. 171 208
Other ............................................ 9,424 9,736
--------- --------
Total current liabilities................ 50,733 51,343
--------- --------
LONG TERM DEBT.................................... 24,125 24,673
--------- --------
OTHER LIABILITIES................................. 4,719 4,489
--------- --------
CONTINGENCIES.....................................
STOCKHOLDERS' EQUITY
Common stock, $.10 par value, 10,500,000 shares
authorized; 3,192,909 shares issued in 1996;
3,193,059 shares issued in 1995.................. 319 319
Series A common stock, $.10 par value,
20,500,000 shares authorized; 8,028,232
shares issued in 1996; 8,028,082 shares
issued in 1995................................... 803 803
Unrealized gain on investments.................... 474 514
Additional paid-in capital........................ 54,157 54,143
Retained earnings................................. 30,946 30,929
--------- --------
86,699 86,708
Less treasury stock at cost, 1,081,275 common
shares in 1996 and 1995; 622,005
Series A common shares in 1996 and 513,105
Series A common shares in 1995................... 4,368 3,807
--------- --------
Total stockholders' equity............... 82,331 82,901
--------- --------
$ 161,908 $163,406
========= ========
</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 March 31,
------------------------------
1996 1995
---- ----
(Thousands of Dollars)
<S> <C> <C>
Gross revenues........................................ $ 67,586 $ 75,601
Direct project costs.................................. 20,497 22,877
---------- ----------
Net revenues................................. 47,089 52,724
---------- ----------
Expenses:
Direct salaries and other operating costs.... 39,773 44,106
General and administrative expenses.......... 7,335 7,498
---------- ----------
47,108 51,604
---------- ----------
Income (loss) from operations................ (19) 1,120
---------- ----------
Other income (expense):
Investment income............................ 500 372
Interest expense............................. (525) (605)
Other........................................ 71 7
---------- ----------
46 (226)
---------- ----------
Income before income taxes................... 27 894
Provision for income taxes......................... 10 322
---------- ----------
Net income .................................. $ 17 $ 572
========== ==========
Net income per share......................... $ .00 $ .06
========== ==========
Weighted average shares outstanding 9,570,828 9,552,040
========== ==========
</TABLE>
See notes to consolidated financial statements.
-3-
<PAGE> 6
ROY F. WESTON, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended March 31,
----------------------------
1996 1995
---- ----
(Thousands of Dollars)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income ......................................... $ 17 $ 572
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization............. 2,115 2,367
Provision for losses on accounts
receivable............................... 56 180
Other..................................... 232 671
Change in assets and liabilities:
Accounts receivable, trade................ 10,816 (9,011)
Unbilled costs and estimated earnings on
contracts in process..................... (563) (449)
Other current assets...................... (585) 831
Accounts payable and accrued expenses..... (855) 58
Billings on contracts in excess of costs
and estimated earnings................... (2,386) 5,712
Employee compensation, benefits and
payroll taxes............................ 3,008 2,450
Income taxes.............................. 188 574
Deferred income taxes..................... 514 (62)
Other current liabilities................. (527) 1,498
Other assets and liabilities.............. 228 (334)
--------- ---------
Net cash provided by operating activities........ 12,258 5,057
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of investments................... 982 6,650
Payments for purchase of investments................ (6,503) (5,052)
Purchase of property and equipment, net............. (1,435) (2,327)
Investments in other assets......................... (134) (500)
--------- ---------
Net cash used for investing activities........... (7,090) (1,229)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments under long-term debt............. (576) (582)
Purchase of Series A common treasury stock.......... (561) (408)
--------- ---------
Net cash used for financing activities.......... (1,137) (990)
--------- ---------
Net increase in cash and cash equivalents....... 4,031 2,838
Cash and cash equivalents:
Beginning of period.......................... 12,980 5,745
--------- ---------
End of period................................ $ 17,011 $ 8,583
========= =========
</TABLE>
See notes to consolidated financial statements.
-4-
<PAGE> 7
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 ended March 31, 1996 are not necessarily indicative of results for
the full year 1996.
NOTE 2 - CONSOLIDATED STATEMENTS OF CASH FLOW
Net cash refunds for income taxes were $696,000 in the first three months of
1996. During the first three months of 1995 there were net cash payments for
income taxes of $14,000. Cash payments for interest were $106,000 and $128,000
in the three months ended March 31, 1996 and 1995, respectively.
No capital lease obligations were incurred in the three months ended March 31,
1996 or 1995.
-5-
<PAGE> 8
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Material Changes in Financial Condition
Cash and cash equivalents increased $4,031,000 in the first three months of 1996
to $17,011,000 from $12,980,000 at December 31, 1995. Marketable securities
increased $6,406,000 in the first three months of 1996 to $9,219,000 from
$2,813,000 at December 31, 1995.
Operating activities provided cash of $12,258,000 for the three months of 1996
compared to $5,057,000 in the comparable 1995 period. Net cash investments in
property and equipment and other assets were $1,569,000 in the first three
months of 1996 compared to $2,827,000 in the comparable 1995 period. The Company
used cash of $1,137,000 in financing activities in the first three months of
1996, compared to $990,000 in the 1995 first quarter.
Material Changes in Results of Operations
Net income for the three months ended March 31, 1996 decreased 97% to $17,000 or
$.00 per share, compared to $572,000 or $.06 per share, for the three months
ended March 31, 1995.
Gross revenues decreased 11% to $67,586,000 for the three months ended March 31,
1996 compared to $75,601,000 in the 1995 period. Net revenues decreased 11% to
$47,089,000 for the three months ended March 31, 1996, compared to $52,724,000
for the comparable 1995 period. Net revenues in the three months ended March 31,
1995 included $600,000 representing a refined estimate of contract realization
on a remediation project. Analytical laboratory services net revenues declined
30% due to the early 1996 closing of one of the Company's laboratory facilities
and continuing downward pricing pressures. Construction and remediation and
federal program management net revenues each declined 12% due principally to
government funding delays and severe weather conditions.
For the three months ended March 31, 1996, the loss from operations was $19,000.
Income from operations was $1,120,000 for the three months ended March 31, 1995.
The 1996 results include a provision of approximately $775,000 relating to
severance benefits for the Company's former Chairman of the Board.
Investment income increased $128,000, or 34%, to $500,000 in 1996 due primarily
to gains realized on sales of investments in mutual funds. Interest expense
declined $80,000, or 13% to $525,000 in 1995 due to lower borrowings. Other
income for the three months ended March 31, 1996 includes $53,000 in gains
realized on equipment sales.
-6-
<PAGE> 9
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.
Exhibit No. Description
----------- -----------
11 Statements of Computation
of Net Income Per Share
27 Financial Data Schedule
(b) No reports on Form 8-K have been filed
during the quarter ended March 31, 1996.
-7-
<PAGE> 10
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: May 13, 1996 By:/s/ M. Christine Murphy
--------------------------------
M. Christine Murphy
Executive Vice President
Quality Assurance/Finance
(Duly Authorized Officer)
(Principal Financial Officer)
Date: May 13, 1996 By:/s/ William G. Mecaughey
--------------------------------
William G. Mecaughey
Vice President and
Corporate Controller
(Chief Accounting Officer)
<PAGE> 11
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
11 Statements of Computation of
Net Income Per Share
27 Financial Data Schedule
<PAGE> 1
Exhibit 11
ROY F. WESTON, INC. AND SUBSIDIARIES
STATEMENTS OF COMPUTATION OF NET INCOME PER SHARE
<TABLE>
<CAPTION>
Three Months Ended March 31,
-----------------------------
1996 1995
---- ----
(Thousands of Dollars)
<S> <C> <C>
Primary
Net income ........................................ $ 17 $ 572
=========== ===========
Weighted average shares outstanding................ 9,570,828 9,552,040
=========== ===========
Net income per share............................... $ .00 $ .06
=========== ===========
Fully diluted
Net income ......................................... $ 17 $ 572
Add:
Interest on 7% Convertible Subordinated
Debentures, net of applicable income
taxes....................................... 244 278
----------- -----------
Net income for fully diluted net income
per share......................................... $ 261 $ 850
=========== ===========
Weighted average number of shares used in
calculating primary net income per share.......... 9,570,828 9,552,040
Add:
Shares issuable upon conversion of 7%
Convertible Subordinated Debentures......... 1,033,128 1,175,106
Stock options................................ 2,985 -
----------- -----------
Weighted average number of shares used in
calculating fully diluted net income per
share............................................ 10,606,941 10,727,146
=========== ===========
Fully diluted net income per share................. $ .02 $ .08
=========== ===========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET OF MARCH 31, 1996 AND THE CONSOLIDATED STATEMENT OF
INCOME FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 17,011
<SECURITIES> 9,219
<RECEIVABLES> 86,000<F1>
<ALLOWANCES> 1,873
<INVENTORY> 0
<CURRENT-ASSETS> 119,295
<PP&E> 80,227
<DEPRECIATION> 60,013
<TOTAL-ASSETS> 161,908
<CURRENT-LIABILITIES> 50,733
<BONDS> 24,125
0
0
<COMMON> 1,122
<OTHER-SE> 81,209
<TOTAL-LIABILITY-AND-EQUITY> 161,908
<SALES> 0
<TOTAL-REVENUES> 67,586
<CGS> 0
<TOTAL-COSTS> 67,605
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 56
<INTEREST-EXPENSE> 525
<INCOME-PRETAX> 27
<INCOME-TAX> 10
<INCOME-CONTINUING> 17
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 17
<EPS-PRIMARY> .00
<EPS-DILUTED> 0
<FN>
<F1> Includes 18,498 of unbilled costs and estimated earnings thereon.
</FN>
</TABLE>
