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 June 30, 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 June 30, 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-
June 30, 1995 and September 30, 1994 3
Consolidated Statements of Earnings -
Nine months ended June 30, 1995 and 1994 4
Consolidated Statements of Earnings -
Three months ended June 30, 1995 and 1994 5
Consolidated Statements of Cash Flow-
Nine months ended June 30, 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)
June 30, September 30,
1995 1994
-------------- -------------
<S> <C> <C>
Assets
Cash (note 4) $ 3,831,000 2,690,000
Receivables, net (note 2) 25,728,000 25,596,000
Inventories 170,000 126,000
Investment in and advances to joint ventures 65,000 1,120,000
Costs and recognized profits in excess of
billings on uncompleted contracts 7,351,000 5,571,000
Deferred tax assets 260,000 168,000
Prepaid expenses and other 349,000 170,000
-------------- -------------
Total Current Assets 37,754,000 35,441,000
Note receivable from Halau Corporation,
noncurrent 3,315,000 3,338,000
Other noncurrent notes receivable 69,000 110,000
Property, plant and equipment, net 1,773,000 1,797,000
Other assets 134,000 103,000
------------- -------------
Total Assets $ 43,045,000 40,789,000
============= =============
Liabilities and Stockholders' Equity
Short term borrowings $ 1,250,000 -0-
Short term notes payable 48,000 -0-
Current portion of long term debt 47,000 45,000
Accounts payable 14,495,000 14,924,000
Accrued expenses 2,620,000 2,744,000
Federal and state income taxes 28,000 191,000
Billings in excess of costs and recognized
profits on uncompleted contracts 7,660,000 6,413,000
Other current liabilities 431,000 573,000
-------------- -------------
Total Current Liabilities 26,579,000 24,890,000
Long term debt, excluding current portion 1,875,000 1,911,000
Deferred federal and state income taxes 25,000 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 capita l7,427,000 7,427,000
Retained earnings 4,602,000 3,945,000
-------------- --------------
17,564,000 16,907,000
Less treasury shares (3,011,000) (3,011,000)
-------------- --------------
Total stockholders' equity 14,553,000 13,896,000
-------------- --------------
Total Liabilities and
Stockholders' Equity $43,045,000 40,789,000
============== ==============
</TABLE>
<PAGE>
<TABLE>
Amelco Corporation and Subsidiaries
Consolidated Statements of Earnings
Nine Months Ended June 30, 1995 and 1994
(Unaudited)
<CAPTION>
1995 1994
------------- -------------
<S> <C> <C>
Revenues $ 94,025,000 78,015,000
Costs and operating expenses 86,564,000 71,088,000
------------- -------------
Gross profit 7,461,000 6,927,000
General and administrative expenses 6,081,000 5,790,000
------------- -------------
Operating income 1,380,000 1,137,000
Other income (expense):
Interest expense (239,000) (232,000)
Other, net 209,000 188,000
------------- -------------
Total other income (expense) (30,000) (44,000)
------------- -------------
Earnings before income taxes 1,350,000 1,093,000
Income tax expense 559,000 444,000
Minority interest in earnings (loss)
of subsidiary (10,000) 33,000
------------- -------------
Net earnings $801,000 616,000
Earnings per share:
Net earnings per common share $ 0.55 $ 0.43
============= =============
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 June 30, 1995 and 1994
(Unaudited)
<CAPTION>
1995 1994
------------- -------------
<S> <C> <C>
Revenues $ 31,669,000 27,699,000
Costs and operating expenses 29,238,000 25,377,000
------------- -------------
Gross profit 2,431,000 2,322,000
General and administrative expenses 2,011,000 1,889,000
------------- -------------
Operating income 420,000 433,000
Other income (expense):
Interest expense (73,000) (92,000)
Other, net 72,000 68,000
------------- -------------
Total other income (expense) (1,000) (24,000)
Earnings before income taxes 419,000 409,000
Income tax expense 168,000 165,000
Minority interest in earnings (loss)
of subsidiary -0- 13,000
------------- -------------
Net earnings $251,000 231,000
Earnings per share:
Net earnings per common share $ 0.17 $ 0.16
============= ============
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
Nine Months Ended June 30, 1995 and 1994
(Unaudited)
<CAPTION>
1995 1994
------------- ------------
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 801,000 616,000
Adjustments to reconcile income to net cash
provided (used) by operating activities:
Depreciation and amortization 300,000 293,000
Gain on sale of assets (4,000) (1,000)
(Increase) decrease in assets and increase
(decrease) in liabilities:
Accounts receivable (132,000) (5,009,000)
Investment in joint venture 1,055,000 (465,000)
Inventories (44,000) 39,000
Costs and recognized profits in excess of
billings on uncompleted contracts (1,780,000) (2,691,000)
Prepaid expenses (179,000) 94,000
Other assets (31,000) (19,000)
Accounts payable and accrued expenses (553,000) 194,000
Billings in excess of costs and recognized
profits on uncompleted contracts 1,247,000 3,725,000
Income taxes payable (291,000) (182,000)
Other liabilities (142,000) 22,000
------------- -----------
Total adjustments (554,000) (4,000,000)
------------- -----------
Net cash (used) by operating activities $247,000 (3,384,000)
------------- -----------
Cash flows from investing activities:
Decrease(increase) in note receivable 64,000 54,000
Increase (decrease) in minority interest (18,000) 33,000
Proceeds from sale of assets 6,000 3,000
Capital expenditures (278,000) (237,000)
------------- -----------
Net cash (used) by investing activities $(226,000) (147,000)
------------- -----------
Cash flows from financing activities:
Borrowings under revolving line of credit, net 1,250,000 2,600,000
Repayments of long term debt (34,000) (152,000)
Borrowings under short term note payable 540,000 291,000
Repayments of short term note payable (492,000) (264,000)
Dividends paid (144,000) (217,000)
------------- -----------
Net cash provided by financing activities $1,120,000 2,258,000
------------- -----------
Net increase (decrease) in cash and
cash equivalents 1,141,000 (1,273,000)
Cash and cash equivalents at beginning of year 2,690,000 3,406,000
------------- -----------
Cash and cash equivalents at end of year $3,831,000 2,133,000
============= ===========
</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
June 30, 1995 and September 30, 1994, the results of its operations for the
nine months ended June 30, 1995 and 1994 and the three months ended June 30,
1995 and 1994 and changes in cash flow for the nine months ended June 30, 1995
and 1994. These condensed financial statements should be read in conjunction
with the financial statements and notes thereto included in the Company's
annual report on Form 10-K for the year ended September 30, 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 $6,170,000 and $5,507,000 at June 30, 1995 and
September 30, 1994, respectively.
3. Backlog: The backlog of uncompleted contracting work was approximately
$92,884,000 on contracts in force as of June 30, 1995, compared with
$110,519,000 as of June 30, 1994, inclusive of the Company's proportionate
share of contract backlog from joint ventures amounting to $40,000 at
June 30, 1995 and $6,022,000 at June 30, 1994.
4. Cash: Cash balances at June 30, 1995 include approximately $1,231,000
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 $3,831,000
at June 30, 1995. This increase in cash of $1,141,000 consisted of
approximately $247,000 provided from operating activities and $1,120,000
provided by financing activities, which was partially offset by $226,000 used
by investing activities.
Cash provided by operating activities included net earnings from operations
of $801,000, a decrease in investment in joint ventures of $1,055,000 and an
increase in billings in excess of costs and recognized profits of $1,247,000.
These increases of cash were largely offset by an increase in costs and
recognized profits in excess of billings on uncompleted contracts of
$1,780,000 and a decrease in accounts payable and accrued expenses of
$553,000.
Net cash provided by financing activities included $1,250,000 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 $526,000 and payment of a $144,000
cash dividend to stockholders on February 15, 1995. Net cash used by investing
activities of $226,000 consisted primarily of capital expenditures of
$278,000.
The Company's construction backlog amounted to approximately $92,884,000
at June 30, 1995, of which approximately $71.9 million was in California,
$10.9 million was in Hawaii and the Pacific Basin, and $10.1 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 June 30, 1995, there
was $1,250,000 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 term future.
Consolidated working capital amounted to $11,175,000 at June 30, 1995 as
compared to $10,551,000 at September 30, 1994. The working capital ratio at
September 30, 1994 and June 30, 1995 was unchanged at 1.42.
<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 14.3% and 20.5% in the three and nine
month periods ended June 30, 1995 as compared to the same periods in the
prior year. The change in the nine month period results primarily from a
revenue increase of approximately $19.9 million from the California
operations. This increase was partially offset by revenue decreases of
$2.8 million from the Hawaii operations and $1.1 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 $109,000 in the three months period ended
June 30, 1995 and by $534,000 in the nine month period ended June 30, 1995.
Gross profits as a percentage of revenue were 7.7% and 7.9% in the three and
nine month periods ended June 30, 1995 as compared to 8.4% and 8.9% in the
three and nine month periods ended June 30,1994. The decrease results from
a combination of the continued highly competitive conditions in the
construction market and the Company's focus on 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 nine month period increased
from $5,790,000 in 1994 to $6,081,000 in 1995. The increase of $291,000
results largely from increased management, estimating and administrative
staffing costs and is related to the increase in revenue volume since the
prior period.
Interest expense decreased by $19,000 and increased by $7,000 in the three
and nine months periods ended June 30, 1995. The increase in the nine month
period results from higher short term interest rates in 1995 as compared to
the previous period. The decrease in the three month period reflects a
decrease in average short term borrowings as compared to the previous period.
<PAGE>
Part II
Other Information
No events occurred during the three (3) month period ended June 30, 1995
which are reportable under this part.
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: August 14, 1995 By /s/ Patrick T. Miike
Patrick T. Miike
Chief Financial Officer,
Vice President-Finance and
Treasurer
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