SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
(Mark One)*
[X] Quarterly report pursuant to section 13 or 15(d) of the
Securities Exchange Act of 1994 for the quarterly period ended June
30, 1995 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 No. 0-7152
DEVCON INTERNATIONAL CORP.
(Exact name of Registrant as specified in its charter)
FLORIDA 59-0671992
(State or other jurisdiction of (I.R.S.Employer
incorporation or organization) Identification No.)
1350 E. NEWPORT CENTER DRIVE, SUITE 201,
DEERFIELD BEACH, FL 33442
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(305) 429-1500
Securities registered pursuant to section 12(g) of the Act:
COMMON STOCK, $.10 PAR VALUE
(Title of Class)
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
As of August 9, 1995, the number of shares outstanding of the
Registrant's Common Stock was 4,431,177.
DEVCON INTERNATIONAL CORP.
AND SUBSIDIARIES
INDEX
[CAPTION]
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Page Number
Part I. Financial Information:
Consolidated Balance Sheets -
June 30, 1995 and December 31,
1994
Consolidated Statements of
Operations and Retained
Earnings - Three and Six
Months Ended June 30, 1995
and 1994
Consolidated Statements of
Cash Flows - Six Months Ended
June 30, 1995 and 1994
Notes to Consolidated
Financial Statements
Management's Discussion and
Analysis of Financial
Conditions and Results
of Operations
Part II. Other Information
</TABLE>
PART I. FINANCIAL INFORMATION
DEVCON INTERNATIONAL CORP.
AND SUBSIDIARIES
Consolidated Balance Sheets
June 30, 1995 and December 31, 1994
[CAPTION]
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June 30, December 31,
1995 1994
(Unaudited) (Audited)
ASSETS
Current assets:
Cash $ 265,693 $ 159,118
Cash equivalents 953,437 920,944
Receivables, net 13,450,324 14,600,993
Prepaid expenses 1,274,261 986,317
Inventories 7,773,652 8,131,881
Costs in excess of billings
and estimated earnings 2,689,203 2,611,494
Total current assets 26,406,570 27,410,747
Property, plant and equipment
Land 5,550,518 5,498,857
Buildings 4,245,138 4,233,720
Leasehold interests 12,573,225 12,454,758
Equipment 70,856,225 69,865,911
Furniture and fixtures 1,004,910 970,571
Construction in process 1,635,992 2,285,638
95,866,008 95,309,455
Less accumulated depreciation (44,745,163) (43,761,782)
51,120,845 51,547,673
Investments in unconsolidated
joint ventures and affiliates 230,280 230,280
Advances to unconsolidated joint
ventures and affiliates 1,169,764 1,351,454
Receivables, net 16,931,653 18,420,072
Intangible assets, net of
accumulated amortization 464,382 500,582
Other assets 1,078,092 1,044,311
$97,401,586 $100,505,119
See accompanying notes to consolidated financial statements.
</TABLE>
DEVCON INTERNATIONAL CORP.
AND SUBSIDIARIES
Consolidated Balance Sheets
June 30, 1995 and December 31, 1994
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June 30, December 31,
1995 1994
(Unaudited) (Audited)
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current Liabilities:
Accounts payable, trade and
other $ 4,907,315 $ 6,598,439
Accrued expenses and other
liabilities 625,737 1,273,003
Notes payable to banks 3,197,000 2,480,000
Current installments of
long-term debt 7,950,145 7,033,073
Billings in excess of costs and
estimated earnings 509,762 56,278
Income taxes 40,847 50,000
Total current liabilities 17,230,806 17,490,793
Long-term debt, excluding current
installments 14,387,159 18,074,674
Minority interest in consolidated
subsidiaries 1,097,958 771,503
Deferred income taxes 1,429,000 1,429,000
Other liabilities 976,235 1,084,058
Total liabilities 35,121,158 38,850,028
Stockholders' Equity:
Common stock, $0.10 par value
Authorized 15,000,000 shares;
issued and outstanding 4,431,177
shares in 1995 and 1994 443,118 443,118
Additional paid-in capital 11,740,700 11,740,700
Retained earnings 50,096,610 49,471,273
Total stockholders' equity 62,280,428 61,655,091
$97,401,586 $100,505,119
See accompanying notes to consolidated financial statements.
</TABLE>
DEVCON INTERNATIONAL CORP.
AND SUBSIDIARIES
Consolidated Statements of Operations and Retained Earnings
Three and Six Months Ended June 30, 1995 and 1994
(Unaudited)
[CAPTION]
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Three Three Six
Months Months Months
Ended Ended Ended
June 30, June 30, June 30,
1995 1994 1995
Concrete and
related products
revenues $10,256,447 $10,018,034 $19,758,995
Contracting
revenues 3,623,585 5,894,005 7,861,612
Other revenues 839,545 966,616 1,991,732
Total revenues 14,719,577 16,878,655 29,612,339
Cost of concrete and
related products
revenues 7,280,033 7,487,472 14,579,830
Cost of contracting
revenues 3,294,288 4,969,420 6,597,131
Cost of other
revenues 620,869 731,384 1,408,648
Gross profit 3,524,387 3,690,379 7,026,730
Selling, general and
administrative
expenses 2,837,662 2,630,907 5,562,464
Operating income 686,725 1,059,472 1,464,266
Other income
(deductions)
Interest expense (651,538) (679,526) (1,314,750)
Gain on sale of
equipment 151,173 22,136 153,221
Interest and other
income 91,988 211,354 235,858
Minority interest 45,733 43,412 86,742
(362,644) (402,624) (838,929)
Income before
income taxes 324,081 656,848 625,337
Income taxes - 7,032 -
Net earnings 324,081 649,816 625,337
Retained earnings,
beginning of
period 49,772,529 47,892,301 49,471,273
Retained earnings,
end of period $50,096,610 $48,542,117 $50,096,610
Earnings per
share $ .07 $ .14 $ .14
Weighted average
number of shares
outstanding 4,558,072 4,564,013 4,561,886
(continued)
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Six
Months
Ended
June 30,
1994
Concrete and
related products
revenues $19,726,194
Contracting
revenues 12,112,156
Other revenues 2,291,277
Total revenues 34,129,627
Cost of concrete and
related products
revenues 14,751,987
Cost of contracting
revenues 10,102,201
Cost of other
revenues 1,760,756
Gross profit 7,514,683
Selling, general and
administrative
expenses 5,511,062
Operating income 2,003,621
Other income
(deductions)
Interest expense (1,340,466)
Gain on sale of
equipment 15,667
Interest and other
income 444,870
Minority interest 74,016
(805,913)
Income before
income taxes 1,197,708
Income taxes 15,398
Net earnings 1,182,310
Retained earnings,
beginning of
period 47,359,807
Retained earnings,
end of period $48,542,117
Earnings per
share $ .26
Weighted average
number of shares
outstanding 4,557,597
See accompanying notes to consolidated financial statements.
</TABLE>
DEVCON INTERNATIONAL CORP.
AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Six Months Ended June 30, 1995 and 1994
(Unaudited)
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1995 1994
Cash flows from operating activities
Net earnings $ 625,337 $ 1,182,310
Adjustments to reconcile net
earnings to net cash provided
by operating activities:
Depreciation and amortization 2,439,929 3,352,291
Deferred income taxes - 32,004
Provision for doubtful accounts
and notes 150,000 150,000
Gain on sale of equipment (153,221) (15,668)
Minority interest income (86,742) (74,016)
Changes in operating assets and
liabilities:
Decrease (Increase) in
receivables, net 570,648 (1,540,757)
Increase in costs in excess
of billings and estimated
earnings (77,709) (685,727)
Decrease (Increase) in inventories 358,229 (377,287)
Increase in other current assets (287,944) (528,978)
Increase in other assets (33,781) (371,166)
Increase (Decrease) in accounts
payable, trade and other (2,167,958) 1,135,446
Increase in billings in excess
of costs and estimated earnings 453,484 858,809
Decrease in income taxes payable (9,153) (26,396)
Decrease in other liabilities (107,822) (227,086)
Net cash provided by
operating activities 1,673,297 2,863,779
Cash flows from investing activities
Purchase of property, plant and
equipment (2,162,888) (1,760,583)
Proceeds from disposition of
property, plant and equipment 339,208 434,095
Issuance of notes (200,993) (1,827,546)
Payments received on notes 2,119,433 273,025
Advances to affiliates (18,310) (12,862)
Advances from affiliates 200,000 100,000
Net cash provided by (used in)
investing activities 276,450 (2,793,871)
See accompanying notes to consolidated financial statements.
</TABLE>
DEVCON INTERNATIONAL CORP.
AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Six Months Ended June 30, 1995 and 1994
(Unaudited)
[CAPTION]
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1995 1994
Cash flows from financing activities
Proceeds from debt $ 3,777,068 $ 3,271,728
Principal payments on debt (5,830,510) (3,768,532)
Net borrowings from bank
overdrafts 242,763 126,938
Net cash used in
financing activities (1,810,679) (369,866)
Net increase (decrease) in
cash and cash equivalents 139,068 (299,958)
Cash and cash equivalents,
beginning of period 1,080,062 1,263,827
Cash and cash equivalents,
end of period $ 1,219,130 $ 963,869
Supplemental disclosures of
cash flow information
Cash paid for
Interest $ 1,400,985 $ 1,233,552
Income taxes $ 26,213 $ 80,154
See accompanying notes to consolidated financial statements.
</TABLE>
DEVCON INTERNATIONAL CORP.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements include the accounts of the
Company and its majority-owned subsidiaries.
The accounting policies followed by the Company are set forth in
Note (1) to the Company's financial statements included in its
Annual Report on Form 10-K for the fiscal year ended December 31,
1994.
In the opinion of management, the accompanying unaudited
consolidated financial statements contain all adjustments necessary
to present fairly the Company's financial position as of June 30,
1995 and the results of its operations and cash flows for the three
and six months ended June 30, 1995 and 1994.
The results of operations for the six months ended June 30, 1995
are not necessarily indicative of the results to be expected for
the full year.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
All dollar amounts of $1.0 million or more are rounded to the
nearest one tenth of a million; all other dollar amounts are
rounded to the nearest one thousand and all percentages are stated
to the nearest one tenth of one percent.
RESULTS OF OPERATIONS
Comparison of Three Months Ended June 30, 1995 vs Three Months
Ended June 30, 1994
REVENUES
The Company's revenues during the second quarter of 1995 were $14.7
million, as compared to $16.9 million during the second quarter of
1994. This 12.8 percent decrease was primarily due to decreases in
the Company's land development contracting division revenues and
other revenues, offset by a slight increase in concrete and related
products division revenues.
The Company's concrete and related products division revenues
increased 2.4 percent to $10.3 million during the second quarter of
1995 from $10.0 million during the second quarter of 1994. This
increase was primarily due to increased demand for this division's
products on two Caribbean islands, which was generated by a modest
increase in the overall level of construction activity, offset by
decreased demand in certain other island locations.
Revenues from the Company's land development contracting division
decreased by 38.5 percent to $3.6 million during the second quarter
of 1995 from $5.9 million during the second quarter of 1994. This
decrease was primarily attributable to the completion in late 1994
of several construction contracts obtained during the latter part
of 1993. The Company's backlog of unfilled portions of land
development contracts at June 30, 1995 was $6.1 million, involving
fifteen projects. As a result of the Company's current backlog it
does not appear likely that the Company will achieve the contract
revenue levels obtained in 1994. The Company expects that most of
the backlog outstanding at June 30, 1995 will be completed by the
end of 1995.
Revenues from the Company's other operations (a marina and a
ceiling tile manufacturing partnership) were $840,000 during the
second quarter of 1995 and $1.0 million during the second quarter
of 1994. This decrease is due primarily to a decrease in marina
revenues resulting from a modest reduction in occupancy levels over
those attained during the second quarter of 1994.
COST OF CONCRETE AND RELATED PRODUCTS
Cost of concrete and related products as a percentage of concrete
and related products revenues decreased to 71.0 percent during the
second quarter of 1995 from 74.7 percent during the second quarter
of 1994. This decrease was primarily attributable to the increase
in revenues recognized and some reductions in fixed operating
costs. The Company's margins will also fluctuate depending on the
mix of products sold and the locations in which sales are made
during the quarter.
COST OF CONTRACTING
Cost of contracting as a percentage of land development contracting
revenues increased to 90.9 percent during the second quarter of
1995 from 84.3 percent during the second quarter of 1994. This
increase is primarily attributable to the decline in revenues
actually recognized and the costs incurred as a result of owning
and operating heavy construction equipment, some of which, because
of the Company's current level of construction volume, is not
heavily utilized. In addition, the Company's gross margins are
affected by the varying profitability levels of individual
contracts and the stage of completion of such contracts.
COST OF OTHER
Cost of other as a percentage of other revenues was 73.9 percent in
the second quarter of 1995 and 75.8 percent in the second quarter
of 1994. This decrease is primarily attributable to improvements
in the ceiling tile manufacturing process which has resulted in a
lower spoilage rate during production.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative expense ("SG&A expense") was
$2.7 million during the second quarter of 1995 and $2.6 million
during the second quarter of 1994. This increase was primarily
attributable to higher than expected operating expenses, offset by
a reduction in expense attributable to personnel reductions. Due to
severance costs, the full impact of these cost reductions will not
be realized until 1996. As a percentage of revenue, SG&A expense
increased to 18.5 percent for the second quarter of 1995 from 15.6
percent for the second quarter of 1994. This percentage increase
was primarily attributable to the decrease in revenues actually
recognized and the increase in SG&A expenses actually incurred.
DIVISIONAL OPERATING INCOME
Operating income was $699,000 for the second quarter of 1995 as
compared to $1.1 million for the second quarter of 1994. The
Company's concrete and related products division operating income
increased to $1.2 million during the second quarter of 1995 from
$410,000 during the second quarter of 1994. This increase is
primarily attributable to improvements in gross profit margins and
reductions in SG&A expense incurred by this division.
The Company's land development contracting division operating
income decreased to a loss of $289,000 for the second quarter of
1995 from income of $543,000 for the second quarter of 1994. This
decrease is primarily attributable to the reduction in contract
revenues.
INTEREST AND OTHER INCOME
Interest and other income decreased to $92,000 in the second
quarter of 1995 from $211,000 in the second quarter of 1994. This
decrease was due primarily to a decrease in interest bearing notes
and investments.
NET EARNINGS
The Company's net earnings decreased to $324,000 during the second
quarter of 1995 from $650,000 for the same period in 1994. This
decrease is primarily attributable to decreases in contracting
revenues and profits.
Comparison of Six Months Ended June 30, 1995 vs Six Months Ended
June 30, 1994
REVENUES
The Company's revenues during the first six months of 1995 were
$29.6 million, as compared to $34.1 million during the same period
in 1994. This 13.2 percent decrease was primarily due to decreases
in the Company's land development contracting division revenues.
The Company's concrete and related products division revenues
increased 0.2 percent to $19.8 million during the first six months
of 1995 from $19.7 million during the same period in 1994. This
increase was primarily due to increased demand for this division's
products on two Caribbean islands, which was generated by a modest
increase in the overall level of construction activity, offset by
decreased demand in certain other island locations.
Revenues from the Company's land development contracting division
decreased by 35.1 percent to $7.9 million during the first six
months of 1995 from $12.1 million for the same period in 1994.
This decrease was primarily attributable to the completion in late
1994 of several construction contracts obtained during the latter
part of 1993. The Company's backlog of unfilled portions of land
development contracts at June 30, 1995 was $6.1 million, involving
fifteen projects. As a result of the Company's current backlog it
does not appear likely that the Company will achieve the contract
revenue levels obtained in 1994. The Company expects that most of
the backlog outstanding at June 30, 1995 will be completed by the
end of 1995.
Revenues from the Company's other operations (a marina and a
ceiling tile manufacturing partnership) were $2.0 million during
the first six months of 1995 and $2.3 million for the same period
in 1994. This decrease is due primarily to a decrease in marina
revenues resulting from a modest reduction in occupancy levels over
those attained during the first six months of 1994.
COST OF CONCRETE AND RELATED PRODUCTS
Cost of concrete and related products as a percentage of concrete
and related products revenues decreased to 73.8 percent during the
first six months of 1995 from 74.8 percent for the same period in
1994. This decrease was primarily attributable to the increase in
revenues recognized and some reductions in fixed operating costs.
The Company's margins will also fluctuate depending on the mix of
products sold and the locations in which sales are made during the
quarter.
COST OF CONTRACTING
Cost of contracting as a percentage of land development contracting
revenues increased to 83.9 percent during the first six months of
1995 from 83.4 percent during the same period in 1994. This
increase is primarily attributable to the decline in revenues
actually recognized and the costs incurred as a result of owning
and operating heavy construction equipment, some of which, because
of the Company's current level of construction volume, is not
heavily utilized. In addition, the Company's gross margins are
affected by the varying profitability levels of individual
contracts and the stage of completion of such contracts.
COST OF OTHER
Cost of other as a percentage of other revenues decreased to 70.7
percent during the first six months of 1995 from 76.9 percent for
the same period in 1994. This decrease is primarily attributable
to improvements in the ceiling tile manufacturing process which has
resulted in a lower spoilage rate during production.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative expense ("SG&A expense") was
$5.6 million during the first six months of 1995 and $5.5 million
for the same period in 1994. This increase was primarily
attributable to higher than expected operating expenses, offset by
a reduction in expense attributable to personnel reductions. Due
to severance costs, the full impact of these cost reductions will
not be realized until 1996. As a percentage of revenue, SG&A
expense increased to 18.8 percent for the first six months of 1995
from 16.1 percent for the same period in 1994. This percentage
increase was primarily attributable to the decrease in revenues
actually recognized and the increase in SG&A expenses actually
incurred.
DIVISIONAL OPERATING INCOME
Operating income was $1.5 million for the first six months of 1995
as compared to $2.0 million for the same period in 1994. The
Company's concrete and related products division operating income
increased to $1.6 million during the first six months of 1995 from
$845,000 during the same period in 1994. This increase is
primarily attributable to improvements in gross profit margins and
reductions in SG&A expenses incurred by this division.
The Company's land development contracting division operating
income decreased to $58,000 for the first six months of 1995 from
$1.1 million during the same period in 1994. This decrease is
primarily attributable to the reduction in contract revenues.
INTEREST AND OTHER INCOME
Interest and other income decreased to $236,000 for the first six
months of 1995 from $445,000 during the same period in 1994. This
decrease was due primarily to a decrease in interest bearing notes
and investments.
NET EARNINGS
The Company's net earnings decreased to $625,000 during the first
six months of 1995 from $1.2 million during the same period in
1994. This decrease is primarily attributable to decreases in
contracting revenues and profits.
LIQUIDITY AND CAPITAL RESOURCES
The Company generally funds its working capital needs from
operations and bank borrowings. In the land development contracting
business, the Company must expend considerable amounts of funds for
equipment, labor and supplies to meet the needs of particular
projects. The Company's capital needs are greatest at the start of
any new contract, since the Company generally must complete 45 to
60 days of work before receiving the first progress payment. In
addition, as a project continues, a portion of the progress billing
is usually withheld as retainage until all work is complete,
further increasing the need for capital. On occasion the Company
has provided long-term financing to certain customers who have
utilized its land development contracting services. The Company has
also provided financing for other business ventures from time to
time. With respect to the Company's concrete and related products
division, accounts receivable are typically outstanding for a
minimum of 60 days and in some cases much longer. The nature of the
Company's business requires a continuing investment in plant and
equipment, as was done in 1994, along with the related maintenance
and upkeep costs of such equipment.
The Company has funded many of these expenditures out of its
current working capital. However, notwithstanding the foregoing
and after factoring in the Company's obligations as set forth
below, management believes that the Company's cash flow from
operations, existing working capital (approximately $9.2 million at
June 30, 1995) and funds available from lines of credit will be
adequate to meet the Company's anticipated needs for operations
during the next twelve months.
At June 30, 1995, the Company had a revolving secured line of
credit in the amount of $2.0 million and three secured lines of
credit in the amount of $1.0 million, $400,000 and $400,000 from
commercial banks in South Florida and the Caribbean. The Company
had $2.0 million of borrowings outstanding under the $2.0 million
line of credit, $417,000 of borrowings outstanding under the $1.0
million line of credit and $800,000 of borrowings outstanding under
the two $400,000 lines of credit. The $2.0 million line expires in
May 1996, the $1.0 million line expires in June 1996 and the two
$400,000 lines have no expiration date. The interest rates on all
such indebtedness outstanding at June 30, 1995 was 9.5 percent.
The Company also has a $500,000 unsecured overdraft facility from
a commercial bank in the Caribbean. The facility expires on
September 30, 1995 and bears interest at 14 percent per annum. At
June 30, 1995 the Company had borrowings of $477,000 outstanding
under this line.
The Company has entered into three term loans with a Caribbean
bank, repayable in varying monthly installments through December
2001. The interest rate on indebtedness outstanding at June 30,
1995 ranged from 9.25 percent to 10.5 percent and the Company had
$5.2 million of borrowings outstanding. The loans are secured by
individual leasehold mortgages on a block manufacturing plant, a
cement distribution facility and a marina in the U.S. Virgin
Islands.
In September 1993, the Company entered into a $4.0 million secured
term loan. Borrowings outstanding bear interest at the prime
interest rate plus three fourths of one percent. The interest rate
on indebtedness outstanding at June 30, 1995 was 9.75 percent and
the Company has $2.5 million of borrowings outstanding. This loan
is being repaid in quarterly installments which commenced in
November 1993 and all remaining unpaid amounts are due in full on
June 30, 1996. The loan is secured by the Company's notes
receivable from the Government of Antigua and Barbuda.
The Company has borrowed $3.4 million from a Company officer. One
note has an outstanding balance of approximately $3.2 million, is
unsecured, bears interest at the prime interest rate and is due in
full on January 1, 1997. The other note has a balance of $200,000,
is secured by equipment, bears interest at 8 percent per annum and
is due in monthly principal installments through February 1997 of
$10,000, plus interest.
The Company purchases equipment from time to time as needed for its
ongoing business operations. At present, management believes that
the Company's inventory of equipment is adequate for its current
contractual commitments and operating activities, however, the
acquisition of significant new construction contracts, depending on
the nature of the contract, the job location and job duration, may
require the Company to make significant investments in heavy
construction equipment. The Company expects to dispose of such
equipment at the conclusion of a specific contract unless the
equipment involved can be profitably employed elsewhere in the
Company's operations. Through June 30, 1995, the Company has sold
equipment with an original cost basis of approximately $1.6 million
and net book value of $186,000. Additional sales are expected over
the remainder of 1995. Accordingly, except for the circumstances
previously discussed, and normal equipment replacements and
additions, management does not anticipate having to make a
substantial investment in new equipment during the current year.
The Company believes it has available or can obtain sufficient
financing for all of its contemplated equipment replacements and
additions. Historically, the Company has used a number of lenders
to finance machinery and equipment purchases, including its ocean
going bulk cement vessel, on an individual asset basis. At June
30, 1995, amounts outstanding to these lenders totalled $6.6
million. These loans are typically repaid over a three to six year
term in monthly principal and interest installments.
A significant portion of the Company's outstanding debt bears
interest at variable rates. The Company could be negatively
impacted by a substantial increase in interest rates.
The Company has contingent obligations and has made certain
guarantees in connection with acquisitions, its participation in
certain joint ventures, certain employee and construction bonding
matters and its receipt of a tax exemption. In connection with the
St. Maarten acquisition, the Company agreed to pay the seller
annually an amount per unit of certain concrete and stone products
sold by the Company in St. Maarten from April 1, 1990 to March 31,
1998, but in no event less than $500,000 per year. The Company has
certain offsets available against this payment which has reduced
the minimum annual payment to $350,000 per year.
Notes receivable and accrued interest at June 30, 1995 include
$17.3 million, net due the Company pursuant to certain promissory
notes delivered to the Company in connection with two construction
contracts with the Government of Antigua, $3.6 million of which is
classified as a current receivable. Scheduled payments call for
both quarterly and monthly principal and interest payments until
maturity in 1997. The Government of Antigua has routinely made the
required quarterly payments aggregating $2.0 million per year but
has made only some of the required monthly payments. The Company
does not presently anticipate material increases in or
accelerations of payments by the Government of Antigua. The
Company expects that the notes will not be satisfied at maturity
but the Antiguan government has advised the Company that the
current payment stream will continue until the obligation is
satisfied. A portion of the payment received from Antigua is
derived from the lease proceeds the Antiguan government receives
from the United States Department of Defense for the rental of two
military bases. In January 1995, the Antiguan government was
notified by the United States government that one of the bases
would be closed in 1996. Terms and conditions of the closure are
the subject of ongoing discussions between the Antiguan government
and representatives of the United States government. The Antiguan
government has advised the Company that it will make up any
shortfall in the military base proceeds from its general treasury.
II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits: None
(b) Reports on Form 8-K:
No reports on Form 8-K were filed by the Company
during the first six months of fiscal 1995.
SIGNATURES
Pursuant to the requirement 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.
Date: August 9, 1995 By: /S/ DONALD L. SMITH, JR.
Donald L. Smith, Jr.
President and Chief
Executive Officer
Date: August 9, 1995 By: /S/ WALTER B. BARRETT
Walter B. Barrett
Vice President, Finance and
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Financial Statements - Devcon International Corp.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
<CASH> 265,693
<SECURITIES> 0
<RECEIVABLES> 16,183,232
<ALLOWANCES> (2,732,908)
<INVENTORY> 7,773,652
<CURRENT-ASSETS> 26,406,570
<PP&E> 95,866,008
<DEPRECIATION> (44,745,163)
<TOTAL-ASSETS> 97,401,586
<CURRENT-LIABILITIES> 17,230,806
<BONDS> 0
<COMMON> 443,118
0
0
<OTHER-SE> 11,740,700
<TOTAL-LIABILITY-AND-EQUITY> 97,401,586
<SALES> 29,612,339
<TOTAL-REVENUES> 29,612,339
<CGS> 22,585,609
<TOTAL-COSTS> 5,086,643
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (1,314,750)
<INCOME-PRETAX> 625,337
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 625,337
<EPS-PRIMARY> .14
<EPS-DILUTED> .14
</TABLE>
