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, 1997
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 E. 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 12, 1997.)
Page 1 of 9 total pages No exhibits are filed with this report.
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CHRISTIANA COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited) (Audited)
September 30, June 30,
1997 1997
ASSETS:
Current Assets:
Cash and cash equivalents $ 586,000 $ 2,888,000
Short-term investments 6,598,000 4,611,000
Accounts receivable 10,068,000 7,649,000
Prepaids and other 1,627,000 1,729,000
------------ ------------
Total Current Assets 18,879,000 16,877,000
------------ ------------
Long-Term Assets:
Investment in EVI, Inc. 43,194,000 41,257,000
Mortgage notes receivable 1,634,000 1,749,000
Fixed assets, net 75,150,000 75,604,000
Other assets 6,593,000 6,869,000
------------ ------------
Total Long-Term Assets 126,571,000 125,479,000
------------ ------------
$145,450,000 $142,356,000
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY:
Current Liabilities:
Accounts payable $ 5,230,000 $ 3,526,000
Accrued liabilities 5,384,000 5,562,000
Short term debt 944,000 -
Current portion of long-term debt 1,245,000 3,531,000
------------ ------------
Total Current Liabilities 12,803,000 12,619,000
------------ ------------
Long-Term Liabilities:
Long-term debt 36,415,000 36,149,000
Deferred federal and state income taxes 21,460,000 20,289,000
Other liabilities 1,202,000 1,214,000
------------ ------------
Total Long-Term Liabilities 59,077,000 57,652,000
------------ ------------
Total Liabilities 71,880,000 70,271,000
------------ ------------
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
Treasury stock (1,236,000) (1,236,000)
Retained earnings 57,588,000 56,103,000
------------ ------------
Total Shareholders' Equity 73,570,000 72,085,000
------------ ------------
$145,450,000 $142,356,000
============ ============
See notes to consolidated financial statements.
<PAGE>
CHRISTIANA COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
September 30,
1997 1996
Revenues:
Warehousing and logistic services $23,047,000 $20,480,000
----------- -----------
Costs and Expenses:
Warehousing and logistic expenses 19,201,000 17,220,000
Selling, general and administrative 2,229,000 1,771,000
----------- -----------
21,430,000 18,991,000
----------- -----------
Earnings from Operations 1,617,000 1,489,000
Other Income (Expense):
Interest income 132,000 133,000
Interest expense (752,000) (867,000)
Gain on sales of assets - 284,000
Equity in earnings of EVI, Inc. 1,937,000 890,000
Other income (expense), net (496,000) (162,000)
----------- -----------
821,000 278,000
----------- -----------
Earnings before income taxes 2,438,000 1,767,000
Income tax provision 953,000 684,000
----------- -----------
Net Earnings $ 1,485,000 $ 1,083,000
=========== ===========
Net Earnings per Share $ 0.29 $ 0.21
=========== ===========
Average number of shares outstanding 5,136,630 5,136,630
See notes to consolidated financial statements.
<PAGE>
<TABLE>
CHRISTIANA COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
<CAPTION>
Additional
Common Stock Treasury Stock Paid-in Retained
Shares Amount Shares Amount Capital Earnings
<S> <C> <C> <C> <C> <C> <C>
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 year - - - - - 6,663,000
--------- ---------- -------- ----------- ----------- -----------
Balance, June 30, 1997 5,195,630 $5,196,000 $(59,000) $(1,236,000) $12,022,000 $56,103,000
--------- ---------- -------- ----------- ----------- -----------
Net earnings for the three months
Ended September 30, 1997 (Unaudited) - - - - - 1,485,000
--------- ---------- -------- ----------- ----------- -----------
Balance, September 30, 1997 5,195,630 $5,196,000 $(59,000) $(1,236,000) $12,022,000 $57,588,000
========= ========== ======== =========== =========== ===========
See notes to consolidated financial statements.
</TABLE>
<PAGE>
CHRISTIANA COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
(unaudited)
Three Months Ended
September 30,
1997 1996
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $1,485,000 $1,083,000
Adjustments to reconcile net
earnings to net cash provided
by operating activities:
Depreciation and amortization 1,708,000 1,850,000
Gain on sales of assets -- (287,000)
Deferred income tax expenses 1,171,000 608,000
Equity in Earnings of EVI, Inc. (1,937,000) (890,000)
Changes in assets and liabilities:
Increase in accounts receivable (2,419,000) (1,294,000)
Decrease in other assets 254,000 990,000
Increase (decrease) in accounts
payable and accrued liabilities 1,525,000 (1,908,000)
---------- ----------
Net cash provided by operating activities 1,787,000 152,000
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of short-term investments, net (1,987,000) (476,000)
Capital expenditures (1,029,000) (1,064,000)
Proceeds from sale of assets -- 1,223,000
Decrease in mortgage notes receivable 3,000 1,240,000
---------- ----------
Net cash provided by (used in)
investing activities (3,013,000) 923,000
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings on credit lines 944,000 1,167,000
Net payments of notes and loans payable (2,020,000) (349,000)
---------- ----------
Net cash provided by (used in)
financing activities (1,076,000) 818,000
---------- ----------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS (2,302,000) 1,893,000
BEGINNING CASH AND CASH EQUIVALENTS, July 1 2,888,000 3,728,000
---------- ----------
ENDING CASH AND CASH EQUIVALENTS, September 30 $ 586,000 $5,621,000
========== ==========
Supplemental disclosures of cash
flow information:
Interest paid 765,000 867,000
Income taxes paid -- --
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 1997 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.
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, 1997 were $23,047,000 reflecting an increase of 13% versus
$20,480,000 reported for the comparable period last year. Earnings from
operations for the quarter were $1,617,000 compared to $1,489,000 for the
same period last year. The increase in revenues and earnings from
operations this quarter was attributable to improved utilization of the
company's warehouse facilities and transportation equipment and growth in
integrated logistic services. The increase in other expense is primarily
attributable to a $200,000 valuation reserve for the closure of a
warehouse facility.
Consolidated net earnings for the quarter were $1,485,000 or $0.29 per
share compared to $1,083,000 or $0.21 per share for the same period last
year. The increase in the company's net earnings was primarily driven by
the significant growth in equity earnings contributed by EVI, Inc., a
principal equity holding. Christiana holds 3,897,462 shares of EVI
representing an 8.5% ownership interest. For the quarter, EVI contributed
$1,937,000 of pre-tax income compared to $890,000 contributed in last
year's first quarter.
Net earnings contributed by Total Logistic Control in the first quarter of
fiscal 1998 were $564,000, or $.11 per share compared to $502,000, or $.10
per share for the first quarter of fiscal 1997.
Financial Condition
Cash equivalent and short-term investments totaled $7,184,000 at
September 30, 1997 compared to $7,499,000 at June 30, 1997, a decrease of
$315,000.
Cash flow provided by operating activities in the period of $1,787,000 was
attributable primarily to net earnings, depreciation, amortization and
increased deferred taxes offset by increased working capital. Cash flow
used in investing activities of $3,013,000 resulted from capital
expenditures and the purchase of short-term investments. Capital
expenditures in the period of $1,029,000 were attributable to Total
Logistic Control. Net cash flow used in financing activities in the
quarter totaled $1,076,000.
At September 30, 1997 the Company had no commitments for any material
capital expenditures.
PART II - OTHER INFORMATION
Item 1. Not applicable.
Item 2. Not applicable.
Item 3. Not applicable.
Item 4. Registrant's annual meeting of shareholders will be held on
December 3, 1997.
Item 5. Not applicable.
Item 6. Exhibits and Reports on Form 8-K
None
<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: November 12, 1997
/s/ Sheldon B. Lubar
Sheldon B. Lubar
Chairman and
Chief Executive Officer
Date: November 12, 1997
/s/ William T. Donovan
William T. Donovan
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
CHRISTIANA COMPANIES, INC.'S CONSOLIDATED FINANCIAL STATEMENTS FOR
THE THREE MONTH PERIOD ENDED SEPTEMBER 30, 1997 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-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 586,000
<SECURITIES> 6,598,000
<RECEIVABLES> 10,338,000
<ALLOWANCES> 270,000
<INVENTORY> 847,000
<CURRENT-ASSETS> 18,879,000
<PP&E> 102,006,000
<DEPRECIATION> 26,968,000
<TOTAL-ASSETS> 145,450,000
<CURRENT-LIABILITIES> 12,803,000
<BONDS> 36,415,000
0
0
<COMMON> 15,982,000
<OTHER-SE> 57,588,000
<TOTAL-LIABILITY-AND-EQUITY> 145,450,000
<SALES> 0
<TOTAL-REVENUES> 23,047,000
<CGS> 0
<TOTAL-COSTS> 19,201,000
<OTHER-EXPENSES> 2,229,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 752,000
<INCOME-PRETAX> 2,438,000
<INCOME-TAX> 953,000
<INCOME-CONTINUING> 1,485,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,485,000
<EPS-PRIMARY> .29
<EPS-DILUTED> .29
</TABLE>
