<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the Quarter Ended Commission File No.
July 31, 1996 0-10146
- --------------------- -------------------
ABRAMS INDUSTRIES, INC.
------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Georgia 58-0522129
- ------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
5775-A Glenridge Drive, N.E., Suite 202, Atlanta, Georgia 30328
-------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(404) 256-9785
---------------------------------------------------
(Registrant's telephone number, including area code)
N/A
---------------------------------------------------------------
(Former name, former address and former fiscal year, if changed
since last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities and Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Yes X No
--- ---
The number of shares of $1.00 par value Common Stock of the
Registrant outstanding as of August 15, 1996 was 2,970,856.
<PAGE>
PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
- -----------------------------
ABRAMS INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
July 31, 1996 April 30, 1996
ASSETS ------------- --------------
------
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 4,858,661 $ 5,452,453
Receivables (note 2) 14,355,932 16,132,372
Less: Allowance for doubtful accounts (27,061) (57,541)
Inventories, net (note 3) 1,306,708 1,676,541
Costs and earnings in excess of billings 2,643,812 2,858,389
Deferred income taxes 999,100 999,100
Other 1,105,691 862,384
------------- -------------
Total current assets 25,242,843 27,923,698
------------- -------------
INCOME-PRODUCING PROPERTIES, net 53,998,684 50,661,940
PROPERTY, PLANT AND EQUIPMENT, net 3,808,398 3,831,902
OTHER ASSETS
Land held for sale (note 4) 4,919,703 4,980,903
Notes receivable 594,551 624,017
Cash surrender value of life insurance on officers, net 930,482 947,134
Deferred loan costs, net 922,764 914,153
Other 1,788,491 1,229,443
------------- -------------
$ 92,205,916 $ 91,113,190
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES
Trade and subcontractors payables $ 8,857,597 $ 11,246,736
Billings in excess of costs and earnings 1,419,545 781,818
Accrued expenses 2,680,492 3,991,790
Current maturities of long-term debt 1,773,283 1,485,657
------------- -------------
Total current liabilities 14,730,917 17,506,001
------------- -------------
DEFERRED INCOME TAXES 1,713,014 1,713,014
OTHER LIABILITIES 4,433,457 539,263
MORTGAGE NOTES AND BONDS PAYABLE, less current maturities 38,843,294 39,102,270
OTHER LONG-TERM DEBT, less current maturities 12,270,986 12,100,266
------------- -------------
Total liabilities 71,991,668 70,960,814
------------- -------------
SHAREHOLDERS' EQUITY
Common stock, $1 par value; authorized 5,000,000 shares;
3,010,039 issued and 2,970,856 outstanding in 1997 and 1996 3,010,039 3,010,039
Additional paid-in capital 2,012,190 2,012,190
Retained earnings 15,351,320 15,289,448
------------- -------------
Total paid-in capital and retained earnings 20,373,549 20,311,677
Less cost of treasury stock 159,301 159,301
------------- -------------
Total shareholders' equity 20,214,248 20,152,376
------------- -------------
$ 92,205,916 $ 91,113,190
============= =============
</TABLE>
See accompanying notes to consolidated financial statements.<PAGE>
ABRAMS INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
<TABLE>
<CAPTION>
FIRST QUARTER ENDED JULY 31,
------------------------------
1996 1995
---- ----
<S> <C> <C>
REVENUES
Construction $21,546,879 $26,865,531
Manufacturing 3,561,312 5,026,014
Real estate 3,190,785 2,754,216
----------- -----------
28,298,976 34,645,761
Less: Intersegment eliminations (329,593) -
----------- -----------
27,969,383 34,645,761
Interest 114,767 135,224
Other 35,420 10,739
----------- -----------
28,119,570 34,791,724
COSTS AND EXPENSES ----------- -----------
Applicable to REVENUES--
Construction 20,361,258 25,796,330
Manufacturing 2,427,176 3,829,409
Real estate, exclusive of interest 1,882,901 1,433,646
----------- -----------
24,671,335 31,059,385
Less: Intersegment eliminations (325,150) -
----------- -----------
24,346,185 31,059,385
----------- -----------
Selling, shipping, general and administrative
Construction 593,652 541,395
Manufacturing 883,502 998,594
Real estate 404,439 423,694
Parent 545,499 531,308
----------- -----------
2,427,092 2,494,991
----------- -----------
Interest costs incurred, less interest capitalized 1,174,866 1,217,194
----------- -----------
27,948,143 34,771,570
----------- -----------
EARNINGS BEFORE INCOME TAXES 171,427 20,154
INCOME TAX EXPENSE 65,000 8,000
----------- -----------
NET EARNINGS $ 106,427 $ 12,154
=========== ===========
NET EARNINGS PER SHARE $ .040 $ .03
=========== ============
DIVIDENDS PER SHARE $ .015 $ .00
=========== ============
WEIGHTED AVERAGE SHARES OUTSTANDING 2,970,856 2,992,909
=========== ============
</TABLE>
See accompanying notes to consolidated financial statements.
2<PAGE>
ABRAMS INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
FIRST QUARTER ENDED JULY 31,
----------------------------
1996 1995
---- ----
<S> <C> <C>
Cash flows from operating activities
Net earnings $ 106,427 $ 12,154
Adjustments to reconcile net earnings to net cash
provided by (used in) operating activities
Depreciation and amortization 830,310 823,038
Gain on sales of real estate (94,753) -
Decrease (increase) in assets
Receivables 1,745,960 (5,574,665)
Inventories 369,833 106,277
Costs and earnings in excess of billings 214,577 (1,449,559)
Other current assets (243,307) (183,018)
Other assets (26,560) 29,137
Increase (decrease) in liabilities
Accounts payable (2,389,139) 4,363,345
Billings in excess of costs and earnings 637,727 1,018,247
Accrued expenses (1,311,298) (1,441,570)
Other liabilities 192,155 18,371
----------- -----------
Net cash provided by (used in) operating activities 31,932 (2,278,243)
----------- -----------
Cash flows from investing activities
Proceeds from sale of real estate 256,000 -
Additions to properties, property, plant and
equipment, net (1,036,539) (199,193)
----------- -----------
Net cash used in investing activities (780,539) (199,193)
----------- -----------
Cash flows from financing activities
Debt proceeds 571,646 2,699,000
Debt repayments (372,276) (2,499,795)
Cash dividends (44,555) (89,794)
Repurchases of common stock - (8,490)
----------- -----------
Net cash provided by financing activities 154,815 100,921
----------- -----------
Net decrease in cash and cash equivalents (593,792) (2,376,515)
Cash and cash equivalents at beginning of period 5,452,453 8,270,703
----------- -----------
Cash and cash equivalents at end of period $ 4,858,661 $ 5,894,188
=========== ===========
Supplemental schedule of cash flow information
Interest paid, net of amounts capitalized $ 1,227,568 $ 1,272,473
=========== ===========
Income taxes paid, net of refunds $ 80,291 $ 212,129
=========== ===========
Supplemental schedule of non-cash investing activities
Accrual of construction allowance payable $ 3,702,039 $ -
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
3<PAGE>
ABRAMS INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JULY 31, 1996 AND APRIL 30, 1996
(UNAUDITED)
NOTE 1. UNAUDITED STATEMENTS
- -----------------------------
The accompanying unaudited consolidated financial statements have
been prepared by the Company in accordance with generally
accepted accounting principles, pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in
financial statements have been condensed or omitted pursuant to
such rules and regulations, although management believes that
the disclosures are adequate to make the information presented
not misleading. In the opinion of management, the accompanying
financial statements contain all adjustments, which consist
solely of normal recurring accruals, necessary for a fair
statement of the results for the interim periods presented.
These financial statements should be read in conjunction with the
consolidated financial statements and the notes thereto included
in the Company's Annual Report to Shareholders for the year ended
April 30, 1996. Results of operation for interim periods are not
necessarily indicative of annual results.
NOTE 2. RECEIVABLES
- --------------------
All contract receivables are expected to be collected within one
year.
NOTE 3. INVENTORIES
- --------------------
The classes of inventory are as follows:
July 31, 1996 April 30, 1996
------------- --------------
Finished goods $ 814,985 $ 1,355,296
Work in process 149,711 73,029
Raw materials 342,012 248,216
----------- -----------
$ 1,306,708 $ 1,676,541
=========== ===========
NOTE 4. LAND HELD FOR SALE
- ---------------------------
Land held for sale is carried at the lower of cost or fair value
less cost to sell. Land held for sale includes all direct costs
of land and land development, including interest, and other
carrying costs incurred during the development period, less
amounts charged to cost of sales. Land and land development
costs (including estimated costs to complete) are allocated to
individual lots sold based on relative sales values.
NOTE 5. RECLASSIFICATIONS
- --------------------------
Certain reclassifications have been made to the fiscal 1996
consolidated financial statements to conform with classifications
adopted in fiscal 1997.
4<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
------------------------------------
Changes in CONSOLIDATED BALANCE SHEETS between April 30, 1996 and
July 31, 1996.
- -----------------------------------------------------------------
Accounts receivable decreased by $1,745,960 and Accounts payable
decreased by $2,389,139 primarily because of decreased sales in
both the Construction and Manufacturing Segments. Accrued
expenses decreased by $1,311,298 because of the payment of year-
end accruals. Other liabilities increased by $3,894,194 primarily
because of the accrual of a construction allowance payable to AMC
Cinema. This new building is owned by the Company and leased to AMC.
The building was completed and occupied in May 1996. Income-
producing properties increased by an almost similar amount.
Results of operations of first quarter fiscal 1997 compared to
first quarter fiscal 1996.
- -----------------------------------------------------------------
REVENUES
For the first quarter ended July 31, 1996, Consolidated REVENUES,
including Interest income and Other income, were $28,119,570,
compared to $34,791,724 for the first quarter ended July 31,
1995. Interest income was $114,767 for the first quarter 1997,
compared to $135,224 for the first quarter 1996.
The figures in Chart A are before Intersegment eliminations and
do not include Interest income or Other income.
CHART A
<TABLE>
<CAPTION>
REVENUE SUMMARY BY SEGMENT
First Quarter Ended Amount Percent
July 31, Increase Increase
1996 1995 (Decrease) (Decrease)
-----------------------------------------------------------------
<S> <C> <C> <C> <C>
Construction <F1> $21,546,879 $26,865,531 $(5,318,652) (20)
Manufacturing <F2> 3,561,312 5,026,014 (1,464,702) (29)
Real Estate <F3> 3,190,785 2,754,216 436,569 16
-------------------------------------------------------------------
$28,298,976 $34,645,761 $(6,346,785) (18)
NOTES TO CHART A
<FN>
<F1> REVENUES for the first quarter 1997 were lower than those of
the first quarter 1996 primarily because of decreased sales to
one of the Company's customers.
<F2> REVENUES for the first quarter 1997 were lower than those of
the first quarter 1996 because of the Company's continuing re-
engineering efforts which emphasize a reduction in volume to
more efficiently control the costs of production.
<F3> REVENUES for the first quarter 1997 were higher than those
of the first quarter 1996 because of a land sale. There was no
land sale during the first quarter 1996.
</FN>
</TABLE>
5<PAGE>
The following table shows the backlog of contracts and orders
by segment:
July 31,
----------------------------
1996 1995
----------- -----------
Construction $35,622,000 $30,329,000
Manufacturing 5,029,000 4,760,000
Real Estate 10,867,000 10,056,000
----------- -----------
Total Backlog $51,518,000 $45,145,000
=========== ============
COSTS AND EXPENSES: Applicable to REVENUES
As a percentage of Segment REVENUES (See Chart A) for the first quarter
1997 and 1996, the applicable COSTS AND EXPENSES (See Chart B) were 87%
and 90%, respectively. The figures in Chart B are prior to Intersegment
eliminations.
<TABLE>
<CAPTION>
CHART B
COSTS AND EXPENSES APPLICABLE TO REVENUES SUMMARY BY SEGMENT
Percent of Segment Revenues
First Quarter Ended For First Quarter Ended
July 31 July 31
------------------------------------------------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Construction <F1> $20,361,258 $25,796,330 94 96
Manufacturing <F2> 2,427,176 3,829,409 68 76
Real Estate <F3> 1,882,901 1,433,646 59 52
----------- ----------- -- --
$24,671,335 $31,059,385 87 90
NOTES TO CHART B
----------------
<FN>
<F1> The decrease in the percentage of COSTS AND EXPENSES:
Applicable to REVENUES for the first quarter 1997 compared to the
first quarter 1996 is attributable to the elimination of some low
gross profit margin customers.
<F2> The decrease in the percentage of COSTS AND EXPENSES:
Applicable to REVENUES for the first quarter 1997 compared to the
first quarter 1996 is attributable to re-engineering efforts
which are emphasizing control of costs.
<F3> The approximately $450,000 increase in the dollar amount and
corresponding 7% increase in the percentage of COSTS AND
EXPENSES: Applicable to REVENUES for the first quarter 1997
compared to the first quarter 1996 is attributable to the
following: (a) cost of land sold -- $161,000; (b) expenses
associated with the transfer of a sale-leaseback property to the
fee owner -- $98,000; shopping center operating expenses --
$151,000; (d) shopping center depreciation expenses -- $32,000.
</FN>
</TABLE>
6
<PAGE>
SELLING, SHIPPING, GENERAL AND ADMINISTRATIVE EXPENSES
For the first quarter 1997 and for the first quarter 1996,
Selling, shipping, general and administrative expenses were
$2,427,092 and $2,494,991, respectively. As a percentage of
Consolidated REVENUES, these expenses were 9% and 7%,
respectively. In reviewing Chart C, the reader should recognize
that the volume of revenues usually affects the amounts and
percentages. The percentages in Chart C are based upon expenses
as they relate to Segment REVENUES (Chart A) prior to
Intersegment eliminations, except that Parent and Total expenses
relate to Consolidated REVENUES.
CHART C
SELLING, SHIPPING, GENERAL AND ADMINISTRATIVE EXPENSES BY SEGMENT
<TABLE>
<CAPTION>
Percent of Segment Revenues
First Quarter Ended For First Quarter Ended
July 31 July 31
------------------------------------------------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Construction <F1> $ 593,652 $ 541,395 3 2
Manufacturing <F2> 883,502 998,594 25 20
Real Estate 404,439 423,694 13 15
Parent 545,499 531,308 2 2
---------------------------------------------
$2,427,092 $ 2,494,991 9 7
NOTES TO CHART C
<FN>
<F1> On a dollar basis, Selling, shipping, general and
administrative expenses were higher for the first quarter 1997 as
compared to the first quarter 1996 because of increased personnel
costs.
<F2> On a dollar basis, Selling, shipping, general and
administrative expenses were lower for the first quarter 1997 as
compared to the first quarter 1996 because personnel costs
associated with the re-engineering effort decreased by $86,000
and interest expense decreased by $27,000 because of the
Company's reduced use of its line of credit in the current year.
</FN>
</TABLE>
Interest rate swap agreement.
- ----------------------------
The Company entered into an interest rate swap agreement with
SunTrust Bank, Atlanta effective January 4, 1994, which
terminates July 1, 1997. The notional amount reduces monthly
from approximately $9.7 million at July 31, 1996, to $9.5 million
prior to expiration of the agreement. The agreement effectively
caps and sets a floor interest rate of 8% and 6%, respectively,
on the construction loan which had an outstanding balance of
$10,469,284 at July 31, 1996, and carries a floating interest
rate of prime plus 3/8%. The Company expects the counterparty to
7
<PAGE>
the agreement to abide by the terms of the agreement. A
determination is made each reporting period whether amounts are
receivable from or payable to the counterparty under the
agreement and such accrual is made in the financial statements.
Liquidity and capital resources.
- --------------------------------
Between April 30, 1996 and July 31, 1996, working capital
increased by $94,229. Operating activities provided cash of
$31,932. Investing activities used cash of $780,539 primarily
for the completion of the AMC Cinema and shops at the Merchants
Crossing Shopping Center in N. Ft. Myers, Florida. Financing
activities provided cash of $154,815 from debt proceeds that were
used to fund the company's operating activities. At July 31,
1996, the Company and its subsidiaries had available unsecured
committed lines of credit totaling $9,500,000, against which none
was outstanding.
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- -----------------------------------------
(a) None
(b) The Registrant has not filed any reports on form 8-K during
the quarter ended July 31, 1996.
8
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
ABRAMS INDUSTRIES, INC.
(Registrant)
Date: September 3, 1996 /S/ Edward M. Abrams
Edward M. Abrams
Chairman of The Board and
Chief Executive Officer
Date: September 3, 1996 /S/ Joseph H. Rubin
Joseph H. Rubin
President, Chief Operating Officer,
Chief Financial Officer and Chief
Accounting Officer
9
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000001923
<NAME> ABRAMS INDUSTRIES
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> APR-30-1997
<PERIOD-START> MAY-01-1996
<PERIOD-END> JUL-31-1996
<CASH> 4,858,661
<SECURITIES> 0
<RECEIVABLES> 14,950,483
<ALLOWANCES> 27,061
<INVENTORY> 1,306,708
<CURRENT-ASSETS> 25,242,843
<PP&E> 85,741,093
<DEPRECIATION> 27,934,011
<TOTAL-ASSETS> 92,205,916
<CURRENT-LIABILITIES> 14,730,917
<BONDS> 51,114,280
0
0
<COMMON> 3,010,039
<OTHER-SE> 17,204,209
<TOTAL-LIABILITY-AND-EQUITY> 92,205,916
<SALES> 27,969,383
<TOTAL-REVENUES> 28,119,570
<CGS> 24,346,185
<TOTAL-COSTS> 24,346,185
<OTHER-EXPENSES> 2,457,572
<LOSS-PROVISION> 30,480
<INTEREST-EXPENSE> 1,174,866
<INCOME-PRETAX> 171,427
<INCOME-TAX> 65,000
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 106,427
<EPS-PRIMARY> .04
<EPS-DILUTED> .04
</TABLE>
