Form 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES AND EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1995
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 or15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____to____
Commission file number 0-6079
AMELCO CORPORATION
(Exact name of registrant as specified in its charter)
California 99-0068616
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
19208 South Vermont Avenue
Gardena, California 90248
(Address of principal executive offices) (Zip Code)
(310) 327-3070
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last
report)
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, and (2) has been subject to such filing
requirements for the past 90 days.
YES [X] NO ____
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Outstanding at
Class of Common Stock March 31, 1995
Stated Value $2.50 per share 1,443,542
<PAGE>
AMELCO CORPORATION AND SUBSIDIARIES
INDEX
PAGE NO.
PART I. FINANCIAL INFORMATION
CONSOLIDATED BALANCE SHEETS -
MARCH 31, 1995 AND SEPTEMBER 30, 1994 3
CONSOLIDATED STATEMENTS OF EARNINGS -
SIX MONTHS ENDED MARCH 31, 1995 AND 1994 4
CONSOLIDATED STATEMENTS OF EARNINGS -
THREE MONTHS ENDED MARCH 31, 1995 AND 1994 5
CONSOLIDATED STATEMENTS OF CASH FLOW-
SIX MONTHS ENDED MARCH 31, 1995 AND 1994 6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 7
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 8
PART II.
OTHER INFORMATION 10
SIGNATURE PAGE 10
<PAGE>
<TABLE>
Amelco Corporation and Subsidiaries
Consolidated Balance Sheets
<CAPTION>
(Unaudited)
March 31, September 30,
1995 1994
------------ ------------
<S> <C> <C>
Assets
Cash (note 4) $ 3,122,000 $ 2,690,000
Receivables, net (note 2) 22,128,000 25,596,000
Inventories 153,000 126,000
Investment in and advances to joint ventures 87,000 1,120,000
Costs and recognized profits in excess of
billings on uncompleted contracts 7,817,000 5,571,000
Deferred tax assets 167,000 168,000
Prepaid expenses and other 496,000 170,000
------------ ------------
Total Current Assets 33,970,000 35,441,000
Note receivable from Halau Corporation,
noncurrent 3,323,000 3,338,000
Other noncurrent notes receivable 110,000 110,000
Property, plant and equipment, net 1,686,000 1,797,000
Other assets 134,000 103,000
------------ ------------
Total Assets $ 39,223,000 $ 40,789,000
============ ============
Liabilities and Stockholders' Equity
Short term borrowings $ 550,000 $ 0
Short term notes payable 192,000 0
Current portion of long term debt 46,000 45,000
Accounts payable 11,814,000 14,924,000
Accrued expenses 2,661,000 2,744,000
Federal and state income taxes 15,000 191,000
Billings in excess of costs and recognized
profits on uncompleted contracts 7,206,000 6,413,000
Other current liabilities 468,000 573,000
------------ ------------
Total Current Liabilities 22,952,000 24,890,000
Long term debt, excluding current portion 1,887,000 1,911,000
Deferred federal and state income taxes 69,000 61,000
Minority interest in subsidiary 13,000 31,000
Stockholders' equity:
Common stock, stated value $2.50 per share,
authorized 3,000,000 shares,issued 2,214,008 5,535,000 5,535,000
Additional paid-in capital 7,427,000 7,427,000
Retained earnings 4,351,000 3,945,000
------------ ------------
17,313,000 16,907,000
Less treasury shares (3,011,000) (3,011,000)
------------ ------------
Total stockholders'equity 14,302,000 13,896,000
------------ ------------
Total Liabilities and
Stockholders' Equity $ 39,223,000 $ 40,789,000
============ ============
</TABLE>
<PAGE>
<TABLE>
Amelco Corporation and Subsidiaries
Consolidated Statements of Earnings
Six Months Ended March 31, 1995 and 1994
(Unaudited)
<CAPTION>
1995 1994
------------ ------------
<S> <C> <C>
Revenues $ 62,356,000 $ 50,316,000
Costs and operating expenses 57,326,000 45,711,000
------------ ------------
Gross profit 5,030,000 4,605,000
General and administrative expenses 4,070,000 3,901,000
------------ ------------
Operating income 960,000 704,000
Other income (expense):
Interest expense (166,000) (140,000)
Other, net 137,000 120,000
------------ ------------
Total other income (expense) (29,000) (20,000)
------------ ------------
Earnings before income taxes 931,000 684,000
Income tax expense 391,000 279,000
Minority interest in earnings (loss)
of subsidiary (10,000) 20,000
------------ ------------
Net earnings $ 550,000 $ 385,000
============ ============
Earnings per share:
Net earnings per common share $ 0.38 $ 0.27
============ ============
Weighted average number of common shares
outstanding during the period 1,444,000 1,444,000
============ ============
</TABLE>
<PAGE>
<TABLE>
Amelco Corporation and Subsidiaries
Consolidated Statements of Earnings
Three Months Ended March 31, 1995 and 1994
(Unaudited)
<CAPTION>
1995 1994
------------ ------------
<S> <C> <C>
Revenues $ 31,006,000 $ 24,843,000
Costs and operating expenses 28,553,000 22,439,000
------------ ------------
Gross profit 2,453,000 2,404,000
General and administrative expenses 2,022,000 1,963,000
------------ ------------
Operating income 431,000 441,000
Other income (expense):
Interest expense (91,000) (75,000)
Other, net 80,000 48,000
------------ ------------
Total other income (expense) (11,000) (27,000)
Earnings before income taxes 420,000 414,000
Income tax expense 183,000 175,000
Minority interest in earnings (loss)
of subsidiary (5,000) 20,000
------------ ------------
Net earnings $ 242,000 $ 219,000
============ ============
Earnings per share:
Net earnings per common share $ 0.17 $ 0.15
=========== ============
Weighted average number of common shares
outstanding during the period 1,444,000 1,444,000
=========== ============
</TABLE>
<PAGE>
<TABLE>
Amelco Corporation and Subsidiaries
Consolidated Statements of Cash Flows
Six Months Ended March 31, 1995 and 1994
(Unaudited)
<CAPTION>
1995 1994
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 550,000 $ 385,000
Adjustments to reconcile income to net cash
provided (used) by operating activities:
Depreciation and amortization 197,000 193,000
Gain on sale of assets (2,000) (1,000)
(Increase) decrease in assets and increase (decrease)
in liabilities:
Accounts receivable 3,468,000 145,000
Investment in joint venture 1,033,000 (290,000)
Inventories (27,000) 33,000
Costs and recognized profits in excess of billings
on uncompleted contracts (2,246,000) (2,528,000)
Prepaid expenses (326,000) (27,000)
Other assets (31,000) (19,000)
Accounts payable and accrued expenses (3,193,000) (1,080,000)
Billings in excess of costs and recognized profits
on uncompleted contracts 793,000 902,000
Income taxes payable (167,000) (152,000)
Other liabilities (105,000) (63,000)
------------ ------------
Total adjustments (606,000) (2,887,000)
------------ ------------
Net cash (used) by operating activities $ (56,000) $ (2,502,000)
------------ ------------
Cash flows from investing activities:
Decrease(increase) in note receivable 15,000 3,000
Increase (decrease) in minority interest (18,000) 20,000
Proceeds from sale of assets 4,000 3,000
Capital expenditures (88,000) (196,000)
------------ ------------
Net cash (used) by investing activities $ (87,000) (170,000)
------------ ------------
Cash flows from financing activities:
Borrowings under revolving line of credit, net 550,000 1,715,000
Repayments of long term debt (23,000) (109,000)
Borrowings under short term note payable 540,000 289,000
Repayments of short term note payable (348,000) (192,000)
Dividends paid (144,000) (217,000)
------------ ------------
Net cash provided by financing activities $ 575,000 $ 1,486,000
------------ ------------
Net increase (decrease) in cash and cash equivalents 432,000 (1,186,000)
Cash and cash equivalents at beginning of year 2,690,000 3,406,000
------------ -----------
Cash and cash equivalents at end of year $ 3,122,000 $ 2,220,000
============ ============
</TABLE>
<PAGE>
Amelco Corporation and Subsidiaries
Notes to Consolidated Financial Statements
1. In the opinion of management, the accompanying unaudited consolidated
financial statements contain all adjustments, consisting of normal recurring
adjustments necessary to present fairly the Company's financial position as
of March 31, 1995 and September 30, 1994, the results of its operations for
the six months ended March 31, 1995 and 1994 and the three months ended
March 31, 1995 and 1994 and changes in cash flow for the six months ended
March 31, 1995 and 1994. These condensed financial statements should be read
in conjunction with the financial statements and notes threto included in the
Company's annual report on Form 10-K for the year ended September, 1994.
2. Retentions: Contract retentions which are collectible upon the owner's
approval of contract performance on construction contracts are included under
receivables and amount to $6,840,000 and $5,507,000 at March 31, 1995 and
September 30, 1994, respectively.
3. Backlog: The backlog of uncompleted contracting work was approximately
$84,272,000 on contracts in force as of March 31, 1995, compared with
$91,425,000 as of March 31, 1994, inclusive of the Company's proportionate
share of contract backlog from joint ventures amounting to $1,724,000 at
March 31, 1995 and $8,308,000 at March 31, 1994.
4. Cash: Cash balances at March 31, 1995 include approximately $1,229,000
in restricted time deposits maintained in lieu of retention which will be
released upon completion of the related construction projects. Interest
income on these deposits are credited to the Company.
5. Dividends: A $.10 per share dividend was paid on February 15, 1995 to
stockholders of record as of February 6, 1995. The dividend amounted to
$144,000.
<PAGE>
Amelco Corporation and Subsidiaries
Management's Discussion and Analysis of Financial Condition and
Results of Operations
Capital Resources and Liquidity
Cash balances increased from $2,690,000 at September 30, 1994 to $3,122,000
at March 31, 1995. This increase in cash of $432,000 consisted of
approximately $575,000 provided from financing activities which was partially
offset by $56,000 used by operating activities and $87,000 used by investing
activities.
Net cash used by operating activities resulted largely from payments on
accounts payable and accrued expenses amounting to $3,193,000 and an increase
in costs and recognized profits in excess of billings on uncompleted
contracts of $2,246,000. These uses of cash were partially offset by a
decrease in accounts receivable of $3,468,000, a decrease in investment in
joint ventures of $1,033,000 and an increase in billings in excess of costs
and recognized profits of $793,000. In addition, prepaid expenses increased
by $326,000 consisting primarily of insurance premiums paid at policy
inception.
Net cash provided by financing activities included $550,000 in borrowings
under the Company's lines of credit and $540,000 under a short term note to
finance insurance premiums. These changes were offset by repayments of long
term debt and short term notes aggregating $371,000 and payment of a $144,000
cash dividend to stockholders on February 15, 1995. Net cash used by
investing activities of $87,000 consisted primarily of capital expenditures
of $88,000.
The Company's construction backlog amounted to approximately $84,272,000 at
March 31, 1995, of which approximately $67.7 million was in California,
$9.1 million was in Hawaii and the Pacific Basin, and $7.5 million in other
western continental U. S. states. The Company's revolving lines of credit
aggregating $6,000,000 were renewed in March 1995. At March 31, 1995, there
was $550,000 borrowed under these lines of credit. Management believes that
the present liquidity of the Company together with the availability of the
aforementioned lines of credit are adequate to provide the necessary working
capital to fund the Company's operations in the near future.
Consolidated working capital amounted to $11,018,000 at March 31, 1995 as
compared to $10,551,000 at September 30, 1994. The working capital ratio
increased slightly from 1.42 at September 30, 1994 to 1.48 at March 31, 1995.
<PAGE>
Amelco Corporation and Subsidiaries
Management's Discussion and Analysis of Financial Condition and
Results of Operations
(continued)
Results of Operations
Consolidated revenues increased by 24.8% and 23.9% in the three and six months
periods ended March 31, 1995 as compared to the same period in the prior year.
The change in the six month period includes a revenue increase of approximately
$14.2 million from the California operations which was partially offset by
revenue decreases of $1.6 million from the Hawaii operations and $0.6 million
from other western continental U.S. states. The change in California revenues
is largely a result of the increased construction backlog obtained in the
second half of fiscal 1994. Changes in revenue volume reflect primarily the
degree of success in bidding on new work as well as the scheduling
requirements of the customer, and are not necessarily indicative of revenue
volume or profitability in future periods.
Gross profits increased by $49,000 in the three months period ended March 31,
1995 and by $425,000 in the six month period ended March 31, 1995. Gross
profits as a percentage of revenue were 7.9% and 8.1% in the three and six
month periods ended March 31, 1995 as compared to 9.7% and 9.2% in the three
and six month period ended March 31, 1994. The decrease results from a
combination of the continued highly competitive conditions in the construction
market and the Company's focus on the procurement of larger projects as a
prime contractor. Management's ability to enhance profit margins in its
business is largely limited to its ability to identify profitable bidding
opportunities, estimate accurately during the bidding stage and upon award,
to effectively manage jobsite performance.
General and administrative expenses for the six month period increased from
$3,901,000 in 1994 to $4,070,000 in 1995. The change is primarily
attributable to increases in management, estimating and administrative
staffing costs.
Interest expense increased by $16,000 and $26,000 in the three and six
months periods ended March 31, 1995. The increase results primarily from
higher short term interest rates in 1995 as compared to the previous period.
<PAGE>
Part II
Other Information
Item 4. Submission of Matters to a Vote of Security Holders
The Company held its Annual Meeting of Shareholders on May 4, 1995 at which
1,341,248 or 92.9% of the outstanding shares were represented. At the
meeting 99.9% of the voting shares were cast for the election of Samuel M.
Angelich, Mark S. Angelich and John M. Carmack as directors for the ensuing
year.
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.
Amelco Corporation
Date: May 15, 1995 __________________
Patrick T. Miike
Chief Financial Officer,
Vice President-Finance and
Treasurer
<TABLE> <S> <C>
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<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> Sep-30-1995
<PERIOD-START> Oct-01-1994
<PERIOD-END> Mar-31-1995
<CASH> 3122
<SECURITIES> 0
<RECEIVABLES> 22462
<ALLOWANCES> 334
<INVENTORY> 153
<CURRENT-ASSETS> 33970
<PP&E> 7446
<DEPRECIATION> 5760
<TOTAL-ASSETS> 39223
<CURRENT-LIABILITIES> 22952
<BONDS> 0
<COMMON> 5535
0
0
<OTHER-SE> 8767
<TOTAL-LIABILITY-AND-EQUITY> 39223
<SALES> 62356
<TOTAL-REVENUES> 62356
<CGS> 57326
<TOTAL-COSTS> 57326
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 166
<INCOME-PRETAX> 931
<INCOME-TAX> 391
<INCOME-CONTINUING> 550
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 550
<EPS-PRIMARY> .38
<EPS-DILUTED> .38
