<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.
January 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 February 15, 1996
was 2,970,856.<PAGE>
<PAGE>
<TABLE>
<CAPTION>
PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
- -----------------------------
ABRAMS INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
January 31, 1996 April 30, 1995
---------------- --------------
<S> <C> <C>
ASSETS
- ------
CURRENT ASSETS:
Cash and cash equivalents $ 4,709,108 $ 8,270,703
Receivables (note 2) 15,133,676 10,782,910
Less: Allowance for doubtful accounts (40,803) (100,189)
Inventories (note 3) 1,987,221 2,655,906
Costs and earnings in excess of billings 5,984,869 1,568,845
Deferred income taxes 1,212,791 1,212,791
Other 915,524 388,079
----------- ------------
Total current assets 29,902,386 24,779,045
INCOME-PRODUCING PROPERTIES, net 50,673,636 50,784,045
----------- -----------
PROPERTY, PLANT AND EQUIPMENT, net 3,953,129 4,281,112
OTHER ASSETS:
Land held for investment 4,950,293 4,950,293
Notes receivable 652,571 783,293
Cash surrender value of life insurance on officers, net 929,245 889,712
Deferred loan costs, net 978,722 1,128,040
Other 850,827 981,205
----------- -----------
$92,890,809 $88,576,745
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
CURRENT LIABILITIES:
Accounts payable $12,710,692 $7,859,614
Billings in excess of costs and earnings 1,986,967 500,468
Accrued expenses 3,519,875 4,046,752
Current maturities of long-term debt 2,938,604 1,510,122
----------- -----------
Total current liabilities 21,156,138 13,916,956
----------- -----------
DEFERRED INCOME TAXES 2,207,525 2,207,525
MORTGAGE NOTES AND BONDS PAYABLE, less current maturities 39,213,261 40,518,332
OTHER LONG-TERM DEBT, less current maturities 10,314,228 11,061,897
----------- -----------
Total liabilities 72,891,152 67,704,710
----------- -----------
SHAREHOLDERS' EQUITY:
Common stock, $1 par value; authorized 5,000,000 shares;
3,010,039 issued and 2,970,856 outstanding in 1996
and 3,010,039 issued and 2,993,540 outstanding in 1995 3,010,039 3,010,039
Additional paid-in capital 2,012,190 2,012,190
Retained earnings 15,136,729 15,906,239
----------- -----------
Total paid-in capital and retained earnings 20,158,958 20,928,468
Less: Treasury stock (159,301) (56,433)
----------- -----------
Total shareholders' equity 19,999,657 20,872,035
----------- -----------
$92,890,809 $88,576,745
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
ABRAMS INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
THIRD QUARTER ENDED NINE MONTHS ENDED
JANUARY 31, JANUARY 31,
---------------------------- -----------------------------
1996 1995 1996 1995
----------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
REVENUES:
Construction $27,126,825 $23,644,923 $ 82,522,343 $76,544,283
Manufacturing 3,137,383 3,838,651 12,004,808 13,044,425
Real estate 2,938,252 2,941,010 8,434,720 8,889,367
----------- ----------- ----------- -----------
33,202,460 30,424,584 102,961,871 98,478,075
Less: Intersegment eliminations (438,524) - (512,351) -
----------- ----------- ----------- -----------
32,763,936 30,424,584 102,449,520 98,478,075
Interest 119,218 96,950 369,103 293,787
Other 22,300 10,822 47,013 34,321
----------- ----------- ----------- -----------
32,905,454 30,532,356 102,865,636 98,806,183
----------- ----------- ----------- -----------
COSTS AND EXPENSES:
Applicable to REVENUES-
Construction 25,706,882 22,627,247 78,725,732 73,346,030
Manufacturing 2,635,554 3,091,120 9,517,678 10,164,067
Real estate, exclusive of interest 1,676,473 1,686,205 4,695,702 4,832,224
----------- ----------- ----------- -----------
30,018,909 27,404,572 92,939,112 88,342,321
Less: Intersegment eliminations (434,236) - (507,400) -
----------- ----------- ----------- -----------
29,584,673 27,404,572 92,431,712 88,342,321
----------- ----------- ----------- -----------
Selling, shipping, general and administrative:
Construction 816,933 654,474 1,978,008 1,679,249
Manufacturing 805,777 916,823 2,707,530 3,028,421
Real estate 450,907 436,010 1,249,174 1,257,268
Parent 606,569 535,819 1,698,727 1,545,001
----------- ----------- ----------- -----------
2,680,186 2,543,126 7,633,439 7,509,939
----------- ----------- ----------- -----------
Interest costs incurred, less interest capitalized 1,166,643 1,214,348 3,588,959 3,625,562
----------- ----------- ----------- -----------
33,431,502 31,162,046 103,654,110 99,477,822
----------- ----------- ----------- -----------
LOSS BEFORE INCOME TAXES (526,048) (629,690) (788,474) (671,639)
INCOME TAX BENEFIT (192,000) (227,000) (287,000) (241,000)
----------- ----------- ----------- -----------
NET LOSS $ (334,048) $ (402,690) $ (501,474) $ (430,639)
=========== =========== ============= ===========
NET LOSS PER SHARE $ (.11) $ (.13) $ (.17) $ (.14)
=========== =========== ============= ===========
DIVIDENDS PER SHARE $ .03 $ .03 $ .09 $ .09
=========== =========== ============= ===========
WEIGHTED AVERAGE SHARES
OUTSTANDING $ 2,970,856 $ 2,993,540 $ 2,979,265 $ 2,993,540
=========== =========== ============= ===========
</TABLE>
See accompanying notes to consolidated financial statements.
2
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
ABRAMS INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
NINE MONTHS ENDED JANUARY 31,
-----------------------------
1996 1995
----------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (501,474) $ (430,639)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities-
Depreciation and amortization 2,450,707 2,337,876
Gain on sales of real estate - (317,330)
Decrease (increase) in assets:
Receivables (4,410,152) 2,145,004
Inventories 668,685 (82,525)
Costs and earnings in excess of billings (4,416,024) (1,363,891)
Income taxes receivable - (233,359)
Other current assets (527,445) 118,978
Other assets 164,608 437,703
Increase (decrease) in liabilities:
Accounts payable 4,851,078 150,134
Billings in excess of costs and earnings 1,486,499 461,144
Accrued expenses (526,877) (1,963,344)
Income taxes payable - (765,265)
---------- -----------
Net cash provided by (used in) operating activities (760,395) 494,486
---------- -----------
Cash flows from investing activities:
Proceeds from sale of real estate - 630,000
Additions to properties, property, plant and
equipment, net
(1,804,010) (840,070)
---------- -----------
Net cash used in investing activities (1,804,010) (210,070)
---------- ------------
Cash flows from financing activities:
Debt proceeds 6,597,951 4,942,000
Debt repayments (7,222,209) (5,987,277)
Additions to deferred loan costs (2,028) (61,584)
Cash dividends (268,036) (269,449)
Repurchases of common stock (102,868) -
---------- ----------
Net cash used in financing activities (997,190) (1,376,310)
---------- ----------
Net decrease in cash and cash equivalents (3,561,595) (1,091,894)
Cash and cash equivalents at beginning of period 8,270,703 7,127,188
---------- ----------
Cash and cash equivalents at end of period $4,709,108 $ 6,035,294
========== ===========
Supplemental schedule of cash flow information:
Interest paid, net of amounts capitalized $3,768,619 $ 3,746,270
========== ===========
Income taxes paid $ 223,050 $ 846,737
========== ===========
</TABLE>
3
See accompanying notes to consolidated financial statements.
<PAGE>
<PAGE>
ABRAMS INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JANUARY 31, 1996 AND APRIL 30, 1995
(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, 1995. Results of operations for interim periods are
not necessarily indicative of annual results.
NOTE 2. RECEIVABLES
- --------------------
All contract and trade receivables are expected to be
collected within one year.
NOTE 3. INVENTORIES
- --------------------
The classes of inventory are as follows:
<TABLE>
<CAPTION>
January 31, 1996 April 30, 1995
---------------- --------------
<S> <C> <C>
Finished goods $1,537,433 $1,790,849
Work in process 200,910 552,803
Raw materials 248,878 312,254
---------- ----------
$1,987,221 $2,655,906
========== ==========
</TABLE>
NOTE 4. RECLASSIFICATIONS
- --------------------------
Certain reclassifications have been made to the fiscal 1995
consolidated financial statements to conform with classifications
adopted in fiscal 1996.
4
<PAGE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
- ----------------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS.
- ------------------------------------
Changes in CONSOLIDATED BALANCE SHEETS between April 30, 1995,
- --------------------------------------------------------------
and January 31, 1996.
- ---------------------
Cash and cash equivalents decreased by $3,561,595 because of
funding the working capital needs of the Company. The timing of
the submission of invoices for construction work performed and
the payment of invoices related to construction work, were the
primary factors that contributed to increases in the following
items: (1) Costs and earnings in excess of billings -
$4,416,024; (2) Billings in excess of costs and earnings -
$1,486,499; (3) Accounts receivable - $4,410,152; and (4)
Accounts payable - $4,851,078.
Results of operations of third quarter and first nine months of
- ---------------------------------------------------------------
fiscal 1996 compared to third quarter and first nine months of
- --------------------------------------------------------------
fiscal 1995.
- ------------
REVENUES
For the third quarter 1996, Consolidated REVENUES, including
Interest income and Other income, increased to $32,905,454, from
$30,532,356 for the third quarter 1995. During the period,
Interest income increased to $119,218 from $96,950.
For the first nine months 1996, Consolidated REVENUES,
including Interest income and Other income increased to
$102,865,636, from $98,806,183 for the first nine months 1995.
During the period, Interest income increased to $369,103 from
$293,787.
The figures in Chart A are before Intersegment eliminations
and do not include Interest income or Other income.
<TABLE>
<CAPTION>
CHART A
REVENUE SUMMARY BY SEGMENT
(In Thousands, Except Percentages)
Third Quarter Ended Nine Months Ended
January 31, Amount Percent January 31, Amount Percent
------------------- Increase Increase ------------------- Increase Increase
1996 1995 (Decrease) (Decrease) 1996 1995 (Decrease) (Decrease)
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Construction (1) $27,127 $23,645 $3,482 15 $82,522 $76,544 $5,978 8
Manufacturing (2) 3,137 3,839 (702) (18) 12,005 13,045 (1,040) (8)
Real Estate (3) 2,938 2,941 (3) - 8,435 8,889 (454) (5)
$33,202 $30,425 $2,777 9 $102,962 $98,478 $4,484 5
</TABLE>
NOTES TO CHART A
----------------
(1) The growth in revenues in the third quarter and first nine
months 1996 compared to the third quarter and first nine months
1995 is the result of increased levels of activity in the
construction of new buildings and expansions of others for both
new and existing customers. The amounts reported include
intercompany revenues of $438,524 in the third quarter and
$512,351 in the first nine months 1996 and no intercompany
5
<PAGE>
revenues for the prior periods. The intercompany revenues are
related to construction work performed for the Real Estate
Segment at one of its shopping centers.
(2) REVENUES for the third quarter and first nine months 1996
were lower than those of the third quarter and first nine months
1995, because several customers have delayed fixturing programs,
others have cut-back fixturing programs, and still others have
canceled current fixturing programs.
(3) REVENUES for the first nine months 1996 were lower than
those of the first nine months 1995 because of the sale of a
shopping center outlot during the first quarter 1995. There were
no land sales in 1996.
The following table shows the backlog of contracts and orders
by segment:
<TABLE>
<CAPTION>
January 31,
------------------------------
1996 1995
----------- -----------
<S> <C> <C>
Construction $33,453,000 $29,927,000
Manufacturing 5,216,000 6,478,000
Real Estate 10,765,000 10,132,000
Less: Intersegment Eliminations (243,000) -
----------- -----------
Total Backlog $49,191,000 $46,537,000
=========== ===========
</TABLE>
COSTS AND EXPENSES: Applicable to REVENUES
As a percentage of Segment REVENUES (See Chart A) for the
third quarter and first nine months 1996 and 1995, the applicable
COSTS AND EXPENSES (See Chart B) were 90%. The figures in Chart
B are prior to Intersegment eliminations.
<TABLE>
<CAPTION>
CHART B
COSTS AND EXPENSES APPLICABLE TO REVENUES SUMMARY BY SEGMENT
(In Thousands, Except Percentages)
Percent of Segment Revenues Percent of Segment Revenues
Third Quarter Ended For Third Quarter Ended Nine Months Ended For Nine Months Ended
January 31, January 31, January 31, January 31,
------------------- --------------------------- ------------------ ----------------------------
1996 1995 1996 1995 1996 1995 1996 1995
---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Construction $25,707 $22,628 95 96 $78,726 $73,346 95 96
Manufacturing (1) 2,636 3,091 84 81 9,517 10,164 79 78
Real Estate 1,676 1,686 57 57 4,696 4,832 56 54
------- ------- -- -- ------- ------- -- --
$30,019 $27,405 90 90 $92,939 $88,342 90 90
</TABLE>
NOTES TO CHART B
----------------
(1) The increase in the percentage of COSTS AND EXPENSES:
Applicable to REVENUES for the third quarter and first nine
months 1996 compared to the third quarter and first nine months
1995 is the result of negative labor variances and
underabsorption of plant overhead.
SELLING, SHIPPING, GENERAL AND ADMINISTRATIVE EXPENSES
For the third quarter 1996 and for the third quarter 1995,
Selling, shipping, general and administrative expenses were
$2,680,186 and $2,543,126, respectively. As a percentage of
Consolidated REVENUES, these expenses were 8% in each period.
For the first nine months 1996 and for the first nine months
1995, Selling, shipping, general and administrative expenses were
$7,633,439 and $7,509,939, respectively. As a percentage of
Consolidated REVENUES these expenses were 7% and 8%,
respectively. In reviewing Chart C, the reader should recognize
that the volume of revenues generally will affect 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.
<TABLE>
<CAPTION>
CHART C
SELLING, SHIPPING, GENERAL AND ADMINISTRATIVE EXPENSES BY SEGMENT
(In Thousands, Except Percentages)
Percent of Segment Revenues Percent of Segment Revenues
Third Quarter Ended For Third Quarter Ended Nine Months Ended For Nine Months Ended
January 31, January 31, January 31, January 31,
------------------- -------------------------- ----------------- ---------------------------
1996 1995 1996 1995 1996 1995 1996 1995
---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Construction (1) $817 $654 3 3 $1,978 $1,679 2 2
Manufacturing (2) 806 917 26 24 2,707 3,029 23 23
Real Estate 451 436 15 15 1,249 1,257 15 14
Parent (3) 606 536 2 2 1,699 1,545 2 2
------ ------ -- -- ------ ------ -- --
$2,680 $2,543 8 8 $7,633 $7,510 7 8
</TABLE>
NOTES TO CHART C
----------------
(1) On a dollar basis, Selling, shipping, general and
administrative expenses were higher for the third quarter and
first nine months 1996 compared to the third quarter and first
nine months 1995. The year-to-date differences resulted from
increased profit-sharing and incentive-based bonus expenses of
approximately $194,000 and health insurance costs of
approximately $110,000.
(2) On a dollar basis, Selling, shipping, general and
administrative expenses were lower for the third quarter and
first nine months 1996 as compared to the third quarter and first
nine months 1995. The year-to-date differences resulted from the
following decreases: (a) doubtful account expense of
approximately $184,000; (b) personnel costs of approximately
$100,000; (c) business development expenses of approximately
$27,000.
7
<PAGE>
(3) On a dollar basis, Selling, shipping, general and
administrative expenses were higher for the third quarter and
first nine months 1996 as compared to the third quarter and first
nine months 1995. The year-to-date differences resulted from the
following increases: (a) profit-sharing expense of approximately
$83,000; (b) personnel costs of approximately $43,000; (c)
computer expenses of approximately $24,000.
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 $9.8 million at January 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 $9,571,377 at January 31, 1996, and carries a floating
interest rate of prime plus 3/8%. The Company expects the
counterparty to 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 Company's financial
statements.
Liquidity and capital resources.
- -------------------------------
Between April 30, 1995, and January 31, 1996, working capital
decreased by $2,115,841. Operating activities used cash of
$760,395. Investing activities used cash of $1,804,010 primarily
for purchasing new equipment and computers to increase
productivity. Financing activities used cash of $997,190
primarily for debt repayment. At January 31, 1996, the Company
and its subsidiaries had available unsecured committed lines of
credit totaling $13,000,000, against which none was outstanding.
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- ------------------------------------------
(a) Financial Data Schedule
(b) The Registrant has not filed any reports on form 8-K during
the quarter ended January 31, 1996.
<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: February 27, 1996 /s/ Edward M. Abrams
----------------- ----------------------------------
Edward M. Abrams
Chairman of The Board and
Chief Executive Officer
Date: February 27, 1996 /s/ Joseph H. Rubin
----------------- -----------------------------------
Joseph H. Rubin
President, Chief Operating Officer,
Chief Financial Officer and Chief
Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000001923
<NAME> ABRAMS INDUSTRIES
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> APR-30-1996
<PERIOD-START> MAY-01-1995
<PERIOD-END> JAN-31-1996
<EXCHANGE-RATE> 1
<CASH> 4,709,108
<SECURITIES> 0
<RECEIVABLES> 15,133,676
<ALLOWANCES> 40,803
<INVENTORY> 1,987,221
<CURRENT-ASSETS> 29,902,386
<PP&E> 79,328,589
<DEPRECIATION> 24,701,824
<TOTAL-ASSETS> 92,890,809
<CURRENT-LIABILITIES> 21,156,489
<BONDS> 49,527,489
0
0
<COMMON> 2,970,856
<OTHER-SE> 17,028,801
<TOTAL-LIABILITY-AND-EQUITY> 92,890,809
<SALES> 102,449,520
<TOTAL-REVENUES> 102,865,636
<CGS> 92,431,712
<TOTAL-COSTS> 92,431,712
<OTHER-EXPENSES> 7,633,439
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,588,959
<INCOME-PRETAX> (788,474)
<INCOME-TAX> (287,000)
<INCOME-CONTINUING> (501,474)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (501,474)
<EPS-PRIMARY> (.17)
<EPS-DILUTED> (.17)
</TABLE>
