<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
/x/ QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended September 30, 1996
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934.
For the transition period from to
----------- ----------
Commission File Number 1-3846
CHRISTIANA COMPANIES, INC.
(Exact name of registrant as specified in its charter.)
Wisconsin 95-1928079
(State of Incorporation) (IRS Employer Identification No.)
777 East Wisconsin Avenue, Suite 3380, Milwaukee, Wisconsin 53202
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (414) 291-9000
---------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common Stock $1.00 par value 5,136,630
- ---------------------------- ----------------------------------
(Class) (Outstanding at November 8, 1996.)
Page 1 of 9 total pages No exhibits are filed with this report.
1
<PAGE> 2
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CHRISTIANA COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
(Unaudited) (Audited)
September 30, June 30,
1996 1996
------------- ------------
ASSETS:
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 5,621,000 $ 3,728,000
Short-term investments 1,226,000 750,000
Accounts receivable 9,588,000 8,294,000
Prepaids and other 711,000 1,732,000
------------ ------------
Total Current Assets 17,146,000 14,504,000
------------ ------------
Long-Term Assets:
Investment in Energy Ventures, Inc. 31,668,000 23,631,000
Mortgage notes receivable 2,073,000 3,314,000
Rental properties, net 192,000 867,000
Fixed assets, net 80,393,000 81,283,000
Other assets 7,293,000 7,419,000
------------ ------------
Total Long-Term Assets 121,619,000 116,514,000
------------ ------------
$138,765,000 $131,018,000
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY:
Current Liabilities:
Accounts payable $ 3,283,000 $ 5,294,000
Accrued liabilities 4,261,000 4,072,000
Short term debt 2,521,000 1,354,000
Current portion of long-term debt 1,605,000 1,295,000
------------ ------------
Total Current Liabilities 11,670,000 12,015,000
------------ ------------
Long-Term Liabilities:
Long-term debt 43,353,000 44,013,000
Deferred federal and state income taxes 16,084,000 12,674,000
Other liabilities 1,153,000 1,239,000
------------ ------------
Total Long-Term Liabilities 60,590,000 57,926,000
------------ ------------
Total Liabilities 72,260,000 69,941,000
------------ ------------
Shareholders' Equity:
Preferred stock -- --
Common stock, par value $1 per share;
authorized 12,000,000 shares;
issued 5,195,630 5,196,000 5,196,000
Additional paid-in capital 16,367,000 12,022,000
Treasury stock (1,236,000) (1,236,000)
Retained earnings 46,178,000 45,095,000
------------ ------------
Total Shareholders' Equity 66,505,000 61,077,000
------------ ------------
$138,765,000 $131,018,000
============ ============
</TABLE>
See notes to consolidated financial statements.
2
<PAGE> 3
CHRISTIANA COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
September 30,
------------------------
1996 1995
----------- -----------
<S> <C> <C>
Revenues:
Warehousing and logistic services $20,480,000 $19,937,000
----------- -----------
Costs and Expenses:
Warehousing and logistic expenses 17,220,000 16,083,000
Selling, general and administrative 1,771,000 1,801,000
----------- -----------
18,991,000 17,884,000
----------- -----------
Earnings from Operations 1,489,000 2,053,000
Other Income (Expense):
Interest income 133,000 128,000
Interest expense (867,000) (773,000)
Gain on sales of real estate 284,000 840,000
Equity in earnings of Energy Ventures, Inc. 890,000 404,000
Other income (expense), net (162,000) 42,000
----------- -----------
278,000 641,000
----------- -----------
Earnings before income taxes 1,767,000 2,694,000
Income tax provision 684,000 1,056,000
----------- -----------
Net Earnings $ 1,083,000 $ 1,638,000
=========== ===========
Net Earnings per Share $ 0.21 $ 0.32
=========== ===========
Average number of shares outstanding 5,136,630 5,195,630
</TABLE>
See notes to consolidated financial statements.
3
<PAGE> 4
CHRISTIANA COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
Common Stock Treasury Stock Additional
-------------------- --------------------- Paid-in Retained
Shares Amount Shares Amount Capital Earnings
-------------------- --------------------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Balance, June 30, 1995 5,195,630 $5,196,000 $12,022,000 $41,492,000
Purchase of Treasury Stock -- -- (59,000) $(1,236,000) --
Net earnings for the year -- -- -- -- -- 3,603,000
------------------------------------------------------------------------
Balance, June 30, 1996 5,195,630 $5,196,000 (59,000) $(1,236,000) $12,022,000 $45,095,000
------------------------------------------------------------------------
EVI stock issuance -- -- -- -- 4,345,000 --
Net earnings for the three months
ended September 30, 1996 (unaudited) -- -- -- -- -- 1,083,000
------------------------------------------------------------------------
Balance, September 30, 1996 5,195,630 $5,196,000 $(59,000) $(1,236,000) $16,367,000 $46,178,000
========================================================================
</TABLE>
See notes to consolidated financial statements.
4
<PAGE> 5
CHRISTIANA COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended
September 30,
-----------------------
1996 1995
--------- ---------
<S> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES:
Net earnings $1,083,000 $1,638,000
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Depreciation and amortization 1,850,000 1,936,000
Gains on sales of assets (287,000) (1,030,000)
Deferred income tax expenses 608,000 673,000
Equity in Earnings of Energy Ventures, Inc. (890,000) (404,000)
Changes in assets and liabilities:
(Increase) in accounts receivable (1,294,000) (784,000)
(Increase) decrease in other assets 990,000 (230,000)
Increase (decrease) in accounts payable
and accrued liabilities (1,908,000) 1,108,000
----------- -----------
Net cash provided by operating activities 152,000 2,907,000
CASH FLOW FROM INVESTING ACTIVITIES:
(Increase) in short-term investments (476,000) (1,293,000)
Capital expenditures (1,064,000) (1,830,000)
Proceeds from sale of assets 1,223,000 2,273,000
(Increase) decrease in mortgages receivable 1,240,000 (135,000)
----------- -----------
Net cash provided by (used in) investing activities 923,000 (985,000)
CASH FLOW FROM FINANCING ACTIVITIES:
Net borrowings (repayments) on credit lines 1,167,000 (1,139,000)
Net payments of notes and loans payable (349,000) (964,000)
---------- -----------
Net cash provided by (used in) financing activities 818,000 (2,103,000)
---------- -----------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 1,893,000 (181,000)
BEGINNING CASH AND CASH EQUIVALENTS, July 1 3,728,000 375,000
---------- -----------
ENDING CASH AND CASH EQUIVALENTS, September 30 $5,621,000 $194,000
========== ===========
Supplemental disclosures of cash flow information:
Interest paid 867,000 738,000
Income taxes paid -- --
</TABLE>
See notes to consolidated financial statements.
5
<PAGE> 6
CHRISTIANA COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - ACCOUNTING POLICIES
The accompanying unaudited financial statements reflect all adjustments which
are, in the opinion of management, necessary to fairly present the results for
the interim periods presented and should be read in conjunction with the
Company's 1996 Annual Report.
NOTE 2 - ENERGY VENTURES, INC. STOCK ISSUANCE
The Company accounts for its investment in EVI under the equity method of
accounting. In July 1996, the Company's share of the underlying net assets of
EVI increased $7,146,000 as a result of a public offering of EVI's common
stock. This was recorded as an increase of $4,345,000 in additional paid-in
capital, and a $2,801,000 increase in deferred income taxes.
6
<PAGE> 7
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Operations
Christiana Companies consolidated revenues for the three months ended September
30, 1996 were $20,480,000 reflecting an increase of 3% versus $19,937,000
reported for the comparable period last year. The increase in revenues this
quarter was primarily attributable to higher volume in logistic services offset
by reduced vegetable freezing and processing volume due to poor growing
conditions and fewer regionally-based customers remaining in the frozen
vegetable business.
Earnings from operations for the quarter were $1,489,000 compared to $2,053,000
for the same period last year. In this quarter operating earnings were
negatively impacted by reduced vegetable freezing and processing volume,
startup costs and higher depreciation attributable to the operations of two new
distribution centers and reduced margins in transportation operations due to
competitive industry conditions and higher fuel prices.
Consolidated net earnings for the quarter were $1,083,000 or $0.21 per share
compared to $1,638,000 or $0.32 per share for the same period last year. Net
earnings were lower this quarter due to reduced earnings from operations as
described above; four fewer home sales and increased expenses associated with
completing the sale of Villa Martinique; and higher interest expense due
primarily to increased debt used in funding the construction of two
distribution centers which cost approximately $14 million and to a lesser
extent increased rates. Partially offsetting these factors was the increase in
equity earnings from Energy Ventures, Inc. In this quarter equity earnings
were $890,000 compared to $404,000 reported for the comparable period last
year.
Financial Condition
Cash equivalent and short-term investments totaled $6,847,000 at September 30,
1996 compared to $4,478,000 at June 30, 1996, an increase of $2,369,000.
Cash flow provided by operating activities in the period of $152,000 was
attributable primarily to net earnings, depreciation, amortization and
increased deferred taxes offset by increased working capital. Cash flow
provided by investing activities of $923,000 resulted from the sale and
payments of mortgages receivable and proceeds from real estate sales. Capital
expenditures of $1,064,000, primarily attributable to Total Logistic Control,
partially offset these increases. Net cash flow provided by financing
activities in the quarter totaled $818,000.
At September 30, 1996 the Company has no commitments for any material capital
expenditures.
During the quarter the Company's share of the underlying net assets of Energy
Ventures, Inc. increased $7,146,000 as a result of a public offering of EVI's
common stock. This resulted in a $4,345,000 increase in additional paid in
capital and a $2,801,000 increase in deferred taxes. At September 30, 1996 the
market value of the Company's holdings of 1,948,731 shares of EVI totaled
$79,000,000.
7
<PAGE> 8
PART II - OTHER INFORMATION
Item 1. Not applicable.
Item 2. Not applicable.
Item 3. Not applicable.
Item 4. Registrant's annual meeting of shareholders was held October
29, 1996. All nominees to the Board of Directors were elected:
Nicholas F. Brady, William T. Donovan, Raymond F. Logan, David J.
Lubar, Sheldon B. Lubar, Albert O. Nicholas, John R. Patterson and
Gary R. Sarner.
Item 5. Not applicable.
Item 6. Exhibits and Reports on Form 8-K
None
8
<PAGE> 9
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.
CHRISTIANA COMPANIES, INC.
(Registrant)
Date: November 8, 1996
---------------- /s/ Sheldon B. Lubar
----------------------------
Sheldon B. Lubar
Chairman and
Chief Executive Officer
Date: November 8, 1996
---------------- /s/ William T. Donovan
----------------------------
William T. Donovan
Executive Vice President and
Chief Financial Officer
9
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 5,621,000
<SECURITIES> 1,226,000
<RECEIVABLES> 9,861,000
<ALLOWANCES> 273,000
<INVENTORY> 711,000
<CURRENT-ASSETS> 17,146,000
<PP&E> 103,474,000
<DEPRECIATION> 22,889,000
<TOTAL-ASSETS> 138,765,000
<CURRENT-LIABILITIES> 11,670,000
<BONDS> 44,958,000
0
0
<COMMON> 5,196,000
<OTHER-SE> 61,309,000
<TOTAL-LIABILITY-AND-EQUITY> 138,765,000
<SALES> 0
<TOTAL-REVENUES> 20,480,000
<CGS> 0
<TOTAL-COSTS> 17,220,000
<OTHER-EXPENSES> 1,771,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 867,000
<INCOME-PRETAX> 1,767,000
<INCOME-TAX> 684,000
<INCOME-CONTINUING> 1,083,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,083,000
<EPS-PRIMARY> 0.21
<EPS-DILUTED> 0.21
</TABLE>
