<PAGE> 1
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 March 31, 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. 1-6082
GREINER ENGINEERING, INC.
----------------------------------------------------
Exact name of registrant as specified in its charter
Nevada 95-1799320
- ------------------------------ ----------------------
State of other jurisdiction of I.R.S. Employer
incorporation or organization Identification No.
909 East Las Colinas Boulevard, #1900, Irving, Texas 75039
-----------------------------------------------------------
Address of Principal Executive Offices
Registrant's telephone number, including area code (214) 869-1001
4,824,034 shares of $.50 par value common stock were outstanding as of
April 21, 1995.
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
----- -----
<PAGE> 2
ITEM 1. FINANCIALS PART I
GREINER ENGINEERING, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
March 31, 1995 December 31, 1994
-------------- -----------------
(Unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $15,025,000 $15,043,000
Short-term investments 3,942,000 5,871,000
Accounts receivable, net 40,374,000 37,723,000
Prepaid expenses and
other current assets 1,893,000 2,170,000
----------- -----------
Total current assets 61,234,000 60,807,000
Property and equipment, net 9,075,000 8,959,000
Investment in partnerships 2,473,000 2,475,000
Excess of cost over net assets
acquired, net 2,311,000 2,359,000
Long-term investments 2,981,000 973,000
Other assets 553,000 616,000
----------- -----------
$78,627,000 $76,189,000
=========== ===========
</TABLE>
See accompanying note to condensed consolidated financial statements.
2
<PAGE> 3
GREINER ENGINEERING, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
March 31, 1995 December 31, 1994
-------------- -----------------
(Unaudited)
<S> <C> <C>
Current liabilities:
Accounts payable $ 9,354,000 $ 8,222,000
Accrued liabilities 10,573,000 10,210,000
Current and deferred income taxes 1,601,000 1,099,000
Long-term debt due within one year 44,000 44,000
----------- ------------
Total current liabilities 21,572,000 19,575,000
----------- ------------
Long-term liabilities:
Long-term debt 157,000 157,000
Other 1,247,000 1,231,000
----------- ------------
Total long-term liabilities 1,404,000 1,388,000
----------- ------------
Stockholders' equity:
Preferred stock, $1.00 par value
1,000,000 shares authorized, none issued - -
Common stock, $.50 par value,
20,000,000 shares authorized,
4,825,734 shares issued 2,413,000 2,413,000
Paid-in capital 24,797,000 24,797,000
Retained earnings 28,460,000 28,016,000
----------- ------------
55,670,000 55,226,000
Common stock held in treasury, at cost,
1,700 shares (1995) (19,000) -
----------- ------------
Total stockholders' equity 55,651,000 55,226,000
----------- ------------
$78,627,000 $ 76,189,000
=========== ============
</TABLE>
See accompanying note to condensed consolidated financial statements.
3
<PAGE> 4
GREINER ENGINEERING, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
THREE MONTHS ENDED MARCH 31, 1995 AND 1994
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Gross revenue $ 37,332,000 $ 37,148,000
Direct costs, principally outside services 8,584,000 8,662,000
------------- -------------
Net revenue 28,748,000 28,486,000
Operating expenses:
Salaries and related costs 20,868,000 20,816,000
General expenses 6,836,000 6,259,000
------------- -------------
27,704,000 27,075,000
------------- -------------
Income from operations 1,044,000 1,411,000
Other income, principally interest 303,000 176,000
Interest expense (4,000) (4,000)
------------- -------------
Income before income taxes 1,343,000 1,583,000
Provision for income taxes 537,000 633,000
------------- -------------
Net income $ 806,000 $ 950,000
============= =============
Earnings per share $ 0.17 $ .20
============= =============
Weighted average shares outstanding 4,825,432 4,825,734
============= =============
</TABLE>
See accompanying note to condensed consolidated financial statements.
4
<PAGE> 5
GREINER ENGINEERING, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
THREE MONTHS ENDED MARCH 31, 1995 AND 1994
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Cash Flows From Operating Activities:
Net income $ 806,000 $ 950,000
Adjustments to reconcile to cash provided by
operating activities:
Depreciation and amortization 933,000 833,000
Provision for losses (recoveries) on accounts
receivable (75,000) 237,000
Other 48,000 -
Changes in assets and liabilities:
Accounts receivable (2,576,000) (3,715,000)
Accounts payable and accrued liabilities 1,495,000 (98,000)
Current and deferred income taxes 502,000 574,000
Prepaid expenses 277,000 376,000
Other assets and liabilities - (5,000)
------------ ------------
Net cash provided (used) by operating 1,410,000 ( 848,000)
activities ------------ ------------
Cash Flows From Investing Activities:
Payments received on ESOP receivable - 500,000
Additions to property and equipment (992,000) (1,225,000)
Change in short-term investments 1,929,000 -
Change in long-term investments (2,008,000) -
Purchase of treasury stock (19,000) -
Other 7,000 (6,000)
------------ ------------
Net cash used by investing activities $ (1,083,000) $ (731,000)
------------ ------------
</TABLE>
Continued on next page.
See accompanying note to condensed consolidated financial statements.
5
<PAGE> 6
GREINER ENGINEERING, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Unaudited)
THREE MONTHS ENDED MARCH 31, 1995 AND 1994
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Cash Flows From Financing Activities:
Cash dividends paid $ (361,000) $ (337,000)
Net increase in other long-term liabilities 16,000 15,000
--------------- --------------
Net cash used by financing activities (345,000) (322,000)
--------------- --------------
Net (decrease) in cash and cash equivalents (18,000) (1,901,000)
Cash and cash equivalents at beginning of quarter 15,043,000 15,037,000
--------------- --------------
Cash and cash equivalents at end of quarter $ 15,025,000 $ 13,136,000
=============== ==============
Supplemental cash flow disclosures:
Interest paid $ 4,000 $ 4,000
=============== ==============
Income taxes paid $ 35,000 $ 59,000
=============== ==============
</TABLE>
See accompanying note to condensed consolidated financial statements.
6
<PAGE> 7
GREINER ENGINEERING, INC.
NOTE TO CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(Unaudited)
THREE MONTHS ENDED MARCH 31, 1995 AND 1994
The condensed consolidated financial statements contained herein should be read
in conjunction with the consolidated statements of Greiner Engineering, Inc.
included in the annual report to stockholders for the year ended December 31,
1994. The accompanying condensed consolidated financial statements are
unaudited, but include all adjustments (consisting only of normal recurring
accruals) which management considers necessary for a fair presentation at March
31, 1995 and 1994.
It should be understood that accounting measurements at interim dates involve
greater imprecision than at year-end, which is due, in part, to increased
reliance on estimates at interim dates. The results for the three-month period
ended March 31, 1995 are not necessarily indicative of results for the entire
year. Quarterly results of operations are subject to seasonal fluctuations
which affect the industry in which the Company operates.
Certain reclassifications have been made to the 1994 financial statements to
conform to the 1995 presentation.
The Company paid a cash dividend of $361,000 in the first quarter of 1995,
equal to $.075 per share of Common Stock.
No sale of unregistered securities was made by the registrant during the
quarter ended March 31, 1995.
7
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
The following table sets forth the percentage of revenue represented by the
items in the Company's consolidated statements of net income:
<TABLE>
<CAPTION>
Three Months Ended March 31
---------------------------
1995 1994
---- ----
<S> <C> <C>
Gross revenue 100.0% 100.0%
Direct costs, principally outside services 23.0% 23.3%
------ ------
Net revenue 77.0% 76.7%
Operating expenses:
Salaries and related costs 55.9% 56.0%
General expenses 18.3% 16.9%
------ ------
74.2% 72.9%
------ ------
Income from operations 2.8% 3.8%
Other income, principally interest 0.8% 0.5%
Interest expense 0.0% 0.0%
------ ------
Income before income taxes 3.6% 4.3%
Provision for income taxes 1.4% 1.7%
------ ------
Net income 2.2% 2.6%
====== ======
</TABLE>
Revenue:
The Company's gross revenue increased to $37,332,000 during the first quarter
of 1995 from $37,148,000 in 1994. Net revenue for the same period increased to
$28,748,000 from $28,486,000. These slight increases in revenue are primarily
due to the continued increase in surface transportation projects in the
mid-Atlantic and northeast areas of the country. These increases are partially
offset by decreases in the surface transportation market in the southwest and
California. The Company's growth in revenue was slowed by temporary delays in
several projects resulting from, among other things, severe weather conditions
in the western and northeastern areas of the U.S. and client implementation of
metric standards in Florida.
8
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(continued)
Salaries and Related Costs:
Salaries and related costs (payroll taxes, insurance and other fringe benefits)
remained relatively constant in the first quarter of 1995 compared to the first
quarter of 1994. However, salaries and related costs included an increase in
labor costs offset by decreases in employee incentives expense and insurance
costs.
General Expenses:
General expenses increased to $6,836,000 in the first quarter of 1995 from
$6,259,000 in 1994. As a percentage of revenue, general expenses increased to
18.3% in 1995 from 16.9% in 1994. The increase in costs is a result of several
factors: higher depreciation expense due to continued upgrading of computer
hardware and software; higher data processing expense as fewer of these
expenses were directly reimbursable on projects in 1995 compared to 1994;
increased employee relocation and hiring expenses, both domestically and
internationally; and higher expenses related to the development of staff in the
Company's international operations. These increases were partially offset by
reductions in the Company's bad debt and marketing expenses.
Other Income, Principally Interest:
Other income increased to $303,000 during the first quarter of 1995 from
$176,000 in 1994 due to the rise in interest rates on the Company's short-term
and long-term investments.
Liquidity and Capital Resources
The Company's liquidity and capital measurements are set forth below:
<TABLE>
<CAPTION>
March 31, December 31,
1995 1994
------------ -------------
<S> <C> <C>
Working capital $39,662,000 $41,232,000
Working capital ratio 2.8 to 1 3.1 to 1
Percentage of debt to equity .4% .4%
</TABLE>
The decrease in working capital is primarily a result of converting $2,000,000
of short-term investments to long-term (average maturity of approximately two
years) to improve the Company's yield on its investments. This decrease was
partially offset by the Company's first quarter profit.
9
<PAGE> 10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(continued)
At March 31, 1995 the Company had a $15,000,000 bank line of credit. Such bank
line provides for the payment of interest at the bank's prime rate or 1-1/2%
over the bank's cost of acquiring funds. At March 31, 1995 and December 31,
1994, there were no borrowings outstanding under the bank line of credit.
Backlog:
The Company's backlog at March 31, 1995 was approximately $163,000,000 as
compared to $162,000,000 at December 31, 1994. Significant projects gained
during Greiner's first quarter include: inspection services for eight
facilities in Maryland, including the Chesapeake Bay Bridges; renovation of
seven schools in Michigan; development of a new Navy Fueling Design Manual; and
design of a facilities maintenance master plan for the new airport in Hong
Kong.
10
<PAGE> 11
ITEM 6. INDEX TO EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit 11 - Statement of computation of per share earnings
(b) Exhibit 27 - Financial Data Schedule
(c) No reports on Form 8-K were filed during the quarter ended March 31, 1995.
11
<PAGE> 12
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.
GREINER ENGINEERING, INC.
(Registrant)
May 1, 1995 Patrick J. McColpin
Date Patrick J. McColpin
Vice President and
Chief Financial Officer
12
<PAGE> 13
INDEX TO EXHIBITS
(a) Exhibit 11 - Statement of computation of per share earnings
(b) Exhibit 27 - Financial Data Schedule
(c) No reports on Form 8-K were filed during the quarter ended March 31, 1995.
<PAGE> 1
EXHIBIT 11 COMPUTATION OF PER SHARE EARNINGS
THREE MONTHS ENDED MARCH 31, 1995 AND 1994
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Primary earnings per share:
Weighted average shares currently
outstanding or as originally reported 4,825,432 4,825,734
Effect of dilutive stock options (A) - -
----------- -----------
4,825,432 4,825,734
=========== ===========
Net income $ 806,000 $ 950,000
=========== ===========
Total earnings per share $ .17 $ .20
=========== ===========
Fully diluted earnings per share:
Weighted average shares currently
outstanding or as originally reported 4,825,432 4,825,734
Effect of dilutive stock options (B) - -
----------- -----------
4,825,432 4,825,734
=========== ===========
Net income $ 806,000 $ 950,000
=========== ===========
Total earnings per share $ .17 $ .20
=========== ===========
</TABLE>
(A) Excludes the effect of stock options of 13,709 and 10,480 for 1995 and
1994.
(B) Excludes the effect of stock options of 15,732 and 10,480 for 1995 and
1994.
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000040956
<NAME> GREINER ENGINEERING, INC.
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-01-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<EXCHANGE-RATE> 1
<CASH> 15,025,000
<SECURITIES> 3,942,000
<RECEIVABLES> 40,374,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 61,234,000
<PP&E> 9,075,000
<DEPRECIATION> 0
<TOTAL-ASSETS> 78,627,000
<CURRENT-LIABILITIES> 21,572,000
<BONDS> 0
<COMMON> 2,413,000
0
0
<OTHER-SE> 53,238,000
<TOTAL-LIABILITY-AND-EQUITY> 78,627,000
<SALES> 0
<TOTAL-REVENUES> 37,332,000
<CGS> 0
<TOTAL-COSTS> 8,584,000
<OTHER-EXPENSES> 27,704,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (4,000)
<INCOME-PRETAX> 1,343,000
<INCOME-TAX> 537,000
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 806,000
<EPS-PRIMARY> .17
<EPS-DILUTED> 0
</TABLE>
