SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q/A
Amendment No. 1 to Form 10-Q
x QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended December 31, 1995
OR
o 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. [X] Yes
[_] No
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date:
5,186,630
<PAGE>
The undersigned registrant hereby amends the following items, financial
statements, exhibits or other portions of its Quarterly Report on Form
10-Q for the quarter ended December 31, 1995, as set forth herein:
Part I Item 1. Financial Statements. As discussed at Note 2, the
Consolidated Financial Statements of Christiana Companies, Inc. have been
amended to reflect the adjustment required to change the method of
accounting for the investment in Energy Ventures, Inc. ("EVI") from the
cost method to the equity method.
Part I Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations. This section has been amended as a
result of the matter described above in Item 1.
Part II Item 6. Exhibits and Reports on Form 8-K. The list of exhibits
has been amended to file a financial data schedule reflecting the change
in accounting discussed above.
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CHRISTIANA COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited) (Audited)
Restated
December 31, June 30,
1995 1995
ASSETS:
Cash and cash equivalents $ 4,916,000 375,000
Short-term investments 293,000 2,822,000
Accounts receivable 11,014,000 10,310,000
Inventories 989,000 248,000
----------- -----------
Total Current Assets 17,212,000 13,755,000
----------- -----------
Long-Term Assets:
Investment in Energy Ventures, Inc. 22,695,000 21,886,000
Mortgage notes receivable 3,045,000 3,205,000
Rental properties, net 2,740,000 3,610,000
Fixed assets, net 72,039,000 71,104,000
Other assets 7,808,000 8,182,000
----------- -----------
Total Long-Term Assets 108,327,000 107,987,000
----------- -----------
$125,539,000 $121,742,000
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY:
Current Liabilities:
Accounts payable $ 4,348,000 $ 2,774,000
Accrued liabilities 5,121,000 5,347,000
Short term debt 1,479,000 1,844,000
Current portion of long-term debt 3,181,000 1,679,000
----------- -----------
Total Current Liabilities 14,129,000 11,644,000
----------- -----------
Long-Term Liabilities:
Long-term debt 35,950,000 38,256,000
Deferred federal and state income taxes 12,995,000 11,866,000
Other liabilities 1,568,000 1,266,000
----------- -----------
Total Long-Term Liabilities 50,513,000 51,388,000
----------- -----------
Total Liabilities 64,642,000 63,032,000
----------- -----------
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 12,022,000 12,022,000
Less: Treasury Stock (211,000) -
Retained earnings 43,890,000 41,492,000
----------- -----------
Total Shareholders' Equity 60,897,000 58,710,000
----------- -----------
$125,539,000 $121,742,000
=========== ===========
See notes to consolidated financial statements.
<PAGE>
<TABLE>
CHRISTIANA COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
Six Months Ended Three Months Ended
December 31, December 31,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Revenues:
Product sales $ - $25,690,000 $ - $12,790,000
Warehousing, rental and
related services 39,588,000 36,577,000 19,651,000 17,408,000
----------- ----------- ----------- -----------
39,588,000 62,267,000 19,651,000 30,198,000
----------- ----------- ----------- -----------
Costs and Expenses:
Cost of product sales - 21,891,000 - 10,935,000
Warehousing, rental and related
expenses 32,820,000 28,598,000 16,737,000 14,101,000
Selling, general and
administrative 3,662,000 5,450,000 1,861,000 2,807,000
---------- ---------- ---------- ----------
36,482,000 55,939,000 18,598,000 27,843,000
---------- ---------- ---------- ----------
Earnings from Operations 3,106,000 6,328,000 1,053,000 2,355,000
Other Income (Expense):
Interest income 271,000 512,000 142,000 219,000
Interest expense (1,532,000) (2,411,000) (758,000) (1,297,000)
Gain on sales of real estate 1,314,000 2,081,000 474,000 644,000
Equity in earnings of EVI 809,000 - 405,000 -
Other income (expenses), net (25,000) (269,000) (67,000) (71,000)
----------- ----------- ----------- ------------
837,000 (87,000) 196,000 (505,000)
----------- ----------- ----------- ------------
Earnings before income taxes
and minority interest 3,943,000 6,241,000 1,249,000 1,850,000
Income tax provision 1,545,000 2,403,000 489,000 693,000
---------- ----------- ----------- -----------
Net earnings before
minority interest 2,398,000 3,838,000 760,000 1,157,000
Minority interest - (293,000) - (127,000)
----------- ----------- ----------- -----------
Net Earnings $ 2,398,000 $ 3,545,000 $ 760,000 $ 1,030,000
========== ========== ========== ==========
Net earnings per share $0.46 $0.66 $0.14 $0.20
======= ======= ====== ======
Average number of
shares outstanding 5,194,065 5,354,955 5,195,200 5,269,010
</TABLE>
See notes to consolidated financial statements.
<PAGE>
<TABLE>
CHRISTIANA COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
<CAPTION>
Additional
Common Stock Treasury Paid-in Retained
Shares Amount Stock Capital Earnings
<S> <C> <C> <C> <C> <C>
Balance, June 30, 1994 5,440,899 $5,441,000 - $18,217,000 $36,430,000
Repurchase of Stock (245,269) (245,000) - (6,195,000) -
Net Earnings for the Year - - - - 5,062,000
---------- --------- ------- ---------- ---------
Balance, June 30, 1995 5,195,630 $5,196,000 - $12,022,000 $41,492,000
Purchase of Treasury stock - - (211,000) -
Net earnings for the six
months ended December 31,
1995 (unaudited) - - - - 2,398,000
---------- --------- ------- ---------- ---------
Balance, December 31, 1995 5,195,630 $5,196,000 $(211,000) $12,022,000 $43,890,000
========= ========= ======== ========== ==========
</TABLE>
See notes to consolidated financial statements.
<PAGE>
CHRISTIANA COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
(unaudited)
Six Months Ended
December 31,
1995 1994
CASH FLOW FROM OPERATING ACTIVITIES:
Net earnings $2,398,000 $ 3,545,000
Adjustments to reconcile net earnings
to net cash provided by operating
activities:
Depreciation and amortization 3,556,000 4,010,000
Gains on sales of assets (1,520,000) (2,139,000)
Deferred income tax expenses 835,000 51,000
Minority interest in consolidated
income of subsidiaries - 293,000
Income of unconsolidated affiliate, net (515,000) -
Changes in assets and liabilities:
(Increase) in accounts receivable (704,000) (763,000)
(Increase) decrease in inventory (741,000) 440,000
Decrease in other assets 283,000 656,000
Increase in accounts payable
and accrued liabilities 1,348,000 719,000
---------- ----------
Net cash provided by operating activities 4,940,000 6,812,000
CASH FLOW FROM INVESTING ACTIVITIES:
Proceeds from sale of assets 4,137,000 4,235,000
(Increase) decrease in mortgage notes
receivable 160,000 (436,000)
Decrease in short-term investments 2,529,000 6,609,000
Capital expenditures (5,846,000) (7,870,000)
---------- -----------
Net cash provided by investing activities 980,000 2,538,000
CASH FLOW FROM FINANCING ACTIVITIES:
Net borrowings (repayments) on long-term
notes and credit lines 898,000 4,620,000
Payments of notes and loans payable (2,066,000) (5,003,000)
Stock repurchase (211,000) (6,091,000)
----------- -----------
Net cash provided by (used in) financing
activities (1,379,000) (6,474,000)
----------- -----------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 4,541,000 2,876,000
BEGINNING CASH AND CASH EQUIVALENTS,
July 1 375,000 3,929,000
---------- ----------
ENDING CASH AND CASH EQUIVALENTS,
December 31 $ 4,916,000 $6,805,000
========= ==========
Supplemental disclosures of cash
flow information:
Interest paid $ 5,134,000 $ 2,005,000
Income taxes paid $ 600,000 $ 1,950,000
See notes to consolidated financial statements.
<PAGE>
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 1995 Annual Report.
NOTE 2 - RESTATEMENT
The Company has restated its previously issued December 31, 1995 financial
statements to reflect the adjustments required to account for the
Company's investment in Energy Ventures, Inc. ("EVI") under the equity
method of accounting instead of the cost method, as was previously
reported.
The restated December 31, 1995 Balance Sheet no longer reports the
Investment in EVI as an available for sale security. Accordingly, the
originally reported "Unrealized Investment Gain, Net of Tax" of
$10,498,000 and the related deferred tax components have been removed from
the restated December 31, 1995 Balance Sheet.
The impact of the restatement is as follows:
Quarter Ended Six Months Ended
December 31, 1995 December 31, 1995
Earnings Before Income Taxes
and Minority Interest
As previously reported $ 844,000 $3,134,000
As restated $1,249,000 $3,943,000
Net Earnings
As previously reported $ 489,000 $1,883,000
As restated $ 760,000 $2,398,000
Earnings Per Share
As previously reported $0.09 $0.36
As restated $0.14 $0.46
At December 31,
Shareholders' Equity 1995
As previously reported $76,262,000
As restated $60,897,000
NOTE 3 - PRO FORMA OPERATING RESULTS
On June 30, 1995, Prideco, Inc. ("Prideco"), a majority-owned subsidiary
of the Company, merged with Grant Acquisition Company, a wholly-owned
subsidiary of Energy Ventures, Inc. ("EVI"). In the merger, the Company's
shares of Prideco were converted into 1,035,858 shares of Common Stock,
$1.00 par value, of EVI. EVI's common stock is listed and traded on the
New York Stock Exchange (NYSE:EVI). Accordingly, the individual accounts
of Prideco have been eliminated from the Company's June 30, 1995 Balance
Sheet which reflects the effect of the merger. Prideco's results of
operations are included in the Company's Consolidated Statement of
Earnings through June 30, 1995, the date of the merger. Concurrently with
the merger, the Company acquired an additional 912,873 shares of EVI
common stock directly from EVI and the minority shareholders of Prideco
for an aggregate cash price of $13,291,000.
The investment in EVI is accounted for under the equity method of
accounting. Included in the Company's fiscal 1996 second quarter and year
to date earnings were earnings from EVI, net of tax, of $271,000 and
$515,000, respectively.
The following summarizes the unaudited consolidated pro forma operating
results of the Company as if the merger of Prideco, Inc. and the
acquisition of EVI shares had occurred as of July 1, 1994 the beginning of
the periods.
Three Months Ended Six Months Ended
December 31, 1994 December 31, 1994
Net Revenues $17,408 $36,577
Net Earnings $ 849 $ 3,127
Earnings per share $ 0.16 $ 0.58
Pro forma results are not necessarily indicative of results that would
have occurred had the merger been made at July 1, 1994, or of results
which may occur in the future.
NOTE 4 - ENERGY VENTURES INC. SUMMARY FINANCIAL INFORMATION (UNAUDITED)
EVI's fiscal year ends December 31. Summary financial information for
EVI, which is, accounted for under the equity method, in the companys
financial statements is as follows:
THREE MONTHS SIX MONTHS
ENDED ENDED
(In Thousands) 12/31/95 12/31/95
Revenues $105,383 $199,180
Gross Profit 25,438 49,694
Income before Income Taxes 6,333 11,018
Net Income 4,371 7,927
<PAGE>
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Operations
Christiana Companies consolidated revenues for the three months ended
December 31, 1995 were $19,651,000 versus $30,198,000 reported for the
comparable period a year ago. Revenues were lower this period due to the
completed merger of Prideco with a unit of Energy Ventures, Inc.
(NYSE:EVI) on June 30, 1995. Revenues attributable to Refrigerated
Warehousing and Logistics increased 13% or $2,243,000 in the first quarter
fiscal 1996 compared with $17,408,000 for the same period last year.
Revenue growth this quarter within this segment occurred due to increased
storage and handling volume at Wiscold, particularly at its largest
facility in Rochelle, Illinois and growth in transportation and
international freight forwarding services at The TLC Group.
Operating earnings for the quarter were $1,053,000 versus $2,355,000
generated in the comparable period a year ago. The reduction in operating
earnings is primarily attributable to the absence of Prideco's operations
this quarter and to a lesser extent reduced margins in Refrigerated
Warehousing and Logistics. Operating margins of the Refrigerated
Warehousing and Logistics segment were lower due to higher unused capacity
at certain warehouses and higher start-up labor expense associated with
new high volume distribution accounts.
Sales of 10 condominium homes were completed in the second quarter of
fiscal 1996 which generated a pretax gain of $474,000 compared with sales
of 10 homes in the same period last year which contributed pretax earnings
of $644,000. Sales this year tended to be lower-priced homes, resulting
in a lower gross profit.
For the quarter ended December 31, 1995, the Company recognized earnings
from EVI of $405,000 attributable to its 10.5% weighted average ownership
interest.
Consolidated net earnings for the quarter were $760,000 or $0.14 per share
compared with $1,030,000 or $0.20 per share for the same period a year
ago. Net earnings were lower this period due to reduced margins in
Refrigerated Warehousing and Logistics, sales of less expensive homes, and
reduced interest expense.
In the second quarter, Christiana generated $2,602,000 of after-tax cash
flow from operations.
For the first six months of fiscal 1996 Christiana Companies consolidated
revenues were $39,588,000 versus $62,267,000 for the comparable period
last year. Refrigerated Warehousing and Logistics revenue increased 8%
when compared to $36,577,000 for the same period a year ago due to growth
at TLC in warehousing, transportation and international services.
Wiscold's revenues were in line year to year, but due to a poor vegetable
harvest in the first quarter of fiscal 1996 vegetable freezing services
this year were reduced resulting in lower operating margins. For the six
month period ended December 31, 1995, Refrigerated Warehousing and
Logistics contributed $1,436,000 or $0.28 per share versus $2,031,000 or
$0.38 per share in the comparable period last year.
For the six months ended December 31, 1995, sales of 24 homes were
completed generating net earnings of $788,000 or $0.15 per share. That
compares with sales of 30 homes in the same period last year which
contributed net earnings of $1,249,000 or $0.23 per share.
As of December 31, 1995, Christiana had 58 units available for sale in
the Tierrasanta region of San Diego, California. In December, Christiana
agreed to sell 16 homes which are currently in the rental pool to an
investor. This sale, which is scheduled for completion in the third
quarter, will transfer the homes in an "as is" condition, eliminating
refurbishment expense.
For the six months ended December 31, 1995, the Company recognized
earnings from EVI of $809,000.
In the six month period, Christiana generated $6,274,000 of after-tax cash
flow from operations.
Financial Condition
Cash equivalents and short term investments totaled $5,209,000 as of
December 31, 1995 compared with $3,197,000 at June 30, 1995, an increase
of $2,012,000. Cash provided by operating activities of $4,940,000 was
attributable primarily to net earnings, depreciation, amortization and
deferred taxes. Cash used in investing activities of $980,000 resulted
from capital expenditures of $5,846,000 primarily attributable to
warehousing and logistics operations, offset by a decrease of $2,529,000
in short term investments and proceeds from asset sales, primarily real
estate, of $4,137,000.
Christiana's operating units have capital commitments to construct new
distribution oriented warehousing capacity. Wiscold is constructing a new
3.5 million cubic foot refrigerated distribution center in Rochelle,
Illinois with an expected cost of $11.5 million. The new facility is
being built on company owned property at the site of its existing 10.6
million cubic foot refrigerated distribution center. This facility is
expected to be completed and operational early in the fourth quarter of
fiscal 1996. At December 31, 1995, $1.1 million had been expended, with a
commitment of an estimated $10.4 million remaining.
The TLC Group is expanding its newest dry distribution center in Zeeland,
Michigan by 106,000 sq. ft. When completed during the third quarter of
fiscal 1996, this facility will total 220,000 sq. ft. of dry distribution
capacity. Construction costs of this expansion are expected to be $2.3
million, of which $0.6 million was spent through December 31, 1995.
The construction of these facilities is expected to be funded primarily by
subsidiary issued term debt.
New Accounting Standard
In 1995, the Financial Accounting Standards Board issued FASB No. 123,
"Accounting for Stock-Based Compensation," which establishes financial
accounting and reporting standards for stock-based employee compensation.
The company plans to adopt only the pro forma disclosure requirements of
this statement, and to continue to apply the accounting provisions of
Opinion 25 to stock-based employee compensation arrangements, as is
allowed by the statement. This disclosure will be effective with the June
30, 1997 financial statements.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27 Financial data schedule
(b) Reports on Form 8-K
No reports on Form 8-K were filed for the quarter covered by
this report.
<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.
CHRISTIANA COMPANIES, INC.
(Registrant)
Date: 7/15/96
/s/ Sheldon B. Lubar
Sheldon B. Lubar
Chairman and
Chief Executive Officer
Date: 7/15/96
/s/ William T. Donovan
William T. Donovan
Executive Vice President and
Chief Financial Officer
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS OF CHRISTIANA COMPANIES, INC. AS OF AND
FOR THE QUARTER ENDED DECEMBER 31, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> OCT-01-1995
<PERIOD-END> DEC-31-1995
<CASH> 4,916,000
<SECURITIES> 293,000
<RECEIVABLES> 9,814,000
<ALLOWANCES> 135,000
<INVENTORY> 989,000
<CURRENT-ASSETS> 17,212,000
<PP&E> 94,261,000
<DEPRECIATION> 19,482,000
<TOTAL-ASSETS> 125,539,000
<CURRENT-LIABILITIES> 14,129,000
<BONDS> 39,131,000
0
0
<COMMON> 17,007,000
<OTHER-SE> 43,890,000
<TOTAL-LIABILITY-AND-EQUITY> 125,539,000
<SALES> 0
<TOTAL-REVENUES> 39,588,000
<CGS> 0
<TOTAL-COSTS> 32,820,000
<OTHER-EXPENSES> 3,662,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,532,000
<INCOME-PRETAX> 3,943,000
<INCOME-TAX> 1,545,000
<INCOME-CONTINUING> 2,398,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,398,000
<EPS-PRIMARY> .46
<EPS-DILUTED> .46
</TABLE>
