<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 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. 1-6082
GREINER ENGINEERING, INC.
Exact name of registrant as specified in its charter
<TABLE>
<S> <C>
Nevada 95-1799320
------------------------------ ----------------------
State of other jurisdiction of I.R.S. Employer
incorporation or organization Identification No.
</TABLE>
909 East Las Colinas Boulevard, #1900, Irving, Texas 75039
Address of Principal Executive Offices
Registrant's telephone number, including area code (214) 869-1001
4,707,942 shares of $.50 par value common stock were outstanding as of July 31,
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. FINANCIAL STATEMENTS PART I
GREINER ENGINEERING, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
June 30, 1995 December 31, 1994
------------- -----------------
(Unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $14,887,000 $15,043,000
Short-term investments - 5,871,000
Accounts receivable, net 41,086,000 37,723,000
Prepaid expenses and
other current assets 1,715,000 2,170,000
----------- -----------
Total current assets 57,688,000 60,807,000
Property and equipment, net 9,203,000 8,959,000
Investment in partnerships 2,503,000 2,475,000
Excess of cost over net assets
acquired, net 2,262,000 2,359,000
Long-term investments 5,002,000 973,000
Other assets 545,000 616,000
----------- -----------
$77,203,000 $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>
June 30, 1995 December 31, 1994
------------- -----------------
(Unaudited)
<S> <C> <C>
Current liabilities:
Accounts payable $10,569,000 $ 8,222,000
Accrued liabilities 10,413,000 10,210,000
Current and deferred income taxes 285,000 1,099,000
Long-term debt due within one year 44,000 44,000
----------- -----------
Total current liabilities 21,311,000 19,575,000
----------- -----------
Long-term liabilities:
Long-term debt 157,000 157,000
Other 1,264,000 1,231,000
----------- -----------
Total long-term liabilities 1,421,000 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 28,140,000 28,016,000
----------- -----------
55,350,000 55,226,000
Common stock held in treasury, at cost,
76,491 shares (1995) (879,000) -
----------- -----------
Total stockholders' equity 54,471,000 55,226,000
----------- -----------
$77,203,000 $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 JUNE 30, 1995 AND 1994
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Gross revenue $40,015,000 $38,484,000
Direct costs, principally outside services 10,760,000 10,358,000
----------- -----------
Net revenue 29,255,000 28,126,000
Operating expenses:
Salaries and related costs 21,099,000 20,289,000
General expenses 8,373,000 6,282,000
----------- -----------
29,472,000 26,571,000
----------- -----------
Income (loss) from operations (217,000) 1,555,000
Other income, principally interest 288,000 131,000
Interest expense (4,000) (3,000)
----------- -----------
Income before income taxes 67,000 1,683,000
Provision for income taxes 27,000 673,000
----------- -----------
Net income $ 40,000 $ 1,010,000
=========== ===========
Earnings per share $ .01 $ .21
=========== ===========
Weighted average shares outstanding 4,788,645 4,825,734
=========== ===========
</TABLE>
See accompanying note to condensed consolidated financial statements.
4
<PAGE> 5
GREINER ENGINEERING, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
SIX MONTHS ENDED JUNE 30, 1995 AND 1994
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Gross revenue $77,347,000 $75,632,000
Direct costs, principally outside services 19,344,000 19,020,000
----------- -----------
Net revenue 58,003,000 56,612,000
Operating expenses:
Salaries and related costs 41,967,000 41,105,000
General expenses 15,209,000 12,541,000
----------- -----------
57,176,000 53,646,000
----------- -----------
Income from operations 827,000 2,966,000
Other income, principally interest 591,000 307,000
Interest expense (8,000) (7,000)
----------- -----------
Income before income taxes 1,410,000 3,266,000
Provision for income taxes 564,000 1,306,000
----------- -----------
Net income $ 846,000 $ 1,960,000
=========== ===========
Earnings per share $ .18 $ .41
=========== ===========
Weighted average shares outstanding 4,806,937 4,825,734
=========== ===========
</TABLE>
See accompanying note to condensed consolidated financial statements.
5
<PAGE> 6
GREINER ENGINEERING, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
SIX MONTHS ENDED JUNE 30, 1995 AND 1994
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Cash Flows From Operating Activities:
Net income $ 846,000 $ 1,960,000
Adjustments to reconcile to cash provided by
operating activities:
Depreciation and amortization 1,934,000 1,714,000
Provision for losses (recoveries) on accounts
receivable 56,000 (123,000)
Other 52,000 38,000
Changes in assets and liabilities:
Accounts receivable (3,419,000) (2,860,000)
Accounts payable and accrued liabilities 2,550,000 463,000
Current and deferred income taxes (814,000) 1,041,000
Prepaid expenses 455,000 438,000
Other assets and liabilities - 30,000
------------ ------------
Net cash provided by operating activities 1,660,000 2,701,000
------------ ------------
Cash Flows From Investing Activities:
Payments received on ESOP receivable - 500,000
Additions to property and equipment (2,047,000) (2,368,000)
Change in short-term investments 5,871,000 -
Change in other investments (4,079,000) -
Payments received on long-term notes receivable - 480,000
Purchase of treasury stock (879,000) -
Other 7,000 15,000
------------ ------------
Net cash used by investing activities $ (1,127,000) $ (1,373,000)
------------ ------------
</TABLE>
Continued on next page.
See accompanying note to condensed consolidated financial statements.
6
<PAGE> 7
GREINER ENGINEERING, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Unaudited)
SIX MONTHS ENDED JUNE 30, 1995 AND 1994
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Cash Flows From Financing Activities:
Cash dividends paid $ (722,000) $ (675,000)
Net increase in other long-term liabilities 33,000 32,000
----------- -----------
Net cash used by financing activities (689,000) (643,000)
----------- -----------
Net increase (decrease) in cash and cash equivalents (156,000) 685,000
Cash and cash equivalents at beginning of year 15,043,000 15,037,000
----------- -----------
Cash and cash equivalents at end of six months $14,887,000 $15,722,000
=========== ===========
Supplemental cash flow disclosures:
Interest paid $ 8,000 $ 7,000
=========== ===========
Income taxes paid $ 1,378,000 $ 265,000
=========== ===========
</TABLE>
See accompanying note to condensed consolidated financial statements.
7
<PAGE> 8
GREINER ENGINEERING, INC.
NOTE TO CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(Unaudited)
SIX MONTHS ENDED JUNE 30, 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 June
30, 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 six-month period
ended June 30, 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 quarterly cash dividends equal to $.075 per share of Common
Stock per quarter, totaling approximately $722,000 in 1995.
No sale of unregistered securities was made by the registrant during the
quarter ended June 30, 1995.
8
<PAGE> 9
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>
Six Months Ended Quarter Ended
June 30, June 30
--------------------- -------------------
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
Gross revenue 100.0% 100.0% 100.0% 100.0%
Direct costs, principally outside services 25.0% 25.1% 26.9% 26.9%
----- ----- ----- -----
Net revenue 75.0% 74.9% 73.1% 73.1%
Operating expenses:
Salaries and related costs 54.3% 54.3% 52.7% 52.7%
General expenses 19.6% 16.7% 20.9% 16.4%
----- ----- ----- -----
73.9% 71.0% 73.6% 69.1%
----- ----- ----- -----
Income from operations 1.1% 3.9% (0.5)% 4.0%
Other income, principally interest 0.7% 0.4% 0.7% 0.4%
----- ----- ----- -----
Income before income taxes 1.8% 4.3% 0.2% 4.4%
Provision for income taxes 0.7% 1.7% 0.1% 1.8%
----- ----- ----- -----
Net income 1.1% 2.6% 0.1% 2.6%
===== ===== ===== =====
</TABLE>
Revenue:
The Company's gross revenue increased to $40,015,000 for the second quarter of
1995 from $38,484,000 in 1994. Net revenue for the same period increased to
$29,255,000 from $28,126,000. These increases in revenue are primarily due to
the continued increase in surface transportation projects in the mid-Atlantic,
northeast and southeast areas of the U.S. These markets continue to be strong,
and the Company anticipates continued revenue flow from these markets. The
growth in revenue was partially offset by temporary delays early in the quarter
on several significant projects. Also during the second quarter, several
members of the Company's technical staff participated in a major marketing
effort related to the pursuit of an equipment procurement contract for a new
airport in China. This marketing effort resulted in lower revenue as this
technical staff was not utilized on reimbursable projects.
For the first six months of 1995, the Company's gross revenue increased to
$77,347,000 from $75,632,000 in 1994. Net revenue for the same period
increased to $58,003,000 from $56,612,000. These increases are due to the
increase in the surface transportation markets discussed above.
9
<PAGE> 10
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) remained
relatively constant for the second quarter and first six months of 1995
compared to 1994. Labor cost fluctuations reflected the extensive
international marketing efforts and increased training and development costs
which were offset by decreases in employee incentives expense and a reduction
in health insurance costs resulting from the Company's effort to utilize
managed care.
General Expenses:
General expenses increased to 20.9% of gross revenue during the second quarter
of 1995 from 16.4% for the same period of 1994. General expenses for the first
six months of 1995 increased to 19.6% of revenue from 16.7% in 1994. These
increases are a result of several factors, including 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 and increased employee relocation and
hiring expenses, both domestically and internationally. In addition, the
Company increased its reserves in the second quarter of 1995 by approximately
$1,000,000 related to contract audit matters, litigation and other
contingencies. These increases were partially offset by reductions in the
Company's non-labor marketing expenses.
Other Income, Principally Interest:
Other income increased to $591,000 during the first six months of 1995 from
$307,000 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>
June 30, December 31,
1995 1994
------------ ------------
<S> <C> <C>
Working capital $36,377,000 $41,232,000
Working capital ratio 2.7 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 $4,000,000
of short-term investments to long-term (average maturity of approximately two
years) to improve the Company's yield on its investments and the purchase of
$879,000 of treasury stock. Another factor contributing to the decrease in the
working capital ratio was the net increase in accounts payable and receivable
related to subconsultants. The overall decrease in the ratio was partially
offset by the positive cash flow from the Company's first six months' profit.
10
<PAGE> 11
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(continued)
At June 30, 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 June 30, 1995 and December 31,
1994, there were no borrowings outstanding under the bank line of credit.
Backlog:
The Company's backlog at June 30, 1995 was approximately $171,000,000 as
compared to $162,000,000 at December 31, 1994. Significant projects gained
during Greiner's first quarter include: a feasibility study for a major bridge
in Malaysia, additional design services for facilities at the Naval Air Station
in Pensacola, Florida, a statewide bridge investigation project for the
Connecticut Department of Transportation, renovation of ten buildings at
Michigan's Grand Valley State University, a major construction management
project in Florida and design of a Facilities Maintenance System for Hong
Kong's new airport at Chek Lap Kok.
11
<PAGE> 12
ITEM 6. INDEX TO EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit 11 - Statement of computation of per share earnings
(b) No reports on Form 8-K were filed during the quarter ended June 30, 1995.
12
<PAGE> 13
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)
August 4, 1995 Patrick J. McColpin
--------------------- ---------------------------
Date Patrick J. McColpin
Vice President and
Chief Financial Officer
13
<PAGE> 14
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<S> <C>
11 Computation of Income per Share
27 Financial Data Schedule
</TABLE>
<PAGE> 1
EXHIBIT 11 COMPUTATION OF PER SHARE EARNINGS
SIX MONTHS ENDED JUNE 30, 1995 AND 1994
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Primary earnings per share:
Weighted average shares currently
outstanding or as originally reported 4,806,937 4,825,734
Effect of dilutive stock options (A) - -
------------ -------------
4,806,937 4,825,734
============ ============
Net income $ 846,000 $ 1,960,000
============ ============
Total earnings per share $ .18 $ .41
============ ============
Fully diluted earnings per share:
Weighted average shares currently
outstanding or as originally reported 4,806,937 4,825,734
Effect of dilutive stock options (B) - -
------------ -------------
4,806,937 4,825,734
============ ============
Net income $ 846,000 $ 1,960,000
============ ============
Total earnings per share $ .18 $ .41
============ ============
</TABLE>
(A) Excludes the effect of stock options of 13,259 and 5,240 for 1995 and
1994.
(B) Excludes the effect of stock options of 14,270 and 5,240 for 1995 and
1994.
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000040956
<NAME> GREINER ENGINEERING, INC.
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
<CASH> 14,887,000
<SECURITIES> 0
<RECEIVABLES> 41,086,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 57,688,000
<PP&E> 9,203,000
<DEPRECIATION> 0
<TOTAL-ASSETS> 77,203,000
<CURRENT-LIABILITIES> 21,311,000
<BONDS> 0
<COMMON> 2,413,000
0
0
<OTHER-SE> 52,058,000
<TOTAL-LIABILITY-AND-EQUITY> 77,203,000
<SALES> 0
<TOTAL-REVENUES> 77,347,000
<CGS> 0
<TOTAL-COSTS> 19,344,000
<OTHER-EXPENSES> 57,176,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 8,000
<INCOME-PRETAX> 1,410,000
<INCOME-TAX> 564,000
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 846,000
<EPS-PRIMARY> .18
<EPS-DILUTED> 0
</TABLE>
