<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 December 31, 1996
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.
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 February 12, 1997)
Page 1 of 10 total pages No exhibits are filed with this report.
1
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CHRISTIANA COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
(Unaudited) (Audited)
December 31, June 30,
1996 1996
------------ ------------
<S> <C> <C>
ASSETS:
Cash and cash equivalents $ 4,243,000 3,728,000
Short-term investments 2,653,000 750,000
Accounts receivable 8,668,000 8,294,000
Prepaids and other 1,041,000 1,732,000
------------ ------------
Total Current Assets 16,605,000 14,504,000
------------ ------------
Long-Term Assets:
Investment in Energy Ventures, Inc. 38,414,000 23,631,000
Mortgage notes receivable 1,842,000 3,314,000
Rental properties, net 108,000 867,000
Fixed assets, net 77,977,000 81,283,000
Other assets 7,039,000 7,419,000
------------ ------------
Total Long-Term Assets 125,380,000 116,514,000
------------ ------------
$141,985,000 $131,018,000
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY:
Current Liabilities:
Accounts payable 3,669,000 $ 5,294,000
Accrued liabilities 3,762,000 4,072,000
Short term debt 1,735,000 1,354,000
Current portion of long-term debt 1,295,000 1,295,000
------------ ------------
Total Current Liabilities 10,461,000 12,015,000
------------ ------------
Long-Term Liabilities:
Long-term debt 41,556,000 44,013,000
Deferred federal and state income taxes 18,610,000 12,674,000
Other liabilities 1,124,000 1,239,000
------------ ------------
Total Long-Term Liabilities 61,290,000 57,926,000
------------ ------------
Total Liabilities 71,751,000 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 49,907,000 45,095,000
------------ ------------
Total Shareholders' Equity 70,234,000 61,077,000
------------ ------------
$141,985,000 $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>
SIX MONTHS ENDED THREE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
1996 1995 1996 1995
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues:
Warehousing and logistic services $40,821,000 $39,588,000 $20,342,000 $19,651,000
----------- ----------- ----------- -----------
Costs and Expenses:
Warehousing and logistic services 33,913,000 32,820,000 16,693,000 16,737,000
Selling, general and administrative 3,895,000 3,662,000 2,124,000 1,861,000
----------- ----------- ----------- -----------
37,808,000 36,482,000 18,817,000 18,598,000
----------- ----------- ----------- -----------
Earnings from Operations 3,013,000 3,106,000 1,525,000 1,053,000
Other Income (Expense):
Interest income 257,000 271,000 124,000 142,000
Interest expense (1,667,000) (1,532,000) (799,000) (758,000)
Gain (losses) on sales of
real estate 279,000 1,314,000 (6,000) 474,000
Equity in earnings of Energy
Ventures, Inc. 7,636,000 809,000 6,746,000 405,000
Loss on disposal of assets (1,281,000) -- (1,281,000) --
Other income (expenses), net (346,000) (25,000) (183,000) (67,000)
----------- ----------- ----------- -----------
4,878,000 837,000 4,601,000 196,000
----------- ----------- ----------- -----------
Earnings before income taxes 7,891,000 3,943,000 6,126,000 1,249,000
Income tax provision 3,079,000 1,545,000 2,396,000 489,000
----------- ----------- ----------- -----------
Net earnings $ 4,812,000 $ 2,398,000 $ 3,730,000 $ 760,000
=========== =========== =========== ===========
Net earnings per share $ 0.94 $ 0.46 $ 0.73 $ 0.14
=========== =========== =========== ===========
Average number of shares outstanding 5,136,630 5,194,065 5,136,630 5,195,200
</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 six months
ended December 31, 1996 (unaudited) -- -- -- -- -- 4,812,000
----------------------------------------------------------------------------------
Balance, December 31, 1996 5,195,630 $5,196,000 $(59,000) $(1,236,000) $16,367,000 $49,907,000
==================================================================================
</TABLE>
See notes to consolidated financial statements.
4
<PAGE> 5
CHRISTIANA COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
(unaudited)
<TABLE>
<CAPTION>
Six Months Ended
December 31,
------------------------
1996 1995
----------- -----------
<S> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES:
Net earnings $4,812,000 $2,398,000
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Depreciation and amortization 3,698,000 3,556,000
Gains (losses) on sales of assets 1,001,000 (1,520,000)
Deferred income tax expenses 3,134,000 1,129,000
Equity in earnings of Energy Ventures, Inc. (7,636,000) (809,000)
Changes in assets and liabilities:
(Increase) in accounts receivable (329,000) (704,000)
(Increase) decrease in other assets 674,000 (458,000)
Increase (decrease) in accounts payable
and accrued liabilities (2,042,000) 1,348,000
----------- -----------
Net cash provided by operating activities 3,312,000 4,940,000
CASH FLOW FROM INVESTING ACTIVITIES:
Proceeds from sale of assets 1,482,000 4,137,000
Decrease in mortgage notes receivable 1,472,000 160,000
(Increase) Decrease in short-term investments (1,903,000) 2,529,000
Capital expenditures (1,772,000) (5,846,000)
----------- -----------
Net cash (used in) provided by investing activities (721,000) 980,000
CASH FLOW FROM FINANCING ACTIVITIES:
Net borrowings (repayments) on long-term notes
and credit lines 381,000 898,000
Payments of notes and loans payable (2,457,000) (2,066,000)
Stock repurchase -- (211,000)
----------- -----------
Net cash (used in) financing activities (2,076,000) (1,379,000)
----------- -----------
NET INCREASE IN CASH AND CASH EQUIVALENTS 515,000 4,541,000
BEGINNING CASH AND CASH EQUIVALENTS, July 1 3,728,000 375,000
----------- -----------
ENDING CASH AND CASH EQUIVALENTS, December 31 $4,243,000 $4,916,000
=========== ===========
Supplemental disclosures of cash flow information:
Interest paid $1,654,000 $5,134,000
Income taxes paid $381,000 $600,000
</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 December
31, 1996 were $20,342,000 versus $19,651,000 reported for the comparable period
a year ago, an increase of 3.5%. The increase in revenues was primarily
attributable to volume in Refrigerated Warehousing operations reflecting both
increased utilization of existing facilities and the use of 3.5 million cubic
feet of increased capacity at the Company's Rochelle, Illinois facility
completed in June, 1996.
Operating earnings for the quarter were $1,525,000 versus $1,053,000 generated
in the comparable period a year ago. The 44.8% increase in operating earnings
is primarily attributable to increased utilization of both refrigerated and dry
warehouse facilities and better cost management in transportation operations.
Pretax earnings for the quarter were negatively impacted by a loss on disposal
of excess processing assets of $1,281,000, incurred in connection with the
execution of a ten year services contract with Dean Foods Company to provide
vegetable processing, packaging and warehousing at the Company's Refrigerated
Logistic Center in Beaver Dam, Wisconsin. In addition sales of Company-owned
condominium homes have been effectively completed. In last year's second
quarter sales of 10 homes were completed contributing $474,000 of pretax
earnings.
For the quarter ended December 31, 1996, Equity in Earnings from Energy
Ventures totaled $6,746,000 attributable to its 8.54% weighted average
ownership interest compared to $405,000 in the previous year. For the quarter
ended December 31, 1996, Energy Ventures' net income from continuing operations
totaled $10,795,000 compared to $2,708,000 reported for the same period a year
ago. Additionally in this year's period, Energy Ventures completed the sale of
Mallard Bay Drilling which generated a one-time after-tax gain of $66,924,000.
Consolidated net earnings for the quarter were $3,730,000 or $0.73 per share
compared with $760,000 or $0.14 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 the loss on the disposal of excess processing assets and reduced
sales of condominium homes this quarter.
For the first six months of fiscal 1997 Christiana Companies consolidated
revenues were $40,821,000 versus $39,588,000 for the comparable period last
year, an increase of $1,233,000 or 3.1%. Volume increases in Refrigerated and
Dry Warehousing, Transportation, and International Freight Forwarding all
contributed to the increase.
Consolidated net earnings for the six months ended December 31, 1996 were
$4,812,000 or $0.94 per share versus $2,398,000 or $0.46 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 13 fewer home sales. For the six months ended December
31, 1996, the Company recognized Equity in Earnings from Energy Ventures of
$7,636,000 compared to $809,000 in the comparable period last year. In the six
month period this year, the Company completed 11 home sales which contributed
net earnings of $167,000 compared to sales of 24 homes contributing net
earnings of $788,000 in the same period last year.
Financial Condition
- -------------------
Cash equivalents and short term investments totaled $6,896,000 as of December
31, 1996 compared with $4,478,000 at June 30, 1996, an increase of $2,418,000.
7
<PAGE> 8
Cash provided by operating activities of $3,312,000 was attributable primarily
to net earnings, depreciation, amortization and deferred taxes. Cash used in
investing activities of $721,000 resulted from capital expenditures of
$1,772,000 primarily attributable to warehousing and logistics operations, an
increase of $1,903,000 in short term investments, proceeds from asset sales,
primarily real estate, of $1,482,000, and the sale or payment of mortgage notes
receivable in the amount of $1,472,000.
In the six month period ended December 31, 1996, total funded debt attributable
to Total Logistic Control's operations was reduced by $2,076,000, all of which
was generated by internal cash flow from its operations.
At December 31, 1996, the market value of the Company's investment of 1,948,731
shares of Energy Ventures totaled $99,142,000.
At December 31, 1996, the Company has no commitments for any material capital
projects.
8
<PAGE> 9
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
<PAGE> 10
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: 2/12/97
/s/ Sheldon B. Lubar
---------------------------
Sheldon B. Lubar
Chairman and
Chief Executive Officer
Date: 2/12/97
/s/ William T. Donovan
---------------------------
William T. Donovan
Executive Vice President and
Chief Financial Officer
10
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000020104
<NAME> CHRISTIANA COMPANIES, INC.
<MULTIPLIER> 1
<CURRENCY> US DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> DEC-31-1996
<EXCHANGE-RATE> 1
<CASH> 4,243,000
<SECURITIES> 2,653,000
<RECEIVABLES> 8,492,000
<ALLOWANCES> 176,000
<INVENTORY> 0
<CURRENT-ASSETS> 16,605,000
<PP&E> 101,756,000
<DEPRECIATION> 23,779,000
<TOTAL-ASSETS> 141,985,000
<CURRENT-LIABILITIES> 10,461,000
<BONDS> 42,851,000
0
0
<COMMON> 20,327,000
<OTHER-SE> 49,907,000
<TOTAL-LIABILITY-AND-EQUITY> 141,985,000
<SALES> 0
<TOTAL-REVENUES> 20,342,000
<CGS> 16,693,000
<TOTAL-COSTS> 18,817,000
<OTHER-EXPENSES> 1,470,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 799,000
<INCOME-PRETAX> 6,126,000
<INCOME-TAX> 2,396,000
<INCOME-CONTINUING> 3,730,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,730,000
<EPS-PRIMARY> .73
<EPS-DILUTED> .73
</TABLE>
