SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Quarterly Period Ended January 31, 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 1-9467
DAVIS WATER & WASTE INDUSTRIES, Inc.
(Exact name of registrant as specified in its charter)
Georgia 58-0959907
------------------------ -------------------
(State of incorporation) (I.R.S. Employer
Identification No.)
1820 Metcalf Avenue, Thomasville, Georgia 31792
(Address of principal executive offices, including zip code)
(912) 226-5733
________________________________________________________
(Registrant's telephone number, including area code)
___________________
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 twelve 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 of each of the issuer's classes of common stock
outstanding as of the latest practicable date.
Class Outstanding at March 13, 1996
----------------------------- -----------------------------
Common Stock, $0.01 Par Value 3,234,138 Shares
Page 1 of 17
Index of Exhibits on Page 16
<PAGE>
DAVIS WATER & WASTE INDUSTRIES, Inc.
Quarterly Report on Form 10-Q
For the Quarter Ended January 31, 1996
<TABLE>
<CAPTION>
Table of Contents
Item Page
Number PART I -- FINANCIAL INFORMATION Number
------ ------
<C> <S> <C>
1 Financial Statements:
Condensed Consolidated Balance
Sheet--January 31, 1996, April 30,
1995 and January 31, 1995 3
Condensed Consolidated Statement of
Operations--Three and Nine Months
Ended January 31, 1996 and 1995 5
Condensed Consolidated Statement of
Changes in Stockholders' Equity--
January 31, 1996, April 30, 1995 and
January 31, 1995 6
Condensed Consolidated Statement of
Cash Flows--Nine Months Ended
January 31, 1996 and 1995 7
Notes to Condensed Consolidated
Financial Statements 8
2 Management's Discussion and Analysis
of Financial Condition and Results
of Operations 9
PART II--OTHER INFORMATION
6 Exhibits and Reports on Form 8-K 14
SIGNATURES 15
INDEX OF EXHIBITS 16
</TABLE>
2
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
DAVIS WATER & WASTE INDUSTRIES, Inc.
CONDENSED CONSOLIDATED BALANCE SHEET
ASSETS
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
January 31, April 30, January 31,
1996 1995 1995
----------- --------- -----------
<S> <C> <C> <C>
Current assets:
Cash and cash equivalents $ 2,023 $ 3,746 $ 2,251
------- ------- -------
Accounts receivable, less allowance
for doubtful accounts ($1,192 at
January 31, 1996, $1,135 at
April 30, 1995 and $1,205 at
January 31, 1995) 32,922 39,795 35,280
------- ------- -------
Inventories:
Finished goods and products purchased
for resale 17,008 16,137 15,807
Work-in-progress 1,942 2,073 1,903
Raw materials and purchased components 960 568 644
------- ------- -------
Total inventories 19,910 18,778 18,354
------- ------- -------
Prepaid expenses 1,327 631 1,229
------- ------- -------
Costs and estimated earnings in excess
of billings on uncompleted contracts 1,253 1,097 592
------- ------- -------
Deferred income taxes 5,360 5,634 5,082
------- ------- -------
Total current assets 62,795 69,681 62,788
------- ------- -------
Property, plant and equipment 21,282 20,701 20,638
Less-accumulated depreciation (14,808) (14,407) (14,327)
------- ------- -------
6,474 6,294 6,311
------- ------- -------
Other assets 5,559 5,561 5,135
------- ------- -------
$74,828 $81,536 $74,234
======= ======= =======
</TABLE>
See accompanying notes to condensed consolidated financial statements.
3
<PAGE>
DAVIS WATER & WASTE INDUSTRIES, Inc.
CONDENSED CONSOLIDATED BALANCE SHEET
LIABILITIES AND STOCKHOLDERS' EQUITY
(Unaudited)
(in thousands, except share data)
<TABLE>
<CAPTION>
January 31, April 30, January 31,
1996 1995 1995
----------- ---------- -----------
<S> <C> <C> <C>
Current liabilities:
Current portion of long-term debt $ 271 $ 249 $ 163
Accounts payable 17,535 24,158 17,632
Accrued salaries and commissions 5,742 3,735 3,619
Other accrued liabilities 8,753 9,497 8,071
Billings in excess of costs and estimated
earnings on uncompleted contracts 828 1,449 1,931
------- ------- -------
Total current liabilities 33,129 39,088 31,416
------- ------- -------
Long-term debt, less current portion 11,199 14,787 15,654
------- ------- -------
Deferred income taxes 0 265 410
------- ------- -------
Other accrued liabilities 2,165 2,064 2,102
------- ------- -------
Stockholders' equity:
Common stock, $0.01 par value,
50,000,000 shares authorized and
3,265,308 shares issued 33 33 33
Capital in excess of par value 9,788 9,788 9,788
Retained earnings 18,900 15,705 14,854
------- ------- -------
28,721 25,526 24,675
Treasury stock at cost - 31,170 shares at
January 31, 1996, 19,379 shares at April
30, 1995 and 2,347 shares at January 31,
1995 (386) (194) (23)
------- ------- -------
Total stockholders' equity 28,335 25,332 24,652
------- ------- -------
$74,828 $81,536 $74,234
======= ======= =======
</TABLE>
See accompanying notes to condensed consolidated financial statements.
4
<PAGE>
DAVIS WATER & WASTE INDUSTRIES, Inc.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
(in thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
January 31, January 31,
1996 1995 1996 1995
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net sales $52,457 $52,730 $171,008 $159,700
Cost of products sold 43,777 44,862 143,353 135,828
------- ------- -------- --------
Gross profit margin 8,680 7,868 27,655 23,872
Selling, general and administration 6,613 6,291 20,091 18,665
Interest expense 208 335 848 1,041
Other income, net 41 67 126 188
------- ------- -------- --------
Income before income taxes 1,900 1,309 6,842 4,354
------- ------- -------- --------
Provision (benefit) for income taxes:
Current 929 564 2,699 1,494
Deferred (185) (31) 9 267
------- ------- -------- --------
744 533 2,708 1,761
------- ------- -------- --------
Net income $ 1,156 $ 776 $ 4,134 $ 2,593
======= ======= ======== ========
PER SHARE INFORMATION:
PRIMARY SHARE INFORMATION:
Primary net income per share $ .36 $ .24 $ 1.28 $ .79
======= ======= ======== ========
Primary weighted average shares
outstanding 3,234,193 3,263,115 3,236,550 3,262,072
========= ========= ========= =========
FULLY DILUTED SHARE INFORMATION:
Fully diluted net income per share $ .35 $ .24 $ 1.24 $ .79
======= ======= ======== ========
Fully diluted weighted average shares
outstanding 3,331,114 3,263,115 3,333,471 3,262,072
========= ========= ========= =========
Dividends per share $ .15 $ .08 $ .29 $ .08
======= ======= ======== ========
</TABLE>
The results of operations for the three and nine month periods ended
January 31, 1995 and 1994 are not necessarily indicative of the
results of operations on an annual basis. See accompanying notes to
condensed consolidated financial statements.
5
<PAGE>
DAVIS WATER & WASTE INDUSTRIES, Inc.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS'
EQUITY
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Capital in Total
Common excess of Retained Treasury stockholders'
stock par value earnings stock equity
------------------------------------- ------ --------- -------- --------- ------------
<S> <C> <C> <C> <C> <C>
Balance, April 30, 1994 $ 33 $9,788 $12,539 $ (51) $22,309
Issuance of common stock in
connection with employee benefit
plans (17) 92 75
Purchase of treasury stock (64) (64)
Dividends paid, $.08 per share (261) (261)
Net income 2,593 2,593
------ ------- ------- ------- -------
Balance, January 31, 1995 33 9,788 14,854 (23) 24,652
Issuance of common stock in
connection with employee
benefit plans (4) 30 26
Purchase of treasury stock (201) (201)
Net income 855 855
------ ------- ------- ------ -------
Balance, April 30, 1995 33 9,788 15,705 (194) 25,332
Issuance of common stock in
connection with employee
benefit plans 82 82
Purchase of treasury stock (274) (274)
Dividends paid, $.29 per share (939) (939)
Net income 4,134 4,134
------ ------- ------- ------- -------
Balance, January 31, 1996 $ 33 $9,788 $18,900 $ (386) $28,335
====== ======= ======= ======= =======
</TABLE>
See accompanying notes to condensed consolidated financial statements.
6
<PAGE>
DAVIS WATER & WASTE INDUSTRIES, Inc.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Nine Months Ended
January 31,
---------------------------
1996 1995
-------- --------
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 4,134 $ 2,593
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 1,123 1,665
(Decrease) in reserve for Taulman shutdown (1,888) (1,819)
Provision for doubtful accounts 445 (364)
Loss on sale of property, plant and equipment 57 (2)
Deferred income taxes 9 267
Decrease in accounts receivable 6,428 4,242
(Increase) decrease in inventories (1,132) 2,172
(Increase) decrease in costs and estimated
earnings in excess of billings (156) 380
(Increase) in other assets (694) (566)
(Decrease) in billings in excess of cost and
estimated earnings (621) (270)
(Decrease) in accounts payable and accrued
expenses (3,371) (3,793)
------- -------
Net cash provided by operating activities 4,334 4,505
------- -------
INVESTING ACTIVITIES
Purchases of property, plant and equipment (1,365) (1,125)
Proceeds from sale of property, plant and equipment 5 845
------- -------
Net cash (used in) investing activities (1,360) (280)
------- -------
FINANCING ACTIVITIES
Proceeds from revolving and long-term debt 47,025 41,432
Principal payments made on debt (50,591) (45,256)
Proceeds from sale of stock 82 75
Purchase of treasury stock (274) (64)
Dividends paid (939) (261)
------- -------
Net cash (used in) financing activities (4,697) (4,074)
------- -------
CASH
(Decrease) increase in cash during period (1,723) 151
Cash and cash equivalents at beginning of period 3,746 2,100
------- -------
Cash and cash equivalents at end of period $ 2,023 $ 2,251
======= =======
</TABLE>
See accompanying notes to condensed consolidated financial statements.
7
<PAGE>
DAVIS WATER & WASTE INDUSTRIES, Inc.
Notes to Condensed Consolidated Financial Statements
January 31, 1996 (Unaudited)
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited interim condensed consolidated financial
statements reflect all adjustments, consisting only of normal recurring
accruals, which, in the opinion of management, are necessary to present
fairly the Company's financial position as of January 31, 1996 and 1995,
and the results of its operations and its cash flows for the three and nine
month periods ended January 31, 1996 and 1995. The consolidated financial
statements included herein should be read in conjunction with the
consolidated financial statements and notes thereto, the Report of
Independent Accountants and the Statement of Management's Responsibility
for Financial Statements included in the Company's 1995 Annual Report.
NOTE B - ACCOUNTING POLICIES
Reference is made to the accounting policies of the Company described in
the Notes to Consolidated Financial Statements contained in the Company's
1995 Annual Report. The Company has consistently followed those policies
in preparing this report.
NOTE C - PROVISION FOR TAULMAN SHUTDOWN AND RELATED INTANGIBLE ASSETS
During the fourth quarter of fiscal 1994, the Company adopted a plan to
shutdown or reorganize the operations of its wholly-owned subsidiary, The
Taulman Company (Taulman). Substantially all of Taulman's operations are
contained within its Turbitrol Instrumentation and Controls division.
These operations will be shutdown following the completion of its
obligations under current contracts. It is anticipated that Taulman will
complete these contractual obligations in approximately two and one half
years subsequent to the end of fiscal 1994 . Taulman Composting Systems,
an immaterial component of Taulman's operations, now operates as a part of
the Company's Process division. The pre-tax loss provision for these
actions included the write-off of intangible assets totalling $2,908,000
associated with Taulman and the accrual of $5,987,000 to provide for
anticipated losses during the shutdown period.
For the nine months ended January 31, 1996 and 1995, Taulman's net sales
were $3,514,000 and $8,996,000, respectively, while cost of products sold
were $3,869,000 and $8,050,000, respectively. Selling, general and
administration expenses for the nine months of fiscal 1996 and fiscal 1995
were $1,548,000 and $2,790,000, respectively. Taulman recorded net losses
of $1,888,000 and $1,819,000 for the nine months of fiscal 1996 and fiscal
1995, respectively. These losses have been recorded against the reserve
established in fiscal 1994 for anticipated losses during the shutdown
period. As such, these losses did not impact the Company's results of
operation for the three and nine months ended January 31, 1996 or 1995.
8
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
RESULTS OF OPERATIONS
Overview
--------
The Company reported net income of $1,156,000, or $.36 per share (based on
primary net income per share), during the three month period ended January
31, 1996, compared with net income of $776,000, or $.24 per share, during
the comparable period of fiscal 1995. The Company reported net income of
$4,134,000, or $1.28 per share (based on primary net income per shares),
for the nine month period ended January 31, 1996 compared to $2,593,000, or
$.79 per share, for the nine month period ended January 31, 1995 . Net
sales were $52,457,000 for the three month period ended January 31, 1996
compared to $52,730,000 for the three month period ended January 31, 1995.
The decline in net sales was due primarily to poor weather during the third
quarter of fiscal 1996, which reduced the demand for the Company's
products. Net sales for the nine month period ended January 31, 1996 were
$171,008,000 compared to $159,700,000 for the same period of fiscal 1995.
Management is cautiously optimistic that sales will continue to show
improvements for fiscal 1996 as compared to fiscal 1995 as a result of the
improvement in the national economy over comparable periods of the prior
year; however, no assurances can be made in this regard. The results for
the three and nine months ended January 31, 1996 and 1995 do not include
the cost of the Taulman shutdown, which was reserved during the fiscal year
ended April 30, 1994. All sales and costs associated with completion of
Taulman's contractual obligations are applied against this reserve.
Net sales
---------
Net sales for the three month period ended January 31, 1996 declined
slightly to $52,457,000 compared to $52,730,000 for the corresponding
period of the prior year. Net sales for the nine month period ended
January 31, 1996 increased 7.1% to $171,008,000 compared to $159,700,000
for the corresponding period of the prior year. Sales in the Company's
distribution equipment business (Distribution Group) increased by 1.2% from
$39,379,000 during the three month period ended January 31, 1996 compared
to $38,927,000 for the corresponding period of the prior year. For the
nine month period ended January 31, 1996 , sales in the Distribution Group
increased by 5.1% to $129,184,000 from $122,885,000 compared to the
corresponding period of the prior year. Sales in the Company's water and
wastewater treatment and pumping equipment and process material and
supplies business (Water Treatment Group) decreased by 5.3% from
$13,078,000 for the three month period ended January 31, 1996 as compared
to $13,804,000 for the corresponding period of the prior year. For the
nine month period ended January 31, 1996, the Water Treatment Group's sales
increased by 13.6% to $41,824,000 compared to $36,816,000 for the
corresponding period of the prior year. Sales in the Distribution Group
represented 75.5% and the Water Treatment Group represented 24.5% of the
Company's total net sales for the nine month period ended January 31, 1996.
The increases in net sales of the Company's products for the nine months
ended January 31, 1996 is due to increased activity during the beginning of
the fiscal year in the commercial and residential land development and
construction markets, as a result of the improvement in the national
economy, which increased the demand for the Company's products. The
increased net sales reflect a higher volume of products shipped in response
to the increased demand rather than to any significant price increases.
The slight decrease in sales for the three months ended January 31, 1996 as
compared to the same period in the prior year is due primary to the poor
weather condition during the third quarter of fiscal 1996. For the
remainder of fiscal 1996, management believes that the Company's overall
sales will continue at improved levels over the comparable periods for the
prior fiscal year if the
9
<PAGE>
economy continues to improve or remains at its present level; however, no
assurances can be made in this regard.
Cost of products sold
---------------------
The Company's gross profit margin (the difference between net sales and
cost of products sold expressed as a percentage of net sales) was 16.5% and
14.9% for the three month periods ended January 31, 1996 and 1995,
respectively, and 16.2% and 14.9% for the nine month periods ended January
31, 1996 and 1995, respectively. The gross profit margin for the
Distribution Group was 13.3% and 11.9% for the three month periods ended
January 31, 1996 and 1995, respectively, and 12.8% and 11.7% for the nine
month periods ended January 31, 1996 and 1995, respectively. The gross
profit margin for the Water Treatment Group was 26.4% and 23.4% for the
three month periods ended January 31, 1996 and 1995, respectively, and
26.7% and 25.8% for the nine month periods ended January 31, 1996 and 1995,
respectively. The increase in the Company's gross profit margin is
attributed to the increased sales volume which enabled the Company to
spread its fixed costs over a larger sales base.
Selling, general and administrative expenses
--------------------------------------------
Selling, general and administrative expenses were 12.6% and 11.9% of net
sales for the three month periods ended January 31, 1996 and 1995,
respectively, and 11.7% and 11.7% of net sales for the nine month periods
ended January 31, 1996 and 1995, respectively. The dollar amount of
selling, general and administrative expenses increased by 5.1% and 7.6% in
the three and nine months of fiscal 1996 as compared to the corresponding
periods of the prior year. The increase is due primarily to the increased
costs associated with the increased sales, including increased employee
incentive awards.
Interest expense
----------------
Interest expense decreased 37.9% for the three month period and 18.6% for
the nine month period ended January 31, 1996 as compared to the
corresponding periods of the previous fiscal year. This was due to a
decrease of approximately $3,902,000 or 21.0% in the Company's weighted
average borrowings for the nine month period ended January 31, 1996 when
compared to the corresponding period of the prior year. The weighted
average borrowing rate increased by 40 basis points for the nine month
period ended January 31, 1996 as compared to the corresponding nine month
period of fiscal 1995. Management anticipates that interest expense will
decrease during the remainder of fiscal 1996 from amounts reported in
comparable periods of the previous year if the average borrowings remain at
present levels. As a result of the second amendment to the Sun Bank,
National Association ("SBNA") loan agreement, the Company has the option to
change between the then current prime rate or the then current LIBOR rate
with adjustments to these rates plus or minus various basis points
depending on the Company financial results.
Provision for income tax expense
--------------------------------
The Company's effective tax rates for the three and nine month periods
ended January 31, 1996 were 39.2% and 39.6%, respectively, and were 40.7%
and 40.5% for the three and nine month periods ended January 31, 1995,
respectively. These rates reflect the Company's estimated effective rates
for the respective fiscal year and do not include any unusual adjustments
or credits.
10
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
The primary sources of liquidity for the Company are funds generated
internally from operations and bank borrowings. Set forth below is
information regarding the sources and amounts of internally generated
funds:
<TABLE>
<CAPTION>
Nine Months Ended
January 31,
------------------- Fiscal Year Ended
(in thousands) 1996 1995 April 30, 1995
------------------------------- ------------------- -----------------
<S> <C> <C> <C>
Net income..................... $4,134 $2,593 $3,448
Depreciation and amortization 1,123 1,665 2,110
Deferred taxes ................ 9 267 (430)
------ ------ ------
$5,266 $4,525 $5,128
====== ====== ======
When internally generated funds are insufficient to support operations and
capital expenditures, the Company has been able to borrow funds to meet its
needs. At January 31, 1996, the Company had approximately $20,339,000
available under a $30,000,000 bank line of credit. These available funds,
together with a cash balance of approximately $2,023,000, placed the
Company's potential cash availability in excess of $22,362,000 at January
31, 1996, which management believes is sufficient to support operations for
the foreseeable future.
During the first quarter of fiscal 1996, the Company and its primary
lender, Sun Bank, National Association (SBNA), amended the Company's loan
agreement to extend the loan maturity through April 30, 1997, reduce the
principal amount that the Company can borrow to $30,000,000, provide
specific guidelines that the Company must meet to eliminate the security
interest that SBNA has on the Company's accounts receivable and inventory,
eliminate the working capital requirement, and limit the amount of cash
that the Company may spend in connection with acquisitions without the
prior consent of SBNA to $2,500,000 per year during the term of the loan
agreement. The amended loan agreement also permits the Company to choose
between the then current prime rate or the then current LIBOR rate plus or
minus various basis point rates for advances under the revolving term loan,
depending on the Company achieving certain financial results. The Company
was in compliance with the financial covenants of the loan agreement as of
January 31, 1996.
The payment of cash dividends is subject to approval by the Board of
Directors and depends on, among other factors, earnings, capital require-
ments, and the operating and financial condition of the Company. The
payment of cash dividends also requires the prior approval of SBNA unless
certain financial requirements are met. During the first and third
quarters of fiscal 1996, the Company's Board of Directors authorized a cash
dividend of $0.14 and $0.15 per share, which was paid on July 3, 1995 and
January 5, 1996 to stockholders of record on June 26, 1995 and December
26,1995, respectively.
The Company's working capital position decreased by 3.0% at January 31,
1996 as compared to April 30, 1995 and by 5.5% as compared to January 31,
1995. The decline in the Company's working capital position at January 31,
1996 as compared to April 30, 1995 was due primarily to a $1,723,000
decrease in cash and a $6,873,000 decrease in accounts receivable which was
offset by an increase in inventories of $1,132,000 and a decrease in
accounts payable of $6,623,000. The primary reasons for the decline in the
working capital position at January 31, 1996 as compared to January 31,
1995 was due to the decrease of
11
<PAGE>
$228,000 and $2,358,000 in cash and accounts receivable, respectively,
offset by the increase in inventories of $1,556,000 and a decrease of
$97,000 in accounts payable. Set forth below is the Company's working
capital position and certain liquidity comparisons as of the dates
indicated:
</TABLE>
<TABLE>
<CAPTION>
January 31,
(in thousands) 1996 1995 April 30, 1995
--------------------------- ------------------ -----------------
<S> <C> <C> <C>
Working capital............ $29,666 $31,372 $30,593
======= ======= =======
Cash....................... $ 2,023 $ 2,251 $ 3,746
Accounts receivable, net... 32,922 35,280 39,795
Inventories................ 19,910 18,354 18,778
------- ------- -------
54,855 55,885 62,319
Accounts payable........... (17,535) (17,632) (24,158)
Notes payable and current
portion of long-term debt (271) (163) (249)
------- ------- -------
$37,049 $38,090 $37,912
======= ======= =======
</TABLE>
The Company's two most significant assets are its accounts receivable and
inventories. The Company measures the effectiveness of its accounts
receivable management program by a calculation designed to estimate the
number of days that it takes the Company to collect accounts receivable.
This calculation excludes the affect of any retainage. Average days to
collect accounts receivable declined by 6.2 days or 10.9% at January 31,
1996 when compared to January 31, 1995 due to continued efforts to improve
collections by the Company.
The Company measures the effectiveness of its inventory management program
by a calculation using average quarterly inventory amounts to estimate the
number of times inventory turns on an annual basis. Inventory turns
increased by .8 turns or 9.0% and .5 turns or 5.4% during the nine month
period ended January 31, 1996 compared to the corresponding period ended
January 31, 1995 and the fiscal year ended April 30, 1995, respectively.
The increase in inventory turns occurred because the Company has been able
to maintain reduced levels of inventory despite the increase in sales.
This has been accomplished through more efficient management of
distribution product inventories. The table below sets forth the results
for the periods shown:
<TABLE>
<CAPTION>
January 31,
----------------- Fiscal Year Ended
1996 1995 April 30, 1995
------ ------ -----------------
<S> <C> <C> <C>
Average days to collect
accounts receivable...... 50.7 56.9 61.0
Inventory turns............ 9.7 8.9 9.2
</TABLE>
Average long-term and short term borrowings decreased by $3,902,000, or
21.0%, and $2,979,000, or 16.9%, during the nine month period ended
January 31, 1996 as compared to the nine month period ended January 31,
1995 and the year ended April 30, 1995, respectively. The Company has
increased its efforts to improve collection of accounts receivable and
minimize inventory levels in order to reduce bank debt. This is
illustrated by the lower level of borrowings the Company currently
maintains despite the 7.1% increase in net sales.
12
<PAGE>
<TABLE>
<CAPTION>
Nine Months Ended
January 31,
------------------ Fiscal Year Ended
(dollars in thousands) 1996 1995 April 30, 1995
---------------------------------- -------- -------- -----------------
<S> <C> <C> <C>
Average long-term debt............ $14,057 $18,006 $17,146
Weighted average interest rate.... 8.1% 7.7% 7.9%
Average short-term borrowings..... $ 639 $ 592 $ 529
Weighted average interest rate.... 7.4% 6.7% 6.7%
</TABLE>
13
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
<TABLE>
<CAPTION>
(a) The following exhibit is filed as part of this report:
Exhibit Description of Exhibit
--------- ---------------------------
<C> <S>
11 Computation of Net Income Per Share
(b) No Current Reports on Form 8-K were filed by the Company
during the quarter ended January 31, 1996.
14
<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.
DAVIS WATER & WASTE INDUSTRIES, Inc.
(Registrant)
Date: March 13, 1996 /S/ STAN WHITE
__________________________________
Stan White, Secretary-Treasurer
(Duly Authorized Officer and
Chief Financial Officer)
15
<PAGE>
DAVIS WATER & WASTE INDUSTRIES, Inc.
INDEX OF EXHIBITS
</TABLE>
<TABLE>
<CAPTION>
Exhibit
Table
Item No. Description of Exhibit Page
-------- ---------------------- ----
<C> <S> <C>
11 Computation of Net Income Per Share 17
</TABLE>
16
<PAGE>
EXHIBIT 11
DAVIS WATER & WASTE INDUSTRIES, Inc.
COMPUTATION OF NET INCOME PER SHARE
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
January 31, January 31,
------------------------- -------------------------
1996 1995 1996 1995
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net income used to calculate primary and fully
diluted income per share $1,155,558 $ 775,826 $4,133,893 $2,592,507
========== ========== ========== ==========
Number of shares used in calculation of per share
data:
Primary per common shares information:
Weighted average number of common shares
outstanding during the period 3,232,460 3,263,115 3,234,817 3,262,072
Add common equivalent shares (determined by
the treasury stock method) composed of shares
issuable upon award of performance shares or
exercised of stock options 1,733 0 1,733 0
---------- ---------- ---------- ----------
Weighted average number of shares used in
calculating primary net income per share 3,234,193 3,263,115 3,236,550 3,262,072
========== ========== ========== ==========
Primary net income per share $0.36 $ .24 $1.28 $ .79
========== ========== ========== ==========
Fully diluted per common shares information:
Weighted average number of common shares
outstanding during the period 3,232,460 3,263,115 3,234,817 3,262,072
Add common equivalent shares (determined by
the treasury stock method) composed of
shares issuable upon award of performance
shares or exercise of stock options 3,115 0 3,115 0
Add common equivalent shares (determined by
the treasury stock method) composed of
shares issuable upon exercise of Officers
and Directors stock options 95,539 0 95,539 0
---------- ---------- ---------- ----------
Wieghted average number of shares used in
calculating fully diluted net income share 3,331,114 3,263,115 3,333,471 3,262,072
========== ========== ========== ==========
Fully diluted net income per share $0.35 $0.24 $1.24 $0.79
========== ========== ========== ==========
</TABLE>
17
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000027326
<NAME> DAVIS WATER & WASTE INDUSTRIES, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> APR-30-1996
<PERIOD-END> JAN-31-1996
<CASH> 2,023
<SECURITIES> 0
<RECEIVABLES> 34,114
<ALLOWANCES> 1,192
<INVENTORY> 19,910
<CURRENT-ASSETS> 62,795
<PP&E> 21,282
<DEPRECIATION> 14,808
<TOTAL-ASSETS> 74,828
<CURRENT-LIABILITIES> 33,129
<BONDS> 0
<COMMON> 33
0
0
<OTHER-SE> 28,302
<TOTAL-LIABILITY-AND-EQUITY> 74,828
<SALES> 171,008
<TOTAL-REVENUES> 171,008
<CGS> 143,353
<TOTAL-COSTS> 143,353
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 848
<INCOME-PRETAX> 6,842
<INCOME-TAX> 2,708
<INCOME-CONTINUING> 4,134
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,134
<EPS-PRIMARY> 1.28
<EPS-DILUTED> 1.24
</TABLE>
