EXHIBIT 13
[FRONT COVER]
abrams industries
2000 annual report
75
years
<PAGE>
[INSIDE FRONT COVER]
Established in 1925, Abrams Industries, Inc.
(the "Company") engages in commercial
BUSINESS DESCRIPTION construction and real estate investment and
development through its wholly owned
subsidiaries. Abrams Construction, Inc.
builds and renovates retail stores, shopping
centers, distribution and manufacturing
facilities, and engages in other types of
commercial construction. Abrams Properties,
Inc. currently controls over 2 million
square feet of shopping centers in the
Midwest and Southeast and approximately
200,000 square feet of office properties in
metropolitan Atlanta, Georgia.
TABLE OF CONTENTS
Annual Meeting and Other Information.......IFC
Letter to Shareholders.......................1
Summary Financial Data.......................2
Form 10-K....................................3
Directors, Officers and Directory...........40
The Annual Meeting of Shareholders of Abrams
Industries, Inc. will be held at 4:00 p.m.
ANNUAL MEETING on Wednesday, August 23, 2000, at the
INFORMATION Corporate Headquarters, 1945 The Exchange,
Suite 300, Atlanta, Georgia.
SunTrust Bank
TRANSFER AGENT Post Office Box 4625
Atlanta, Georgia 30302
<PAGE>
[75
years - appears on printed version as a graphic]
DEAR FELLOW SHAREHOLDERS:
Twelve months ago, we entered our 75th year, Fiscal 2000, facing significant
challenges. Although our core Construction Segment had recorded over a decade of
uninterrupted earnings growth, and despite our diversified Real Estate
investment portfolio having produced cash flows at steadily increasing levels,
Abrams Industries' shareholder value consistently failed to grow in relation to
the overall stock market. Poor corporate clarity, excess balance sheet leverage,
and years of inconsistent earnings growth restrained our stock's performance. In
June 1999, we determined that in order to unlock the per share price, we had to
begin to eliminate a structural barrier in the mix of our assets. Accordingly
the Board of Directors commenced an in-depth investigation of strategic and
financial alternatives that might be available.
In connection with that investigation:
* During the third quarter, we decided to discontinue the operations and
liquidate the assets of the Company's fifty-three year-old Manufacturing
Segment. The implementation of the plan of liquidation resulted in a pre-tax
charge to earnings of approximately $2,750,000. The Company disposed of
substantially all of its manufacturing assets prior to the fiscal year end,
April 30, 2000.
* Proceeds from the eminent domain conveyance of the Company's former wood
manufacturing facility in downtown Atlanta, and from the sale of the
Company's former manufacturing headquarters facility in Douglas County,
Georgia, were used in the reduction of the Company's interest rate sensitive
debt, which was decreased by approximately 52% by fiscal year end.
* We streamlined our real estate strategy by entering into a letter of intent
to outsource the asset management and property management functions of our
commercial real estate portfolio, and shifted our strategic focus away from
operating activities to a concentration on the investment nature of our
portfolio of assets.
* Throughout the year, we focused on improving the quality of construction
revenues.
Also, we strengthened your Company's Board of Directors with the addition of
three new outside directors: David L. Abrams, an attorney with the firm of
Sutherland Asbill & Brennan LLP, Gilbert L. Danielson, Executive Vice President,
Chief Financial Officer and Director of Aaron Rents, Inc., and Robert T.
McWhinney, Jr., President and Chief Executive Officer of Stone & Webster
Management Consultants, Inc.; and two new key inside directors: Melinda S.
Garrett, our Chief Financial Officer, and B. Michael Merritt, President of the
Construction Segment. The Board is now comprised of five inside and six outside
directors.
HERE ARE A FEW OPERATING HIGHLIGHTS FROM FISCAL 2000:
* Lower volume from a key customer early in the year and a renewed emphasis on
improving revenue quality led to a decline in sales and profits at our core
Construction Segment. Perhaps validating the truism that sometimes you have
to contract before you can expand, however, Abrams Construction ended the
year with solid earnings in the fourth quarter and a record backlog, up
approximately 32% from a year ago.
* As a consequence of our analysis of strategic alternatives, the Real Estate
Segment sold its award-winning Abrams Riverside manufacturing facility,
which the Company developed and constructed two years earlier, at a pre-tax
gain of approximately $2.4 million, or approximately 28% above our net book
value.
* When the decision was made several years ago to relocate our manufacturing
headquarters to the Abrams Riverside facility, the Company elected not to
sell the former wood manufacturing facility at prices offered at that time.
The Company instead believed the ongoing growth of Atlanta would lead to an
increase in demand for existing downtown properties, and thus over time a
much higher valuation could be realized. That strategy proved correct, as
the building was conveyed to the State of Georgia this year through an
eminent domain proceeding for $4.5 million cash. We are deferring
recognition of the resulting pre-tax gain of approximately $2.8 million, or
176% above our depreciated basis, pending resolution of legal appeals of the
awarded valuation by both the State and the Company.
* For the year ended April 30, 2000, inclusive of gains recognized on real
estate sales, we recorded net earnings from continuing operations of
$2,367,190 compared to a net loss from continuing operations of $39,599 a
year ago. Revenues from continuing operations increased slightly to
$174,579,492, up from $172,201,090 for the same period last year. Inclusive
of discontinued operations and extraordinary expenses, there was a net loss
of $456,605 in 2000 compared to a net loss of $676,031 in 1999.
<PAGE>
WE ENTER OUR 76TH YEAR, FISCAL 2001, WITH CONFIDENCE, STRENGTH AND MOMENTUM.
Overall, our Company is now leaner and more efficient, and well positioned for
growth, profitability and success. In order to create new growth, we will
continue to examine available business opportunities that are tightly focused
within our core competencies. We expect to continue to refine corporate clarity
and to look for ways to manage and reduce our overall administrative expenses.
We are optimistic about our prospects in the new millennium, and have a clear
understanding about what we must accomplish in order to obtain consistent growth
in shareholder value.
Sincerely,
/s/ Alan R. Abrams /s/ J. Andrew Abrams
Alan R. Abrams J. Andrew Abrams
Co-Chairman of the Board Co-Chairman of the Board
President and Chief Executive Officer
<PAGE>
[75
years - appears on printed version as a graphic]
SUMMARY FINANCIAL DATA*
<TABLE>
<CAPTION>
Years Ended Years Ended
April 30, April 30,
--------------------- % --------------------- %
2000 1999 CHANGE 1999 1998 CHANGE
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<S> <C> <C> <C> <C> <C> <C>
Revenues from Continuing
Operations $174,579,492 $172,201,090 1 $172,201,090 $163,586,356 5
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Net Earnings (Loss) from
Continuing Operations $ 2,367,190 $ (39,599) N/A $ (39,599) $ 2,694,211 N/A
---------------------------------------------------------------------------------------------------------------------
Net Earnings (Loss) per Share
from Continuing Operations $ 0.80 $ (0.01) N/A $ (0.01) $ 0.92 N/A
---------------------------------------------------------------------------------------------------------------------
Cash Dividends per Share $ 0.16 $ 0.20 (20) $ 0.20 $ 0.19 5
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Shareholders' Equity $ 22,346,138 $ 23,272,560 -4 $ 23,272,560 $ 24,535,863 -5
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Return from Continuing
Operations on Average
Shareholders' Equity 10.4% -0.2% N/A -0.2% 11.5% N/A
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</TABLE>
*For complete 5 year review, see "Item 6. Selected Financial Data" in Form 10-K.
CONSTRUCTION
Total Operating
Years Ended April 30 Revenues Earnings
-------------------------------------------------------------------------
2000 $144,083,906 $3,147,237
-------------------------------------------------------------------------
1999 $160,611,412 $4,084,633
-------------------------------------------------------------------------
1998 $146,618,881 $3,506,219
-------------------------------------------------------------------------
1997 $ 98,460,046 $3,088,094
-------------------------------------------------------------------------
1996 $108,437,335 $2,806,030
-------------------------------------------------------------------------
Note: Total revenues and operating earnings include revenues generated from
intercompany sources of $1,114,823, $5,026,181, $345,048, and $792,213, in 1999,
1998, 1997, and 1996, respectively. In computing operating earnings, allocated
parent expenses and income taxes have not been considered. (For additional
information, see Note 14 to Consolidated Financial Statements herein.)
REAL ESTATE
Operating
Total Earnings
Years Ended April 30 Revenues (Loss)
-------------------------------------------------------------------------
2000 $32,025,436 $ 4,807,481
-------------------------------------------------------------------------
1999 $14,202,578 $ (226,053)
-------------------------------------------------------------------------
1998 $22,082,012 $ 2,882,490
-------------------------------------------------------------------------
1997 $21,132,159 $ 1,003,370
-------------------------------------------------------------------------
1996 $11,473,415 $(1,261,552)
-------------------------------------------------------------------------
Note: Total revenues and operating earnings include revenues generated from
intercompany sources of $1,576,990, $1,485,038, and $200,615 in 2000, 1999, and
1998, respectively. In computing operating earnings, allocated parent expenses
and income taxes have not been considered. (For additional information, see Note
14 to Consolidated Financial Statements herein.)
2
<PAGE>
FOUNDER
ALFRED R. ABRAMS
(1899-1979)
CHAIRMAN EMERITUS
BERNARD W. ABRAMS
BOARD OF DIRECTORS
ALAN R. ABRAMS (E)
Co-Chairman of the Board
Chief Executive Officer and President
Abrams Industries, Inc.
J. ANDREW ABRAMS (E)
Co-Chairman of the Board
Vice President - Business Development
Abrams Industries, Inc.
EDWARD M. ABRAMS (E)
Chairman of the Executive Committee
Abrams Industries, Inc.
DAVID L. ABRAMS
Attorney
Sutherland Asbill & Brennan LLP
GILBERT L. DANIELSON (A)
Executive Vice President, Chief Financial Officer
Aaron Rents, Inc.
MELINDA S. GARRETT (E)
Chief Financial Officer
Abrams Industries, Inc.
Chief Financial Officer, Vice President
Abrams Properties, Inc.
PAULA LAWTON BEVINGTON (A) (C)
Chairman
Servidyne Systems, Inc.
ROBERT T. MCWHINNEY, JR. (C)
President, Chief Executive Officer
Stone & Webster Management Consultants, Inc.
B. MICHAEL MERRITT (E)
President
Abrams Construction, Inc.
L. ANTHONY MONTAG (C)
Chief Executive Officer
A. Montag & Associates, Inc.
FELKER W. WARD, JR. (A) (C)
Chairman of the Board
Pinnacle Investment Advisors, Inc.
Committees:
E-Executive
A-Audit
C-Compensation
OFFICERS OF ABRAMS INDUSTRIES, INC. AND SUBSIDIARIES
Alan R. Abrams
J. Andrew Abrams
Gerald T. Anderson II
Janis H. Fowler
Melinda S. Garrett
George W. Hodges, Jr.
B. Michael Merritt
James D. O'Donnell
Rick A. Paternostro
Brennon E. Smith
Thomas F. Stock
PARENT COMPANY
ABRAMS INDUSTRIES, INC.
1945 The Exchange
Suite 300
Atlanta, Georgia 30339-2029
(770) 953-0304
(770) 953-9922 (FAX)
www.abramsindustries.com
CONSTRUCTION SEGMENT
ABRAMS CONSTRUCTION, INC.
1945 The Exchange
Suite 350
Atlanta, Georgia 30339-2029
(770) 952-3555
(770) 952-4010 (FAX)
www.aciatl.com
REAL ESTATE SEGMENT
ABRAMS PROPERTIES, INC.
1945 The Exchange
Suite 400
Atlanta, Georgia 30339-2029
(770) 953-1777
(770) 953-9922 (FAX)
www.abramsproperties.com
<PAGE>
[INSIDE BACK COVER]
In Appreciation of
Bernard W. Abrams
Chairman Emeritus
Mr. Bernard W. Abrams, Abrams Industries' Chairman Emeritus and long time
leader, retired as a Director of the Company this year after 47 years of
service, on his 75th birthday, January 21, 2000.
Bernie was born in 1925 in West Palm Beach, Florida, as the first son of Alfred
R. Abrams (1899-1979), our Company founder. A graduate of the United States
Military Academy, Bernie bravely served his country in peace and in war in the
United States Army, before joining the Company in 1952. Mr. "B.W." has helped to
lead our Company with distinction and integrity for almost five decades, as a
Director, as Chairman of the Board and Chief Executive Officer from 1972 to
1995, as Chairman of the Executive Committee from 1995 to 1998, and most
recently as Chairman Emeritus.
The Board of Directors of Abrams Industries, Inc., for itself and representing
the shareholders and past and present employees, expresses our gratefulness,
admiration and highest regard for our "Chief," Bernard W. Abrams, soldier,
businessman, community leader and our friend.
<PAGE>
[BACK COVER]
[LOGO APPEARS HERE]
ABRAMS INDUSTRIES, INC.
CORPORATE HEADQUARTERS
1945 The Exchange
Suite 300
Atlanta, Georgia 30339-2029
(770) 953-0304
FAX (770) 953-9922
www.abramsindustries.com
