================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 10549
----------------------
FORM 10
GENERAL FORMS FOR REGISTRATION OF SECURITIES
PURSUANT TO SECTION 12(B) OR 12(G) OF
THE SECURITIES EXCHANGE ACT OF 1934
THE PBSJ CORPORATION
--------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
FLORIDA 59-1494168
------- ----------
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
2001 N.W. 107th AVENUE
MIAMI, FLORIDA 33172
-------------- -----
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(305) 592-7275
--------------
(REGISTRANTS TELEPHONE NUMBER, INCLUDING AREA CODE)
----------------------
SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
None
SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
Common Stock ($.0033 Par Value)
-------------------------------
(TITLE OF CLASS)
================================================================================
<PAGE>
ITEM 1. BUSINESS
General
The PBSJ Corporation and its subsidiaries are an employee-owned
professional services organization that provides a broad range of planning,
design and construction services to a variety of public and private sector
clients. Our four major service sectors are transportation, environmental, civil
engineering and construction management. We utilize our expertise in
engineering, planning, management, science, architectural and surveying
disciplines to solve complex problems in each of these basic service areas. We
provide these services through our staff of over 2,200 professional, technical
and support personnel operating from 60 offices located in Florida and the
Eastern, Central and Western regions of the U.S. and we have active projects in
24 states and 8 nations. We believe our multi-disciplinary approach to problems
facilitates our ability to effectively meet the needs of our clients.
Since our founding in 1960, we have grown from a civil engineering
practice in South Florida to a firm of national reputation. In 1999, Engineering
News-Record placed PBSJ at 33rd on ENR's list of the 500 largest design firms.
During fiscal 1999, we provided services to approximately 3,000 clients in the
public and private sectors. Approximately 95% of our clients had previously used
our services. In fiscal 1999, 66% of our net revenues were derived from the
public sector and 34% from the private sector.
We have developed capabilities, customers and markets through internal
growth as well as the acquisition of other firms and the formation of
subsidiaries. We engage in business primarily through our major wholly-owned
subsidiaries: Post, Buckley, Schuh & Jernigan, Inc., a Florida corporation
(PBS&J); PBS&J Construction Services, Inc; Seminole Development Corporation; and
Post, Buckley International, Inc.
We have built an organization composed of highly skilled professionals
and top level technical and administrative personnel with a wide variety of
scientific, engineering, architectural and management resources. These resources
enable us to develop and implement innovative long-term solutions to the complex
problems of our clients, many of which are the subject of public concern and
extensive governmental regulation. We assist our clients in responding to these
concerns, in obtaining governmental permits and approvals and in complying with
applicable laws and regulations.
We began operations on February 29, 1960. Our holding company, The PBSJ
Corporation, was incorporated in 1973. In this registration statement, all
references to "PBSJ" or "our" operations refer to The PBSJ Corporation and its
wholly-owned subsidiaries and the activities of these entities on a consolidated
basis. Our executive offices are located at 2001 N.W. 107th Avenue, Miami,
Florida.
Acquisitions
Throughout our history, PBSJ has made selected strategic acquisitions
to increase the firm's geographic presence and to enhance its technical
capabilities. In the last eight years, we have used acquisitions to
significantly expand our operations in the West and Central regions and to
solidify our operations in the Eastern region.
2
<PAGE>
o November 1992 - Church Engineering and Church Engineering of
Nevada.
Our acquisition of Church Engineering gave us a stronger presence
in California and introduced the firm to Nevada and the
Intermountain region. Through Church's participation in the
Corridor Design Management Group joint venture, we began our
long-running relationship with the Transportation Corridor
Agencies in California, while Church Engineering's experience in
and solid reputation for land development services and public
works allowed us to launch operations in the Las Vegas market.
o June 1995 - The Nelson Corporation.
The acquisition of The Nelson Corporation, a 100-member firm,
helped us establish a solid foothold in the Dallas, Texas area.
Nelson's area of specialty included land development, surveying,
planning and landscape architecture.
o July 1996 - Coastal Environmental Services, Inc.
Coastal Environmental gave us world-class environmental
capabilities in the specialized fields of biostatistics,
ecological risk assessment, and watershed management. This highly
regarded firm had 50 employees working on projects in the Hudson
River, Chesapeake Bay, and Tampa Bay areas.
o August 1996 - Frank Coleman and Associates, Inc.
Our acquisition of Frank Coleman and Associates, an established
North Carolina firm, strengthened our capabilities in the growing
Raleigh and Charlotte communities. Coleman's operations primarily
involved transportation projects, but also supported general civil
engineering and surveying assignments.
o August 1997 - Espey, Huston & Associates, Inc.
Our acquisition of EH&A, a 374-person firm headquartered in
Austin, Texas with offices in Houston, Dallas, Nashville,
Cincinnati, Charlotte and Newport News, significantly advanced our
strategic program of geographic and technical diversification.
EH&A's strong environmental engineering, ecological science, and
cultural resources capabilities rounded out the land development
services that PBSJ already offered in Texas. The EH&A acquisition
also provided PBSJ with a nationally recognized presence in the
aviation services market.
o December 1997 - Kercheval and Associates, Inc.
Our acquisition of Kercheval, a 100-person firm headquartered in
San Diego, California with offices in California, Nevada and
Alabama, strengthened our capabilities in Southern California and
provided a strong entry into the telecommunications market.
Kercheval's operations primarily involved transportation,
telecommunications and civil and structural engineering projects.
Through our strategic acquisitions, PBSJ has developed solid technical
expertise, in both core services and emerging markets, and a nationwide presence
that allows us to respond to clients in our "local" markets with the advantages
of a national firm. In the future, we will continue to evaluate possible
strategic acquisitions of engineering or related service businesses in
connection with our plan to diversify our sources of business and the geographic
areas in which we operate.
3
<PAGE>
Services
The following table sets forth our revenues from each of our four basic
service categories for each of the three years ended September 30, 1999, 1998
and 1997, and the approximate percentage of our total revenues attributable to
each service category:
<TABLE>
<CAPTION>
1999 1998 1997
--------------------- --------------------- ----------------------
Revenues % Revenues % Revenues %
-------------- ----- -------------- ---- -------------- -----
<S> <C> <C> <C> <C> <C> <C>
Transportation $ 89,324 37% $ 82,651 37% $ 63,878 37%
Environmental 55,526 23 51,377 23 37,982 22
Civil Engineering 67,597 28 62,547 28 50,067 29
Construction Management 28,970 12 26,806 12 20,717 12
</TABLE>
Transportation
Industry Overview
The need to modernize and upgrade the transportation infrastructure in
the United States has been a source of continued business for us through the
last ten years. Fueling the initial growth in this market was the Intermodal
Surface Transportation Efficiency Act ("ISTEA") of 1991. ISTEA established
funding for mass transportation and public transit programs, introduced the
Congestion Mitigation and Air Quality program to provide funding for
non-attainment areas under the Clean Air Act to meet attainment deadlines, and
included funding for alternative-fuel transit buses. In 1998, ISTEA was
reauthorized as the Transportation Equity Act for the 21st Century ("TEA-21").
TEA-21 earmarks $218 billion for highway and transit projects over the next six
year period. Although a U.S. federal program, TEA-21 provides state and local
governments considerable flexibility in project selection.
Our Services
Our activities in this area generally involve planning, design, right
of way acquisitions, intelligent transportation services and program
construction management services for highways, including interstate, primary,
and arterial roads and toll facilities, bridges, transit, airports and port
facilities. We currently serve 15 state departments of transportation throughout
the U.S. and seven foreign agencies.
Our Program Management group provides many of our governmental clients
the necessary resources to manage large infrastructure programs from concept
through construction. Our services include planning, programming, and contract
support. During production we develop design standards, manage projects, perform
design reviews and develop cost estimates. We facilitate environmental
permitting and right-of-way administration and provide construction management
oversight.
During 1999, projects in our Transportation Division included:
o Designing three segments for the reconstruction of 11.4 miles of
interstate highway, with a construction cost of $105 million, for
the Florida Department of Transportation.
o Overseeing all production activities and providing bond support
services for the Florida Turnpike's capital improvement program.
4
<PAGE>
o Overseeing the management of the York County (South Carolina) $100
million transportation capital improvement program.
o An on-call three-year contract with the South Carolina Department
of Transportation to provide surveying, planning and design
services for various state highway projects.
o Providing engineering services at the Port of Miami for the
renovation of berthing facilities.
o Providing design services for the construction of various runways
at the Cincinnati/Northern Kentucky International Airport.
Environmental
Industry Overview
Over the past twenty-five years, significant environmental laws at the
federal, state and local levels have been enacted in response to public concern
over the environment. Those laws and their implementation through regulation
affect numerous industrial and governmental actions and form a key market driver
for the products and services of our Environmental Division.
Two of these federal environmental water regulations, The Safe Drinking
Water Act of 1974 and the Safe Drinking Water Act Amendments of 1996, have
brought substantial changes to the regulation and financing of water systems.
Pursuant to these amendments, Congress has authorized nearly $9.6 billion
through 2003 to be allotted to states to create low interest loan funds for
installing and upgrading drinking water treatment facilities. The Federal Water
Pollution Control Act of 1972 also established a system of standards, permits
and enforcement procedures for the discharge of pollutants from industrial and
municipal wastewater sources. According to the EPA's survey of wastewater and
sewage treatment needs, as much as $137 billion will be needed for construction
and upgrade of wastewater treatment facilities by the year 2012.
Our Services
Our Environmental Division focuses on the delivery of planning, design
and construction services for private and public sector clients. Included in
this division's services are:
Air Quality Management Flood Insurance Studies
Chemical Testing Analysis Hazardous and Solid Waste
Management
Cultural Resources Assessments Information Solutions
Ecological Studies Wastewater Treatment
Environmental Toxicology Analysis Water Resources
Flood Control Facility Planning and Water Supply and Treatment
Design
5
<PAGE>
During 1999, projects in our Environmental Division included:
o A multi-year contract with the Federal Emergency Management Agency
("FEMA") to serve as Flood Map Production Coordination Contractor
for FEMA's Central Region V (Illinois, Indiana, Michigan, Ohio,
Minnesota and Wisconsin), Central Region VI (Texas, Oklahoma,
Arkansas, Louisiana and New Mexico) and Central Region VII
(Nebraska, Kansas, Idaho and Missouri).
o Providing support to the Water Replenishment District of Southern
California, including completion of a water resources master plan
concept report and assisting in the implementation of a $60
million capital improvements program.
o A contract with the Dallas/Fort Worth International Airport to
delineate jurisdictional wetlands, obtain Clean Water Act permits
and develop off-site mitigation strategies in conjunction with FAA
requirements to remove wetlands that pose a potential safety
hazard.
o Designing the Washington Suburban Sanitary Commission's
20-million-gallons-per-day advanced Seneca Wastewater Treatment
Plant in Montgomery County, Maryland which utilizes biological
nutrient removal.
Civil Engineering
Industry Overview
A strong and long-running national economic expansion has fueled demand
for services from our Civil Engineering Division. Private sector clients have
spent increased dollars on corporate relocations and office, commercial,
industrial and residential development. The expansion has also provided our
public sector clients with additional funding to replace aging infrastructure
and revitalize their urban cores. The commitment to revitalize our American
cities has spurred new retail and residential projects, thereby creating new
markets for multiservice firms who can provide all the necessary design services
to clients looking for "one-stop" shopping. In addition, public-private
partnerships are bringing government and private development together to bridge
the funding gaps for critical new projects.
Our Services
Our Civil Engineering Division provides general civil engineering
services to public and private clients. Included in these services are (1) site
suitability studies, (2) master infrastructure engineering and planning, (3)
site engineering, (4) regulatory permitting, (5) construction phase services and
(6) disaster planning and response. Within our Civil Engineering Division, we
also have three additional service groups: Surveying Engineering, Planning and
Landscape Architecture, and Architecture.
Our Surveying Engineering group provides clients GPS-based surveying,
Vangarde 505 non-contact mobile surveying, land platting, right-of-way mapping,
construction layout and control, boundary and topographic surveys, control
networks, tunnel surveying, ALTA/ACSM land title surveys, hydrographic
surveying, geodetic control, movement detection and deformation surveys, and
rail and mass transit surveys.
6
<PAGE>
Our Planning and Landscape Architecture group provides clients master
land use planning, site planning, urban and regional planning, urban design,
environmental planning, cultural resource identification, and landscape
architecture.
Our Architecture group provides clients architectural design, space
planning and interior design, as well as electrical, mechanical and structural
engineering services.
During 1999, projects in our Civil Engineering Division included:
o Completing the master infrastructure and site engineering for
Universal Studio's Portofino Bay Hotel along with regulatory
permitting and construction phase services.
o Providing engineering services to Cagles Poultry, one of the
largest poultry production and processing companies in the U.S.,
for feed mills, hatcheries and processing plants across North
Georgia.
o Providing engineering and surveying services for a 200 acre
commercial subdivision in Henderson, Nevada.
o Providing master planning, urban design, landscape architecture
and visual communication services for the City of Decatur and
Georgia's MARTA Plans and Church Street Renovation project.
o Completing the mechanical, electrical, plumbing, structural and
civil engineering design of the new Tri-Cities Regional Airport
Concourse Expansion in Tennessee.
Construction Management
Industry Overview
The demand for our construction management services has also been
fueled by the legislation and industry trends that are driving the growth in our
Transportation and Environmental Divisions, including ISTEA and TEA-21. These
trends have resulted in a large number of infrastructure projects throughout the
U.S. which are subject to increasingly complex governmental regulations. The
role of the construction manager has become increasingly important to the
success of these projects, requiring a new level of versatility and a wide range
of skills. Both public and private sector entities are under pressure to
complete these projects at accelerated schedules, resulting in a myriad of
project delivery systems. With limited in- house staff, these entities must rely
on experienced construction managers to complete the project on time and within
budget.
Our Services
In the area of construction management, we provide a wide range of
services as an agent for our clients, including contract administration,
inspection, field testing, scheduling/estimating, instituting project controls
and quality assessment. We may act as the program director whereby we oversee,
on behalf of the owner of the project, the complete planning, design and
construction phases of the project, or our services may be limited to providing
construction consulting.
7
<PAGE>
During 1999, projects in our Construction Management Division included:
o Providing construction engineering and inspection services to the
Departments of Transportation in Alabama, Colorado, Georgia,
Florida and North Carolina.
o Providing construction administration to the Clark County (Nevada)
Department of Public Works for the Desert Inn Detention Basin
project in Las Vegas, Nevada.
o Providing comprehensive services, including cost estimating,
scheduling and construction claims reviews, to the school boards
of Dade County and Broward County, Florida, two of the largest
school districts in the U.S.
o Providing construction-related services to BellSouth throughout
Florida and Georgia, including quality assurance inspections,
verification of contractor's invoices, damage inspections and
responding to natural disasters.
Other Services
In addition to our four national service disciplines, we have developed
a National Information Solutions Division to address the digital infrastructure
needs of our clients. Our services include: training, database analysis, system
programming, land planning and design and geographic information systems. Recent
projects which have allowed our information solutions to address client needs
include:
o Continued development of the Florida Department of Transportation
Turnpike District's Turnpike Asset Management System, which will
utilize an interactive GIS web-based mapping application.
o Implementing a Geographic Permit Management and Compliance System
for the City of Tucson, Arizona that will track all environmental
permit requirements and water quality monitoring data.
Clients
We provide our services to a broad range of clients, including state,
local and municipal agencies, the Federal government and private sector
businesses. Our state and local government clients include approximately 15
state departments of transportation, water utilities, local power generators,
waste water treatment agencies, environmental protection agencies, schools and
colleges, law enforcement, judiciary, hospitals and healthcare providers. We
provide services to Federal agencies, including the Army Corps of Engineers,
Environmental Protection Agency, Navy, Air Force, Coast Guard, United States
Postal Service, Federal Emergency Management Agency and Department of Energy.
Our private sector clients include retail and commercial, entertainment,
railroad, petro-chemical, food, telecommunications, oil and gas, power,
semi-conductor, transportation, technology, public utility, mining and forest
products entities.
In 1999, we derived approximately 15% of our net earned revenue from
various districts and departments of the Florida Department of Transportation
(the "FDOT") under numerous contracts. While we believe the loss of any
individual contract would not have a material adverse effect on our results of
operations and would not adversely impact our ability to continue work under our
other contracts with the
8
<PAGE>
FDOT, the loss of all the FDOT contracts could have a material adverse effect on
our results of operations.
For each of the three years ended September 30, 1999, 1998 and 1997, our
revenues were attributed to the following categories:
<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
(Dollars in thousands)
Domestic
<S> <C> <C> <C> <C> <C> <C>
Local and state agencies....... $156,921 65% $ 138,496 62% $ 107,039 62%
Federal agencies............... 4,828 2 8,935 4 6,906 4
Private businesses............. 79,668 33 71,482 32 55,246 32
International.................. 0 0 4,468 2 3,453 2
--------- ---- --------- ---- -------- ---
Total.......................... $ 241,417 100% $ 223,381 100% $ 172,644 100%
========= ==== ========= ==== ======== ====
</TABLE>
We treat the various independent agencies of federal, state and local
governments as independent clients, since our experience has been that these
agencies operate autonomously in the procurement of services.
International Business
Revenues from our international operations are insignificant. We
currently have no plans to expand our international operations.
Marketing
Marketing activities are conducted by key operating and executive
personnel, including specifically assigned business development personnel, as
well as through professional personnel who develop and maintain new and existing
client relationships. Our continued ability to compete successfully in the areas
in which we do business is largely dependent upon aggressive marketing, the
development of information regarding client requirements, the submission of
responsive cost-effective proposals and the successful completion of contracts.
Information concerning private and governmental requirements is obtained, during
the course of contract performance, from formal and informal briefings, from
participation in activities of professional organizations, and from literature
published by the government and other organizations.
Contract Pricing and Terms of Engagement
We earn our revenues from cost-plus, time-and-materials and fixed price
contracts.
Cost-Plus Contracts. Under our cost-plus contracts, we charge clients
negotiated rates based on our direct and indirect costs. Labor costs and
subcontractor services are the principal components of our direct costs. Federal
Acquisition Regulations, which are applicable to all Federal government
contracts and which are partially incorporated in many local and state agency
contracts, limit the recovery of certain
9
<PAGE>
specified indirect costs or contracts subject to such regulations. In
negotiating a cost-plus contract, we estimate all recoverable direct and
indirect costs and then add a profit component, which is either a percentage of
total recoverable costs or a fixed negotiated fee, to arrive at a total dollar
estimate for the project. We receive payment based on the total actual number of
labor hours expended. If the actual total number of labor hours is lower than
estimated, the revenues from that project will be lower than estimated. If the
actual labor hours expended exceed the initial negotiated amount, we must obtain
a contract modification to receive payment for such overage. Our profit margin
will increase to the extent we are able to reduce actual costs below the
estimates used to produce the negotiated fixed prices on contracts not covered
by Federal Acquisition Regulations. Conversely, our profit margin will decrease
and we may realize a loss on the project if we do not control costs and exceed
the overall estimates used to produce the negotiated fixed price. During fiscal
1999, approximately 65% of our contracts were cost-plus contracts, primarily
with federal, state and local government agencies.
Cost-plus contracts covered by Federal Acquisition Regulations and
certain state and local agencies require an audit of actual costs and provide
for upward or downward adjustments if actual recoverable costs differ from
billed recoverable costs.
Time-and-Materials Contracts. Under our time-and-materials contracts,
we negotiate hourly billing rates and charge our clients based on actual time
expended. In addition, clients reimburse us for the actual out-of-pocket costs
of materials and other direct incidental expenditures incurred in connection
with performing the contract. Our profit margins on time-and-materials contracts
fluctuate based on actual labor and overhead costs directly charged or allocated
to contracts compared with negotiated billing rates. During fiscal 1999,
approximately 20% of our contracts were time-and-materials contracts, primarily
with private sector clients.
Fixed-Price Contracts. Under our fixed-price contracts, clients pay us
an agreed sum negotiated in advance for the specified scope of work. Under
fixed-price contracts, we make no payment adjustments if we over-estimate or
under-estimate the number of labor hours required to complete the project,
unless there is a change of scope in the work to be performed. Accordingly, our
profit margin will increase to the extent the number of labor hours and other
costs are below the contracted amounts. The profit margin will decrease and we
may realize a loss on the project if the number of labor hours required and
other costs exceed the estimate. During fiscal 1999, approximately 15% of our
contracts were fixed-price contracts, primarily with private sector clients.
Competition
We face active competition in all areas of our business. Some of our
competitors are larger, more diversified firms having substantially greater
financial resources and larger professional and technical staffs than ours.
Competition for major contracts is frequently intense and may entail public
submittals and multiple presentations by numerous firms seeking to be awarded
the contract. The extent of competition which we will encounter in the future
will vary depending on changing customer requirements in terms of types of
projects and technological developments. It has been our experience that the
principal competitive factors for the type of service business in which we
engage are a firm's demonstrated ability to perform certain types of projects,
the client's own previous experience with competing firms, and the firm's size
and financial condition and the cost of the particular proposal.
It is our belief that the diversified scope of the services offered by
us through our subsidiaries is a positive factor in enabling us to compete for
business more effectively. Among other things, the wide
10
<PAGE>
range of expertise which we possess permits us to remain competitive in
obtaining government contracts despite shifts in governmental spending emphasis.
Our multi-disciplinary capabilities enable us to compete more effectively for
clients whose projects require that the expertise of professionals in a number
of different disciplines be brought to bear in the problem solving effort. We
believe that our ability to offer our services over a large part of the United
States is a positive factor in enabling us to attract and retain clients who
have a need for our services in different parts of the country.
The engineering and architectural services industries are highly
competitive. PBSJ's competitors include large national firms as well as many
small local firms. We compete with these firms on the basis of technical
capabilities, qualifications of personnel, reputation, quality and price.
Additionally, a local presence is important in certain areas. No one firm
currently dominates a significant portion of the sectors in which we compete.
Given the expanding demand for some of the services provided by PBSJ, it is
likely that additional competitors will emerge. At the same time, consolidation
continues to occur in the environmental business, particularly in the United
States due to mergers. We believe that we will retain the ability to compete
effectively with other firms that provide similar services by continuing to
offer a broad range of high-quality consulting and environmental,
transportation, and engineering and construction management services through our
network of offices.
Backlog
Our backlog for services as of March 31, 2000 was estimated to be
approximately $251.5 million. We define backlog as contracted task orders less
previously recognized revenue on such task orders. U.S. government agencies, and
many state and local governmental agencies, operate under annual fiscal
appropriations and fund various contracts only on an incremental basis. Our
ability to realize revenues from our backlog depends on the availability of
funding for various federal, state and local government agencies.
A majority of our customer orders or contract awards and additions to
contracts previously awarded are received or occur at random during the year and
may have varying periods of performance. The comparison of backlog amounts on
the same date in successive years is not necessarily indicative of trends in our
business or future revenues.
The major components of our operating costs are payroll and
payroll-related costs. Since our business is dependent upon the reputation and
experience of our personnel and adequate staffing, a reasonable backlog is
important for the scheduling of operations and for the maintenance of a
fully-staffed level of operations.
Regulation
Compliance with federal, state and local regulations which have been
enacted or adopted relating to the protection of the environment is not expected
to have any material effect upon the capital expenditures, earnings and
competitive position of PBSJ.
Personnel
As of May 31, 2000, we employed 2,171 persons. Most of our employees
are professional or technical personnel having specialized training and skills,
including engineers, architects, analysts, scientists, management specialists,
technical writers and skilled technicians. Although many of our
11
<PAGE>
personnel are highly specialized in certain areas and while there is a
nationwide shortage of certain qualified technical personnel, we are not
currently experiencing any material difficulty in obtaining the personnel we
require to perform under our contracts. We believe that our future growth and
success will depend, in large part, upon our continued ability to attract and
retain highly qualified personnel. We believe our employee relations to be good.
Liabilities and Insurance
When we perform services for our clients, we can become liable for
breach of contract, personal injury, property damage and negligence. Such claims
could include improper or negligent performance or design, failure to meet
specifications and breaches of express or implied warranties. Our clients often
require us to contractually assume liabilities for damage or personal injury to
the client, third parties and their property and for fines and penalties.
Because our projects are typically large enough to affect the lives of many
people, the damages available to a client or third parties are potentially large
and could include punitive and consequential damages. For example, our
transportation projects involve services that affect not only our client, but
also many end users of those services.
We seek to protect PBSJ from potential liabilities by obtaining
indemnification, where possible, from our public and private sector clients.
However, even when we obtain such indemnification, it is generally not available
if we fail to satisfy specified standards of care in performing our services or
if the indemnifying person has insufficient assets to cover the liability.
Therefore, we also seek to protect PBSJ by maintaining a full range of insurance
coverage, including worker's compensation, general and professional liability
(including pollution liability) and property coverage. Our professional
liability coverage is on a claims made basis, while the rest of our insurance
coverage is on an occurrence basis. Based upon our previous experience with such
claims and lawsuits, we believe our insurance coverage is adequate for all our
present operational activities, although there can be no assurances that such
coverage will prove to be adequate in all cases. A successful claim or claims in
an amount in excess of our insurance coverage for which there is not coverage
could have a material adverse effect on our results of operation.
12
<PAGE>
ITEM 2. FINANCIAL INFORMATION
Selected Financial Data
The following table sets forth selected historical financial data as of
and for the years ended September 30, 1999, 1998, 1997, 1996 and 1995. The
financial data for each of the fiscal years has been derived from, and is
qualified by reference to, our audited financial statements which
PricewaterhouseCoopers LLP, our independent certified public accountants, have
audited. You should read the information set forth below in conjunction with our
consolidated Financial Statements, including the notes thereto, and Management's
Discussion and Analysis of Financial Condition and Results of Operations
included elsewhere in this registration statement.
<TABLE>
<CAPTION>
Year Ended September 30, March 31
---------------------------------------------------- ----------------
1999 1998 1997 1996 1995 2000 1999
---- ---- ---- ---- ---- ---- ----
(dollars in thousands, except per share data)
Operating Data:
<S> <C> <C> <C> <C> <C> <C> <C>
Engineering fees $ 241,417 $ 223,381 $172,644 $143,731 $130,903 $126,152 $116,957
Net earned revenues 180,637 167,133 131,423 110,080 101,255 96,730 87,213
Net income 5,446 4,474 4,000 3,363 3,343 3,903 2,822
Common stock per share data:
Basic and diluted earnings per share 2.87 2.40 2.16 1.78 1.77 2.05 1.49
Weighted average shares of common
stock outstanding 1,896,533 1,861,022 1,852,051 1,892,996 1,889,799 1,899,759 1,896,533
Balance Sheet Data (at end of
period):
Working capital $ 31,721 $20,545 $19,186 $14,802 $14,280 $27,855
Total assets 103,835 96,425 83,457 63,601 56,817 108,552
Long-term debt (less current
portion) 13,337 8,589 11,064 3,414 3,708 12,907
Common stockholders' equity 45,270 37,613 31,508 27,782 25,328 43,232
Cash dividends per common share - - - - - -
</TABLE>
13
<PAGE>
Management's Discussion and Analysis of Financial
Condition and Results of Operations
The following discussion and analysis explains our general financial
condition, changes in financial condition and results of operations as a whole
including:
o Factors affecting our business
o Our revenues and profits
o Where our revenues and profits came from
o Why those revenues and profits were different from year to year
o Where our cash came from and how it was used
o How all of this affects our overall financial condition
Overview
We are an employee-owned professional services organization that provides
a broad range of planning, design and construction services to a variety of
public and private sector clients. Our four major service sectors are
transportation, environmental, civil engineering and construction management. We
utilize our expertise in engineering, planning, management, science,
architectural and surveying disciplines to solve complex problems in each of
these basic service areas. We provide these services through a staff of over
2,200 professional, technical and support personnel operating from 60 offices
located in Florida and the Eastern, Central and Western regions of the U.S., and
we have active projects in 24 states and 8 nations. We believe our
multi-disciplinary approach to problems facilitates our ability to effectively
meet the needs of our clients.
Since our founding in 1960, we have grown from a civil engineering
practice in South Florida to a firm of national reputation. We have developed
capabilities, customers and markets through internal growth as well as the
acquisition of other firms and the formation of subsidiaries. We engage in
business primarily through our major wholly-owned subsidiaries: Post, Buckley,
Shuh & Jernigan, Inc., a Florida corporation (PBS&J), PBS&J Construction
Services, Inc., Seminole Development Corporation and Post, Buckley
International, Inc.
On August 7, 1997, we acquired all of the outstanding capital stock of
Espey, Huston & Associates, Inc., a Texas corporation ("EH&A"). Our acquisition
of EH&A, a 374-person firm headquartered in Austin, Texas with offices in
Houston, Dallas, Nashville, Cincinnati, Charlotte and Newport News,
significantly advanced our strategic program of geographic and technical
diversification.
On December 1, 1997, we acquired all of the outstanding capital stock of
Kercheval and Associates, Inc., a California corporation ("Kercheval"). Our
acquisition of Kercheval, a 100-person firm headquartered in San Diego,
California with offices in California, Nevada and Alabama strengthened our
transportation and civil engineering capabilities in Southern California and
provided a strong entry into the telecommunications market.
14
<PAGE>
Effective June 30, 1999, our wholly-owned subsidiary, PBS&J became the
successor to its affiliates: Post, Buckley, Schuh & Jernigan, Inc., a Texas
corporation, Post, Buckley, Schuh & Jernigan, Inc., a California corporation,
Post, Buckley, Schuh & Jernigan, Inc., a Nevada corporation, Post, Buckley,
Schuh & Jernigan, Inc. of Arizona, Coastal Environmental Services, Inc., Survey
Resources, Inc., Kercheval and EH&A, through the merger of the affiliates with
and into PBS&J.
The engineering and construction industry has been undergoing substantial
change as public and private clients privatize and outsource many of the
services that were formerly provided internally. Numerous mergers and
acquisitions in the industry have resulted in a group of larger firms that offer
a full complement of single-source services including studies, designs,
construction, operations, and in some instances, facility ownership.
During fiscal 1999, we provided services to approximately 3,000 clients in
the public and private sectors. Approximately 95% of our clients had previously
used our services. In fiscal year 1999, 66% of our net revenues were derived
from the public sector and 34% from the private sector.
Results of Operations
Revenues from each of our four service groups, as percentages of total
revenues, were consistent for fiscal years 1999, 1998 and 1997. Similarly,
direct expenses for each of the four service groups, as percentages of total
direct expenses, remained consistent for fiscal years 1999, 1998 and 1997. For
additional segment financial data, refer to the accompanying notes to the
consolidated financial statements included elsewhere in this registration
statement.
The following table sets forth the percentage of net earned service
revenue represented by the items in our consolidated statements of income:
<TABLE>
<CAPTION>
Year ended September 30, Six Months ended
March 31,
1999 1998 1997 2000 1999
-------------- ------------- ------------- -------------- -------------
<S> <C> <C> <C> <C> <C>
Engineering fees 133.6% 133.6% 131.4% 130.4% 134.1%
Direct expenses 33.6 33.6 31.4 30.4 34.1
-------------- ------------- ------------- -------------- -------------
Net earned revenue 100.0 100.0 100.0 100.0 100.0
Costs and Expenses:
Direct salaries 36.7 36.8 38.1 36.9 37.2
Selling, general and
administrative expenses 58.4 58.5 56.8 54.7 57.1
-------------- ------------- ------------- -------------- -------------
Operating income 4.9 4.7 5.1 8.4 5.7
Interest expense (.6) (.7) (.5) (.8) (.7)
Other, net .6 .5 .5 (.9) .3
-------------- ------------- ------------- -------------- -------------
Income before income taxes 4.9 4.5 5.1 6.7 5.3
Income tax expense 1.9 1.8 2.1 2.7 2.1
-------------- ------------- ------------- -------------- -------------
Net income 3.0% 2.7% 3.0% 4.0% 3.2%
============== ============= ============= ============== =============
</TABLE>
15
<PAGE>
Fiscal Years Ended September 30, 1999, 1998 and 1997
A summary of operating results is as follows for each of the years
ended September 30 (dollars in thousands):
<TABLE>
<CAPTION>
1999 1998 1997
------------------ ------------------- -------------------
<S> <C> <C> <C>
Engineering fees.................................... $ 241,417 $ 223,381 $ 172,644
Direct Expenses..................................... 60,780 56,248 41,221
------------------ ------------------- -------------------
Net Earned Revenue.................................. 180,637 167,133 131,423
Costs and Expenses.................................. 171,637 159,349 124,761
------------------ ------------------- -------------------
Operating Income.................................... 9,000 7,784 6,662
Other Income (expenses)............................. (54) (360) 121
Income tax expense.................................. 3,500 2,950 2,783
------------------ ------------------- -------------------
Net Income.......................................... $ 5,446 $ 4,474 $ 4,000
================== =================== ===================
</TABLE>
Engineering fees:
Engineering fees for fiscal 1999 were $241.4 million as compared to
$223.4 million for fiscal 1998. The 8% increase was primarily due to additional
contracts and extensions on current projects. Engineering fees for fiscal 1997
were $172.6 million. The increase of $50.8 million, or 29%, from fiscal 1997 to
fiscal 1998 was primarily due to an increase of $25.6 million in the engineering
fees related to EH&A operations.
Direct expenses:
Direct expenses consist of out-of-pocket disbursements related to the
delivery of services, such as blueprints, reproductions, CADD/computer charges,
travel and subconsultant fees. Direct expenses for fiscal 1999 were $60.8
million as compared to $56.2 million for fiscal 1998. The 8% increase was
directly related to the increase in engineering fees for the same period. The
percentage of direct expenses to net earned revenues remained consistent at
33.6% for fiscal 1999 as compared to 33.6% for fiscal 1998. Direct expenses for
fiscal 1997 were $41.2 million. The increase of $15.0 million, or 36%, was
attributable to the increase in revenues generated by the EH&A operations,
internal revenue growth, and an increase in subconsultant fees. Direct expenses
as a percent of net earned revenue increased from 31.4% in fiscal 1997 to 33.6%
in fiscal 1998 primarily due to the increased use of subconsultants due to
turnover of EH&A technical personnel after the acquisition.
Net earned revenue:
Net earned revenue was $180.6 million for fiscal 1999 as compared to
$167.1 million for fiscal 1998. This 8% increase is directly related to the
increase in engineering fees and direct expenses for the same period. Net earned
revenue for fiscal 1997 was $131.4 million for fiscal 1997. This increase of
$35.7 million, or 27%, was a result of an increase in engineering fees offset by
a higher increase in direct expenses.
16
<PAGE>
Costs and expenses:
Costs and expenses represent (i) direct salaries (i.e., salaries of
personnel used in projects and in the generation of net earned revenue) and (ii)
general and administrative expenses associated with the generation of net earned
revenues. General and administrative expenses consist of labor costs of
operational personnel not utilized on projects (i.e., indirect labor), labor
costs of administrative and support personnel, office rent, depreciation,
insurance, and other operating expenses.
Direct salaries were $66.3 million in fiscal 1999 as compared to $61.5
million in fiscal 1998. This 8% increase is directly related to the 8% increase
in engineering fees, as more technical personnel were working on an increased
number of projects. The percentage of direct salaries to net earned revenue was
36.7% for fiscal 1999 as compared to 36.8% in fiscal 1998. Direct salaries were
$50.1 million in fiscal 1997. This increase of $11.4 million, or 23%, was
directly attributable to the increase in engineering fees generated by the EH&A
operations. The percentage of direct salaries to net earned revenue was 36.8%
for fiscal 1998 as compared to 38.1% for fiscal 1997. The decrease of direct
salaries as a percentage of net earned revenue was attributable to turnover of
EH&A technical personnel during the year following the acquisition.
General and administrative expenses in fiscal 1999 were $105.3 million
as compared to $97.8 million in fiscal 1998. This 8% increase is primarily due
to the implementation and installation fees for our information systems upgrade,
an increase in depreciation expense as we purchased a significant amount of
computer hardware, an increase in insurance expenses due to increased premiums
paid for liability and employee medical insurance and increases in other general
and administrative expenses related to the increase in engineering fees for the
same period. The percentage of general and administrative expenses to net earned
revenue was 58.4% in fiscal 1999 as compared to 58.5% in fiscal 1998. These
percentages are consistent as a percentage of net earned revenue.
General and administrative expenses were $74.6 million in fiscal 1997.
The increase of $23.2 million, or 31%, was related primarily to increased costs
associated with the EH&A acquisition. The percentage of general and
administrative expenses to net earned revenue was 58.5% in fiscal 1998 as
compared to 56.8% in fiscal 1997. The increase in general and administrative
expenses was related primarily to additional expenditures related to our efforts
in monitoring and developing EH&A and Kercheval. As a result of such
acquisition, there were increases in rent, telephone, leased computer, software
license, consultant and travel expenses, payroll and related benefits, travel,
and amortization of goodwill. In addition, a portion of the increase in general
and administrative expenses were related to internal growth and the hiring of
more personnel, both technical and administrative, to handle our internal
growth.
Operating Income:
Operating income was $9.0 million for fiscal 1999 as compared to $7.8
million for fiscal 1998. The increase of $1.2 million, or 15%, was a result of
increased engineering fees as compared to the prior year. The percentage of
operating income to net earned revenue was 4.9% in fiscal 1999 as compared to
4.7% in fiscal 1998.
Operating income was $6.7 million for fiscal 1997. The increase of $1.1
million, or 16%, was primarily due to the EH&A acquisition. The percentage of
operating income to net earned revenue was
17
<PAGE>
4.7% in fiscal 1998 as compared to 5.1% in fiscal 1997 due primarily to
increased indirect labor costs for hiring additional administrative personnel.
Other income (expenses):
Other income and expenses primarily consists of interest and dividend
income and interest expense. Other income (expenses) was ($54,000), ($360,000)
and $121,000 for fiscal 1999, fiscal 1998 and fiscal 1997, respectively. The
decrease in other expenses, net during fiscal 1999 was a result of (i) realized
gains of $620,000 on the sale of investments and a decrease of 5% in interest
expense due to lower average borrowings outstanding during fiscal 1999 as
compared to the prior year, offset by (ii) decreases in interest and dividend
income related to investments. The decrease in other income and expenses from
fiscal 1997 to fiscal 1998 was primarily due to increased interest expense as
there were increased borrowings relating to the Kercheval and EH&A acquisitions.
Net Income:
Net income was $5.4 million, $4.5 million and $4.0 million for fiscal
1999, 1998 and 1997, respectively. The percentage of net income to net earned
revenue was 3% in fiscal 1999 as compared to 2.7% in fiscal 1998 and 3.0% in
fiscal 1997. The 22% increase in net income in fiscal 1999 was a result of an 8%
increase in engineering fees offset by an 8% increase in direct and general and
administrative expenses, in addition to a 5% decrease in interest expense and a
28% increase in other income. Net income increased 12% during fiscal 1998 due to
increased engineering fees and related increased costs, offset by an increase in
interest expense related to the financing of the Kercheval and EH&A
acquisitions.
Six Months Ended March 31, 2000 Compared to Six Months Ended March 31, 1999
A summary of our operating results is as follows for each of the six
months ended March 31 (dollars in thousands):
<TABLE>
<CAPTION>
2000 1999
------------------ -------------------
<S> <C> <C>
Engineering fees.................................... $ 126,152 $ 116,957
Direct Expenses..................................... 29,422 29,744
------------------ -------------------
Net Earned Revenue.................................. 96,730 87,213
Costs and Expenses.................................. 88,627 82,239
------------------ -------------------
Operating Income.................................... 8,103 4,974
Other Expenses...................................... (1,595) (355)
Income tax expense.................................. 2,605 1,797
------------------ -------------------
Net Income.......................................... $ 3,903 $ 2,822
================== ===================
</TABLE>
18
<PAGE>
Engineering fees:
Engineering fees were $126.2 million for the six months ended March 31,
2000 as compared to $117.0 million for the six months ended March 31, 1999. This
7.9% increase was due to internal growth.
Direct expenses:
Direct expenses were $29.4 million for the six months ended March 31,
2000 as compared to $29.7 million for the six months ended March 31, 1999. This
1% decrease was due to projects having fewer reimbursable expenses.
Net earned revenue:
Net earned revenue was $96.7 for the six months ended March 31, 2000 as
compared to $87.2 million for the six months ended March 31, 1999. This 10.9%
increase is related to internal growth and good economic conditions.
Costs and expenses:
Costs and expenses represent direct salaries and general and
administrative expenses. Direct salaries were $35.7 million for the six months
ended March 31, 2000 as compared to $32.4 million for the six months ended March
31, 1999. This 10.1% increase is directly related to the increase in engineering
fees for the same period.
General and administrative expenses were $53.0 million for the six
months ended March 31, 2000 as compared to $49.8 million for the six months
ended March 31, 1999. This 6.2% increase is directly related to the increase in
engineering fees for the same period.
Operating Income:
Operating income was $8.1 million for the six months ended March 31,
2000 as compared to $5.0 million for the six months ended March 31, 1999. This
63% increase is due to internal growth and increased efficiencies in production.
Other expenses:
Other expenses were $1.6 million for the six months ended March 31,
2000 as compared to approximately $355,000 for the six months ended March 31,
1999. This 349% increase is directly related to an increase in interest rates
and a decrease in dividend income due to the sale of marketable securities.
Net Income:
Net income was $3.9 million for the six months ended March 31, 2000 as
compared to $2.8 million for the six months ended March 31, 1999. The 38%
increase was a result of internal growth, good economic conditions and improved
production efficiencies.
19
<PAGE>
Liquidity and Capital Resources
Cash From Operating Activities
In fiscal 1999 net cash used in operating activities totaled $522,000
as compared to net cash provided by operating activities of $6.4 million for
fiscal 1998. This significant change is primarily a result of (i) an increase in
accounts and unbilled receivables which increased as revenues increased and (ii)
an increase in accounts payable primarily attributable to the increase in direct
expenses where the timing of payment is tied to collection of related
receivables.
Net cash provided by operating activities for fiscal 1998 totaled $6.4
million as compared to $8.3 million for fiscal 1997. The most significant factor
affecting this decrease is the growth in accounts and unbilled receivables
primarily due to increased revenues arising from the acquisition of EH&A in
fiscal 1997. The decrease was offset by (i) decreases in accounts payable and
(ii) increases in the provision for deferred taxes.
For the six months ended March 31, 2000 and 1999, net cash provided by
operating activities totaled $13.6 million in 2000 as compared to $4.9 million
in 1999. The significant change is primarily a result of an increase in accounts
payable which is attributable to the increase in direct expenses where the
timing of payment is tied to collection of related receivables.
Cash Flow from Investing Activities
Net cash used in investing activities was $7.0 million in fiscal 1999,
comprised principally of purchases of property and equipment. By comparison net
cash used in fiscal 1998 was $8.0 million. The difference was principally due to
the acquisitions made during 1998.
Net cash used in investing activities for the six months ended March
31, 2000 and 1999 was $3.2 million in 2000 as compared to $4.2 million in 1999.
The decrease in the use of cash for investing activities is due to the sale of a
substantial portion of our mutual fund portfolio. The offsetting increase is
attributable to increased computer equipment purchases and leasehold
improvements to various office locations.
Cash Flow from Financing Activities
Net cash used in financing activities for fiscal 1999 was $5.7 million
as compared to $1.7 million in fiscal 1998. The increase in the cash used by
financing activities is attributable to a net increase in bank borrowings of
$2.6 million, combined with a net increase of $1.3 million in stock financing.
Net cash provided by financing activities for fiscal 1998 was $1.7 million as
compared to $8.9 million in fiscal 1997. The decrease is due to the fact that we
obtained $10 million in notes payable related to the acquisition of EH&A in
fiscal 1997. The decrease is offset by additional borrowings used in the
acquisition of Kercheval in fiscal 1998 and repayments of long-term debt.
Net cash used in financing activities for the six months ended March
31, 2000 and 1999 was $10.4 million in 2000 as compared to $1.1 million in 1999.
The increase in the cash used in financing activities is primarily attributable
to a smaller amount of proceeds from the issuance of our stock and repayment of
borrowings. Stock purchases by employees decreased significantly for the six
months ended March 31,
20
<PAGE>
2000 due to two items: (i) a reduced number of shares offered and (ii) employees
not being able to purchase stock through our Profit Sharing Plan as was allowed
in the previous year.
Capital Resources
On June 30, 1999, we entered into a new revolving line of credit
agreement. The new revolving line of credit increased the availability of funds
from $12 million to $37 million. The expiration of the new revolving line of
credit is June 30, 2002. The interest rate on the revolving line of credit
ranges from LIBOR plus 50 basis points to prime minus 125 basis points if our
funded debt average ratio is less than 2.5 (5.87%, 6.125% and 6.633% at
September 30, 1999 and 1998 and March 31, 2000, respectively). The range
increases to LIBOR plus 75 basis points to prime minus 100 basis points if our
funded debt coverage ratio is between 2.5 and 3.0. As of March 31, 2000, we had
$7.5 million outstanding under the revolving line of credit which accrued
interest at an effective rate of 6.633% for the six months ended March 31, 2000.
By comparison, on September 30, 1999, we had $7.7 million outstanding under the
revolving line of credit which accrued interest at an effective rate of 6.125%
for the year ended September 30, 1999.
On June 30, 1999, we also consolidated our term loans. The new term
loan matures on July 31, 2002, and principal is amortized in annual installments
of $2.0 million. Interest on the term loan is either LIBOR plus 75 basis points
or prime minus 100 basis points. As of March 31, 2000, we had $6.0 million
outstanding under the term loan, unchanged from September 30, 1999. For the six
months ended March 31, 2000, the effective interest rate on the term loan was
6.883% as compared to 6.1125% for the year ended September 30, 1999. The
revolving line of credit is collateralized by substantially all of our assets.
Pursuant to the terms of our credit agreement, we cannot declare or pay
dividends in excess of 50% of our net income.
As of March 31, 2000, we also had $1.9 million outstanding under a
mortgage which had a balloon payment of $1.8 million due on May 31, 2000. The
balloon payment was paid in full. The mortgage had a fixed interest rate of
6.87% per annum.
Our capital expenditures are generally for purchases of property and
equipment. We spent $7.0 million, $6.7 million and $3.8 million on such
expenditures in fiscal years 1999, 1998 and 1997, respectively. The increase in
capital expenditures in fiscal years 1999 and 1998 was a result of increased
leasehold improvements and information technology purchases, such as equipment
and software.
We believe that our existing financial resources, together with our
cash flow from operations and availability under our revolving line of credit,
will provide sufficient capital to fund our operations for fiscal 2000.
Inflation
The rate of inflation has not had a material impact on our operations.
Moreover, if inflation remains at its recent levels, it is not expected to have
a material impact on our operations for the foreseeable future.
21
<PAGE>
Significant Accounting Pronouncements
In June 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for
Derivative Instruments and Hedging Activities" ("SFAS No. 133"). SFAS No. 133
established methods of accounting for derivative financial instruments and
hedging activities related to those instruments as well as other hedging
activities. We believe that the effect of SFAS No. 133 is immaterial on our
operations and financial position.
In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements"
("SAB101"). SAB 101 summarizes certain areas of the Staff's views in applying
generally accepted accounting principles to revenue recognition in financial
statements. We believe that our current revenue recognition policies comply with
SAB 101.
Cautionary Information regarding Forward-Looking Statements
Certain statements and information contained in this registration
statement constitute "forward-looking statements" within the meaning of Section
21E of the Exchange Act. Discussions containing forward-looking statements may
be found in the material set forth in this section and "Business" section as
well as in this registration statement generally These statements contain or
express our intentions, beliefs, expectations, strategies or predictions for the
future. In addition, from time to time we or our representatives may make
forward-looking statements, orally or in writing. Furthermore, such forwarding-
looking statements may be included in our filings with the Securities and
Exchange Commission or press releases or oral statements made by or with the
approval of one of our executive officers. Forward looking statements in this
registration statement, include, among others, statements regarding:
o the continued demand for our services, including the demand for
multiservice firms such as ours and our ability to capture that
demand;
o our ability to utilize our multi-disciplinary approach to
effectively meet the needs of our clients and compete for
business;
o our plan to evaluate possible strategic acquisitions of
engineering or related services business in connection with our
plan to diversify our sources of business and the geographic areas
in which we operate;
o the effect of the loss of any contract or customer;
o our ability to finance our operations from cash flow and
availability of funds under our revolving line of credit;
o the effect of market risks on our financial condition; and
o the possible impact of any current or future claims against us
based on theories of negligence and other theories of liability.
These forward-looking statements involve known and unknown issues,
uncertainties and other factors which may cause our actual results, performance
or achievements to be materially different from any future results, performance,
or achievements expressed or implied by these forward-looking statements. These
factors include, among other things:
o the possibility that the demand for our services may decline due
to general and industry specific economic conditions and the
effects of competition;
o our ability to attract and retain key professional employees;
22
<PAGE>
o our ability to perform within budget or contractual limitations;
o our ability to convert backlog into revenue; and
o the availability of insurance coverage for any current or future
claims made against us.
Quantitative and Qualitative Disclosures
about Market Risk
We believe that our exposure to market risks is minimal. We do not hold
market-risk sensitive instruments for trading purposes. We do not employ any
derivative financial instruments, other financial instruments or derivative
commodity instruments to hedge any market risk, and we do not currently plan to
employ them in the near future. The interest rate on our revolving line of
credit and term loan ranges from LIBOR plus 50 basis points to prime minus 125
basis points if our funded debt coverage ratio is less than 2.5 (5.87%, 6.125%
and 6.633% at September 30, 1999 and 1998 and March 31, 2000, respectively). The
range increases to LIBOR plus 75 basis points to prime minus 100 basis points if
our funded debt coverage ratio is between 2.5 to 3.0.
Because the interest rates under our revolving line of credit and term
loan are variable, to the extent that we have borrowings outstanding, there may
be market risk relating to the amount of such borrowings, however, our exposure
is minimal due to the short-term nature of these borrowings.
ITEM 3. PROPERTIES
We own our executive offices located at 2001 N.W. 107th Avenue, Miami,
Florida 33172 which consists of approximately 100,000 square feet of office
space. We own three additional office buildings in Ft. Myers, Florida,
Homestead, Florida and Hollywood, Florida through our wholly-owned subsidiary,
Seminole Development Corporation. All of these properties are currently being
leased to third parties. We are in the process of constructing a 90,000 square
foot facility in Maitland, Florida which will replace office space we are
currently leasing in Winter Park, Florida.
We lease an additional 60 offices in 16 states in the U.S. and Puerto
Rico and lease offices in Argentina and Venezuela. Aggregate lease payments
during fiscal year 1999 were approximately $9.3 million.
We believe that substantially all of our property and equipment are, in
general, well maintained and in good operating condition. They are considered
adequate for present needs, and as supplemented by planned construction, are
expected to remain adequate for the near future.
We are of the opinion that we, or our subsidiaries, have clear title to
the properties owned and used in our business, subject to liens for current
taxes and easements, restrictions and other liens which do not materially
detract from the value of the properties or our interest in the properties or
the use of those properties in our business.
23
<PAGE>
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The following table provides information with respect to the beneficial
ownership of our common stock as of June 15, 2000 by:
o each of our shareholders who is the beneficial owner of more than
5% of our outstanding common stock;
o each of our directors;
o each Named Officer; and
o all of our directors and executive officers as a group.
<TABLE>
<CAPTION>
Shares
Beneficially Owned
------------------
Name and Address of Beneficial Owner(1)(2) Number Percent
------------------------------------------ ------ -------
<S> <C> <C>
PBSJ Employee Profit Sharing and Stock Ownership Plan and Trust.......... 978,300(3) 51.2%
Richard A. Wickett, Judith A. Squillante, John B. Zumwalt, III, Bernard F.
Silver, Thomas D. Pellarin, Becky S. Schaffer and Robert J. Paulsen, joint
trustees of the PBSJ Employee Profit Sharing and Stock Ownership Plan and
Trust.................................................................... 978,300(4) 51.2%
William W. Randolph...................................................... 188,814(5) 9.9%
H. Michael Dye........................................................... 71,021(6) 3.7%
Richard A. Wickett....................................................... 58,552(7) 3.1%
John B. Zumwalt, III..................................................... 45,000(8) 2.4%
Robert J. Paulsen........................................................ 25,716(9) 1.4%
Richard M. Grubel........................................................ 25,105(10) 1.3%
David A. Twiddy.......................................................... 20,230(11) 1.1%
All executive officers and directors as a group (15 persons).......... 597,318(12) 31.3%
--------------------------
</TABLE>
(1) The address of each person or entity named in this table is c/o The PBSJ
Corporation, 2001 N.W. 107th Ave., Miami, Florida 33172.
(2) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission. In general, a person who has voting
power and/or investment power with respect to securities is treated as a
beneficial owner of those securities. Shares of common stock subject to
options and/or warrants currently exercisable or exercisable within 60 days
of the date of this registration statement count as outstanding for
computing the percentage beneficially owned by the person holding these
options. Except as otherwise indicted by footnote, we believe that the
persons named in this table have sole voting and investment power with
respect to the shares of common stock shown.
24
<PAGE>
(3) The Trust has sole voting power with respect to these shares. The trustees
of the Trust are: Richard A. Wickett (Managing Trustee), Judith A.
Squillante, John B. Zumwalt, III, Bernard F. Silver, Thomas D. Pellarin,
Becky S. Schaffer and Robert J. Paulsen.
(4) Each of the Trustees has shared voting power, with each of the other
trustees, with respect to the shares owned by the Trust.
(5) Includes (i) 86,196 shares held of record by the Trust over which Mr.
Randolph has no voting power and (ii) 31,554 shares held in three trusts
for the benefit of Mr. Randolph's children. Mr. Randolph serves as trustee
of, and has sole voting power for the shares in, these trusts. Mr. Randolph
disclaims any pecuniary interest in shares held for the benefit of his
children.
(6) Includes 25,389 shares held of record by the Trust over which Mr. Dye has
no voting power.
(7) Includes 29,401 shares held of record by the Trust over which Mr. Wickett
has no voting power.
(8) Includes 17,331 shares held of record by the Trust over which Mr. Zumwalt
has no voting power and 4,800 shares of restricted stock, all of which
shall vest on April 16, 2007.
(9) Includes 4,176 shares held of record by the Trust over which Mr. Paulsen
has no voting power.
(10) Includes 1,520 shares held of record by the Trust over which Mr. Grubel has
no voting power.
(11) Includes 8,950 shares held of record by the Trust over which Mr. Twiddy has
no voting power.
(12) Includes 215,104 shares held of record by the Trust over which the
executive officers and directors as a group have no voting power.
25
<PAGE>
ITEM 5. DIRECTORS AND EXECUTIVE OFFICERS
All of our directors are elected for one year terms at each annual
meeting of the shareholders. As of June 15, 2000 the following persons served as
directors of The PBSJ Corporation. In addition each of these persons served as a
director and executive officer of PBS&J, our wholly-owned subsidiary.
<TABLE>
<CAPTION>
Directors
Name Age Position
---- --- --------
<S> <C> <C>
H. Michael Dye 59 Chairman of the Board of Directors and Chief Executive Officer
John B. Zumwalt, III 49 President, Chief Operating Officer and Director
Richard A. Wickett 58 Vice Chairman of the Board of Directors, Vice President, Chief
Financial Officer and Treasurer
William W. Randolph 62 Vice President and Director
David A. Twiddy 67 Executive Vice President and Director
Robert J. Paulsen 47 Senior Vice President, Secretary and Director
</TABLE>
As of June 15, 2000 the following persons served as executive officers
of either The PBSJ Corporation or as executive officers of PBS&J, our
wholly-owned subsidiary.
<TABLE>
<CAPTION>
Officers
Name Age Position
---- --- --------
<S> <C> <C>
Richard M. Grubel 53 Senior Vice President
Craig T. Curry 55 Executive Vice President
Charles I. Homan 56 Executive Vice President
Todd J. Kenner 38 Executive Vice President
James M. Killough, Jr. 61 Executive Vice President
Everett M. Owen 54 Executive Vice President
Thomas D. Pellarin 47 Executive Vice President
John S. Shearer 48 Executive Vice President
Judith A. Squillante 58 Senior Vice President
</TABLE>
H. Michael Dye has been Chairman of the Board of Directors and our
Chief Executive Officer since January 2000 and has served as a Director since
December 1980. From 1991 to January 2000, Mr. Dye served as our President. Mr.
Dye has been employed with us for over 23 years. Mr. Dye also serves as a
director of our wholly-owned subsidiary, PBS&J. He holds a bachelors degree in
Economics from the University of Charleston and a Masters of Public
Administration from Florida State University.
John B. Zumwalt, III has been our President since January 2000, and our
Chief Operating Officer since January 1998 and has served as a Director since
January 1990. From September 1992 to January 1998, Mr. Zumwalt served as a
Senior Vice President and Director of Civil Engineering.
26
<PAGE>
Mr. Zumwalt has been employed with us for over 27 years. Mr. Zumwalt also serves
as a director of our wholly-owned subsidiary, PBS&J. He holds a bachelors degree
in Civil and Environmental Engineering from the University of Rhode Island.
Richard A. Wickett has been Vice Chairman of the Board of Directors
since January 2000, Chief Financial Officer since January 1993 and
Treasurer/Senior Vice President since February 1989 and has served as a Director
since January 1992. Mr. Wickett has been employed with us for over 27 years. Mr.
Wickett also serves as a director of our wholly-owned subsidiary, PBS&J. He
holds a bachelors degree from the University of Miami and holds a Certified
Public Accountant certification in the State of Florida.
William W. Randolph has been a Vice President since January 2000 and
has served as a Director since November 1972. From 1983 to January 2000, Mr.
Randolph served as Chairman of the Board of Directors and our Chief Executive
Officer, and as our President from January 1992 to December 1996. Mr. Randolph
has been employed with us for over 32 years. He holds a bachelors degree in
Civil Engineering from the Georgia Institute of Technology.
David A. Twiddy has been an Executive Vice President since February
1989 and has served as a Director since January 1988. Prior to January 1996, he
was also our Director of Transportation. Mr. Twiddy has been employed with us
for over 14 years. He holds a bachelors degree in Civil Engineering from the
University of Florida.
Robert J. Paulsen has been a Senior Vice President since January 2000
and has served as a Director since January 1996. He became our Director of
Transportation in January 1996 and served as an Executive Vice President since
January 1996. Mr. Paulsen has been employed with us for over 14 years. Mr.
Paulsen also serves as a director of our wholly-owned subsidiary, PBS&J. He
holds a bachelors degree in Civil Engineering from Iowa State University.
Richard M. Grubel has been a Senior Vice President responsible for our
real estate and lease agreements since January 1998. From January 1991 to
January 1998, Mr. Grubel served as Assistant Secretary. Mr. Grubel has been
employed with us for over 15 years. He holds a bachelors degree in Business
Administration and a Masters of Business Administration from Rutgers State
University.
Craig T. Curry has been an Executive Vice President and Regional
Manager in our South Central Region since June 1999. Mr. Curry served as
President and Chief Operating Officer of PBS&J Inc. of Texas from June 1995 to
June 1999, when we merged this subsidiary into PBS&J. Mr. Curry also serves as
an executive officer of our wholly-owned subsidiary, PBS&J. He holds a bachelors
degree in Landscape Design from Oklahoma State University.
Charles I. Homan has been an Executive Vice President and Regional
Director of our Northeastern Region since January 2000. From 1994 to 1999, Mr.
Homan served as Chief Executive Officer of Michael Baker Corporation, a
publicly-held engineering company. Mr. Homan also serves as a director and
executive officer of our wholly-owned subsidiary, PBS&J and as a Director of Sky
Financial Group, a publicly-held financial services holding company. He holds a
bachelors degree in Civil Engineering from West Virginia University.
Todd J. Kenner has been an Executive Vice President and Regional
Director of our West Region since January 1999. From March 1995 to January 1999,
Mr. Kenner served as an Executive Vice President. Mr. Kenner also serves as a
director and executive officer of our wholly-owned subsidiary,
27
<PAGE>
PBS&J. He holds a bachelors degree in Civil Engineering from South Dakota School
of Mines and Technology.
James M. Killough, Jr. has been President and Chief Operating Officer
of our Construction Services Division since 1991. Mr. Killough also serves as a
director and executive officer of our wholly-owned subsidiary, PBS&J. He holds a
bachelors degree in Civil Engineering from The Citadel.
Everett M. Owen has been an Executive Vice President and Regional
Manager in our South Central Region since June 1999. From July 1997 to June
1999, Mr. Owen served as Executive Vice President and Senior Deputy Service
Director. Mr. Owen served as an Executive Vice President and Chief Engineer of
EH&A from 1979 until 1997 when we acquired EH&A. Mr. Owen also serves as a
director and executive officer of our wholly-owned subsidiary, PBS&J. He holds a
bachelors degree in Civil Engineering from Oklahoma State University.
Thomas D. Pellarin has been an Executive Vice President and Senior
Director of Civil Engineering since January 2000. From January 1998 to January
2000, Mr. Pellarin served as Executive Vice President and Director of Civil
Engineering. Mr. Pellarin has been employed with us for over 6 years. Mr.
Pellarin also serves as a director and executive officer of our wholly-owned
subsidiary, PBS&J. He holds a bachelors degree in Civil Engineering from the
University of Dayton and a bachelors degree in Political Science from Thiel
College.
John S. Shearer has been an Executive Vice President and Senior
Director of our Environmental Division since January 1991. Mr. Shearer also
serves as a director and executive officer of our wholly-owned subsidiary,
PBS&J. He holds a bachelors degree of Civil Engineering from the University of
South Florida.
Judith A. Squillante has been a Senior Vice President and Director of
Human Resources since 1995. Ms. Squillante also serves as a director of our
wholly-owned subsidiary, PBS&J. She holds a bachelors degree in Business
Administration from Bryant College and a Management Certification from the
University of Rhode Island.
28
<PAGE>
ITEM 6. EXECUTIVE COMPENSATION
Executive Compensation
The following table sets forth compensation information with respect to
our Chief Executive Officer and our four most highly compensated executive
officers whose total annual salary and bonus for the last completed fiscal year
exceeded $100,000. In this document, we refer to these executive officers as the
"Named Officers."
<TABLE>
<CAPTION>
Summary Compensation Table (1)
Long-Term
Annual Compensation Compensation
------------------------------ -----------------
Name and Principal Other Annual Restricted Stock All Other
Position Year Salary($) Bonus($) Compensation($) Award(s)($)(2) Compensation ($)
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
H. Michael Dye, 1999 $208,308 $78,000 * -- --
Chairman and Chief 1998 198,796 83,500 * -- --
Executive Officer 1997 200,260 70,000 * -- --
William W. Randolph, 1999 $226,308 $84,100 * -- $113,332 (3)
Vice President 1998 216,796 60,000 * -- --
1997 218,260 70,000 * -- --
John B. Zumwalt, 1999 $164,000 $57,000 * $20,460 --
President and Chief 1998 149,046 46,000 * 16,920 --
Operating Officer 1997 152,260 35,500 * 11,880 --
Richard A. Wickett, 1999 $148,808 $51,200 * -- --
Vice Chairman, 1998 140,546 48,750 * -- --
V.P. and Chief 1997 142,260 36,000 * -- --
Financial Officer
Robert J. Paulsen, 1999 $151,500 $51,900 * -- --
Sr. Vice President 1998 140,796 47,700 * -- --
1997 133,510 36,000 * -- --
---------------------
</TABLE>
* Value of perquisites and other personal benefits paid does not exceed
the lesser of $50,000 or 10% of the total annual salary and bonus
reported for the executive officer and therefore is not required to be
disclosed pursuant to Securities and Exchange Commission rules.
(1) Certain columns have been omitted because they do not apply.
(2) The aggregate number of shares of restricted stock held by the Named
Officers is 6,816 valued at $266,505.60 based on the value of our stock
as of September 30, 1999 as determined by an independent appraisal.
Although we do not intend to declare or pay any dividends in the
foreseeable future and are limited in this respect by the terms of our
credit agreement, if we did declare or pay any dividends, any Named
Officer holding restricted stock would be entitled to receive dividends
on their restricted stock.
(3) Represents the actuarial present value of imputed interest for advance
contract premiums paid on split dollar life insurance policies for Mr.
Randolph and his wife.
29
<PAGE>
Employment Contracts, Termination of Employment and Change-in-Control
Arrangements
We currently have in effect employment/supplemental
retirement/death benefits agreements with Messrs. Dye, Randolph, Zumwalt,
Wickett and Paulsen and restricted stock agreements with Messrs. Zumwalt and
Paulsen. The following is a brief description of the agreements:
Employment/Supplemental Retirement/Death Benefits Agreements
Pursuant to the agreement with Mr. Wickett dated December 17, 1987, as
amended, we agreed to pay Mr. Wickett $75,000 per year, as adjusted. We also
agreed to reimburse Mr. Wickett for certain business expenses for 15 years
following his retirement. Additionally, during the first five years of his
retirement, we agreed to pay him a maximum of $25,000 per year for providing
consulting services to us. We also agreed to provide him and his wife with major
medical and hospitalization insurance benefits equivalent to those offered to
our executives for so long as either of them are alive. In the event of a change
of control (as defined in the agreement), if Mr. Wickett is terminated after the
change of control without cause (as defined in the agreement), or Mr. Wickett
resigns for good reason (as defined in the agreement) at any time after six
months from the change of control, the terms and conditions of the agreement
remain in full force and effect.
Pursuant to the agreement with Mr. Zumwalt dated December 17, 1987, as
amended, we agreed to pay Mr. Zumwalt $50,000 per year, as adjusted. We also
agreed to reimburse Mr. Zumwalt for certain business expenses for 15 years
following his retirement. Additionally, during the first five years of his
retirement, we agreed to pay Mr. Zumwalt $25,000 per year for providing
consulting services to us. We also agreed to provide him and his wife with major
medical and hospitalization insurance benefits equivalent to those offered to
our executives for so long as either of them are alive. In the event if a change
of control (as defined in the agreement), if Mr. Zumwalt is terminated after a
change of control without cause (as defined in the agreement), or Mr. Zumwalt
resigns for good reason (as defined in the agreement) at any time after six
months from the change of control, the terms and conditions of the agreement
remain in full force and effect.
Pursuant to the agreement with Mr. Paulsen dated December 17, 1987, if
Mr. Paulsen remains in our employment until he is 56, we agreed to pay him
$25,000 per year, increased by $2,778 per year until the earlier of such time as
Mr. Paulsen terminates his employment with us or he is 65, at which time we will
pay him $50,000 per year whether or not he continues to be actively employed
with us. If Mr. Paulsen does not remain in our employment until he is 56, he
will receive $12,500 per year for a period of ten years beginning the year in
which he attains age 56. If Mr. Paulsen does not attain age 56, his designated
beneficiary shall receive an annual death benefit of $10,000 per year for a
period of ten years.
We entered into an agreement with Mr. Randolph, dated February 15,
1999, in which we agreed to employ Mr. Randolph until March 1, 2005. We agreed
to pay Mr. Randolph (i) $226,000 for his full-time employment for the period
from February 15, 1999 to December 31, 1999, (ii) 60% of his 1999 compensation
as salary and 60% of the average of our three highest executive officer's 2000
bonuses as bonus, for his part-time employment for the calendar year 2000 and
(iii) $1,000 per day for each day in excess of 45 days worked by Mr. Randolph in
any calendar year between January 1, 2001 and March 1, 2005. In addition, for a
period of 11 years after March 1, 2005, Mr. Randolph will receive supplemental
retirement income equal to $1,000 per day for each day that he is requested to
work. If Mr. Randolph dies or is disabled any time prior to March 1, 2016, we
have agreed to pay his wife $25,000 per year, as adjusted, through December 31,
2015. In addition, we agreed to reimburse Mr. Randolph for certain
30
<PAGE>
business expenses, up to $25,000 per year, until March 1, 2016. We also agreed
to provide him and his wife with major medical and hospitalization insurance
benefits equivalent to those offered to our executives for so long as either of
them are alive.
In 1999, we also entered into a split dollar insurance agreement with
Mr. Randolph whereby we agreed to advance premiums, for ten years, for
$4,500,000 life insurance policies on each of Mr. Randolph and his wife. The
advances are secured by the proceeds of the policies, and are repayable to us
fifteen years from the date of the agreement; provided, however, if the policies
are surrendered or if both Mr. Randolph and his wife die prior to the fifteen
years, then the advances will be repaid from the proceeds of the policies.
Mr. Dye has entered into an agreement with us with respect to various
employment and benefit matters. Pursuant to the terms of the agreement, as
amended, Mr. Dye's term of employment extends to January 1, 2001 during which
term he is eligible to receive a salary of at least $120,000. Subsequent to the
termination of his employment we have agreed to retain Mr. Dye as a consultant
for a period of 5 years at a rate of $100,000 per year. At the end of the 5-year
consulting period, he is eligible to receive supplemental retirement income
equal to $75,000 per year plus certain other benefits for 10 years. We have also
agreed to provide him and his wife with major medical and hospitalization
insurance benefits equivalent to those offered to our executives for so long as
either of them are alive. In addition, we agreed to reimburse Mr. Dye for
certain business expenses, up to $25,000 per year, during his 5-year consulting
period and the 10-year period in which he receives supplemental retirement
income.
Restricted Stock Agreements
Pursuant to the agreement with Mr. Zumwalt dated April 1, 1993, we
granted Mr. Zumwalt 600 shares of restricted stock, and agreed to grant him an
additional 600 shares of restricted stock per year until April 1, 2002, provided
that he is still a full-time employee. Such restricted stock is both forfeitable
and non-transferable in the event Mr. Zumwalt does not remain continuously
employed by us until April 16, 2007.
Pursuant to the agreement with Mr. Paulsen dated July 29, 1996, we
granted Mr. Paulsen 2,616 shares of restricted stock. Such restricted stock is
both forfeitable and non-transferable in the event Mr. Paulsen does not remain
continuously employed by us until July 26, 2009.
31
<PAGE>
Employee Stock Purchase Plan/Restricted Stock Awards
The PBSJ Corporation Stock Ownership Plan
The PBSJ Corporation Stock Ownership Plan (the "Plan") is an employee
stock purchase plan. The Plan was approved by our stockholders on December 14,
1985 and was amended and restated as of December 31, 1998. The Plan is not
subject to any of the provisions of the Employee Retirement Income Security Act
of 1974 ("ERISA"), as amended, and is not a qualified plan under Section 401(a)
of the Internal Revenue Code.
The Plan is administered by our board of directors and provides that
the board may grant eligible employees rights to purchase a number of shares of
our common stock at the exercise price and on the terms and conditions
determined by the board, provided that, the exercise price cannot be less than
100% of the fair market value of one share of our common stock as determined by
an independent appraisal performed at the end of the most recent fiscal year
prior to the date of exercise of the right. An eligible employee means an
individual who performs services for us and is included in our regular payroll.
An employee to whom stock purchase rights are granted will have the right,
during the term of the stock purchase rights, which shall be determined by the
board, to exercise the rights in whole or in part and purchase shares of our
common stock.
Unless otherwise provided by the board, generally, an employee
exercising the stock purchase rights may either pay the total exercise price for
the shares in full in cash upon exercise of the rights or make payment of the
total purchase price pursuant to the terms and procedures instituted by the
board at the time the stock purchase rights are granted to the employee.
If an employee is permitted to purchase shares through payroll
deductions and chooses to do so, he will be entitled to exercise all rights as a
stockholder with respect to the full number of shares purchased, but will not
receive certificates for the shares until he has paid the full exercise price
for the stock. If an employee purchasing stock through payroll deductions is
terminated for any reason prior to the issuance of the shares, all of his stock
purchase rights will terminate and we will refund all prior payroll deductions
to the employee, without interest.
Historical example: On January 3, 2000, we granted 500 stock purchase
rights each to 400 of our employees who are eligible employees. The Stock
Ownership Rights Agreement signed by each employee who received the rights
provided that the employee could exercise a minimum of 50 and a maximum of 500
stock purchase rights on or before February 3, 2000. If the employee did not
exercise the rights prior to February 3, 2000, the rights terminated. The
exercise price was $39.10 based on an independent appraisal of the fair market
value of one share of our common stock on September 30, 1999. The exercise price
was payable in full by the employee not later than September 30, 2000. The
exercise price could be paid by the employee through payroll deductions with a
balloon payment due on September 30, 2000.
If an employee's employment is terminated after he has exercised his
stock purchase rights, the employee must sell his stock back to us. If he has
held the stock for less than six months, we may repurchase the stock at the
lesser of the exercise price for the stock or the fair market value of our
common stock at the time of termination. If the employee has held the stock for
more than six months or if the stock is repurchased by us due to the death or
disability of the employee, we will repurchase the stock at the fair market
value of our common stock at the time of termination or death.
32
<PAGE>
Restricted Stock Awards
Our board of directors has granted restricted stock to certain of our
employees in connection with their initial employment or as an incentive,
performance or retention bonus. The employee is granted one share of restricted
stock for every two shares of common stock purchased by the employee. Our board
of directors has granted restricted stock to 51 of our employees between January
15, 1991 and November 30, 1999. The restricted stock is subject to total
forfeiture if the employee ceases to be employed with us for any reason prior to
the third-anniversary of the date the restricted stock is granted to the
employee, except upon death, in which case the restricted stock becomes 100%
vested.
The holders of restricted stock have no right to sell the restricted
stock prior to the expiration of the restricted period but are entitled to
exercise all rights including voting rights as a stockholder with respect to the
restricted stock from the date he is granted the restricted stock.
On occasion, we have also issued restricted stock to certain of our
Named Officers. A description of the relevant restricted stock agreements is set
forth under "Employment Contracts, Termination of Employment and
Change-in-Control Arrangements."
The PBSJ Employee Profit Sharing and Stock Ownership Plan and Trust (Trust)
Effective October 1, 1994, an employee stock ownership plan ("ESOP")
feature was added to our profit sharing plan so that any shares purchased upon
the exercise of stock purchase rights and any restricted stock granted to our
employees can be held through the Trust.
An ESOP is a tax-qualified defined contribution plan of deferred
compensation under Section 401(a) of the Internal Revenue Code of 1986, as
amended, with its primary objective to provide stock ownership to employees.
Unlike other defined contribution plans, an ESOP must invest primarily in
employer securities. Moreover, an ESOP may borrow against the employer's credit,
provided the loan proceeds are used to acquire employer securities. The ESOP
also functions as a source through which departing employees may sell their
shares back to us. Depending on our profits, each year we may make a tax
deductible contribution to the ESOP. The contributions are allocated to the ESOP
participants, subject to a seven year vesting schedule, based on the ratio of a
participant's compensation for the year to the total compensation of all
participants for the year. Contributions are converted to our common stock by
purchasing stock from terminating employees. The voting rights with respect to
the common stock held through the ESOP are held by the trustees of the Trust.
The current trustees of the Trust are Richard A. Wickett, Judith A.
Squillante, John B. Zumwalt, III, Bernard F. Silver, Thomas P. Pellarin, Becky
S. Schaffer and Robert J. Paulsen.
Compensation of Directors
Because all of our directors are also executive officers, no additional
compensation is paid to any director for any services performed by him in his
capacity as director. We reimburse our directors for any expenses incurred by
them in connection with their duties as directors.
33
<PAGE>
Compensation Committee Interlocks and Insider Participation
We do not have a compensation committee. All of the members of our
board of directors participated in deliberations concerning executive officer
compensation. All of our directors are also executive officers.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None.
ITEM 8. LEGAL PROCEEDINGS
We are party to various legal proceedings arising from our operations.
In addition, we are currently involved in two lawsuits in which the damages
claimed are unspecified. One is styled Church & Tower, Inc. vs. Dade County,
Florida, vs. PBS&J Construction Services, Inc. The second is in Osceola County,
Florida styled George T. Kuser vs. Celebration Community Development District
and Post, Buckley, Schuh & Jernigan, Inc. We believe that we have sufficient
professional liability insurance such that the outcome of any of these
proceedings, individually and in the aggregate, will not have a material adverse
effect on our financial position or results of operations. However, if our
insurance company were to deny coverage for significant judgment or if a
judgment was entered against us in an amount greater than our coverage, it could
adversely affect our results of operations. Based upon our previous experience
with claims and lawsuits, we believe our insurance coverage is adequate.
ITEM 9. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON
EQUITY AND RELATED STOCKHOLDER MATTERS
Market Information
There is no established public trading market for our common stock.
As of June 15, 2000 there were no shares of common stock that were
subject to outstanding warrants or options to purchase, or securities
convertible into, our common stock, and no shares of our common stock could be
sold pursuant to Rule 144 under the Securities Act. No shares of our common
stock are being, or have been, publicly offered.
As of June 15, 2000, there were 1,911,405 shares of common stock
outstanding and held of record by 354 shareholders.
Dividends
Each share of our common stock is entitled to share equally in any
dividends declared by our board of directors. Pursuant to the terms of our
credit agreement, we cannot declare or pay dividends in excess of 50% of our net
income. We have not in the past paid cash dividends on our common stock and have
no present intention of paying cash dividends on our common stock in the
foreseeable future. All earnings are retained for investment in our business.
34
<PAGE>
ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES
Employee Stock Purchase Plan
Between February 23 and March 24, 1998, we sold 74,152 shares of our
common stock to 266 of our employees pursuant to the terms of The PBSJ
Corporation Stock Ownership Plan ("Plan") and related Stock Ownership Rights
Agreements for $28.20 per share. The aggregate offering price for these shares
was $2,091,086.
Between February 1 and March 2, 1999, we sold 242,436 shares of our
common stock to 174 of our employees pursuant to the terms of the Plan and
related Stock Ownership Rights Agreements for $34.10 per share. The aggregate
offering price for these shares was $8,267,068.
Between January 3 and February 1, 2000, we sold 21,895 shares of our
common stock to 145 of our employees pursuant to the terms of the Plan and
related Stock Ownership Rights Agreements for $39.10 per share. The aggregate
offering price of these shares was $856,095.
We also issued 22,045, 24,722 and 91,190 shares of restricted stock to
148, 119 and 174 of our employees during each of the last three years. These
issuances were sporadic and were issued pursuant to the terms of the Plan and
individual restricted stock agreements. Employees are not required to pay for
the restricted stock. Other than restricted stock issued to Named Officers, the
restricted stock is subject to total forfeiture in the event the employee's
employment is terminated for any reason, except death, prior to the three-year
anniversary of the date the restricted stock is issued to the employee. For a
description of the restricted stock issued to Named Officers, read the relevant
description under "Employment Contracts, Termination of Employment and
Change-in-Control Arrangements."
The sale of stock and the issuance of restricted stock to our employees
pursuant to the terms of the Plan is exempt from registration pursuant to Rule
701 of the Securities Act of 1933, as amended which exempts offers and sales of
securities under a written compensation benefit plan established by an issuer of
securities for the participation of their employees, directors, officers and,
under certain circumstances, family members of these persons. In all instances,
the sales price or amount of stock sold by us under Rule 701 during any 12-month
period did not exceed the greater of $1,000,000, 15% of our total assets for
that period or 15% of the number of outstanding shares of our common stock as of
our most recent balance sheet date.
ITEM 11. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED
The following is a summary description of the material provisions of
our Articles of Incorporation and Amended and Restated Bylaws relating to our
capital stock. You may find more detailed information by reading our Articles of
Incorporation and Amended and Restated Bylaws, copies of which are filed as
exhibits to this registration statement.
We are authorized to issue 3,000,000 shares of common stock, par value
of $.0033 per share. As of June 15, 2000, there were 1,911,405 shares of common
stock issued and outstanding and held of record by approximately 354
shareholders. Other than the Plan, all of the holders of record of outstanding
shares of our common stock on June 15, 2000 were our officers, directors,
employees or former employees pending repurchase. Our board of directors is
authorized to issue shares of our common stock as partly
35
<PAGE>
paid stock. These shares are subject to any conditions, limitations and
restrictions relating to ownership, sale and transfer which are set forth in any
agreement with the holder of the partly paid shares.
Each share of our common stock is entitled to one vote on all matters
on which shareholders are entitled to vote. If we liquidate, dissolve or wind
up, holders of our common stock are entitled to share ratably in all assets
remaining after payment of all our liabilities. There is no cumulative voting
for directors, and there are no preemptive or other subscription rights.
Our Amended and Restated Bylaws provide that our shares of capital
stock may be owned only by our employees, the Plan and personal trusts created
by our shareholders. Non-employees are not permitted to own our capital stock
unless they are a member of our board of directors or a spouse or child of one
of our employees, provided that at all times at least 95% of the value of our
capital stock must be held by our current employees, retired employees or the
estate of a deceased employee.
All of our shares of capital stock are subject to the following
restrictions set forth in our Amended and Restated Bylaws:
1. Right of Repurchase Upon Termination of Employment. When a
shareholder's employment is terminated for any reason, including death, the
shareholder and his guardian, heirs, trustees, beneficiaries or personal
representatives are required to sell all of the employee's shares of our capital
stock to us at the fair market value of the shares, as determined by an
independent appraiser. A former employee may continue to own shares of our
capital stock if the former employee has entered into a separate written share
redemption or purchase agreement with us and the agreement is approved prior to
the employee's termination by more than 50% of the shares of our capital stock
entitled to vote.
2. Right of First Refusal. We are required to purchase any
shareholder's shares of capital stock if he so requests at the fair market value
of the shares, as determined by an independent appraiser. The Plan may assume
our obligation to purchase the shares on the same terms and conditions. If we
and the Plan are prohibited by law from purchasing the employee's shares, the
other shareholders shall have the right (but not the obligation) to purchase the
employee's shares.
ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Chapter 607.0850, Florida Statutes permits a corporation to indemnify
any director or officer of the corporation against expenses, including
attorneys' fees, judgments, fines and amounts paid in settlement actually and
reasonably incurred in connection with any action, suit or proceeding brought by
reason of the fact that the person is or was a director or officer of the
corporation, if the person acted in good faith and in a manner that he
reasonably believed to be in, or not opposed, to the best interests of the
corporation, and, with respect to any criminal action or proceeding, if he had
no reason to believe his conduct was unlawful. In a derivative action,
indemnification may be made only for expenses, actually and reasonably incurred
by any director or officer in connection with the defense or settlement of an
action or suit, if the person acted in good faith and in a manner that he
reasonably believed to be in, or not opposed to, the best interests of the
corporation, except that no indemnification shall be made if the person shall
have been adjudged to be liable to the corporation, unless and only to the
extent that the court in which the action or suit was brought determines that
the defendant is fairly and reasonably entitled to indemnity for these expenses
despite an adjudication of liability.
36
<PAGE>
As provided for in Chapter 607.0831 directors are not liable to the
corporation or its stockholders for monetary damages for a breach of fiduciary
duty as a director, except for liabilities arising (i) from acts or omissions
not in good faith or which involve intentional misconduct or a knowing violation
of law, (ii) under Chapter 607.0834, Florida Statutes, or (iii) from any
transactions from which the director derived an improper personal benefit.
We currently have in effect director and officer liability insurance.
At present, there is no pending or threatened litigation or proceeding
involving any of our directors or officers, employees or agents where
indemnification will be required or permitted.
ITEM 13. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this item is contained in the financial
statements beginning on page F-1. This registration statement includes the
following financial statements: (i) audited balance sheets as of September 30,
1998 and 1999, and the unaudited balance sheet as of March 31, 2000; (ii)
audited statements of operations for the fiscal years ended September 30, 1997,
1998 and 1999, and unaudited statements of operations for the six month periods
ended March 31, 1999 and 2000; (iii) audited statements of stockholders' equity
for the fiscal years ended September 30, 1997, 1998 and 1999, and the unaudited
statement of stockholders' equity for the six month period ended March 31, 2000,
and (iv) audited statements of cash flows for the fiscal years ended September
30, 1997, 1998 and 1999, and the unaudited statements of cash flows for the six
months ended March 31, 1999 and 2000.
ITEM 14. CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
None.
ITEM 15. FINANCIAL STATEMENTS AND EXHIBITS
(a) The following is a list of financial information filed as a part of
this registration statement:
(1) Consolidated Financial Statements of The PBSJ Corporation and
its subsidiaries as of March 31, 2000 (unaudited), September
30, 1999 and 1998, and for the six months ended March 31, 2000
and 1999 (unaudited) and the fiscal years ended September 30,
1999, 1998 and 1997.
37
<PAGE>
(b) Exhibits
Exhibit
Number Description
------ -----------
3.1 - Articles of Incorporation, as amended
3.2 - Amended and Restated Bylaws
4.1 - Form of Specimen Stock Certificate
10.1 - The PBSJ Employee Profit Sharing and Stock Ownership Plan and
Trust (1)
10.2 - Supplemental Income Plan effective as of January 12, 1988
10.3 - Consulting/Supplemental Retirement/Death Benefits Agreement,
dated November 6, 1987, between the Registrant and H. Michael
Dye, as amended on October 16, 1989, March 1, 1993, February 6,
1995, May 19, 1998 and November 22, 1999
10.4 - Supplemental Retirement/Death Benefits Agreement, dated December
17, 1987, between the Registrant and Robert J. Paulsen
10.5 - Supplemental Income Agreement, dated as of July 29, 1996, between
the Registrant and Robert J. Paulsen
10.6 - Employment/Retirement Benefits Agreement, dated February 15,
1999, between the Registrant and William W. Randolph
10.7 - Supplemental Retirement/Death Benefits Agreement, dated December
17, 1987, between the Registrant and Richard A. Wickett, as
amended on April 27, 1989, May 19, 1998 and November 22, 1999
10.8 - Supplemental Retirement/Death Benefits Agreement dated December
17, 1987, between the Registrant and John B. Zumwalt, III, as
amended on May 19, 1998 and November 22, 1999
10.9 - Agreement, dated as of April 1, 1993, between the Registrant and
John B. Zumwalt, III
10.10 - Split Dollar Life Insurance Agreement dated February 1, 1999, by
and between The Randolph Insurance Trust and the Registrant
10.11 - Credit Agreement, dated as of June 28, 1996, by and among
Nationsbank, N.A., Suntrust Bank, Miami, N.A., Post, Buckley,
Schuh and Jernigan, Inc., The PBSJ Corporation, and the
subsidiaries named therein, as amended on July 3, 1997 and June
30, 1999
10.12 - Lease Agreement, dated as of March 25, 1998, by and between Post,
Buckley, Schuh & Jernigan, Inc. and Highwoods/Florida Holdings
L.P. as successor in interest to Cypress-Tampa II L.P., as
amended on May 26, 1998, December 26, 1998, November 29, 1999 and
March 1, 2000
10.13 - Lease Agreement, dated as of November 23, 1999, by and between
Post, Buckley, Schuh & Jernigan, Inc. and 1560 N. Orange Ltd.
21 - Subsidiaries
27.1 - Financial Data Schedule - September 30, 1999
38
<PAGE>
Exhibit
Number Description
27.2 - Financial Data Schedule - March 31, 2000
----------------
(1) To be filed by Amendment
39
<PAGE>
III. SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized.
The PBSJ Corporation
By: /s/ H. MICHAEL DYE
------------------
H. Michael Dye
Chairman and Chief Executive
Officer
Date: June 27, 2000
40
<PAGE>
Report of Independent Certified Public Accountants
To the Board of Directors and
Stockholders of The PBSJ Corporation
In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of income, stockholders' equity and cash flows present
fairly, in all material respects, the consolidated financial position of The
PBSJ Corporation and subsidiaries (the "Company") at September 30, 1999 and
1998, and the consolidated results of their operations and their cash flows for
each of the three years in the period ended September 30, 1999, in conformity
with accounting principles generally accepted in the United States. These
financial statements are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these statements in accordance with
auditing standards generally accepted in the United States, which require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for the opinion expressed above.
/s/ PricewaterhouseCoopers LLP
December 3, 1999
Miami, Florida
F-1
<PAGE>
The following financial statements should be read in conjunction with the
accompanying notes and Management's Discussion and Analysis of Financial
Condition and Results of Operations.
<TABLE>
<CAPTION>
THE PBSJ CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
Years ended September 30, Six months ended March 31,
Assets 1999 1998 2000
------ --------- --------- ---------
(Unaudited)
<S> <C> <C> <C>
Current Assets:
Cash and cash equivalents $ -- $ 1,857 $ --
Marketable securities 3,904 3,087 475
Accounts and notes receivable, net 37,608 33,889 34,988
Unbilled fees, net 25,355 21,062 33,014
Other current assets 1,553 1,619 1,962
--------- --------- ---------
Total current assets 68,420 61,514 70,439
Property and equipment, net 21,203 19,268 23,897
Cash surrender value of life insurance 4,856 4,577 5,085
Deferred income taxes 2,476 2,764 2,211
Other assets 6,880 8,302 6,920
--------- --------- ---------
Total assets $ 103,835 $ 96,425 $ 108,552
========= ========= =========
Liabilities and Shareholders Equity
-----------------------------------
Current Liabilities:
Accounts payable and accrued expenses $ 9,009 $ 14,384 $ 17,986
Current portion of long term debt 4,594 8,540 4,453
Accrued vacation 3,695 3,060 3,986
Deferred income taxes 15,578 14,985 15,604
Bank overdrafts 3,823 -- 555
--------- --------- ---------
Total current liabilities 36,699 40,969 42,584
Long term debt 13,337 8,589 12,907
Deferred compensation 5,090 5,057 5,714
Other liabilities 3,439 4,197 4,115
--------- --------- ---------
Total liabilities 58,565 58,812 65,320
--------- --------- ---------
Stockholders' equity:
Common stock, par value $0.0033, 3,000,000 shares
authorized, 2,073,361 and 1,993,347 shares issued and
outstanding at September 30, 1999 and 1998, respectively and 7 7 7
1,926,190 shares issued and outstanding at March 31, 2000
Additional paid in capital 8,145 5,311 2,395
Retained earnings 38,481 33,035 42,384
Accumulated other comprehensive income (421) 330 34
Notes receivable from stockholders -- -- (740)
Unearned compensation (942) (1,070) (848)
--------- --------- ---------
Total stockholders' equity 45,270 37,613 43,232
--------- --------- ---------
Total liabilities and stockholders' equity $ 103,835 $ 96,425 $ 108,552
========= ========= =========
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
F-2
<PAGE>
<TABLE>
<CAPTION>
THE PBSJ CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
Years ended September 30, Six months ended March 31,
STATEMENT OF OPERATIONS DATA: 1999 1998 1997 2000 1999
------- ------- ------- ------- ------
(Unaudited)
<S> <C> <C> <C> <C> <C>
Earned revenue:
Engineering fees $ 241,417 $ 223,381 $ 172,644 $ 126,152 $ 116,957
Direct Expenses 60,780 56,248 41,221 29,422 29,744
----------- ----------- ----------- ----------- -----------
Net earned revenue 180,637 167,133 131,423 96,730 87,213
----------- ----------- ----------- ----------- -----------
Costs and expenses:
Direct salaries 66,291 61,538 50,126 35,664 32,407
General and administrative expenses 105,346 97,811 74,635 52,963 49,832
----------- ----------- ----------- ----------- -----------
Total costs and expenses 171,637 159,349 124,761 88,627 82,239
Operating income 9,000 7,784 6,662 8,103 4,974
----------- ----------- ----------- ----------- -----------
Other income (expenses):
Interest expense (1,162) (1,227) (659) (769) (596)
Other, net 1,108 867 780 (826) 241
----------- ----------- ----------- ----------- -----------
Total other expenses (54) (360) 121 (1,595) (355)
Income before income taxes 8,946 7,424 6,783 6,508 4,619
Provision for income taxes 3,500 2,950 2,783 2,605 1,797
----------- ----------- ----------- ----------- -----------
Net income $ 5,446 $ 4,474 $ 4,000 $ 3,903 $ 2,822
=========== =========== =========== =========== ===========
Common stock per share data:
Basic and diluted earnings per share $ 2.87 $ 2.40 $ 2.16 $ 2.05 $ 1.49
=========== =========== =========== =========== ===========
Weighted average shares of
common stock outstanding 1,896,533 1,861,022 1,852,051 1,899,759 1,896,533
=========== =========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
F-3
<PAGE>
THE PBSJ CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED MARCH 31, 2000 AND YEARS ENDED SEPTEMBER 30, 1999,
1998 AND 1997
(in thousands, except per share data)
<TABLE>
<CAPTION>
Accumulated Note
Common Stock Additional Other Receivable Total
------------------- Pain-in Retained Comprehensive from Unearned Stockholders'
Shares Amount Capital Earnings Income (Loss) Shareholders Compensation Equity
--------- ------ ---------- --------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at September 30, 1996 1,960,676 $ 7 $ 4,144 $ 24,561 $ 178 $ (28) $ (1,079) $ 27,782
Comprehensive income:
Net income 4,000 4,000
Unrealized gain on investments
(net of tax of $98) 153 153
----------
Total comprehensive income 4,153
Sale of stock 70,721 1,400 (1,400)
Purchase of stock (121,348) (2,402) (2,402)
Note Payments 1,428 1,428
Issuance of restricted stock
net of amortization and
cancellations 26,376 571 (24) 547
--------- ------ ---------- --------- ------------ ------------ ------------ ------------
Balance at September 30, 1997 1,936,425 $ 7 $ 3,713 $ 28,561 $ 331 $ -- $ (1,103) $ 31,508
Comprehensive income:
Net income 4,474 4,474
----------
Total comprehensive income 4,474
Sale of stock 143,836 4,056 (4,056) --
Purchase of stock (90,889) (2,561) (2,561)
Note Payments 4,056 4,056
Issuance of restricted stock
net of amortization and
cancellations 3,975 103 33 136
--------- ------ ---------- --------- ------------ ------------ ------------ ------------
Balance at September 30, 1998 1,993,347 $ 7 $ 5,311 $ 33,035 $ 331 $ -- $ (1,070) $ 37,613
Comprehensive income:
Net income 5,446 5,446
Unrealized loss on investments (752)
(net of tax of $198) (752)
----------
Total comprehensive income 4,694
Sale of stock 239,329 1 8,150 8,151
Purchase of stock (156,268) (1) (5,317) (5,318)
Issuance of restricted stock
net of amortization and
cancellations (3,047) 2 128 130
--------- ------ ---------- --------- ------------ ------------ ------------ ------------
Balance at September 30, 1999 2,073,361 $ 7 $ 8,145 $ 38,481 $ (421) $ -- $ (942) $ 45,270
</TABLE>
F-4
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Comprehensive income:
Net income 3,903 3,903
Unrealized gain on investments 455
(net of tax of $239) 455
----------
Total comprehensive income 4,358
Sale of stock 22,045 1 861 (791) 71
Purchase of stock (171,663) (1) (6,689) (6,690)
Note Payments 51 51
Issuance of restricted stock
net of amortization and
cancellations 2,447 -- 78 -- -- 94 172
--------- ------ ---------- --------- ------------ ------------ ------------ ------------
Balance at March 31, 2000 1,926,190 $ 7 $ 2,395 $ 42,384 $ 34 $ (740) $ (848) $ 43,232
--------- ------ ---------- --------- ------------ ------------ ------------ ------------
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
F-5
<PAGE>
<TABLE>
<CAPTION>
THE PBSJ CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands, except per share data)
Years ended September 30, Six months ended March 31,
1999 1998 1997 2000 1999
----------- ---------- ----------- ----------- -----------
(Unaudited)
<S> <C> <C> <C> <C> <C>
Cash Flow from operating activities:
Net income $ 5,446 $ 4,474 $ 4,000 $ 3,903 $ 2,821
Adjustments to reconcile net income to net
cash (used in) provided by operating activities:
Realized (loss) on sale of investments (620) - - 946 -
Non-cash special charges 131 135 547 172 90
Depreciation and amortization 6,113 5,330 3,931 3,520 2,732
Provision for bad debt and unbillable amounts 1,899 1,579 1,537 262 460
Provision for deferred income taxes 880 2,743 694 291 -
Provision for deferred credits and other accruals - - 1,014 - -
Amortization of deferred compensation 33 557 - 624 529
Net investment in list insurance policies (279) (446) (317) (229) 62
Change in operating assets and liabilities,
net of acquisitions:
(Increase) decrease in accounts and notes (5,617) (4,174) (928) 2,358 (125)
receivable
(Increase) in unbilled fees (4,292) (3,686) (227) (7,659) (1,681)
Decrease (increase) in other current assets 65 22 (527) (409) (184)
Decrease (increase) in other assets 1,217 (309) - (156) (253)
(Decrease) increase in accounts payable and (5,375) (427) (1,411) 8,977 314
accrued expenses
Increase in accrued vacation 635 653 - 291 394
(Decrease) increase in other liabilities (758) (80) - 676 (303)
----------- ---------- ----------- ----------- -----------
Net cash (used in) provided by
operating activities (522) 6,371 8,313 13,567 4,856
----------- ---------- ----------- ----------- -----------
Cash flows from investing activities:
Purchases of marketable securities (1,968) - (620) - -
Proceeds from sale of marketable securities 1,636 - - 2,938 -
Acquisitions, net of cash acquired - (1,285) (11,803) - -
Sale of property and equipment 350 - - - -
Purchase of property and equipment (7,025) (6,748) (3,757) (6,098) (4,201)
----------- ---------- ----------- ----------- -----------
Net cash used in investing activities (7,007) (8,033) (16,180) (3,160) (4,201)
----------- ---------- ----------- ----------- -----------
Cash flows from financing activities:
Increase (decrease) in bank overdraft 3,823 - - (3,268) -
Borrowings under line of credit 92,975 69,153 60,699 48,300 43,461
Principal payments under line of credit (93,345) (65,160) (59,630) (48,445) (47,171)
Proceeds from issuance of notes payable - - 10,000 - 1,786
Principal payments under notes and mortgage (614) (3,793) (1,145) (426) (562)
payable
Proceeds from sale of the Company's common 8,151 4,056 1,400 71 8,267
stock
Repayment of notes receivable from stockholders - - 28 51 -
Decrease in notes receivable from stockholders - - - - (2,085)
Purchase of the Company's common stock (5,318) (2,561) (2,403) (6,690) (4,785)
----------- ---------- ----------- ----------- -----------
Net cash provided by (used in)
financing activities 5,672 1,695 8,949 (10,407) (1,089)
----------- ---------- ----------- ----------- -----------
Net (decrease) increase in cash and
cash equivalents (1,857) 33 1,082 - (434)
Cash and cash equivalents at beginning of period 1,857 1,824 742 - 1,857
----------- ---------- ----------- ----------- -----------
Cash and cash equivalents at end of period $ - $ 1,857 $ 1,824 $ - $ 1,423
=========== ========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
F-6
<PAGE>
NOTES TO FINANCIAL STATEMENTS (in thousands, except for per share data)
1. Organization and Summary of Significant Accounting Policies:
Organization and Principles of Consolidation
The consolidated financial statements include the accounts of The PBSJ
Corporation and its wholly-owned subsidiaries, Post, Buckley, Schuh &
Jernigan, Inc., a Florida corporation ("PBS&J"), PBS&J Construction
Services, Inc., Post, Buckley International, Inc., Post Buckley de Mexico,
S.A. de C.V., Seminole Development Corporation and HOH Associates, Inc.
(collectively the "Company"). All material intercompany transactions and
accounts have been eliminated in the accompanying consolidated financial
statements.
Effective June 30, 1999, PBS&J became the successor to Post, Buckley, Schuh
& Jernigan, Inc., a Texas corporation, Post, Buckley, Schuh & Jernigan,
Inc., a California corporation, Post, Buckley, Schuh & Jernigan, Inc., a
Nevada corporation, Post, Buckley, Schuh & Jernigan, Inc. of Arizona,
Coastal Environmental Services, Inc., Espey, Huston & Associates, Inc.,
Survey Resources, Inc., and Kercheval and Associates, Inc. (collectively
"Related Entities") through the merger of PBS&J and the Related Entities of
the Company. The acquisition of the Related Entities has been accounted for
in a manner similar to a pooling of interest since it was acquired from
companies under common control. There was no consideration given by PBS&J
for the acquisition of these Related Entities. The merger does not have an
effect on the accompanying financial statements.
Unaudited Interim Results
The accompanying consolidated balance sheet as of March 31, 2000 and
statements of income, stockholders' equity and cash flows for the six
months ended March 31, 2000 and 1999 are unaudited. In the opinion of
management, these financial statements have been prepared on the same basis
as the audited consolidated financial statements and include all
adjustments, consisting only of normal recurring adjustments, necessary to
present fairly the Company's consolidated results of operations and cash
flows for the interim period presented. The data for the six months ended
March 31, 2000 and 1999 included in notes to the consolidated financial
statements is also unaudited.
Revenue Recognition
The Company recognizes professional services revenue as the services are
rendered for cost plus contracts. For time and material contracts, the
Company reports fees earned based on actual labor multiplied by contractual
rates or multipliers. For fixed price contracts, the Company reports fees
earned on the percentage of completion basis which includes revenue on the
basis of costs incurred to date as a percentage of the total estimated
costs. Anticipated losses are recognized in total in the period in which
they became determinable. The Company provides certain accruals for
additional estimated costs relating to closed projects when such amounts
become susceptible to estimation. Accounts receivable is presented net of
an allowance for doubtful accounts of $4,952, $4,954 and $3,084 at
September 30, 1999 and 1998, and March 31, 2000, respectively. Unbilled
fees are presented net of an allowance for estimated unbillable amounts of
$611, $295, and $611 at September 30, 1999 and 1998 and March 31, 2000,
respectively.
Capital Structure
The company has authorized 3,000,000 shares of common stock (par value
$.0033).
The by-laws of the Company require the Company to redeem, at fair market
value, common stock held by shareholders who terminate employment with the
Company.
F-7
<PAGE>
Cash and Cash Equivalents
Cash equivalents consist of all highly liquid investments with an original
maturity of three months or less from their dates of purchase. Cash
equivalents consist primarily of money market accounts.
Income Taxes
The Company uses the liability method of accounting for income taxes. The
liability method requires the recognition of deferred tax liabilities and
assets for the expected future tax consequences of temporary differences
between tax bases and financial reporting bases of assets and liabilities.
Such differences relate, primarily, to the Company's use of the accrual
method of accounting for financial reporting purposes, and the cash method
of accounting for tax purposes.
Basic and Diluted Earnings Per Share
Basic net income attributable to common stockholders per share has been
computed by dividing net income attributable to common stockholders by the
weighted average number of common shares outstanding. Diluted net income
attributable to common stockholders per share reflects the potential
dilution that could occur assuming the inclusion of dilutive potential
common shares and has been computed by dividing net income attributable to
common stockholders by the weighted average number of common shares and
dilutive potential common shares outstanding. Dilutive potential common
shares include all outstanding restricted stock awards after applying the
treasury stock. The restricted stock does not have a material impact on the
diluted earnings per share calculation.
Marketable Securities
Marketable securities consist of equity securities and mutual funds that
are considered available-for-sale and are recorded at fair value. Changes
in unrealized gains and losses for available-for-sale securities are
charged or credited as a component of accumulated other comprehensive
income, net of tax. A decline in the fair value of an available-for-sale
security below cost that is deemed other than temporary is charged to
earnings.
Fair Value of Financial Instruments
The fair value of the Company's cash, accounts receivables, unbilled fees
and trade accounts payable approximates book value due to the short-term
maturities of these instruments. The carrying amount of marketable
securities is based on quoted market prices at the reporting date for those
investments and as such approximate fair value. The fair value of the
Company's debt approximates the carrying value which was based on similar
stated rates, terms and maturities of existing debt as compared to current
market conditions.
Goodwill
Goodwill, included in other assets, represents the difference between the
purchase price and the fair value of the net assets of acquired businesses,
and is being amortized on a straight-line basis over 10 to 40 years.
Amortization expense relating to goodwill amounted to $206, $199 and $180
for the years ended September 30, 1999, 1998 and 1997, respectively, and
$116 and $100 for the six months ended March 31, 2000 and 1999,
respectively. The Company annually evaluates the realizability of goodwill
based upon undiscounted forecasted operating earnings over the remaining
amortization period for each investment having a significant goodwill
balance. If an impairment in the value of the goodwill were to occur, the
Company would reflect the impairment through a reduction in the carrying
value of the goodwill based upon the estimated fair value of the
investment. Management believes that no impairment of goodwill exists at
September 30, 1999.
F-8
<PAGE>
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Such estimates include the allowance for
doubtful accounts, unbilled fees, and reserve for litigation. Actual
results could differ from those estimates.
Stock Based Compensation
Non-vested, restricted stock awarded to certain employees are measured at
the estimated fair value of the stock at the grant date.
Changes in Presentation
Certain financial statement reclassifications have been made to conform
prior years' data to the 1999 financial statement presentations.
Property and Equipment
Property and equipment are stated at cost. Major renewals and improvements
are capitalized, while repairs and maintenance are expensed as incurred.
Depreciation is computed using the straight-line method over the estimated
useful lives of the related assets.
Leasehold improvements are amortized over the shorter of the terms of the
leases or their estimated useful lives. Cost and accumulated depreciation
of property and equipment retired or sold are eliminated from the accounts
at the time of retirement or sale and the resulting gain or loss is
recorded in income.
Concentrations of Credit Risk
Financial instruments, which potentially subject the Company to
concentrations of credit risk, consist principally of cash, accounts
receivable and unbilled fees. The Company places its cash with high credit
quality financial institutions. At times, such amounts may be in excess of
the FDIC insurance limits.
Work performed for governmental entities accounted for approximately 66% of
engineering fees for the years ended September 30, 1999, 1998 and 1997 and
for the six months ended March 31, 2000 and 1999. Ongoing credit
evaluations of customers are performed and generally no collateral is
required. The Company provides an allowance for doubtful accounts based
upon factors surrounding the credit risk of specific customers, historical
trends and other information. Actual losses have historically been within
management's expectations and estimates.
Comprehensive Income
In 1999, the Company implemented Statement of Financial Accounting
Standards No. 130 ("SFAS No. 130"), "Reporting Comprehensive Income," which
establishes standards for the reporting and display of comprehensive income
and its components in a full set of general purpose financial statements.
This statement requires that an enterprise (a) classify items of other
comprehensive income, such as unrealized holding gains and losses on
investments, by their nature in the financial statements and (b) display
the accumulated balance of other comprehensive income separately from
retained earnings and additional paid-in capital in the equity section of
the balance sheet. The entire accumulated other comprehensive income
consisted of unrealized holding gains and losses on investments as of
September 30, 1999, 1998 and 1997 and March 31, 2000.
F-9
<PAGE>
Recent Accounting Pronouncements
In June 1998, the FASB issued Statement No. 133, "Accounting for Derivative
Instruments and Hedging Activities" ("SFAS No. 133"). SFAS No. 133
established methods of accounting for derivative financial instruments and
hedging activities related to those instruments as well as other hedging
activities. The Company believes that the effect of SFAS No. 133 is
immaterial on the operations and financial position of the Company.
In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements"
("SAB101"). SAB 101 summarizes certain areas of the Staff's views in
applying generally accepted accounting principles to revenue recognition in
financial statements. The Company believes that its current revenue
recognition policies comply with SAB 101.
2. Marketable Securities:
At March 31, 2000 and September 30, 1999 and 1998, the Company held
investments in marketable securities classified as available-for-sale which
consisted of mutual funds and equity securities. Available- for-sale
securities at March 31, 2000 and September 30, 1999 and 1998 consisted of
the following:
<TABLE>
<CAPTION>
Fair Unrealized
Cost Value (Loss) / Gain
--------------------------------------------------------
<S> <C> <C> <C>
March 31, 2000
Mutual funds $ 272 $ 399 $ 127
Common stock 76 76 0
----------------- ----------------- -----------------
Total $ 348 $ 475 $ 127
================= ================= =================
September 30, 1999
Mutual funds $ 3,905 $ 3,560 $ (345)
Common stock 618 344 (274)
----------------- ----------------- -----------------
Total $ 4,523 $ 3,904 $ (619)
================= ================= =================
September 30, 1998
Mutual funds $ 2,756 $ 3,087 $ 331
================= ================= =================
</TABLE>
F-10
<PAGE>
3. Property and Equipment:
Property and equipment consisted of the following:
<TABLE>
<CAPTION>
September 30,
Estimated --------------------------- March 31,
Useful Lives 1999 1998 2000
--------------------- ------------- ----------- ------------
<S> <C> <C> <C> <C>
Land - $ 596 $ 470 $ 2,226
Building and building improvements 10 to 31.5 years 4,633 4,633 5,169
Furniture and equipment 5 to 7 years 32,969 32,612 34,997
Computer equipment under capital lease 3 years 1,786 - 1,786
Vehicles 3 years 3,042 3,419 3,166
Leasehold improvements 10 years 5,574 5,327 5,924
------------- ----------- ------------
48,600 46,461 53,268
Less accumulated depreciation and amortization (27,397) (27,193) (29,371)
------------- ----------- ------------
$ 21,203 $ 19,268 $ 23,897
============= =========== ============
</TABLE>
Depreciation and amortization expense relating to property and equipment
amounted to $5,908, $5,131 and $3,751 for the years ended September 30,
1999, 1998 and 1997, respectively, and $3,404 and $2,632 for the six months
ended March 31, 2000 and 1999, respectively. The computer equipment is held
under a capitalized lease. Accumulated depreciation related to the computer
equipment amounted to $310 and $608 at September 30, 1999 and March 31,
2000, respectively.
4. Acquisition:
On December 1, 1997 and August 7, 1997, respectively, the Company acquired
all of the outstanding stock of Kercheval and Associates, Inc. (a
California corporation) for $1,324 and Espey, Huston & Associates, Inc.
("EH&A") (a Texas corporation) for $12,046.
The acquisitions were accounted for using the purchase method of
accounting, and the results of operations have been included since their
respective dates of acquisition. The Company has recorded goodwill in the
amount of $65 related to Kercheval and $5,280 related to EH&A, which is the
cost in excess of fair value of net assets acquired in these purchase
transactions.
5. Income Taxes:
Provisions for income taxes consisted of the following
<TABLE>
<CAPTION>
Six Months Ended
Years Ended September 30, March 31,
----------------------------------------- --------------------------
1999 1998 1997 2000 1999
---------- ---------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Current $ - $ 207 $ 2,089 $ - $ -
Deferred 3,500 2,743 694 2,605 1,797
---------- ---------- ---------- ----------- ----------
$ 3,500 $ 2,950 $ 2,783 $ 2,605 $ 1,797
========== ========== ========== =========== ==========
</TABLE>
F-11
<PAGE>
Included in the 1999 and 1998 and 1997 provisions for income taxes are
deferred state taxes of $581 and $454 and $145, respectively. The current
portions of state taxes was $0, $0, $283, for the years ended September 30,
1999, 1998 and 1997. A reconciliation of the income tax provision to taxes
computed at the U.S. federal statutory rate is as follows:
<TABLE>
<CAPTION>
1999 1998 1997
---------- ---------- ----------
<S> <C> <C> <C>
U.S. Statutory Rate 35.0% 35.0% 35.0%
State Taxes, net of Federal Tax Benefit 3.9 3.9 3.9
Nondeductible expenses 0.2 0.9 2.1
---------- ---------- ----------
Effective tax rate 39.1% 39.8% 41.0%
========== ========== ==========
</TABLE>
The provision for income taxes for the six months ended March 31, 2000 and
1999 were calculated at an effective tax rate of approximately 39%.
The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities consisted
of the following:
<TABLE>
<CAPTION>
December 31,
------------------------------
1999 1998
------------ -----------
<S> <C> <C>
Deferred tax liabilities:
Accounts receivable $ 14,665 $ 13,072
Unbilled fees 8,316 8,193
Depreciation 836 836
Other 841 604
------------ -----------
Gross deferred tax liabilities 24,658 22,705
Deferred tax assets:
Accounts payable and accrued expenses (5,538) (6,884)
Net operating loss carryforwards (1,806) -
Compensation (900) -
Deferred credits (2,120) (1,925)
Other liabilities (1,192) (1,675)
------------ -----------
Gross deferred tax assets (11,556) (10,484)
------------ -----------
Net deferred tax liabilities $ 13,102 $ 12,221
============ ===========
</TABLE>
6. Deferred Compensation Plans:
The Company maintains deferred compensation/consulting plans which cover
certain present key officers and employees and provides for payments upon
retirement, death, or disability. The contracts fixed a minimum level for
retirement benefits to be paid to participants based on age at retirement
with the Company. The deferred compensation plans are funded through life
insurance and are being provided for currently. Total annual cash surrender
value increase for the years ended September 30, 1999, 1998 and 1997 for
the plans amounted to $279, $446 and $558, respectively. For the six months
ended March 31, 2000 and 1999, total annual cash surrender value increase
for the plans was $229 and $240, respectively. Total compensation expense,
included in general and administrative expenses, related to the plans
amounted to $566, $557, $659, $353 and $272 in fiscal years 1999, 1998 and
1997 and for the six months ended March 31, 2000 and 1999, respectively.
F-12
<PAGE>
7. Employee Benefit Plan:
The Company has a qualified contributory profit-sharing and employee stock
ownership plan (the "Plan") providing benefits for all eligible employees.
During 1999, the Plan was amended to include an employer matching
contribution up to 3% of the participants' eligible compensation. Prior to
1999, the Plan included an employer matching contribution, equal to 1% of
the participants' eligible compensation. The Company's matching
contribution was $1,831, $909 and $0 for the fiscal years 1999, 1998 and
1997, respectively. The Company's matching contribution for the six months
ended March 31, 2000 and 1999 was $1,162 and $758, respectively. In
addition, the Company accrued an additional $400 and $1,631 at September
30, 1999 and 1998, respectively, as discretionary contributions to the
profit sharing plan.
8. Restricted Stock:
Restricted stock is offered to existing employees, which are subject to
restrictions on transfer, and risk of forfeiture until earned by continued
employment. Should employment terminate before ownership vests, the stock
is forfeited. During the restriction period, holders have the rights of
shareholders, including the right to vote, but cannot transfer ownership.
Restricted stock is recorded at fair value on the date of issuance. The
stock vests over the service period, which is usually 5 years. The issuance
of restricted stock gives rise to unearned compensation that is amortized
over the vesting period. Through March 31, 2000 and September 30, 1999,
88,283 and 99,602 shares of restricted stock have been issued, of which
2,277 and 14,269 shares had vested or had been canceled. Unearned
compensation is shown as a reduction of stockholders' equity in the
accompanied financial statements. The total amount of compensation expense
recognized under these agreements during 1999, 1998 and 1997 was $280, $183
and $175, respectively.
9. Long Term Debt:
<TABLE>
<CAPTION>
September 30, March 31,
1999 1998 2000
----------- ------------- ----------------
<S> <C> <C> <C>
Line of credit unused availability of $29,280,
$5,910 and $29,425 at September 30, 1999 and
1998 and March 31, 2000, respectively. $ 7,720 $ 6,090 $7,575
Term loan due in annual installments of
$2,000,000 through July 31, 2002.
Interest at LIBOR plus 75 basis points or
prime minus 50 basis points (6.1125%, 5.98%
and 6.8825% at September 30,
1999 and 1998 and March 31, 2000, respectively). 6,000 8,000 6,000
Mortgage note payable due in monthly installments
of $36, including interest at 6.87%, collateralized
by real property, unpaid principal due May 31, 2000. 2,044 2,294 1,896
Notes payable to current and former stockholders
due in monthly and quarterly installments with
interest from 6.375% to 7.25% through 2001. 527 745 398
Capital lease of equipment, interest accrues at 8.30%,
collateralized by certain equipment due in monthly
payments of principal and interest of $36,481. 1,640 - 1,491
----------- ------------- ----------------
17,931 17,129 17,360
Less current portion 4,594 8,540 4,453
----------- ------------- ----------------
$ 13,337 $ 8,589 $ 12,907
=========== ============= ================
</TABLE>
Scheduled maturities are as follows:
F-13
<PAGE>
2000 - $4594; 2001 - $2,565; 2002 - $10,156; 2003 - 402, and 2004 and
thereafter - $214.
On June 30, 1999, the Company entered into a new line of credit agreement
with a bank. The line of credit replaced a line of credit with two other
banks and increased the availability of funds from $12 million to $37
million. The expiration date on the new line of credit is June 30, 2002.
The interest rate ranges from LIBOR plus 50 basis points to prime minus 125
basis points if the Company's funded debt coverage ratio is less than 2.5
(5.87% , 6.125% and 6.6325% at September 30, 1999 and 1998 and March 31,
2000, respectively). The range increases to LIBOR plus 75 basis points to
prime minus 100 basis points if the Company's funded debt coverage ratio is
between 2.5 to 3.0. The line of credit contains clauses requiring the
maintenance of various covenants and financial ratios.
Additionally, on June 30, 1999, the Company consolidated the term loans
with one bank. The line of credit and term loans are collateralized by
substantially all the assets of the Company.
10. Commitments and Contingencies:
The Company is obligated under various noncancelable leases for office
facilities, furniture and equipment. Certain leases contain renewal
options, escalation clauses and certain other operating expenses of the
properties. In the normal course of business, leases that expire are
expected to be renewed or replaced by leases for other properties. As of
September 30, 1999, the future minimum annual rental commitments under
operating and capital leases are as follows:
F-14
<PAGE>
<TABLE>
<CAPTION>
Capitalized Operating
Year ending September 30 Leases Leases
=============== ===============
<S> <C> <C>
2000 $ 438 $ 8,735
2001 438 6,199
2002 438 4,097
2003 438 2,816
2004 218 676
=============== ===============
Total minimum lease payments 1,970 $ 22,523
===============
Less: amount representing interest 330
---------------
Present value of minimum lease payments $ 1,640
===============
</TABLE>
Total rent expense included in general and administrative expenses was
$8,903, $8,089,$5,922, $5,045 and $4,073 for fiscal years ended 1999, 1998,
1997 and for the six months ended March 31, 2000 and 1999, respectively.
The Company is involved in legal actions arising in the ordinary course of
business. The Company believes that it has adequate legal defenses or
reserves with respect to such litigation and believes that their ultimate
outcome will not have a material adverse effect on the Company's results of
operations or financial position.
11. Supplemental Cash Flow Information:
<TABLE>
<CAPTION>
Years ended September 30, Six months ended
March 31,
1999 1998 1997 2000 1999
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Cash paid during the year for:
Interest $ 1,115 $ 1,366 $ 659 $ 769 $ 566
Income taxes 33 2,170 1,509 - -
Non-cash investing activities:
Computer equipment acquired
through capital leases 1,786 - - - -
Investments received in the
sale of fixed assets 618 - - - -
Details of acquisition:
Fair value of assets acquired $ - $ 4,121 $ 12,165 $ - $ -
Goodwill - 65 5,280 - -
Liabilities assumed - (2,862) (5,399) - -
---------- ---------- ---------- ---------- -----------
Cash paid - 1,324 12,046 - -
Less: cash acquired - (39) 243 - -
---------- ---------- ---------- ---------- -----------
Net cash paid for acquisitions $ - $ 1,285 $ 11,803 $ - $ -
========== ========== ========== ========== ===========
</TABLE>
F-15
<PAGE>
12. Segment Reporting
Financial information relating to the Company's operations by service are
as follows:
<TABLE>
<CAPTION>
Six Months Ended March 31, 2000
<S> <C> <C> <C> <C> <C>
Transportation Construction Civil Environmental Total
Engineering fees $49,359 $15,627 $34,999 $26,167 $126,152
Net earned revenue 36,862 11,382 27,468 21,018 96,730
Operating income 2,987 890 2,415 1,811 8,103
Depreciation and amortization 1,297 387 1,049 787 3,520
Total assets 40,001 11,930 32,359 24,262 108,552
Capital expenditures 2,246 670 1,818 1,364 6,098
Six Months Ended March 31, 1999
Transportation Construction Civil Environmental Total
Engineering fees $43,274 $14,035 $32,748 $26,900 $116,957
Net earned revenue 32,269 10,466 24,420 20,058 87,213
Operating income 1,832 547 1,482 1,113 4,974
Depreciation and amortization 1,007 300 814 611 2,732
Total assets 36,548 10,900 29,566 22,168 99,182
Capital expenditures 1,548 462 1,252 939 4,201
Year Ended September 30, 1999
Transportation Construction Civil Environmental Total
Engineering fees $89,324 $28,970 $67,597 $55,526 $241,417
Net earned revenue 66,835 21,676 50,579 41,547 180,637
Operating income 3,316 989 2,683 2,012 9,000
Depreciation and amortization 2,262 672 1,834 1,345 6,113
Total assets 38,263 11,411 30,953 23,208 103,835
Capital expenditures 2,589 772 2,094 1,570 7,025
Year Ended September 30, 1998
Transportation Construction Civil Environmental Total
Engineering fees $82,651 $26,806 $62,547 $51,377 $223,381
Net earned revenue 61,839 20,056 46,797 38,441 167,133
Operating income 3,357 1,139 1,677 1,611 7,784
Depreciation and amortization 2,299 780 1,148 1,103 5,330
Total assets 41,588 14,107 20,770 19,960 96,425
Capital expenditures 2,910 987 1,453 1,398 6,748
Year Ended September 30, 1997
Transportation Construction Civil Environmental Total
Engineering fees $63,878 $20,717 $50,067 $37,982 $172,644
Net earned revenue 48,627 15,771 38,113 28,912 131,423
Operating income 2,957 928 1,371 1,406 6,662
Depreciation and amortization 1,744 548 809 830 3,931
Total assets 37,038 11,626 17,176 17,617 83,457
Capital expenditures 1,667 523 773 794 3,757
</TABLE>
Prior to fiscal year 2000, general and administrative costs were allocated
based on each segment's directs costs, as a percentage of total direct costs.
Beginning with fiscal year 2000, each segment's general and administrative costs
are a combination of its' actual relative direct expenses and an allocation of
corporate expenses.
F-16
<PAGE>
Exhibit Index
Ex # Exhibit Description
3.1 - Articles of Incorporation, as amended
3.2 - Amended and Restated Bylaws
4.1 - Form of Specimen Stock Certificate
10.2 - Supplemental Income Plan effective as of January 12, 1988
10.3 - Consulting/Supplemental Retirement/Death Benefits Agreement,
dated November 6, 1987, between the Registrant and H. Michael
Dye, as amended on October 16, 1989, March 1, 1993, February 6,
1995, May 19, 1998 and November 22, 1999
10.4 - Supplemental Retirement/Death Benefits Agreement, dated December
17, 1987, between the Registrant and Robert J. Paulsen
10.5 - Supplemental Income Agreement, dated as of July 29, 1996, between
the Registrant and Robert J. Paulsen
10.6 - Employment/Retirement Benefits Agreement, dated February 15,
1999, between the Registrant and William W. Randolph
10.7 - Supplemental Retirement/Death Benefits Agreement, dated December
17, 1987, between the Registrant and Richard A. Wickett, as
amended on April 27, 1989, May 19, 1998 and November 22, 1999
10.8 - Supplemental Retirement/Death Benefits Agreement dated December
17, 1987, between the Registrant and John B. Zumwalt, III, as
amended on May 19, 1998 and November 22, 1999
10.9 - Agreement, dated as of April 1, 1993, between the Registrant and
John B. Zumwalt, III
10.10 - Split Dollar Life Insurance Agreement dated February 1, 1999, by
and between The Randolph Insurance Trust and the Registrant
10.11 - Credit Agreement, dated as of June 28, 1996, by and among
Nationsbank, N.A., Suntrust Bank, Miami, N.A., Post, Buckley,
Schuh and Jernigan, Inc., The PBSJ Corporation, and the
subsidiaries named therein, as amended on July 3, 1997 and June
30, 1999
10.12 - Lease Agreement, dated as of March 25, 1998, by and between Post,
Buckley, Schuh & Jernigan, Inc. and Highwoods/Florida Holdings
L.P. as successor in interest to Cypress-Tampa II L.P., as
amended on May 26, 1998, December 26, 1998, November 29, 1999 and
March 1, 2000
10.13 - Lease Agreement, dated as of November 23, 1999, by and between
Post, Buckley, Schuh & Jernigan, Inc. and 1560 N. Orange Ltd.
21 - Subsidiaries
27.1 - Financial Data Schedule - September 30, 1999
27.2 - Financial Data Schedule - March 31, 2000
