<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 March 31, 1997
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, WI 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 May 12, 1997)
Page 1 of 10 total pages No exhibits are filed with this report.
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CHRISTIANA COMPANIES, INC. AND SUBSIDIARIES
-------------------------------------------
CONSOLIDATED BALANCE SHEETS
---------------------------
<TABLE>
<CAPTION>
(Unaudited) (Audited)
March 31, June 30,
1997 1996
------------------------------
<S> <C> <C>
ASSETS:
Cash and cash equivalents $ 722,000 3,728,000
Short-term investments 6,371,000 750,000
Accounts receivable 8,931,000 8,294,000
Prepaids and other 958,000 1,732,000
------------ ------------
Total Current Assets 16,982,000 14,504,000
------------ ------------
Long-Term Assets:
Investment in Energy Ventures, Inc. 39,633,000 23,631,000
Mortgage notes receivable 1,837,000 3,314,000
Rental properties, net 108,000 867,000
Fixed assets, net 76,172,000 81,283,000
Other assets 6,963,000 7,419,000
------------ ------------
Total Long-Term Assets 124,713,000 116,514,000
------------ ------------
$141,695,000 $131,018,000
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY:
Current Liabilities:
Accounts payable 4,674,000 $ 5,294,000
Accrued liabilities 3,979,000 4,072,000
Short-term debt 370,000 1,354,000
Current portion of long-term debt 1,190,000 1,295,000
------------ ------------
Total Current Liabilities 10,213,000 12,015,000
------------ ------------
Long-Term Liabilities:
Long-term debt 39,971,000 44,013,000
Deferred federal and state income taxes 19,169,000 12,674,000
Other liabilities 1,089,000 1,239,000
------------ ------------
Total Long-Term Liabilities 60,229,000 57,926,000
------------ ------------
Total Liabilities 70,442,000 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
Less: Treasury Stock (1,236,000) (1,236,000)
Retained earnings 50,926,000 45,095,000
------------ ------------
Total Shareholders' Equity 71,253,000 61,077,000
------------ ------------
$141,695,000 $131,018,000
============ ============
</TABLE>
See notes to consolidated financial statements.
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CHRISTIANA COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended Three Months Ended
March 31, March 31,
-------------------- -------------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues:
Warehousing and logistic services $63,271,000 $59,004,000 $22,450,000 $19,416,000
----------- ----------- ----------- -----------
Costs and Expenses:
Warehousing and logistic services 53,051,000 49,569,000 19,138,000 16,749,000
Selling, general and administrative 6,114,000 5,519,000 2,219,000 1,857,000
----------- ----------- ----------- -----------
59,165,000 55,088,000 21,357,000 18,606,000
----------- ----------- ----------- -----------
Earnings from Operations 4,106,000 3,916,000 1,093,000 810,000
Other Income (Expense):
Interest income 376,000 403,000 119,000 132,000
Interest expense (2,437,000) (2,309,000) (770,000) (777,000)
Gain (losses) on sales of
real estate 279,000 2,352,000 -- 1,038,000
Equity in earnings of Energy
Ventures, Inc. 8,855,000 1,214,000 1,219,000 405,000
Loss on disposal of assets (1,281,000) -- -- --
Other income (expenses), net (336,000) (123,000) 10,000 (98,000)
----------- ----------- ----------- -----------
5,456,000 1,537,000 578,000 700,000
----------- ----------- ----------- -----------
Earnings before income taxes 9,562,000 5,453,000 1,671,000 1,510,000
Income tax provision 3,731,000 2,137,000 652,000 592,000
----------- ----------- ----------- -----------
Net earnings $ 5,831,000 $ 3,316,000 $ 1,019,000 $ 918,000
=========== =========== =========== ===========
Net earnings per share $ 1.14 $ 0.64 $ 0.20 $ 0.18
=========== =========== =========== ===========
Average number of shares outstanding 5,136,630 5,191,605 5,136,630 5,186,630
</TABLE>
See notes to consolidated financial statements.
3
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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 nine months
ended March 31, 1997 (unaudited) -- -- -- -- -- 5,831,000
-------------------------------------------------------------------------------------
Balance, March 31, 1997 5,195,630 $5,196,000 (59,000) $(1,236,000) $16,367,000 $50,926,000
=====================================================================================
</TABLE>
See notes to consolidated financial statements.
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CHRISTIANA COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
(unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
March 31,
----------------------------
1997 1996
------------- ------------
<S> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES:
Net earnings $ 5,831,000 $ 3,316,000
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Depreciation and amortization 5,454,000 5,316,000
Gains (losses) on sales of assets 980,000 (2,589,000)
Deferred income tax expenses 3,693,000 1,424,000
Equity in earnings of Energy Ventures, Inc. (8,855,000) (1,214,000)
Changes in assets and liabilities:
(Increase) in accounts receivable (637,000) (757,000)
(Increase) decrease in other assets 580,000 (334,000)
Increase (decrease) in accounts payable
and accrued liabilities (713,000) 1,149,000
------------ ------------
Net cash provided by operating activities 6,333,000 6,311,000
CASH FLOW FROM INVESTING ACTIVITIES:
Proceeds from sale of assets 2,242,000 7,010,000
Decrease in mortgage notes receivable 1,477,000 242,000
(Increase) decrease in short-term investments (5,621,000) 2,529,000
Capital expenditures (2,306,000) (14,829,000)
------------ ------------
Net cash (used in) investing activities (4,208,000) (5,048,000)
CASH FLOW FROM FINANCING ACTIVITIES:
Net borrowings (repayments) on long-term notes
and credit lines (1,684,000) 3,652,000
Payments of notes and loans payable (3,447,000) --
Stock repurchase -- (211,000)
------------ ------------
Net cash (used in) provided by financing activities (5,131,000) 3,441,000
------------ ------------
NET INCREASE DECREASE IN CASH AND CASH EQUIVALENTS (3,006,000) 4,704,000
BEGINNING CASH AND CASH EQUIVALENTS, July 1 3,728,000 375,000
------------ ------------
ENDING CASH AND CASH EQUIVALENTS, March 31 $ 722,000 $ 5,079,000
============ ============
Supplemental disclosures of cash flow information:
Interest paid $ 2,398,000 $ 2,195,000
Income taxes paid $ 381,000 $ 1,737,000
</TABLE>
See notes to consolidated financial statements.
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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.
During March 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (SFAS) No. 128, "Earnings Per Share," effective
for fiscal years ending after December 15, 1997. When adopted, SFAS No. 128
will require restatement of prior years' earnings per share; however,
management does not believe this Statement will have a material impact on the
financial statements of the Company.
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.
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ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Operations
Christiana Companies consolidated revenues for the three months ended March 31,
1997 were $22,450,000 versus $19,416,000 reported for the comparable period a
year ago, an increase of 15.6%. The increase in revenues was primarily
attributable to volume and improved cost management in transportation operations
and increased volume and utilization and selected price increases in
refrigerated warehousing operations.
Operating earnings for the quarter were $1,093,000 versus $810,000 generated in
the comparable period a year ago. The 34.9% increase in operating earnings is
primarily attributable to increased utilization of refrigerated warehouse
facilities and growth and improvement in transportation operations. In the
quarter Transportation activities contributed positively compared to prior
periods which had loss operations.
Pretax earnings for the third quarter include no gains from real estate sales.
In last year's third quarter sales of 26 homes were completed contributing
$1,038,000 of pretax earnings.
For the third quarter ended March 31, 1997, Equity in Earnings from Energy
Ventures totaled $1,219,000 attributable to an 8.54% weighted average ownership
interest compared to $405,000 in the previous year. For the quarter ended,
Energy Ventures' net income from continuing operations totaled $14,345,000 on
revenues of $164,641,000, compared to income from continuing operations of
$2,747,000 on revenues of $90,326,000 reported for the same period a year ago.
The Company's consolidated net earnings for the quarter were $1,019,000 or
$0.20 per share compared with $918,000 or $0.18 per share for the same period a
year ago. Net earnings were higher this period due to the increase in Equity
in Earnings of Energy Ventures, and improved operating performance of Total
Logistic Control offset by reduced sales of condominium homes this quarter.
For the first nine months of fiscal 1997 Christiana Companies consolidated
revenues were $63,271,000 versus $59,004,000 for the comparable period last
year, an increase of $4,267,000 or 7.2%. Volume increases in Logistic Services
and Refrigerated Warehousing were the principal factors contributing to the
increase.
Consolidated net earnings for the nine months ended March 31, 1997 were
$5,831,000 or $1.14 per share versus $3,316,000 or $0.64 per share reported for
the comparable period last year. Net earnings were higher this period due to
the increase in Equity in Earnings of Energy Ventures offset by the loss on the
disposal of assets and 39 fewer home sales. For the nine months ended March 31,
1997, the Company recognized Equity in Earnings from Energy Ventures of
$8,855,000 which included $5,715,000 attributable to the gain reported on the
sale of Mallard Bay Drilling compared to $1,214,000 in the same period last
year. In the nine month period this year, the Company completed 11 home sales
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which contributed net earnings of $167,000 compared to sales of 50 homes
contributing net earnings of $1,411,000 in the same period last year.
Financial Condition
Cash equivalents and short-term investments as of March 31, 1997 totaled
$7,093,000 compared to $4,478,000 at June 30, 1996, an increase of $2,615,000.
Cash provided by operating activities of $6,333,000 was attributable primarily
to net earnings and depreciation, offset by Equity in Earnings of Energy
Ventures. Cash used in investment activities of $4,208,000 resulted from
capital expenditures of $2,306,000, primarily attributable to warehousing and
logistics operations, an increase of $5,621,000 in short-term investments,
proceeds from asset sales of $2,242,000 primarily related to real estate and
the sale or payment of mortgage notes receivable in the amount of $1,477,000.
In the nine month period ended March 31, 1997, total funded debt attributable
to Total Logistics Control's operations was reduced by $5,131,000, all of which
was generated by internal cash flow from its operations.
At March 31, 1997, the market value of the Company's investment of 1,948,731
shares of Energy Ventures totaled $120,035,000.
At March 31, 1997, the Company has no commitments for any material capital
projects.
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PART II - OTHER INFORMATION
Item 1. Not applicable.
Item 2. Not applicable.
Item 3. Not applicable.
Item 4. See Item 4 of Form 10-Q for quarter ended 9/30/96.
Item 5. Not applicable.
Item 6. Exhibits and Reports on Form 8-K
None
9
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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: May 12, 1997 /s/ Sheldon B. Lubar
------------------------------
Sheldon B. Lubar
Chairman and
Chief Executive Officer
Date: May 12, 1997 /s/ William T. Donovan
------------------------------
William T. Donovan
Executive Vice President and
Chief Financial Officer
10
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 722,000
<SECURITIES> 6,371,000
<RECEIVABLES> 9,179,000
<ALLOWANCES> 248,000
<INVENTORY> 591,000
<CURRENT-ASSETS> 16,982,000
<PP&E> 100,480,000
<DEPRECIATION> 24,308,000
<TOTAL-ASSETS> 141,695,000
<CURRENT-LIABILITIES> 10,213,000
<BONDS> 0
0
0
<COMMON> 5,196,000
<OTHER-SE> 66,057,000
<TOTAL-LIABILITY-AND-EQUITY> 141,695,000
<SALES> 0
<TOTAL-REVENUES> 22,450,000
<CGS> 0
<TOTAL-COSTS> 21,357,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 770,000
<INCOME-PRETAX> 1,671,000
<INCOME-TAX> 652,000
<INCOME-CONTINUING> 1,019,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,019,000
<EPS-PRIMARY> .20
<EPS-DILUTED> 0
</TABLE>
